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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1989 

                        CHAPTER 144-H.F.No. 1411 
           An act relating to cooperatives; recodifying and 
          clarifying certain provisions on cooperative 
          businesses; amending certain provisions of cooperative 
          business law; requiring a registered officer or agent 
          for cooperatives; authorizing cooperatives to provide 
          greater approval proportions than provided in statute 
          for certain cooperative actions; providing corporate 
          existence of cooperative begins with filing of 
          articles; authorizing loans to and fiduciary powers 
          with members; specifying how vacancies in unexpired 
          directors' terms may be filled; authorizing the board 
          to rescind membership for member violations; 
          eliminating certain filings with county recorders; 
          eliminating attorney general approval of articles of 
          merger or consolidation; prescribing a fee for filing 
          articles of consolidation; prescribing a procedure for 
          dissolution of cooperatives; deeming certain organized 
          cooperatives to be organized under and subject to this 
          act; amending Minnesota Statutes 1988, sections 47.20, 
          subdivision 2; 117.232, subdivision 1; 216B.027, 
          subdivision 5; 237.075, subdivision 9; 273.124, 
          subdivisions 3 and 6; 273.132, subdivision 5; 363.01, 
          subdivision 32; and 500.20, subdivision 2a; proposing 
          coding for new law as Minnesota Statutes, chapter 
          308A; repealing Minnesota Statutes 1988, sections 
          308.01 to 308.92.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                               ARTICLE 1 

                              CHAPTER 308A 

                            COOPERATIVE LAW 
    Section 1.  [308A.001] [CITATION.] 
    This chapter may be cited as the "Minnesota cooperative 
law."  
    Sec. 2.  [308A.005] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to this chapter.  
    Subd. 2.  [ARTICLES.] "Articles" means the articles of 
incorporation of a cooperative as originally filed and amended.  
    Subd. 3.  [ASSOCIATION.] "Association" means an 
organization conducting business on a cooperative plan that is 
incorporated under other laws of this state or another state.  
    Subd. 4.  [BOARD.] "Board" means the board of directors of 
a cooperative.  
    Subd. 5.  [COOPERATIVE.] "Cooperative" means an association 
conducting business on a cooperative plan that is organized 
under this chapter or is subject to this chapter.  
    Subd. 6.  [CORPORATION.] "Corporation" means a company, 
association, or body vested with a corporate power or function. 
    Subd. 7.  [DOMESTIC CORPORATION.] "Domestic corporation" 
means a corporation organized under the laws of this state.  
[300.02 s. 5] 
    Subd. 8.  [FOREIGN CORPORATION.] "Foreign corporation" 
means a corporation that is not a domestic corporation.  [300.02 
s. 6] 
    Subd. 9.  [MEMBER.] "Member" means a member or a 
stockholder of a cooperative who is entitled to vote.  
    Subd. 10.  [MEMBERS' MEETING.] "Members' meeting means a 
regular or special members' meeting.  
    Subd. 11.  [STOCKHOLDER.] "Stockholder" means the holder of 
a share of common stock of a cooperative.  [308.06 s. 2] 

                           GENERAL PROVISIONS 
    Sec. 3.  [308A.011] [USE OF TERM COOPERATIVE RESTRICTED.] 
    Subdivision 1.  [ONLY BUSINESS SUBJECT TO THIS CHAPTER MAY 
USE TERM COOPERATIVE.] A corporation or association organized in 
this state may not use the term "cooperative" as part of its 
corporate or business name or title, or to represent itself as a 
cooperative, unless the corporation or association has complied 
with and is subject to this chapter or has incorporated under 
other laws of this state authorizing incorporation of business 
on a cooperative plan.  [308.05 s. 3] 
    Subd. 2.  [PENALTY FOR MISUSE OF TERM COOPERATIVE.] A 
corporation or association is guilty of a misdemeanor that 
violates subdivision 1.  [308.05 s. 3] 
    Sec. 4.  [308A.021] [FILING FEE.] 
    Unless otherwise provided, the filing fee for documents 
filed with the secretary of state is $25.  [308.06 s. 4] 
    Sec. 5.  [308A.031] [PROMOTION EXPENSE NOT TO BE INCURRED.] 
    (a) Except as provided in paragraph (b), a cooperative may 
not spend money, issue or pledge capital stock of the 
cooperative, or incur indebtedness for payment of promotion of 
the cooperative or for the payment of commissions, salaries, or 
expenses of any kind in connection with the promotion of the 
cooperative. 
    (b) An amount not more than ten percent of the par value of 
the capital stock sold may be used by officers or committees 
elected by the stockholders or for hiring responsible solicitors 
to sell or solicit the sale of stock.  [308.13] 

                              ORGANIZATION 
    Sec. 6.  [308A.101] [ORGANIZATIONAL PURPOSE.] 
    Subdivision 1.  [GENERAL PURPOSE.] A cooperative may be 
formed and incorporated on a cooperative plan for the purpose of 
conducting an agricultural, dairy, marketing, transportation, 
warehousing, commission, contracting, building, mining, 
telephone, manufacturing, mechanical, mercantile, electrical, 
heat, light, or power business, or for any combination of these 
purposes or for any other lawful purpose.  [308.05 s. 1] 
    Subd. 2.  [ELECTRIC COOPERATIVE PURPOSE.] An electric 
cooperative may only be formed by cooperatives engaged in the 
generation, transmission, and distribution of electric energy 
for the purpose of financing, or refinancing, the construction, 
improvement, expansion, acquisition, and operation of electric 
generating plants and electric transmission and distribution 
lines, systems, facilities and equipment and related facilities 
of its members.  [308.05 s. 5] 
    Sec. 7.  [308A.105] [INCORPORATORS.] 
    A cooperative may be organized by one or more 
incorporators, who may act for themselves as individuals or as 
the agents of other cooperatives or associations.  [308.06 s. 1] 
    Sec. 8.  [308A.121] [COOPERATIVE NAME.] 
    Subdivision 1.  [NAME.] The name of a cooperative must 
distinguish the cooperative from other entities doing business 
in the state as domestic or foreign corporations or limited 
partnerships, or under assumed names, trade or service marks, or 
reserved corporate or limited partnership names, as provided in 
section 302A.115.  [308.06 s. 1] 
    Subd. 2.  [NAME RESERVED.] The cooperative name shall be 
reserved for the cooperative during its corporate existence.  
[308.06 s. 1] 
    Sec. 9.  [308A.125] [STOCK AND NONSTOCK ORGANIZATION.] 
    Subdivision 1.  [STOCK AND NONSTOCK COOPERATIVES HAVE SAME 
AUTHORITY.] Cooperatives organized on a capital stock basis may 
be organized and have the same powers and authority as 
cooperatives organized without capital stock on a membership 
basis.  [308.06 s. 2] 
    Subd. 2.  [CAPITAL STOCK ORGANIZATION.] A cooperative is 
organized on a capital stock basis if holding shares of common 
stock entitles the holder of the stock to vote.  [308.06 s. 2] 
    Subd. 3.  [NONSTOCK ORGANIZATION.] (a) The articles of a 
nonstock cooperative must contain the provisions required in the 
articles of a cooperative organized on a capital stock basis if 
the provisions are applicable to a cooperative organized upon a 
membership basis.  
    (b) Except for cooperatives constituted partially or 
entirely of other cooperatives, a member of a cooperative 
organized on a membership basis may not have more than one vote, 
and a membership is transferable only with the consent and 
approval of the board.  [308.06 s. 2] 
    Sec. 10.  [308A.131] [ARTICLES OF INCORPORATION.] 
    Subdivision 1.  [CONTENTS.] (a) The incorporators shall 
prepare the articles, which must include:  
    (1) the name of the cooperative; 
    (2) the purpose of the cooperative; 
    (3) the principal place of business for the cooperative; 
    (4) the period of duration for the cooperative, if the 
duration is not to be perpetual; 
    (5) the total authorized number of shares and the par value 
of each share if the cooperative is organized on a capital stock 
basis; 
    (6) a description of the classes of shares, if the shares 
are to be classified; 
    (7) a statement of the number of shares in each class and 
relative rights, preferences, and restrictions granted to or 
imposed upon the shares of each class, and a provision that only 
common stockholders have voting power; 
    (8) a statement that individuals owning common stock shall 
be restricted to one vote in the affairs of the cooperative; 
    (9) a statement that shares of stock are transferable only 
with the approval of the board; 
    (10) a statement that dividends on the capital stock of the 
cooperative may not exceed eight percent annually; 
    (11) the names, post office addresses, and terms of office 
of the directors of the first board; and 
     (12) a statement that net income in excess of dividends and 
additions to reserves shall be distributed on the basis of 
patronage, and that the records of the cooperative may show the 
interest of patrons, stockholders of any classes, and members in 
the reserves.  
    (b) The articles must always contain the provisions in 
paragraph (a), except that the names, post office addresses, and 
terms of offices of the directors of the first board may be 
omitted after their successors have been elected by the members 
or the articles are amended in their entirety. 
    (c) The articles may contain other lawful provisions.  
    (d) The articles must be signed by the incorporators.  
[308.06 s. 2] 
    Subd. 2.  [FILING ARTICLES.] (a) The original articles must 
be filed with the secretary of state and a copy filed in the 
office of the county recorder of the county where the principal 
place of business of the cooperative is located.  
    (b) The fee for filing the articles with the secretary of 
state is $60.  [308.06 s. 4] 
    Sec. 11.  [308A.135] [AMENDMENT OF ARTICLES.] 
    (a) The articles of a cooperative must be amended as 
provided in this subdivision. 
     (b) The board by majority vote must pass a resolution 
stating the text of the proposed amendment.  The text of the 
proposed amendment and an attached mail ballot, if the board has 
provided for a mail ballot in the resolution, must be mailed 
with a regular or special meeting notice to each member.  The 
notice must designate the time and place of the meeting for the 
proposed amendment to be considered and voted on.  A cooperative 
with more than 200 members may publish the notice, proposed 
amendment, and ballot in the manner provided for a regular 
meeting notice.  
    (c) If a quorum of the members is registered as being 
present or represented by mail vote at the meeting, the proposed 
amendment is adopted if approved by a majority of the votes cast.
    (d) After an amendment has been adopted by the members, a 
certificate stating the amendment and the manner of adoption 
shall be signed by the president, vice president, secretary, or 
assistant secretary, and filed in the office of the secretary of 
state and the office of the county recorder of the county where 
the cooperative's principal place of business is located.  
[308.15 s. 1] 
    Sec. 12.  [308A.141] [AMENDMENT OF ARTICLES TO BE GOVERNED 
BY THIS CHAPTER.] 
    Subdivision 1.  [AUTHORITY.] A corporation or association 
organized and doing business under other statutes of this state 
or under the laws of other states that has conducted business on 
a cooperative plan may become subject to this chapter by 
amending its articles of incorporation to conform to the 
requirements of this chapter.  [308.14 s. 1] 
    Subd. 2.  [PROCEDURE FOR AMENDMENT.] (a) A corporation or 
association organized under statutes of this state may amend its 
articles of incorporation in the manner provided under the 
statute that it is governed by for the adoption of amendments. 
    (b) A corporation or association organized under laws of 
other states shall amend its articles of incorporation in the 
manner required by the laws of the state where it was 
incorporated.  After the articles of incorporation are amended, 
the corporation or association shall file a certified copy of 
the articles of incorporation and amendments with the secretary 
of state with the fees and requirements prescribed for filing 
articles.  After filing, the corporation or association is a 
cooperative in this state and subject to the provisions of this 
chapter.  [308.14 s. 1] 
    Sec. 13.  [308A.145] [AMENDMENT OF ARTICLES TO INCORPORATE 
DEFECTIVELY ORGANIZED COOPERATIVE.] 
    Subdivision 1.  [AMENDMENT OF ARTICLES.] An association or 
corporation organized defectively under other law of this state 
that has conducted its business upon the cooperative plan and 
has in good faith carried on and transacted business, may amend 
its articles of incorporation in their entirety to be governed 
by this chapter.  The articles of amendment shall be filed with 
the secretary of state and a copy of the articles recorded in 
the office of the county recorder of the county where the 
principal place of business of the corporation or association is 
located.  [308.36 s. 1] 
    Subd. 2.  [DE FACTO CORPORATION BECOMES CORPORATION DE 
JURE.] Upon the filing and recording of the articles of 
amendment of a de facto corporation, the corporation is a legal 
and valid corporation de jure.  Courts shall hold all 
transactions, past and future, as if the organization was not 
defective.  [308.36 s. 2] 
    Subd. 3.  [PENDING LITIGATION NOT AFFECTED.] This section 
does not affect pending litigation.  [308.36 s. 3] 
    Subd. 4.  [NOT APPLICABLE IF CHARTER IS FORFEITED.] This 
section does not apply to a corporation whose charter has been 
declared forfeited by a court of competent jurisdiction in this 
state.  [308.36 s. 3] 
    Sec. 14.  [308A.151] [AMENDMENT OF ARTICLES TO RENEW 
EXPIRED CORPORATE EXISTENCE.] 
    Subdivision 1.  [AMENDMENT TO RENEW CORPORATE 
EXISTENCE.] If the period of corporate existence of a 
corporation organized under any law of this state that has 
conducted its business on a cooperative plan expires and the 
corporation continues in good faith to carry on and transact 
business, the corporation may renew its corporate existence by 
amending its articles of incorporation to comply with this 
chapter.  The amended articles must include a provision 
extending the corporate duration for a limited period or making 
the corporate existence perpetual.  [308.062 s. 1] 
    Subd. 2.  [DOES NOT AFFECT PENDING LITIGATION.] This 
section does not affect pending litigation.  [308.062 s. 1] 
    Subd. 3.  [DOES NOT APPLY TO FORFEITED CHARTER.] This 
section does not apply to a corporation whose charter has been 
declared forfeited by a court of competent jurisdiction.  
[308.062 s. 1] 
    Subd. 4.  [CORPORATE ACTS AND CONTRACTS VALIDATED.] If a 
corporation complies with subdivisions 1, 2, and 3, corporate 
acts and contracts that were performed, made, and entered into 
after the expiration of the corporate existence are legal and 
valid against the objection that the period of duration of the 
corporation had expired.  [308.062 s. 2] 
    Sec. 15.  [308A.155] [CORPORATE EXISTENCE.] 
    Subdivision 1.  [COMMENCEMENT OF BUSINESS.] A cooperative 
may commence business when ten percent of the authorized capital 
stock has been subscribed and paid in.  [308.07 s. 2] 
    Subd. 2.  [PERPETUAL EXISTENCE UNLESS 
LIMITED.] Cooperatives have perpetual duration unless the 
cooperative provides for a limited period of duration of 
corporate existence in the articles.  [308.061, 308.15 s. 1] 
    Sec. 16.  [308A.165] [BYLAWS.] 
    The bylaws of a cooperative may be amended at a regular or 
special members' meeting if:  
    (1) the notice of the meeting contains a summary statement 
of the proposed amendment; 
    (2) a quorum is registered as being present or represented 
by mail vote; and 
    (3) the amendment is approved by a majority of the votes 
cast.  [308.15 s. 2] 

