HF 3800

2nd Engrossment - 93rd Legislature (2023 - 2024) Posted on 04/25/2024 08:22am

A bill for an act
relating to cooperatives; providing for the organization and operation of housing
cooperatives for seniors, low and moderate income people, limited equity
cooperatives and leasing cooperatives for designated members; amending Minnesota
Statutes 2022, sections 116J.395, subdivision 3; 273.11, subdivision 8; 273.124,
subdivisions 3, 3a; 290.0922, subdivision 2; 327C.095, subdivision 5; 515B.3-101;
515B.3-103; Minnesota Statutes 2023 Supplement, sections 273.124, subdivision
6; 290.0694, subdivision 1; 290A.03, subdivision 16; 462A.38, subdivision 1;
proposing coding for new law as Minnesota Statutes, chapter 308C.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MINNESOTA COOPERATIVE HOUSING ACT

Section 1.

new text begin [308C.001] CITATION.
new text end

new text begin This chapter may be cited as the "Minnesota Cooperative Housing Act."
new text end

Sec. 2.

new text begin [308C.003] APPLICATION OF OTHER STATUTES.
new text end

new text begin Subdivision 1. new text end

new text begin Cooperative ownership. new text end

new text begin Cooperatives formed under this chapter and
cooperatives that were formed under chapter 308A or 308B that convert and become
exclusively governed by this chapter shall be known as housing cooperatives.
new text end

new text begin Subd. 2. new text end

new text begin Securities registration exemption. new text end

new text begin Membership interests are exempt from
registration to the same extent as the securities offered by any cooperative under chapter
308A or 308B are exempt from registration under chapter 80A.
new text end

new text begin Subd. 3. new text end

new text begin Chapter 515B prevails. new text end

new text begin In the event of a conflict between this chapter and
chapter 515B, chapter 515B shall control.
new text end

Sec. 3.

new text begin [308C.005] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin The definitions in this section apply to this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Address. new text end

new text begin "Address" means the mailing address, including a zip code. In the
case of a registered address, the term means mailing address and the actual office location,
which may not be a post office box.
new text end

new text begin Subd. 3. new text end

new text begin Alternative ballot. new text end

new text begin "Alternative ballot" means a method of voting on a candidate
or issue prescribed by the board of directors in advance of the vote and may include voting
by electronic, telephonic, Internet, or other means that reasonably allow members the
opportunity to vote.
new text end

new text begin Subd. 4. new text end

new text begin Articles. new text end

new text begin "Articles" means the articles of organization of a cooperative as
originally filed and subsequently amended.
new text end

new text begin Subd. 5. new text end

new text begin Association. new text end

new text begin "Association" means an organization conducting business on a
cooperative plan under the laws of this state or another state that is chartered to conduct
business under other laws of this state.
new text end

new text begin Subd. 6. new text end

new text begin Board of directors. new text end

new text begin "Board of directors" or "board" means the board of directors
of a cooperative.
new text end

new text begin Subd. 7. new text end

new text begin Business entity. new text end

new text begin "Business entity" means a company, limited liability company,
limited liability partnership, or other legal entity, whether domestic or foreign, association,
or body vested with the power or function of a legal entity.
new text end

new text begin Subd. 8. new text end

new text begin Chapter. new text end

new text begin "Chapter" means sections 308C.001 to 308C.975.
new text end

new text begin Subd. 9. new text end

new text begin Cooperative. new text end

new text begin "Cooperative" means a cooperative organized under this chapter
providing housing opportunities on a cooperative plan as provided under this chapter.
new text end

new text begin Subd. 10. new text end

new text begin Common elements. new text end

new text begin "Common elements" means all portions of the cooperative
other than a dwelling unit or a manufactured home.
new text end

new text begin Subd. 11. new text end

new text begin Common expenses. new text end

new text begin "Common expenses" means expenditures made or
liabilities incurred by or on behalf of the cooperative together with any allocations to reserves.
new text end

new text begin Subd. 12. new text end

new text begin Common expense liability. new text end

new text begin "Common expense liability" means the liability
for common expenses allocated to each dwelling unit which shall be allocated by a method
provided for in the bylaws pursuant to section 308C.241, subdivision 2, paragraph (a), clause
7.
new text end

new text begin Subd. 13. new text end

new text begin Developer. new text end

new text begin "Developer" means a real estate developer in the business of
building dwelling units that will be owned and operated by a cooperative organized under
this chapter.
new text end

new text begin Subd. 14. new text end

new text begin Domestic business entity. new text end

new text begin "Domestic business entity" means a business entity
organized under the laws of this state.
new text end

new text begin Subd. 15. new text end

new text begin Domestic cooperative. new text end

new text begin "Domestic cooperative" means a cooperative organized
under this chapter, chapter 308A, or chapter 308B.
new text end

new text begin Subd. 16. new text end

new text begin Dwelling unit. new text end

new text begin "Dwelling unit" means a residential housing unit consisting
of a group of rooms and hallways which are designated or intended for use as living quarters
for an individual, family, or other persons living together.
new text end

new text begin Subd. 17. new text end

new text begin Filed with the secretary of state. new text end

new text begin "Filed with the secretary of state" means a
document meeting the applicable requirements of this chapter, signed and accompanied by
the required filing fee that has been delivered to the Office of the Secretary of State. The
secretary of state shall endorse on the document the word "filed" or a similar word determined
by the secretary of state; the month, day, and year of filing; record the document in the
Office of the Secretary of State; and return the document to the person or entity who delivered
it for filing.
new text end

new text begin Subd. 18. new text end

new text begin Foreign business entity. new text end

new text begin "Foreign business entity" means a business entity
that is not a domestic business entity.
new text end

new text begin Subd. 19. new text end

new text begin Foreign cooperative. new text end

new text begin "Foreign cooperative" means a foreign business entity
organized to conduct business on a cooperative plan consistent with this chapter, chapter
308A, or chapter 308B.
new text end

new text begin Subd. 20. new text end

new text begin Housing cooperative. new text end

new text begin "Housing cooperative" means a housing cooperative
governed by this chapter to provide housing on a not-for-profit and cooperative basis in
accordance with the organizational purposes contemplated in this chapter.
new text end

new text begin Subd. 21. new text end

new text begin Housing facility. new text end

new text begin "Housing facility" means a multiunit dwelling, a
manufactured home park, shared wall units or townhomes, and one or more single-family
homes or detached homes or structures intended to be used for residential housing.
new text end

new text begin Subd. 22. new text end

new text begin Limited equity cooperative. new text end

new text begin "Limited equity cooperative" means a cooperative
governed by this chapter that limits the appreciation and value of a membership interest to
a formula price set forth in the bylaws that is defined as the transfer value herein. A limited
equity cooperative also sets limits on the extent to which a member may transfer a
membership interest and provides for a right of first refusal to purchase the interest in favor
of the cooperative.
new text end

new text begin Subd. 23. new text end

new text begin Low income. new text end

new text begin "Low income" means having income that is less than or equal
to 80 percent of median income for the area, adjusted for family size, in accordance with
federal standards generally accepted at the time of organization and comparable to standards
of the United States Department of Housing and Urban Development existing on June 16,
1988.
new text end

new text begin Subd. 24. new text end

new text begin Lot. new text end

new text begin "Lot" means an area within a manufactured home park or another parcel
of real property, designed or used for the accommodation of a manufactured home or
structure intended to be used for residential housing.
new text end

new text begin Subd. 25. new text end

new text begin Manufactured home. new text end

new text begin "Manufactured home" means a structure, not affixed
to or part of real estate, transportable in one or more sections that is eight body feet or more
in width or 40 body feet or more in length in the traveling mode, or, when erected on site
is 320 or more square feet, and is built on a permanent chassis and designed to be used as
a dwelling with or without a permanent foundation when connected to the required utilities,
and includes the plumbing, heating, air conditioning, and electrical systems contained in
the home.
new text end

new text begin Subd. 26. new text end

new text begin Manufactured home park. new text end

new text begin "Manufactured home park" means any site, lot,
field, or tract of land upon which two or more occupied manufactured homes are located,
either free of charge or for compensation, and includes any building, structure, tent, vehicle,
or enclosure used or intended for use as part of the equipment of the manufactured home
park.
new text end

new text begin Subd. 27. new text end

new text begin Member. new text end

new text begin "Member" means any person who is approved for membership in
the cooperative pursuant to the articles of organization or bylaws and who is identified as
a member on the books and records of the cooperative and has been issued a membership
certificate. Membership certificates include owner members and nonoccupant members.
new text end

new text begin Subd. 28. new text end

new text begin Membership certificate. new text end

new text begin "Membership certificate" means a certificate
evidencing ownership of a membership interest in the cooperative.
new text end

new text begin Subd. 29. new text end

new text begin Membership interest. new text end

new text begin "Membership interest" means a member's interest in
a cooperative consisting of a member's financial rights, a member's right to assign financial
rights, a member's governance rights, and a member's right to assign governance rights.
Membership interest includes occupant membership interests and nonoccupant membership
interests.
new text end

new text begin Subd. 30. new text end

new text begin Member meeting. new text end

new text begin "Member meeting" means a regular or special meeting of
the members.
new text end

new text begin Subd. 31. new text end

new text begin Membership purchase and sale agreement. new text end

new text begin "Membership purchase and sale
agreement" means the contract for purchase of a membership interest to which a particular
dwelling unit is appurtenant between the member who is selling the membership interest
and an incoming prospective member of the cooperative who has been approved for
membership by the cooperative's board of directors.
new text end

new text begin Subd. 32. new text end

new text begin Minnesota limited liability company. new text end

new text begin "Minnesota limited liability company"
means a limited liability company governed by chapter 322C.
new text end

new text begin Subd. 33. new text end

new text begin Moderate income. new text end

new text begin "Moderate income" means less than or equal to 100 percent
of median income for the area, adjusted for family size, in accordance with federal standards
generally accepted at the time of organization and comparable to standards of the United
States Department of Housing and Urban Development existing on June 16, 1988.
new text end

new text begin Subd. 34. new text end

new text begin Nonoccupant membership interest. new text end

new text begin "Nonoccupant membership interest"
means a membership interest that does not require the holder to be an occupant or resident
of the cooperative.
new text end

new text begin Subd. 35. new text end

new text begin Occupant. new text end

new text begin "Occupant" means any person legally entitled to occupy a dwelling
unit, whether a member, spouse or partner of a member, or permitted sublessee or guest of
a member.
new text end

new text begin Subd. 36. new text end

new text begin Occupant membership interest. new text end

new text begin "Occupant membership interest" means the
composite ownership of both a membership certificate issued by the cooperative and a
possessory right of occupancy of a dwelling unit or lot pursuant to an occupancy agreement
or proprietary lease, including a member's financial rights and a member's governance rights.
new text end

new text begin Subd. 37. new text end

new text begin Occupancy agreement. new text end

new text begin "Occupancy agreement" means the agreement between
the member and the cooperative describing the terms and conditions under which the member
will occupy the dwelling unit or lot appurtenant to the member's membership interest.
new text end

new text begin Subd. 38. new text end

new text begin Older persons. new text end

new text begin "Older persons" means natural persons who are age 55 and
older in accordance with the applicable provisions of the Fair Housing Act, Title VIII of
the Civil Rights Act of 1968, as amended; United States Code, title 42, chapter 3607, section
807(a)(b)(1)(2), and the rules and regulations of the United States Department of Housing
and Urban Development applicable with respect to housing for older persons contained in
Code of Federal Regulations, title 24, subtitle B, chapter I, subpart E, section 100.300-308.
new text end

new text begin Subd. 39. new text end

new text begin Person. new text end

new text begin "Person" means a natural person, domestic or foreign business or
nonprofit corporation, domestic and foreign limited liability company, limited partnership,
joint venture, association, trust, estate, enterprise, or other legal or commercial entity.
new text end

new text begin Subd. 40. new text end

new text begin Project. new text end

new text begin "Project" means the real property and improvements on the real
property owned by the cooperative and appurtenant facilities, constituting the cooperative's
housing facility or a manufactured home park.
new text end

new text begin Subd. 41. new text end

new text begin Proprietary lease. new text end

new text begin "Proprietary lease" means an agreement with a cooperative
governing a member's right to occupancy under which a member has an exclusive possessory
interest in a unit or lot.
new text end

new text begin Subd. 42. new text end

new text begin Resident. new text end

new text begin "Resident" means any occupant of space owned by the cooperative
or an owner of a manufactured home who rents a lot in a manufactured home park and
includes the members of the resident's household.
new text end

new text begin Subd. 43. new text end

new text begin Security interest. new text end

new text begin "Security interest" means the lien on and security interest
in a membership and occupancy agreement.
new text end

new text begin Subd. 44. new text end

new text begin Senior housing cooperative. new text end

new text begin "Senior housing cooperative" means a housing
cooperative governed by this chapter to provide housing on a not-for-profit and cooperative
basis to older persons in accordance with the applicable provisions of the Fair Housing Act,
Title VIII of the Civil Rights Act of 1968, as amended; United States Code, title 42, chapter
3607, section 807(a)(b)(1)(2), and the rules and regulations of the United States Department
of Housing and Urban Development applicable with respect to housing for older persons
contained in Code of Federal Regulations, title 24, subtitle B, chapter I, subpart E, section
100.300-308.
new text end

new text begin Subd. 45. new text end

new text begin Signed. new text end

new text begin The signature of a person subscribed on a document, with respect to
a document required by this chapter to be filed with the secretary of state, means that the
document has been signed by a person authorized to do so by this chapter, the articles or
bylaws, or by a resolution approved by the directors or the members. A signature on a
document may be a facsimile affixed, engraved, printed, placed, stamped with indelible ink,
transmitted by facsimile or electronically, or in any other manner reproduced on the
document.
new text end

new text begin Subd. 46. new text end

new text begin Subscription agreement. new text end

new text begin "Subscription agreement" means the contract of
purchase between a prospective member and the cooperative of a membership interest in
the cooperative.
new text end

new text begin Subd. 47. new text end

new text begin Transfer value. new text end

new text begin "Transfer value" means the formula price at which the
cooperative may purchase the membership interest of a deceased or departing member in
a limited equity cooperative.
new text end

new text begin Subd. 48. new text end

new text begin Unit. new text end

new text begin "Unit" means a portion of the cooperative property leased for exclusive
occupancy by a member under a proprietary lease or leased to a tenant by an occupancy
agreement.
new text end

Sec. 4.

new text begin [308C.007] LEGAL RECOGNITION OF ELECTRONIC RECORDS AND
SIGNATURES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Electronic" means relating to technology having electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capabilities.
new text end

new text begin (c) "Electronic record" means a record created, generated, sent, communicated, received,
or stored by electronic means.
new text end

new text begin (d) "Electronic signature" means an electronic sound, symbol, or process attached to or
logically associated with a record and executed or adopted by a person with the intent to
sign the record.
new text end

new text begin (e) "Record" means information that is inscribed on a tangible medium or that is stored
in an electronic or other medium and is retrievable in the perceivable form.
new text end

new text begin Subd. 2. new text end

new text begin Electronic records and signatures. new text end

new text begin For purposes of this chapter:
new text end

new text begin (1) a record or signature may not be denied legal effect or enforceability solely because
it is in electronic form;
new text end

new text begin (2) a contract may not be denied legal effect or enforceability solely because an electronic
record was used in its formation;
new text end

new text begin (3) if a provision requires a record to be in writing, an electronic record satisfies the
requirement; and
new text end

new text begin (4) if a provision requires a signature, an electronic signature satisfies the requirement.
new text end

Sec. 5.

new text begin [308C.009] USE OF TERM COOPERATIVE RESTRICTED.
new text end

new text begin Subdivision 1. new text end

new text begin Permissible uses. new text end

new text begin Businesses subject to this chapter may use the term
"cooperative" or "housing cooperative" as part of its corporate or business name. Nothing
in this chapter shall preclude a business organized under chapter 308A, 308B, 317A, or
515B from using the term "housing cooperative."
new text end

new text begin A corporation or association organized in this state may not use the term "housing
cooperative" as part of its corporate or business name or title, or to represent itself as a
housing cooperative, unless the corporation or association has complied with and is subject
to this chapter or has incorporated under the laws of this state authorizing incorporation of
business on a cooperative plan.
new text end

new text begin Subd. 2. new text end

new text begin Penalty for misuse of term housing cooperative. new text end

new text begin A corporation or association
that violates subdivision 1 is guilty of a misdemeanor.
new text end

Sec. 6.

new text begin [308C.101] RESERVATION OF RIGHT.
new text end

new text begin The state reserves the right to amend or repeal the provisions of this chapter by law. A
cooperative organized or governed by this chapter is subject to this reserved right.
new text end

Sec. 7.

new text begin [308C.111] FILING FEES.
new text end

new text begin Unless otherwise provided, the filing fee for documents filed under this chapter with
the secretary of state is $35.
new text end

Sec. 8.

new text begin [308C.115] REGISTERED OFFICE.
new text end

new text begin A cooperative must have a registered office and may have a registered agent. A
cooperative may change its registered agent and the agent may resign or change its business
address or its name in the manner prescribed by section 5.36.
new text end

Sec. 9.

new text begin [308C.121] ANNUAL RENEWAL.
new text end

new text begin Subdivision 1. new text end

new text begin Annual renewal. new text end

new text begin A cooperative governed by this chapter must file an
annual renewal with the secretary of state in each calendar year following the calendar year
in which the cooperative was incorporated. The secretary of state may send annually to the
cooperative, using the information provided by the cooperative pursuant to section 5.002
or 5.34 or the articles of incorporation, a notice announcing the need to file the annual
renewal, informing the cooperative that the annual renewal may be filed online and that
paper filings may also be made, and informing the cooperative that failing to file the annual
renewal will result in an administrative dissolution of the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Cooperative renewal form. new text end

new text begin In each calendar year in which a renewal is to be
filed, a cooperative must file with the secretary of state an annual renewal by December 31
of that calendar year containing the items required by section 5.34.
new text end

new text begin Subd. 3. new text end

new text begin Information public. new text end

new text begin The information required by subdivision 2 is public data.
new text end

new text begin Subd. 4. new text end

new text begin Penalty; dissolution. new text end

new text begin (a) A cooperative that has failed to file a renewal pursuant
to the requirements of this section by December 31 of the calendar year for which the renewal
is required must be dissolved by the secretary of state as described in paragraph (b).
new text end

new text begin (b) If the cooperative has not filed the renewal by December 31 of that calendar year,
the secretary of state must issue a certificate of involuntary dissolution, and the certificate
must be filed with the secretary of state. The secretary of state must make available in an
electronic format the names of the dissolved cooperatives. A cooperative dissolved in this
manner is not entitled to the benefits of section 308C.975.
new text end

new text begin Subd. 5. new text end

new text begin Reinstatement. new text end

new text begin A cooperative may retroactively reinstate its existence by filing
a single annual renewal and paying a $25 fee. Filing the annual renewal with the secretary
of state:
new text end

new text begin (1) returns the cooperative to active status as of the date of the dissolution;
new text end

new text begin (2) validates contracts or other acts within the authority of the articles, and the cooperative
is liable for those contracts or acts; and
new text end

new text begin (3) restores to the cooperative all assets and rights of the cooperative and its shareholders
or members to the extent that assets or rights were held by the cooperative and its
shareholders or members before the dissolution occurred, except to the extent that assets or
rights were affected by acts occurring after the dissolution or sold or otherwise distributed
after that time.
new text end

Sec. 10.

new text begin [308C.201] ORGANIZATIONAL PURPOSE.
new text end

new text begin A cooperative may be formed and organized on a cooperative basis and plan under this
chapter:
new text end

new text begin (1) to provide housing on a nonprofit and cooperative basis to older persons in accordance
with the provisions of this chapter, the Fair Housing Act, Title VIII of the Civil Rights Act
of 1968, as amended; United States Code, title 42, chapter 3607, section 807(a)(b)(1)(2),
and the rules and regulations of the United States Department of Housing and Urban
Development applicable with respect to housing for older persons contained in Code of
Federal Regulations, title 24, subtitle B, chapter I, subpart E, sections 100.300-308;
new text end

new text begin (2) to provide on a nonprofit and cooperative basis residential housing either through
ownership, leasing, or a combination of both and the social, recreational, commercial, and
communal facilities necessary to serve and improve the residential housing; or
new text end

new text begin (3) to establish a limited equity cooperative that provides on a nonprofit and cooperative
basis residential housing to its members that: (i) limits the appreciation and value of a
membership interest to a formula price set forth in the bylaws that is defined as the transfer
value herein, and (ii) sets limits on the extent to which a member may transfer a membership
interest and provides for a right of first refusal to purchase the interest in favor of the
cooperative.
new text end

Sec. 11.

new text begin [308C.205] ORGANIZERS.
new text end

new text begin A cooperative may be organized by one or more organizers who shall be adult natural
persons and who may act for themselves as individuals or as agents of other entities.
new text end

Sec. 12.

new text begin [308C.211] COOPERATIVE NAME.
new text end

new text begin Subdivision 1. new text end

new text begin Distinguished name. new text end

new text begin The name of a cooperative shall distinguish the
cooperative upon the records in the Office of the Secretary of State from the name of a
domestic business entity or a foreign business entity, authorized or registered to do business
in this state, or a name the right to which is, at the time of organization, reserved or provided
by law.
new text end

new text begin Subd. 2. new text end

new text begin Reservation. new text end

new text begin The cooperative name shall be reserved for the cooperative during
its existence.
new text end

Sec. 13.

new text begin [308C.215] ARTICLES OF ORGANIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements. new text end

new text begin (a) The articles of the cooperative shall include:
new text end

new text begin (1) the name of the cooperative;
new text end

new text begin (2) the organizational purpose of the cooperative in accordance with this chapter;
new text end

new text begin (3) the name and address of each organizer;
new text end

new text begin (4) the period of duration for the cooperative, if the duration is not to be perpetual;
new text end

new text begin (5) the name and address of the registered agent, if any; and
new text end

new text begin (6) the address of the registered office.
new text end

new text begin (b) The articles of the cooperative may include:
new text end

new text begin (1) a statement that assessments to members collected annually for common expenses
in excess of common expenses shall be refunded annually on the basis of patronage, which
may, upon resolution of the board of directors, be credited to the following year's
assessments; and
new text end

new text begin (2) if the cooperative is to be organized as a limited equity cooperative, the requirements
set forth in section 308C.312.
new text end

new text begin (c) The articles may contain any other lawful provision.
new text end

new text begin (d) The articles shall be signed by each organizer.
new text end

new text begin Subd. 2. new text end

new text begin Filing. new text end

new text begin The original articles shall be filed with the secretary of state. The basic
fee for filing the articles with the secretary of state is $60.
new text end

new text begin Subd. 3. new text end

new text begin Effect of filing. new text end

new text begin When the articles have been filed with the secretary of state
and the required fee has been paid to the secretary of state, it shall be presumed that:
new text end

new text begin (1) all conditions precedent that are required to be performed by the organizers have
been complied with;
new text end

new text begin (2) the incorporation of the cooperative has been chartered by the state as a separate
legal entity; and
new text end

new text begin (3) the secretary of state shall issue a certificate of organization to the cooperative.
new text end

Sec. 14.

new text begin [308C.221] AMENDMENT OF ARTICLES.
new text end

new text begin Subdivision 1. new text end

new text begin Procedure. new text end

new text begin (a) The articles of a cooperative shall be amended as follows:
new text end

new text begin (1) the board, by majority vote, shall pass a resolution stating the text of the proposed
amendment. The text of the proposed amendment and an attached mail or alternative ballot,
if the board has provided for a mail or alternative ballot in the resolution, shall be mailed
or otherwise distributed with a regular or special meeting notice to each member. The notice
shall designate the time and place of the meeting for the proposed amendment to be
considered and voted on; and
new text end

new text begin (2) if a quorum of the members is registered as being present or represented by alternative
vote at the meeting, the proposed amendment is adopted:
new text end

new text begin (i) if approved by a majority of the votes cast; or
new text end

new text begin (ii) for a cooperative with articles or bylaws requiring more than majority approval or
other conditions for approval, the amendment is approved by a proportion of the votes cast
or a number of total members as required by the articles or bylaws and the conditions for
approval in the articles or bylaws have been satisfied.
new text end

new text begin (b) After an amendment has been adopted by the members, the amendment shall be
signed by the president and secretary and a copy of the amendment filed with the secretary
of state.
new text end

new text begin Subd. 2. new text end

new text begin Certificate. new text end

new text begin (a) A certificate shall be prepared stating:
new text end

new text begin (1) the vote and meeting of the board adopting a resolution of the proposed amendment;
new text end

new text begin (2) the notice given to members of the meeting at which the amendment was adopted;
new text end

new text begin (3) the quorum registered at the meeting; and
new text end

new text begin (4) the vote cast adopting the amendment.
new text end

new text begin (b) The certificate shall be signed by the president and secretary and filed with the records
of the cooperative.
new text end

new text begin Subd. 3. new text end

new text begin Amendment by directors. new text end

new text begin A majority of directors may amend the articles if
the cooperative does not have any members.
new text end

new text begin Subd. 4. new text end

new text begin Amendment by the organizer. new text end

new text begin The organizer or a majority of the organizers
may amend the articles if the cooperative does not have directors or any members.
new text end

new text begin Subd. 5. new text end

new text begin Filing. new text end

new text begin An amendment of the articles shall be filed with the secretary of state.
The amendment is effective upon filing or the date specified in the resolution adopting the
amendment.
new text end

Sec. 15.

new text begin [308C.225] AMENDMENT OF ORGANIZATIONAL DOCUMENTS TO
BE GOVERNED BY THIS CHAPTER.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin (a) A housing cooperative organized under chapter 308A or
308B may convert and become exclusively subject to this chapter by amending the housing
cooperative's organizational documents to conform to the requirements of this chapter and
filing a certificate of conversion that complies with this chapter.
new text end

new text begin (b) A housing cooperative organized under chapter 308A or 308B that intends to convert
to a cooperative subject to this chapter must provide its members with a disclosure statement
of the rights and obligations of the members and the capital structure of the cooperative
before becoming subject to this chapter. A cooperative organized under chapter 308A or
308B upon distribution of the disclosure required in this subdivision must obtain the approval
of its members as necessary for amending its articles under chapter 308A or 308B.
new text end

new text begin Subd. 2. new text end

new text begin Filings. new text end

new text begin (a) A housing cooperative organized under chapter 308A or 308B that
is converting to be subject to this chapter must file with the secretary of state and the
applicable county recorder:
new text end

new text begin (1) a certificate of conversion stating:
new text end

new text begin (i) the date on which the entity was first organized;
new text end

new text begin (ii) the name of the chapter 308A or 308B cooperative and, if the name is changed, the
name of the housing cooperative to be governed under this chapter; and
new text end

new text begin (iii) the future effective date and time, which must be a date and time certain, that it will
be governed by this chapter, if the effective date and time is not to be the date and time of
filing; and
new text end

new text begin (2) a certificate of amendment amending the housing cooperative's articles to conform
with the requirements of this chapter.
new text end

new text begin (b) The conversion is effective upon the filing with the secretary of state and upon the
recording of the written certificate in the county recorder's office.
new text end

new text begin Subd. 3. new text end

new text begin Effect of being governed by this chapter. new text end

new text begin The conversion of a housing
cooperative organized under chapter 308A or 308B to a cooperative governed by this chapter
does not affect any obligations or liabilities of the cooperative before the conversion or the
personal liability of any person incurred before the conversion. When the conversion is
effective, the rights, privileges, and powers of the cooperative; real and personal property
of the cooperative; debts due to the cooperative; and causes of action belonging to the
cooperative remain vested in the cooperative and are the property of the cooperative as
converted and governed by this chapter. Title to real property vested by deed or otherwise
in the housing cooperative organized under chapters 308A and 308B does not revert and is
not impaired by reason of the cooperative being converted and governed by this chapter.
Rights of creditors and liens upon property of the housing cooperative under chapters 308A
and 308B are preserved unimpaired, and debts, liabilities, and duties of the housing
cooperative under chapters 308A and 308B remain attached to the housing cooperative as
converted and governed by this chapter and may be enforced against the housing cooperative
to the same extent as if the debts, liabilities, and duties had originally been incurred or
contracted by the cooperative as organized under this chapter. The rights, privileges, powers,
and interests in property of the cooperative under chapters 308A and 308B, as well as the
debts, liabilities, and duties of the cooperative are not deemed, as a consequence of the
conversion, to have been transferred for any purpose of the laws of this state.
new text end

