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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 105-H.F.No. 984 
                  An act relating to cooperatives; authorizing 
                  businesses to organize as cooperative associations; 
                  providing penalties; amending Minnesota Statutes 2002, 
                  sections 80A.14, subdivision 17; 80A.15, subdivision 
                  2; 322B.70, subdivision 1; proposing coding for new 
                  law in Minnesota Statutes, chapter 322B; proposing 
                  coding for new law as Minnesota Statutes, chapter 308B.
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1
                     MINNESOTA COOPERATIVE ASSOCIATIONS ACT
           Section 1.  [308B.001] [CITATION.] 
           This chapter may be cited as the "Minnesota Cooperative 
        Associations Act." 
           Sec. 2.  [308B.005] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] The definitions in this section 
        apply to this chapter. 
           Subd. 2.  [ADDRESS.] "Address" means mailing address, 
        including a zip code.  In the case of a registered address, the 
        term means the mailing address and the actual office location, 
        which may not be a post office box. 
           Subd. 3.  [ALTERNATIVE BALLOT.] "Alternative ballot" means 
        a method of voting on a candidate or issue prescribed by the 
        board of directors in advance of the vote, and may include 
        voting by electronic, telephonic, Internet, or other means that 
        reasonably allow members the opportunity to vote. 
           Subd. 4.  [ARTICLES.] "Articles" means the articles of 
        organization of a cooperative as originally filed and 
        subsequently amended. 
           Subd. 5.  [ASSOCIATION.] "Association" means an 
        organization conducting business on a cooperative plan under the 
        laws of this state or another state that is chartered to conduct 
        business under other laws of this state or another state. 
           Subd. 6.  [BOARD.] "Board" means the board of directors of 
        a cooperative. 
           Subd. 7.  [BUSINESS ENTITY.] "Business entity" means a 
        company, limited liability company, limited liability 
        partnership, or other legal entity, whether domestic or foreign, 
        association, or body vested with the power or function of a 
        legal entity. 
           Subd. 8.  [CHAPTER.] "Chapter" means sections 308B.001 to 
        308B.975. 
           Subd. 9.  [COOPERATIVE.] "Cooperative" means an association 
        organized under this chapter conducting business on a 
        cooperative plan as provided under this chapter. 
           Subd. 10.  [DOMESTIC BUSINESS ENTITY.] "Domestic business 
        entity" means a business entity organized under the laws of this 
        state. 
           Subd. 11.  [DOMESTIC COOPERATIVE.] "Domestic cooperative" 
        means a cooperative organized under this chapter or chapter 308A.
           Subd. 12.  [FILED WITH THE SECRETARY OF STATE.] "Filed with 
        the secretary of state" means that a document meeting the 
        applicable requirements of this chapter, signed and accompanied 
        by the required filing fee, has been delivered to the secretary 
        of state.  The secretary of state shall endorse on the document 
        the word "filed" or a similar word determined by the secretary 
        of state and the month, day, and year of filing, record the 
        document in the office of the secretary of state, and return a 
        document to the person or entity who delivered it for filing. 
           Subd. 13.  [FOREIGN BUSINESS ENTITY.] "Foreign business 
        entity" means a business entity that is not a domestic business 
        entity. 
           Subd. 14.  [FOREIGN COOPERATIVE.] "Foreign cooperative" 
        means a foreign business entity organized to conduct business on 
        a cooperative plan consistent with this chapter or chapter 308A. 
           Subd. 15.  [MEMBER.] "Member" means a person or entity 
        reflected on the books of the cooperative as the owner of 
        governance rights of a membership interest of the cooperative 
        and includes patron and nonpatron members. 
           Subd. 16.  [MEMBERSHIP INTEREST.] "Membership interest" 
        means a member's interest in a cooperative consisting of a 
        member's financial rights, a member's right to assign financial 
        rights, a member's governance rights, and a member's right to 
        assign governance rights.  Membership interest includes patron 
        membership interests and nonpatron membership interests. 
           Subd. 17.  [MEMBERS' MEETING.] "Members' meeting" means a 
        regular or special members' meeting. 
           Subd. 18.  [MINNESOTA LIMITED LIABILITY COMPANY.] 
        "Minnesota limited liability company" means a limited liability 
        company governed by chapter 322B. 
           Subd. 19.  [NONPATRON MEMBERSHIP INTEREST.] "Nonpatron 
        membership interest" means a membership interest that does not 
        require the holder to conduct patronage business for or with the 
        cooperative to receive financial rights or distributions. 
           Subd. 20.  [PATRON.] "Patron" means a person or entity who 
        conducts patronage business with the cooperative. 
           Subd. 21.  [PATRONAGE.] "Patronage" means business, 
        transactions, or services done for or with the cooperative as 
        defined by the cooperative. 
           Subd. 22.  [PATRON MEMBER.] "Patron member" means a member 
        holding a patron membership interest. 
           Subd. 23.  [PATRON MEMBERSHIP INTEREST.] "Patron membership 
        interest" means the membership interest requiring the holder to 
        conduct patronage business for or with the cooperative, as 
        specified by the cooperative to receive financial rights or 
        distributions. 
           Subd. 24.  [SIGNED.] "Signed" means that the signature of a 
        person has been written on a document, and with respect to a 
        document required by this chapter to be filed with the secretary 
        of state, means that the document has been signed by a person 
        authorized to do so by this chapter, the articles or bylaws, or 
        by a resolution approved by the directors or the members.  A 
        signature on a document may be a facsimile affixed, engraved, 
        printed, placed, stamped with indelible ink, transmitted by 
        facsimile or electronically, or in any other manner reproduced 
        on the document. 
                               GENERAL PROVISIONS
           Sec. 3.  [308B.101] [RESERVATION OF RIGHT.] 
           The state reserves the right to amend or repeal the 
        provisions of this chapter by law.  A cooperative organized or 
        governed by this chapter is subject to this reserved right. 
           Sec. 4.  [308B.111] [FILING FEES.] 
           Unless otherwise provided, the filing fee for documents 
        filed under this chapter with the secretary of state is $35. 
           Sec. 5.  [308B.115] [REGISTERED OFFICE AND AGENT.] 
           Subdivision 1.  [REGISTERED OFFICE AND AGENT.] A 
        cooperative must establish and continuously maintain in this 
        state: 
           (1) a registered office that may be, but need not be, the 
        same as its place of business; and 
           (2) a registered agent, which agent may be either an 
        individual resident in this state whose business office is 
        identical with the registered office, or a domestic business 
        entity, or a foreign business entity authorized to transact 
        business in this state, having an office identical with the 
        registered office. 
           Subd. 2.  [CHANGE OF OFFICE AND AGENT.] A cooperative may 
        designate or change its registered office or agent, or both, 
        upon filing in the office of the secretary of state a statement 
        setting forth: 
           (1) the name of the cooperative; 
           (2) the address of its then registered office; 
           (3) if the address of its registered office is to be 
        changed, the address to which the registered office is to be 
        changed; 
           (4) the name of its then registered agent; 
           (5) if its registered agent is to be changed, the name of 
        its successor registered agent; 
           (6) that the address of its registered office and the 
        address of the business office of its registered agent, as 
        changed, will be identical; and 
           (7) that the change was authorized by affirmative vote of a 
        majority of the board of the cooperative. 
           Subd. 3.  [FILING.] The statement shall be signed and 
        delivered to the secretary of state.  If the secretary of state 
        finds that the statement conforms to the provisions of this 
        section, the secretary of state shall file the statement, and 
        upon filing the change of address of the registered office or 
        the appointment of a new registered agent or both, as the case 
        may be, is effective. 
           Subd. 4.  [RESIGNATION OF AGENT.] Any registered agent of a 
        cooperative may resign as agent upon filing a written notice 
        resignation, signed with one original and one exact or conformed 
        copy, with the secretary of state, who shall mail a copy to the 
        cooperative at its principal mailing address as defined and 
        prescribed by the secretary of state.  The appointment of the 
        agent shall terminate upon the expiration of 30 days after 
        receipt of notice by the secretary of state. 
           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 2, except that the statement need only be signed by 
        the registered agent, need not be responsive to subdivision 2, 
        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. 
           Sec. 6.  [308B.121] [PERIODIC REGISTRATION.] 
           Subdivision 1.  [PERIODIC REGISTRATION IN CERTAIN 
        YEARS.] Each cooperative governed by this chapter and each 
        foreign cooperative registered under section 308B.151, must file 
        a periodic registration with the secretary of state with the 
        initial articles and any amendment of the articles in each 
        odd-numbered year.  In these years, the secretary of state must 
        mail by first class mail a registration form to the registered 
        office of each cooperative and registered foreign cooperative as 
        shown in the records of the secretary of state, or if no such 
        address is in the records, to the location of the principal 
        place of business shown in the records of the secretary of 
        state.  For a cooperative, the form must include the following 
        notice: 
           "NOTICE:  Failure to file this form by December 31 of this 
        year will result in the dissolution of this cooperative without 
        further notice from the secretary of state, under Minnesota 
        Statutes, section 308B.121, subdivision 4, paragraph (b)." 
           For a foreign cooperative, the form must contain the 
        following notice: 
           "NOTICE:  Failure to file this form by December 31 of this 
        year will result in the loss of good standing and the authority 
        to do business in Minnesota." 
           Subd. 2.  [REGISTRATION FORM.] In each calendar year in 
        which a registration is to be filed, a cooperative must file 
        with the secretary of state a registration by December 31 of 
        that calendar year containing: 
           (1) the name of the cooperative; 
           (2) the address of its registered office; 
           (3) the address of its principal place of business, if 
        different from the registered office address; and 
           (4) the name and business address of the officer or other 
        person exercising the principal functions of the chief executive 
        officer of the cooperative. 
           Subd. 3.  [INFORMATION PUBLIC.] The information required by 
        subdivision 2 is public data. 
           Subd. 4.  [PENALTY; DISSOLUTION.] (a) A cooperative that 
        has failed to file a registration under the requirements of this 
        section must be dissolved by the secretary of state as described 
        in paragraph (b). 
           (b) If the cooperative has not filed the registration by 
        December 31 of that calendar year, the secretary of state must 
        issue a certificate of involuntary dissolution and the 
        certificate must be filed in the office of the secretary of 
        state.  The secretary of state must annually inform the attorney 
        general and the commissioner of revenue of the methods by which 
        the names of cooperatives dissolved under this section during 
        the preceding year may be determined.  The secretary of state 
        must also make available in an electronic format the names of 
        the dissolved cooperatives.  A cooperative dissolved in this 
        manner is not entitled to the benefits of section 308B.971. 
           Subd. 5.  [REINSTATEMENT.] A cooperative may, within one 
        year of the date of dissolution under this section, 
        retroactively reinstate its existence by filing a single annual 
        registration and paying a $25 fee.  Filing the annual 
        registration with the secretary of state: 
           (1) returns the cooperative to active status as of the date 
        of the dissolution; 
           (2) validates contracts or other acts within the authority 
        of the articles and the cooperative is liable for those 
        contracts or acts; and 
           (3) restores to the cooperative all assets and rights of 
        the cooperative and its shareholders or members to the extent 
        they were held by the cooperative and its shareholders or 
        members before the dissolution occurred, except to the extent 
        that assets or rights were affected by acts occurring after the 
        dissolution or sold or otherwise distributed after that time. 
           Sec. 7.  [308B.007] [LEGAL RECOGNITION OF ELECTRONIC 
        RECORDS AND SIGNATURES.] 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section. 
           (b) "Electronic" means relating to technology having 
        electrical, digital, magnetic, wireless, optical, 
        electromagnetic, or similar capabilities. 
           (c) "Electronic record" means a record created, generated, 
        sent, communicated, received, or stored by electronic means. 
           (d) "Electronic signature" means an electronic sound, 
        symbol, or process attached to or logically associated with a 
        record and executed or adopted by a person with the intent to 
        sign the record. 