                                 POWERS 
    Sec. 17.  [308A.201] [POWERS.] 
    Subdivision 1.  [GENERAL POWERS.] In addition to other 
powers, a cooperative as an agent or otherwise:  
    (1) may perform every act and thing necessary or proper to 
the conduct of the cooperative's business or the accomplishment 
of the purposes of the cooperative; 
    (2) has other rights, powers, or privileges granted by the 
laws of this state to other corporations, except those that are 
inconsistent with the express provisions of this chapter; and 
    (3) has the powers given in this section.  [308.05 s. 1] 
    Subd. 2.  [DEALING IN ITS OWN PRODUCTS.] (a) A cooperative 
may buy, sell, or deal in its own products, the products of the 
cooperative's individual members or patrons, the products of 
another cooperative or association or of its members or patrons. 
    (b) A cooperative may negotiate the price at which the 
products the cooperative is selling may be sold.  [308.05 s. 1] 
    Subd. 3.  [CONTRACTS AND AGREEMENTS.] A cooperative may 
enter into or become a party to a contract or agreement for the 
cooperative or for the cooperative's individual members or 
patrons, or between the cooperative and its members.  [308.05 s. 
1] 
    Subd. 4.  [TRANSACTIONS OF REAL ESTATE AND PERSONAL 
PROPERTY.] A cooperative may purchase and hold, lease, mortgage, 
encumber, sell, exchange, and convey as a corporation real 
estate, buildings, and personal property as the business of the 
cooperative may require.  [308.05 s. 1] 
    Subd. 5.  [CONSTRUCTION OF BUILDINGS AND FACILITIES.] A 
cooperative may erect buildings or other structures or 
facilities or the cooperative's owned or leased property, or on 
a right-of-way legally acquired by the cooperative.  [308.05 s. 
1] 
    Subd. 6.  [ISSUANCE OF BONDS AND INDEBTEDNESS.] A 
cooperative may issue bonds or other evidence of indebtedness 
and to borrow money to finance the business of the cooperative.  
[308.05 s. 1] 
    Subd. 7.  [ADVANCES TO MEMBERS OR PATRONS.] A cooperative 
may make advances to the cooperative's members or patrons on 
produce delivered by the members or patrons to the cooperative.  
[308.05 s. 1] 
    Subd. 8.  [ACCEPTANCE OF DEPOSITS.] A cooperative may 
accept deposits of money from other cooperatives or associations 
from which it is constituted.  [308.05 s. 2] 
    Subd. 9.  [LENDING AND BORROWING MONEY.] A cooperative may 
loan or borrow money to or from cooperatives or associations 
from which it is constituted with security that it considers 
sufficient in dealing with the member cooperatives or 
associations.  [308.05 s. 2] 
    Subd. 10.  [ACQUISITION AND DISPOSAL OF STOCK.] (a) A 
cooperative may purchase, acquire, hold, or dispose of the stock 
of another association or corporation, whether incorporated 
under the laws of this state or another state, and assume all 
rights, interests, privileges, responsibilities, and obligations 
arising out of the ownership of the stock after approval by the 
board to allow the cooperative to join with other cooperatives 
and associations in this state and other states, to form 
district, state, or national organizations or market agencies.  
[308.05 s. 1] 
    (b) A cooperative may acquire and hold stock in another 
corporation organized under the law of this state or another 
state of the United States, including a corporation organized: 
    (1) as a federation of associations; 
    (2) for the purpose of forming a district, state, or 
national marketing, sales, or service agency; or 
    (3) for the purpose of acquiring marketing facilities at 
terminal or other markets in this state or other states.  
[308.07 s. 3] 
    (c) A cooperative may purchase, own, and hold shares of 
capital stock, memberships, interests in nonstock capital, 
evidences of indebtedness of any domestic or foreign corporation 
when reasonably necessary or incidental to accomplish the 
purposes stated in the articles.  [308.37] 
    Subd. 11.  [FIDUCIARY POWERS.] A cooperative may exercise 
any and all fiduciary powers in relations with cooperatives or 
associations from which it is constituted.  [308.05 s. 2] 
    Subd. 12.  [ELECTRIC COOPERATIVE POWERS.] (a) An electric 
cooperative has the power and authority to:  
    (1) make loans to its members; 
    (2) prerefund debt; 
    (3) obtain funds through negotiated financing or public 
sale; 
    (4) borrow money and issue its bonds, debentures, notes, or 
other evidence of indebtedness; 
    (5) mortgage, pledge, or otherwise hypothecate its assets 
as may be necessary; 
    (6) invest its resources; 
    (7) deposit money in state and national banks and trust 
companies authorized to receive deposits; and 
    (8) exercise all other powers and authorities granted to 
cooperatives.  [308.05 s. 5] 
    (b) A cooperative organized to provide rural electric power 
may enter agreements and contracts with other electric power 
cooperatives or with a cooperative constituted of electric power 
cooperatives to share losses and risk of losses to their 
transmission and distribution lines, transformers, substations, 
and related appurtenances from storm, sleet, hail, tornado, 
cyclone, hurricane, or wind storm.  An agreement or contract or 
a cooperative formed to share losses under this paragraph is not 
subject to the laws of this state relating to insurance and 
insurance companies.  [308.43] 
    Subd. 13.  [UTILITY COOPERATIVE CONDEMNATION POWER.] A 
cooperative that is engaged in the electrical, heat, light, 
power, or telephone business may exercise the power of eminent 
domain in the manner provided by state law for the exercise of 
the power by other corporations engaged in the same business.  
[308.05 s. 1] 
    Subd. 14.  [CREAMERY COOPERATIVE SEWAGE CONDEMNATION 
POWER.] (a) A creamery cooperative organized in this state has 
the right, power, and authority to condemn lands by eminent 
domain for easements for sewers and sites for filtration plants 
to take care of all sewage and refuse made in the operation of 
its business.  The power and authority shall be exercised as 
provided in chapter 117.  [308.39] 
    (b) The establishment, maintenance, and operation of sewers 
or filtration plants shall be under the supervision of the chair 
of the board of health as defined in section 145A.02, 
subdivision 2, of the town or city where the cooperative has its 
operating plant.  [308.40] 
    Sec. 18.  [308A.205] [AGRICULTURAL MARKETING CONTRACTS.] 
    Subdivision 1.  [AUTHORITY.] A cooperative and its members 
or patrons may make and execute marketing contracts, requiring 
the members or patrons to sell a specified portion of their 
agricultural products or specified commodities exclusively to or 
through the cooperative or facilities established by the 
cooperative.  [308.68] 
    Subd. 2.  [TITLE TO PRODUCTS.] If a sale is contracted to 
the cooperative, the sale transfers title to the products 
absolutely, except for recorded liens and security interest, to 
the cooperative on delivery of the products or at another 
specified time if expressly provided in the contract.  The 
contract may allow the cooperative to sell or resell the 
products of its members or patrons, with or without taking title 
to the product, and pay the resale price, after deducting all 
necessary selling, overhead, and other costs and expenses, 
including other proper reserves, and interest not exceeding 
eight percent per annum on common stock.  [308.68] 
    Subd. 3.  [TERM OF CONTRACT.] The term of a marketing 
contract may not exceed five years, but may be made 
self-renewing for periods not exceeding five years each, subject 
to the right of either party to terminate at the end of the 
original term and each renewal term by giving written notice of 
the termination during a period specified in the contact.  The 
period for notifying to terminate a contract may not be more 
than 180 days or less than 30 days before the end of the term.  
[308.68] 
    Subd. 4.  [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or 
the marketing contract may set specific sums, as liquidated 
damages to be paid by the member or patron to the cooperative 
for breach of any provisions of the marketing contract regarding 
the sale or delivery or withholding of products including that 
the member or patron will pay the costs, premiums for bonds, 
expenses, and fees if an action is brought on the contract by 
the cooperative.  The remedies for breach of contract are valid 
and enforceable in the courts of this state.  The provisions 
shall be enforced as liquidated damages and are not to be 
considered or regarded as a penalty.  [308.05 s. 4, 308.69] 
    Subd. 5.  [INJUNCTION AGAINST BREACH OF CONTRACT.] If there 
is a breach or threatened breach of a marketing contract by a 
member or patron, the cooperative is entitled to an injunction 
to prevent the further breach of the contract, and to a decree 
of specific performance of the contract.  Pending the 
adjudication of the action after filing a certified complaint 
showing the breach or threatened breach and filing a sufficient 
bond, the cooperative is entitled to a temporary restraining 
order and preliminary injunction against the member or patron.  
[308.05 s. 4, 308.69] 
     Subd. 6.  [PRESUMPTION ON ACTION ON CONTRACT.] In an action 
on a marketing contract, it is presumed that landowners, 
landlords, and lessors are able to control the delivery of 
products produced on their land by tenants or others and are 
liable for and subject to remedies for the breach of delivery, 
if the tenancy, possession, or work on the land or the terms of 
the tenancy, possession, or labor on the land was created or 
changed after execution by the landowners, landlords, or lessors 
of the marketing contract.  [308.05 s. 4, 308.69] 
    Subd. 7.  [PENALTIES FOR CONTRACT INTERFERENCE AND FALSE 
REPORTS.] (a) A person or a corporation is guilty of a 
misdemeanor and subject to a $500 civil penalty to be paid to 
the aggrieved cooperative or association if the person or the 
corporation's officers or employees: 
    (1) knowingly induce or attempt to induce a member or 
stockholder of a cooperative or an association operating in this 
state that is organized under similar statutes of other states 
with similar restrictions and rights to break a marketing 
contract with the cooperative or association; or 
    (2) maliciously and knowingly spread false reports about 
the finances or management or activity of a cooperative or 
association.  
     (b) Each violation is a separate offense and is subject to 
the penalties in paragraph (a).  [308.05 s. 4, 308.78] 
    Subd. 8.  [CONTRACTS AND COOPERATIVES NOT IN RESTRAINT OF 
TRADE.] A cooperative exercising authority under this section is 
not a combination in restraint of trade or an illegal monopoly, 
or an attempt to lessen competition or fix prices arbitrarily.  
The marketing contracts and agreements under this section are 
not illegal, or an unlawful restraint of trade, or a part of a 
conspiracy or combination to accomplish an improper or illegal 
purpose.  [308.80] 
 
                           BOARD OF DIRECTORS 
    Sec. 19.  [308A.301] [BOARD GOVERNS COOPERATIVE.] 
    A cooperative is governed by its board.  [308.11] 
    Sec. 20.  [308A.305] [NUMBER OF DIRECTORS.] 
     The board must have at least five directors, except a 
cooperative housing corporation as defined in United States 
Code, title 26, section 216, subsection (b)(1), must have at 
least three directors who are members of the association.  
[308.11] 
    Sec. 21.  [308A.311] [ELECTION OF DIRECTORS.] 
    Subdivision 1.  [GENERALLY.] Directors shall be elected for 
the term, at the time, and in the manner provided in this 
section and the bylaws.  [308.11] 
    Subd. 2.  [ELECTION AT REGULAR MEETING.] Directors shall be 
elected at the regular members' meeting for the terms of office 
prescribed in the bylaws.  Except for directors elected at 
district meetings, all directors shall be elected at the regular 
members' meeting.  [308.09 s. 1] 
    Subd. 3.  [DISTRICT OR LOCAL UNIT ELECTION OF 
DIRECTORS.] (a) A cooperative with districts or other local 
units may elect directors on a district or local unit basis if 
provided in the bylaws.  
    (b) The directors may be nominated or elected at district 
meetings if provided in the bylaws.  Directors who are nominated 
at district meetings shall be elected at the annual regular 
members' meeting by vote of the members of the entire 
membership, unless the bylaws provide that directors who are 
nominated at district meetings are to be elected by vote of the 
members of the district at the annual regular members' meeting.  
[308.07 s. 6] 
    Subd. 4.  [VOTE BY MAIL.] (a) A member may not vote by mail 
for a director unless mail voting is authorized by the articles 
or bylaws.  
    (b) The ballot shall be in a form prescribed by the board.  
    (c) 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 shareholder's name. 
    (d) If the ballot of the member is received by the 
cooperative on or before the date of the regular members' 
meeting, the ballot shall be accepted and counted as the vote of 
the absent member.  [308.071 s. 2] 
    Subd. 5.  [VOTE BY MAIL FOR TELEPHONE COOPERATIVE.] If 
voting by mail is authorized by the articles or the bylaws of a 
telephone cooperative, a member may vote by mail for the 
director in the manner prescribed in the articles or bylaws.  
The mail voting shall be by secret ballot.  [308.071 s. 3] 
    Subd. 6.  [FARM CORPORATION STOCKHOLDER MAY BE 
DIRECTOR.] If a member of a cooperative is a family farm 
corporation defined in section 500.24, subdivision 2, clause 
(c), or an authorized farm corporation defined in section 
500.24, subdivision 2, clause (d), the member may elect or 
appoint an individual stockholder of the farm corporation 
residing on or actively operating the farm to be eligible for 
election as a director to the board.  [308.11] 
    Subd. 7.  [CORPORATE MEMBERS MAY NOMINATE PERSONS FOR 
DIRECTOR.] If a member of a cooperative is not a natural person, 
family farm corporation, or an authorized farm corporation and 
the bylaws do not provide otherwise, the member may appoint or 
elect one or, for a cooperative constituted entirely of other 
cooperatives or associations, one or more natural persons to be 
eligible for election as a director to the board.  [308.11] 
    Sec. 22.  [308A.321] [REMOVAL OF DIRECTORS.] 
    Members may remove a director for cause and fill the 
vacancy caused by the removal at a regular or special members' 
meeting.  [308.11] 
    Sec. 23.  [308A.325] [LIMITATION OF DIRECTOR'S LIABILITY.] 
    Subdivision 1.  [ARTICLES MAY LIMIT LIABILITY.] A 
director's personal liability to the cooperative or members for 
monetary damages for breach of fiduciary duty as a director may 
be eliminated or limited in the articles as provided in 
subdivision 2.  [308.111] 
    Subd. 2.  [RESTRICTIONS ON LIABILITY LIMITATION.] The 
articles may not eliminate or limit the liability of a director: 
    (1) for a breach of the director's duty of loyalty to the 
cooperative or its members; 
    (2) for acts or omissions that are not in good faith or 
involve intentional misconduct or a knowing violation of law; 
    (3) for a transaction from which the director derived an 
improper personal benefit; or 
    (4) for an act or omission occurring before the date when 
the provision in the articles eliminating or limiting liability 
becomes effective.  [308.111] 