Sec. 16.

new text begin [308C.235] EXISTENCE.
new text end

new text begin Subdivision 1. new text end

new text begin Commencement upon filing. new text end

new text begin The existence of a cooperative shall
commence when the articles are filed with the secretary of state.
new text end

new text begin Subd. 2. new text end

new text begin Duration. new text end

new text begin A cooperative shall have a perpetual duration unless the cooperative
provides for a limited period of duration in the articles.
new text end

Sec. 17.

new text begin [308C.241] BYLAWS.
new text end

new text begin Subdivision 1. new text end

new text begin Required. new text end

new text begin A cooperative shall have bylaws governing the cooperative's
business affairs, structure, qualifications, and classification, and the rights and obligations
of members that are not otherwise provided in the articles or by this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Contents. new text end

new text begin (a) If not stated in the articles, the bylaws must state:
new text end

new text begin (1) the purpose of the cooperative;
new text end

new text begin (2) the capital structure of the cooperative to the extent not stated in the articles, including
a statement of the classes and relative rights, preferences, and restrictions granted to or
imposed upon each class of member interests, and the authority to issue membership interests,
which may be designated to be determined by the board;
new text end

new text begin (3) a provision designating the voting and governance rights, to the extent not stated in
the articles, including which membership interests have voting power and any limitations
or restrictions on the voting power, which shall be in accordance with the provisions of this
chapter;
new text end

new text begin (4) a statement that occupant membership interests with voting power shall be restricted
to one vote for each member in the affairs of the cooperative or a statement describing the
allocation of voting power allocated as prescribed in this chapter;
new text end

new text begin (5) a statement that membership interests held by a member are transferable only with
the approval of the board or as provided in the bylaws; and
new text end

new text begin (6) if nonoccupant membership interests are authorized, a statement as to how profits
and losses will be allocated and cash will be distributed between occupant membership
interests collectively and nonoccupant membership interests collectively to the extent not
stated in the articles, a statement that net income allocated to a occupant membership interest
as determined by the board in excess of dividends and additions to reserves shall be
distributed on the basis of patronage, and a statement that the records of the cooperative
shall include occupant membership interests and, if authorized, nonoccupant membership
interests, which may be further described in the bylaws of any classes and in the reserves.
new text end

new text begin (b) The bylaws may contain any provision relating to the management or regulation of
the affairs of the cooperative that are not inconsistent with law or the articles, and may
include the following:
new text end

new text begin (1) the number of directors and the qualifications, manner of election, powers, duties,
and compensation, if any, of directors;
new text end

new text begin (2) the qualifications of members and any limitations on their number;
new text end

new text begin (3) the manner of admission, withdrawal, suspensions, and expulsion of members;
new text end

new text begin (4) generally, the governance rights, financial rights, assignability of governance and
financial rights, and other rights, privileges, and obligations of members and their
membership interests, which may be further described in member agreements;
new text end

new text begin (5) if the cooperative intends to operate as a limited equity cooperative, the use and
calculation of transfer value, including limits on the extent to which membership interests
may appreciate in value, and the extent, if any, of the cooperative's power to exercise a right
of first refusal or option to acquire a member's interest and the conditions under which that
power is exercised;
new text end

new text begin (6) the basis for allocating common expenses, charges, outlays, and other expenditures
or payments of the cooperative among dwelling units. Unless limited in the bylaws, the
board of directors may use any approach the board believes to be fair and that is a reasonable
reflection of use or consumption that may be utilized, provided that the sum of each category
of interests allocated at any time to all memberships under any of the provisions must equal
one if stated as a fraction, or 100 percent if stated as a percentage;
new text end

new text begin (7) the circumstances under which the board of directors may execute share loan
recognition agreements with lenders that provide members with loans to finance the purchase
of memberships in the cooperative, and the limitations of recognition agreements;
new text end

new text begin (8) the circumstances under which liens are imposed against membership interests and
occupancy rights, how the liens are foreclosed by the cooperative, the process by which the
cooperative may remove the members and occupants from the dwelling units, and the
circumstances and processes under which the cooperative may terminate the membership
and occupancy rights of its members;
new text end

new text begin (9) a statement that the cooperative will observe the basic cooperative principles that
purchases and sales of memberships and rights under occupancy agreements are not for
speculative purposes, that investments in the cooperative by members are for the purpose
of securing homes for members' use and benefit, and that the policies established by the
cooperative will be designed to discourage and avoid speculation either in the sale and resale
of memberships and rights under occupancy agreements by members or by the cooperative;
and
new text end

new text begin (10) any provisions required by the articles to be in the bylaws.
new text end

new text begin (c) Any other provision relating to the management or regulation of the affairs of the
cooperative that are not inconsistent with law or the cooperative's articles.
new text end

new text begin Subd. 3. new text end

new text begin Adoption. new text end

new text begin (a) Bylaws may be adopted by the organizer or a nonoccupant
member if, at the time of adoption, the cooperative does not have any occupant members.
new text end

new text begin (b) The bylaws of a cooperative may be adopted or amended by the members at a regular
or special member meeting if:
new text end

new text begin (1) the notice of the regular or special meeting contains a statement that the bylaws or
restated bylaws will be voted upon and copies are included with the notice, or copies are
available upon request from the cooperative, and a summary statement of the proposed
bylaws or amendment is included with the notice;
new text end

new text begin (2) a quorum is registered as being present or represented by mail or alternative voting
method if the mail or alternative voting method is authorized by the board; and
new text end

new text begin (3) the bylaws or amendment is approved by a majority vote cast, or for a cooperative
with articles or bylaws requiring more than majority approval or other conditions for
approval, the bylaws or amendment is approved by a proportion of the vote cast or a number
of the total members are required by the articles or bylaws and the conditions for approval
in the articles or bylaws have been satisfied.
new text end

new text begin (c) Until the next annual or special members' meeting, the majority of directors may
adopt and amend bylaws for the cooperative that are consistent with subdivisions 4 to 6,
which may be further amended or repealed by the members at an annual or special members'
meeting.
new text end

new text begin Subd. 4. new text end

new text begin Amendment of bylaws by board or members. new text end

new text begin (a) The board may amend the
bylaws at any time to add, change, or delete a provision, unless:
new text end

new text begin (1) this chapter, the articles, or the bylaws reserve the power exclusively to the members
in whole or in part; or
new text end

new text begin (2) a particular bylaw expressly prohibits the board from doing so.
new text end

new text begin (b) Any amendment of the bylaws by the board must be distributed to the members no
later than ten days after adoption and the notice of the annual meeting of the members must
contain a notice and summary or the actual amendments to the bylaws adopted by the board.
new text end

new text begin (c) The members may amend the bylaws even though the bylaws may also be amended
by the board.
new text end

new text begin Subd. 5. new text end

new text begin Bylaw changing quorum or voting requirement for members. new text end

new text begin (a) The
members may amend the bylaws to fix a greater quorum or voting requirement for members,
or voting groups of members, than is required under this chapter. An amendment to the
bylaws to add, change, or delete a greater quorum or voting requirement for members shall
meet the same quorum requirement and be adopted by the same vote and voting groups
required to take action under the quorum and voting requirements then in effect or proposed
to be adopted, whichever is greater.
new text end

new text begin (b) A bylaw that fixes a greater quorum or voting requirement for members under
paragraph (a) may not be adopted and shall not be amended by the board.
new text end

new text begin Subd. 6. new text end

new text begin Bylaw changing quorum or voting requirement for directors. new text end

new text begin (a) A bylaw
that fixes a greater quorum or voting requirement for the board may be amended: (1) if
adopted by the members, only by the members; or (2) if adopted by the board, either by the
members or by the board.
new text end

new text begin (b) A bylaw adopted or amended by the members that fixes a greater quorum or voting
requirement for the board may provide that the bylaw may be amended only by a specified
vote of either the members or the board, but if the bylaw is to be amended by a specified
vote of the members, the bylaw must be adopted by the same specified vote of the members.
new text end

new text begin (c) Action by the board under paragraph (a), clause (2), to adopt or amend a bylaw that
changes the quorum or voting requirement for the board shall meet the same quorum
requirement and be adopted by the same vote required to take action under the quorum and
voting requirement then in effect or proposed to be adopted, whichever is greater.
new text end

new text begin Subd. 7. new text end

new text begin Emergency bylaws. new text end

new text begin (a) Unless otherwise provided in the articles or bylaws,
the board may adopt bylaws to be effective only in an emergency as defined in paragraph
(d). The emergency bylaws, which are subject to amendment or repeal by the members,
may include all provisions necessary for managing the cooperative during the emergency,
including:
new text end

new text begin (1) procedures for calling a meeting of the board;
new text end

new text begin (2) quorum requirements for the meeting; and
new text end

new text begin (3) designation of additional or substitute directors.
new text end

new text begin (b) All provisions of the regular bylaws consistent with the emergency bylaws shall
remain in effect during the emergency. The emergency bylaws shall not be effective after
the emergency ends.
new text end

new text begin (c) Action taken in good faith in accordance with the emergency bylaws:
new text end

new text begin (1) binds the cooperative; and
new text end

new text begin (2) may not be the basis for imposition of liability on any director, officer, employee,
or agent of the cooperative on the grounds that the action was not authorized cooperative
action.
new text end

new text begin (d) An emergency exists for the purposes of this section, if a quorum of the directors
cannot readily be obtained because of some catastrophic event.
new text end

Sec. 18.

new text begin [308C.245] COOPERATIVE RECORDS.
new text end

new text begin (a) A cooperative shall retain as permanent records minutes of all meetings of its members
and of all board meetings, a record of all actions taken by the members or the board without
a meeting by a written unanimous consent in lieu of a meeting, and a record of all waivers
of notices of meetings of the members and of the board.
new text end

new text begin (b) A cooperative shall maintain appropriate account records.
new text end

new text begin (c) A cooperative shall maintain its records in written form or in another form capable
of conversion into written form within a reasonable time.
new text end

new text begin (d) A cooperative shall retain a copy of each of the following records at its principal
office:
new text end

new text begin (1) articles and other governing instruments;
new text end

new text begin (2) bylaws or other similar instruments;
new text end

new text begin (3) a record of the names and addresses of its members, in a form that allows preparation
of an alphabetical list of members with each member's address;
new text end

new text begin (4) minutes of member meetings, and records of all actions taken by members without
a meeting by unanimous written consent in lieu of a meeting, for the prior three years;
new text end

new text begin (5) all written communications within the prior three years to members as a group;
new text end

new text begin (6) a list of the names and business addresses of its current board members and officers;
new text end

new text begin (7) a copy of its most recent periodic registration delivered to the secretary of state under
section 308C.121; and
new text end

new text begin (8) all financial statements prepared for periods ending during the last fiscal year.
new text end

new text begin (e) Except as otherwise limited by this chapter, the board of a cooperative shall have
discretion to determine what records are appropriate for the purposes of the cooperative,
the length of time records are to be retained, and policies relating to the confidentiality,
disclosure, inspection, and copying of the records of the cooperative.
new text end

Sec. 19.

new text begin [308C.301] POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin In addition to other powers, a cooperative as an agent or
otherwise:
new text end

new text begin (1) may perform every act necessary or proper to the conduct of the cooperative's business
or the accomplishment of the purposes of the cooperative;
new text end

new text begin (2) has other rights, powers, or privileges granted by the laws of this state to other
cooperatives, except those that are inconsistent with the express provisions of this chapter;
and
new text end

new text begin (3) has the powers given in section 308C.201 and this section.
new text end

new text begin Subd. 2. new text end

new text begin Legal capacity. new text end

new text begin A cooperative may sue and be sued, complain and defend and
participate as a party or otherwise in any legal, administrative, or arbitration proceeding, in
its corporate name.
new text end

new text begin Subd. 3. new text end

new text begin Contracts with members. new text end

new text begin A cooperative may enter into or become a party to
a contract or agreement for the cooperative or for the cooperative's members or others or
between the cooperative and its members.
new text end

new text begin Subd. 4. new text end

new text begin Holding and transactions of real and personal property. new text end

new text begin (a) A cooperative
may purchase and hold, lease, mortgage, encumber, sell, exchange, insure, and convey as
a legal entity real, personal, and intellectual property, including real estate, buildings,
personal property, patents, and copyrights as the business of the cooperative may require,
including the sale or other disposition of assets required by the business of the cooperative
as determined by the board.
new text end

new text begin (b) A cooperative may take, receive, and hold real and personal property, including the
principal and interest of money or other funds and rights in a contract, in trust for any purpose
not inconsistent with the purposes of the cooperative in its articles or bylaws and may
exercise fiduciary powers in relation to taking, receiving, and holding the real and personal
property.
new text end

new text begin Subd. 5. new text end

new text begin Buildings. new text end

new text begin A cooperative may erect buildings or other structures or facilities
on the cooperative's owned or leased property or on a right-of-way legally acquired by the
cooperative.
new text end

new text begin Subd. 6. new text end

new text begin Debt instruments. new text end

new text begin A cooperative may issue bonds, debentures, or other evidence
of indebtedness and may borrow money, may secure any of its obligations by mortgage of
or creation of a security interest in or other encumbrances or assignment of all or any of its
property, franchises, or income, and may issue guarantees for any legal purpose. The
cooperative may form special purpose business entities to secure assets of the cooperative.
new text end

new text begin Subd. 7. new text end

new text begin Advances to occupants. new text end

new text begin A cooperative may make advances to its members.
new text end

new text begin Subd. 8. new text end

new text begin Deposits. new text end

new text begin A cooperative may accept donations or deposits of money or real
personal property from other cooperatives, associations, organizations, agencies,
municipalities, local, state and federal governments.
new text end

new text begin Subd. 9. new text end

new text begin Lending, borrowing, investing. new text end

new text begin A cooperative may loan or borrow money to
or from members, other cooperatives, associations, organizations, agencies, municipalities,
local, state and federal governments with security that it considers sufficient. A cooperative
may invest and reinvest its funds.
new text end

new text begin Subd. 10. new text end

new text begin Pensions and benefits. new text end

new text begin A cooperative may pay pensions, retirement allowances,
and compensation for past services to and for the benefit of; and establish, maintain, continue,
and carry out, wholly or partially at the expense of the cooperative, employee or incentive
benefit plans, trust, and provisions to or for the benefit of any or all of its and its related
organizations' officers, managers, directors, governors, employees, and agents; and in the
case of a related organization that is a cooperative, members who provide services to the
cooperative, and any of their families, dependents, and beneficiaries. It may indemnify and
purchase and maintain insurance for and on behalf of a fiduciary of any of these employee
benefit and incentive plans, trusts, and provisions.
new text end

new text begin Subd. 11. new text end

new text begin Insurance. new text end

new text begin A cooperative may provide for its benefit life insurance and other
insurance with respect to the services of any or all of its members, managers, directors,
employees, and agents, or on the life of a member for the purpose of acquiring at the death
of the member any or all membership interests in the cooperative owned by the member.
new text end

new text begin Subd. 12. new text end

new text begin Ownership interests in other entities. new text end

new text begin (a) A cooperative may purchase,
acquire, hold, or dispose of the ownership interests of another business entity or organize
business entities whether organized under the laws of this state or another state or the United
States and assume all rights, interests, privileges, responsibilities, and obligations arising
out of the ownership interest.
new text end

new text begin (b) A cooperative may purchase, own, and hold ownership interests, including stock and
other equity interests, memberships, interests in nonstock capital, and evidences of
indebtedness of any domestic business entity or foreign business entity.
new text end

new text begin Subd. 13. new text end

new text begin Fiduciary powers. new text end

new text begin A cooperative may exercise any and all fiduciary powers
in relations with members, other cooperatives, associations, organizations, agencies,
municipalities, local, state and federal governments.
new text end

Sec. 20.

new text begin [308C.305] EMERGENCY POWERS.
new text end

new text begin (a) In anticipation of or during an emergency defined in paragraph (d), the board may:
new text end

new text begin (1) modify lines of succession to accommodate the incapacity of any director, officer,
employee, or agent; and
new text end

new text begin (2) relocate the principal office, designate alternative principal offices or regional offices,
or authorize the officers to do so.
new text end

new text begin (b) During an emergency as contemplated in paragraph (d), unless emergency bylaws
provide otherwise:
new text end

new text begin (1) notice of a meeting of the board need be given only to those directors to whom it is
practicable to reach and may be given in any practicable manner, including by publication
or radio; and
new text end

new text begin (2) 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.
new text end

new text begin (c) Cooperative action taken in good faith during an emergency under this section to
further the ordinary business affairs of the cooperative:
new text end

new text begin (1) binds the cooperative; and
new text end

new text begin (2) may not be the basis for the imposition of liability on any director, officer, employee,
or agent of the cooperative on the grounds that the action was not an authorized cooperative
action.
new text end

new text begin (d) An emergency exists for purposes of this section if a quorum of the directors cannot
readily be obtained because of a catastrophic event.
new text end

Sec. 21.

new text begin [308C.311] OCCUPANCY AGREEMENTS AND PROPRIETARY LEASES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin A cooperative and its occupant members may make and
execute an occupancy agreement, proprietary lease, or other agreements that specify the
terms of the occupant members' lease or occupancy of a unit or dwelling unit.
new text end

new text begin Subd. 2. new text end

new text begin Title to unit or dwelling unit. new text end

new text begin Title to cooperative property consisting of a
dwelling unit or units shall at all times remain the property of the cooperative. Title to any
manufactured home owned by a member placed in a manufactured home park owned by a
cooperative pursuant to a proprietary lease remains in the name of the member.
new text end

new text begin Subd. 3. new text end

new text begin Damages for breach of contract. new text end

new text begin The bylaws, an occupancy agreement, or
proprietary lease may include the requirement of the member to pay liquidated damages to
the cooperative for breach of any provision of an occupancy agreement, proprietary lease,
or other agreement. The remedies for breach of contract are valid and enforceable in the
courts of this state.
new text end

Sec. 22.

new text begin [308C.312] LIMITED EQUITY COOPERATIVES.
new text end

new text begin A cooperative formed under this chapter may organize as a limited equity cooperative
in order to fulfill the public purpose of providing and preserving housing for persons and
households of low and moderate income at the time that they purchase their memberships.
In addition to safeguarding the foregoing public purpose, a limited equity cooperative shall
meet the following requirements:
new text end

new text begin (1) the articles shall require that cooperative interests be sold at no more than a transfer
value determined by a limited equity formula contained in the articles. That value shall be
consistent with the object of maintaining long-term affordability of membership interests
for persons or households of low and moderate income;
new text end

new text begin (2) a limited equity formula, once established by a cooperative in its articles, may be
amended only if that amendment does not make the cooperative membership unaffordable
for low or moderate income households for which the cooperative was originally
incorporated. A limited equity cooperative once organized under this chapter may not
reorganize as other than a limited equity cooperative without first dissolving;
new text end

new text begin (3) a limited equity cooperative shall not sell all or substantially all of its assets if such
sale is intended to circumvent the public purposes of this section;
new text end

new text begin (4) the articles shall require that the cooperative shall have the first right to repurchase
a member's cooperative interest;
new text end

new text begin (5) the articles shall require that the total distribution out of capital to a member shall
not exceed the transfer value; and
new text end

new text begin (6) the articles shall require that upon dissolution of the cooperative, any assets remaining
after retirement of corporate debts and distribution to members shall be distributed to a
charitable organization described in section 501(c)(3) of the Internal Revenue Code of 1986,
as amended, a public agency, or another limited equity cooperative whose formula for
determining transfer value shall be no less restrictive than that of the cooperative being
dissolved.
new text end

Sec. 23.

new text begin [308C.401] BOARD GOVERNS COOPERATIVE.
new text end

new text begin 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. Board action
shall be by the affirmative vote of a majority of the directors voting at a duly called meeting
unless a greater majority is required by the articles or bylaws. A director individually or
collectively with other directors does not have authority to act for or on behalf of the
cooperative unless authorized by the board. A director may advocate interests of members
or member groups to the board, but the duty of each director is to represent the best interests
of the cooperative and all members collectively.
new text end

Sec. 24.

new text begin [308C.405] NUMBER OF DIRECTORS.
new text end

new text begin A board of directors must consist of three or more individuals, with the number specified
in or fixed in accordance with the articles or bylaws. The power to elect or appoint directors
is vested in the members. If the number of directors is fewer than three, or such greater
minimum number set forth in the articles or bylaws, a majority of the directors in office
may appoint or elect the number of additional directors necessary to increase the board to
three directors or such greater minimum set forth in the articles or bylaws.
new text end

Sec. 25.

new text begin [308C.411] ELECTION OF DIRECTORS.
new text end

new text begin Subdivision 1. new text end

new text begin First board. new text end

new text begin Unless appointed by a developer, the organizer or organizers
shall elect and obtain the acknowledgment of the first board to serve until directors are
elected by members. Until election by members, the first board shall appoint directors to
fill any vacancies. The first board may be named in the articles.
new text end

new text begin Subd. 2. new text end

new text begin Generally. new text end

new text begin (a) Directors shall be elected for the term, at the time, and in the
manner provided in this section and the bylaws.
new text end

new text begin (b) Except for the first board, all of the directors shall be members and shall be elected
exclusively by the members holding occupant membership interests.
new text end

new text begin (c) The voting authority of the directors may be allocated according to equity
classifications of the cooperative provided that at least two-thirds (2/3) of the voting power
on general matters of the cooperative shall be allocated to the directors who are members
holding occupant membership interests.
new text end

new text begin (d) A director holds office for the term the director was elected and until a successor is
elected and has qualified, or until the earlier death, resignation, removal, or disqualification
of the director.
new text end

new text begin (e) The expiration of a director's term with or without election of a qualified successor
does not make the prior or subsequent acts of the director or the board void or voidable.
new text end

new text begin (f) Subject to any limitation in the articles or bylaws, directors shall not be compensated,
but may be reimbursed reasonable and necessary expenses incurred when they are acting
on behalf of the board of directors.
new text end

new text begin (g) Directors may be divided into or designated and elected by class or other distinction
as provided in the articles or bylaws.
new text end

new text begin (h) A director may resign by giving written notice to the chair of the board or the board.
The resignation is effective without acceptance when the notice is given to the chair of the
board or the board unless a later effective time is specified in the notice.
new text end

new text begin Subd. 3. new text end

new text begin Election at regular meeting. new text end

new text begin Directors shall be elected at the regular member
meeting for the terms of office prescribed in the bylaws. Except for directors elected at
special meetings to replace a vacancy, all directors shall be elected at the regular member
meeting.
new text end

new text begin Subd. 4. new text end

new text begin Vote by mail or alternative ballot. new text end

new text begin The following shall apply to voting by
mail or alternative ballot voting:
new text end

new text begin (1) a member may not vote for a director other than by being present at a meeting or by
mail ballot or alternative ballot authorized by the board;
new text end

new text begin (2) the ballot shall be in a form prescribed by the board;
new text end

new text begin (3) the member shall mark the ballot for the candidate chosen and mail the ballot to the
cooperative in a sealed plain envelope inside another envelope bearing the member's name,
or shall vote designating the candidate chosen by alternative ballot in the manner prescribed
by the board; and
new text end

new text begin (4) if the ballot of the member is received by the cooperative on or before the date of
the regular member meeting or as otherwise prescribed for alternative ballots, the ballot
shall be accepted and counted as the vote of the absent member.
new text end

new text begin Subd. 5. new text end

new text begin Business entity members may nominate persons for director. new text end

new text begin If a member
of a cooperative is not a natural person, and the bylaws do not provide otherwise, the member
may appoint or elect one or more natural persons to be eligible for election as a director.
new text end

new text begin Subd. 6. new text end

new text begin Acts not void or voidable. new text end

new text begin The expiration of a director's term with or without
the election of a qualified successor does not make prior or subsequent acts of the director
void or voidable.
new text end

Sec. 26.

new text begin [308C.415] FILLING VACANCIES.
new text end

new text begin Subdivision 1. new text end

new text begin Occupant directors. new text end

new text begin If an occupant member director's position becomes
vacant or a new director position is created for a director that was or is to be elected by
occupant members, the board, in consultation with the directors elected by occupant members,
shall appoint an occupant member of the cooperative to fill the director's position until the
next regular or special members' meeting. If there are no directors elected by occupant
members on the board at the time of the vacancy, a special members' meeting shall be called
to fill the occupant member director vacancy.
new text end

new text begin Subd. 2. new text end

new text begin Nonoccupant directors. new text end

new text begin If the vacating director was not elected by the occupant
members or a new director position is created, unless otherwise provided in the articles or
bylaws, the board shall appoint a director to fill the vacant position by majority vote of the
remaining or then serving directors even though less than a quorum. At the next regular or
special members' meeting, the members shall elect a director to fill the unexpired term of
the vacant director's position.
new text end

Sec. 27.

new text begin [308C.421] REMOVAL OF DIRECTORS.
new text end

new text begin Subdivision 1. new text end

new text begin Modification. new text end

new text begin The provisions of this section apply unless modified by
the articles or the bylaws.
new text end

new text begin Subd. 2. new text end

new text begin Removal by directors. new text end

new text begin A director may be removed at any time, with or without
cause, if:
new text end

new text begin (1) the director was named by the board to fill a vacancy;
new text end

new text begin (2) the members have not elected directors in the interval between the time of the
appointment to fill a vacancy and the time of the removal; and
new text end

new text begin (3) a majority of the remaining directors present affirmatively vote to remove the director.
new text end

new text begin Subd. 3. new text end

new text begin Removal by members. new text end

new text begin Any one or all of the directors may be removed at any
time, with or without cause, by the affirmative vote of the holders of a majority of the entire
membership of record at any duly called annual meeting, or at any special meeting called
for the purpose of removing or electing directors; provided that if a director has been elected
solely by the occupant members or the holders of a class or series of membership interests
as stated in the articles or bylaws, then that director may be removed only by the affirmative
vote of the holders of a majority of the voting power of the occupant members for a director
elected by the occupant members or of all membership interests of that class or series entitled
to vote at an election of that director.
new text end

new text begin Subd. 4. new text end

new text begin Election of replacements. new text end

new text begin New directors may be elected at a meeting at which
directors are removed.
new text end