           (e) "Record" means information that is inscribed on a 
        tangible medium or that is stored in an electronic or other 
        medium and is retrievable in perceivable form. 
           Subd. 2.  [ELECTRONIC RECORDS AND SIGNATURES.] For purposes 
        of this chapter: 
           (1) a record or signature may not be denied legal effect or 
        enforceability solely because it is in electronic form; 
           (2) a contract may not be denied legal effect or 
        enforceability solely because an electronic record was used in 
        its formation; 
           (3) if a provision requires a record to be in writing, an 
        electronic record satisfies the requirement; and 
           (4) if a provision requires a signature, an electronic 
        signature satisfies the requirement. 
           Sec. 8.  [308B.151] [FOREIGN COOPERATIVES.] 
           Subdivision 1.  [AUTHORITY.] (a) Subject to the 
        constitution of this state, the laws of the jurisdiction under 
        which a foreign cooperative is organized govern its organization 
        and internal affairs and the liability of its members.  A 
        foreign cooperative may not be denied a certificate of authority 
        to transact business in this state by reason of any difference 
        between those laws and the laws of this state. 
           (b) A foreign cooperative holding a valid certificate of 
        authority in this state has no greater rights and privileges 
        than a domestic cooperative.  The certificate of authority does 
        not authorize the foreign cooperative to exercise any of its 
        powers or purposes that a domestic cooperative is forbidden by 
        law to exercise in this state. 
           (c) A foreign cooperative may apply for a certificate of 
        authority under any name that would be available to a 
        cooperative, whether or not the name is the name under which it 
        is authorized in its jurisdiction of organization. 
           Subd. 2.  [CERTIFICATE OF AUTHORITY.] (a) Before 
        transacting business in this state, a foreign cooperative shall 
        obtain a certificate of authority.  An applicant for the 
        certificate shall file with the secretary of state a certificate 
        of status from the filing office in the jurisdiction in which 
        the business entity is organized and an application executed by 
        an authorized person and setting forth: 
           (1) the name of the foreign cooperative and, if different, 
        the name under which it proposes to transact business in this 
        state; 
           (2) the jurisdiction of its organization; 
           (3) the name and business address of the proposed 
        registered agent in this state, which agent shall be an 
        individual resident of this state, a domestic business entity, 
        or a foreign cooperative having a place of business in, and 
        authorized to do business in, this state; 
           (4) the address of the office required to be maintained in 
        the jurisdiction of its organization by the laws of that 
        jurisdiction or, if not so required, of the principal place of 
        business of the foreign cooperative; and 
           (5) the date the foreign cooperative expires in the 
        jurisdiction of its organization. 
           (b) The application must be accompanied by payment of $185, 
        which includes a $150 initial license fee in addition to the $35 
        filing fee required by section 308B.111. 
           (c) If the secretary of state finds that an application for 
        a certificate of authority conforms to law and all fees have 
        been paid, the secretary of state shall: 
           (1) endorse on the application the word "Filed" and the 
        date of filing the application; 
           (2) file the original application; and 
           (3) return the original application to the person who filed 
        it with a certificate of authority issued by the secretary of 
        state. 
           (d) A certificate of authority issued under this section is 
        effective from the date the application is filed with the 
        secretary of state accompanied by the payment of the requisite 
        fees. 
           (e) If any statement in the application for a certificate 
        of authority by a foreign cooperative was false when made or any 
        arrangements or other facts described have changed, making the 
        application inaccurate in any respect, the foreign cooperative 
        shall promptly file with the secretary of state: 
           (1) in the case of a change in its name, a termination, or 
        a merger, a certificate to that effect authenticated by the 
        proper officer of the state or country under the laws of which 
        the foreign cooperative is organized; or 
           (2) in the case of a change in the name or address of the 
        registered agent required to be maintained by section 308B.121, 
        an amendment to the certificate of authority signed by an 
        authorized person. 
           The fee for filing the document is the same as for filing 
        an amendment. 
           Subd. 3.  [REGISTERED AGENT AND CERTAIN REPORTS.] A foreign 
        cooperative authorized to transact business in this state shall: 
           (1) appoint and continuously maintain a registered agent in 
        the same manner as provided in section 308B.121; or 
           (2) file a report upon any change in the name or business 
        address of its registered agent in the same manner as provided 
        in section 308B.121. 
           Subd. 4.  [BIENNIAL REGISTRATION.] (a) A foreign 
        cooperative must file a periodic registration with the secretary 
        of state in each odd-numbered year containing: 
           (1) the name of the foreign cooperative; 
           (2) the alternate name, if any, the foreign cooperative has 
        adopted for use in this state; 
           (3) the address of its registered office; 
           (4) the name of its registered agent, if any; 
           (5) the jurisdiction in which the foreign cooperative is 
        organized; and 
           (6) the name and business address of the manager or other 
        person exercising the principal functions of the chief manager 
        of the foreign cooperative. 
           (b) The secretary of state shall mail a registration form 
        to each foreign cooperative not less than 90 days before the 
        registration is due.  The registration form must be sent to the 
        last registered office address filed with the secretary of 
        state.  A foreign cooperative that needs to amend its name, 
        registered office address, or registered agent may make these 
        amendments on the biennial registration form.  If an amendment 
        is made on the biennial registration form, it must be signed by 
        an authorized person.  The fee listed in section 308B.121 
        applies to these amendments. 
           (c) A foreign cooperative that fails to file a registration 
        under the requirements of this subdivision loses its good 
        standing in this state.  The business entity may regain its good 
        standing in this state by filing a registration and paying a $50 
        fee. 
           (d) If a foreign cooperative has not filed a registration 
        during a reporting period, the secretary of state shall notify 
        the business entity that its authority to do business in this 
        state will be revoked if the biennial registration is not filed 
        by the due date of the next registration.  This notice must be 
        sent to the foreign cooperative at its registered office address 
        of record as part of the registration form.  If the foreign 
        cooperative does not file the biennial registration by the due 
        date, the secretary of state shall revoke the authority of the 
        foreign cooperative to do business in this state.  The secretary 
        of state shall issue a certificate of revocation, which shall be 
        sent to the foreign cooperative at its registered office 
        address.  A copy of the certificate must be filed with the 
        secretary of state. 
           (e) If a foreign cooperative has its authority to do 
        business in this state revoked, it may retroactively reinstate 
        its authority to do business by filing a single biennial 
        registration and paying a $50 fee but only within one year of 
        the date of termination or revocation. 
           (f) A foreign cooperative filing the biennial registration 
        restores the foreign cooperative's ability to do business in 
        this state and the rights and privileges that accompany that 
        authority. 
           Subd. 5.  [CERTIFICATE OF WITHDRAWAL.] (a) A foreign 
        cooperative authorized to transact business in this state may 
        withdraw from this state upon procuring from the secretary of 
        state a certificate of withdrawal.  In order to procure the 
        certificate, the foreign cooperative shall file with the 
        secretary of state an application for withdrawal which must set 
        forth: 
           (1) the name of the foreign cooperative and the state or 
        country under the laws of which it is organized; 
           (2) that the foreign cooperative is not transacting 
        business in this state; 
           (3) that the foreign cooperative surrenders its authority 
        to transact business in this state; 
           (4) that the foreign cooperative revokes the authority of 
        its registered agent in this state to accept service of process 
        and consents to that service of process in any action, suit, or 
        proceeding based upon any cause of action arising in this state 
        during the time the business entity was authorized to transact 
        business in this state.  Service may be made on the business 
        entity by service upon the secretary of state; and 
           (5) a post office address to which a person may mail a copy 
        of any process against the business entity. 
           (b) The filing with the secretary of state of a certificate 
        of termination or a certificate of merger if the foreign 
        cooperative is not the surviving organization from the proper 
        officer of the state or country under the laws of which the 
        business entity is organized constitutes a valid application of 
        withdrawal and the authority of the business entity to transact 
        business in this state shall cease upon filing of the 
        certificate. 
           (c) The certificate of authority of a foreign cooperative 
        to transact business in this state may be revoked by the 
        secretary of state upon the occurrence of any of these events: 
           (1) the foreign cooperative has failed to appoint and 
        maintain a registered agent as required by this chapter, file a 
        report upon any change in the name or business address of the 
        registered agent, or file in the office of the secretary of 
        state any amendment to its application for a certificate of 
        authority as specified in section 308B.121; or 
           (2) a misrepresentation has been made of any material 
        matter in any application, report, affidavit, or other document 
        submitted by the foreign cooperative under this chapter. 
           (d) No certificate of authority of a foreign cooperative 
        shall be revoked by the secretary of state unless: 
           (1) the secretary of state has given the foreign 
        cooperative not less than 60 days' notice by mail addressed to 
        its registered office in this state or, if the foreign 
        cooperative fails to appoint and maintain a registered agent in 
        this state, addressed to the office address in the jurisdiction 
        of organization; and 
           (2) during the 60-day period, the foreign cooperative has 
        failed to file the report of change regarding the registered 
        agent, to file any amendment, or to correct the 
        misrepresentation. 
           (e) Sixty days after the mailing of the notice, the 
        authority of the foreign cooperative to transact business in 
        this state ceases.  The secretary of state shall issue a 
        certificate of revocation and shall mail the certificate to the 
        address of the principal place of business or the office 
        required to be maintained in the jurisdiction of organization of 
        the foreign cooperative. 
           Subd. 6.  [TRANSACTION OF BUSINESS WITHOUT CERTIFICATE OF 
        AUTHORITY.] (a) A foreign cooperative transacting business in 
        this state may not maintain any action, suit, or proceeding in 
        any court of this state until it possesses a certificate of 
        authority. 
           (b) The failure of a foreign cooperative to obtain a 
        certificate of authority does not impair the validity of any 
        contract or act of the foreign cooperative or prevent the 
        foreign cooperative from defending any action, suit, or 
        proceeding in any court of this state. 
           (c) A foreign cooperative, by transacting business in this 
        state without a certificate of authority, appoints the secretary 
        of state as its agent upon whom any notice, process, or demand 
        may be served. 
           (d) A foreign cooperative that transacts business in this 
        state without a valid certificate of authority is liable to the 
        state for the years or parts of years during which it transacted 
        business in this state without the certificate in any amount 
        equal to all fees that would have been imposed by this chapter 
        upon that business entity had it duly obtained the certificate, 
        filed all reports required by this chapter, and paid all 
        penalties imposed by this chapter.  The attorney general shall 
        bring proceedings to recover all amounts due this state under 
        the provisions of this section. 
           (e) A foreign cooperative that transacts business in this 
        state without a valid certificate of authority is subject to a 
        civil penalty, payable to the state, not to exceed $5,000.  Each 
        director or, in the absence of directors, each member or agent 
        who authorizes, directs, or participates in the transaction of 
        business in this state on behalf of a foreign cooperative that 
        does not have a certificate is subject to a civil penalty, 
        payable to the state, not to exceed $1,000. 
           (f) The civil penalties set forth in paragraph (e) may be 
        recovered in an action brought in the district court for Ramsey 
        county by the attorney general.  Upon a finding by the court 
        that a foreign cooperative or any of its members, directors, or 
        agents have transacted business in this state in violation of 
        this chapter, the court shall issue, in addition to the 
        imposition of a civil penalty, an injunction restraining the 
        further transaction of the business of the foreign cooperative 
        and the further exercise of any business entity's rights and 
        privileges in this state.  The foreign cooperation must be 
        enjoined from transacting business in this state until all civil 
        penalties plus any interest and court costs that the court may 
        assess have been paid and until the foreign cooperative has 
        otherwise complied with the provisions of this chapter. 
           (g) A member of a foreign cooperative is not liable for the 
        debts and obligations of the foreign cooperative solely by 
        reason of the business entity's having transacted business in 
        this state without a valid certificate of authority. 