                                OFFICERS 
    Sec. 24.  [308A.401] [OFFICERS.] 
    Subdivision 1.  [REQUIRED OFFICERS.] (a) The board shall 
elect: 
    (1) a president; 
    (2) one or more vice presidents; 
    (3) a secretary; and 
    (4) a treasurer.  
    (b) The board may elect additional officers as the articles 
or bylaws authorize or require.  [308.11] 
    Subd. 2.  [SECRETARY AND TREASURER MAY BE COMBINED.] The 
offices of secretary and treasurer may be combined and if 
combined the person filling the office shall be termed 
secretary-treasurer.  [308.11] 
    Subd. 3.  [CHAIR AND VICE CHAIR.] If the bylaws provide, 
the board may elect directors as a chair and one or more vice 
chairs.  [308.11] 
    Subd. 4.  [OFFICERS THAT MUST BE STOCKHOLDERS.] The 
president and vice president must be directors and members 
unless the articles or bylaws provide for a chair and one or 
more vice chairs and the articles or bylaws do not require 
otherwise.  The treasurer, secretary, and additional officers 
need not be directors or members.  [308.11] 
    Subd. 5.  [REMOVAL OF OFFICERS.] Members may remove an 
officer at a members' meeting for cause and fill the vacancy 
caused by the removal.  [308.11] 

                                 STOCK 
    Sec. 25.  [308A.501] [CAPITAL STOCK.] 
    Subdivision 1.  [AUTHORIZED AMOUNTS.] The amount, number of 
shares, and par value of the authorized capital stock may be 
increased or decreased and classes of the capital stock may be 
established or altered by amending the articles at a regular 
members' meeting or at a special members' meeting called for the 
purpose of the amendment.  [308.07 s. 1] 
    Subd. 2.  [ISSUANCE OF SHARES.] A share of stock may not be 
issued until at least the par value of the share has been paid 
for in cash or a cash equivalent.  [308.07 s. 2] 
    Subd. 3.  [SALE OF STOCK TO BE APPROVED BY BOARD.] Stock in 
a cooperative may only be sold or transferred with the approval 
of the board.  [308.07 s. 9] 
    Subd. 4.  [REPURCHASE BY COOPERATIVE.] (a) The bylaws must 
provide that the cooperative has the first privilege of 
purchasing stock of any class offered for sale by a stockholder. 
    (b) Stock acquired by the cooperative may be held as 
treasury stock or may be retired and canceled.  [308.07 s. 9] 
    Sec. 26.  [308A.505] [SUBJECT TO SECURITIES LAW.] 
    Cooperatives are subject to the provisions of chapter 80A, 
except as specifically provided in section 80A.15.  [308.06 s. 
3] 

                                MEMBERS 
    Sec. 27.  [308A.601] [GROUPING OF MEMBERS.] 
    Subdivision 1.  [AUTHORIZATION.] A cooperative may in the 
articles or bylaws group members in districts, local units, or 
another basis.  [308.07 s. 5] 
    Subd. 2.  [IMPLEMENTATION.] The board may do things 
necessary to implement the use of districts or local units 
including setting the time and place and prescribing the rules 
of conduct for holding meetings by districts or local units to 
elect delegates to members' meetings.  [308.07 s. 8] 
    Sec. 28.  [308A.605] [STOCKHOLDER VIOLATIONS.] 
    (a) A stockholder who knowingly, intentionally, or 
repeatedly violates a provision of the bylaws may be required by 
the board to surrender stock of any class owned by the 
stockholder.  [308.07 s. 9] 
    (b) The cooperative shall refund to the stockholder the 
lesser of the par value or the book value of the stock.  Stock 
required to be surrendered shall be retired and canceled by the 
board.  [308.07 s. 9] 
    Sec. 29.  [308A.611] [REGULAR MEMBERS' MEETINGS.] 
    Subdivision 1.  [ANNUAL MEETING.] Regular members' meetings 
must be held annually at a time determined by the board, unless 
otherwise provided for in the articles or bylaws.  [308.09 s. 1] 
    Subd. 2.  [LOCATION.] The regular members' meeting shall be 
held at the principal place of business of the cooperative, or 
at another place conveniently located within the area served by 
the cooperative.  A cooperative constituted entirely or 
partially of other cooperatives or associations organized under 
the laws of another state, or doing business in another state, 
may hold regular members' meetings at a place within or outside 
of the state, as designated in the notice of the meeting.  
[308.09 s. 1] 
    Subd. 3.  [BUSINESS AND FISCAL REPORTS.] The officers must 
submit reports to the members at the regular members' meeting 
covering the business of the cooperative for the previous fiscal 
year that show the condition of the cooperative at the close of 
the fiscal year.  [308.09 s. 1] 
    Subd. 4.  [ELECTION OF DIRECTORS.] All directors shall be 
elected at the regular members' meeting for the terms of office 
prescribed in the bylaws, except for directors elected at 
district or local unit meetings.  [308.09 s. 1] 
    Subd. 5.  [NOTICE.] (a) The secretary shall give notice of 
regular members' meetings by: 
    (1) publication in a legal newspaper published in the 
county of the principal place of business of the cooperative; 
    (2) publication in a magazine, periodical, or other 
publication of the cooperative that is regularly published by or 
on behalf of the cooperative and circulated generally among 
members; or 
    (3) mailing the regular members' meeting notice to each 
member personally at the person's last known post office 
address, which for a member cooperative means notice mailed to 
the secretary of the cooperative.  
    (b) The regular members' meeting notice must be published 
at least two weeks before the date of the meeting or mailed at 
least 15 days before the date of the meeting.  [308.09 s. 1] 
    Sec. 30.  [308A.615] [SPECIAL MEMBERS' MEETINGS.] 
    Subdivision 1.  [CALLING MEETING.] Special members' 
meetings of the members may be called by: 
    (1) a majority vote of the board; or 
    (2) the written petition of at least 20 percent of the 
members submitted to the president.  [308.09 s. 2] 
    Subd. 2.  [NOTICE.] (a) The president shall give notice of 
a special members' meeting.  
    (b) The special members' meeting notice shall state the 
time, place, and purpose of the special members' meeting.  
    (c) The special members' meeting notice shall be issued 
within ten days from and after the date of the presentation of a 
members' petition, and the special members' meeting must be held 
by 30 days after the date of the presentation of the members' 
petition.  [308.09 s. 2] 
    Sec. 31.  [308A.621] [CERTIFICATION OF MAILED MEETING 
NOTICE.] 
    (a) After mailing special or regular members' meeting 
notices, the secretary shall execute a certificate containing: 
    (1) a correct copy of the mailed notice; 
    (2) the date of mailing the notice; and 
    (3) a statement that the special or regular members' 
meeting notices were mailed as prescribed by this section.  
    (b) The certificate shall be made a part of the record of 
the meeting.  [308.09 s. 2] 
    Sec. 32.  [308A.625] [FAILURE TO RECEIVE MEETING NOTICE.] 
    Failure of a member to receive a special or regular 
members' meeting notice does not invalidate an action that is 
taken by the members at a members' meeting.  [308.09 s. 2] 
    Sec. 33.  [308A.631] [QUORUM.] 
    Subdivision 1.  [QUORUM.] (a) Except as provided in 
paragraph (b), the quorum for a members' meeting to transact 
business is: 
    (1) ten percent of the total number of members for a 
cooperative with 500 or less members; or 
    (2) 50 members for cooperatives with more than 500 members. 
    (b) The quorum provisions of paragraph (a) apply 
notwithstanding quorum requirements of the articles or the 
bylaws, except for:  
    (1) a larger quorum in articles filed by a cooperative 
after March 26, 1949; or 
    (2) a larger quorum provided by amending the articles or 
bylaws after May 1, 1959.  [308.10] 
    Subd. 2.  [QUORUM FOR VOTING BY MAIL.] In determining a 
quorum at a meeting, on a question submitted to a vote by mail, 
members present in person or represented by mail vote 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 and secretary of 
the cooperative and shall be reported in the minutes of the 
meeting.  [308.10] 
    Subd. 3.  [MEETING ACTION INVALID WITHOUT QUORUM.] 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.  [308.10] 
    Sec. 34.  [308A.635] [MEMBER VOTING RIGHTS.] 
    Subdivision 1.  [MEMBER HAS ONE VOTE.] A member of a 
cooperative is only entitled to one vote.  [308.07 s. 3] 
    Subd. 2.  [SPOUSE MAY VOTE FOR MEMBER.] If a vote of 
members is taken on any matter, including a petition pursuant to 
section 216B.02, subdivision 4, the spouse of the member may 
vote on behalf of the member unless the member has indicated 
otherwise.  [308.105] 
    Subd. 3.  [RIGHT TO VOTE AT MEETING.] A member or delegate 
may exercise voting rights on any matter that is before the 
members at a members' meeting from the time the member or 
delegate arrives at the members' meeting, unless the articles or 
bylaws specify an earlier and specific time for closing the 
right to vote.  [308.07 s. 3] 
    Subd. 4.  [VOTING METHOD.] A member's vote at a members' 
meeting must be in person or by mail and not by proxy, except as 
provided in subdivisions 2 and 5.  [308.07 s. 3] 
    Subd. 5.  [MEMBERS REPRESENTED BY DELEGATES.] (a) A 
cooperative may provide in the articles or bylaws that local 
units of members are entitled to be represented at members' 
meetings by delegates chosen by the members of the unit.  The 
delegates may vote on matters at the members' meeting in the 
same manner as a member.  The delegates may only exercise the 
voting rights on a basis and with the number of votes as 
prescribed in the articles or bylaws.  
    (b) If the approval of a certain portion of the members is 
required for adoption of amendments, a dissolution, a merger, a 
consolidation, or a sale of assets, the votes of delegates shall 
be counted as votes by the members represented by the delegate.  
[308.07 s. 7] 
    Subd. 6.  [ABSENTEE BALLOTS.] (a) A member who is absent 
from a members' meeting may vote by mail on the ballot 
prescribed in this subdivision on any motion, resolution, or 
amendment that the board submits to the members.  
    (b) The ballot shall be in the form prescribed by the board 
and contain: 
    (1) the exact text of the proposed motion, resolution, or 
amendment to be acted on at the meeting; and 
    (2) spaces opposite the text of the motion, resolution, or 
amendment in which the member may indicate an affirmative or 
negative vote.  
    (c) The member shall express a choice by marking an "X" in 
the appropriate space on the ballot.  The ballot must be signed 
by the member.  
    (d) A properly executed ballot shall be accepted by the 
board and counted as the vote of the absent member at the 
meeting.  [308.07 s. 10] 
    Sec. 35.  [308A.641] [VOTE OF COOPERATIVE CONSTITUTED OF 
OTHER COOPERATIVES.] 
    A cooperative that is constituted entirely or partially of 
other cooperatives or associations may authorize by the articles 
or the bylaws for affiliated cooperative members to have an 
additional vote for a stipulated amount of business transacted 
between the member cooperative and the cooperative central 
organization or a stipulated number of members in the member 
cooperative.  [308.07 s. 4] 
    Sec. 36.  [308A.645] [VOTE OF CORPORATE STOCK HELD BY 
COOPERATIVE.] 
    A cooperative that holds stock of another corporation may 
by direction of the cooperative's board or members elect or 
appoint a person to represent the cooperative at a meeting of 
the corporation.  The representative has authority to represent 
the cooperative and may cast the cooperative's vote at the 
corporation's meeting.  [308.07 s. 3] 