Sec. 28.

new text begin [308C.425] BOARD OF DIRECTORS' MEETINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Time and place. new text end

new text begin Meetings of the board may be held from time to time
as provided in the articles or bylaws. If the meeting is an open meeting as provided for in
this chapter, it must be held on the cooperative's premises or at such other location that the
cooperative's members can reasonably attend. If the meeting is a closed meeting as authorized
by this chapter, the meeting may be held at any location designated by the board.
new text end

new text begin Subd. 2. new text end

new text begin Open meetings. new text end

new text begin Meetings of the board must be open to all members, subject
to the following requirements:
new text end

new text begin (1) to the extent practicable, the board shall give reasonable notice to the members of
the date, time, and place of each open board meeting. If the date, time, and place of meetings
are provided for in the bylaws, announced at a previous meeting of the board, posted in a
location accessible to the members and designated by the board from time to time, or if an
emergency requires immediate consideration of a matter by the board, notice is not required;
new text end

new text begin (2) meetings may be closed to discuss the following:
new text end

new text begin (i) personnel matters;
new text end

new text begin (ii) pending or potential litigation, arbitration, or other potentially adversarial proceedings
between members or between the board or cooperative and members, or other matters in
which any member may have an adversarial interest if the board determines that closing
the meeting is necessary to discuss strategy or to otherwise protect the position of the board
or cooperative or the privacy of a member;
new text end

new text begin (iii) criminal activity arising within the cooperative if the board determines that closing
the meeting is necessary to protect the privacy of the victim or that opening the meeting
would jeopardize investigation of the activity;
new text end

new text begin (iv) meetings with legal counsel for counsel and advice on any matter of concern to the
board; and
new text end

new text begin (v) review of financial and other lawful information required by the board of directors
of all applicants for membership in the cooperative; and
new text end

new text begin (3) the minutes of any part of a meeting that is closed under this section may be kept
confidential at the discretion of the board.
new text end

new text begin Subd. 3. new text end

new text begin Electronic communications. new text end

new text begin (a) A conference among directors by any means
of communication through which the directors may simultaneously hear each other during
the conference constitutes a board meeting if the same notice is given of the conference as
would be required by subdivision 3 for a meeting and if the number of directors participating
in the conference would be sufficient to constitute a quorum at a meeting. Participation in
a meeting by that means constitutes presence in person at the meeting.
new text end

new text begin (b) A director may participate in an in-person board meeting by any means of
communication through which the director, other directors so participating, and all directors
physically present at the meeting may simultaneously hear each other during the meeting.
Participation in a meeting by that means constitutes presence in person at the meeting.
new text end

new text begin Subd. 4. new text end

new text begin Calling meetings and notice. new text end

new text begin Unless the articles or bylaws provide for a
different time period, a director may call a board meeting by giving at least ten days' notice
or, in the case of organizational meetings, at least three days' notice to all directors of the
date, time, and place of the meeting. The notice need not state the purpose of the meeting
unless this chapter, the articles, or the bylaws require it.
new text end

new text begin Subd. 5. new text end

new text begin Previously scheduled meetings. new text end

new text begin If the day or date, time, and place of a board
meeting have been provided in the articles or bylaws, or announced at a previous meeting
of the board, no notice is required. Notice of an adjourned meeting need not be given other
than by announcement at the meeting at which adjournment is taken.
new text end

new text begin Subd. 6. new text end

new text begin Waiver of notice. new text end

new text begin A director may waive notice of a meeting of the board. A
waiver of notice by a director entitled to notice 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 meeting is a waiver of notice of that meeting, except where the director objects at the
beginning of the meeting to the transaction of business because the meeting is not lawfully
called or convened and the director does not participate in the meeting after the objection.
new text end

new text begin Subd. 7. new text end

new text begin Absent directors. new text end

new text begin 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, but consent or
opposition must be counted as the vote of a director present at the meeting in favor of or
against the proposal and must be entered in the minutes or other record of action at the
meeting, if the proposal 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 objected.
new text end

Sec. 29.

new text begin [308C.431] QUORUM.
new text end

new text begin A majority, or a larger portion or number provided in the articles or bylaws, of the
directors currently holding office is a quorum for the transaction of business. 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 duly called or held meeting is
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 the
proportion of number otherwise required for a quorum.
new text end

Sec. 30.

new text begin [308C.435] ACT OF BOARD OF DIRECTORS.
new text end

new text begin The board shall take action by the affirmative vote of a majority of directors present at
a duly held meeting at the time the action is taken, except where this chapter, the articles,
or bylaws require the affirmative vote of a larger proportion or number. If the articles or
bylaws require a larger proportion or number than is required by this chapter for a particular
action, the articles or bylaws control.
new text end

Sec. 31.

new text begin [308C.441] ACTION WITHOUT A MEETING.
new text end

new text begin Subdivision 1. new text end

new text begin Method. new text end

new text begin An action required or permitted to be taken at a board meeting
may be taken by written action signed by all of the directors. If the articles or bylaws so
provide, any action, other than an action requiring member approval, may be taken by
written action signed by the number of directors that would be required to take the same
action at a meeting of the board at which all directors were present. If the board takes an
action without a meeting, the written action must be signed by all of the members of the
board, must state why the action was taken without a meeting, and must be placed in the
corporate records of the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Effective time. new text end

new text begin The written action is effective when signed by the required
number of directors, unless a different effective time is provided in the written action.
new text end

new text begin Subd. 3. new text end

new text begin Notice and liability. new text end

new text begin When written action is permitted to be taken by less than
all directors, all directors must be notified immediately of its text and effective date. Failure
to provide the notice does not invalidate the written action. A director who does not sign
or consent to the written action has no liability for the action or actions taken by the written
action.
new text end

Sec. 32.

new text begin [308C.451] COMMITTEES.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin If the bylaws so provide, the board may establish committees.
A resolution approved by the affirmative vote of a majority of the board may establish
committees having the authority of the board in the management of the business of the
cooperative only to the extent provided in the resolution. Committees may include a special
litigation committee consisting of one or more independent directors or other independent
persons to consider legal rights or remedies of the cooperative and whether those rights and
remedies should be pursued. Committees other than special litigation committees are subject
at all times to the direction and control of the board.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin Committee members must be natural persons. Unless the articles
or bylaws provide for a different membership or manner of appointment, a committee
consists of one or more persons, who need not be directors or members, appointed by
affirmative vote of a majority of the directors present.
new text end

new text begin Subd. 3. new text end

new text begin Procedure. new text end

new text begin The procedures for meetings of the board apply to committees and
members of committees to the same extent as those sections apply to the board and individual
directors.
new text end

new text begin Subd. 4. new text end

new text begin Minutes. new text end

new text begin Minutes, if any, of committee meetings must be made available upon
request to members of the committee and to any director.
new text end

new text begin Subd. 5. new text end

new text begin Standard of conduct. new text end

new text begin The establishment of, delegation of authority to, and
action by a committee does not alone constitute compliance by a director with the standard
of conduct set forth in section 308C.455.
new text end

new text begin Subd. 6. new text end

new text begin Committee members considered directors. new text end

new text begin Committee members are considered
to be directors for purposes of sections 308C.455, 308C.461, and 308C.471.
new text end

Sec. 33.

new text begin [308C.455] STANDARD OF CONDUCT.
new text end

new text begin Subdivision 1. new text end

new text begin Standard and liability. new text end

new text begin A director shall discharge the duties of the
position of director in good faith, in a manner the director reasonably believes to be in the
best interests of the cooperative, and with the care an ordinarily prudent person in a like
position would exercise under similar circumstances. A person who so performs those duties
is not liable by reason of being or having been a director of the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Reliance. new text end

new text begin (a) A director is entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, in each case prepared
or presented by:
new text end

new text begin (1) one or more officers or employees of the cooperative who the director reasonably
believes to be liable and competent in the matters presented;
new text end

new text begin (2) counsel, public accountants, the general manager or management company, or other
persons as to matters that the director reasonably believes are within the person's professional
or expert competence; or
new text end

new text begin (3) a committee of the board upon which the director does not serve, duly established
by the board, as to matters within its designated authority, if the director reasonably believes
the committee to merit confidence.
new text end

new text begin (b) Paragraph (a) does not apply to a director who has knowledge concerning the matter
in question that makes the reliance otherwise permitted by paragraph (a) unwarranted.
new text end

new text begin Subd. 3. new text end

new text begin Presumption of assent and dissent. new text end

new text begin A director who is present at a meeting of
the board when an action is approved by the affirmative vote of a majority of the directors
present is presumed to have assented to the action approved, unless the director:
new text end

new text begin (1) 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, in which case the director is not considered to be present at the meeting for any
purpose of this chapter;
new text end

new text begin (2) votes against the action at the meeting; or
new text end

new text begin (3) is prohibited by a conflict of interest from voting on the action.
new text end

new text begin Subd. 4. new text end

new text begin Considerations. new text end

new text begin In discharging the duties of the position of director, a director
may, in considering the best interests of the cooperative, consider the interests of the
cooperative's employees, vendors, agents, suppliers, and creditors, the economy of the state,
and long-term as well as short-term interests of the cooperative and its members, including
the possibility that these interests may be best served by the continued independence of the
cooperative.
new text end

Sec. 34.

new text begin [308C.461] DIRECTOR CONFLICTS OF INTEREST.
new text end

new text begin Subdivision 1. new text end

new text begin Conflict and procedure when conflict arises. new text end

new text begin (a) A contract or other
transaction between a cooperative and one or more of its directors, or between a cooperative
and a business entity in or of which one or more of its directors are governors, directors,
managers, officers, or legal representatives or have a material financial interest, is not void
or voidable because the director or directors or the other business entities are parties or
because the director or directors are present at the meeting of the members or the board or
a committee at which the contract or transaction is authorized, approved, or ratified, if:
new text end

new text begin (1) the contract or transaction was, and the person asserting the validity of the contract
or transaction sustains the burden of establishing that the contract or transaction was, fair
and reasonable as to the cooperative at the time it was authorized, approved, or ratified,
and:
new text end

new text begin (i) the material facts as to the contract or transaction and as to the director's or directors'
interest are disclosed or known to the members; and
new text end

new text begin (ii) the material facts as to the contract or transaction and as to the director's or directors'
interest are fully disclosed or known to the board or a committee, and the board or committee
authorizes, approves, or ratifies the contract or transaction in good faith by a majority of
the board or committee, but the interested director or directors are not counted in determining
the presence of a quorum and must not vote; or
new text end

new text begin (2) the contract or transaction is a distribution, contract, or transaction that is made
available to all members as part of the cooperative's business.
new text end

new text begin (b) If a committee is elected or appointed to authorize, ratify, or approve a contract or
transaction under this section, the members of the committee must not have a conflict of
interest and be charged with representing the best interests of the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Material financial interest. new text end

new text begin For purposes of this section: a director has a
material financial interest in each organization in which the director or the spouse; parents;
children and spouses of children; brothers and sisters and spouses of brothers and sisters;
and the brothers and sisters of the spouse of the director or any combination of them have
a material financial interest. For purposes of this section, a contract or other transaction
between a cooperative and the spouse; parents; children and spouses of children; brothers
and sisters and spouses of brothers and sisters; and the brothers and sisters of the spouse of
a director or any combination of them, is considered to be a transaction between the
cooperative and the director.
new text end

Sec. 35.

new text begin [308C.465] LIMITATION OF DIRECTOR'S LIABILITY.
new text end

new text begin Subdivision 1. new text end

new text begin Articles may limit liability. new text end

new text begin A director's personal liability to the
cooperative or members for monetary damages for breach of the standards of conduct may
be eliminated or limited in the articles or bylaws except as provided in subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Restrictions on liability limitation. new text end

new text begin The articles or bylaws may not eliminate
or limit the liability of a director:
new text end

new text begin (1) for a breach of the director's obligation to act in good faith in a manner the director
reasonably believes to be in the best interests of the cooperative, and with the care an
ordinarily prudent person in a like position would exercise under similar circumstances;
new text end

new text begin (2) for acts or omissions that are not in good faith or involve intentional misconduct or
a knowing violation of law;
new text end

new text begin (3) for knowing violations of laws or for illegal distributions;
new text end

new text begin (4) for a transaction from which the director derived an improper personal benefit; or
new text end

new text begin (5) for an act or omission occurring before the date when the provision in the articles or
bylaws eliminating or limiting liability becomes effective.
new text end

Sec. 36.

new text begin [308C.471] INDEMNIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this section.
new text end

new text begin (b) "Cooperative" includes a domestic or foreign cooperative that was the predecessor
of the cooperative referred to in this section in a conversion, merger, or other transaction
in which the predecessor's existence ceased upon consummation of the transaction.
new text end

new text begin (c) "Official capacity" means:
new text end

new text begin (1) with respect to a director, the position of director in a cooperative;
new text end

new text begin (2) with respect to a person other than a director, the elective or appointive office or
position held by the person, member of a committee of the board, the employment
relationship undertaken by an employee of the cooperative, or the scope of the services
provided by members of the cooperative who provide services to the cooperative; and
new text end

new text begin (3) with respect to a director, general manager, member, or employee of the cooperative
who, while a member, director, general manager, or employee of the cooperative, is or was
serving at the request of the cooperative or whose duties in that position involve or involved
service as a governor, director, manager, officer, member, partner, trustee, employee, or
agent of another organization or employee benefit plan, the position of that person as a
governor, director, manager, officer, member, partner, trustee, employee, or agent, as the
case may be, of the other organization or employee benefit plan.
new text end

new text begin (d) "Proceeding" means a threatened, pending, or completed civil, criminal,
administrative, arbitration, or investigative proceeding, including a proceeding by or in the
right of the cooperative.
new text end

new text begin (e) "Special legal counsel" means counsel who has not represented the cooperative or a
related organization, or a director, manager, member of a committee of the board, or
employee whose indemnification is in issue.
new text end

new text begin Subd. 2. new text end

new text begin Indemnification. new text end

new text begin (a) Subject to the provisions of subdivision 4, a cooperative
shall indemnify a person made or threatened to be made a party to a proceeding by reason
of the former or present official capacity of the person against judgments, penalties, fines,
including, without limitation, excise taxes assessed against the person with respect to an
employee benefit plan, settlements, and reasonable expenses, including attorney fees and
disbursements incurred by the person in connection with the proceeding, if, with respect to
the acts or omissions of the person complained of in the proceeding, the person:
new text end

new text begin (1) has not been indemnified by another organization or employee benefit plan for the
same judgments, penalties, fines, including, without limitation, excise taxes assessed against
the person with respect to an employee benefit plan, settlements, and reasonable expenses,
including attorney fees and disbursements incurred by the person in connection with the
proceeding with respect to the same acts or omissions;
new text end

new text begin (2) acted in good faith;
new text end

new text begin (3) received no improper personal benefit and the person has not committed an act for
which liability cannot be eliminated or limited under section 308C.465, subdivision 2;
new text end

new text begin (4) in the case of a criminal proceeding, had no reasonable cause to believe the conduct
was unlawful; and
new text end

new text begin (5) in the case of acts or omissions occurring in the official capacity described in
subdivision 1, paragraph (c), clause (1) or (2), reasonably believed that the conduct was in
the best interests of the cooperative, or in the case of acts or omissions occurring in the
official capacity described in subdivision 1, paragraph (c), clause (3), reasonably believed
that the conduct was not opposed to the best interests of the cooperative. If the person's acts
or omissions complained of in the proceeding relate to conduct as a director, officer, trustee,
employee, or agent of an employee benefit plan, the conduct is not considered to be opposed
to the best interests of the cooperative if the person reasonably believed that the conduct
was in the best interests of the participants or beneficiaries of the employee benefit plan.
new text end

new text begin (b) The termination of a proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent does not, of itself, establish that the person did
not meet the criteria set forth in this subdivision.
new text end

new text begin Subd. 3. new text end

new text begin Advances. new text end

new text begin Subject to the provisions of subdivision 4, if a person is made or
threatened to be made a party to a proceeding, the person is entitled, upon written request
to the cooperative, to payment or reimbursement by the cooperative of reasonable expenses,
including attorney fees and disbursements incurred by the person in advance of the final
disposition of the proceeding:
new text end

new text begin (1) upon receipt by the cooperative of a written affirmation by the person of a good faith
belief that the criteria for indemnification set forth in subdivision 2 have been satisfied, and
a written undertaking by the person to repay all amounts paid or reimbursed by the
cooperative, if it is ultimately determined that the criteria for indemnification has not been
satisfied; and
new text end

new text begin (2) after a determination that the facts then known to those making the determination
would not preclude indemnification under this section.
new text end

new text begin The written undertaking required by clause (1) is an unlimited general obligation of the
person making it, but need not be secured and shall be accepted without reference to financial
ability to make the repayment.
new text end

new text begin Subd. 4. new text end

new text begin Prohibition or limit on indemnification or advances. new text end

new text begin The articles or bylaws
either may prohibit indemnification or advances of expenses otherwise required by this
section or may impose conditions on indemnification or advances of expenses in addition
to the conditions contained in subdivisions 2 and 3, including, without limitation, monetary
limits on indemnification or advances of expenses if the conditions apply equally to all
persons or to all persons within a given class. A prohibition or limit on indemnification or
advances of expenses may not apply to or affect the right of a person to indemnification or
advances of expenses with respect to any acts or omissions of the person occurring before
the effective date of a provision in the articles or the date of adoption of a provision in the
bylaws establishing the prohibition or limit on indemnification or advances of expenses.
new text end

new text begin Subd. 5. new text end

new text begin Reimbursement to witnesses. new text end

new text begin This section does not require, or limit the ability
of a cooperative to reimburse expenses, including attorney fees and disbursements incurred
by a person in connection with an appearance as a witness in a proceeding at a time when
the person has not been made or threatened to be made a party to a proceeding.
new text end

new text begin Subd. 6. new text end

new text begin Determination of eligibility. new text end

new text begin (a) All determinations whether indemnification
of a person is required because the criteria set forth in subdivision 2 have been satisfied and
whether a person is entitled to payment or reimbursement of expenses in advance of the
final disposition of a proceeding as provided in subdivision 3 must be made:
new text end

new text begin (1) by the board by a majority of a quorum, if the directors who are, at the time, parties
to the proceeding are not counted for determining either a majority or the presence of a
quorum;
new text end

new text begin (2) if a quorum under clause (1) cannot be obtained by a majority of a committee of the
board consisting solely of two or more directors not at the time parties to the proceeding
duly designated to act in the matter by a majority of the full board, including directors who
are parties;
new text end

new text begin (3) if a determination is not made under clause (1) or (2) by special legal counsel selected
either by a majority of the board or a committee by vote under clause (1) or (2) or if the
requisite quorum of the full board cannot be obtained and the committee cannot be established
by a majority of the full board, including directors who are parties;
new text end

new text begin (4) if a determination is not made under clauses (1) to (3) by the affirmative vote of the
members, but the membership interests held by parties to the proceeding must not be counted
in determining the presence of a quorum, and are not considered to be present and entitled
to vote on the determination; or
new text end

new text begin (5) if an adverse determination is made under clauses (1) to (4) or paragraph (b), or if
no determination is made under clauses (1) to (4) or paragraph (b) within 60 days after (i)
the later to occur of the termination of a proceeding or a written request for indemnification
to the cooperative, or (ii) a written request for an advance of expenses, as the case may be,
by a court in this state, which may be the same court in which the proceeding involving the
person's liability took place upon application of the person and any notice the court requires.
The person seeking indemnification or payment or reimbursement of expenses under this
clause has the burden of establishing that the person is entitled to indemnification or payment
or reimbursement of expenses.
new text end

new text begin (b) With respect to a person who is not, and was not at the time of the acts or omissions
complained of in the proceedings; a director, general manager, or person possessing, directly
or indirectly, the power to direct or cause the direction of the management or policies of
the cooperative; the determination whether indemnification of this person is required because
the criteria set forth in subdivision 2 have been satisfied; and whether this person is entitled
to payment or reimbursement of expenses in advance of the final disposition of a proceeding
as provided in subdivision 3 may be made by an annually appointed committee of the board,
having at least one member who is a director. The committee shall report at least annually
to the board concerning its actions.
new text end

new text begin Subd. 7. new text end

new text begin Insurance. new text end

new text begin A cooperative may purchase and maintain insurance on behalf of
a person in that person's official capacity against any liability asserted against and incurred
by the person in or arising from that capacity, whether or not the cooperative would have
been required to indemnify the person against the liability under the provisions of this
section.
new text end

new text begin Subd. 8. new text end

new text begin Disclosure. new text end

new text begin A cooperative that indemnifies or advances expenses to a person
in accordance with this section in connection with a proceeding by or on behalf of the
cooperative shall report to the members in writing the amount of the indemnification or
advance and to whom and on whose behalf it was paid not later than the next meeting of
members.
new text end

new text begin Subd. 9. new text end

new text begin Indemnification of other persons. new text end

new text begin Nothing in this section shall be construed
to limit the power of the cooperative to indemnify persons other than a director, general
manager, member, employee, or member of a committee of the board of the cooperative by
contract or otherwise.
new text end

Sec. 37.

new text begin [308C.475] OFFICERS.
new text end

new text begin Subdivision 1. new text end

new text begin Required officers. new text end

new text begin (a) The board shall elect:
new text end

new text begin (1) a president or chief executive officer;
new text end

new text begin (2) one or more vice presidents;
new text end

new text begin (3) a secretary; and
new text end

new text begin (4) a treasurer or chief financial officer.
new text end

new text begin (b) The officers, other than the president or a general manager, shall not have the authority
to bind the cooperative except as authorized by the board.
new text end

new text begin Subd. 2. new text end

new text begin Additional officers. new text end

new text begin The board may elect additional officers as the articles or
bylaws authorize or require.
new text end

new text begin Subd. 3. new text end

new text begin Treasurer and secretary may be combined. new text end

new text begin The offices of secretary and
treasurer may be combined.
new text end

new text begin Subd. 4. new text end

new text begin Officers must be members. new text end

new text begin All officers must be members of the cooperative.
new text end

new text begin Subd. 5. new text end

new text begin Election of officers. new text end

new text begin Officers of the cooperative shall be elected at such intervals
as the articles or bylaws authorize or require and will hold office at the pleasure of the board.
new text end

new text begin Subd. 6. new text end

new text begin Removal of officers. new text end

new text begin Upon an affirmative vote of a majority of the members
of the board, any officer may be removed with or without cause, and the officer's successor
selected at any regular meeting of the board, or at any special meeting of the board called
for such a purpose.
new text end

new text begin Subd. 7. new text end

new text begin General manager. new text end

new text begin The board may employ a general manager to manage the
day-to-day affairs and business of the cooperative, and if a general manager is employed,
the general manager shall have the authority to implement the functions, duties, and
obligations of the cooperative except as restricted by the board. The general manager shall
not exercise authority reserved to the board or the members under this chapter, the articles,
or the bylaws.
new text end

Sec. 38.

new text begin [308C.501] MEMBERS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin A cooperative shall have one or more members.
new text end

new text begin Subd. 2. new text end

new text begin Classes of members. new text end

new text begin A cooperative may have one class of members, all of
whom are occupant members or a cooperative may have more than one class of members
as long as one class of members are occupant members.
new text end

new text begin Subd. 3. new text end

new text begin Member violations. new text end

new text begin (a) A member who knowingly, intentionally, or repeatedly
violates a provision of the articles, bylaws, occupancy agreement, proprietary lease or rules,
policies, and procedures promulgated by the board may be required by the board to surrender
the member's membership interest and occupancy rights or any other financial rights of
membership interests of any class owned by a member, or both.
new text end

new text begin (b) The cooperative shall refund to the member for the surrendered membership interest
at the lesser of the book value or the price paid the member for the membership interest
payable in not more than seven years from the date of surrender.
new text end

new text begin (c) Membership interests required to be surrendered may be reissued or be retired and
canceled by the board.
new text end

new text begin (d) The board may establish a procedure for members to dispute the basis for an alleged
violation.
new text end

new text begin Subd. 4. new text end

new text begin Inspection of cooperative records by member. new text end

new text begin (a) A member is entitled to
inspect and copy, at the member's expense, during regular business hours at a reasonable
location specified by the cooperative, any of the records described in section 308C.245 if
the member meets the requirements of paragraph (b) and gives the cooperative written
demand at least five business days before the date on which the member wishes to inspect
and copy the records. Notwithstanding the provisions of this subdivision or any provisions
of section 308C.245, a cooperative may limit a member's right to 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 of any employee.
new text end

new text begin (b) To be entitled to inspect and copy permitted records, the member shall meet the
following requirements:
new text end

new text begin (1) the demand is made in good faith and for a proper cooperative business purpose;
new text end

new text begin (2) the member describes with reasonable particularity the purpose and the records the
member desires to inspect; and
new text end

new text begin (3) the records are directly connected with the described purpose.
new text end

new text begin (c) The right of inspection granted by this subdivision shall not be abolished or limited
by the articles, bylaws, or any actions of the board or the members.
new text end

new text begin (d) This subdivision does not affect:
new text end

new text begin (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; or
new text end

new text begin (2) the power of a court to compel the production of the cooperative's records for
examination.
new text end

new text begin (e) Notwithstanding any other provision in this subdivision, if the records to be inspected
or copied are in active use or storage and, therefore, not available at the time otherwise
provided for inspection or copying, the cooperative shall notify the member and shall set a
date and hour within three business days of the date otherwise set in this subdivision for
the inspection or copying.
new text end

new text begin (f) A member's agent or attorney has the same inspection and copying rights as the
member. The right to copy records under this subdivision includes, if reasonable, the right
to receive copies made by photographic copying, xerographic copying, or other means. The
cooperative may impose a reasonable charge, covering the costs of labor and material, for
copies of any documents provided to the member. The charge may not exceed the estimated
cost of production and reproduction of the records.
new text end

new text begin (g) If a cooperative refuses to allow a member, or the member's agent or attorney, who
complies with this subdivision to inspect or copy any records that the member is entitled to
inspect or copy within a prescribed time limit or, if none, within a reasonable time, the
district court of the county in this state where the cooperative's principal office is located
or, if it has no principal office in this state, the district court of the county in which its
registered office is located may, on application of the member, summarily order the inspection
or copying of the records demanded at the cooperative's expense.
new text end

new text begin (h) If a court orders inspection or copying of the records demanded, 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 member or the member's agent or attorney to inspect or copy
the records demanded:
new text end

new text begin (1) the court may order the losing party to pay the prevailing party's reasonable costs,
including reasonable attorney fees;
new text end

new text begin (2) the court may order the losing party to pay the prevailing party for any damages the
prevailing party shall have incurred by reason of the subject matter of the litigation;
new text end

new text begin (3) if inspection or copying is ordered under this paragraph, the court may order the
cooperative to pay the member's inspection and copying expenses;
new text end

new text begin (4) the court may grant either party any other remedy provided by law; and
new text end

new text begin (5) the court may impose reasonable restrictions on the use or distribution of the records
by the demanding member.
new text end