           Subd. 7.  [TRANSACTIONS NOT CONSTITUTING TRANSACTING 
        BUSINESS.] (a) The following activities of a foreign 
        cooperative, among others, do not constitute transacting 
        business within the meaning of this section: 
           (1) maintaining, defending, or settling any proceeding; 
           (2) holding meetings of its members or carrying on any 
        other activities concerning its internal affairs; 
           (3) maintaining bank accounts; 
           (4) maintaining offices or agencies for the transfer, 
        exchange, and registration of the foreign cooperative's own 
        securities or maintaining trustees or depositories with respect 
        to those securities; 
           (5) selling through independent contractors; 
           (6) soliciting or obtaining orders, whether by mail or 
        through employees or agents or otherwise, if the orders require 
        acceptance outside this state before they become contracts; 
           (7) creating or acquiring indebtedness, mortgages, and 
        security interests in real or personal property; 
           (8) securing or collecting debts or enforcing mortgages, 
        and security interests in property securing the debts; 
           (9) holding, protecting, renting, maintaining, and 
        operating real or personal property in this state; 
           (10) selling or transferring title to property in this 
        state to any person; or 
           (11) conducting an isolated transaction that is completed 
        within 30 days and that is not one in the course of repeated 
        transactions of a like manner. 
           (b) The term "transacting business" as used in this section 
        has no effect on personal jurisdiction under section 543.19. 
           (c) For purposes of this section, any foreign cooperative 
        that owns income-producing real or tangible personal property in 
        this state, other than property exempted under paragraph (a), is 
        considered to be transacting business in this state. 
           (d) The list of activities in paragraph (a) is not 
        exhaustive.  This subdivision does not apply in determining the 
        contracts or activities that may subject a foreign cooperative 
        to service of process or taxation in this state or to regulation 
        under any other law of this state. 
           Subd. 8.  [ACTION TO RESTRAIN FOREIGN COOPERATIVE.] The 
        attorney general may bring an action to restrain a foreign 
        cooperative from transacting business in this state in violation 
        of this chapter, chapter 308A, or other laws of this state. 
           Subd 9.  [SERVICE OF PROCESS.] Service of process on a 
        foreign cooperative must be as provided under section 5.25. 
                                  ORGANIZATION
           Sec. 9.  [308B.201] [ORGANIZATIONAL PURPOSE.] 
           A cooperative may be formed and organized on a cooperative 
        plan for any lawful purpose, including: 
           (1) to market, process, or otherwise change the form or 
        marketability of products, including crops, livestock, and other 
        agricultural products, the manufacturing and further processing 
        of those products, other purposes that are necessary or 
        convenient to facilitate the production or marketing of products 
        by patron members and others, and other purposes that are 
        related to the business of the cooperative; 
           (2) to provide products, supplies, and services to its 
        members; and 
           (3) for any other purposes that cooperatives are authorized 
        by law. 
           Sec. 10.  [308B.205] [ORGANIZERS.] 
           Subdivision 1.  [QUALIFICATION.] A cooperative may be 
        organized by one or more organizers who shall be adult natural 
        persons, and who may act for themselves as individuals or as the 
        agents of other entities.  The organizers forming the 
        cooperative need not be members of the cooperative. 
           Subd. 2.  [ROLE OF ORGANIZERS.] If the first board is not 
        named in the articles of organization, the organizers may elect 
        the first board or may act as directors with all of the powers, 
        rights, duties, and liabilities of directors, until directors 
        are elected or until a contribution is accepted, whichever 
        occurs first. 
           Subd. 3.  [MEETING.] After the filing of articles of 
        organization, the organizers or the directors named in the 
        articles of organization shall either hold an organizational 
        meeting at the call of a majority of the organizers or of the 
        directors named in the articles, or take written action for the 
        purposes of transacting business and taking actions necessary or 
        appropriate to complete the organization of the cooperative, 
        including, without limitations, amending the articles, electing 
        directors; adopting bylaws, adopting banking resolutions, 
        authorizing or ratifying the purchase, lease, or other 
        acquisition of suitable space, furniture, furnishings, supplies, 
        and materials; adopting a fiscal year for the cooperative; 
        contracting to receive and accept contributions; and making any 
        appropriate tax elections.  If a meeting is held, the person or 
        persons calling the meeting shall give at least three days' 
        notice of the meeting to each organizer or director named, 
        stating the date, time, and place of the meeting.  Organizers 
        and directors may waive notice of an organizational meeting in 
        the same manner that a director may waive notice of meetings of 
        the board. 
           Sec. 11.  [308B.211] [COOPERATIVE NAME.] 
           Subdivision 1.  [DISTINGUISHED NAME.] The name of a 
        cooperative shall distinguish the cooperative upon the records 
        in the office of the secretary of state from the name of a 
        domestic business entity or a foreign business entity, 
        authorized or registered to do business in this state, or a name 
        the right to which is, at the time of organization, reserved or 
        provided for by law. 
           Subd. 2.  [RESERVATION; CONTEST OF NAME.] The cooperative 
        name shall be reserved for the cooperative during its 
        existence.  A person doing business in this state may contest 
        the registration of a name with the secretary of state under 
        section 5.22. 
           Sec. 12.  [308B.215] [ARTICLES OF ORGANIZATION.] 
           Subdivision 1.  [REQUIREMENTS.] (a) The articles of the 
        cooperative shall include: 
           (1) the name of the cooperative; 
           (2) the purpose of the cooperative; 
           (3) the name and address of each organizer; and 
           (4) the period of duration for the cooperative, if the 
        duration is not to be perpetual. 
           (b) The articles may contain any other lawful provision. 
           (c) The articles shall be signed by the organizers. 
           Subd. 2.  [FILING.] The original articles and a designation 
        of the cooperative's registered office and agent, including a 
        registration form under section 308B.121, shall be filed with 
        the secretary of state.  The fee for filing the articles with 
        the secretary of state is $60. 
           Subd. 3.  [EFFECT OF FILING.] When the articles, the 
        registration form under section 308B.121, and the designation of 
        the cooperative's registered office and agent have been filed 
        with the secretary of state and the required fee has been paid 
        to the secretary of state, it shall be presumed that: 
           (1) all conditions precedent that are required to be 
        performed by the organizers have been complied with; 
           (2) the organization of the cooperative has been chartered 
        by the state as a separate legal entity; and 
           (3) the secretary of state shall issue a certificate of 
        organization to the cooperative. 
           Sec. 13.  [308B.221] [AMENDMENT OF ARTICLES.] 
           Subdivision 1.  [PROCEDURE.] (a) The articles of a 
        cooperative shall be amended as follows: 
           (1) the board, by majority vote, shall pass a resolution 
        stating the text of the proposed amendment.  The text of the 
        proposed amendment and an attached mail or alternative ballot, 
        if the board has provided for a mail or alternative ballot in 
        the resolution or alternative method approved by the board and 
        stated in the resolution, shall be mailed or otherwise 
        distributed with a regular or special meeting notice to each 
        member.  The notice shall designate the time and place of the 
        meeting for the proposed amendment to be considered and voted 
        on; 
           (2) if a quorum of the members is registered as being 
        present or represented by alternative vote at the meeting, the 
        proposed amendment is adopted: 
           (i) if approved by a majority of the votes cast; or 
           (ii) for a cooperative with articles or bylaws requiring 
        more than majority approval or other conditions for approval, 
        the amendment is approved by a proportion of the votes cast or a 
        number of total members as required by the articles or bylaws 
        and the conditions for approval in the articles or bylaws have 
        been satisfied. 
           (b) After an amendment has been adopted by the members, the 
        amendment shall be signed by the chair, vice chair, records 
        officer, or assistant records officer and a copy of the 
        amendment filed in the office of the secretary of state. 
           Subd. 2.  [CERTIFICATE.] (a) A certificate shall 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 at which the 
        amendment was adopted; 
           (3) the quorum registered at the meeting; and 
           (4) the vote cast adopting the amendment. 
           (b) The certificate shall be signed by the chair, vice 
        chair, records officer, or financial officer and filed with the 
        records of the cooperative. 
           Subd. 3.  [AMENDMENT BY DIRECTORS.] A majority of directors 
        may amend the articles if the cooperative does not have any 
        members with voting rights. 
           Subd. 4.  [FILING.] An amendment of the articles shall be 
        filed with the secretary of state with a registration statement 
        under section 308B.121, and the amendment is effective upon 
        filing or the date specified in the resolution adopting the 
        amendment. 
           Sec. 14.  [308B.225] [AMENDMENT OF ORGANIZATIONAL DOCUMENTS 
        TO BE GOVERNED BY THIS CHAPTER.] 
           Subdivision 1.  [AUTHORITY.] (a) A cooperative organized 
        under chapter 308A may convert and become subject to this 
        chapter by amending its organizational documents to conform to 
        the requirements of this chapter.  
           (b) A cooperative organized under chapter 308A that becomes 
        subject to this chapter must provide its members with a 
        disclosure statement of the rights and obligations of the 
        members and the capital structure of the cooperative before 
        becoming subject to this chapter.  A cooperative organized under 
        chapter 308A, upon distribution of the disclosure required in 
        this subdivision and approval of its members as necessary for 
        amending its articles under chapter 308A, may amend its articles 
        to comply with this chapter. 
           (c) A cooperative organized under chapter 308A that is 
        converting to be subject to this chapter must prepare a 
        certificate stating: 
           (1) the date on which the entity was first organized; 
           (2) the name of the chapter 308A cooperative and, if the 
        name is changed, the name of the cooperative to be governed 
        under this chapter; and 
           (3) the future effective date and time, which must be a 
        date and time certain, that it will be governed by this chapter, 
        if the effective date and time is not to be the date and time of 
        filing. 
           (d) Upon filing with the secretary of state of the articles 
        for compliance with this chapter and the certificate required 
        under paragraph (c), a cooperative organized under chapter 308A 
        is converted and governed by this chapter unless a later date 
        and time is specified in the certificate under paragraph (c). 
           (e) In connection with a conversion under which a 
        cooperative becomes governed by this chapter, the rights, 
        securities, or interests in the chapter 308A cooperative may be 
        exchanged or converted into rights, property, securities, or 
        interests in the cooperative as governed by this chapter. 
           Subd. 2.  [EFFECT OF BEING GOVERNED BY THIS CHAPTER.] The 
        conversion of a cooperative organized under chapter 308A to a 
        cooperative governed by this chapter does not affect any 
        obligations or liabilities of the cooperative before the 
        conversion or the personal liability of any person incurred 
        before the conversion.  When the conversion is effective, the 
        rights, privileges, and powers of the cooperative, real and 
        personal property of the cooperative, debts due to the 
        cooperative, and causes of action belonging to the cooperative, 
        remain vested in the cooperative and are the property of the 
        cooperative as converted and governed by this chapter.  Title to 
        real property vested by deed or otherwise in the cooperative 
        organized under chapter 308A does not revert and is not impaired 
        by reason of the cooperative being converted and governed by 
        this chapter.  Rights of creditors and liens upon property of 
        the cooperative under chapter 308A are preserved unimpaired, and 
        debts, liabilities, and duties of the cooperative under chapter 
        308A remain attached to the cooperative as converted and 
        governed by this chapter and may be enforced against the 
        cooperative to the same extent as if the debts, liabilities, and 
        duties had originally been incurred or contracted by the 
        cooperative as organized under this chapter.  The rights, 
        privileges, powers, and interests in property of the cooperative 
        under chapter 308A, as well as the debts, liabilities, and 
        duties of the cooperative are not deemed, as a consequence of 
        the conversion, to have been transferred for any purpose of the 
        laws of this state. 
           Sec. 15.  [308B.231] [CURATIVE FILING.] 