                 EARNINGS, RESERVE, AND DISTRIBUTIONS. 
    Sec. 37.  [308A.701] [RESERVES.] 
    Subdivision 1.  [CAPITAL RESERVE.] A cooperative may set 
aside a portion of net income as the board determines advisable 
to create or maintain a capital reserve.  [308.12 s. 1] 
    Subd. 2.  [ADDITIONAL RESERVES.] In addition to a capital 
reserve, the board may: 
    (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 
    (2) establish and accumulate reserves for new buildings, 
machinery and equipment, depreciation, losses, and other proper 
purposes.  [308.12 s. 1] 
    Sec. 38.  [308A.705] [DISTRIBUTION OF INCOME.] 
    Subdivision 1.  [DISTRIBUTION OF NET INCOME.] Net income in 
excess of dividends on capital stock and additions to reserves 
shall be distributed on the basis of patronage.  [308.12 s. 1] 
    Subd. 2.  [FREQUENCY OF INCOME DISTRIBUTION.] (a) 
Distribution of net income shall be made at least annually.  
    (b) A cooperative with income from trucking operations may 
only distribute net income 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.  
[308.12 s. 2] 
    Subd. 3.  [DIVIDENDS.] Dividends may be paid on capital 
stock only if the net income of the cooperative for the previous 
fiscal year is sufficient.  The dividends are not cumulative.  
[308.12 s. 3] 
    Subd. 4.  [FORM OF DISTRIBUTION.] A cooperative may 
distribute net income in cash, credits, revolving fund 
certificates, or its own or other securities.  [308.12 s. 4] 
    Subd. 5.  [ELIGIBLE NONMEMBER PATRONS.] (a) The members may 
provide in the bylaws that nonmember patrons are allowed to 
participate in the distribution of net income on equal terms 
with member patrons.  [308.12 s. 1] 
    (b) If a nonmember patron is qualified and eligible for 
membership, the amount of patronage refund due shall be credited 
to the patron's individual account.  
    (c) If the credits equal the value of a share of common 
stock that entitles the stockholder to vote, or a membership, a 
share of stock or a membership shall be issued to the nonmember 
patron.  [308.12 s. 1] 
    Subd. 6.  [PATRONAGE CREDITS FOR INELIGIBLE MEMBERS.] If a 
nonmember patron with patronage credits is not qualified or 
eligible for membership, a refund due may be credited to the 
patron's individual account.  If the credited amount in the 
individual account of a patron ineligible for membership equals 
the value of a share of common stock and does not entitle the 
holder to vote, or to preferred stock or a certificate of 
interest, the board may issue a share of preferred stock or a 
certificate of interest.  After the patron is issued preferred 
stock or a certificate of interest, the patron may participate 
in the distribution of income on the same basis as a stockholder 
or member.  [308.12 s. 1] 
    Sec. 39.  [308A.711] [DISTRIBUTION OF UNCLAIMED PROPERTY.] 
    Subdivision 1.  [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.] 
Notwithstanding the provisions of section 345.43, a cooperative 
may, in lieu of paying or delivering to the commissioner of 
commerce the unclaimed property specified in its report of 
unclaimed property, distribute the unclaimed property to a 
corporation or organization that is exempt from taxation under 
section 290.05, subdivision 1, paragraph (b), or 2.  A 
cooperative making the election to distribute unclaimed property 
shall, within 20 days after the time specified in section 345.42 
for claiming the property from the holder, file with the 
commissioner of commerce: 
    (1) a verified written explanation of the proof of claim of 
an owner establishing a right to receive the abandoned property; 
    (2) any errors in the presumption of abandonment; 
    (3) the name, address, and exemption number of the 
corporation or organization to which the property was or is to 
be distributed; and 
    (4) the approximate date of distribution.  [308.12 s. 5] 
    Subd. 2.  [REPORTING AND CLAIMING PROCEDURE NOT 
AFFECTED.] This subdivision does not alter the procedure 
provided in sections 345.41 and 345.42 for cooperatives to 
report unclaimed property to the commissioner of commerce and 
the requirement that claims of owners are made to the 
cooperatives for a period of 65 days following the publication 
of lists of abandoned property.  [308.12 s. 5] 
    Subd. 3.  [OWNER'S RIGHT EXTINGUISHED ON DISBURSEMENT.] 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 in accordance with this section.  
[308.12 s. 5] 

                        MERGER AND CONSOLIDATION 
    Sec. 40.  [308A.801] [MERGER AND CONSOLIDATION.] 
    Subdivision 1.  [AUTHORIZATION.] Unless otherwise 
prohibited, cooperatives or associations organized under the 
laws of this state may merge or consolidate with each other or 
with associations incorporated under the laws of another state 
by complying with the provisions of this section or the law of 
the state where the surviving or new association will exist.  
[308.15 s. 4] 
     Subd. 2.  [PLAN.] To initiate a merger or consolidation, a 
written plan of merger or consolidation must be prepared by the 
board or by a committee selected by the board or the members to 
prepare a plan.  The plan must state:  
    (1) the terms of the merger or consolidation; 
    (2) the proposed effect of the consolidation or merger on 
the members of the cooperative; and 
    (3) for a consolidation, the plan must contain the articles 
of the new association.  [308.15 s. 4] 
    Subd. 3.  [NOTICE.] (a) The board must mail a merger or 
consolidation notice to each member.  The notice must contain: 
    (1) the full text of the plan; and 
    (2) the time and place of the meeting at which the plan 
will be considered.  
    (b) A cooperative or association with more than 200 members 
may publish the merger or consolidation notice in the same 
manner as a regular members' meeting notice.  [308.15 s. 4] 
     Subd. 4.  [ADOPTION OF PLAN.] (a) A plan of merger or 
consolidation is adopted if: 
    (1) a quorum of the members is registered as being present 
or represented by mail vote at the meeting; and 
    (2) the plan is approved by two-thirds of the votes cast.  
    (b) After the plan has been adopted, articles of merger or 
consolidation stating the plan and the manner of adoption of the 
plan shall be signed by the president, vice president, 
secretary, or assistant secretary of each cooperative or 
association merging or consolidating.  
     (c) The plan shall be approved by the attorney general. 
    (d) The articles of merger or consolidation shall be filed 
in the office of the secretary of state and recorded in the 
office of the county recorder of each county where each merging 
or consolidating cooperative or association has a principal 
place of business.  
    (e) For a merger, the articles of the surviving cooperative 
or association are deemed amended to the extent provided in the 
articles of merger.  
    (f) Unless otherwise 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. 
[308.15 s. 4] 
    Subd. 5.  [EFFECT OF MERGER.] (a) After the effective date, 
the cooperatives and associations that are parties to the plan 
become a single association.  For a merger, the surviving 
association is the association designated in the plan.  For a 
consolidation, the new cooperative is the association provided 
for in the plan.  Except for the surviving or new association, 
the separate existence of all cooperatives and associations that 
are parties to the plan cease on the effective date of the 
merger or consolidation.  
    (b) The surviving or new association possesses all of the 
rights and property of each of the merged or consolidated 
cooperatives or associations, and is responsible for all their 
obligations.  The title to property of the merged or 
consolidated association is vested in the surviving or new 
association without reversion or impairment of the title caused 
by the merger or consolidation.  
    (c) The right of a creditor may not be impaired by the 
merger or consolidation without the creditor's consent.  [308.15 
s. 4] 
    Subd. 6.  [FILING FEE.] The fee to be paid to the secretary 
of state for filing articles of merger is $50.  [308.06 s. 4] 

                              LIQUIDATION 
    Sec. 41.  [308A.901] [LIQUIDATION.] 
    Subdivision 1.  [MEMBERS MAY AUTHORIZE LIQUIDATION.] If a 
liquidation is authorized by the members, the board may dispose 
of all or substantially all of the property of the cooperative 
on terms and conditions determined by the board.  [308.05 s. 6] 
    Subd. 2.  [RESOLUTION AT MEMBERS' MEETING.] The members may 
authorize a liquidation by adopting a resolution at a members' 
meeting.  The notice of the members' meeting must include a 
statement that the disposition of the property of the 
cooperative will be considered at the meeting.  If a quorum is 
present in person or by mail ballot at the members' meeting, the 
resolution approving of the liquidation is adopted if approved 
by two-thirds of the votes cast, unless the articles or bylaws 
of the cooperative require a greater proportion of the votes 
cast or of the total number of members with voting rights to 
approve liquidation.  [308.05 s. 6] 
    Sec. 42.  [308A.905] [DISSOLUTION OF COOPERATIVE.] 
    Subdivision 1.  [VOLUNTARY DISSOLUTION.] (a) Voluntary 
proceedings for dissolution of a cooperative may be initiated by 
a resolution for dissolution adopted by two-thirds of the votes 
cast on the question of dissolution at a members' meeting with a 
quorum that is called to vote on dissolution of the 
cooperative.  [308.14 s. 2] 
    Subd. 2.  [OUT OF COURT DISSOLUTION BY TRUSTEES.] (a) The 
resolution may provide that the affairs of the cooperative will 
be wound up out of court, if the resolution designates one or 
more trustees to conduct the winding up.  The resolution may 
provide a method for filling vacancies in the office of trustees 
and for the election of a president and secretary of the 
trustees from their own number.  [308.14 s. 2] 
    (b) The appointment is not operative until a certificate of 
dissolution is filed.  
    (c) If a vacancy occurs in the office of trustee, it may be 
filled by resolution adopted by a majority of the persons voting 
at a members' meeting.  The members' meeting may be called by 
the remaining trustee or trustees, if any, and if none, then by 
any member.  Unless the resolution to dissolve provides 
otherwise, the trustee or trustees may be removed with or 
without cause by the vote of a majority of the members at a 
members' meeting called for that purpose.  [308.14 s. 2] 
    Subd. 3.  [FILING CERTIFICATE OF DISSOLUTION.] (a) A 
certificate of dissolution stating the resolution and the manner 
of its adoption, signed by the president, vice president, 
secretary or assistant secretary must be filed.  
    (b) If the articles have been filed with the secretary of 
state, the certificate of dissolution must be filed with the 
secretary of state. 
    (c) If the cooperative's current articles or certificate of 
incorporation and amendments are not on file with the secretary 
of state, the certificate of voluntary dissolution shall be 
filed with the public officer having custody of the current 
articles or certificate of incorporation and amendments.  
    (d) If the cooperative's current articles or certificate of 
incorporation and amendments are not on file with a public 
officer, the certificate of voluntary dissolution shall be filed 
with the public officer with whom the articles or certificate 
should have been filed pursuant to law.  [308.14 s. 2] 
    Subd. 4.  [COURT SUPERVISION OF DISSOLUTION.] If the 
resolution to dissolve provides that the affairs of the 
cooperative will be wound up under the supervision of the court, 
the resolution shall authorize certain directors or members to 
sign and present a petition to the court requesting that the 
cooperative be wound up and dissolved under the supervision of 
the court.  If a cooperative is being wound up and dissolved out 
of court, the trustee, or if there is more than one trustee, a 
majority of the trustees, may by petition apply to the court for 
a receiver and to have the proceedings continued under the 
supervision of the court.  After the petition is filed with the 
court, the proceedings shall continue as if originally 
instituted subject to the supervision of the court.  [308.14 s. 
2] 
    Subd. 5.  [DUTIES OF TRUSTEES.] (a) Except as otherwise 
provided in the resolution for dissolution, the trustee or 
trustees appointed by the members to wind up the cooperative's 
business must proceed as soon as practicable to: 
    (1) collect all sums due or owing to the cooperative; 
    (2) sell and convert all corporate assets into cash; 
    (3) collect remaining unpaid amounts on subscriptions to 
shares; and 
    (4) pay all debts and liabilities of the cooperative 
according to their respective priorities.  
    (b) Any property remaining after discharging the debts and 
liabilities of the cooperative shall be distributed by the 
trustee or trustees to the stockholders of the several classes 
according to their respective priorities, members, or patrons of 
the association.  Stockholders of the several classes according 
to their respective priorities shall first be paid the par value 
of their shares, and the remainder of the property shall be 
distributed among patrons, members, and common stockholders in 
accordance with their interest in the reserves and surplus as 
shown by the records of the cooperative.  
    (c) The resolution for dissolution may provide a different 
method or plan of liquidation of the cooperative cooperative.  
The resolution may include a plan or procedure for all or part 
of the property of the cooperative to be acquired by another 
cooperative or association.  A plan of acquisition by a 
cooperative or association contained in the resolution for 
dissolution is invalid if all other provisions of this section 
have been fully complied with.  [308.14 s. 3] 
    Subd. 6.  [UNDISTRIBUTED PROPERTY TO TAX EXEMPT 
ORGANIZATION.] Notwithstanding subdivision 4 and the resolution 
for dissolution, if five years after the resolution for 
dissolution, property remains and is unable to be distributed 
for any reason after discharging the debts and liabilities of 
the cooperative, the undistributed property may be distributed 
by the trustee or trustees to a tax exempt organization under 
section 290.05, subdivision 2, or to a unit of state or local 
government.  [308.14 s. 3b] 
    Subd. 7.  [DISSOLUTION ORDER.] Under a court supervised 
dissolution, the court shall make an order dissolving the 
cooperative when the business of the cooperative has been wound 
up.  [308.14 s. 4] 
    Subd. 8.  [DISSOLUTION CERTIFICATE.] If the dissolution is 
not a court supervised dissolution, the trustees, president or 
secretary of the trustees, or the attorney representing the 
trustees shall sign a certificate stating that the cooperative 
has completely wound up its business and is dissolved.  A 
president, secretary, or attorney of the trustees must make an 
affidavit stating that they are acting on behalf of the 
trustees.  [308.14 s. 4] 
    Subd. 9.  [FILING OF DISSOLUTION ORDER OR DISSOLUTION 
CERTIFICATE.] The order or certificate of dissolution shall be 
filed for record in the same manner as a certificate of 
dissolution and after filing the order or certificate of 
dissolution the corporate existence of the cooperative 
terminates.  [308.14 s. 5] 
    Subd. 10.  [OMITTED ASSETS.] The title to assets omitted 
from the winding up shall vest in the trustees, or receivers, 
for the benefit of the persons entitled to the assets and shall 
be administered and distributed for those persons accordingly.  
[308.14 s. 6] 
    Sec. 43.  [308A.911] [DISSOLUTION OF CERTAIN RURAL 
TELEPHONE COOPERATIVES.] 
    A rural cooperative telephone company organized under 
Revised Statutes 1905, chapter 58, or the general laws of 
Minnesota 1905, chapters 276 and 313, may dissolve by voluntary 
proceedings as provided by sections 302A.721 to 302A.733, after 
a resolution for dissolution is adopted by a majority of the 
voting power of all stockholders or members at a meeting called 
to consider the dissolution.  [308.341] 
    Sec. 44.  [REPEALER.] 
    Minnesota Statutes 1988, sections 308.01; 308.02; 308.03; 
308.05; 308.06; 308.061; 308.062; 308.07; 308.071; 308.08; 
308.09; 308.10; 308.105; 308.11; 308.111; 308.12; 308.13; 
308.14; 308.15; 308.16; 308.17; 308.18; 308.29; 308.30; 308.31; 
308.32; 308.34; 308.341; 308.35; 308.36; 308.361; 308.37; 
308.39; 308.40; 308.41; 308.42; 308.43; 308.51; 308.52; 308.53; 
308.54; 308.55; 308.56; 308.57; 308.58; 308.59; 308.60; 308.61; 
308.62; 308.63; 308.64; 308.65; 308.66; 308.67; 308.68; 308.69; 
308.70; 308.71; 308.72; 308.73; 308.74; 308.75; 308.76; 308.77; 
308.78; 308.79; 308.80; 308.81; 308.82; 308.83; 308.84; 308.85; 
308.853; 308.854; 308.901; 308.902; 308.903; 308.904; 308.905; 
and 308.92, are repealed. 