Sec. 39.

new text begin [308C.502] MEMBER RESTRICTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Older persons. new text end

new text begin In accordance with the applicable provisions of the Fair
Housing Act, Title VIII of the Civil Rights Act of 1968, as amended; United States Code,
title 42, chapter 3607, section 807(a)(b)(1)(2), and the rules and regulations of the United
States Department of Housing and Urban Development applicable with respect to housing
for older persons contained in Code of Federal Regulations, title 24, subtitle B, chapter I,
subpart E, section 100.300-308, membership and housing in a cooperative governed by this
chapter may be age restricted to older persons. As used in this section, "housing for older
persons" means housing:
new text end

new text begin (1) intended for, and solely occupied by, persons 62 years of age or older, except that:
new text end

new text begin (i) as to joint holders of a membership, only one person need be age 62 or older; and
new text end

new text begin (ii) as to a trust that is the holder of a membership pursuant to the requirements of this
chapter, only one beneficiary who intends to occupy the cooperative as a member need be
age 62 or older; or
new text end

new text begin (2) intended and operated for occupancy by persons 55 years of age or older, and:
new text end

new text begin (i) at least 80 percent of the occupied units are occupied by at least one person who is
55 years of age or older;
new text end

new text begin (ii) the housing facility or community publishes and adheres to policies and procedures
that demonstrate the intent required under this clause; and
new text end

new text begin (iii) the housing facility or community complies with rules issued by the secretary of
housing and urban development for verification of occupancy, which shall:
new text end

new text begin (A) provide for verification by reliable surveys and affidavits; and
new text end

new text begin (B) include examples of the types of policies and procedures relevant to a determination
of compliance with the requirement of item (ii). Such surveys and affidavits shall be
admissible in administrative and judicial proceedings for the purposes of such verification.
new text end

new text begin Subd. 2. new text end

new text begin Persons of low or moderate income. new text end

new text begin In accordance with the applicable
provisions of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended;
United States Code, title 42, chapter 3607, section 807(a)(b)(1)(2), membership and housing
in a cooperative governed by this chapter may be restricted to persons of low or moderate
income.
new text end

new text begin Subd. 3. new text end

new text begin Persons by activity. new text end

new text begin Membership and housing in a cooperative governed by
this chapter may be restricted to persons engaged in a specific activity or persons who meet
a specified characteristic based on past activity provided such restriction does not violate
any provision of the Fair Housing Act, Title VIII of the Civil Rights Act of 1968, as amended;
United States Code, title 42, chapter 3607, section 807(a)(b)(1)(2).
new text end

new text begin Subd. 4. new text end

new text begin Additional restrictions. new text end

new text begin Cooperatives governed by this chapter may impose
the same age or income restrictions on any nonmember occupants the board may permit to
reside at the housing cooperative.
new text end

Sec. 40.

new text begin [308C.505] MEMBER NOT LIABLE FOR COOPERATIVE DEBTS.
new text end

new text begin A member is not, merely on the account of that status, personally liable for the acts,
debts, liabilities, or obligations of a cooperative. A member is liable for any unpaid
subscription for the membership interest, unpaid membership fees or carrying charges, or
a debt for which the member has separately contracted with the cooperative.
new text end

Sec. 41.

new text begin [308C.511] REGULAR MEMBER MEETINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Annual meeting. new text end

new text begin Regular member meetings shall be held annually at a
time determined by the board, unless more frequent meetings are provided for in the bylaws.
new text end

new text begin Subd. 2. new text end

new text begin Location. new text end

new text begin The regular member meeting shall be held at the principal place of
business of the cooperative or at another conveniently located place as determined by the
bylaws or the board.
new text end

new text begin Subd. 3. new text end

new text begin Business and fiscal reports. new text end

new text begin Unless additional information is required by the
bylaws, the officers shall submit reports to the members at the regular member meetings
covering the business of the cooperative for the previous fiscal year that show the financial
condition of the cooperative at the close of the fiscal year.
new text end

new text begin Subd. 4. new text end

new text begin Election of directors. new text end

new text begin All directors shall be elected at the regular member
meeting for the terms of office prescribed in the bylaws.
new text end

new text begin Subd. 5. new text end

new text begin Notice. new text end

new text begin The cooperative shall give notice of regular member meetings by
personal delivery of the meeting notice to each member or mailing the regular member
meeting notice to each member at the member's post office address as it appears on the
membership book of the cooperative, or by other notification approved by the board and
agreed to by the members. The regular member meeting notice shall be published or
otherwise given by approved method at least two weeks before the date of the meeting, or
mailed at least 15 days, but not more than 30 days before the date of the meeting.
new text end

new text begin Subd. 6. new text end

new text begin Waiver and objections. new text end

new text begin A member may waive notice of a meeting of members.
A waiver of notice by a member entitled to notice 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 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, or objects before a vote on an item of business because the
item may not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.
new text end

Sec. 42.

new text begin [308C.515] SPECIAL MEMBER MEETINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Calling meeting. new text end

new text begin Special member meetings of the members may be
called by:
new text end

new text begin (1) a majority vote of the board; or
new text end

new text begin (2) the written petition of at least 20 percent of the occupant members and, if authorized,
20 percent of the nonoccupant members, 20 percent of all members, or members representing
20 percent of the membership interests collectively are submitted to the secretary.
new text end

new text begin Subd. 2. new text end

new text begin Notice. new text end

new text begin The cooperative shall give notice of a special member meeting by
mailing the special member meeting notice to each member personally at the person's post
office address as it appears on the membership book of the cooperative or an alternative
method approved by the board and the member individually or the members generally. The
special member meeting notice shall state the time, place, and purpose of the special member
meeting. The special member meeting notice shall be issued within ten days from and after
the date of the presentation of a member petition, and the special member meeting shall be
held within 30 days after the date of the presentation of the member petition.
new text end

new text begin Subd. 3. new text end

new text begin Waiver and objections. new text end

new text begin A member may waive notice of a special member
meeting. A waiver of notice by a member entitled to notice 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 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, or objects before a vote on an item of business because
the item may not lawfully be considered at the meeting, and does not participate in the
consideration of the item at that meeting.
new text end

Sec. 43.

new text begin [308C.521] CERTIFICATION OF MEETING NOTICE.
new text end

new text begin Subdivision 1. new text end

new text begin Certificate of mailing. new text end

new text begin After mailing special or regular member meeting
notices or otherwise delivering the notices, the cooperative shall execute a certificate
containing the date of mailing or delivery of the notice and a statement that the special or
regular member meeting notices were mailed or delivered as prescribed by law.
new text end

new text begin Subd. 2. new text end

new text begin Matter of record. new text end

new text begin The certificate shall be made a part of the record of the
meeting.
new text end

new text begin Subd. 3. new text end

new text begin Failure to receive meeting notice. new text end

new text begin Failure of a member to receive a special or
regular member meeting notice does not invalidate an action taken by the members at a
member meeting.
new text end

Sec. 44.

new text begin [308C.525] QUORUM.
new text end

new text begin Subdivision 1. new text end

new text begin Quorum. new text end

new text begin At any annual or special meeting of the members, unless other
increased by the bylaws, a quorum necessary for the transaction of business shall be ten
percent of the total number of members.
new text end

new text begin Subd. 2. new text end

new text begin Quorum for voting by mail. new text end

new text begin In determining a quorum at a meeting, on a
question submitted to a vote by mail or an alternative method, members present in person
or represented by mail vote or the alternative voting method shall be counted. The attendance
of a sufficient number of members to constitute a quorum shall be established by a
registration of the members of the cooperative present at the meeting. The registration shall
be verified by the president or the secretary of the cooperative and shall be reported in the
minutes of the meeting.
new text end

new text begin Subd. 3. new text end

new text begin Meeting action invalid without quorum. new text end

new text begin An action by a cooperative is not
valid or legal in the absence of a quorum at the meeting at which the action was taken.
new text end

Sec. 45.

new text begin [308C.531] REMOTE COMMUNICATIONS FOR MEMBER MEETINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Construction and application. new text end

new text begin This section shall be construed and
applied to:
new text end

new text begin (1) facilitate remote communication consistent with other applicable law; and
new text end

new text begin (2) be consistent with reasonable practices concerning remote communication and with
the continued expansion of those practices.
new text end

new text begin Subd. 2. new text end

new text begin Member meetings held solely by means of remote communication. new text end

new text begin To the
extent authorized in the articles or the bylaws and determined by the board, a regular or
special meeting of members may be held solely by any combination of means of remote
communication through which the members may participate in the meeting, if notice of the
meeting is given to every owner of membership interests entitled to vote as would be required
by this chapter for a meeting, and if the membership interests held by the members
participating in the meeting would be sufficient to constitute a quorum at a meeting.
Participation by a member by that means constitutes presence at the meeting in person if
all the other requirements of this chapter for the meeting are met.
new text end

new text begin Subd. 3. new text end

new text begin Participation in member meetings by means of remote communication. new text end

new text begin To
the extent authorized in the articles or the bylaws and determined by the board, a member
not physically present in person at a regular or special meeting of members may, by means
of remote communication, participate in a meeting of members held at a designated place.
Participation by a member by that means constitutes presence at the meeting in person if
all the other requirements of this chapter for the meeting are met.
new text end

new text begin Subd. 4. new text end

new text begin Requirements for meetings held solely by means of remote communication
and for participation by means of remote communication. new text end

new text begin In any meeting of members
held solely by means of remote communication under subdivision 2 or in any meeting of
members held at a designated place in which one or more members participate by means
of remote communication under subdivision 3:
new text end

new text begin (1) the cooperative shall implement reasonable measures to verify that each person
deemed present and entitled to vote at the meeting by means of remote communication is
a member; and
new text end

new text begin (2) the cooperative shall implement reasonable measures to provide each member
participating by means of remote communication with a reasonable opportunity to participate
in the meeting, including an opportunity to:
new text end

new text begin (i) read or hear the proceedings of the meeting substantially concurrently with those
proceedings;
new text end

new text begin (ii) 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; and
new text end

new text begin (iii) if otherwise entitled, vote on matters submitted to the members.
new text end

new text begin Subd. 5. new text end

new text begin Notice to members. new text end

new text begin (a) Any notice to members given by the cooperative under
any provision of this chapter, the articles, or the bylaws by a form of electronic
communication consented to by the member to whom the notice is given, is effective when
given. The notice is deemed given:
new text end

new text begin (1) if by facsimile communication, when directed to a telephone number at which the
member has consented to receive notice;
new text end

new text begin (2) if by electronic mail, when directed to an electronic mail address at which the member
has consented to receive notice;
new text end

new text begin (3) if by a posting on an electronic network on which the member has consented to
receive notice, together with separate notice to the member of the specific posting, upon
the later of:
new text end

new text begin (i) the posting; and
new text end

new text begin (ii) the giving of the separate notice; and
new text end

new text begin (4) if by any other form of electronic communication by which the member has consented
to receive notice, when directed to the member.
new text end

new text begin (b) An affidavit of the secretary, other authorized officer, or authorized agent of the
cooperative that the notice has been given by a form of electronic communication is, in the
absence of fraud, prima facie evidence of the facts stated in the affidavit.
new text end

new text begin (c) Consent by a member to notice given by electronic communication may be given in
writing or by authenticated electronic communication. The cooperative is entitled to rely
on any consent so given until revoked by the member, provided that no revocation affects
the validity of any notice given before receipt by the cooperative of revocation of the consent.
new text end

new text begin Subd. 6. new text end

new text begin Revocation. new text end

new text begin Any ballot, vote, authorization, or consent submitted by electronic
communication under this chapter may be revoked by the member submitting the ballot,
vote, authorization, or consent so long as the revocation is received by a director or the chief
executive officer of the cooperative at or before the meeting or before an action without a
meeting is effective.
new text end

new text begin Subd. 7. new text end

new text begin Waiver. new text end

new text begin Waiver of notice by a member of a meeting by means of authenticated
electronic communication may be given in the manner provided for the regular or special
meeting. Participation in a meeting by means of remote communication described in
subdivisions 2 and 3 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, or objects before a vote on an item of business because the
item may not lawfully be considered at the meeting and does not participate in the
consideration of the item at that meeting.
new text end

Sec. 46.

new text begin [308C.535] ACT OF MEMBERS.
new text end

new text begin Subdivision 1. new text end

new text begin Action of affirmative vote of members. new text end

new text begin (a) The members shall take
action by the affirmative vote of a majority of the membership interests present and entitled
to vote on that item of business.
new text end

new text begin (b) If the articles or bylaws require a larger proportion than is required by this chapter
for a particular action, the articles or bylaws shall have control over the provisions of this
chapter.
new text end

new text begin Subd. 2. new text end

new text begin Greater quorum or voting requirements. new text end

new text begin (a) The articles or bylaws adopted
by the members may provide for a greater quorum or voting requirement for members or
voting groups than is provided for by this chapter.
new text end

new text begin (b) An amendment to the articles or bylaws that adds, changes, or deletes a greater
quorum or voting requirement shall meet the same quorum requirement and be adopted by
the same vote and voting groups required to take action under the quorum and voting
requirements then in effect or proposed to be adopted, whichever is greater.
new text end

Sec. 47.

new text begin [308C.541] ACTION WITHOUT A MEETING.
new text end

new text begin Subdivision 1. new text end

new text begin Method. new text end

new text begin An action required or permitted to be taken at a meeting of the
members may be taken by written action signed or consented to by authenticated electronic
communication, by a majority of the entire membership of record or such other percentage
of membership as is defined in the cooperative's articles of incorporation or bylaws, that
would be required to take the same action at a meeting of the members at which all members
were present.
new text end

new text begin Subd. 2. new text end

new text begin Effective time. new text end

new text begin The written action is effective when signed or consented to by
authenticated electronic communication by the required members, unless a different effective
time is provided in the written action.
new text end

new text begin Subd. 3. new text end

new text begin Notice and liability. new text end

new text begin When written action is permitted to be taken by less than
all members, all members must be notified immediately of its text and effective date. Failure
to provide the notice does not invalidate the written action. A member who does not sign
or consent to the written action has no liability for the action or actions taken by the written
action.
new text end

Sec. 48.

new text begin [308C.545] MEMBER VOTING RIGHTS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin One membership shall be issued by the cooperative for each
dwelling unit or lot in the project the resulting number of memberships outstanding at all
times is equal to the number of dwelling units or lots in the project. Each membership shall
have one vote in the affairs of the cooperative. If the cooperative has both occupant and
nonoccupant members, on any matter of the cooperative, the entire occupant members
voting power shall be voted collectively based upon the vote of the majority of occupant
members voting on the issue and the collective vote of the nonoccupant members shall be
a majority of the vote cast unless otherwise provided in the bylaws. The bylaws may not
reduce the collective occupant member vote to less than 15 percent of the total vote on
matters of the cooperative. A nonoccupant member has the voting rights in accordance with
nonoccupant membership interests as granted in the bylaws, subject to the provisions of
this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Right to vote at meeting. new text end

new text begin A member may exercise voting rights on any matter
that is before the members as prescribed in the articles or bylaws at a member meeting from
the time the member arrives at the member meeting, unless the articles or bylaws specify
an earlier and specific time for closing the right to vote.
new text end

new text begin Subd. 3. new text end

new text begin Voting method. new text end

new text begin A member's vote at a member meeting shall be in person or
by mail if a mail vote is authorized by the board or by alternative method if authorized by
the board.
new text end

new text begin Subd. 4. new text end

new text begin Absentee ballots. new text end

new text begin (a) A member who is or will be absent from a member
meeting may vote by mail or by an approved alternative method on the ballot prescribed in
this subdivision on any motion, resolution, or amendment that the board submits for vote
by mail or alternative method to the members.
new text end

new text begin (b) The ballot shall be in the form prescribed by the board and contain:
new text end

new text begin (1) the exact text of the proposed motion, resolution, or amendment to be acted on at
the meeting; and
new text end

new text begin (2) the text of the motion, resolution, or amendment for which the member may indicate
an affirmative or negative vote.
new text end

new text begin (c) The member shall express a choice by marking an appropriate choice on the ballot
and mail, deliver, or otherwise submit the ballot to the cooperative in a plain, sealed envelope
inside another envelope bearing the member's name or by an alternative method approved
by the board.
new text end

new text begin (d) A properly executed ballot shall be accepted by the board and counted as the vote
of the absent member at the meeting.
new text end

new text begin Subd. 5. new text end

new text begin Jointly owned membership interest. new text end

new text begin If membership interest is owned by two
or more individuals, any individual may vote on a matter that is before the members, unless
the cooperative receives written notice denying the authority of an individual to vote on the
behalf of the jointly owned membership interest.
new text end

Sec. 49.

new text begin [308C.571] SALE OF PROPERTY AND ASSETS.
new text end

new text begin Subdivision 1. new text end

new text begin Member approval. new text end

new text begin A cooperative, by affirmative vote of a majority of
the board present, may sell, lease, transfer, or otherwise dispose of all or substantially all
of its property and assets, including its good will, not in the usual and regular course of its
business, a grant a security interest in all or substantially all of the cooperatives property
and assets whether or not in the usual and regular course of its business upon those terms
and conditions and for those considerations, which may be money, securities, or other
instruments for the payment of money or other property, as the board considers expedient,
when approved at a regular or special meeting of the members by the affirmative vote of
the owners of a majority of the voting power of the interests entitled to vote. Written notice
of the meeting must be given to all members whether or not they are entitled to vote at the
meeting. The written notice must state that a purpose of the meeting is to consider the sale,
lease, transfer, or other disposition of all or substantially all of the property and assets of
the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Confirmatory documents. new text end

new text begin Confirmatory deeds, assignments, or similar
instruments to evidence a sale, lease, transfer, or other disposition may be signed and
delivered at any time in the name of the transferor by its current president of the board or
authorized agents.
new text end

new text begin Subd. 3. new text end

new text begin Liability of transferee. new text end

new text begin The transferee is liable for the debts, obligations, and
liabilities of the transferor only to the extent provided in the contract or agreement between
the transferee and the transferor or to the extent provided by law.
new text end

Sec. 50.

new text begin [308C.601] MEMBERSHIP INTERESTS.
new text end

new text begin Subdivision 1. new text end

new text begin Amounts and divisions of membership interests. new text end

new text begin The authorized amount
and divisions of occupant membership interests and, if authorized, nonoccupant membership
interests may be increased, decreased, established, or altered, in accordance with the
restrictions in this chapter by amending the articles or bylaws at a regular members' meeting
or at a special members' meeting called for the purpose of the amendment.
new text end

new text begin Subd. 2. new text end

new text begin Issuance of membership interests. new text end

new text begin Authorized membership interests may be
issued on terms and conditions prescribed in the articles, bylaws, or if authorized in the
articles or bylaws as determined by the board. The cooperative shall disclose to any person
or entity acquiring membership interests to be issued by the cooperative, the organization,
capital structure, and known business prospects and risks of the cooperative, the nature of
the governance and financial rights of the membership interest being acquired and of other
classes of membership and membership interests.
new text end

new text begin Subd. 3. new text end

new text begin Occupant membership interests. new text end

new text begin The occupant membership interests
collectively shall have not less than 60 percent of the cooperative's financial rights to profit
allocations and distributions. If authorized in the original articles as filed, or articles or
bylaws adopted by an affirmative vote of the occupant members, or the articles or bylaws
are amended by the affirmative vote of occupant members, then the cooperative's financial
rights to profit allocations and distributions to occupant members collectively may be not
less than 15 percent.
new text end

new text begin Subd. 4. new text end

new text begin Transferring or selling membership interests. new text end

new text begin After issuance by the
cooperative, membership interests in a cooperative may only be sold or transferred with the
approval of the board. The board may adopt resolutions prescribing procedures to
prospectively approve transfers.
new text end

new text begin Subd. 5. new text end

new text begin Nonoccupant membership interests. new text end

new text begin If authorized by the articles, the
cooperative may solicit and issue nonoccupant membership interests on terms and conditions
determined by the board and disclosed in the articles, bylaws, or by separate disclosure to
the members. Each member acquiring nonoccupant membership interests shall sign a member
control agreement or agree to the conditions of the bylaws, either of which shall describe
the rights and obligations of the member as it relates to the nonoccupant membership
interests, the financial and governance rights, the transferability of the nonoccupant
membership interests, the division and allocations of profits and losses among the
membership interests and membership classes, and financial rights upon liquidation. If the
articles or bylaws do not otherwise provide for the allocation of the profits and losses between
occupant membership interests and nonoccupant membership interests, then the allocation
of profits and losses among nonoccupant membership interests individually and occupant
membership interests collectively shall be allocated on the basis of the value of contributions
to capital made according to the occupant membership interests collectively and the
nonoccupant membership interests individually to the extent the contributions have been
accepted by the cooperative. Distributions of cash or other assets of the cooperative shall
be allocated among the membership interests as provided in the articles and bylaws, subject
to the provisions of this chapter. If not otherwise provided in the articles or bylaws,
distributions shall be made on the basis of value of the capital contributions of the occupant
membership interests collectively and the nonoccupant membership interests to the extent
the contributions have been accepted by the cooperative.
new text end

new text begin Subd. 6. new text end

new text begin Cooperative first right to purchase membership interests. new text end

new text begin The articles or
bylaws may provide that the cooperative or the occupant members, individually or
collectively, have the first privilege of purchasing the membership interests of any class of
membership interests offered for sale. The first privilege to purchase membership interests
may be satisfied by notice to other members that the membership interests are for sale and
a procedure by which members may proceed to attempt to purchase and acquire the
membership interests. A membership interest acquired by the cooperative may be held to
be reissued or may be retired and canceled.
new text end

new text begin Subd. 7. new text end

new text begin Payment for nonoccupant membership interests. new text end

new text begin Subject to the provisions
in the articles and bylaws, a member may dissent from and obtain payment for the fair value
of the member's nonoccupant membership interests in the cooperative if the articles or
bylaws are amended in a manner that materially and adversely affects the rights and
preferences of the nonoccupant membership interests of the dissenting member. The
dissenting member shall file a notice of intent to demand fair value of the membership
interest with the records officer of the cooperative within 30 days after the amendment of
the bylaws and notice of the amendment to members, otherwise the right of the dissenting
member to demand payment of fair value for the membership interest is waived. If a proposed
amendment of the articles or bylaws must be approved by the members, a member who is
entitled to dissent and who wishes to exercise dissenter's rights shall file a notice to demand
fair value of the membership interest with the records officer of the cooperative before the
vote on the proposed action and shall not vote in favor of the proposed action, otherwise
the right to demand fair value for the membership interest by the dissenting member is
waived. After receipt of the dissenting member's demand notice and approval of the
amendment, the cooperative has 60 days to rescind the amendment or otherwise the
cooperative shall remit the fair value for the member's interest to the dissenting member by
180 days after receipt of the notice. Upon receipt of the fair value for the membership
interest, the member has no further member rights in the cooperative.
new text end

Sec. 51.

new text begin [308C.602] TITLE TO MEMBERSHIP IN THE COOPERATIVE.
new text end

new text begin (a) Title to membership in a cooperative governed by this chapter may be held by:
new text end

new text begin (1) a natural person who satisfies the member restrictions set forth in this chapter;
new text end

new text begin (2) a natural person who does not satisfy the restrictions set forth in this chapter but who
purchases a membership interest for a natural person who satisfies the restrictions set forth
in this chapter and who is a member of the cooperative and shall, for purposes of this section,
be referred to as a "third-party purchaser";
new text end

new text begin (3) a natural person who is the trustee of a trust, except as prohibited, limited, or otherwise
provided by the cooperative. If title to a membership interest is held by a trustee of a trust,
a beneficiary of the trust must be a natural person who satisfies the restriction set forth in
this chapter and who exercises the right of occupancy appurtenant to membership. In order
to apply for membership in the cooperative following the death of a member or members
who occupied the cooperative under the trust's title, a successor beneficiary of the trust must
satisfy the restriction structure set forth in this chapter. The cooperative may require successor
beneficiaries who did not occupy the dwelling unit with the deceased cooperative member
or members to offer the membership interest back to the cooperative for sale pursuant to
any cooperative right of first refusal, cooperative purchase option, or other membership
sale requirements or restrictions established by the cooperative in its bylaws or through the
cooperative's policies, rules, or regulations;
new text end

new text begin (4) an adult natural person remainderman, subject to a life estate retained by a natural
person who satisfies the restrictions set forth in this chapter and who exercises the right of
occupancy appurtenant to membership in the dwelling unit, except as prohibited, limited,
or otherwise provided by the bylaws. In order to apply for membership in the cooperative
following the death of the life tenant member or members of the cooperative, a remainderman
must satisfy the age restriction structure set forth in this chapter for membership in the
cooperative. Following the death of the life tenant member, a cooperative may require a
remainderman to offer the membership interest back to the cooperative for sale pursuant to
any cooperative right of first refusal, cooperative purchase option, or other membership
sale requirements or restrictions established by the cooperative in its bylaws or through the
cooperative's policies, rules, or regulations;
new text end

new text begin (5) transfer on death (TOD) beneficiaries upon the death of a member in the cooperative
and in accordance with the Minnesota Uniform TOD Security Registration Act, sections
524.6-301, et. seq., except as prohibited, limited, or otherwise provided by the cooperative.
A natural person who, as a TOD beneficiary, becomes the title holder of a membership
interest in the cooperative following the death of a member must satisfy the restriction
structure set forth in this chapter in order to apply for membership in the cooperative. A
cooperative may require a TOD beneficiary who becomes the title holder of a membership
interest in the cooperative following the death of a member to offer the membership interest
back to the cooperative for sale pursuant to any cooperative right of first refusal, cooperative
purchase option, or other membership sale requirements or restrictions the cooperative may
have developed in its bylaws or through the cooperative's policies, rules, or regulations;
and
new text end

new text begin (6) with respect to nonoccupant membership interest, any person as defined by this
chapter.
new text end

new text begin (b) In each instance in which title to a membership interest is held by a trustee,
remainderman, or third-party purchaser who purchases a membership interest for a member
who will occupy the cooperative, the trustee, remainderman, or third-party purchaser shall
agree to abide by the cooperative's articles, bylaws, occupancy agreement or proprietary
lease of the member, and rules, policies, and regulations of the cooperative, and shall not,
by virtue of their status of holding title to the membership interest, have any voting rights
that a member of the cooperative would otherwise have by reason of being the holder of a
membership certificate. All voting rights shall be vested solely with the member who
occupies the cooperative.
new text end

Sec. 52.