           If the secretary of state determines that a filing has been 
        made in error by the cooperative, the secretary of state may 
        revoke and expunge the erroneous filing and authorize a curative 
        document to be filed.  A filing fee of $500 shall be charged for 
        any such revocation or expungement and subsequent curative 
        filing. 
           Sec. 16.  [308B.235] [EXISTENCE.] 
           Subdivision 1.  [COMMENCEMENT UPON FILING.] The existence 
        of a cooperative shall commence when the articles are filed with 
        the secretary of state. 
           Subd. 2.  [DURATION.] A cooperative shall have a perpetual 
        duration unless the cooperative provides for a limited period of 
        duration in the articles. 
           Sec. 17.  [308B.241] [BYLAWS.] 
           Subdivision 1.  [REQUIRED.] A cooperative shall have bylaws 
        governing the cooperative's business affairs, structure, the 
        qualifications, classification, rights and obligations of 
        members, and the classifications, allocations, and distributions 
        of membership interests, which are not otherwise provided in the 
        articles or by this chapter. 
           Subd. 2.  [CONTENTS.] (a) If not stated in the articles, 
        the bylaws must state: 
           (1) the purpose of the cooperative; 
           (2) the capital structure of the cooperative to the extent 
        not stated in the articles, including a statement of the classes 
        and relative rights, preferences, and restrictions granted to or 
        imposed upon each class of member interests, the rights to share 
        in profits or distributions of the cooperative, and the 
        authority to issue membership interests, which may be designated 
        to be determined by the board; 
           (3) a provision designating the voting and governance 
        rights, to the extent not stated in the articles, including 
        which membership interests have voting power and any limitations 
        or restrictions on the voting power, which shall be in 
        accordance with the provisions of this chapter; 
           (4) a statement that patron membership interests with 
        voting power shall be restricted to one vote for each member 
        regardless of the amount of patron membership interests held in 
        the affairs of the cooperative or a statement describing the 
        allocation of voting power allocated as prescribed in this 
        chapter; 
           (5) a statement that membership interests held by a member 
        are transferable only with the approval of the board or as 
        provided in the bylaws; and 
           (6) if nonpatron membership interests are authorized, a 
        statement as to how profits and losses will be allocated and 
        cash will be distributed between patron membership interests 
        collectively and nonpatron membership interests collectively to 
        the extent not stated in the articles, a statement that net 
        income allocated to a patron membership interest as determined 
        by the board in excess of dividends and additions to reserves 
        shall be distributed on the basis of patronage, and a statement 
        that the records of the cooperative shall include patron 
        membership interests and, if authorized, nonpatron membership 
        interests, which may be further described in the bylaws of any 
        classes and in the reserves. 
           (b) The bylaws may contain any provision relating to the 
        management or regulation of the affairs of the cooperative that 
        are not inconsistent with law or the articles, and shall include 
        the following: 
           (1) the number of directors and the qualifications, manner 
        of election, powers, duties, and compensation, if any, of 
        directors; 
           (2) the qualifications of members and any limitations on 
        their number; 
           (3) the manner of admission, withdrawal, suspensions, and 
        expulsion of members; 
           (4) generally, the governance rights, financial rights, 
        assignability of governance and financial rights, and other 
        rights, privileges, and obligations of members and their 
        membership interests, which may be further described in member 
        control agreements; and 
           (5) any provisions required by the articles to be in the 
        bylaws. 
           Subd. 3.  [ADOPTION.] (a) Bylaws shall be adopted before 
        any distributions to members, but if the articles or bylaws 
        provide that rights of contributors to a class of membership 
        interest will be determined in the bylaws, then the bylaws must 
        be adopted before the acceptance of any contributions to that 
        class. 
           (b) Subject to subdivisions 4, 5, and 6, the bylaws of a 
        cooperative may be adopted or amended by the directors, or the 
        members may adopt or amend bylaws at a regular or special 
        members' meeting if: 
           (1) the notice of the regular or special meeting contains a 
        statement that the bylaws or restated bylaws will be voted upon 
        and copies are included with the notice, or copies are available 
        upon request from the cooperative and summary statement of the 
        proposed bylaws or amendment is included with the notice; 
           (2) a quorum is registered as being present or represented 
        by mail or alternative voting method if the mail or alternative 
        voting method is authorized by the board; and 
           (3) the bylaws or amendment is approved by a majority vote 
        cast, or for a cooperative with articles or bylaws requiring 
        more than majority approval or other conditions for approval, 
        the bylaws or amendment is approved by a proportion of the vote 
        cast or a number of the total members are required by the 
        articles or bylaws and the conditions for approval in the 
        articles or bylaws have been satisfied. 
           (c) Until the next annual or special members' meeting, the 
        majority of directors may adopt and amend bylaws for the 
        cooperative that are consistent with subdivisions 4 to 6, which 
        may be further amended or repealed by the members at an annual 
        or special members' meeting. 
           Subd. 4.  [AMENDMENT OF BYLAWS BY BOARD OR MEMBERS.] (a) 
        The board may amend the bylaws at any time to add, change, or 
        delete a provision, unless: 
           (1) this chapter, the articles, or the bylaws reserve the 
        power exclusively to the members in whole or in part; or 
           (2) a particular bylaw expressly prohibits the board from 
        doing so. 
           (b) Any amendment of the bylaws by the board must be 
        distributed to the members no later than ten days after adoption 
        and the notice of the annual meeting of the members must contain 
        a notice and summary or the actual amendments to the bylaws 
        adopted by the board. 
           (c) The members may amend the bylaws even though the bylaws 
        may also be amended by the board. 
           Subd. 5.  [BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 
        MEMBERS.] (a) The members may amend the bylaws to fix a greater 
        quorum or voting requirement for members, or voting groups of 
        members, than is required under this chapter.  An amendment to 
        the bylaws to add, change, or delete a greater quorum or voting 
        requirement for members shall meet the same quorum requirement 
        and be adopted by the same vote and voting groups required to 
        take action under the quorum and voting requirements then in 
        effect or proposed to be adopted, whichever is greater. 
           (b) A bylaw that fixes a greater quorum or voting 
        requirement for members under paragraph (a) may not be adopted 
        and shall not be amended by the board. 
           Subd. 6.  [BYLAW CHANGING QUORUM OR VOTING REQUIREMENT FOR 
        DIRECTORS.] (a) A bylaw that fixes a greater quorum or voting 
        requirement for the board may be amended: 
           (1) if adopted by the members, only by the members; or 
           (2) if adopted by the board, either by the members or by 
        the board. 
           (b) A bylaw adopted or amended by the members that fixes a 
        greater quorum or voting requirement for the board may provide 
        that it may be amended only by a specified vote of either the 
        members or the board, but if the bylaw is to be amended by a 
        specified vote of the members, the bylaw must be adopted by the 
        same specified vote of the members. 
           (c) Action by the board under paragraph (a), clause (2), to 
        adopt or amend a bylaw that changes the quorum or voting 
        requirement for the board shall meet the same quorum requirement 
        and be adopted by the same vote required to take action under 
        the quorum and voting requirement then in effect or proposed to 
        be adopted, whichever is greater. 
           Subd. 7.  [EMERGENCY BYLAWS.] (a) Unless otherwise provided 
        in the articles or bylaws, the board may adopt bylaws to be 
        effective only in an emergency as defined in paragraph (d).  The 
        emergency bylaws, which are subject to amendment or repeal by 
        the members, may include all provisions necessary for managing 
        the cooperative during the emergency, including: 
           (1) procedures for calling a meeting of the board; 
           (2) quorum requirements for the meeting; and 
           (3) designation of additional or substitute directors. 
           (b) All provisions of the regular bylaws consistent with 
        the emergency bylaws shall remain in effect during the 
        emergency.  The emergency bylaws shall not be effective after 
        the emergency ends. 
           (c) Action taken in good faith in accordance with the 
        emergency bylaws: 
           (1) binds the cooperative; and 
           (2) may not be the basis for imposition of liability on any 
        director, officer, employee, or agent of the cooperative on the 
        grounds that the action was not authorized cooperative action. 
           (d) An emergency exists for the purposes of this section, 
        if a quorum of the directors cannot readily be obtained because 
        of some catastrophic event. 
           Sec. 18.  [308B.245] [COOPERATIVE RECORDS.] 
           (a) A cooperative shall keep as permanent records minutes 
        of all meetings of its members and of the board, a record of all 
        actions taken by the members or the board without a meeting by a 
        written unanimous consent in lieu of a meeting, and a record of 
        all waivers of notices of meetings of the members and of the 
        board. 
           (b) A cooperative shall maintain appropriate accounting 
        records. 
           (c) A cooperative shall maintain its records in written 
        form or in another form capable of conversion into written form 
        within a reasonable time. 
           (d) A cooperative shall keep a copy of each of the 
        following records at its principal office: 
           (1) its articles and other governing instruments; 
           (2) its bylaws or other similar instruments; 
           (3) a record of the names and addresses of its members, in 
        a form that allows preparation of an alphabetical list of 
        members with each member's address; 
           (4) the minutes of members' meetings, and records of all 
        actions taken by members without a meeting by unanimous written 
        consent in lieu of a meeting, for the past three years; 
           (5) all written communications within the past three years 
        to members as a group or to any class of members as a group; 
           (6) a list of the names and business addresses of its 
        current board members and officers; 
           (7) a copy of its most recent periodic registration 
        delivered to the secretary of state under section 308B.121; and 
           (8) all financial statements prepared for periods ending 
        during the last fiscal year.  
           (e) Except as otherwise limited by this chapter, the board 
        of a cooperative shall have discretion to determine what records 
        are appropriate for the purposes of the cooperative, the length 
        of time records are to be retained, and policies relating to the 
        confidentiality, disclosure, inspection, and copying of the 
        records of the cooperative.  
           Sec. 19.  [308B.301] [POWERS.] 
           Subdivision 1.  [GENERALLY.] (a) In addition to other 
        powers, a cooperative as an agent or otherwise: 
           (1) may perform every act necessary or proper to the 
        conduct of the cooperative's business or the accomplishment of 
        the purposes of the cooperative; 
           (2) has other rights, powers, or privileges granted by the 
        laws of this state to other cooperatives, except those that are 
        inconsistent with the express provisions of this chapter; and 
           (3) has the powers given in section 308A.201 and in this 
        section.  
           (b) This section does not give a cooperative the power or 
        authority to exercise the powers of a credit union under chapter 
        52, a bank under chapter 48, or a savings association under 
        chapter 51A. 
           Subd. 2.  [DEALING IN PRODUCTS.] A cooperative may buy, 
        sell, or deal in its own products; the products of its 
        individual members, patrons, or nonmembers; the products of 
        another cooperative association or of its members or patrons; or 
        the products of another person or entity.  A cooperative may 
        negotiate the price at which its products may be sold.  
           Subd. 3.  [CONTRACTS WITH MEMBERS.] 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.  
           Subd. 4.  [HOLDING AND TRANSACTIONS OF REAL AND PERSONAL 
        PROPERTY.] (a) A cooperative may purchase and hold, lease, 
        mortgage, encumber, sell, exchange, and convey as a legal entity 
        real, personal, and intellectual property, including real 
        estate, buildings, personal property, patents, and copyrights as 
        the business of the cooperative may require, including the sale 
        or other disposition of assets required by the business of the 
        cooperative as determined by the board. 
           (b) A cooperative may take, receive, and hold real and 
        personal property, including the principal and interest of money 
        or other funds and rights in a contract, in trust for any 
        purpose not inconsistent with the purposes of the cooperative in 
        its articles or bylaws and may exercise fiduciary powers in 
        relation to taking, receiving, and holding the real and personal 
        property.  
           Subd. 5.  [BUILDINGS.] A cooperative may erect buildings or 
        other structures or facilities on the cooperative's owned or 
        leased property or on a right-of-way legally acquired by the 
        cooperative.  