                               ARTICLE 2 

                     CORRECTION OF CROSS-REFERENCES 
    Section 1.  Minnesota Statutes 1988, section 47.20, 
subdivision 2, is amended to read: 
    Subd. 2.  [DEFINITIONS.] For the purposes of this section 
the terms defined in this subdivision have the meanings given 
them: 
     (1) "Actual closing costs" mean reasonable charges for or 
sums paid for the following, whether or not retained by the 
mortgagee or lender: 
     (a) Any insurance premiums including but not limited to 
premiums for title insurance, fire and extended coverage 
insurance, flood insurance, and private mortgage insurance, but 
excluding any charges or sums retained by the mortgagee or 
lender as self-insured retention. 
     (b) Abstracting, title examination and search, and 
examination of public records. 
     (c) The preparation and recording of any or all documents 
required by law or custom for closing a conventional or 
cooperative apartment loan. 
     (d) Appraisal and survey of real property securing a 
conventional loan or real property owned by a cooperative 
apartment corporation of which a share or shares of stock or a 
membership certificate or certificates are to secure a 
cooperative apartment loan. 
      (e) A single service charge, which includes any 
consideration, not otherwise specified herein as an "actual 
closing cost" paid by the borrower and received and retained by 
the lender for or related to the acquisition, making, 
refinancing or modification of a conventional or cooperative 
apartment loan, and also includes any consideration received by 
the lender for making a borrower's interest rate commitment or 
for making a borrower's loan commitment, whether or not an 
actual loan follows the commitment.  The term service charge 
does not include forward commitment fees.  The service charge 
shall not exceed one percent of the original bona fide principal 
amount of the conventional or cooperative apartment loan, except 
that in the case of a construction loan, the service charge 
shall not exceed two percent of the original bona fide principal 
amount of the loan.  That portion of the service charge imposed 
because the loan is a construction loan shall be itemized and a 
copy of the itemization furnished the borrower.  A lender shall 
not collect from a borrower the additional one percent service 
charge permitted for a construction loan if it does not perform 
the service for which the charge is imposed or if third parties 
perform and charge the borrower for the service for which the 
lender has imposed the charge. 
      (f) Charges and fees necessary for or related to the 
transfer of real or personal property securing a conventional or 
cooperative apartment loan or the closing of a conventional or 
cooperative apartment loan paid by the borrower and received by 
any party other than the lender. 
      (2) "Contract for deed" means an executory contract for the 
conveyance of real estate, the original principal amount of 
which is less than $100,000.  A commitment for a contract for 
deed shall include an executed purchase agreement or earnest 
money contract wherein the seller agrees to finance any part or 
all of the purchase price by a contract for deed. 
      (3) "Conventional loan" means a loan or advance of credit, 
other than a loan or advance of credit made by a credit union or 
made pursuant to section 334.011, to a noncorporate borrower in 
an original principal amount of less than $100,000, secured by a 
mortgage upon real property containing one or more residential 
units or upon which at the time the loan is made it is intended 
that one or more residential units are to be constructed, and 
which is not insured or guaranteed by the secretary of housing 
and urban development, by the administrator of veterans affairs, 
or by the administrator of the farmers home administration, and 
which is not made pursuant to the authority granted in 
subdivision 1, clause (3) or (4).  The term mortgage does not 
include contracts for deed or installment land contracts. 
      (4) "Cooperative apartment loan" means a loan or advance of 
credit, other than a loan or advance of credit made by a credit 
union or made pursuant to section 334.011, to a noncorporate 
borrower in an original principal amount of less than $100,000, 
secured by a security interest on a share or shares of stock or 
a membership certificate or certificates issued to a stockholder 
or member by a cooperative apartment corporation, which may be 
accompanied by an assignment by way of security of the 
borrower's interest in the proprietary lease or occupancy 
agreement in property issued by the cooperative apartment 
corporation and which is not insured or guaranteed by the 
secretary of housing and urban development, by the administrator 
of veterans affairs, or by the administrator of the farmers home 
administration.  
    (5) "Cooperative apartment corporation" means a corporation 
or association cooperative organized under sections 308.05 to 
308.18 chapter 308A or chapter 317, the shareholders or members 
of which are entitled, solely by reason of their ownership of 
stock or membership certificates in the corporation or 
association, to occupy one or more residential units in a 
building owned or leased by the corporation or association.  
      (6) "Forward commitment fee" means a fee or other 
consideration paid to a lender for the purpose of securing a 
binding forward commitment by or through the lender to make 
conventional loans to two or more credit worthy purchasers, 
including future purchasers, of residential units, or a fee or 
other consideration paid to a lender for the purpose of securing 
a binding forward commitment by or through the lender to make 
conventional loans to two or more credit worthy purchasers, 
including future purchasers, of apartments as defined in section 
515.02 to be created out of existing structures pursuant to the 
Minnesota condominium act, or a fee or other consideration paid 
to a lender for the purpose of securing a binding forward 
commitment by or through the lender to make cooperative 
apartment loans to two or more credit worthy purchasers, 
including future purchasers, of a share or shares of stock or a 
membership certificate or certificates in a cooperative 
apartment corporation; provided, that the forward commitment 
rate of interest does not exceed the maximum lawful rate of 
interest effective as of the date the forward commitment is 
issued by the lender. 
      (7) "Borrower's interest rate commitment" means a binding 
commitment made by a lender to a borrower wherein the lender 
agrees that, if a conventional or cooperative apartment loan is 
made following issuance of and pursuant to the commitment, the 
conventional or cooperative apartment loan shall be made at a 
rate of interest not in excess of the rate of interest agreed to 
in the commitment, provided that the rate of interest agreed to 
in the commitment is not in excess of the maximum lawful rate of 
interest effective as of the date the commitment is issued by 
the lender to the borrower. 
      (8) "Borrower's loan commitment" means a binding commitment 
made by a lender to a borrower wherein the lender agrees to make 
a conventional or cooperative apartment loan pursuant to the 
provisions, including the interest rate, of the commitment, 
provided that the commitment rate of interest does not exceed 
the maximum lawful rate of interest effective as of the date the 
commitment is issued and the commitment when issued and agreed 
to shall constitute a legally binding obligation on the part of 
the mortgagee or lender to make a conventional or cooperative 
apartment loan within a specified time period in the future at a 
rate of interest not exceeding the maximum lawful rate of 
interest effective as of the date the commitment is issued by 
the lender to the borrower; provided that a lender who issues a 
borrower's loan commitment pursuant to the provisions of a 
forward commitment is authorized to issue the borrower's loan 
commitment at a rate of interest not to exceed the maximum 
lawful rate of interest effective as of the date the forward 
commitment is issued by the lender. 
      (9) "Finance charge" means the total cost of a conventional 
or cooperative apartment loan including extensions or grant of 
credit regardless of the characterization of the same and 
includes interest, finders fees, and other charges levied by a 
lender directly or indirectly against the person obtaining the 
conventional or cooperative apartment loan or against a seller 
of real property securing a conventional loan or a seller of a 
share or shares of stock or a membership certificate or 
certificates in a cooperative apartment corporation securing a 
cooperative apartment loan, or any other party to the 
transaction except any actual closing costs and any forward 
commitment fee.  The finance charges plus the actual closing 
costs and any forward commitment fee, charged by a lender shall 
include all charges made by a lender other than the principal of 
the conventional or cooperative apartment loan.  The finance 
charge, with respect to wraparound mortgages, shall be computed 
based upon the face amount of the wraparound mortgage note, 
which face amount shall consist of the aggregate of those funds 
actually advanced by the wraparound lender and the total 
outstanding principal balances of the prior note or notes which 
have been made a part of the wraparound mortgage note.  
      (10) "Lender" means any person making a conventional or 
cooperative apartment loan, or any person arranging financing 
for a conventional or cooperative apartment loan.  The term also 
includes the holder or assignee at any time of a conventional or 
cooperative apartment loan. 
     (11) "Loan yield" means the annual rate of return obtained 
by a lender over the term of a conventional or cooperative 
apartment loan and shall be computed as the annual percentage 
rate as computed in accordance with sections 226.5 (b), (c) and 
(d) of Regulation Z, Code of Federal Regulations, title 12, 
section 226, but using the definition of finance charge provided 
for in this subdivision.  For purposes of this section, with 
respect to wraparound mortgages, the rate of interest or loan 
yield shall be based upon the principal balance set forth in the 
wraparound note and mortgage and shall not include any interest 
differential or yield differential between the stated interest 
rate on the wraparound mortgage and the stated interest rate on 
the one or more prior mortgages included in the stated loan 
amount on a wraparound note and mortgage.  
     (12) "Monthly index of the federal home loan mortgage 
corporation auction yields" means the net weighted average yield 
of accepted offers in the eight month forward commitment program 
of the federal home loan mortgage corporation in a month. 
     (13) "Person" means an individual, corporation, business 
trust, partnership or association or any other legal entity. 
     (14) "Residential unit" means any structure used 
principally for residential purposes or any portion thereof, and 
includes a unit in a townhouse or planned unit development, a 
condominium apartment, a nonowner occupied residence, and any 
other type of residence regardless of whether the unit is used 
as a principal residence, secondary residence, vacation 
residence or residence of some other denomination. 
     (15) "Vendor" means any person or persons who agree to sell 
real estate and finance any part or all of the purchase price by 
a contract for deed.  The term also includes the holder or 
assignee at any time of the vendor's interest in a contract for 
deed. 
    Sec. 2.  Minnesota Statutes 1988, section 117.232, 
subdivision 1, is amended to read: 
    Subdivision 1.  When acquisition of private property is 
accomplished by the state department of transportation by direct 
purchase the owner shall be entitled to reimbursement for 
appraisal fees, not to exceed a total of $500.  When acquisition 
of private property is accomplished by any other acquiring 
authority, the owner is entitled to reimbursement for appraisal 
fees, not to exceed $500, if the owner is otherwise entitled to 
reimbursement under sections 117.50 to 117.56.  The purchaser in 
all instances shall inform the owner of the right, if any, to 
reimbursement for appraisal fees reasonably incurred, in an 
amount not to exceed $500, together with relocation costs, 
moving costs and any other related expenses to which an owner is 
entitled by sections 117.50 to 117.56.  This subdivision does 
not apply to acquisition for utility purposes made by a public 
service corporation organized pursuant to section 300.03 or 
electric cooperative associations organized pursuant to section 
308.05 chapter 308A. 
    Sec. 3.  Minnesota Statutes 1988, section 216B.027, 
subdivision 5, is amended to read: 
     Subd. 5.  [PETITIONS; VOTING.] Notwithstanding the 
provisions of section 308.09 article 1, sections 29 and 30, upon 
receipt of a written petition concerning governance matters 
signed by at least 500 stockholders or five percent of the 
stockholders, whichever is less, of a retail cooperative 
electric association, the matter in the petition must be 
presented to the stockholders of the cooperative for a vote at 
the next annual meeting.  Petitions must be received by the 
cooperative electric association 60 days prior to the scheduled 
annual meeting.  For purposes of this section, "governance 
matters" means matters properly contained in the articles of 
incorporation or bylaws by adopting, amending, or repealing 
bylaws or the articles of incorporation.  
    Sec. 4.  Minnesota Statutes 1988, section 237.075, 
subdivision 9, is amended to read: 
    Subd. 9.  [ELECTION ON REGULATION.] For the purposes of 
this section, "telephone company" shall not include a 
cooperative telephone association organized under the provisions 
of chapter 308, an independent telephone company, or a 
municipal, unless the cooperative telephone association, 
independent telephone company, or municipal makes the election 
provided in this subdivision. 
     A cooperative telephone association may elect to become 
subject to rate regulation by the commission pursuant to this 
section.  The election shall be (a) approved by the board of 
directors of the association in accordance with the procedures 
for amending the articles of incorporation contained in section 
308.15, subdivision 1 article 1, section 11, excluding the 
filing requirements; or (b) approved by a majority of members or 
stockholders voting by mail ballot initiated by petition of no 
fewer than five percent of the members or stockholders of the 
association.  The ballot to be used for the election shall be 
approved by the board of directors and the department of public 
service.  The department shall mail the ballots to the 
association's members who shall return the ballots to the 
department.  The department will keep the ballots sealed until a 
date agreed upon by the department and the board of directors.  
On this date, representatives of the department and the 
association shall count the ballots. If a majority of the 
association's members who vote elect to become subject to rate 
regulation by the commission, the election shall be effective 30 
days after the date the ballots are counted.  For purposes of 
this section, the term "member or stockholder"  shall mean 
either the member or stockholder of record or the spouse of the 
member or stockholder unless the association has been notified 
otherwise in writing.  
     A municipal may elect to become subject to rate regulation 
by the commission pursuant to this section.  The election shall 
be (a) approved by resolution of the governing body of the 
municipality; or (b) approved by a majority of the customers of 
the municipal voting by mail ballot initiated by petition of no 
fewer than 20 percent of the customers of the municipal.  The 
ballot to be used for the election shall be approved by the 
governing body of the municipality and the department of public 
service.  The department shall mail the ballots to the 
municipal's customers who shall return the ballots to the 
department.  The department will keep the ballots sealed until a 
date agreed upon by the department and the governing body of the 
municipality.  On this date, representatives of the department 
and the municipal shall count the ballots.  If a majority of the 
customers of the municipal who vote elect to become subject to 
rate regulation by the commission, the election shall be 
effective 30 days after the date the ballots are counted.  For 
purposes of this section, the term "customer" shall mean either 
the person in whose name the telephone service is registered or 
the spouse of the person unless the municipal utility has been 
notified otherwise in writing.  
     An independent telephone company may elect to become 
subject to rate regulation by the commission pursuant to this 
section.  The election shall be (a) approved by the board of 
directors of the company in accordance with the procedures for 
amending the articles of incorporation contained in sections 
302A.133 to 302A.139, excluding the filing requirements; or (b) 
approved by a majority of subscribers voting by mail ballot 
initiated by petition of no fewer than five percent of the 
subscribers of the company.  The ballot to be used for the 
election shall be approved by the board of directors and the 
department of public service.  The department shall mail the 
ballots to the company's subscribers who shall return the 
ballots to the department.  The department will keep the ballots 
sealed until a date agreed upon by the department and the board 
of directors.  On this date, representatives of the department 
and the company shall count the ballots.  If a majority of the 
company's subscribers who vote elect to become subject to rate 
regulation by the commission, the election shall be effective 30 
days after the date the ballots are counted.  For purposes of 
this section the term "subscriber" shall mean either the person 
in whose name the telephone service is registered or the spouse 
of the person unless the independent telephone company has been 
notified otherwise in writing.  
    Sec. 5.  Minnesota Statutes 1988, section 273.124, 
subdivision 3, is amended to read: 
     Subd. 3.  [COOPERATIVES AND CHARITABLE CORPORATIONS.] When 
one or more dwellings, or one or more buildings which each 
contain several dwelling units, are owned by a corporation or 
association organized under sections 308.05 to 308.18 chapter 
308A, and each person who owns a share or shares in the 
corporation or association is entitled to occupy a dwelling, or 
dwelling unit in the building, the corporation or association 
may claim homestead treatment for each dwelling, or for each 
unit in case of a building containing several dwelling units, 
for the dwelling or for the part of the value of the building 
occupied by a shareholder.  Each dwelling or unit must be 
designated by legal description or number, and the gross tax 
capacity of each dwelling that qualifies for assessment under 
this subdivision must include not more than one-half acre of 
land, if platted, nor more than 80 acres if unplatted.  The 
gross tax capacity of the building or buildings containing 
several dwelling units is the sum of the gross tax capacities of 
each of the respective units comprising the building.  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 dwelling or dwelling 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. 
    Sec. 6.  Minnesota Statutes 1988, 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 317 or a limited partnership which 
corporation or partnership operates the property in conjunction 
with a cooperative association, 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 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 sections 308.05 to 308.18 
chapter 308A; (b) the cooperative association must have a lease 
for occupancy of the property for a term of at least 20 years; 
(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 when 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; and (d) if a limited partnership owns the 
property, it must include as the managing general partner either 
the cooperative association or a nonprofit organization 
operating under the provisions of chapter 317.  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. 
    Sec. 7.  Minnesota Statutes 1988, section 273.132, 
subdivision 5, is amended to read: 
    Subd. 5.  [APPROPRIATION.] The amount necessary to make the 
payments required under this section is appropriated from the 
general fund in the state treasury to the commissioners of 
revenue and education for property taxes payable in 1989. 
    Sec. 8.  Minnesota Statutes 1988, section 363.01, 
subdivision 32, is amended to read: 
    Subd. 32.  [COOPERATIVE APARTMENT CORPORATION.] 
"Cooperative apartment corporation" means a corporation or 
association organized under sections 308.05 to 308.18 chapter 
308A or chapter 317, the shareholders or members of which are 
entitled, solely by reason of their ownership of stock or 
membership certificates in the corporation or association, to 
occupy one or more residential units in a building owned or 
leased by the corporation or association.  
    Sec. 9.  Minnesota Statutes 1988, section 500.20, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [RESTRICTION OF DURATION OF CONDITION.] Except 
for any right to reenter or to repossess as provided in 
subdivision 3, all private covenants, conditions, or 
restrictions created by which the title or use of real property 
is affected, cease to be valid and operative 30 years after the 
date of the deed, or other instrument, or the date of the 
probate of the will, creating them, and may be disregarded.  
     This subdivision does not apply to covenants, conditions, 
or restrictions:  
     (1) that were created before August 1, 1988, by deed or 
other instrument dated on or after August 1, 1982, or by will 
the date of death of the testator of which was on or after 
August 1, 1982; 
      (2) that were created before August 1, 1959, under which a 
person who owns or has an interest in real property against 
which the covenants, conditions, or restrictions have been filed 
claims a benefit of the covenant, condition, or restriction if 
the person records in the office of the county recorder or files 
in the office of the registrar of titles in the county in which 
the real estate affected is located, on or before March 30, 
1989, a notice sworn to by the claimant or the claimant's agent 
or attorney:  setting forth the name of the claimant; describing 
the real estate affected; describing the deed, instrument, or 
will creating the covenant, condition, or restriction; and 
stating that the covenant, condition, or restriction is not 
nominal and may not be disregarded under subdivision 1; 
     (3) that are created by the declaration, bylaws, floor 
plans, or condominium plat of a condominium created before 
August 1, 1980, under sections 515.01 to 515.29 or created on or 
after August 1, 1980, under sections 515A.1-101 to 515A.4-117, 
or by any amendments of the declaration, bylaws, floor plans, or 
condominium plat; 
     (4) that are created by the articles of incorporation, 
bylaws, or proprietary leases of a cooperative association 
formed under sections 308.05 to 308.18 chapter 308A; 
     (5) that are created by a declaration or other instrument 
that authorizes and empowers a corporation of which the 
qualification for being a stockholder or member is ownership of 
certain parcels of real estate, to hold title to common real 
estate for the benefit of the parcels; 
     (6) that are created by a deed, declaration, reservation, 
or other instrument by which one or more portions of a building, 
set of connecting or adjacent buildings, or complex or project 
of related buildings and structures share support, structural 
components, ingress and egress, or utility access with another 
portion or portions; or 
     (7) that were created after July 31, 1959, and before 
August 1, 1982, under which a person who owns or has an interest 
in real estate against which covenants, conditions, or 
restrictions have been filed claims a benefit of the covenants, 
conditions, or restrictions if the person records in the office 
of the county recorder or files in the office of the registrar 
of titles in the county in which the real estate affected is 
located during the period commencing on the 28th anniversary of 
the date of the deed or instrument, or the date of the probate 
of the will, creating them and ending on the 30th anniversary, a 
notice as described in clause (2). 
     A notice filed in accordance with clause (2) or (7) delays 
application of this subdivision to the covenants, conditions, or 
restrictions for a period ending on the later of seven years 
after the date of filing of the notice, or until final judgment 
is entered in an action to determine the validity of the 
covenants, conditions, or restrictions, provided in the case of 
an action the summons and complaint must be served and a notice 
of lis pendens must be recorded in the office of the county 
recorder or filed in the office of the registrar of titles in 
each county in which the real estate affected is located within 
seven years after the date of recording or filing of the notice 
under clause (2) or (7). 
     County recorders and registrars of titles shall accept for 
recording or filing a notice conforming with this subdivision 
and charge a fee corresponding with the fee charged for filing a 
notice of lis pendens of similar length.  The notice may be 
discharged in the same manner as a notice of lis pendens and 
when discharged, together with the information included with it, 
ceases to constitute either actual or constructive notice. 