new text begin [308C.603] DEVELOPER RIGHTS, RESTRICTIONS, AND OBLIGATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Developer control. new text end

new text begin If a developer causes a cooperative to be organized
under this chapter, the developer shall have the right to appoint an initial board of directors
consisting of three persons. The developer's control of the board shall terminate on the date
of the first annual meeting of members. The first annual meeting shall occur on or about 60
days after the date of the certificate of occupancy issued for the project by the municipality
in which the project is situated and subject to any requirements under the mortgage for
permanent financing related to the project.
new text end

new text begin Subd. 2. new text end

new text begin Termination of developer's contracts. new text end

new text begin Any contract, lease, or license binding
the cooperative and to which the developer or an affiliate of the developer is a party may
be terminated without penalty by the cooperative upon not less than 90 days' notice if entered
into prior to termination of the period of developer control. The notice shall be in writing
and is effective upon hand delivery or upon mailing properly addressed with postage prepaid
and deposited in the United States mail. This subdivision does not apply to any mortgage
encumbering the cooperative's real estate.
new text end

new text begin Subd. 3. new text end

new text begin Developer's standard of conduct during period of developer control. new text end

new text begin (a)
During the period of the developer's control of the cooperative, the developer and any of
the developer's representatives who are acting as officers or directors of the cooperative
shall be subject to the provisions of sections 308C.401 and 308C.455.
new text end

new text begin (b) At such time as the developer's control of the cooperative terminates, the developer
shall deliver to the board exclusive control of all funds of the cooperative, all contracts and
agreements to which the cooperative was or is a party, all corporate records of the
cooperative, and all plans and specifications relating to the project.
new text end

new text begin Subd. 4. new text end

new text begin Developer's obligation for assessments. new text end

new text begin (a) Prior to the commencement of
occupancy of the project by the members, the developer shall pay all accrued expenses of
the cooperative.
new text end

new text begin (b) After the commencement of occupancy of the project by the members, the developer
shall pay all common expenses and payments to reserves allocated to the dwelling unit
appurtenant to the membership interests that have not been conveyed to members, and the
payment obligation shall remain in effect until each unissued membership interest has been
conveyed to a member.
new text end

Sec. 53.

new text begin [308C.605] ASSIGNMENT OF FINANCIAL RIGHTS.
new text end

new text begin Subdivision 1. new text end

new text begin Assignment of financial rights permitted. new text end

new text begin Except as provided in
subdivision 3, a member's financial rights are transferable in whole or in part.
new text end

new text begin Subd. 2. new text end

new text begin Effect of assignment of financial rights. new text end

new text begin An assignment of a member's financial
rights entitles the assignee to receive, to the extent assigned, only the share of profits and
losses and the distributions, if any, to which the assignor would otherwise be entitled. An
assignment of a member's financial rights does not dissolve the cooperative and does not
entitle or empower the assignee to become a member, to exercise any governance rights,
to receive any notices from the cooperative, or to cause dissolution. The assignment shall
not allow the assignee to control the member's exercise of governance or voting rights.
new text end

new text begin Subd. 3. new text end

new text begin Restrictions of assignment of financial rights. new text end

new text begin (a) A restriction on the
assignment of financial rights may be imposed in the articles, in the bylaws, in an operating
agreement, by a resolution adopted by the members, by an agreement among or other written
action by the members, or by an agreement among or other written action by the members
and the cooperative. A restriction is not binding with respect to financial rights reflected in
the required records before the adoption of the restriction, unless the owners of those financial
rights are parties to the agreement or voted in favor of the restriction.
new text end

new text begin (b) Subject to paragraph (c), a written restriction on the assignment of financial rights
that is not manifestly unreasonable under the circumstances and is noted conspicuously in
the required records may be enforced against the owner of the restricted financial rights or
a successor or transferee of the owner, including a pledgee or a legal representative. Unless
noted conspicuously in the required records, a restriction, even though permitted by this
section, is ineffective against a person without knowledge of the restriction.
new text end

new text begin (c) With regard to restrictions on the assignment of financial rights, a would-be assignee
of financial rights is entitled to rely on a statement of membership interest issued by the
cooperative. A restriction on the assignment of financial rights, which is otherwise valid
and in effect at the time of the issuance of a statement of membership interest but which is
not reflected in that statement, is ineffective against an assignee who takes an assignment
in reliance on the statement.
new text end

new text begin (d) Notwithstanding any provision of law, articles, bylaws, operating agreement, other
agreement, resolution, or action to the contrary, a security interest in a member's financial
rights may be foreclosed and otherwise enforced, and a secured party may assign a member's
financial rights in accordance with chapter 336, without the consent or approval of the
member whose financial rights are subject to the security interest.
new text end

Sec. 54.

new text begin [308C.611] NATURE OF A MEMBERSHIP INTEREST AND STATEMENT
OF INTEREST OWNED.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin A membership interest is personal property. A member has
no interest in specific cooperative property except the right to occupy a dwelling unit pursuant
to an occupancy agreement, the proprietary lease, and use of the common elements. All
property of the cooperative is property of the cooperative itself.
new text end

new text begin Subd. 2. new text end

new text begin Lien on membership interest. new text end

new text begin The cooperative may take a lien on the
membership interest and any dwelling unit represented by the membership certificate for
all sums due and to become due under the articles, bylaws, occupancy agreement, and
propriety lease whether by means of assessments or otherwise. The board may refuse consent
to the transfer of the membership interest represented by the membership certificate until
all outstanding sums due under the occupancy agreement are paid or for other reasonable
cause described in the bylaws.
new text end

new text begin Subd. 3. new text end

new text begin Terms of membership interests. new text end

new text begin All the membership interests of a cooperative
must:
new text end

new text begin (1) be of one class, without series, unless the articles or bylaws establish or authorize
the board to establish more than one class or series within classes;
new text end

new text begin (2) be occupant membership interests and if authorized nonoccupant membership interest
subject to this chapter entitled to vote as provided in section 308C.555, and have equal
rights and preferences in all matters not otherwise provided for by the board and to the
extent that the articles or bylaws have fixed the relative rights and preferences of different
classes and series; and
new text end

new text begin (3) if applicable due to the nature of the cooperative, share profits and losses and are
entitled to distributions as provided in sections 308C.721 and 308C.725.
new text end

new text begin Subd. 4. new text end

new text begin Rights of judgment creditor. new text end

new text begin On application to a court of competent jurisdiction
by any judgment creditor of a member, the court may charge a member with payment of
the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment
creditor has only the rights of an assignee of a member's financial rights, if any. This chapter
does not deprive any member or a judgment creditor who is an assignee of financial rights
of the benefit of any exemption laws applicable to the membership interest. This section is
the sole and exclusive remedy of a judgment creditor with respect to the judgment debtor's
membership interest.
new text end

new text begin Subd. 5. new text end

new text begin Procedure for fixing terms. new text end

new text begin (a) Subject to any restrictions in the articles or
bylaws, the power granted in this subdivision may be exercised by a resolution or resolutions
establishing a class or series, setting forth the designation of the class or series, and fixing
the relative rights and preferences of the class or series. Any of the rights and preferences
of a class or series established in the articles, bylaws, or by resolution of the board:
new text end

new text begin (1) may be made dependent upon facts ascertainable outside the articles or bylaws or
outside the resolution or resolutions establishing the class or series, if the manner in which
the facts operate upon the rights and preferences of the class or series is clearly and expressly
set forth in the articles or bylaws or in the resolution or resolutions establishing the class or
series; and
new text end

new text begin (2) may include by reference some or all of the terms of any agreements, contracts, or
other arrangements entered into by the cooperative in connection with the establishment of
the class or series if the cooperative retains at its principal executive office a copy of the
agreements, contracts, or other arrangements or the portions will be included by reference.
new text end

new text begin (b) A statement setting forth the name of the cooperative and the text of the resolution
and certifying the adoption of the resolution and the date of adoption must be given to the
members before the acceptance of any contributions for which the resolution creates rights
or preferences not set forth in the articles or bylaws. Where the members have received
notice of the creation of membership interests with rights or preferences not set forth in the
articles or bylaws before the acceptance of the contributions with respect to the membership
interests, the statement may be filed any time within one year after the acceptance of the
contributions. The resolution is effective three days after delivery to the members is deemed
effective by the board, or, if the statement is not required to be given to the members before
the acceptance of contributions, on the date of its adoption by the directors.
new text end

new text begin Subd. 6. new text end

new text begin Specific terms. new text end

new text begin Without limiting the authority granted in this section, a
cooperative may have membership interests of a class or series:
new text end

new text begin (1) subject to the right of the cooperative to redeem any of those membership interests
at the price fixed for their redemption by the articles or bylaws or by the board;
new text end

new text begin (2) entitling the members to cumulative, partially cumulative, or noncumulative
distributions;
new text end

new text begin (3) having preference over any class or series of membership interests for the payment
of distributions of any or all kinds;
new text end

new text begin (4) convertible into membership interests of any other class or any series of the same or
another class; or
new text end

new text begin (5) having full, partial, or no voting rights, except as provided in section 308B.555.
new text end

new text begin Subd. 7. new text end

new text begin Grant of a security interest. new text end

new text begin For the purpose of any law relating to security
interests, membership interests, governance or voting rights, and financial rights are each
to be characterized as provided in section 336.8-103, paragraph (c).
new text end

new text begin Subd. 8. new text end

new text begin Powers of estate of a deceased or incompetent member. new text end

new text begin (a) If a member
who is an individual dies or a court of competent jurisdiction adjudges the member to be
incompetent to manage the member's person or property, or an order for relief under the
bankruptcy code is entered with respect to the member, the member's executor, administrator,
guardian, conservator, trustee, or other legal representative may exercise all of the member's
rights for the purpose of settling the estate or administering the member's property. If a
member is a business entity, trust, or other entity and is dissolved, terminated, or placed by
a court in receivership or bankruptcy, the powers of that member may be exercised by its
legal representative or successor.
new text end

new text begin (b) If an event referred to in paragraph (a) causes the termination of a member's
membership interest and the termination does not result in dissolution, then subject to the
articles and bylaws:
new text end

new text begin (1) as provided in section 308C.605, the terminated member's interest will be considered
to be merely that of an assignee of the financial rights owned before the termination of
membership; and
new text end

new text begin (2) the rights to be exercised by the legal representative of the terminated member will
be limited accordingly.
new text end

new text begin Subd. 9. new text end

new text begin Liability of subscribers and members with respect to membership
interests. new text end

new text begin A subscriber for membership interests or a member of a cooperative is under no
obligation to the cooperative or its creditors with respect to the membership interests
subscribed for or owned, except to pay to the cooperative the full consideration for which
the membership interests are issued or to be issued.
new text end

Sec. 55.

new text begin [308C.612] SENIOR HOUSING COOPERATIVE OFFERING
DOCUMENTS; GENERAL PROVISIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin The senior housing cooperative organized under this chapter
shall provide to each subscriber for a membership in the cooperative: (1) an occupancy
agreement or proprietary lease; (2) the articles; (3) the bylaws; (4) an annualized budget for
the current fiscal period; and (5)(i) for the initial purchase of a membership interest to which
a particular dwelling unit is appurtenant, an information bulletin and a subscription
agreement; and (ii) for any purchase of a membership interest after its initial purchase, a
resale disclosure statement and a membership purchase and sale agreement, all of which
shall minimally include the contents of the provisions set forth in subdivisions 2 to 6, as
applicable.
new text end

new text begin Subd. 2. new text end

new text begin Information bulletin. new text end

new text begin (a) With respect to an initial sale of a cooperative's
authorized membership interests to older persons, each subscriber for membership shall be
given an information bulletin that shall fully and accurately disclose:
new text end

new text begin (1) the name and principal address of the cooperative;
new text end

new text begin (2) the number of dwelling units in the project;
new text end

new text begin (3) a general description of the project, including, at a minimum:
new text end

new text begin (i) the number of buildings;
new text end

new text begin (ii) the number of dwellings per building;
new text end

new text begin (iii) the type of construction;
new text end

new text begin (iv) whether the project involves new construction or rehabilitation;
new text end

new text begin (v) whether any building was wholly or partially occupied, for any purpose, before it
was added to the project and the nature of the occupancy;
new text end

new text begin (vi) a general description of any roads, trails, or utilities that are located on the common
elements and that the cooperative is required to maintain;
new text end

new text begin (vii) the name of the developer, the developer's credentials, and the credentials of the
persons constituting the initial board of directors of the cooperative; and
new text end

new text begin (viii) a statement that the developer shall be financially liable for all of the common
expenses and costs allocated to the unsold membership interests and dwelling units
appurtenant thereto until such membership interests are sold to the initial purchasers thereof;
new text end

new text begin (4) the cooperative's schedule of commencement and completion of construction of any
buildings and other improvements that the cooperative is obligated to build;
new text end

new text begin (5) any expenses or services not reflected in the budget that the cooperative pays or
provides that may become a common expense and the projected common expense attributable
to each of those expenses or services;
new text end

new text begin (6) identification of any liens, defects, or encumbrances that will continue to affect the
title to a dwelling unit or to any real property owned by the cooperative after the contemplated
conveyance;
new text end

new text begin (7) a statement disclosing to the extent of the cooperative's or an affiliate of a cooperative's
actual knowledge, after reasonable inquiry, any unsatisfied judgments or lawsuits to which
the cooperative is a party, and the status of those lawsuits which are material to the project
or the dwelling unit appurtenant to a membership being purchased;
new text end

new text begin (8) a summary of the insurance coverage provided by the cooperative for the benefit of
members, and a detailed description of the insurance coverage that members are encouraged
to purchase for their own benefit;
new text end

new text begin (9) a statement describing:
new text end

new text begin (i) whether the members are entitled for federal and state tax purposes to deduct payments
made by the cooperative for real estate taxes and interest paid to the holder of a security
interest encumbering the cooperative;
new text end

new text begin (ii) a statement as to the effect on the members if the cooperative fails to pay real estate
taxes or payments due the holder of a security interest encumbering the cooperative; and
new text end

new text begin (iii) the principal amount and a general description of the terms of any blanket mortgage
contract for deed, or other blanket security instrument encumbering the cooperative property;
new text end

new text begin (10) a statement:
new text end

new text begin (i) that real estate taxes for the dwelling unit or any real property owned by the
cooperative are not delinquent, or if there are delinquent real estate taxes, describing the
property for which the taxes are delinquent, stating the amount of the delinquent taxes,
interest, and penalties, and stating the years for which taxes are delinquent; and
new text end

new text begin (ii) setting forth the amount of real estate taxes expected to be allocated to the dwelling
units, including the amount of any special assessments certified for payment with the real
estate taxes, due and payable with respect to the dwelling unit in the year in which the
information bulletin is given;
new text end

new text begin (11) any recorded covenants, conditions restrictions, and reservations affecting the
project; a statement that the occupancy agreement must be signed at the closing; and a
statement that members are required to abide by the bylaws, the articles of incorporation,
and the rules, regulations, and policies of the cooperative, including amendments from time
to time;
new text end

new text begin (12) a brief narrative description of any material agreements entered into between the
cooperative and a governmental entity that affect the project;
new text end

new text begin (13) a budget prepared by the developer; and
new text end

new text begin (14) a statement that purchase and sales of memberships and rights under occupancy
agreements are not for speculative purposes and that investments in the cooperative by
members are for the sole purpose of securing and acquiring a dwelling unit for their
residential use and benefit.
new text end

new text begin (b) A cooperative shall promptly amend the information bulletin to reflect any material
change in the information required by this chapter.
new text end

new text begin Subd. 3. new text end

new text begin Resale disclosure certificate. new text end

new text begin (a) In the event of a resale of a membership
interest by either the departing member or by the cooperative, the departing member or the
cooperative, as applicable, shall furnish to the purchaser before the execution of any purchase
and sale agreement for the applicable membership interest the following documents relating
to the cooperative:
new text end

new text begin (1) copies of the articles and bylaws, any rules and regulations, and any amendments
thereto; and
new text end

new text begin (2) a resale disclosure certificate containing the information set forth in paragraph (b).
new text end

new text begin (b) The resale disclosure certificate must provide the following information:
new text end

new text begin (1) the name of the cooperative;
new text end

new text begin (2) the number of the dwelling unit appurtenant to the subject membership interest;
new text end

new text begin (3) the amount of the monthly common expense assessments payable under the occupancy
agreement applicable to the subject dwelling unit;
new text end

new text begin (4) the amount of other additional fees or charges payable by members, such as late
payment charges;
new text end

new text begin (5) extraordinary expenditures, if any, approved by the cooperative and not yet assessed
to members for the current and two succeeding fiscal years;
new text end

new text begin (6) the current balances in the cooperative's replacement reserve and the general operating
reserve, and any other reserves maintained by the cooperative;
new text end

new text begin (7) copies of the most current financial statements of the cooperative, including balance
sheet and income and expense statements;
new text end

new text begin (8) a disclosure of any unsatisfied judgments against the cooperative;
new text end

new text begin (9) a statement that there are no pending lawsuits to which the cooperative is a party
except as specifically disclosed;
new text end

new text begin (10) a radon disclosure pursuant to the requirements of section 144.496; and
new text end

new text begin (11) the resale disclosure certificate shall contain a certification by the subscribing party
that the information contained therein is true and correct as of the date of the certification.
new text end

new text begin Subd. 4. new text end

new text begin Subscription agreement for new project. new text end

new text begin The subscription agreement must
include the following provisions:
new text end

new text begin (1) a statement that all subscription funds received from applicants shall be deposited
promptly without deduction in an escrow account at a bank or banks whose deposits are
insured by an agency of the federal government. The escrow account shall be controlled by
a licensed title insurance company or agent thereof. Money in the account shall be held
solely for the benefit of the subscribers until transferred to the account of the cooperative
as provided in clauses (2) and (5). The escrow account may be interest bearing, in which
event interest earnings shall accrue to the benefit of subscribers, except that subscription
funds and interest earned, if any, may be used solely to pay the escrow agent to administer
the escrow account and to pay costs and expenses associated with the offering;
new text end

new text begin (2) a statement of any subscription funds due and payable upon execution of the
subscription agreement and, where less than all of the subscription funds are due and payable
upon execution of the subscription agreement, a statement of the balance due and payable
and the estimated time frame within which that balance must be paid;
new text end

new text begin (3) a statement of the estimated monthly carrying charges with respect to the membership
interest being subscribed for;
new text end

new text begin (4) a statement that refundable subscription funds shall be immediately refunded by the
escrow agent to an applicant whose subscription agreement is terminated pursuant to the
agreement and a statement whether the return of subscription funds shall be with or without
accrued interest earned on the escrow;
new text end

new text begin (5) a statement concerning the deadline when sufficient subscribers and loan commitments
must be obtained, and a statement that if the deadline is not attained, the subscribers' escrowed
funds will be released;
new text end

new text begin (6) a statement that the entire escrow account and accrued interest earned, if any, shall
be immediately paid to the cooperative if sufficient subscribers and loan commitments are
obtained by the disclosed end date and the cooperative proceeds with the project;
new text end

new text begin (7) a statement that:
new text end

new text begin (i) within ten days after the receipt of an information bulletin, a purchaser may cancel
the subscription agreement for the purchase of a membership in a cooperative, provided
that the right to cancel terminates upon the purchaser's voluntary acceptance of a conveyance
of the membership interest from the cooperative or by the purchaser agreeing to modify or
waive the right to cancel by a separate writing from the subscription agreement and signed
by the purchaser more than three days after the purchaser receives the information bulletin;
and
new text end

new text begin (ii) if a purchaser receives an information bulletin more than ten days before signing a
subscription agreement, the purchaser cannot cancel the subscription agreement pursuant
to this ten-day cancellation.
new text end

new text begin Subd. 5. new text end

new text begin Membership purchase and sale agreements. new text end

new text begin In the event of a resale of a
membership interest by either the departing member or by the cooperative, a membership
purchase and sale agreement shall be utilized as the contract for purchase of the membership
interest rather than a subscription agreement. A membership purchase and sale agreement
must contain the following provisions:
new text end

new text begin (1) a statement disclosing the identities of the selling and purchasing parties;
new text end

new text begin (2) a statement acknowledging that the purchase of a membership interest in the
cooperative constitutes personal property and not an interest in real estate;
new text end

new text begin (3) a statement of the purchase price for the membership interest, including any earnest
money due and payable, the date on which the membership interest is due and payable, and
any sum which may be due and payable upon closing;
new text end

new text begin (4) a schedule of any items of personal property owned by the seller that the buyer is
purchasing as part of the membership interest;
new text end

new text begin (5) a statement acknowledging that the seller and the cooperative have furnished the
buyer with copies of the cooperative's articles of incorporation, bylaws, rules, and policies
currently in effect and a resale disclosure statement;
new text end

new text begin (6) a statement that:
new text end

new text begin (i) within ten days after the receipt of a copy of the documents set forth in clause (5), a
purchaser may cancel the purchase agreement for the purchase of a membership in a
cooperative, without penalty and with a full and prompt refund of all payments made under
the purchase agreement, unless within that ten-day period the buyer has closed on the
purchase of the membership interest; and
new text end

new text begin (ii) if the buyer elects to cancel the purchase agreement pursuant to this provision, the
buyer may do so in writing by hand delivering the notice of cancellation to the seller or
seller's agent, or by mailing such notice by postage prepaid United States mail, to the seller
or the seller's agent within the ten-day period;
new text end

new text begin (7) a statement outlining any contingencies or conditions precedent to closing on the
purchase of the membership interest and the impact of a failure of one or more of the
articulated contingencies on the refund of any earnest money to the buyer;
new text end

new text begin (8) a statement of the monthly carrying charges allocable to the dwelling unit appurtenant
to the membership interest being purchased and any adjustments or prorations of carrying
charges due and payable in the month of closing as between the seller and buyer;
new text end

new text begin (9) a statement of any dwelling alterations that will be permitted prior to closing, the
conditions under which those alterations may be made, and the parties financially responsible
for any such alterations;
new text end

new text begin (10) a statement of the anticipated closing date for the purchase of the membership
interest;
new text end

new text begin (11) a statement of the remedies available to the seller or buyer as a result of a default
by the other party in its obligation to close on the purchase of the subject membership
interest;
new text end

new text begin (12) a schedule of the items to be delivered at closing which shall include:
new text end

new text begin (i) the seller's delivery of seller's membership certificate to the buyer, duly assigned to
the buyer;
new text end

new text begin (ii) the seller's delivery to the buyer of a bill of sale in a form reasonably acceptable to
the buyer, conveying to the buyer free and clear of all encumbrances any personal property
purchased by the buyer pursuant to clause (4);
new text end

new text begin (iii) the buyer's delivery to the seller of funds representing any balance of the purchase
price due and payable; and
new text end

new text begin (iv) the buyer's delivery to the cooperative of an occupancy agreement duly executed
by the buyer; and
new text end

new text begin (13) a statement regarding the impact of destruction of the subject dwelling unit prior
to the closing date on the buyer's purchase obligations and refund of any earnest money
paid.
new text end

new text begin Subd. 6. new text end

new text begin Occupancy agreement contents. new text end

new text begin The occupancy agreement must include the
following provisions:
new text end

new text begin (1) a statement of the monthly carrying charges due and payable by the member to the
cooperative representing the member's proportionate share of the sum that the cooperative's
board of directors' estimates are required to meet the cooperative's annual expenses, and
the method of calculating the same;
new text end

new text begin (2) a statement of when the payment of carrying charges will commence;
new text end

new text begin (3) a statement of the circumstances under which the cooperative may issue any patronage
refunds or credits to members;
new text end

new text begin (4) a statement that the term of the occupancy agreement is coextensive with membership
in the cooperative, a statement regarding any automatic renewal of the occupancy agreement
term, and a statement of any other terms, conditions, or requirements for renewal of the
occupancy agreement term;
new text end

new text begin (5) a statement of the terms under which the member or cooperative may terminate a
member's occupancy agreement;
new text end

new text begin (6) a statement that the member may occupy the member's dwelling unit solely as a
private residential dwelling unit;
new text end

new text begin (7) a statement outlining the member's rights, duties, and obligations under the occupancy
agreement and as a member of the cooperative;
new text end

new text begin (8) a statement outlining member acts prohibited by the occupancy agreement, articles,
bylaws, or the rules, regulations, and policies of the cooperative;
new text end

new text begin (9) a statement regarding the circumstances under which assignment of the occupancy
agreement or subletting is to be permitted or prohibited;
new text end

new text begin (10) a statement outlining the circumstances and manner in which a membership interest
can be transferred, assigned, or sold;
new text end

new text begin (11) a statement outlining the manner in which the cooperative will manage the
cooperative property and operate and administer the cooperative's business, including the
payment of all taxes and assessments levied against the cooperative to the extent not billed
by the taxing authority directly to the member;
new text end

new text begin (12) a statement outlining the separate insurance obligations of the cooperative and the
member, and should minimally include the separate insurance requirements set forth in this
chapter;
new text end

new text begin (13) a statement concerning the circumstances and extent to which the cooperative must
repair, maintain, and replace property owned by the cooperative and the circumstances, if
any, under which the cooperative may hold the member responsible for repairing,
maintaining, or replacing property owned by the cooperative;
new text end

new text begin (14) a statement defining events of default under the occupancy agreement, the effects
of default, and the remedies available to the cooperative;
new text end

new text begin (15) a statement through which the member covenants that the member and the member's
guests and subtenants, if any, must preserve and promote the cooperative ownership principles
of the cooperative and abide by the cooperative's articles, bylaws, and rules, policies and
regulations;
new text end

new text begin (16) a statement that representatives of any mortgagee holding a mortgage on the property
of the cooperative, the officers and employees of the cooperative, and, with the approval
of the cooperative, the employees of any contractor, utility company, municipal agency, or
others, has the right to enter the member's dwelling unit and make inspections at any
reasonable hour of the day with reasonable notice and at any time in the event of emergency;
and
new text end

new text begin (17) a statement that the cooperative will not discriminate against any person because
of race, color, religion, sex, handicap, or national origin.
new text end

Sec. 56.

new text begin [308C.613] BUDGET AND REPLACEMENT RESERVE REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements. new text end

new text begin The annual budget of a senior housing cooperative formed
under this chapter shall include, without limitation:
new text end

new text begin (1) the amount included in the budget as a reserve for replacement;
new text end

new text begin (2) the amount included in the budget for the general operating reserve;
new text end

new text begin (3) the amount included in the budget for any other reserves;
new text end

new text begin (4) the projected common expense for each category of expenditures for the cooperative;
and
new text end

new text begin (5) the projected monthly common expense assessment for each type of dwelling unit.
new text end

new text begin Subd. 2. new text end

new text begin Replacement reserves. new text end

new text begin The cooperative shall include in its annual budgets
replacement reserves projected by the board to be adequate, together with past and future
contributions thereto to fund the replacement of those components of the cooperative that
the cooperative is obligated to replace by reason of ordinary wear and tear or obsolescence,
subject to the following:
new text end

new text begin (1) the annual budgets need not include reserves for replacement of components that
have a remaining useful life of more than 30 years, unless required otherwise by the lender
or mortgage insurer relative to the cooperative's master mortgage;
new text end

new text begin (2) the cooperative shall keep the replacement reserves in an account or accounts separate
from the cooperative's operating funds, and shall not use or borrow from the replacement
reserves to fund the cooperative's operating expenses, except that this restriction shall not
affect the cooperative's authority to pledge the replacement reserves as security for a loan
to the cooperative; and
new text end

new text begin (3) the cooperative shall reevaluate the adequacy of the cooperative's budgeted
replacement reserves at least every third year after the filing of the cooperative's articles.
new text end