           Subd. 6.  [DEBT INSTRUMENTS.] A cooperative may issue 
        bonds, debentures, or other evidence of indebtedness and may 
        borrow money, may secure any of its obligations by mortgage of 
        or creation of a security interest in or other encumbrances or 
        assignment of all or any of its property, franchises, or income, 
        and may issue guarantees for any legal purpose.  The cooperative 
        may form special purpose business entities to secure assets of 
        the cooperative.  
           Subd. 7.  [ADVANCES TO PATRONS.] A cooperative may make 
        advances to its members or patrons on products delivered by the 
        members or patrons to the cooperative.  
           Subd. 8.  [DEPOSITS.] A cooperative may accept donations or 
        deposits of money or real personal property from other 
        cooperatives or associations from which it is constituted.  
           Subd. 9.  [LENDING, BORROWING, INVESTING.] 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.  A cooperative may invest 
        and reinvest its funds. 
           Subd. 10.  [PENSIONS AND BENEFITS.] A cooperative may pay 
        pensions, retirement allowances, and compensation for past 
        services to and for the benefit of; and establish, maintain, 
        continue, and carry out, wholly or partially at the expense of 
        the cooperative, employee or incentive benefit plans, trust, and 
        provisions to or for the benefit of any or all of its and its 
        related organizations' officers, managers, directors, governors, 
        employees, and agents; and in the case of a related organization 
        that is a cooperative, members who provide services to the 
        cooperative, and any of their families, dependents, and 
        beneficiaries.  It may indemnify and purchase and maintain 
        insurance for and on behalf of a fiduciary of any of these 
        employee benefit and incentive plans, trusts, and provisions.  
           Subd. 11.  [INSURANCE.] A cooperative may provide for its 
        benefit life insurance and other insurance with respect to the 
        services of any or all of its members, managers, directors, 
        employees, and agents, or on the life of a member for the 
        purpose of acquiring at the death of the member any or all 
        membership interests in the cooperative owned by the member.  
           Subd. 12.  [OWNERSHIP INTERESTS IN OTHER ENTITIES.] (a) A 
        cooperative may purchase, acquire, hold, or dispose of the 
        ownership interests of another business entity or organize 
        business entities whether organized under the laws of this state 
        or another state or the United States and assume all rights, 
        interests, privileges, responsibilities, and obligations arising 
        out of the ownership interests, including a business entity 
        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.  
           (b) A cooperative may purchase, own, and hold ownership 
        interests, including stock and other equity interests, 
        memberships, interests in nonstock capital, and evidences of 
        indebtedness of any domestic business entity or foreign business 
        entity. 
           Subd. 13.  [FIDUCIARY POWERS.] A cooperative may exercise 
        any and all fiduciary powers in relations with members, 
        cooperatives, associations, or business entities from which it 
        is constituted.  
           Sec. 20.  [308B.305] [EMERGENCY POWERS.] 
           (a) In anticipation of or during an emergency defined in 
        paragraph (d), the board may: 
           (1) modify lines of succession to accommodate the 
        incapacity of any director, officer, employee, or agent; and 
           (2) relocate the principal office, designate alternative 
        principal offices or regional offices, or authorize the officers 
        to do so.  
           (b) During an emergency as contemplated in paragraph (d), 
        unless emergency bylaws provide otherwise: 
           (1) notice of a meeting of the board need be given only to 
        those directors to whom it is practicable to reach and may be 
        given in any practicable manner, including by publication or 
        radio; and 
           (2) one of more officers of the cooperative present at a 
        meeting of the board may be deemed to be directors for the 
        meeting, in order of rank and within the same rank in order of 
        seniority, as necessary to achieve a quorum. 
           (c) Cooperative action taken in good faith during an 
        emergency under this section to further the ordinary business 
        affairs of the cooperative: 
           (1) binds the cooperative; and 
           (2) may not be the basis for the imposition of liability on 
        any director, officer, employee, or agent of the cooperative on 
        the grounds that the action was not an authorized cooperative 
        action. 
           (d) An emergency exists for purposes of this section if a 
        quorum of the directors cannot readily be obtained because of a 
        catastrophic event.  
           Sec. 21.  [308B.311] [AGRICULTURAL PRODUCT MARKETING 
        CONTRACTS.] 
           Subdivision 1.  [AUTHORITY.] A cooperative and its patron 
        member or patron may make and execute a marketing contract, 
        requiring the patron member or patron to sell a specified 
        portion of the patron member's or patron's agricultural product 
        or specified commodity produced from a certain area exclusively 
        to or through the cooperative or facility established by the 
        cooperative.  
           Subd. 2.  [TITLE TO PRODUCTS.] If a sale is contracted to 
        the cooperative, the sale shall transfer title to the product 
        absolutely, except for a recorded lien or security interest 
        against the agricultural products of the patron member or patron 
        in the state central notification system and liens granted 
        against farm products under federal law, to the cooperative on 
        delivery of the product or at another specified time if 
        expressly provided in the contract.  The contract may allow the 
        cooperative to sell or resell the product of its patron member 
        or patron with or without taking title to the product, and pay 
        the resale price to the patron member or patron, after deducting 
        all necessary selling, overhead, and other costs and expenses, 
        including other proper reserves and interest.  
           Subd. 3.  [TERM OF CONTRACT.] A single term of a marketing 
        contract shall not exceed ten years, but a marketing contract 
        may be made self-renewing for periods not exceeding five years 
        each, subject to the right of either party to terminate by 
        giving written notice of the termination during a period of the 
        current term as specified in the contract.  
           Subd. 4.  [DAMAGES FOR BREACH OF CONTRACT.] The bylaws or 
        the marketing contract, or both, may set a specific sum as 
        liquidated damages to be paid by the patron member or patron to 
        the cooperative for breach of any provision of the marketing 
        contract regarding the sale or delivery or withholding of a 
        product and may provide that the member or patron shall 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 considered a penalty.  
           Subd. 5.  [INJUNCTION AGAINST BREACH OF CONTRACT.] If there 
        is a breach or threatened breach of a marketing contract by a 
        patron 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 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 patron member or patron.  
           Subd. 6.  [PENALTIES FOR CONTRACT INTERFERENCE AND FALSE 
        REPORTS.] Any person who knowingly induces or attempts to induce 
        any member or patron of a cooperative organized under this 
        chapter to breach a marketing contract with the cooperative, or 
        who maliciously and knowingly spreads false reports about the 
        cooperative's finances or management, is guilty of a misdemeanor 
        and subject to a fine of not less than $100, and not more than 
        $1,000, for each such offense.  
           Subd. 7.  [CIVIL DAMAGES FOR CONTRACT INTERFERENCE AND 
        FALSE REPORTS.] In addition to the penalty provided in 
        subdivision 6, the person may be liable to the cooperative for 
        civil damages for any violation of subdivision 6.  Each 
        violation shall constitute a separate offense.  
                             DIRECTORS AND OFFICERS
           Sec. 22.  [308B.401] [BOARD GOVERNS COOPERATIVE.] 
           A cooperative shall be governed by its board, which shall 
        take all action for and on behalf of the cooperative, except 
        those actions reserved or granted to members.  Board action 
        shall be by the affirmative vote of a majority of the directors 
        voting at a duly called meeting unless a greater majority is 
        required by the articles or bylaws.  A director individually or 
        collectively with other directors does not have authority to act 
        for or on behalf of the cooperative unless authorized by the 
        board.  A director may advocate interests of members or member 
        groups to the board, but the fiduciary duty of each director is 
        to represent the best interests of the cooperative and all 
        members collectively.  
           Sec. 23.  [308B.405] [NUMBER OF DIRECTORS.] 
           The board shall not have less than five directors, except 
        that a cooperative with 50 or fewer members may have three or 
        more directors as prescribed in the articles or bylaws.  
           Sec. 24.  [308B.411] [ELECTION OF DIRECTORS.] 
           Subdivision 1.  [FIRST BOARD.] The organizers shall elect 
        and obtain the acknowledgment of the first board to serve until 
        directors are elected by members.  Until election by members, 
        the first board shall appoint directors to fill any vacancies.  
           Subd. 2.  [GENERALLY.] (a) Directors shall be elected for 
        the term, at the time, and in the manner provided in this 
        section and the bylaws.  
           (b) A majority of the directors shall be members and a 
        majority of the directors shall be elected exclusively by the 
        members holding patron membership interests unless otherwise 
        provided in the articles or bylaws. 
           (c) The voting authority of the directors may be allocated 
        according to allocation units or equity classifications of the 
        cooperative provided that at least one-half of the voting power 
        on general matters of the cooperative shall be allocated to the 
        directors elected by members holding patron membership 
        interests, or in the alternative, the directors elected by the 
        members holding patron membership interests shall have an equal 
        or shall not have a minority voting power on general matters of 
        the cooperative. 
           (d) A director holds office for the term the director was 
        elected and until a successor is elected and has qualified, or 
        until the earlier death, resignation, removal, or 
        disqualification of the director.  
           (e) The expiration of a director's term with or without 
        election of a qualified successor does not make the prior or 
        subsequent acts of the director or the board void or voidable.  
           (f) Subject to any limitation in the articles or bylaws, 
        the board may set the compensation of directors.  
           (g) Directors may be divided into or designated and elected 
        by class or other distinction as provided in the articles or 
        bylaws. 
           (h) A director may resign by giving written notice to the 
        chair of the board or the board.  The resignation is effective 
        without acceptance when the notice is given to the chair of the 
        board or the board unless a later effective time is specified in 
        the notice.  
           Subd. 3.  [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 or special meetings to replace a vacancy, all 
        directors shall be elected at the regular members' meeting.  
        There shall be no cumulative voting for directors except as 
        provided in this chapter and the articles or bylaws.  
           Subd. 4.  [DISTRICT OR LOCAL UNIT ELECTION OF 
        DIRECTORS.] For a cooperative with districts or other units, 
        members may elect directors on a district or unit basis if 
        provided in the bylaws.  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 
        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 district meeting, or the 
        annual regular members' meeting.  
           Subd. 5.  [VOTE BY MAIL OR ALTERNATIVE BALLOT.] The 
        following shall apply to voting by mail or alternative ballot 
        voting: 
           (1) a member may not vote for a director other than by 
        being present at a meeting or by mail ballot or alternative 
        ballot authorized by the board; 
           (2) the ballot shall be in a form prescribed by the board; 
           (3) the member shall mark the ballot for the candidate 
        chosen and mail the ballot to the cooperative in a sealed plain 
        envelope inside another envelope bearing the member's name, or 
        shall vote designating the candidate chosen by alternative 
        ballot in the manner prescribed by the board; and 
           (4) if the ballot of the member is received by the 
        cooperative on or before the date of the regular members' 
        meeting or as otherwise prescribed for alternative ballots, the 
        ballot shall be accepted and counted as the vote of the absent 
        member.  
           Subd. 6.  [BUSINESS ENTITY MEMBERS MAY NOMINATE PERSONS FOR 
        DIRECTOR.] If a member of a cooperative is not a natural person, 
        and the bylaws do not provide otherwise, the member may appoint 
        or elect one or more natural persons to be eligible for election 
        as a director.  
           Subd. 7.  [TERM.] A director holds office for the term the 
        director was elected and until a successor is elected and has 
        qualified, or the earlier death, resignation, removal, or 
        disqualification of the director. 
           Subd. 8.  [ACTS NOT VOID OR VOIDABLE.] The expiration of a 
        director's term with or without the election of a qualified 
        successor does not make prior or subsequent acts of the director 
        void or voidable.  
           Subd. 9.  [COMPENSATION.] Subject to any limitation in the 
        articles or bylaws, the board may fix the compensation of the 
        directors.  
           Subd. 10.  [CLASSIFICATION.] Directors may be divided into 
        classes as provided in the articles or bylaws.  
           Sec. 25.  [308B.415] [FILLING VACANCIES.] 