                               ARTICLE 3 

                        AMENDMENTS TO ARTICLE 1 
    Section 1.  Article 1 is amended by adding a section to 
read: 
    Sec. 3a.  [308A.015] [RESERVATION OF RIGHT.] 
    The state reserves the right to amend or repeal the 
provisions of this chapter by law.  A cooperative incorporated 
or governed by this chapter is subject to this reserved right.  
[308.81, 302A.041] 
    Sec. 2.  Article 1 is amended by adding a section to read: 
    Sec. 4a.  [308A.025] [REGISTERED OFFICE.] 
    Subdivision 1.  [REGISTERED OFFICE.] A cooperative must 
continuously maintain a registered office in this state.  A 
registered office need not be the same as the principal place of 
business of the cooperative.  [302A.121 s. 1] 
    Subd. 2.  [REGISTERED AGENT.] A cooperative may designate a 
registered agent.  The registered agent may be a natural person 
residing in this state, a domestic corporation, or a foreign 
corporation authorized to transact business in this state.  The 
registered agent must maintain an office that is identical with 
the registered office.  [302A.121 s. 2] 
    Subd. 3.  [DESIGNATION OR CHANGE OF REGISTERED OFFICE OR 
REGISTERED AGENT.] A cooperative may designate or change its 
registered office, designate or change its registered agent, or 
state a change in the name of its registered agent, by filing a 
statement with the secretary of state containing:  
    (1) the name of the cooperative; 
    (2) the new address of the cooperative's registered office; 
    (3) the name of the cooperative's registered agent, if any; 
    (4) a statement that the address of its registered office 
and the address of the office of its registered agent, as 
changed, will be identical; and 
    (5) a statement that the change of registered office or 
registered agent was authorized by a resolution approved by the 
affirmative vote of a majority of the board.  [302A.123 s. 1] 
    Subd. 4.  [RESIGNATION OF AGENT.] A registered agent of a 
cooperative may resign by filing with the secretary of state a 
signed written notice of resignation, including a statement that 
a signed copy of the notice has been given to the cooperative at 
its principal place of business or to a legal representative of 
the cooperative.  The appointment of the agent terminates 30 
days after the notice is filed with the secretary of state.  
[302A.123 s. 2] 
    Subd. 5.  [CHANGE OF ADDRESS OR NAME OF AGENT.] If the 
address or name of a registered agent changes, the agent must 
change the address of the registered office or the name of the 
registered agent of the cooperative represented by the agent by 
filing with the secretary of state the statement required in 
subdivision 3, except that the statement need only be signed by 
the registered agent, need not be responsive to subdivision 3, 
clause (5), but must state that a copy of the statement has been 
mailed to the cooperative or to the legal representative of the 
cooperative.  [302A.123 s. 3] 
    Sec. 3.  Article 1, section 10, subdivision 2, is amended 
to read: 
    Subd. 2.  [FILING ARTICLES.] (a) The original articles must 
be filed with the secretary of state and a copy filed in the 
office of the county recorder of the county where the principal 
place of business of the cooperative is located.  
    (b) The fee for filing the articles with the secretary of 
state is $60.  [308.06 s. 4] 
    Sec. 4.  Article 1, section 10, is amended by adding a 
subdivision to read: 
    Subd. 3.  [PRESUMPTION IN FILING ARTICLES.] (a) When the 
articles of incorporation have been filed with the secretary of 
state and the required fee has been paid to the secretary of 
state, it is presumed that:  
    (1) all conditions precedent that are required to be 
performed by the incorporators have been complied with; 
    (2) the cooperative has been incorporated; and 
    (3) the secretary of state shall issue a certificate of 
incorporation to the cooperative.  [302A.155] 
    Sec. 5.  Article 1, section 11, is amended to read: 
    Sec. 11.  [308A.135] [AMENDMENT OF ARTICLES.] 
    Subdivision 1.  [PROCEDURE.] (a) The articles of a 
cooperative must be amended as provided in this subdivision. 
    (b) The board by majority vote must pass a resolution 
stating the text of the proposed amendment.  The text of the 
proposed amendment and an attached mail ballot, if the board has 
provided for a mail ballot in the resolution, must be mailed 
with a regular or special meeting notice to each member.  The 
notice must designate the time and place of the meeting for the 
proposed amendment to be considered and voted on.  A cooperative 
with more than 200 members may publish the notice, proposed 
amendment, and ballot in the manner provided for a regular 
meeting notice.  
    (c) If a quorum of the members is registered as being 
present or represented by mail vote at the meeting, the proposed 
amendment is adopted:  
    (1) if approved by a majority of the votes cast; or 
    (2) 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.  [308.15 s. 1] 
    (d) Subd. 2.  [FILING.] After an amendment has been adopted 
by the members, a certificate stating the amendment and the 
manner of adoption shall must be signed by the chair, vice 
chair, president, vice president, secretary, or assistant 
secretary, and a copy of the amendment filed in the office of 
the secretary of state and the office of the county recorder of 
the county where the cooperative's principal place of business 
is located.  [308.15 s. 1] 
    Subd. 3.  [CERTIFICATE.] (a) A certificate must be prepared 
stating:  
    (1) the vote and meeting of the board adopting a resolution 
of the proposed amendment; 
    (2) the notice given to members of the meeting that the 
amendment was adopted; 
    (3) the quorum registered at the meeting; and 
    (4) the vote cast adopting the amendment.  
    (b) The certificate must be signed by the chair, vice 
chair, president, vice president, secretary, or assistant 
secretary and filed with the records of the cooperative.  
    Subd. 4.  [AMENDMENT BY BOARD.] A majority of directors may 
amend the articles if the cooperative does not have any members 
or stockholders with voting rights.  [302A.133] 
    Sec. 6.  Article 1, section 13, subdivision 1, is amended 
to read: 
    Subdivision 1.  [AMENDMENT OF ARTICLES.] An association or 
corporation organized defectively under other law of this state 
that has conducted its business upon the cooperative plan and 
has in good faith carried on and transacted business, may amend 
its articles of incorporation in their entirety to be governed 
by this chapter.  The articles of amendment shall be filed with 
the secretary of state and a copy of the articles recorded in 
the office of the county recorder of the county where the 
principal place of business of the corporation or association is 
located.  [308.36 s. 1] 
    Sec. 7.  Article 1, section 15, subdivision 1, is amended 
to read: 
    Subdivision 1.  [COMMENCEMENT OF BUSINESS CORPORATE 
EXISTENCE.] A cooperative may commence business when ten percent 
of the authorized capital stock has been subscribed and paid 
in The corporate existence of a cooperative begins when the 
articles are filed with the secretary of state.  [302A.153] 
    Sec. 8.  Article 1 is amended by adding a section to read: 
    Sec. 15a.  [308A.161] [COMMENCEMENT OF BUSINESS.] 
    A cooperative may commence business when ten percent of the 
authorized capital stock has been subscribed and paid in.  
[308.07 s. 2] 
    Sec. 9.  Article 1 is amended by adding a section to read: 
    Sec. 16a.  [308A.165] [BYLAWS.] 
    Subdivision 1.  [GENERAL PROVISIONS.] A cooperative may, 
but need not, have bylaws.  [302A.181] 
    Subd. 2.  [ADOPTION AND AMENDMENT.] The bylaws of a 
cooperative may be adopted or amended at a regular or special 
members' meeting if:  
    (1) the notice of the meeting contains a summary statement 
of the proposed bylaws or amendment; 
    (2) a quorum is registered as being present or represented 
by mail vote if authorized by the board; and 
    (3) the bylaws or amendment is approved by a majority of 
the votes 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 votes cast or a number of the total members as required by 
the articles or bylaws and the conditions for approval in the 
articles or bylaws have been satisfied.  [308.15 s. 2] 
    Subd. 3.  [CONTENTS.] 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, 
including: 
    (1) the number of directors, and the qualifications, manner 
of election, powers, duties, and compensation, if any, of 
directors; 
    (2) the qualifications of members, stockholders, and 
patrons and limitations on their number; 
    (3) the manner of admission, withdrawal, suspensions, and 
expulsion of members; 
    (4) property, voting, and other rights and privileges of 
members; 
    (5) the appointment and authority of committees; 
    (6) the appointment or election, duties, compensation, and 
tenure of officers; 
    (7) the time, place, and manner of calling, conducting, and 
giving notice of member, board, and committee meetings, or of 
conducting mail ballots; and 
    (8) the making of reports and financial statements to 
members. 
    Sec. 10.  Article 1, section 17, subdivision 9, is amended 
to read: 
    Subd. 9.  [LENDING AND BORROWING MONEY.] A cooperative may 
loan or borrow money to or from individual members, 
cooperatives, or associations from which it is constituted with 
security that it considers sufficient in dealing with the member 
members, cooperatives, or associations.  [308.05 s. 2] 
    Sec. 11.  Article 1, section 17, subdivision 10, is amended 
to read: 
    Subd. 10.  [ACQUISITION AND DISPOSAL OF STOCK.] (a) A 
cooperative may purchase, acquire, hold, or dispose of the stock 
of another association or corporation, whether incorporated 
under the laws of this state or another state, and assume all 
rights, interests, privileges, responsibilities, and obligations 
arising out of the ownership of the stock after approval by the 
board to allow the cooperative to join with other cooperatives 
and associations in this state and other states, to form 
district, state, or national organizations or market agencies.  
[308.05 s. 1] 
    (b) A cooperative may acquire and hold stock in another 
corporation organized under the law of this state or another 
state of the United States, including a corporation organized: 
    (1) as a federation of associations; 
    (2) for the purpose of forming a district, state, or 
national marketing, sales, or service agency; or 
    (3) for the purpose of acquiring marketing facilities at 
terminal or other markets in this state or other states.  
[308.07 s. 3] 
    (c) A cooperative may purchase, own, and hold shares of 
capital stock, memberships, interests in nonstock capital, 
evidences of indebtedness of any domestic or foreign corporation 
when reasonably necessary or incidental to accomplish the 
purposes stated in the articles.  [308.37] 
    Sec. 12.  Article 1, section 17, subdivision 11, is amended 
to read: 
    Subd. 11.  [FIDUCIARY POWERS.] (a) A cooperative may 
exercise any and all fiduciary powers in relations with members, 
cooperatives, or associations from which it is constituted.  
[308.05 s. 2] 
    (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, and may exercise fiduciary powers in relation to 
taking, receiving, and holding the real and personal property. 
    Sec. 13.  Article 1, section 18, subdivision 2, is amended 
to read: 
    Subd. 2.  [TITLE TO PRODUCTS.] If a sale is contracted to 
the cooperative, the sale transfers title to the products 
absolutely, except for recorded liens and security interest, to 
the cooperative on delivery of the products or at another 
specified time if expressly provided in the contract.  The 
contract may allow the cooperative to sell or resell the 
products of its members, or patrons, with or without taking 
title to the product, and pay the resale price to the patron, 
after deducting all necessary selling, overhead, and other costs 
and expenses, including other proper reserves, and interest not 
exceeding eight percent per annum on common stock.  [308.68] 
    Sec. 14.  Article 1, section 18, subdivision 4, is amended 
to read: 
    Subd. 4.  [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or 
the marketing contract may set specific sums, as liquidated 
damages to be paid by the member or patron to the cooperative 
for breach of any provisions of the marketing contract regarding 
the sale or delivery or withholding of products including and 
may provide that the member or patron will pay the costs, 
premiums for bonds, expenses, and fees if an action is brought 
on the contract by the cooperative.  The remedies for breach of 
contract are valid and enforceable in the courts of this state.  
The provisions shall be enforced as liquidated damages and are 
not to be considered or regarded as a penalty.  [308.05 s. 4, 
308.69] 
    Sec. 15.  Article 1, section 21, subdivision 4, is amended 