Sec. 57.

new text begin [308C.614] LIEN FOR ASSESSMENTS.
new text end

new text begin (a) A senior housing cooperative formed under this chapter has a lien on a membership
interest, the appurtenant occupancy agreement, and the member's associated occupancy
rights for any assessment levied against that membership interest from the time the
assessment becomes due. If an assessment is payable in installments, the full amount of the
assessment is a lien from the time the first installment thereof becomes due. Unless the
bylaws provide otherwise, any fees, charges, or payments that members must regularly pay
to the cooperative are enforceable as assessments under this section. Other cooperatives
formed under this chapter may authorize a lien on a membership interest, occupancy
agreement, or a proprietary lease in the bylaws.
new text end

new text begin (b) A lien under this section is prior to all other liens and encumbrances on a membership
certificate except (i) liens, encumbrances, or mortgages which the cooperative creates,
assumes, or takes subject to, or (ii) any first security interest encumbering only the
membership interest. If a first security interest encumbering a membership interest which
is personal property is foreclosed, the secured party or the purchaser at the sale shall take
title to the membership interest subject to unpaid assessments. This paragraph shall not
affect the priority of mechanics' liens encumbering the project.
new text end

new text begin (c) Proceedings to enforce an assessment lien shall be instituted within three years after
the last installment of the assessment becomes payable, or shall be barred.
new text end

new text begin (d) The member and owner of the membership interest, at the time an assessment is due,
shall be personally liable to the cooperative for payment of the assessment levied against
the membership interest. If there are multiple owners of the membership interest, they shall
be jointly and severally liable.
new text end

new text begin (e) This section does not prohibit actions to recover sums for which paragraph (a) creates
a lien nor prohibit a cooperative from taking an assignment of the membership certificate
and occupancy agreement or other conveyance documents agreed upon by the parties in
lieu of foreclosure.
new text end

new text begin (f) The cooperative shall furnish to a member or the member's authorized agent upon
written request of the member or the authorized agent a statement setting forth the amount
of unpaid assessments currently levied against the member's interest. The statement shall
be furnished within ten business days after receipt of the request and is binding on the
cooperative and every member.
new text end

Sec. 58.

new text begin [308C.615] FORECLOSURE OF LIENS OR TO ACQUIRE OCCUPANCY
RIGHTS FOLLOWING MEMBERSHIP TERMINATION IN A SENIOR HOUSING
COOPERATIVE.
new text end

new text begin (a) A senior housing cooperative's lien shall be foreclosed by a private sale negotiated
by the cooperative, or by an acceptance by the cooperative of the subject membership interest
in full satisfaction of the secured indebtedness pursuant to the following:
new text end

new text begin (1) a notice of the sale or acceptance shall be served on the member 90 days prior to the
sale or acceptance;
new text end

new text begin (2) the cooperative shall be entitled to its reasonable costs and attorney fees not exceeding
the amount provided by section 582.01, subdivision 1a;
new text end

new text begin (3) the amount of the cooperative's lien shall be deemed to be adequate consideration
for the membership interest subject to sale or acceptance, notwithstanding the value of the
membership interest; and
new text end

new text begin (4) the notice of sale or acceptance shall contain the following statement in capital letters
with the name of the cooperative or secured party filled in:
new text end

new text begin "THIS IS TO INFORM YOU THAT BY THIS NOTICE (fill in name of cooperative
or secured party) HAS BEGUN PROCEEDINGS UNDER MINNESOTA STATUTES,
CHAPTER 308C, TO FORECLOSE ON YOUR MEMBERSHIP INTEREST FOR THE
REASON SPECIFIED IN THIS NOTICE. YOUR MEMBERSHIP INTEREST AND
YOUR RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO
WILL TERMINATE 90 DAYS AFTER SERVICE OF THIS NOTICE ON YOU UNLESS
BEFORE THEN:
new text end

new text begin (a) THE PERSON AUTHORIZED BY (fill in the name of cooperative or secured party)
AND DESCRIBED IN THIS NOTICE TO RECEIVE PAYMENTS RECEIVES FROM
YOU:
new text end

new text begin (1) THE AMOUNT THIS NOTICE SAYS YOU OWE; PLUS
new text end

new text begin (2) THE COSTS INCURRED TO SERVE THIS NOTICE ON YOU; PLUS
new text end

new text begin (3) $500 TO APPLY TO ATTORNEY FEES ACTUALLY EXPENDED OR
INCURRED; PLUS
new text end

new text begin (4) ANY ADDITIONAL AMOUNTS FOR YOUR MEMBERSHIP INTEREST
BECOMING DUE TO (fill in name of cooperative or secured party) AFTER THE DATE
OF THIS NOTICE; OR
new text end

new text begin (b) YOU SECURE FROM A DISTRICT COURT AN ORDER THAT THE
FORECLOSURE OF YOUR RIGHTS TO YOUR MEMBERSHIP INTEREST AND
YOUR RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO BE
SUSPENDED UNTIL YOUR CLAIMS OR DEFENSES ARE FINALLY DISPOSED OF
BY TRIAL, HEARING, OR SETTLEMENT. YOUR ACTION MUST SPECIFICALLY
STATE THOSE FACTS AND GROUNDS THAT DEMONSTRATE YOUR CLAIMS
OR DEFENSES. IF YOU DO NOT TAKE ACTION AS PRESCRIBED IN PARAGRAPH
(A) OF THIS NOTICE WITHIN THE TIME PERIOD SPECIFIED IN THIS NOTICE,
YOUR OWNERSHIP RIGHTS IN YOUR MEMBERSHIP INTEREST AND YOUR
RIGHT TO OCCUPY THE DWELLING UNIT APPURTENANT THERETO WILL
TERMINATE AT THE END OF THE PERIOD, YOU WILL LOSE ALL THE MONEY
YOU HAVE PAID FOR YOUR MEMBERSHIP INTEREST, YOU WILL LOSE YOUR
RIGHT TO POSSESSION AND OCCUPANCY OF YOUR DWELLING UNIT, YOU
MAY LOSE YOUR RIGHT TO ASSERT ANY CLAIMS OR DEFENSES THAT YOU
MIGHT HAVE, AND YOU WILL BE EVICTED. IF YOU HAVE ANY QUESTIONS
ABOUT THIS NOTICE, CONTACT AN ATTORNEY IMMEDIATELY."
new text end

new text begin (b) If the member or occupant fails to redeem before the expiration of 90 days following
delivery of the notice to the member, the cooperative may bring an action for eviction against
the member and any persons occupying the dwelling unit, and in that case section 504B.291
shall not apply.
new text end

new text begin (c) A cooperative may assign its lien rights in the same manner as any other secured
party.
new text end

Sec. 59.

new text begin [308C.616] CERTIFICATED MEMBERSHIP INTERESTS.
new text end

new text begin Subdivision 1. new text end

new text begin Certificated; uncertificated. new text end

new text begin The membership interests of a cooperative
shall be either certificated or uncertificated. Each holder of certificated membership interests
issued is entitled to a certificate of membership interest.
new text end

new text begin Subd. 2. new text end

new text begin Signature required. new text end

new text begin Certificates shall be signed by an agent or officer authorized
in the articles or bylaws to sign share certificates or, in the absence of an authorization, by
the chair or records officer of the cooperative.
new text end

new text begin Subd. 3. new text end

new text begin Signature valid. new text end

new text begin If a person signs or has a facsimile signature placed upon a
certificate while the chair, an officer, transfer agent, or records officer of a cooperative, the
certificate may be issued by the cooperative, even if the person has ceased to have that
capacity before the certificate is issued, with the same effect as if the person had that capacity
at the date of its issue.
new text end

new text begin Subd. 4. new text end

new text begin Form of certificate. new text end

new text begin A certificate representing membership interests of a
cooperative shall contain on its face:
new text end

new text begin (1) the name of the cooperative;
new text end

new text begin (2) a statement that the cooperative is organized under the laws of this state and this
chapter;
new text end

new text begin (3) the name of the person to whom the certificate is issued;
new text end

new text begin (4) the number and class of membership interests, and the designation of the series, if
any, that the certificate represents;
new text end

new text begin (5) a statement that the membership interests in the cooperative are subject to the articles
and bylaws of the cooperative; and
new text end

new text begin (6) any restrictions on transfer, including approval of the board, if applicable, first rights
of purchase by the cooperative, and other restrictions on transfer, which may be stated by
reference to the back of the certificate or to another document.
new text end

new text begin Subd. 5. new text end

new text begin Limitations set forth. new text end

new text begin A certificate representing membership interest issued
by a cooperative authorized to issue membership interests of more than one class or series
shall set forth upon the face or back of the certificate, or shall state that the cooperative will
furnish to any member upon request and without charge, a full statement of the designations,
preferences, limitations, and relative rights of the membership interests of each class or
series authorized to be issued, so far as they have been determined, and the authority of the
board to determine the relative rights and preferences of subsequent classes or series.
new text end

new text begin Subd. 6. new text end

new text begin Prima facie evidence. new text end

new text begin A certificate signed as provided in subdivision 2 is prima
facie evidence of the ownership of the membership interests referred to in the certificate.
new text end

new text begin Subd. 7. new text end

new text begin Uncertificated membership interests. new text end

new text begin Unless uncertificated membership
interests are prohibited by the articles or bylaws, a resolution approved by the affirmative
vote of a majority of the directors present may provide that some or all of any or all classes
and series of its membership interests will be uncertificated membership interests. The
resolution does not apply to membership interests represented by a certificate until the
certificate is surrendered to the cooperative. Within a reasonable time after the issuance or
transfer of uncertificated membership interests, the cooperative shall send to the new member
the information required by this section to be stated on certificates. This information is not
required to be sent to the new holder by a publicly held cooperative that has adopted a
system of issuance, recordation, and transfer of its membership interests by electronic or
other means not involving an issuance of certificates if the system complies with section
17A of the Securities Exchange Act of 1934. Except as otherwise expressly provided by
statute, the rights and obligations of the holders of certificated and uncertificated membership
interests of the same class and series are identical.
new text end

Sec. 60.

new text begin [308C.621] LOST CERTIFICATES; REPLACEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance. new text end

new text begin A new membership interest certificate may be issued under
section 336.8-405 in place of one that is alleged to have been lost, stolen, or destroyed.
new text end

new text begin Subd. 2. new text end

new text begin Not overissue. new text end

new text begin The issuance of a new certificate under this section does not
constitute an overissue of the membership interests it represents.
new text end

Sec. 61.

new text begin [308C.625] RESTRICTION ON TRANSFER OR REGISTRATION OF
MEMBERSHIP INTERESTS.
new text end

new text begin Subdivision 1. new text end

new text begin How imposed. new text end

new text begin A restriction on the transfer or registration of transfer of
membership interests of a cooperative may be imposed in the articles, in the bylaws, by a
resolution adopted by the members, or by an agreement among or other written action by
a number of members or holders of other membership interests or among them and the
cooperative. A restriction is not binding with respect to membership interests issued prior
to the adoption of the restriction, unless the holders of those membership interests are parties
to the agreement or voted in favor of the restriction.
new text end

new text begin Subd. 2. new text end

new text begin Restrictions permitted. new text end

new text begin A written restriction on the transfer or registration of
transfer of membership interests of a cooperative that is not manifestly unreasonable under
the circumstances may be enforced against the holder of the restricted membership interests
or a successor or transferee of the holder, including a pledgee or a legal representative, if
the restriction is either:
new text end

new text begin (1) noted conspicuously on the face or back of the certificate;
new text end

new text begin (2) included in this chapter or the articles or bylaws; or
new text end

new text begin (3) included in information sent to the holders of uncertificated membership interests.
new text end

new text begin Unless a restriction is in this chapter, the articles, bylaws, noted conspicuously on the
face or back of the certificate, or included in information sent to the holders of uncertificated
membership interests, a restriction, even though permitted by this section, is ineffective
against a person without knowledge of the restriction. A restriction under this section is
deemed to be noted conspicuously and is effective if the existence of the restriction is stated
on the certificate and reference is made to a separate document creating or describing the
restriction.
new text end

Sec. 62.

new text begin [308C.627] OPERATING AGREEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin A written agreement among persons who are then
members, including a sole member, or who have signed subscription or contribution
agreements, relating to the control of any phase of the business and affairs of the cooperative,
its liquidation, dissolution and termination, or the relations among members or persons who
have signed subscription or contribution agreements is valid as provided in subdivision 2.
Wherever this chapter provides that a particular result may or must be obtained through a
provision in the articles or bylaws, the same result can be accomplished through an operating
agreement valid under this section or through a procedure established by an operating
agreement valid under this section.
new text end

new text begin Subd. 2. new text end

new text begin Valid execution. new text end

new text begin Other than occupant member voting control under section
308C.545 and occupant member allocation and distribution provisions under sections
308C.721 and 308C.725, a written agreement among persons described in subdivision 1
that relates to the control of or the liquidation, dissolution, and termination of the cooperative;
the relations among them; or any phase of the business and affairs of the cooperative,
including, without limitation, the management of its business; the declaration and payment
of distributions; the sharing of profits and losses; the election of directors; the employment
of members by the cooperative; or the arbitration of disputes, is valid, if the agreement is
signed by all persons who are then the members of the cooperative, whether or not the
members all have voting power, and all those who have signed contribution agreements,
regardless of whether those signatories will, when members, have voting power.
new text end

new text begin Subd. 3. new text end

new text begin Other agreements not affected. new text end

new text begin This section does not apply to, limit, or restrict
agreements otherwise valid, nor is the procedure set forth in this section the exclusive method
of agreement among members or between the members and the cooperative with respect to
any of the matters described.
new text end

Sec. 63.

new text begin [308C.701] AUTHORIZATION, FORM, AND ACCEPTANCE OF
CONTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Board of directors may authorize. new text end

new text begin Subject to any restrictions in this
chapter regarding occupant and nonoccupant membership interests or in the articles or
bylaws, and only when authorized by the board, a cooperative may accept contributions,
which may be occupant or nonoccupant membership contributions as determined by the
board under subdivisions 2 and 3, make contribution agreements under section 308C.711,
and make contribution allowance agreements under section 308C.715.
new text end

new text begin Subd. 2. new text end

new text begin Permissible forms. new text end

new text begin A person may make a contribution to a cooperative:
new text end

new text begin (1) by paying money or transferring the ownership of an interest in property to the
cooperative or rendering services to or for the benefit of the cooperative; or
new text end

new text begin (2) through a written obligation signed by the person to pay money or transfer ownership
of an interest in property to the cooperative or to perform services to or for the benefit of
the cooperative.
new text end

new text begin Subd. 3. new text end

new text begin Acceptance of contributions. new text end

new text begin No purported contribution is to be treated or
considered as a contribution, unless:
new text end

new text begin (1) the board accepts the contribution on behalf of the cooperative and in that acceptance
describes the contribution, including terms of future performance, if any, and states the
value being accorded to the contribution; and
new text end

new text begin (2) the fact of contribution and the contribution's accorded value are both reflected in
the required records of the cooperative.
new text end

new text begin Subd. 4. new text end

new text begin Valuation. new text end

new text begin The determinations of the board as to the amount or fair value or
the fairness to the cooperative of the contribution accepted or to be accepted by the
cooperative or the terms of payment or performance, including under a contribution
agreement in section 308C.711, and a contribution allowance agreement in section 308C.715,
are presumed to be proper if they are made in good faith and on the basis of accounting
methods, or a fair valuation or other method, reasonable in the circumstances. Directors
who are present and entitled to vote, and who, intentionally or without reasonable
investigation, fail to vote against approving a consideration that is unfair to the cooperative,
or overvalue property or services received or to be received by the cooperative as a
contribution, are jointly and severally liable to the cooperative for the benefit of the then
members who did not consent to and are damaged by the action, to the extent of the damages
of those members. A director against whom a claim is asserted under this subdivision, except
in case of knowing participation in a deliberate fraud, is entitled to contribution on an
equitable basis from other directors who are liable under this subdivision.
new text end

Sec. 64.

new text begin [308C.705] RESTATEMENT OF VALUE OF PREVIOUS
CONTRIBUTIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin As used in this section, an "old contribution" is a contribution
reflected in the required records of a cooperative for a nonoccupant membership interest
before the time the cooperative accepts a new contribution for a nonoccupant membership
interest.
new text end

new text begin Subd. 2. new text end

new text begin Restatement required. new text end

new text begin Whenever a cooperative accepts a new contribution
for a nonoccupant membership interest, the board shall restate, as required by this section,
the value of all old contributions.
new text end

new text begin Subd. 3. new text end

new text begin Restatement as to particular series or class to which new contribution
pertains. new text end

new text begin (a) Unless otherwise provided in the articles or bylaws, this subdivision sets forth
the method of restating the value of old contributions that pertain to the same series or class
to which the new contribution pertains. To restate the value:
new text end

new text begin (1) state the value the cooperative has accorded to the new contribution under section
308C.701, subdivision 3, clause (1);
new text end

new text begin (2) determine what percentage the value stated under clause (1) will constitute, after the
restatement required by this subdivision, of the total value of all contributions that pertain
to the particular series or class to which the new contribution pertains;
new text end

new text begin (3) divide the value stated under clause (1) by the percentage determined under clause
(2), yielding the total value, after the restatement required by this subdivision, of all
contributions pertaining to the particular series or class;
new text end

new text begin (4) subtract the value stated under clause (1) from the value determined under clause
(3), yielding the total value, after the restatement required by this subdivision, of all the old
contributions pertaining to the particular series or class;
new text end

new text begin (5) subtract the value, as reflected in the required records before the restatement required
by this subdivision, of the old contributions from the value determined under clause (4),
yielding the value to be allocated among and added to the old contributions pertaining to
the particular series or class; and
new text end

new text begin (6) allocate the value determined under clause (5) proportionally among the old
contributions pertaining to the particular series or class, add the allocated values to those
old contributions, and change the required records accordingly.
new text end

new text begin (b) The values determined under paragraph (a), clause (5), and allocated and added under
paragraph (a), clause (6), may be positive, negative, or zero.
new text end

new text begin Subd. 4. new text end

new text begin Restatement method for other series or class. new text end

new text begin Unless otherwise provided in
the articles or bylaws, this subdivision sets forth the method of restating the value of old
contributions that do not pertain to the same series or class to which the new contribution
pertains. To restate the value:
new text end

new text begin (1) determine the percentage by which the restatement under subdivision 3 has changed
the total contribution value reflected in the required records for the series or class to which
the new contribution pertains; and
new text end

new text begin (2) as to each old contribution that does not pertain to the same series or class to which
the new contribution pertains, change the value reflected in the required records by the
percentage determined under clause (1). The percentage determined under clause (1) may
be positive, negative, or zero.
new text end

new text begin Subd. 5. new text end

new text begin New contributions may be aggregated. new text end

new text begin If a cooperative accepts more than
one contribution pertaining to the same series or class at the same time, then for the purpose
of the restatement required by this section, the cooperative may consider all the new
contributions a single contribution.
new text end

Sec. 65.

new text begin [308C.711] CONTRIBUTION AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Signed writing. new text end

new text begin A contribution agreement, whether made before or after
the formation of the cooperative, is not enforceable against the would-be contributor unless
it is in writing and signed by the would-be contributor.
new text end

new text begin Subd. 2. new text end

new text begin Irrevocable period. new text end

new text begin Unless otherwise provided in the contribution agreement,
or unless all of the would-be contributors and, if in existence, the cooperative, consent to a
shorter or longer period, a contribution agreement is irrevocable for a period of six months.
new text end

new text begin Subd. 3. new text end

new text begin Current and deferred payment. new text end

new text begin A contribution agreement, whether made
before or after the formation of a cooperative, must be paid or performed in full at the time
or times, or in the installments, if any, specified in the contribution agreement. In the absence
of a provision in the contribution agreement specifying the time at which the contribution
is to be paid or performed, the contribution must be paid or performed at the time or times
determined by the board, but a call made by the board for payment or performance on
contributions must be uniform for all membership interests of the same class or for all
membership interests of the same series.
new text end

new text begin Subd. 4. new text end

new text begin Failure to pay remedies. new text end

new text begin (a) Unless otherwise provided in the contribution
agreement, in the event of default in the payment or performance of an installment or call
when due, the cooperative may proceed to collect the amount due in the same manner as a
debt due the cooperative. If a would-be contributor does not make a required contribution
of property or services, the cooperative shall require the would-be contributor to contribute
cash equal to that portion of the value, as stated in the cooperative required records, of the
contribution that has not been made.
new text end

new text begin (b) If the amount due under a contribution agreement remains unpaid for a period of 20
days after written notice of demand for payment has been given to the delinquent would-be
contributor, the membership interests that were subject to the contribution agreement may
be offered for sale by the cooperative for a price in money equaling or exceeding the sum
of the full balance owed by the delinquent would-be contributor plus the expenses incidental
to the sale.
new text end

new text begin If the membership interests that were subject to the contribution agreement are sold
according to this paragraph, the cooperative shall pay to the delinquent would-be contributor
or to the delinquent would-be contributor's legal representative the lesser of:
new text end

new text begin (1) the excess of net proceeds realized by the cooperative over the sum of the amount
owed by the delinquent would-be contributor plus the expenses incidental to the sale, less
any penalty stated in the contribution agreement, which may include forfeiture of the partial
contribution; and
new text end

new text begin (2) the amount actually paid by the delinquent would-be contributor.
new text end

new text begin If the membership interests that were subject to the contribution agreement are not sold
according to this paragraph, the cooperative may collect the amount due in the same manner
as a debt due the cooperative or cancel the contribution agreement according to paragraph
(c).
new text end

new text begin (c) If the amount due under a contribution agreement remains unpaid for a period of 20
days after written notice of demand for payment has been given to the delinquent would-be
contributor and the membership interests that were subject to the defaulted contribution
agreement have not been sold according to paragraph (b), the cooperative may cancel the
contribution agreement, the cooperative may retain any portion of the contribution agreement
price actually paid as provided in the contribution agreement, and the cooperative shall
refund to the delinquent would-be contributor or the delinquent would-be contributor's legal
representatives any portion of the contribution agreement price as provided in the contribution
agreement.
new text end

new text begin Subd. 5. new text end

new text begin Restrictions on assignment. new text end

new text begin Unless otherwise provided in the articles or
bylaws, a would-be contributor's rights under a contribution agreement may not be assigned,
in whole or in part, to a person who was not a member at the time of the assignment, unless
all the members approve the assignment by unanimous written consent.
new text end

Sec. 66.

new text begin [308C.715] CONTRIBUTION RIGHTS AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Agreements permitted. new text end

new text begin Subject to any restrictions in the articles or
bylaws, a cooperative may enter into contribution rights agreements under the terms,
provisions, and conditions fixed by the board.
new text end

new text begin Subd. 2. new text end

new text begin Writing required and terms to be stated. new text end

new text begin Any contribution rights agreement
must be in writing and the writing must state in full, summarize, or include by reference all
the agreement's terms, provisions, and conditions of the rights to make contributions.
new text end

new text begin Subd. 3. new text end

new text begin Restrictions on assignment. new text end

new text begin Unless otherwise provided in the articles or
bylaws, a would-be contributor's rights under a contribution rights agreement may not be
assigned, in whole or in part, to a person who was not a member at the time of the assignment,
unless all the members approve the assignment by unanimous written consent.
new text end

Sec. 67.

new text begin [308C.721] ALLOCATIONS AND DISTRIBUTIONS TO MEMBERS.
new text end

new text begin Subdivision 1. new text end

new text begin Allocation of profits and losses. new text end

new text begin If applicable to the specific type of
housing cooperative formed under this chapter, the bylaws or operating agreement shall
prescribe the allocation of profits and losses between occupant membership interests
collectively and any other membership interests. If the bylaws or operating agreement do
not otherwise provide, the profits and losses between occupant membership interests
collectively and other membership interests shall be allocated on the basis of the value of
contributions to capital made by the occupant membership interests collectively and other
membership interests and accepted by the cooperative. The allocation of profits to the
occupant membership interests collectively shall not be less than 50 percent of the total
profits in any fiscal year, except that if authorized in the original articles as filed or in articles
or bylaws that are adopted by an affirmative vote of the occupant members or the articles
or bylaws are amended by the affirmative vote of the occupant members, the allocation of
profits to the occupant membership interests collectively may not be less than 15 percent
of the total profits in any fiscal year.
new text end

new text begin Subd. 2. new text end

new text begin Distribution of cash or other assets. new text end

new text begin The bylaws or operating agreement shall
prescribe the distribution of cash or other assets of the cooperative among the membership
interests of the cooperative. If not otherwise provided in the bylaws, distribution shall be
made to the occupant membership interests collectively and other members on the basis of
the value of contributions to capital made and accepted by the cooperative, by the occupant
membership interests collectively, and other membership interests. The distributions to
occupant membership interests collectively shall not be less than 50 percent of the total
distributions in any fiscal year, except that if authorized in the articles or bylaws adopted
by the affirmative vote of the occupant members, or the articles or bylaws are amended by
the affirmative vote of the occupant members, the distributions to patron membership
interests collectively shall not be less than 15 percent of the total distributions in any year.
new text end

Sec. 68.

new text begin [308C.725] ALLOCATIONS AND DISTRIBUTIONS TO OCCUPANT
MEMBERS.
new text end

new text begin Subdivision 1. new text end

new text begin Distribution of net income. new text end

new text begin A cooperative may set aside a portion of
net income allocated to the occupant membership interests as the board determines advisable
to create or maintain a capital reserve.
new text end

new text begin Subd. 2. new text end

new text begin Reserves. new text end

new text begin In addition to a capital reserve, the board may, for occupant
membership interests:
new text end

new text begin (1) set aside an amount not to exceed five percent of the annual net income of the
cooperative for promoting and encouraging cooperative organization; and
new text end

new text begin (2) establish and accumulate reserves for common area items, buildings, depreciation,
losses, and other proper purposes.
new text end

new text begin Subd. 3. new text end

new text begin Occupant distributions. new text end

new text begin Any net income allocated to occupant members in
excess of dividends on equity and additions to reserves shall be distributed to occupant
members on the basis of patronage of cooperative. A cooperative may establish allocation
units, whether the units are functional, divisional, departmental, or otherwise and pooling
arrangements and may account for and distribute net income to occupants on the basis of
allocation units and pooling arrangements. A cooperative may offset the net loss of an
allocation unit or pooling arrangement against the net income of other allocation units or
pooling arrangements.
new text end

new text begin Subd. 4. new text end

new text begin Frequency of distribution. new text end

new text begin Distribution of net income may be made at least
annually. The board shall present to the members at their annual meeting a report covering
the operations of the cooperative during the preceding fiscal year.
new text end

new text begin Subd. 5. new text end

new text begin Form of distribution. new text end

new text begin A cooperative may distribute net income to occupant
members in cash, capital credits, allocated patronage equities, revolving fund certificates,
or its own or other securities.
new text end