           Subdivision 1.  [PATRON DIRECTORS.] If a patron member 
        director's position becomes vacant or a new director position is 
        created for a director that was or is to be elected by patron 
        members, the board, in consultation with the directors elected 
        by patron members, shall appoint a patron member of the 
        cooperative to fill the director's position until the next 
        regular or special members' meeting.  If there are no directors 
        elected by patron members on the board at the time of the 
        vacancy, a special patron members' meeting shall be called to 
        fill the patron member director vacancy.  
           Subd. 2.  [NONPATRON DIRECTORS.] If the vacating director 
        was not elected by the patron members or a new director position 
        is created, unless otherwise provided in the articles or bylaws, 
        the board shall appoint a director to fill the vacant position 
        by majority vote of the remaining or then serving directors even 
        though less than a quorum.  At the next regular or special 
        members' meeting, the members or patron members shall elect a 
        director to fill the unexpired term of the vacant director's 
        position. 
           Sec. 26.  [308B.421] [REMOVAL OF DIRECTORS.] 
           Subdivision 1.  [MODIFICATION.] The provisions of this 
        section apply unless modified by the articles or the bylaws.  
           Subd. 2.  [REMOVAL OF DIRECTORS.] A director may be removed 
        at any time, with or without cause, if: 
           (1) the director was named by the board to fill a vacancy; 
           (2) the members have not elected directors in the interval 
        between the time of the appointment to fill a vacancy and the 
        time of the removal; and 
           (3) a majority of the remaining directors present 
        affirmatively vote to remove the director.  
           Subd. 3.  [REMOVAL BY MEMBERS.] Any one or all of the 
        directors may be removed at any time, with or without cause, by 
        the affirmative vote of the holders of a majority of the voting 
        power of membership interests entitled to vote at an election of 
        directors; provided that if a director has been elected solely 
        by the patron members or the holders of a class or series of 
        membership interests as stated in the articles or bylaws, then 
        that director may be removed only by the affirmative vote of the 
        holders of a majority of the voting power of the patron members 
        for a director elected by the patron members or of all 
        membership interests of that class or series entitled to vote at 
        an election of that director.  
           Subd. 4.  [ELECTION OF REPLACEMENTS.] New directors may be 
        elected at a meeting at which directors are removed.  
           Sec. 27.  [308B.425] [BOARD OF DIRECTORS' MEETINGS.] 
           Subdivision 1.  [TIME AND PLACE.] Meetings of the board may 
        be held from time to time as provided in the articles or bylaws 
        at any place within or without the state that the board may 
        select or by any means described in subdivision 2.  If the board 
        fails to select a place for a meeting, the meeting must be held 
        at the principal executive office, unless the articles or bylaws 
        provide otherwise.  
           Subd. 2.  [ELECTRONIC COMMUNICATIONS.] (a) A conference 
        among directors by any means of communication through which the 
        directors may simultaneously hear each other during the 
        conference constitutes a board meeting, if the same notice is 
        given of the conference as would be required by subdivision 3 
        for a meeting, and if the number of directors participating in 
        the conference would be sufficient to constitute a quorum at a 
        meeting.  Participation in a meeting by that means constitutes 
        presence in person at the meeting.  
           (b) A director may participate in a board meeting not 
        described in paragraph (a) by any means of communication through 
        which the director, other directors so participating, and all 
        directors physically present at the meeting may simultaneously 
        hear each other during the meeting.  Participation in a meeting 
        by that means constitutes presence in person at the meeting.  
           Subd. 3.  [CALLING MEETINGS AND NOTICE.] Unless the 
        articles or bylaws provide for a different time period, a 
        director may call a board meeting by giving at least ten days' 
        notice or, in the case of organizational meetings, at least 
        three days' notice to all directors of the date, time, and place 
        of the meeting.  The notice need not state the purpose of the 
        meeting unless this chapter, the articles, or the bylaws require 
        it.  
           Subd. 4.  [PREVIOUSLY SCHEDULED MEETINGS.] If the day or 
        date, time, and place of a board meeting have been provided in 
        the articles or bylaws, or announced at a previous meeting of 
        the board, no notice is required.  Notice of an adjourned 
        meeting need not be given other than by announcement at the 
        meeting at which adjournment is taken.  
           Subd. 5.  [WAIVER OF NOTICE.] A director may waive notice 
        of a meeting of the board.  A waiver of notice by a director 
        entitled to notice is effective whether given before, at, or 
        after the meeting, and whether given in writing, orally, or by 
        attendance.  Attendance by a director at a meeting is a waiver 
        of notice of that meeting, except where the director objects at 
        the beginning of the meeting to the transaction of business 
        because the meeting is not lawfully called or convened and does 
        not participate in the meeting after the objection.  
           Subd. 6.  [ABSENT DIRECTORS.] If the articles or bylaws so 
        provide, a director may give advance written consent or 
        opposition to a proposal to be acted on at a board meeting.  If 
        the director is not present at the meeting, consent or 
        opposition to a proposal does not constitute presence for 
        purposes of determining the existence of a quorum, but consent 
        or opposition must be counted as the vote of a director present 
        at the meeting in favor of or against the proposal and must be 
        entered in the minutes or other record of action at the meeting, 
        if the proposal acted on at the meeting is substantially the 
        same or has substantially the same effect as the proposal to 
        which the director has consented or objected.  
           Sec. 28.  [308B.431] [QUORUM.] 
           A majority, or a larger or smaller portion or number 
        provided in the articles or bylaws, of the directors currently 
        holding office is a quorum for the transaction of business.  In 
        the absence of a quorum, a majority of the directors present may 
        adjourn a meeting from time to time until a quorum is present.  
        If a quorum is present when a duly called or held meeting is 
        convened, the directors present may continue to transact 
        business until adjournment, even though the withdrawal of a 
        number of directors originally present leaves less than the 
        proportion of number otherwise required for a quorum.  
           Sec. 29. [308B.435] [ACT OF BOARD OF DIRECTORS.] 
           The board shall take action by the affirmative vote of the 
        greater of (1) a majority of directors present at a duly held 
        meeting at the time the action is taken, or (2) a majority of 
        the minimum proportion or number of directors that would 
        constitute a quorum for the transaction of business at the 
        meeting, except where this chapter, the articles, or bylaws 
        require the affirmative vote of a larger proportion or number.  
        If the articles or bylaws require a larger proportion or number 
        than is required by this chapter for a particular action, the 
        articles or bylaws control.  
           Sec. 30.  [308B.441] [ACTION WITHOUT A MEETING.] 
           Subdivision 1.  [METHOD.] An action required or permitted 
        to be taken at a board meeting may be taken by written action 
        signed by all of the directors.  If the articles or bylaws so 
        provide, any action, other than an action requiring member 
        approval, may be taken by written action signed by the number of 
        directors that would be required to take the same action at a 
        meeting of the board at which all directors were present.  
           Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
        when signed by the required number of directors, unless a 
        different effective time is provided in the written action. 
           Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
        permitted to be taken by less than all directors, all directors 
        must be notified immediately of its text and effective date.  
        Failure to provide the notice does not invalidate the written 
        action.  A director who does not sign or consent to the written 
        action has no liability for the action or actions taken by the 
        written action.  
           Sec. 31.  [308B.445] [AUDIT COMMITTEE.] 
           The board shall establish an audit committee to review the 
        financial information and accounting report of the cooperative.  
        The cooperative shall have the financial information audited for 
        presentation to the members unless the bylaws allow financial 
        statements that are not audited and the financial statements 
        clearly state that they are not audited and the difference 
        between the financial statements and audited financial 
        statements that are prepared according to generally accepted 
        accounting procedures.  The directors shall elect members to the 
        audit committee.  The audit committee shall ensure an 
        independent review of the cooperative's finances and audit.  
           Sec. 32.  [308B.451] [COMMITTEES.] 
           Subdivision 1.  [GENERALLY.] A resolution approved by the 
        affirmative vote of a majority of the board may establish 
        committees having the authority of the board in the management 
        of the business of the cooperative only to the extent provided 
        in the resolution.  Committees may include a special litigation 
        committee consisting of one or more independent directors or 
        other independent persons to consider legal rights or remedies 
        of the cooperative and whether those rights and remedies should 
        be pursued.  Committees other than special litigation committees 
        are subject at all times to the direction and control of the 
        board.  
           Subd. 2.  [MEMBERSHIP.] Committee members must be natural 
        persons.  Unless the articles or bylaws provide for a different 
        membership or manner of appointment, a committee consists of one 
        or more persons, who need not be directors, appointed by 
        affirmative vote of a majority of the directors present.  
           Subd. 3.  [PROCEDURE.] The procedures for meetings of the 
        board apply to committees and members of committees to the same 
        extent as those sections apply to the board and individual 
        directors.  
           Subd. 4.  [MINUTES.] Minutes, if any, of committee meetings 
        must be made available upon request to members of the committee 
        and to any director.  
           Subd. 5.  [STANDARD OF CONDUCT.] The establishment of, 
        delegation of authority to, and action by a committee does not 
        alone constitute compliance by a director with the standard of 
        conduct set forth in section 308B.455.  
           Subd. 6.  [COMMITTEE MEMBERS CONSIDERED DIRECTORS.] 
        Committee members are considered to be directors for purposes of 
        sections 308B.455, 308B.461, and 308B.471.  
           Sec. 33.  [308B.455] [STANDARD OF CONDUCT.] 
           Subdivision 1.  [STANDARD AND LIABILITY.] A director shall 
        discharge the duties of the position of director in good faith, 
        in a manner the director reasonably believes to be in the best 
        interests of the cooperative, and with the care an ordinarily 
        prudent person in a like position would exercise under similar 
        circumstances.  A person who so performs those duties is not 
        liable by reason of being or having been a director of the 
        cooperative.  
           Subd. 2.  [RELIANCE.] (a) A director is entitled to rely on 
        information, opinions, reports, or statements, including 
        financial statements and other financial data, in each case 
        prepared or presented by: 
           (1) one or more officers or employees of the cooperative 
        who the director reasonably believes to be liable and competent 
        in the matters presented; 
           (2) counsel, public accountants, or other persons as to 
        matters that the director reasonably believes are within the 
        person's professional or expert competence; or 
           (3) a committee of the board upon which the director does 
        not serve, duly established by the board, as to matters within 
        its designated authority, if the director reasonably believes 
        the committee to merit confidence.  
           (b) Paragraph (a) does not apply to a director who has 
        knowledge concerning the matter in question that makes the 
        reliance otherwise permitted by paragraph (a) unwarranted.  
           Subd. 3.  [PRESUMPTION OF ASSENT AND DISSENT.] A director 
        who is present at a meeting of the board when an action is 
        approved by the affirmative vote of a majority of the directors 
        present is presumed to have assented to the action approved, 
        unless the director:  
           (1) objects at the beginning of the meeting to the 
        transaction of business because the meeting is not lawfully 
        called or convened and does not participate in the meeting after 
        the objection, in which case the director is not considered to 
        be present at the meeting for any purpose of this chapter; 
           (2) votes against the action at the meeting; or 
           (3) is prohibited by a conflict of interest from voting on 
        the action.  
           Subd. 4.  [CONSIDERATIONS.] In discharging the duties of 
        the position of director, a director may, in considering the 
        best interests of the cooperative, consider the interests of the 
        cooperative's employees, customers, suppliers, and creditors, 
        the economy of the state, and long-term as well as short-term 
        interests of the cooperative and its patron members, including 
        the possibility that these interests may be best served by the 
        continued independence of the cooperative.  
           Sec. 34.  [308B.461] [DIRECTOR CONFLICTS OF INTEREST.] 