to read: 
    Subd. 4.  [VOTE BY MAIL.] (a) A member may not vote by mail 
for a director unless mail voting is authorized for election of 
directors by the articles or bylaws.  
    (b) The ballot shall be in a form prescribed by the board.  
    (c) 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 shareholder's 
member's name. 
    (d) If the ballot of the member is received by the 
cooperative on or before the date of the regular members' 
meeting, the ballot shall be accepted and counted as the vote of 
the absent member.  [308.071 s. 2] 
    Sec. 16.  Article 1 is amended by adding a section to read: 
    Sec. 22a.  [308A.315] [FILLING VACANCIES.] 
    If a director's position is vacant, the board may appoint a 
member of the cooperative to fill the director's position until 
the next regular or special members' meeting.  At the next 
regular or special members' meeting, the members must elect a 
director to fill the unexpired term of the vacant director's 
position.  [302A.225] 
    Sec. 17.  Article 1 is amended by adding a section to read: 
    Sec. 22b.  [308A.321] [REMOVAL OF DIRECTORS.] 
    Members may remove a director at a members' meeting for 
cause related to the duties of the position of director and fill 
the vacancy caused by the removal.  [308.11] 
    Sec. 18.  Article 1, section 24, subdivision 5, is amended 
to read: 
    Subd. 5.  [REMOVAL OF OFFICERS.] Members may remove an 
officer at a members' meeting for cause related to the duties of 
the position of the officer and fill the vacancy caused by the 
removal.  [308.11] 
    Sec. 19.  Article 1, section 28, is amended to read: 
    Sec. 28.  [308A.605] [MEMBER AND STOCKHOLDER VIOLATIONS.] 
    Subdivision 1.  [STOCKHOLDER VIOLATIONS.] (a) A stockholder 
who knowingly, intentionally, or repeatedly violates a provision 
of the bylaws may be required by the board to surrender stock of 
any class owned by the stockholder.  
    (b) The cooperative shall refund to the stockholder for the 
surrendered stock the lesser of the par value or the book value 
of the stock.  
    (c) Stock required to be surrendered shall be retired and 
canceled by the board.  [308.07 s. 9] 
    Subd. 2.  [MEMBER VIOLATIONS.] A member who knowingly, 
intentionally, or repeatedly violates a provision of the bylaws 
may be required by the board to surrender membership in the 
cooperative.  
    Sec. 20.  Article 1, section 29, subdivision 2, is amended 
to read: 
    Subd. 2.  [LOCATION.] The regular members' meeting shall be 
held at the principal place of business of the cooperative, or 
at another place conveniently located within the area served by 
the cooperative place as determined by the bylaws or the board.  
A cooperative constituted entirely or partially of other 
cooperatives or associations organized under the laws of another 
state, or doing business in another state, may hold regular 
members' meetings at a place within or outside of the state, as 
designated in the notice of the meeting.  [308.09 s. 1] 
    Sec. 21.  Article 1, section 30, subdivision 2, is amended 
to read: 
    Subd. 2.  [NOTICE.] (a) The chair or president shall give 
notice of a special members' meeting by:  
    (1) publication in a legal newspaper published in the 
county of the principal place of business of the cooperative; 
    (2) publication in a magazine, periodical, or other 
publication of the cooperative that is regularly published by or 
on behalf of the cooperative and circulated generally among 
members; or 
    (3) mailing the special members' meeting notice to each 
member personally at the person's last known post office 
address, which for a member cooperative means notice mailed to 
the secretary of the cooperative.  
    (b) The special members' meeting notice shall state the 
time, place, and purpose of the special members' meeting.  
    (c) The special members' meeting notice shall be issued 
within ten days from and after the date of the presentation of a 
members' petition, and the special members' meeting must be held 
by 30 days after the date of the presentation of the members' 
petition.  [308.09 s. 2] 
    Sec. 22.  Article 1, section 31, is amended to read: 
    Sec. 31.  [308A.621] [CERTIFICATION OF MAILED MEETING 
NOTICE.] 
    (a) After mailing special or regular members' meeting 
notices, the secretary shall execute a certificate containing: 
    (1) a correct copy of the mailed or published notice; 
    (2) the date of mailing or publishing the notice; and 
    (3) a statement that the special or regular members' 
meeting notices were mailed or published as prescribed by this 
section.  
    (b) The certificate shall be made a part of the record of 
the meeting.  [308.09 s. 2] 
    Sec. 23.  Article 1, section 34, subdivision 4, is amended 
to read: 
    Subd. 4.  [VOTING METHOD.] A member's vote at a members' 
meeting must be in person or by mail if a mail vote is 
authorized by the board, and not by proxy, except as provided in 
subdivisions 2 and 5.  [308.07 s. 3] 
    Sec. 24.  Article 1, section 34, subdivision 6, is amended 
to read: 
    Subd. 6.  [ABSENTEE BALLOTS.] (a) A member who is absent 
from a members' meeting may vote by mail on the ballot 
prescribed in this subdivision on any motion, resolution, or 
amendment that the board submits for vote by mail to the members.
    (b) The ballot shall be in the form prescribed by the board 
and contain: 
    (1) the exact text of the proposed motion, resolution, or 
amendment to be acted on at the meeting; and 
    (2) spaces opposite the text of the motion, resolution, or 
amendment in which the member may indicate an affirmative or 
negative vote.  
    (c) The member shall express a choice by marking an "X" in 
the appropriate space on the ballot.  The ballot must be signed 
by the member.  
    (d) A properly executed ballot shall be accepted by the 
board and counted as the vote of the absent member at the 
meeting.  [308.07 s. 10] 
    Sec. 25.  Article 1, section 38, subdivision 4, is amended 
to read: 
    Subd. 4.  [FORM OF DISTRIBUTION.] A cooperative may 
distribute net income in cash, capital stock credits, allocated 
patronage equities, revolving fund certificates, or its own or 
other securities.  [308.12 s. 4] 
    Sec. 26.  Article 1, section 40, subdivision 2, is amended 
to read: 
    Subd. 2.  [PLAN.] To initiate a merger or consolidation, a 
written plan of merger or consolidation must be prepared by the 
board or by a committee selected by the board or the members to 
prepare a plan.  The plan must state:  
    (1) the names of the constituent cooperatives or 
associations; 
    (2) the name of the surviving or new cooperative or 
association; 
    (3) the manner and basis of converting stock or membership 
of the constituent cooperatives or associations into stock or 
membership in the surviving or new cooperative or association; 
    (4) the terms of the merger or consolidation; 
    (2) (5) the proposed effect of the consolidation or merger 
on the members of the cooperative; and 
    (3) (6) for a consolidation, the plan must contain the 
articles of the new association.  [308.15 s. 4] 
    Sec. 27.  Article 1, section 40, subdivision 4, is amended 
to read: 
    Subd. 4.  [ADOPTION OF PLAN.] (a) A plan of merger or 
consolidation is adopted if: 
    (1) a quorum of the members is registered as being present 
or represented by mail vote at the meeting; and 
    (2) the plan is approved by two-thirds of the votes cast, 
or for a cooperative with articles or bylaws requiring more than 
two-thirds 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.  
    (b) After the plan has been adopted, articles of merger or 
consolidation stating the plan and the manner of adoption of 
that the plan was adopted according to this chapter shall be 
signed by the chair, vice chair, president, vice president, 
secretary, or assistant secretary of each cooperative or 
association merging or consolidating.  
    (c) The plan articles of merger or consolidation shall be 
approved by the attorney general filed in the office of the 
secretary of state.  
    (d) For a merger, the articles of the surviving cooperative 
or association are deemed amended to the extent provided in the 
articles of merger or consolidation shall be filed in the office 
of the secretary of state and reported in the office of the 
county recorder of each county where each merging or 
consolidating cooperative or association has a principal place 
of business.  
    (e) For a merger, the articles of the surviving cooperative 
or association are deemed amended to the extent provided in the 
articles of merger. 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.  [308.15 s. 4] 
    (f) Unless otherwise 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 
shall issue a certificate of the merged or consolidated 
cooperative or association.  
    Sec. 28.  Article 1, section 40, subdivision 6, is amended 
to read: 
    Subd. 6.  [FILING FEE.] The fee to be paid to the secretary 
of state for filing articles of merger or consolidation is $50.  
[308.06 s. 4] 
    Sec. 29.  Article 1, section 41, subdivision 2, is amended 
to read: 
    Subd. 2.  [RESOLUTION AT MEMBERS' MEETING.] The members may 
authorize a liquidation by adopting a resolution at a members' 
meeting.  The notice of the members' meeting must include a 
statement that the disposition of the property of the 
cooperative will be considered at the meeting.  If a quorum is 
present in person or by mail ballot at the members' meeting, the 
resolution approving of the liquidation is adopted if:  
    (1) approved by two-thirds of the votes cast, unless the; 
or 
    (2) for a cooperative with articles or bylaws of the 
cooperative require a greater requiring more than two-thirds for 
approval or other conditions for approval, the resolution is 
approved by the proportion of the votes cast or a number of the 
total number of members with voting rights to approve 
liquidation as required by the articles or bylaws and the 
conditions for approval in the articles or bylaws have been 
satisfied.  [308.05 s. 6] 
    Sec. 30.  Article 1 is amended by adding a section to read: 
    Sec. 42a.  [308A.905] [METHODS OF DISSOLUTION.] 
    A cooperative may be dissolved by the members or by order 
of the court.  [302A.701] 
    Sec. 31.  Article 1 is amended by adding a section to read: 
    Sec. 43a.  [308A.911] [VOLUNTARY DISSOLUTION BY MEMBERS.] 
    Subdivision 1.  [MEETING TO CONSIDER DISSOLUTION.] A 
regular or a special members' meeting may be called to consider 
dissolution of a cooperative.  [302A.721 s. 1, 2] 
    Subd. 2.  [APPROVAL.] The proposed dissolution must be 
submitted for approval at the members' meeting.  The dissolution 
must be started if a quorum is present and the proposed 
dissolution is approved at a meeting by two-thirds of the votes 
cast, 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 the conditions for approval in the articles or bylaws 
are satisfied.  [302A.721 s. 1, 2] 
    Subd. 3.  [REVOCATION OF DISSOLUTION.] The members retain 
the right to revoke the dissolution proceedings and the right to 
remove directors and fill vacancies on the board.  [302A.723 s. 
2] 
    Subd. 4.  [NOTICE OF INTENT TO DISSOLVE.] Before a 
cooperative begins dissolution, a notice of intent to dissolve 
must be filed with the secretary of state.  The notice must 
contain: 
    (1) the name of the cooperative; 
    (2) the date and place of the members' meeting at which the 
resolution was approved; and 
    (3) a statement that the requisite vote of the members 
approved the proposed dissolution.  [302A.723 s. 1] 
    Subd. 5.  [BUSINESS AFTER DISSOLUTION BEGINS.] After the 
notice of intent to dissolve has been filed with the secretary 
of state, the cooperative may carry on its business only to the 
extent necessary for the winding up of the cooperative unless 
the members revoke the dissolution proceedings.  The existence 
of the cooperative continues to the extent necessary to wind up 
the affairs of the cooperative until the dissolution proceedings 
are revoked or articles of dissolution are filed with the 
secretary of state.  [302A.723 s. 2.] 
    Subd. 6.  [REMEDIES CONTINUED.] The filing with the 
secretary of state of a notice of intent to dissolve does not 
affect a remedy in favor of the cooperative or a remedy against 
the cooperative or its directors, officers, or members in their 
capacities, except as provided in section 57.  [302A.723 s. 3] 
    Sec. 32.  Article 1 is amended by adding a section to read: 
    Sec. 44a.  [308A.915] [WINDING UP.] 
    Subdivision 1.  [COLLECTION AND PAYMENT OF DEBTS.] 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:  
    (1) to collect or make provision for the collection of all 
debts due or owing to the cooperative, including unpaid 
subscriptions for shares; and 
    (2) to pay or make provision for the payment of all debts, 
obligations, and liabilities of the cooperative according to 
their priorities.  [302A.725 s. 1] 