Sec. 69.

new text begin [308C.735] DISTRIBUTION OF UNCLAIMED PROPERTY.
new text end

new text begin Subdivision 1. new text end

new text begin Alternate procedure to disburse property. new text end

new text begin A cooperative may, in lieu
of paying or delivering to the state the unclaimed property specified in its report of unclaimed
property, distribute the unclaimed property to a business entity or organization that is exempt
from taxation.
new text end

new text begin Subd. 2. new text end

new text begin Owner's right extinguished on disbursement. new text end

new text begin The right of an owner to
unclaimed property held by a cooperative is extinguished when the property is disbursed
by the cooperative to a tax exempt organization if: (1) notice that the payment is available
has been mailed to the last known address of the person shown by the records to be entitled
to the property; or (2) the address is unknown, notice is published in an official publication
of the cooperative.
new text end

Sec. 70.

new text begin [308C.801] MERGER AND CONSOLIDATION.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Unless otherwise prohibited, cooperatives organized
under the laws of this state, including cooperatives organized under this chapter or chapter
308A or 308B, may merge or consolidate with each other, a Minnesota limited liability
company under the provisions of sections 322C.1001 to 322C.1015, or other business entities
organized under the laws of another state by complying with the provisions of this section
and the law of the state where the surviving or new business entity will exist. A cooperative
may not merge or consolidate with a business entity organized under the laws of this state,
other than a cooperative organized under chapter 308A or 308B, unless the law governing
the business entity expressly authorizes merger or consolidation with a cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Plan. new text end

new text begin To initiate a merger or consolidation of a cooperative, a written plan of
merger or consolidation shall be prepared by the board or by a committee selected by the
board to prepare a plan. The plan shall state:
new text end

new text begin (1) the names of the constituent domestic cooperatives, the name of any Minnesota
limited liability company that is a party to the merger, to the extent authorized under sections
322C.1001 to 322C.1005 and 322C.1015, and any foreign business entities;
new text end

new text begin (2) the name of the surviving or new domestic cooperative, Minnesota limited liability
company as required by section 322C.1002, or other foreign business entity;
new text end

new text begin (3) the manner and basis of converting membership or ownership interests of the
constituent domestic cooperatives, the surviving Minnesota limited liability company as
provided in section 322C.1002, or foreign business entities into membership or ownership
interests in the surviving or new domestic cooperative, the surviving Minnesota limited
liability company as authorized in section 322C.1002, or foreign business entity;
new text end

new text begin (4) the terms of the merger or consolidation;
new text end

new text begin (5) the proposed effect of the consolidation or merger on the members and patron
members of each constituent domestic cooperative; and
new text end

new text begin (6) for a consolidation, the plan shall contain the articles of the entity or organizational
documents to be filed with the state in which the entity is organized or, if the surviving
organization is a Minnesota limited liability company, the articles of organization.
new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin The following shall apply to notice:
new text end

new text begin (1) the board shall mail or otherwise transmit or deliver notice of the merger or
consolidation to each member. The notice shall contain the full text of the plan, and the
time and place of the meeting at which the plan will be considered; and
new text end

new text begin (2) a cooperative with more than 200 members may provide the notice in the same
manner as a regular members' meeting notice.
new text end

new text begin Subd. 4. new text end

new text begin Adoption of plan. new text end

new text begin (a) A plan of merger or consolidation shall be adopted by
a domestic cooperative as provided in this subdivision.
new text end

new text begin (b) A plan of merger or consolidation is adopted if:
new text end

new text begin (1) a quorum of the members eligible to vote is registered as being present or represented
by mail vote or alternative ballot at the meeting; and
new text end

new text begin (2) the plan is approved by the occupant members, or if otherwise provided in the articles
or bylaws is approved by a majority of the votes cast in each class of votes cast, or for a
domestic cooperative with articles or bylaws requiring more than a majority of the votes
cast or other conditions for approval, the plan is approved by a proportion of the votes cast
or a number of total members as required by the articles or bylaws and the conditions for
approval in the articles or bylaws have been satisfied.
new text end

new text begin (c) After the plan has been adopted, articles of merger or consolidation stating the plan
and that the plan was adopted according to this subdivision shall be signed by the chair,
vice chair, records officer, or documents officer of each cooperative merging or consolidating.
new text end

new text begin (d) The articles of merger or consolidation shall be filed in the Office of the Secretary
of State.
new text end

new text begin (e) For a merger, the articles of the surviving domestic cooperative subject to this chapter
are deemed amended to the extent provided in the articles of merger.
new text end

new text begin (f) Unless a later date is provided in the plan, the merger or consolidation is effective
when the articles of merger or consolidation are filed in the office of the secretary of state
or the appropriate office of another jurisdiction.
new text end

new text begin (g) The secretary of state shall issue a certificate of organization of the merged or
consolidated cooperative.
new text end

new text begin Subd. 5. new text end

new text begin Effect of merger. new text end

new text begin For a merger that does not involve a Minnesota limited
liability company, the following shall apply to the effect of a merger:
new text end

new text begin (a) After the effective date, the domestic cooperative, Minnesota limited liability
company, if party to the plan, and any foreign business entity that is a party to the plan
become a single entity. For a merger, the surviving business entity is the business entity
designated in the plan. For a consolidation, the new domestic cooperative, the Minnesota
limited liability company, if any, and any foreign business entity is the business entity
provided for in the plan. Except for the surviving or new domestic cooperative, Minnesota
limited liability company, or foreign business entity, the separate existence of each merged
or consolidated domestic or foreign business entity that is a party to the plan ceases on the
effective date of the merger or consolidation.
new text end

new text begin (b) The surviving or new domestic cooperative, Minnesota limited liability company,
or foreign business entity possesses all of the rights and property of each of the merged or
consolidated business entities and is responsible for all their obligations. The title to property
of the merged or consolidated domestic cooperative or foreign business entity is vested in
the surviving or new domestic cooperative, Minnesota limited liability company, or foreign
business entity without reversion or impairment of the title caused by the merger or
consolidation.
new text end

new text begin (c) If a merger involves a Minnesota limited liability company, this subdivision is subject
to the provisions of section 322C.1002.
new text end

Sec. 71.

new text begin [308C.805] MERGER OF SUBSIDIARY.
new text end

new text begin Subdivision 1. new text end

new text begin When authorized; contents of plan. new text end

new text begin (a) For purposes of this section,
"subsidiary" means a domestic cooperative, a Minnesota limited liability company, or a
foreign cooperative, and "cooperative" means a domestic cooperative. A Minnesota limited
liability company may only participate in a merger under this section to the extent authorized
under section 322C.1002. A parent domestic cooperative or a subsidiary that is a domestic
cooperative may complete the merger of a subsidiary as provided in this section, provided
however, if either the parent or the subsidiary is a business entity organized under the laws
of this state, the merger of the subsidiary is not authorized under this section unless the law
governing the business entity expressly authorizes merger with a cooperative. A parent
cooperative owning at least 90 percent of the outstanding ownership interests of each class
and series of a subsidiary directly, or indirectly through related organizations, other than
classes or series that, absent this section, would otherwise not be entitled to vote on the
merger, may merge the subsidiary into itself or into any other subsidiary at least 90 percent
of the outstanding ownership interests of each class and series of which is owned by the
parent cooperative directly, or indirectly through related organizations, other than classes
or series that, absent this section, would otherwise not be entitled to vote on the merger,
without a vote of the members of itself or any subsidiary or may merge itself, or itself and
one or more of the subsidiaries, into one of the subsidiaries under this section. A resolution
approved by the affirmative vote of a majority of the directors of the parent cooperative
present shall set forth a plan of merger that contains:
new text end

new text begin (1) the name of the subsidiary or subsidiaries, the name of the parent, and the name of
the surviving cooperative;
new text end

new text begin (2) the manner and basis of converting the membership interests of the subsidiary or
subsidiaries or parent into securities of the parent, subsidiary, or of another cooperative or,
in the whole or in part, into money or other property;
new text end

new text begin (3) if the parent is a constituent cooperative but is not the surviving cooperative in the
merger, a provision for the pro rata issuance of membership interests of the surviving
cooperative to the holders of membership interests of the parent on surrender of any
certificates for shares of the parent; and
new text end

new text begin (4) if the surviving cooperative is a subsidiary, a statement of any amendments to the
articles of the surviving cooperative that will be part of the merger.
new text end

new text begin (b) If the parent is a constituent cooperative and the surviving cooperative in the merger,
it may change its cooperative name, without a vote of its members, by the inclusion of a
provision to that effect in the resolution of merger setting forth the plan of merger that is
approved by the affirmative vote of a majority of the directors of the parent present. Upon
the effective date of the merger, the name of the parent shall be changed.
new text end

new text begin (c) If the parent is a constituent cooperative but is not the surviving cooperative in the
merger, the resolution is not effective unless it is also approved by the affirmative vote of
the holders of a majority of the voting power of all membership interests of the parent
entitled to vote at a regular or special meeting if the parent is a cooperative, or in accordance
with the laws under which it is organized if the parent is a foreign business entity or
cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Notice to members of subsidiary. new text end

new text begin Notice of the action, including a copy of
the plan of merger, shall be given to each member, other than the parent and any subsidiary
of each subsidiary that is a constituent cooperative in the merger before, or within ten days
after, the effective date of the merger.
new text end

new text begin Subd. 3. new text end

new text begin Articles of merger; contents of articles. new text end

new text begin Articles of merger shall be prepared
that contain:
new text end

new text begin (1) the plan of merger;
new text end

new text begin (2) the number of outstanding membership interests of each series and class of each
subsidiary that is a constituent cooperative in the merger, other than the series or classes
that, absent this section, would otherwise not be entitled to vote on the merger, and the
number of membership interests of each series and class of the subsidiary or subsidiaries,
other than series or classes that, absent this section, would otherwise not be entitled to vote
on the merger, owned by the parent directly, or indirectly through related organizations;
and
new text end

new text begin (3) a statement that the plan of merger has been approved by the parent under this section.
new text end

new text begin Subd. 4. new text end

new text begin Articles signed, filed. new text end

new text begin The articles of merger shall be signed on behalf of the
parent and filed with the secretary of state.
new text end

new text begin Subd. 5. new text end

new text begin Certificate. new text end

new text begin The secretary of state shall issue a certificate of merger to the
parent or its legal representative or, if the parent is a constituent cooperative but is not the
surviving cooperative in the merger, to the surviving cooperative or its legal representative.
new text end

new text begin Subd. 6. new text end

new text begin Nonexclusivity. new text end

new text begin A merger among a parent and one or more subsidiaries or
among two or more subsidiaries of a parent may be accomplished under section 308C.801
instead of this section, in which case this section does not apply.
new text end

Sec. 72.

new text begin [308C.835] ABANDONMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Abandonment by members before plan effective date. new text end

new text begin After a plan of
merger has been approved by the members entitled to vote on the approval of the plan and
before the effective date of the plan, the plan may be abandoned by the same vote that
approved the plan.
new text end

new text begin Subd. 2. new text end

new text begin Generally. new text end

new text begin (a) A merger may be abandoned:
new text end

new text begin (1) if the members of each of the constituent domestic cooperatives entitled to vote on
the approval of the plan have approved the abandonment at a meeting by the affirmative
vote of the holders of a majority of the voting power of the membership interests entitled
to vote; if the merger is with a domestic cooperative and a Minnesota limited liability
company or foreign business entity, if abandonment is approved in such manner as may be
required by section 322C.1003 for the involvement of a Minnesota limited liability company,
or for a foreign business entity by the laws of the state under which the foreign business
entity is organized; and the members of a constituent domestic cooperative are not entitled
to vote on the approval of the plan, the board of the constituent domestic cooperative has
approved the abandonment by the affirmative vote of a majority of the directors present;
new text end

new text begin (2) if the plan itself provides for abandonment and all conditions for abandonment set
forth in the plan are met; or
new text end

new text begin (3) under paragraph (b).
new text end

new text begin (b) A plan of merger may be abandoned before the effective date of the plan by a
resolution of the board of any constituent domestic cooperative abandoning the plan of
merger approved by the affirmative vote of a majority of the directors present, subject to
the contract rights of any other person under the plan. If a plan of merger is with a domestic
or foreign business entity, the plan of merger may be abandoned before the effective date
of the plan by a resolution of the foreign business entity adopted according to the laws of
the state under which the foreign business entity is organized, subject to the contract rights
of any other person under the plan. If the plan of merger is with a Minnesota limited liability
company, the plan of merger may be abandoned by the Minnesota limited liability company
as provided in section 322C.1003, subject to the contractual rights of any other person under
the plan.
new text end

new text begin (c) If articles of merger have been filed with the secretary of state, but have not yet
become effective, the constituent organizations, in the case of abandonment under paragraph
(a), clause (1), the constituent organizations or any one of them, in the case of abandonment
under paragraph (a), clause (2), or the abandoning organization in the case of abandonment
under paragraph (b), shall file with the secretary of state articles of abandonment that contain:
new text end

new text begin (1) the names of the constituent organizations;
new text end

new text begin (2) the provisions of this section under which the plan is abandoned; and
new text end

new text begin (3) if the plan is abandoned under paragraph (b), the text of the resolution abandoning
the plan.
new text end

Sec. 73.

new text begin [308C.901] METHODS OF DISSOLUTION.
new text end

new text begin A cooperative may be dissolved by the members or by order of the court.
new text end

Sec. 74.

new text begin [308C.902] VOLUNTARY DISSOLUTION BY MEMBERS.
new text end

new text begin Subdivision 1. new text end

new text begin Meeting to consider dissolution. new text end

new text begin A regular or a special member meeting
may be called to consider dissolution of a cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Approval. new text end

new text begin The proposed dissolution must be submitted for approval at the
member meeting. The dissolution must be started if a quorum is present and the proposed
dissolution is approved at a meeting by the affirmative vote of two-thirds of the entire
membership of record, or for a cooperative with articles or bylaws requiring a greater
proportion of the votes cast or other conditions for approval, the dissolution is approved by
the proportion of votes cast or the number of total members required by the articles or
bylaws, and if the conditions for approval in the articles or bylaws are satisfied.
new text end

new text begin Subd. 3. new text end

new text begin Revocation of dissolution. new text end

new text begin The members retain the right to revoke the
dissolution proceedings and the right to remove directors and fill vacancies on the board.
new text end

Sec. 75.

new text begin [308C.903] NOTICE OF INTENT TO DISSOLVE.
new text end

new text begin Before a cooperative begins dissolution, a notice of intent to dissolve must be filed with
the secretary of state. The notice must contain:
new text end

new text begin (1) the name of the cooperative;
new text end

new text begin (2) the date and place of the member meeting at which the resolution was approved; and
new text end

new text begin (3) a statement that the requisite vote of the members approved the proposed dissolution.
new text end

Sec. 76.

new text begin [308C.905] WINDING UP.
new text end

new text begin Subdivision 1. new text end

new text begin Collection and payment of debts. new text end

new text begin After the notice of intent to dissolve
has been filed with the secretary of state, the board, or the officers acting under the direction
of the board, shall proceed as soon as possible:
new text end

new text begin (1) to collect or make provision for the collection of all debts due or owing to the
cooperative, including unpaid subscriptions for shares; and
new text end

new text begin (2) to pay or make provision for the payment of all debts, obligations, and liabilities of
the cooperative according to their priorities.
new text end

new text begin Subd. 2. new text end

new text begin Transfer of assets. new text end

new text begin After the notice of intent to dissolve has been filed with
the secretary of state, the board may sell, lease, transfer, or otherwise dispose of all or
substantially all of the property and assets of the dissolving cooperative without a vote of
the members.
new text end

new text begin Subd. 3. new text end

new text begin Distribution to members. new text end

new text begin Unless required otherwise by this chapter, tangible
and intangible property, including money, remaining after the discharge of the debts,
obligations, and liabilities of the cooperative shall be distributed as provided in the articles
or bylaws. If previously authorized by the members, the tangible and intangible property
of the cooperative may be liquidated and disposed of at the discretion of the board.
new text end

Sec. 77.

new text begin [308C.911] REVOCATION OF DISSOLUTION PROCEEDINGS.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to revoke. new text end

new text begin Dissolution proceedings may be revoked before
the articles of dissolution are filed with the secretary of state.
new text end

new text begin Subd. 2. new text end

new text begin Revocation by members. new text end

new text begin The president may call a member meeting to consider
the advisability of revoking the dissolution proceedings. The question of the proposed
revocation shall be submitted to the members at the member meeting called to consider the
revocation. The dissolution proceedings are revoked if the proposed revocation is approved
at the member meeting by the affirmative vote of a majority of the entire membership of
record in the cooperative or, for a cooperative with articles or bylaws requiring a greater
number of affirmative votes, the number of memberships required by the articles or bylaws.
new text end

new text begin Subd. 3. new text end

new text begin Filing with secretary of state. new text end

new text begin Revocation of dissolution proceedings is effective
when a notice of revocation is filed with the secretary of state. After the notice is filed, the
cooperative may resume business.
new text end

Sec. 78.

new text begin [308C.915] STATUTE OF LIMITATIONS.
new text end

new text begin The claim of a creditor or claimant against a dissolving cooperative is barred if the claim
has not been enforced by initiating legal, administrative, or arbitration proceedings concerning
the claim within two years after the date the notice of intent to dissolve is filed with the
secretary of state.
new text end

Sec. 79.

new text begin [308C.921] ARTICLES OF DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Conditions to file. new text end

new text begin Articles of dissolution of a cooperative shall be filed
with the secretary of state after payment of the claims of all known creditors and claimants
has been made or provided for and the remaining property has been distributed by the board.
The articles of dissolution shall state:
new text end

new text begin (1) that all debts, obligations, and liabilities of the cooperative have been paid or
discharged or adequate provisions have been made for them or time periods allowing claims
have run and other claims are not outstanding;
new text end

new text begin (2) that the remaining property, assets, and claims of the cooperative have been distributed
among the members or under a liquidation authorized by the members; and
new text end

new text begin (3) that legal, administrative, or arbitration proceedings by or against the cooperative
are not pending or adequate provision has been made for the satisfaction of a judgment,
order, or decree that may be entered against the cooperative in a pending proceeding.
new text end

new text begin Subd. 2. new text end

new text begin Dissolution effective on filing. new text end

new text begin The cooperative is dissolved when the articles
of dissolution have been filed with the secretary of state.
new text end

new text begin Subd. 3. new text end

new text begin Certificate. new text end

new text begin The secretary of state shall issue to the dissolved cooperative or
its legal representative a certificate of dissolution that contains:
new text end

new text begin (1) the name of the dissolved cooperative;
new text end

new text begin (2) the date the articles of dissolution were filed with the secretary of state; and
new text end

new text begin (3) a statement that the cooperative is dissolved.
new text end

Sec. 80.

new text begin [308C.925] APPLICATION FOR COURT-SUPERVISED VOLUNTARY
DISSOLUTION.
new text end

new text begin After a notice of intent to dissolve has been filed with the secretary of state and before
a certificate of dissolution has been issued, the cooperative or, for good cause shown, a
member or creditor may apply to a court within the county where the registered office is
located to have the dissolution conducted or continued under the supervision of the courts.
new text end

Sec. 81.

new text begin [308C.931] COURT-ORDERED REMEDIES OR DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Conditions for relief. new text end

new text begin A court may grant equitable relief that it deems
just and reasonable in the circumstances or may dissolve a cooperative and liquidate its
assets and business:
new text end

new text begin (1) in a supervised voluntary dissolution that is applied for by the cooperative;
new text end

new text begin (2) in an action by a member when it is established that:
new text end

new text begin (i) the directors or the persons having the authority otherwise vested in the board are
deadlocked in the management of the cooperative's affairs and the shareholders or members
are unable to break the deadlock;
new text end

new text begin (ii) the directors or those in control of the cooperative have acted fraudulently, illegally,
or in a manner unfairly prejudicial toward one or more members in their capacities as
members, directors, or officers;
new text end

new text begin (iii) the members of the cooperative are so divided in voting power that, for a period
that includes the time when two consecutive regular member meetings were held, they have
failed to elect successors to directors whose terms have expired or would have expired upon
the election and qualification of their successors;
new text end

new text begin (iv) the cooperative assets are being misapplied or wasted; or
new text end

new text begin (v) the period of duration as provided in the articles has expired and has not been extended
as provided in this chapter;
new text end

new text begin (3) in an action by a creditor when:
new text end

new text begin (i) the claim of the creditor against the cooperative has been reduced to judgment and
an execution on the judgment has been returned unsatisfied; or
new text end

new text begin (ii) the cooperative has admitted in writing that the claim of the creditor against the
cooperative is due and owing and it is established that the cooperative is unable to pay its
debts in the ordinary course of business; or
new text end

new text begin (4) in an action by the attorney general to dissolve the cooperative in accordance with
this chapter when it is established that a decree of dissolution is appropriate.
new text end

new text begin Subd. 2. new text end

new text begin Condition of cooperative. new text end

new text begin In determining whether to order equitable relief or
dissolution, the court shall take into consideration the financial condition of the cooperative
but may not refuse to order equitable relief or dissolution solely on the ground that the
cooperative has accumulated operating net income or current operating net income.
new text end

new text begin Subd. 3. new text end

new text begin Dissolution as remedy. new text end

new text begin In deciding whether to order dissolution of the
cooperative, the court must consider whether lesser relief suggested by one or more parties,
such as a form of equitable relief or a partial liquidation, would be adequate to permanently
relieve the circumstances established under subdivision 1, clause (2) or (3). Lesser relief
may be ordered if it would be appropriate under the facts and circumstances of the case.
new text end

new text begin Subd. 4. new text end

new text begin Expenses. new text end

new text begin If the court finds that a party to a proceeding brought under this
section has acted arbitrarily, vexatiously, or otherwise not in good faith, the court may in
its discretion award reasonable expenses, including attorney fees and disbursements, to any
of the other parties.
new text end

new text begin Subd. 5. new text end

new text begin Venue. new text end

new text begin Proceedings under this section shall be brought in a court within the
county where the registered office of the cooperative is located.
new text end

new text begin Subd. 6. new text end

new text begin Parties. new text end

new text begin It is not necessary to make members parties to the action or proceeding
unless relief is sought against them personally.
new text end

Sec. 82.

new text begin [308C.935] PROCEDURE INVOLUNTARY OR COURT-SUPERVISED
VOLUNTARY DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Action before hearing. new text end

new text begin In dissolution proceedings before a hearing can
be completed, the court may:
new text end

new text begin (1) issue injunctions;
new text end

new text begin (2) appoint receivers with all powers and duties that the court directs;
new text end

new text begin (3) take actions required to preserve the cooperative's assets wherever located; and
new text end

new text begin (4) carry on the business of the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Action after hearing. new text end

new text begin After a hearing is completed, upon notice to parties to
the proceedings and to other parties in interest designated by the court, the court may appoint
a receiver to collect the cooperative's assets, including amounts owing to the cooperative
by subscribers on account of an unpaid portion of the consideration for the issuance of
shares. In addition to the powers set forth in chapter 576, a receiver has authority, subject
to the order of the court, to continue the business of the cooperative and to sell, lease, transfer,
or otherwise dispose of the property and assets of the cooperative either at public or private
sale.
new text end

new text begin Subd. 3. new text end

new text begin Discharge of obligations. new text end

new text begin The assets of the cooperative or the proceeds resulting
from a sale, lease, transfer, or other disposition shall be applied in the order of priority set
forth in section 576.51.
new text end

new text begin Subd. 4. new text end

new text begin Remainder to members. new text end

new text begin After payment of the expenses of receivership and
claims of creditors are proved, the remaining assets, if any, may be distributed to the
members, distributed according to an approved liquidation plan, or distributed as otherwise
required under this chapter.
new text end

Sec. 83.

new text begin [308C.941] RECEIVER QUALIFICATIONS AND POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Qualifications. new text end

new text begin Any person qualified under section 576.26 may be
appointed as a receiver. A receiver must give a bond as required by section 576.27.
new text end

new text begin Subd. 2. new text end

new text begin Powers. new text end

new text begin A receiver may sue and defend all actions as receiver of the cooperative.
new text end

Sec. 84.

new text begin [308C.945] DISSOLUTION ACTION BY ATTORNEY GENERAL;
ADMINISTRATIVE DISSOLUTION.
new text end

new text begin Subdivision 1. new text end

new text begin Conditions to begin action. new text end

new text begin A cooperative may be dissolved involuntarily
by a decree of a court in this state in an action filed by the attorney general if it is established
that:
new text end

new text begin (1) the articles and certificate of organization were procured through fraud;
new text end

new text begin (2) the cooperative was incorporated for a purpose not permitted by this chapter or
prohibited by state law;
new text end

new text begin (3) the cooperative has flagrantly violated a provision of this chapter, has violated a
provision of this chapter more than once, or has violated more than one provision of this
chapter; or
new text end

new text begin (4) the cooperative has acted, or failed to act, in a manner that constitutes surrender or
abandonment of the cooperative's franchise, privileges, or enterprise.
new text end

new text begin Subd. 2. new text end

new text begin Notice to cooperative. new text end

new text begin An action may not be commenced under this section
until 30 days after notice to the cooperative by the attorney general of the reason for the
filing of the action. If the reason for filing the action is an act that the cooperative has done,
or omitted to do, and the act or omission may be corrected by an amendment of the articles
or bylaws or by performance of or abstention from the act, the attorney general shall give
the cooperative 30 additional days to make the correction before filing the action.
new text end

Sec. 85.

new text begin [308C.951] FILING CLAIMS IN COURT-SUPERVISED DISSOLUTION
PROCEEDINGS.
new text end

new text begin In proceedings to dissolve a cooperative, the court may require all creditors and claimants
of the cooperative to file their claims under section 576.49. The receiver or any party in
interest may object to any claims under section 576.50.
new text end

Sec. 86.

new text begin [308C.955] DISCONTINUANCE OF COURT-SUPERVISED DISSOLUTION
PROCEEDINGS.
new text end

new text begin The involuntary or supervised voluntary dissolution of a cooperative may be discontinued
at any time during the dissolution proceedings if it is established that cause for dissolution
does not exist. The court shall dismiss the proceedings and direct the receiver, if any, to
redeliver to the cooperative its remaining property and assets and to file a final report under
section 576.38, subdivision 3.
new text end

Sec. 87.

new text begin [308C.961] COURT-SUPERVISED DISSOLUTION ORDER.
new text end

new text begin Subdivision 1. new text end

new text begin Conditions for dissolution order. new text end

new text begin In an involuntary or supervised
voluntary dissolution after the costs and expenses of the proceedings and all debts,
obligations, and liabilities of the cooperative have been paid or discharged and the remaining
property and assets have been distributed to its members or, if its property and assets are
not sufficient to satisfy and discharge the costs, expenses, debts, obligations, and liabilities,
when all the property and assets have been applied so far as they will go to their payment
according to their priorities, the court shall enter an order dissolving the cooperative.
new text end

new text begin Subd. 2. new text end

new text begin Dissolution effective on filing order. new text end

new text begin When the order dissolving the cooperative
or association has been entered, the cooperative or association is dissolved.
new text end

Sec. 88.

new text begin [308C.965] FILING COURT'S DISSOLUTION ORDER.
new text end

new text begin After the court enters an order dissolving a cooperative, the court administrator shall
cause a certified copy of the dissolution order to be filed with the secretary of state. The
secretary of state may not charge a fee for filing the dissolution order.
new text end

Sec. 89.

new text begin [308C.971] BARRING OF CLAIMS.
new text end

new text begin Subdivision 1. new text end

new text begin Claims barred. new text end

new text begin A person who is or becomes a creditor or claimant before,
during, or following the conclusion of dissolution proceedings, who does not file a claim
or pursue a remedy in a legal, administrative, or arbitration proceeding during the pendency
of the dissolution proceeding, or has not initiated a legal, administrative, or arbitration
proceeding before the commencement of the dissolution proceedings, and all those claiming
through or under the creditor or claimant, are forever barred from suing on that claim or
otherwise realizing upon or enforcing it, except as provided in this section.
new text end

new text begin Subd. 2. new text end

new text begin Certain unfiled claims allowed. new text end

new text begin By one year after articles of dissolution have
been filed with the secretary of state pursuant to this chapter, or a dissolution order has been
entered, a creditor or claimant who shows good cause for not having previously filed the
claim may apply to a court in this state to allow a claim:
new text end

new text begin (1) against the cooperative to the extent of undistributed assets; or
new text end

new text begin (2) if the undistributed assets are not sufficient to satisfy the claim, the claim may be
allowed against a member to the extent of the distributions to members in dissolution received
by the member.
new text end

new text begin Subd. 3. new text end

new text begin Omitted claims allowed. new text end

new text begin Debts, obligations, and liabilities incurred during
dissolution proceedings must be paid or provided for by the cooperative before the
distribution of assets to a member. A person to whom this kind of debt, obligation, or liability
is owed but is not paid may pursue any remedy against the officers, directors, or members
of the cooperative before the expiration of the applicable statute of limitations. This
subdivision does not apply to dissolution under the supervision or order of a court.
new text end

Sec. 90.

new text begin [308C.975] RIGHT TO SUE OR DEFEND AFTER DISSOLUTION.
new text end

new text begin After a cooperative has been dissolved, any of its former officers, directors, or members
may assert or defend, in the name of the cooperative, a claim by or against the cooperative.
new text end

Sec. 91. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective August 1, 2025.
new text end

ARTICLE 2

CROSS-REFERENCE UPDATES

Section 1.