           Subdivision 1.  [CONFLICT AND PROCEDURE WHEN CONFLICT 
        ARISES.] (a) A contract or other transaction between a 
        cooperative and one or more of its directors, or between a 
        cooperative and a business entity in or of which one or more of 
        its directors are governors, directors, managers, officers, or 
        legal representatives or have a material financial interest, is 
        not void or voidable because the director or directors or the 
        other business entities are parties or because the director or 
        directors are present at the meeting of the members or the board 
        or a committee at which the contract or transaction is 
        authorized, approved, or ratified, if: 
           (1) the contract or transaction was, and the person 
        asserting the validity of the contract or transaction sustains 
        the burden of establishing that the contract or transaction was, 
        fair and reasonable as to the cooperative at the time it was 
        authorized, approved, or ratified and: 
           (i) the material facts as to the contract or transaction 
        and as to the director's or directors' interest are disclosed or 
        known to the members; and 
           (ii) the material facts as to the contract or transaction 
        and as to the director's or directors' interest are fully 
        disclosed or known to the board or a committee, and the board or 
        committee authorizes, approves, or ratifies the contract or 
        transaction in good faith by a majority of the board or 
        committee, but the interested director or directors are not 
        counted in determining the presence of a quorum and must not 
        vote; or 
           (2) the contract or transaction is a distribution, 
        contract, or transaction that is made available to all members 
        or patron members as part of the cooperative's business.  
           (b) If a committee is elected or appointed to authorize, 
        ratify, or approve a contract or transaction under this section, 
        the members of the committee must not have a conflict of 
        interest and be charged with representing the best interests of 
        the cooperative.  
           Subd. 2.  [MATERIAL FINANCIAL INTEREST.] For purposes of 
        this section: 
           (1) a resolution fixing the compensation of a director or 
        fixing the compensation of another director as a director, 
        officer, employee, or agent of the cooperative, is not void or 
        voidable or considered to be a contract or other transaction 
        between a cooperative and one or more of its directors for 
        purposes of this section even though the director receiving the 
        compensation fixed by the resolution is present and voting at 
        the meeting of the board or a committee at which the resolution 
        is authorized, approved, or ratified or even though other 
        directors voting upon the resolution are also receiving 
        compensation from the cooperative; and 
           (2) a director has a material financial interest in each 
        organization in which the director or the spouse; parents; 
        children and spouses of children; brothers and sisters and 
        spouses of brothers and sisters; and the brothers and sisters of 
        the spouse of the director or any combination of them have a 
        material financial interest.  For purposes of this section, a 
        contract or other transaction between a cooperative and the 
        spouse; parents; children and spouses of children; brothers and 
        sisters and spouses of brothers and sisters; and the brothers 
        and sisters of the spouse of a director or any combination of 
        them, is considered to be a transaction between the cooperative 
        and the director. 
           Sec. 35.  [308B.465] [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 or bylaws except as 
        provided in subdivision 2. 
           Subd. 2.  [RESTRICTIONS ON LIABILITY LIMITATION.] The 
        articles or bylaws 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 knowing violations of securities laws under section 
        80A.23 or for illegal distributions; 
           (4) for a transaction from which the director derived an 
        improper personal benefit; or 
           (5) for an act or omission occurring before the date when 
        the provision in the articles or bylaws eliminating or limiting 
        liability becomes effective. 
           Sec. 36.  [308B.471] [INDEMNIFICATION.] 
           Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
        subdivision apply to this section. 
           (b) "Cooperative" includes a domestic or foreign 
        cooperative that was the predecessor of the cooperative referred 
        to in this section in a merger or other transaction in which the 
        predecessor's existence ceased upon consummation of the 
        transaction. 
           (c) "Official capacity" means: 
           (1) with respect to a director, the position of director in 
        a cooperative; 
           (2) with respect to a person other than a director, the 
        elective or appointive office or position held by the person, 
        member of a committee of the board, the employment relationship 
        undertaken by an employee of the cooperative, or the scope of 
        the services provided by members of the cooperative who provide 
        services to the cooperative; and 
           (3) with respect to a director, chief executive officer, 
        member, or employee of the cooperative who, while a member, 
        director, chief executive officer, or employee of the 
        cooperative, is or was serving at the request of the cooperative 
        or whose duties in that position involve or involved service as 
        a governor, director, manager, officer, member, partner, 
        trustee, employee, or agent of another organization or employee 
        benefit plan, the position of that person as a governor, 
        director, manager, officer, member, partner, trustee, employee, 
        or agent, as the case may be, of the other organization or 
        employee benefit plan. 
           (d) "Proceeding" means a threatened, pending, or completed 
        civil, criminal, administrative, arbitration, or investigative 
        proceeding, including a proceeding by or in the right of the 
        cooperative. 
           (e) "Special legal counsel" means counsel who has not 
        represented the cooperative or a related organization, or a 
        director, manager, member of a committee of the board, or 
        employee whose indemnification is in issue. 
           Subd. 2.  [INDEMNIFICATION.] (a) Subject to the provisions 
        of subdivision 4, a cooperative shall indemnify a person made or 
        threatened to be made a party to a proceeding by reason of the 
        former or present official capacity of the person against 
        judgments, penalties, fines, including, without limitation, 
        excise taxes assessed against the person with respect to an 
        employee benefit plan, settlements, and reasonable expenses, 
        including attorney fees and disbursements incurred by the person 
        in connection with the proceeding, if, with respect to the acts 
        or omissions of the person complained of in the proceeding, the 
        person: 
           (1) has not been indemnified by another organization or 
        employee benefit plan for the same judgments, penalties, fines, 
        including, without limitation, excise taxes assessed against the 
        person with respect to an employee benefit plan, settlements, 
        and reasonable expenses, including attorney fees and 
        disbursements incurred by the person in connection with the 
        proceeding with respect to the same acts or omissions; 
           (2) acted in good faith; 
           (3) received no improper personal benefit and the person 
        has not committed an act for which liability cannot be 
        eliminated or limited under section 308B.465, subdivision 2; 
           (4) in the case of a criminal proceeding, had no reasonable 
        cause to believe the conduct was unlawful; and 
           (5) in the case of acts or omissions occurring in the 
        official capacity described in subdivision 1, paragraph (c), 
        clause (1) or (2), reasonably believed that the conduct was in 
        the best interests of the cooperative, or in the case of acts or 
        omissions occurring in the official capacity described in 
        subdivision 1, paragraph (c), clause (3), reasonably believed 
        that the conduct was not opposed to the best interests of the 
        cooperative.  If the person's acts or omissions complained of in 
        the proceeding relate to conduct at a director, officer, 
        trustee, employee, or agent of an employee benefit plan, the 
        conduct is not considered to be opposed to the best interests of 
        the cooperative if the person reasonably believed that the 
        conduct was in the best interests of the participants or 
        beneficiaries of the employee benefit plan. 
           (b) The termination of a proceeding by judgment, order, 
        settlement, conviction, or upon a plea of nolo contendere or its 
        equivalent does not, of itself, establish that the person did 
        not meet the criteria set forth in this subdivision. 
           Subd. 3.  [ADVANCES.] Subject to the provisions of 
        subdivision 4, if a person is made or threatened to be made a 
        party to a proceeding, the person is entitled, upon written 
        request to the cooperative, to payment or reimbursement by the 
        cooperative of reasonable expenses, including attorney fees and 
        disbursements incurred by the person in advance of the final 
        disposition of the proceeding: 
           (1) upon receipt by the cooperative of a written 
        affirmation by the person of a good faith belief that the 
        criteria for indemnification set forth in subdivision 2 have 
        been satisfied, and a written undertaking by the person to repay 
        all amounts paid or reimbursed by the cooperative, if it is 
        ultimately determined that the criteria for indemnification have 
        not been satisfied; and 
           (2) after a determination that the facts then known to 
        those making the determination would not preclude 
        indemnification under this section. 
           The written undertaking required by clause (1) is an 
        unlimited general obligation of the person making it, but need 
        not be secured and shall be accepted without reference to 
        financial ability to make the repayment. 
           Subd. 4.  [PROHIBITION OR LIMIT ON INDEMNIFICATION OR 
        ADVANCES.] The articles or bylaws either may prohibit 
        indemnification or advances of expenses otherwise required by 
        this section or may impose conditions on indemnification or 
        advances of expenses in addition to the conditions contained in 
        subdivisions 2 and 3, including, without limitation, monetary 
        limits on indemnification or advances of expenses if the 
        conditions apply equally to all persons or to all persons within 
        a given class.  A prohibition or limit on indemnification or 
        advances of expenses may not apply to or affect the right of a 
        person to indemnification or advances of expenses with respect 
        to any acts or omissions of the person occurring before the 
        effective date of a provision in the articles or the date of 
        adoption of a provision in the bylaws establishing the 
        prohibition or limit on indemnification or advances of expenses. 
           Subd. 5.  [REIMBURSEMENT TO WITNESSES.] This section does 
        not require, or limit the ability of a cooperative to reimburse 
        expenses, including attorney fees and disbursements incurred by 
        a person in connection with an appearance as a witness in a 
        proceeding at a time when the person has not been made or 
        threatened to be made a party to a proceeding. 
           Subd. 6.  [DETERMINATION OF ELIGIBILITY.] (a) All 
        determinations whether indemnification of a person is required 
        because the criteria set forth in subdivision 2 have been 
        satisfied and whether a person is entitled to payment or 
        reimbursement of expenses in advance of the final disposition of 
        a proceeding as provided in subdivision 3 must be made: 
           (1) by the board by a majority of a quorum, if the 
        directors who are, at the time, parties to the proceeding are 
        not counted for determining either a majority or the presence of 
        a quorum; 
           (2) if a quorum under clause (1) cannot be obtained by a 
        majority of a committee of the board consisting solely of two or 
        more directors not at the time parties to the proceeding duly 
        designated to act in the matter by a majority of the full board, 
        including directors who are parties; 
           (3) if a determination is not made under clause (1) or (2) 
        by special legal counsel selected either by a majority of the 
        board or a committee by vote under clause (1) or (2) or if the 
        requisite quorum of the full board cannot be obtained and the 
        committee cannot be established by a majority of the full board, 
        including directors who are parties; 
           (4) if a determination is not made under clauses (1) to (3) 
        by the affirmative vote of the members, but the membership 
        interests held by parties to the proceeding must not be counted 
        in determining the presence of a quorum, and are not considered 
        to be present and entitled to vote on the determination; or 
           (5) if an adverse determination is made under clauses (1) 
        to (4) or paragraph (b), or if no determination is made under 
        clauses (1) to (4) or paragraph (b) within 60 days after (i) the 
        later to occur of the termination of a proceeding or a written 
        request for indemnification to the cooperative, or (ii) a 
        written request for an advance of expenses, as the case may be, 
        by a court in this state, which may be the same court in which 
        the proceeding involving the person's liability took place upon 
        application of the person and any notice the court requires.  
        The person seeking indemnification or payment or reimbursement 
        of expenses under this clause has the burden of establishing 
        that the person is entitled to indemnification or payment or 
        reimbursement of expenses.  
           (b) With respect to a person who is not, and was not at the 
        time of the acts or omissions complained of in the proceedings, 
        a director, chief executive officer, or person possessing, 
        directly or indirectly, the power to direct or cause the 
        direction of the management or policies of the cooperative, the 
        determination whether indemnification of this person is required 
        because the criteria set forth in subdivision 2 have been 
        satisfied and whether this person is entitled to payment or 
        reimbursement of expenses in advance of the final disposition of 
        a proceeding as provided in subdivision 3 may be made by an 
        annually appointed committee of the board, having at least one 
        member who is a director.  The committee shall report at least 
        annually to the board concerning its actions.  
           Subd. 7.  [INSURANCE.] A cooperative may purchase and 
        maintain insurance on behalf of a person in that person's 
        official capacity against any liability asserted against and 
        incurred by the person in or arising from that capacity, whether 
        or not the cooperative would have been required to indemnify the 
        person against the liability under the provisions of this 
        section.  