    Subd. 2.  [TRANSFER OF ASSETS.] 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.  [302A.725 s. 2] 
    Subd. 3.  [DISTRIBUTION TO MEMBERS.] Tangible and 
intangible property, including money, remaining after the 
discharge of the debts, obligations, and liabilities of the 
cooperative or association may be distributed to the members and 
former members as provided in the 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.  [302A.725 s. 3] 
    Sec. 33.  Article 1 is amended by adding a section to read: 
    Sec. 45.  [308A.921] [REVOCATION OF DISSOLUTION 
PROCEEDINGS.] 
    Subdivision 1.  [AUTHORITY TO REVOKE.] Dissolution 
proceedings may be revoked before the articles of dissolution 
are filed with the secretary of state.  [302A.731 s. 1] 
    Subd. 2.  [REVOCATION BY MEMBERS.] The chair or president 
may call a members' meeting to consider the advisability of 
revoking the dissolution proceedings.  The question of the 
proposed revocation must be submitted to the members at the 
members' meeting called to consider the revocation.  The 
dissolution proceedings are revoked if the proposed revocation 
is approved at the members' meeting by a majority of the members 
of the cooperative, or for a cooperative with articles or bylaws 
requiring a greater number of members, the number of members 
required by the articles or bylaws.  [302A.731 s. 2] 
    Subd. 3.  [FILING WITH SECRETARY OF STATE.] 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.  
    Sec. 34.  Article 1 is amended by adding a section to read: 
    Sec. 46.  [308A.925] [STATUTE OF LIMITATIONS.] 
    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 by two years after the date the notice of 
intent to dissolve is filed with the secretary of state, subject 
to the provisions of section 57. 
    Sec. 35.  Article 1 is amended by adding a section to read: 
    Sec. 47.  [308A.931] [ARTICLES OF DISSOLUTION.] 
    Subdivision 1.  [CONDITIONS TO FILE.] 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.  
    Subd. 2.  [CONTENTS OF ARTICLES.] The articles of 
dissolution must state: 
    (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 under section 45 have 
run and other claims are not outstanding; 
    (2) that the remaining property, assets, and claims of the 
cooperative have been distributed among the members or pursuant 
to a liquidation authorized by the members; and 
    (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. 
    Subd. 3.  [DISSOLUTION EFFECTIVE ON FILING.] The 
cooperative is dissolved when the articles of dissolution have 
been filed with the secretary of state.  [302A.733 s. 3] 
    Subd. 4.  [CERTIFICATE.] The secretary of state shall issue 
to the dissolved cooperative or its legal representative a 
certificate of dissolution that contains:  
    (1) the name of the dissolved cooperative; 
    (2) the date the articles of dissolution were filed with 
the secretary of state; and 
    (3) a statement that the cooperative is dissolved.  
[302A.733 s. 4] 
    Sec. 36.  Article 1 is amended by adding a section to read: 
    Sec. 48.  [308A.935] [APPLICATION FOR COURT-SUPERVISED 
VOLUNTARY DISSOLUTION.] 
    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 court as 
provided in section 50.  [302A.741] 
    Sec. 37.  Article 1 is amended by adding a section to read: 
    Sec. 49.  [308A.941] [COURT-ORDERED REMEDIES OR 
DISSOLUTION.] 
    Subdivision 1.  [CONDITIONS FOR RELIEF.] 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:  
    (1) in a supervised voluntary dissolution that is applied 
for by the cooperative; 
    (2) in an action by a member when it is established that:  
    (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; 
    (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; 
    (iii) the members of the cooperative are so divided in 
voting power that, for a period that includes the time when two 
consecutive regular members' 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; 
    (iv) the cooperative assets are being misapplied or wasted; 
or 
    (v) the period of duration as provided in the articles has 
expired and has not been extended as provided in this chapter; 
    (3) in an action by a creditor when:  
    (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 
    (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 
    (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.  
[302A.751 s. 1] 
    Subd. 2.  [CONDITION OF COOPERATIVE OR ASSOCIATION.] 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.
[302A.751 s. 3] 
    Subd. 3.  [DISSOLUTION AS REMEDY.] 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.  [302A.751 s. 3b] 
    Subd. 4.  [EXPENSES.] 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 attorneys' 
fees and disbursements, to any of the other parties.  [302A.751 
s. 4] 
    Subd. 5.  [VENUE.] Proceedings under this section shall be 
brought in a court within the county where the registered office 
of the cooperative is located.  [302A.751] 
    Subd. 6.  [PARTIES.] It is not necessary to make members 
parties to the action or proceeding unless relief is sought 
against them personally.  [302A.751] 
    Sec. 38.  Article 1 is amended by adding a section to read: 
    Sec. 50.  [308A.945] [PROCEDURE IN INVOLUNTARY OR 
COURT-SUPERVISED VOLUNTARY DISSOLUTION.] 
    Subdivision 1.  [ACTION BEFORE HEARING.] In dissolution 
proceedings before a hearing can be completed the court may:  
    (1) issue injunctions; 
    (2) appoint receivers with all powers and duties that the 
court directs; 
    (3) take actions required to preserve the cooperative's 
assets wherever located; and 
    (4) carry on the business of the cooperative.  [302A.753 s. 
1] 
    Subd. 2.  [ACTION AFTER HEARING.] After a hearing is 
completed, on notice the court directs to be given 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.  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.  [302A.753 s. 2] 
    Subd. 3.  [DISCHARGE OF OBLIGATIONS.] The assets of the 
cooperative or the proceeds resulting from a sale, lease, 
transfer, or other disposition shall be applied in the following 
order of priority or: 
    (1) the costs and expenses of the proceedings, including 
attorneys' fees and disbursements; 
    (2) debts, taxes and assessments due the United States, the 
state of Minnesota and their subdivisions, and other states and 
their subdivisions, in that order; 
    (3) claims duly proved and allowed to employees under the 
provisions of the workers' compensation act except that claims 
under this clause may not be allowed if the cooperative has 
carried workers' compensation insurance, as provided by law, at 
the time the injury was sustained; 
    (4) claims, including the value of all compensation paid in 
a medium other than money, proved and allowed to employees for 
services performed within three months preceding the appointment 
of the receiver, if any; and 
    (5) other claims proved and allowed.  [302A.753 s. 3 ] 
    Subd. 4.  [REMAINDER TO MEMBERS.] After payment of the 
expenses of receivership and claims of creditors are proved, the 
remaining assets, if any, may be distributed to the members or 
distributed pursuant to an approved liquidation plan.  [302A.753 
s. 4] 
    Sec. 39.  Article 1 is amended by adding a section to read: 
    Sec. 51.  [308A.951] [RECEIVER QUALIFICATIONS AND POWERS.] 
    Subdivision 1.  [QUALIFICATIONS.] A receiver must be a 
natural person or a domestic corporation or a foreign 
corporation authorized to transact business in this state.  A 
receiver must give a bond as directed by the court with the 
sureties required by the court.  [302A.755 s. 1] 
    Subd. 2.  [POWERS.] A receiver may sue and defend in all 
courts as receiver of the cooperative.  The court appointing the 
receiver has exclusive jurisdiction of the cooperative and its 
property.  [302A.755 s. 2] 
    Sec. 40.  Article 1 is amended by adding a section to read: 
    Sec. 52.  [308A.955] [DISSOLUTION ACTION BY ATTORNEY 
GENERAL.] 
    Subdivision 1.  [CONDITIONS TO BEGIN ACTION.] 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:  
    (1) the articles and certificate of incorporation were 
procured through fraud; 
    (2) the cooperative was incorporated for a purpose not 
permitted by this chapter; 
    (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 
    (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.  [302A.757 
s. 1] 
    Subd. 2.  [NOTICE TO COOPERATIVE.] 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.  [302A.757 s. 
2] 
    Sec. 41.  Article 1 is amended by adding a section to read: 
    Sec. 53.  [308A.961] [FILING CLAIMS IN COURT-SUPERVISED 
DISSOLUTION PROCEEDINGS.] 
    Subdivision 1.  [FILING UNDER OATH.] In proceedings to 
dissolve a cooperative, the court may require all creditors and 
claimants of the cooperative to file their claims under oath 
with the court administrator or with the receiver in a form 
prescribed by the court.  [302A.759 s. 1] 
    Subd. 2.  [DATE TO FILE CLAIM.] (a) If the court requires 
the filing of claims, the court shall:  
    (1) set a date, by order, at least 120 days after the date 
the order is filed, as the last day for the filing of claims; 
and 
    (2) prescribe the notice of the fixed date that shall be 
given to creditors and claimants.  
    (b) Before the fixed date, the court may extend the time 
for filing claims.  Creditors and claimants failing to file 
claims on or before the fixed date may be barred, by order of 
court, from claiming an interest in or receiving payment out of 
the property or assets of the cooperative.  [302A.759 s. 2] 
    Sec. 42.  Article 1 is amended by adding a section to read: 
    Sec. 54.  [308A.965] [DISCONTINUANCE OF COURT-SUPERVISED 
DISSOLUTION PROCEEDINGS.] 
    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.  [302A.761] 
    Sec. 43.  Article 1 is amended by adding a section to read: 
    Sec. 55.  [308A.971] [COURT-SUPERVISED DISSOLUTION ORDER.] 
    Subdivision 1.  [CONDITIONS FOR DISSOLUTION ORDER.] 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.  [302A.763 s. 1] 
    Subd. 2.  [DISSOLUTION EFFECTIVE ON FILING ORDER.] When the 
order dissolving the cooperative or association has been 
entered, the cooperative or association is dissolved.  [302A.763 
s. 2] 
    Sec. 44.  Article 1 is amended by adding a section to read: 
    Sec. 56.  [308A.975] [FILING COURT'S DISSOLUTION ORDER.] 
    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.  [302A.765] 
    Sec. 45.  Article 1 is amended by adding a section to read: 
    Sec. 57.  [308A.981] [BARRING OF CLAIMS.] 
    Subdivision 1.  [CLAIMS BARRED.] 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.  [302A.781 s. 1] 
    Subd. 2.  [CERTAIN UNFILED CLAIMS ALLOWED.] 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:  
    (1) against the cooperative to the extent of undistributed 
assets; or 
    (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.  [302A.781 s. 2] 
    Subd. 3.  [OMITTED CLAIMS ALLOWED.] 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.  [302A.781 s. 3] 
    Sec. 46.  Article 1 is amended by adding a section to read: 
    Sec. 58.  [308A.985] [RIGHT TO SUE OR DEFEND AFTER 
DISSOLUTION.] 
    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.  
[302A.783] 
    Sec. 47.  Article 1 is amended by adding a section to read: 
    Sec. 59.  [COOPERATIVES ORGANIZED UNDER CHAPTER 308 SUBJECT 
TO THIS ACT.] 
    A cooperative organized under the general cooperative laws, 
Minnesota Statutes 1988, sections 308.05 to 308.18, or the 
agricultural marketing act, Minnesota Statutes 1988, sections 
308.52 to 308.85, is deemed to be organized under and subject to 
this act and has the power to perform every act and thing 
necessary or proper to the conduct of the cooperative's business 
or the accomplishment of the purposes of the cooperative, and 
has other rights, powers, or privileges granted by the laws of 
this state to other corporations, except those that are 
inconsistent with the express provisions of this act. 
    Sec. 48.  Article 1, section 44, is amended to read: 
    Sec. 44 60.  [REPEALER.] 
    Minnesota Statutes 1988, sections 308.01; 308.02; 308.03; 
308.05; 308.06; 308.061; 308.062; 308.07; 308.071; 308.08; 
308.09; 308.10; 308.105; 308.11; 308.111; 308.12; 308.13; 
308.14; 308.15; 308.16; 308.17; 308.18; 308.29; 308.30; 308.31; 
308.32; 308.34; 308.341; 308.35; 308.36; 308.361; 308.37; 
308.39; 308.40; 308.41; 308.42; 308.43; 308.51; 308.52; 308.53; 
308.54; 308.55; 308.56; 308.57; 308.58; 308.59; 308.60; 308.61; 
308.62; 308.63; 308.64; 308.65; 308.66; 308.67; 308.68; 308.69; 
308.70; 308.71; 308.72; 308.73; 308.74; 308.75; 308.76; 308.77; 
308.78; 308.79; 308.80; 308.81; 308.82; 308.83; 308.84; 308.85; 
308.853; 308.854; 308.901; 308.902; 308.903; 308.904; 308.905; 
and 308.92, are repealed. 
    Sec. 49.  [REPEALER.] 
    Article 1, sections 16, 22, 42, and 43, are repealed. 
    Presented to the governor May 15, 1989 
    Signed by the governor May 16, 1989, 6:20 p.m.