Minnesota Statutes 2022, section 116J.395, subdivision 3, is amended to read:

Subd. 3.

Eligible applicants.

Eligible applicants for grants awarded under this section
include:

(1) an incorporated business or a partnership;

(2) a political subdivision;

(3) an Indian tribe;

(4) a Minnesota nonprofit organization organized under chapter 317A;

(5) a Minnesota cooperative association organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or
308C new text end ; or

(6) a Minnesota limited liability corporation organized under chapter 322C, to expand
broadband access.

Sec. 2.

Minnesota Statutes 2022, section 273.11, subdivision 8, is amended to read:

Subd. 8.

Limited equity cooperative apartments.

For the purposes of this subdivision,
the terms defined in this subdivision have the meanings given them.

A "limited equity cooperative" is a corporation organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin ,
or 308C new text end , which has as its primary purpose the provision of housing and related services to
its members which meets one of the following criteria with respect to the income of its
members: (1) a minimum of 75 percent of members must have incomes at or less than 90
percent of area median income, (2) a minimum of 40 percent of members must have incomes
at or less than 60 percent of area median income, or (3) a minimum of 20 percent of members
must have incomes at or less than 50 percent of area median income. For purposes of this
clause, "member income" shall mean the income of a member existing at the time the
member acquires cooperative membership, and median income shall mean the St.
Paul-Minneapolis metropolitan area median income as determined by the United States
Department of Housing and Urban Development. It must also meet the following
requirements:

(a) The articles of incorporation set the sale price of occupancy entitling cooperative
shares or memberships at no more than a transfer value determined as provided in the articles.
That value may not exceed the sum of the following:

(1) the consideration paid for the membership or shares by the first occupant of the unit,
as shown in the records of the corporation;

(2) the fair market value, as shown in the records of the corporation, of any improvements
to the real property that were installed at the sole expense of the member with the prior
approval of the board of directors;

(3) accumulated interest, or an inflation allowance not to exceed the greater of a ten
percent annual noncompounded increase on the consideration paid for the membership or
share by the first occupant of the unit, or the amount that would have been paid on that
consideration if interest had been paid on it at the rate of the percentage increase in the
revised Consumer Price Index for All Urban Consumers for the Minneapolis-St. Paul
metropolitan area prepared by the United States Department of Labor, provided that the
amount determined pursuant to this clause may not exceed $500 for each year or fraction
of a year the membership or share was owned; plus

(4) real property capital contributions shown in the records of the corporation to have
been paid by the transferor member and previous holders of the same membership, or of
separate memberships that had entitled occupancy to the unit of the member involved. These
contributions include contributions to a corporate reserve account the use of which is
restricted to real property improvements or acquisitions, contributions to the corporation
which are used for real property improvements or acquisitions, and the amount of principal
amortized by the corporation on its indebtedness due to the financing of real property
acquisition or improvement or the averaging of principal paid by the corporation over the
term of its real property-related indebtedness.

(b) The articles of incorporation require that the board of directors limit the purchase
price of stock or membership interests for new member-occupants or resident shareholders
to an amount which does not exceed the transfer value for the membership or stock as
defined in clause (a).

(c) The articles of incorporation require that the total distribution out of capital to a
member shall not exceed that transfer value.

(d) The articles of incorporation require that upon liquidation of the corporation any
assets remaining after retirement of corporate debts and distribution to members will be
conveyed to a charitable organization described in section 501(c)(3) of the Internal Revenue
Code or a public agency.

A "limited equity cooperative apartment" is a dwelling unit owned by a limited equity
cooperative.

"Occupancy entitling cooperative share or membership" is the ownership interest in a
cooperative organization which entitles the holder to an exclusive right to occupy a dwelling
unit owned or leased by the cooperative.

For purposes of taxation, the assessor shall value a unit owned by a limited equity
cooperative at the lesser of its market value or the value determined by capitalizing the net
operating income of a comparable apartment operated on a rental basis at the capitalization
rate used in valuing comparable buildings that are not limited equity cooperatives. If a
cooperative fails to operate in accordance with the provisions of clauses (a) to (d), the
property shall be subject to additional property taxes in the amount of the difference between
the taxes determined in accordance with this subdivision for the last ten years that the
property had been assessed pursuant to this subdivision and the amount that would have
been paid if the provisions of this subdivision had not applied to it. The additional taxes,
plus interest at the rate specified in section 549.09, shall be extended against the property
on the tax list for the current year.

Sec. 3.

Minnesota Statutes 2022, section 273.124, subdivision 3, is amended to read:

Subd. 3.

Cooperatives and charitable corporations; homestead and other
property.

(a) When property is owned by a corporation or association organized under
chapter 308A deleted text begin or deleted text end new text begin , new text end 308B, new text begin or 308C, new text end and each person who owns a share or shares in the
corporation or association is entitled to occupy a building on the property, or a unit within
a building on the property, the corporation or association may claim homestead treatment
for each dwelling, or for each unit in the case of a building containing several dwelling
units, or for the part of the value of the building occupied by a shareholder. Each building
or unit must be designated by legal description or number. The net tax capacity of each
building or unit that qualifies for assessment as a homestead under this subdivision must
include not more than one-half acre of land, if platted, nor more than 80 acres if unplatted.
The net tax capacity of the property is the sum of the net tax capacities of each of the
respective buildings or units comprising the property, including the net tax capacity of each
unit's or building's proportionate share of the land and any common buildings. To qualify
for the treatment provided by this subdivision, the corporation or association must be wholly
owned by persons having a right to occupy a building or unit owned by the corporation or
association. A charitable corporation organized under the laws of Minnesota and not
otherwise exempt thereunder with no outstanding stock qualifies for homestead treatment
with respect to member residents of the dwelling units who have purchased and hold
residential participation warrants entitling them to occupy the units.

(b) To the extent provided in paragraph (a), a cooperative or corporation organized under
chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end may obtain separate assessment and valuation, and separate
property tax statements for each residential homestead, residential nonhomestead, or for
each seasonal residential recreational building or unit not used for commercial purposes.
The appropriate classification rates under section 273.13 shall be applicable as if each
building or unit were a separate tax parcel; provided, however, that the tax parcel which
exists at the time the cooperative or corporation makes application under this subdivision
shall be a single parcel for purposes of property taxes or the enforcement and collection
thereof, other than as provided in paragraph (a) or this paragraph.

(c) A member of a corporation or association may initially obtain the separate assessment
and valuation and separate property tax statements, as provided in paragraph (b), by applying
to the assessor by June 30 of the assessment year.

(d) When a building, or dwelling units within a building, no longer qualify under
paragraph (a) or (b), the current owner must notify the assessor within 30 days. Failure to
notify the assessor within 30 days shall result in the loss of benefits under paragraph (a) or
(b) for taxes payable in the year that the failure is discovered. For these purposes, "benefits
under paragraph (a) or (b)" means the difference in the net tax capacity of the building or
units which no longer qualify as computed under paragraph (a) or (b) and as computed
under the otherwise applicable law, times the local tax rate applicable to the building for
that taxes payable year. Upon discovery of a failure to notify, the assessor shall inform the
auditor of the difference in net tax capacity for the building or buildings in which units no
longer qualify, and the auditor shall calculate the benefits under paragraph (a) or (b). Such
amount, plus a penalty equal to 100 percent of that amount, shall then be demanded of the
building's owner. The property owner may appeal the county's determination by serving
copies of a petition for review with county officials as provided in section 278.01 and filing
a proof of service as provided in section 278.01 with the Minnesota Tax Court within 60
days of the date of the notice from the county. The appeal shall be governed by the Tax
Court procedures provided in chapter 271, for cases relating to the tax laws as defined in
section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and 278.03,
but including section 278.05, subdivision 2. If the amount of the benefits under paragraph
(a) or (b) and penalty are not paid within 60 days, and if no appeal has been filed, the county
auditor shall certify the amount of the benefit and penalty to the succeeding year's tax list
to be collected as part of the property taxes on the affected property.

Sec. 4.

Minnesota Statutes 2022, section 273.124, subdivision 3a, is amended to read:

Subd. 3a.

Manufactured home park cooperative.

(a) When a manufactured home park
is owned by a corporation or association organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B, new text begin or 308C,
new text end and each person who owns a share or shares in the corporation or association is entitled to
occupy a lot within the park, the corporation or association may claim homestead treatment
for the park. Each lot must be designated by legal description or number, and each lot is
limited to not more than one-half acre of land.

(b) The manufactured home park shall be entitled to homestead treatment if all of the
following criteria are met:

(1) the occupant or the cooperative corporation or association is paying the ad valorem
property taxes and any special assessments levied against the land and structure either
directly, or indirectly through dues to the corporation or association; and

(2) the corporation or association organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end is
wholly owned by persons having a right to occupy a lot owned by the corporation or
association.

(c) A charitable corporation, organized under the laws of Minnesota with no outstanding
stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
qualifies for homestead treatment with respect to a manufactured home park if its members
hold residential participation warrants entitling them to occupy a lot in the manufactured
home park.

(d) "Homestead treatment" under this subdivision means the classification rate provided
for class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause
(5), item (ii), and the homestead market value exclusion under section 273.13, subdivision
35, does not apply.

Sec. 5.

Minnesota Statutes 2023 Supplement, section 273.124, subdivision 6, is amended
to read:

Subd. 6.

Leasehold cooperatives.

When one or more dwellings or one or more buildings
which each contain several dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the
Internal Revenue Code, or a limited partnership which corporation or partnership operates
the property in conjunction with a cooperative association, and has received public financing,
homestead treatment may be claimed by the cooperative association on behalf of the members
of the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers or
individual taxpayer identification numbers of those members. To qualify for the treatment
provided by this subdivision, the following conditions must be met:

(a) the cooperative association must be organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end
and all voting members of the board of directors must be resident tenants of the cooperative
and must be elected by the resident tenants of the cooperative;

(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;

(c) to the extent permitted under state or federal law, the cooperative association must
have a right under a written agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not purchase the property it is offered
for sale, the owner may not subsequently sell the property to another purchaser at a price
lower than the price at which it was offered for sale to the cooperative association unless
the cooperative association approves the sale;

(d) a minimum of 40 percent of the cooperative association's members must have incomes
at or less than 60 percent of area median gross income as determined by the United States
Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal
Revenue Code. For purposes of this clause, "member income" means the income of a member
existing at the time the member acquires cooperative membership;

(e) if a limited partnership owns the property, it must include as the managing general
partner a nonprofit organization operating under the provisions of chapter 317A and
qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited
partnership agreement must provide that the managing general partner have sufficient powers
so that it materially participates in the management and control of the limited partnership;

(f) prior to becoming a member of a leasehold cooperative described in this subdivision,
a person must have received notice that (1) describes leasehold cooperative property in plain
language, including but not limited to the effects of classification under this subdivision on
rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that
copies of the articles of incorporation and bylaws of the cooperative association, the lease
between the owner and the cooperative association, a sample sublease between the
cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited
partnership agreement, can be obtained upon written request at no charge from the owner,
and the owner must send or deliver the materials within seven days after receiving any
request;

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy shall
be disclosed to any occupant who has requested a copy of the document. Copies of the
articles of incorporation and certificate of limited partnership shall be filed with the secretary
of state after the expiration of the 60-day period unless the change to leasehold cooperative
status does not proceed;

(h) the county attorney of the county in which the property is located must certify to the
assessor that the property meets the requirements of this subdivision;

(i) the public financing received must be from at least one of the following sources:

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;

(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue
Code, the proceeds of which are used for the acquisition or rehabilitation of the building;

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing
Act;

(4) rental housing program funds under Section 8 of the United States Housing Act of
1937, as amended, or the market rate family graduated payment mortgage program funds
administered by the Minnesota Housing Finance Agency that are used for the acquisition
or rehabilitation of the building;

(5) low-income housing credit under section 42 of the Internal Revenue Code;

(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or

(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;

(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:

(1) that the granting of the homestead treatment of the apartment's units will facilitate
safe, clean, affordable housing for the cooperative members that would otherwise not be
available absent the homestead designation;

(2) that the owner has presented information satisfactory to the governing body showing
that the savings garnered from the homestead designation of the units will be used to reduce
tenant's rents or provide a level of furnishing or maintenance not possible absent the
designation; and

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

Homestead treatment must be afforded to units occupied by members of the cooperative
association and the units must be assessed as provided in subdivision 3, provided that any
unit not so occupied shall be classified and assessed pursuant to the appropriate class. No
more than three acres of land may, for assessment purposes, be included with each dwelling
unit that qualifies for homestead treatment under this subdivision.

When dwelling units no longer qualify under this subdivision, the current owner must
notify the assessor within 60 days. Failure to notify the assessor within 60 days shall result
in the loss of benefits under this subdivision for taxes payable in the year that the failure is
discovered. For these purposes, "benefits under this subdivision" means the difference in
the net tax capacity of the units which no longer qualify as computed under this subdivision
and as computed under the otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a failure to notify, the assessor
shall inform the auditor of the difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate the benefits under this
subdivision. Such amount, plus a penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section 278.01
and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court
within 60 days of the date of the notice from the county. The appeal shall be governed by
the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as
defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and
278.03, but including section 278.05, subdivision 2. If the amount of the benefits under this
subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the
county auditor shall certify the amount of the benefit and penalty to the succeeding year's
tax list to be collected as part of the property taxes on the affected buildings.

Sec. 6.

Minnesota Statutes 2023 Supplement, section 290.0694, subdivision 1, is amended
to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following definitions
have the meanings given.

(b) "Qualified property" means a manufactured home park in Minnesota classified as
4c(5)(i) or 4c(5)(iii) under section 273.13, subdivision 25, paragraph (d).

(c) "Qualified seller" means a taxpayer, as defined under section 290.01, subdivision 6,
who sells qualified property to: (1) a corporation or association organized under chapter
308A deleted text begin or deleted text end new text begin , new text end 308B, new text begin or 308C, new text end where each person who owns a share or shares in the corporation
or association would be entitled to occupy a lot within the qualified property after the sale;
(2) a charitable corporation, organized under the laws of Minnesota with no outstanding
stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status,
whose members hold residential participation warrants entitling the members to occupy the
units in the manufactured home park; or (3) a nonprofit or a representative acting on behalf
of residents, as defined by section 327C.015, subdivision 13, who purchases the property
on behalf of residents who intend to form a corporation or association as described in clause
(1) or (2).

Sec. 7.

Minnesota Statutes 2022, section 290.0922, subdivision 2, is amended to read:

Subd. 2.

Exemptions.

The following entities are exempt from the tax imposed by this
section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof;

(4) entities having a valid election in effect under section 860D(b) of the Internal Revenue
Code;

(5) township mutual insurance companies;

(6) cooperatives organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end that provide housing
exclusively to persons age 55 and over and are classified as homesteads under section
273.124, subdivision 3; and

(7) a qualified business as defined under section 469.310, subdivision 11, if for the
taxable year all of its property is located in a job opportunity building zone designated under
section 469.314 and all of its payroll is a job opportunity building zone payroll under section
469.310.

Entities not specifically exempted by this subdivision are subject to tax under this section,
notwithstanding section 290.05.

Sec. 8.

Minnesota Statutes 2023 Supplement, section 290A.03, subdivision 16, is amended
to read:

Subd. 16.

Manufactured home.

"Manufactured home" means homesteads that are
manufactured homes as defined in section 273.125, subdivision 8, including manufactured
homes located in a manufactured home community owned by a cooperative organized under
chapter 308A deleted text begin or deleted text end new text begin , new text end 308B, new text begin or 308C, new text end and park trailers taxed as manufactured homes under
section 168.012, subdivision 9.

Sec. 9.

Minnesota Statutes 2022, section 327C.095, subdivision 5, is amended to read:

Subd. 5.

Park conversions.

If the planned cessation of operation is for the purpose of
converting the part of the park occupied by the resident to a common interest community
pursuant to chapter 515B, the provisions of section 515B.4-111, except subsection (a), shall
apply. The nine-month notice required by this section shall state that the cessation is for the
purpose of conversion and shall set forth the rights conferred by this subdivision and section
515B.4-111, subsection (b). Not less than 120 days before the end of the nine months, the
park owner shall serve upon the resident a form of purchase agreement setting forth the
terms of sale contemplated by section 515B.4-111, subsection (d). Service of that form shall
operate as the notice described by section 515B.4-111, subsection (a). This subdivision does
not apply to the conversion of a manufactured home park to a common interest community:

(1) that is a cooperative incorporated under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end ;

(2) in which at least 90 percent of the cooperative's members are residents of the park
at the time of the conversion; and

(3) that does not require persons who are residents of the park at the time of the
conversion to become members of the cooperative.

Sec. 10.

Minnesota Statutes 2023 Supplement, section 462A.38, subdivision 1, is amended
to read:

Subdivision 1.

Establishment.

A workforce and affordable homeownership development
program is established to award homeownership development grants and loans to cities,
counties, Tribal governments, nonprofit organizations, cooperatives created under chapter
308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end , and community land trusts created for the purposes outlined in
section 462A.31, subdivision 1, for development of workforce and affordable homeownership
projects. The purpose of the program is to increase the supply of workforce and affordable,
owner-occupied multifamily or single-family housing throughout Minnesota.

Sec. 11.

Minnesota Statutes 2022, section 515B.3-101, is amended to read:

515B.3-101 ORGANIZATION OF UNIT OWNERS' ASSOCIATION.

A common interest community shall be administered by an association. The association
shall be incorporated no later than the date the common interest community is created. The
membership of the association at all times consists exclusively of all unit owners or, following
termination of the common interest community, of all former unit owners entitled to
distributions of proceeds under section 515B.2-119 or their heirs, successors, or assigns.
The association shall be organized as a Minnesota profit or nonprofit corporation, or may,
in the case of a cooperative, be organized under chapter 308A deleted text begin or deleted text end new text begin , new text end 308B new text begin , or 308C new text end . In the
event of a conflict between this chapter and any other chapter under which the association
is incorporated, this chapter shall control.

Sec. 12.

Minnesota Statutes 2022, section 515B.3-103, is amended to read:

515B.3-103 BOARD OF DIRECTORS, OFFICERS AND DECLARANT
CONTROL.

(a) An association shall be governed by a board of directors whose appointment or
election shall occur no later than the date of creation of the common interest community
and shall be reflected in the association's records. Except as expressly prohibited by the
declaration, the articles of incorporation, bylaws, subsection (b), or other provisions of this
chapter, the board may act in all instances on behalf of the association. In the performance
of their duties, the officers and directors are required to exercise (i) if appointed by the
declarant, the care required of fiduciaries of the unit owners and (ii) if elected by the unit
owners, the care required of a director by section 302A.251, 308B.455, new text begin 308C.455, new text end or
317A.251, as applicable. The officers and directors appointed by the declarant shall have
a duty to fulfill, and to cause the association to fulfill, their respective obligations under the
declaration, bylaws, articles of incorporation, and this chapter and to enforce the provisions
of the declaration, bylaws, articles of incorporation, and this chapter against all unit owners,
including the declarant and its affiliates, in a uniform and fair manner. The standards of
conduct for officers and directors set forth in this subsection shall also apply to the officers
and directors of master associations in the exercise of their duties on behalf of the master
association.

(b) The board may not act unilaterally to amend the declaration, to terminate the common
interest community, to elect directors to the board, or to determine the qualifications, powers
and duties, or terms of office of directors, but the board may fill vacancies in its membership
created other than by removal by the vote of the association members for the unexpired
portion of any term.

(c) The declaration may provide for a period of declarant control of the association,
during which a declarant, or persons designated by the declarant, may appoint and remove
the officers and directors of the association. The period of declarant control begins on the
date of creation of the common interest community and terminates upon the earliest of the
following events: (i) five years after the date of the first conveyance of a unit to a unit owner
other than a declarant in the case of a flexible common interest community or three years
in the case of any other common interest community, (ii) the declarant's voluntary surrender
of control by giving written notice to the unit owners pursuant to section 515B.1-115, or
(iii) the conveyance of 75 percent of the units to unit owners other than a declarant.

(d) The board shall cause a meeting of the unit owners to be called, as follows:

(1) If the period of declarant control has terminated pursuant to subsection (c), a meeting
of the unit owners shall be called and held within 60 days after said termination, at which
the board shall be appointed or elected by all unit owners, including declarant, subject to
the requirements of subsection (e).

(2) If 50 percent of the units that a declarant is authorized by the declaration to create
have been conveyed prior to the termination of the declarant control period, a meeting of
the unit owners shall be called and held within 60 days thereafter, at which not less than
33-1/3 percent of the members of the board shall be elected by unit owners other than a
declarant or an affiliate of a declarant.

(3) If the board fails or refuses to cause a meeting of the unit owners required to be called
pursuant to subsection (d), then the unit owners other than a declarant and its affiliates may
cause the meeting to be called pursuant to the applicable provisions of the law under which
the association was created. The declarant and its affiliates shall be deemed to be present
at the meeting for purposes of establishing a quorum regardless of their failure to attend the
meeting.

(e) Following the termination of any period of declarant control, the unit owners shall
appoint or elect the board. All unit owners, including the declarant and its affiliates, may
cast the votes allocated to any units owned by them. The board shall thereafter be subject
to the following:

(1) Unless otherwise approved by a vote of unit owners other than the declarant or an
affiliate of the declarant, a majority of the directors shall be unit owners or a natural person
designated by a unit owner that is not a natural person, other than a declarant or an affiliate
of a declarant. The remaining directors need not be unit owners unless required by the
articles of incorporation or bylaws.

(2) Subject to the requirements of subsection (e)(1), the articles of incorporation or
bylaws may authorize the declarant or a person designated by the declarant to appoint one
director, who need not be a member. The articles of incorporation or bylaws shall not be
amended to change or terminate the authorization to appoint one director without the written
consent of the declarant or other person possessing the power to appoint.

(3) Subject to the requirements of subsection (e)(1), the articles of incorporation or
bylaws may authorize special classes of directors and director voting rights, as follows: (i)
classes of directors, (ii) the appointment or election of directors in certain classes by certain
classes of members, or (iii) class voting by classes of directors on issues affecting only a
certain class or classes of members, units, or other parcels of real estate, or to otherwise
protect the legitimate interest of such class or classes. No person may utilize such special
classes or class voting for the purpose of evading any limitation imposed on declarants by
this chapter.

(4) The board shall elect the officers. The directors and officers shall take office upon
election.

(f) In determining whether the period of declarant control has terminated under subsection
(c), or whether unit owners other than a declarant are entitled to elect members of the board
of directors under subsection (d), the percentage of the units conveyed shall be calculated
using as a numerator the number of units conveyed and as a denominator the number of
units subject to the declaration plus the number of units which the declarant is authorized
by the declaration to create on any additional real estate. The percentages referred to in
subsections (c) and (d) shall be calculated without reference to units that are auxiliary to
other units, such as garage units or storage units. A person shall not use a master association
or other device to evade the requirements of this section.

(g) Except as otherwise provided in this subsection, meetings of the board of directors
must be open to the unit owners. To the extent practicable, the board shall give reasonable
notice to the unit owners of the date, time, and place of a board meeting. If the date, time,
and place of meetings are provided for in the declaration, articles, or bylaws, announced at
a previous meeting of the board, posted in a location accessible to the unit owners and
designated by the board from time to time, or if an emergency requires immediate
consideration of a matter by the board, notice is not required. "Notice" has the meaning
given in section 317A.011, subdivision 14. Meetings may be closed to discuss the following:

(1) personnel matters;

(2) pending or potential litigation, arbitration or other potentially adversarial proceedings,
between unit owners, between the board or association and unit owners, or other matters in
which any unit owner may have an adversarial interest, if the board determines that closing
the meeting is necessary to discuss strategy or to otherwise protect the position of the board
or association or the privacy of a unit owner or occupant of a unit; or

(3) criminal activity arising within the common interest community if the board
determines that closing the meeting is necessary to protect the privacy of the victim or that
opening the meeting would jeopardize investigation of the activity.

Nothing in this subsection imposes a duty on the board to provide special facilities for
meetings. The failure to give notice as required by this subsection shall not invalidate the
board meeting or any action taken at the meeting. The minutes of any part of a meeting that
is closed under this subsection may be kept confidential at the discretion of the board.

Sec. 13. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective August 1, 2025.
new text end