           Subd. 8.  [DISCLOSURE.] A cooperative that indemnifies or 
        advances expenses to a person in accordance with this section in 
        connection with a proceeding by or on behalf of the cooperative 
        shall report to the members in writing the amount of the 
        indemnification or advance and to whom and on whose behalf it 
        was paid not later than the next meeting of members.  
           Subd. 9.  [INDEMNIFICATION OF OTHER PERSONS.] Nothing in 
        this section must be construed to limit the power of the 
        cooperative to indemnify persons other than a director, chief 
        executive officer, member, employee, or member of a committee of 
        the board of the cooperative by contract or otherwise.  
           Sec. 37.  [308B.475] [OFFICERS.] 
           Subdivision 1.  [REQUIRED OFFICERS.] (a) The board shall 
        elect:  
           (1) a chair; and 
           (2) one or more vice chairs.  
           (b) The board shall elect or appoint: 
           (1) a records officer; and 
           (2) a financial officer.  
           (c) The officers, other than the chief executive officer, 
        shall not have the authority to bind the cooperative except as 
        authorized by the board.  
           Subd. 2.  [ADDITIONAL OFFICERS.] The board may elect 
        additional officers as the articles or bylaws authorize or 
        require.  
           Subd. 3.  [RECORDS OFFICER AND FINANCIAL OFFICER MAY BE 
        COMBINED.] The offices of records officer and financial officer 
        may be combined.  
           Subd. 4.  [OFFICERS THAT MUST BE MEMBERS.] The chair and 
        first vice chair shall be directors and members.  The financial 
        officer, records officer, and additional officers need not be 
        directors or members.  
           Subd. 5.  [CHIEF EXECUTIVE OFFICER.] The board may employ a 
        chief executive officer to manage the day-to-day affairs and 
        business of the cooperative, and if a chief executive officer is 
        employed, the chief executive officer shall have the authority 
        to implement the functions, duties, and obligations of the 
        cooperative except as restricted by the board.  The chief 
        executive officer shall not exercise authority reserved to the 
        board or the members under this chapter, the articles, or the 
        bylaws. 
                                    MEMBERS
           Sec. 38.  [308B.501] [MEMBERS.] 
           Subdivision 1.  [REQUIREMENT.] A cooperative shall have one 
        or more members. 
           Subd. 2.  [GROUPING OF MEMBERS.] (a) A cooperative may 
        group members and patron members in districts, units, or on 
        another basis if and as authorized in its articles or bylaws.  
        The articles or bylaws may include authorization for the board 
        to determine the groupings. 
           (b) The board may implement the use of districts or units, 
        including setting the time and place and prescribing the rules 
        of conduct for holding meetings by districts or units to elect 
        delegates to members' meetings. 
           Subd. 3.  [MEMBER VIOLATIONS.] (a) A member who knowingly, 
        intentionally, or repeatedly violates a provision of the 
        articles, bylaws, member control agreement, or marketing 
        contract with the cooperative may be required by the board to 
        surrender the member's voting power or the financial rights of 
        membership interest of any class owned by the member, or both. 
           (b) The cooperative shall refund to the member for the 
        surrendered financial rights of membership interest the lesser 
        of the book value or market value of the financial right of the 
        membership interest payable in not more than seven years from 
        the date of surrender or the board may transfer all of any 
        patron member's financial rights to a class of financial rights 
        held by members who are not patron members, or to a certificate 
        of interest, which carries liquidation rights on par with 
        membership interests and is redeemed within seven years after 
        the transfer as provided in the certificate. 
           (c) Membership interests required to be surrendered may be 
        reissued or be retired and canceled by the board. 
           Subd. 4.  [INSPECTION OF COOPERATIVE RECORDS BY 
        MEMBER.] (a) A member is entitled to inspect and copy, at the 
        member's expense, during regular business hours at a reasonable 
        location specified by the cooperative, any of the records 
        described in section 308B.245 if the member meets the 
        requirements of paragraph (b) and gives the cooperative written 
        demand at least five business days before the date on which the 
        member wishes to inspect and copy the records.  Notwithstanding 
        the provisions of this subdivision or any provisions of section 
        308B.245, no member shall have the right to inspect or copy any 
        records of the cooperative relating to the amount of equity 
        capital in the cooperative held by any person or any accounts 
        receivable or other amounts due the cooperative from any person, 
        or any personnel records or employment records of any employee. 
           (b) To be entitled to inspect and copy permitted records, 
        the member shall meet the following requirements: 
           (1) the member has been a member for at least one year 
        immediately preceding the demand to inspect or copy or is a 
        member holding at least five percent of all of the outstanding 
        equity interests in the cooperative as of the date the demand is 
        made; 
           (2) the demand is made in good faith and for a proper 
        cooperative business purpose; 
           (3) the member describes with reasonable particularity the 
        purpose and the records the member desires to inspect; and 
           (4) the records are directly connected with the described 
        purpose. 
           (c) The right of inspection granted by this subdivision 
        shall not be abolished or limited by the articles, bylaws, or 
        any actions of the board or the members. 
           (d) This subdivision does not affect: 
           (1) the right of a member to inspect records to the same 
        extent as any other litigant if the member is in litigation with 
        the cooperative; or 
           (2) the power of a court to compel the production of the 
        cooperative's records for examination. 
           (e) Notwithstanding any other provision in this 
        subdivision, if the records to be inspected or copied are in 
        active use or storage and, therefore, not available at the time 
        otherwise provided for inspection or copying, the cooperative 
        shall notify the member and shall set a date and hour within 
        three business days of the date otherwise set in this 
        subdivision for the inspection or copying. 
           (f) A member's agent or attorney has the same inspection 
        and copying rights as the member.  The right to copy records 
        under this subdivision includes, if reasonable, the right to 
        receive copies made by photographic copying, xerographic 
        copying, or other means.  The cooperative may impose a 
        reasonable charge, covering the costs of labor and material, for 
        copies of any documents provided to the member.  The charge may 
        not exceed the estimated cost of production and reproduction of 
        the records. 
           (g) If a cooperative refuses to allow a member, or the 
        member's agent or attorney, who complies with this subdivision 
        to inspect or copy any records that the member is entitled to 
        inspect or copy within a prescribed time limit or, if none, 
        within a reasonable time, the district court of the county in 
        this state where the cooperative's principal office is located 
        or, if it has no principal office in this state, the district 
        court of the county in which its registered office is located 
        may, on application of the member, summarily order the 
        inspection or copying of the records demanded at the 
        cooperative's expense. 
           (h) If a court orders inspection or copying of the records 
        demanded, unless the cooperative proves that it refused 
        inspection or copying in good faith because it had a reasonable 
        basis for doubt about the right of the member or the member's 
        agent or attorney to inspect or copy the records demanded: 
           (1) the court may order the losing party to pay the 
        prevailing party's reasonable costs, including reasonable 
        attorney fees; 
           (2) the court may order the losing party to pay the 
        prevailing party for any damages the prevailing party shall have 
        incurred by reason of the subject matter of the litigation; 
           (3) if inspection or copying is ordered under this 
        paragraph, the court may order the cooperative to pay the 
        member's inspection and copying expenses; 
           (4) the court may grant either party any other remedy 
        provided by law; and 
           (5) the court may impose reasonable restrictions on the use 
        or distribution of the records by the demanding member. 
           Sec. 39.  [308B.505] [MEMBER NOT LIABLE FOR COOPERATIVE 
        DEBTS.] 
           A member is not, merely on the account of that status, 
        personally liable for the acts, debts, liabilities, or 
        obligations of a cooperative.  A member is liable for any unpaid 
        subscription for the membership interest, unpaid membership 
        fees, or a debt for which the member has separately contracted 
        with the cooperative. 
           Sec. 40.  [308B.511] [REGULAR MEMBERS' MEETINGS.] 
           Subdivision 1.  [ANNUAL MEETING.] Regular members' meetings 
        shall be held annually at a time determined by the board, unless 
        otherwise provided for in the bylaws. 
           Subd. 2.  [LOCATION.] The regular members' meeting shall be 
        held at the principal place of business of the cooperative or at 
        another conveniently located place as determined by the bylaws 
        or the board. 
           Subd. 3.  [BUSINESS AND FISCAL REPORTS.] The officers shall 
        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. 
           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 unit meetings. 
           Subd. 5.  [NOTICE.] (a) The cooperative shall give notice 
        of regular members' meetings by mailing the regular members' 
        meeting notice to each member at the members' last known post 
        office address or by other notification approved by the board 
        and agreed to by the members.  The regular members' meeting 
        notice shall be published or otherwise given by approved method 
        at least two weeks before the date of the meeting or mailed at 
        least 15 days before the date of the meeting. 
           (b) The notice shall contain a summary of any bylaw 
        amendments adopted by the board since the last annual meeting. 
           Subd. 6.  [WAIVER AND OBJECTIONS.] A member may waive 
        notice of a meeting of members.  A waiver of notice by a member 
        entitled to notice is effective whether given before, at, or 
        after the meeting, and whether given in writing, orally, or by 
        attendance.  Attendance by a member at a meeting is a waiver of 
        notice of that meeting, except where the member objects at the 
        beginning of the meeting to the transaction of business because 
        the meeting is not lawfully called or convened, or objects 
        before a vote on an item of business because the item may not 
        lawfully be considered at that meeting and does not participate 
        in the consideration of the item at that meeting. 
           Sec. 41.  [308B.515] [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 
        patron members and, if authorized, 20 percent of the nonpatron 
        members, 20 percent of all members, or members representing 20 
        percent of the membership interests collectively are submitted 
        to the chair. 
           Subd. 2.  [NOTICE.] The cooperative shall give notice of a 
        special members' meeting by mailing the special members' meeting 
        notice to each member personally at the person's last known post 
        office address or an alternative method approved by the board 
        and the member individually or the members generally.  For a 
        member that is an entity, notice mailed or delivered by an 
        alternative method shall be to an officer of the entity.  The 
        special members' meeting notice shall state the time, place, and 
        purpose of the special members' meeting.  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 shall be held within 30 days after the 
        date of the presentation of the members' petition. 
           Subd. 3.  [WAIVER AND OBJECTIONS.] A member may waive 
        notice of a meeting of members.  A waiver of notice by a member 
        entitled to notice is effective whether given before, at, or 
        after the meeting, and whether given in writing, orally, or by 
        attendance.  Attendance by a member at a meeting is a waiver of 
        notice of that meeting, except where the member objects at the 
        beginning of the meeting to the transaction of business because 
        the meeting is not lawfully called or convened, or objects 
        before a vote on an item of business because the item may not 
        lawfully be considered at that meeting and does not participate 
        in the consideration of the item at that meeting. 
           Sec. 42.  [308B.521] [CERTIFICATION OF MEETING NOTICE.] 
           Subdivision 1.  [CERTIFICATE OF MAILING.] After mailing 
        special or regular members' meeting notices or otherwise 
        delivering the notices, the cooperative shall execute a 
        certificate containing the date of mailing or delivery of the 
        notice and a statement that the special or regular members' 
        meeting notices were mailed or delivered as prescribed by law. 
           Subd. 2.  [MATTER OF RECORD.] The certificate shall be made 
        a part of the record of the meeting. 
           Subd. 3.  [FAILURE TO RECEIVE MEETING NOTICE.] Failure of a 
        member to receive a special or regular members' meeting notice 
        does not invalidate an action taken by the members at a members' 
        meeting. 
           Sec. 43.  [308B.525] [QUORUM.] 
           Subdivision 1.  [QUORUM.] The quorum for a members' meeting 
        to transact business shall be: 
           (1) ten percent of the total number of members for a 
        cooperative with 500 or fewer members; or 
           (2) 50 members for cooperatives with more than 500 members. 
           Subd. 2.  [QUORUM FOR VOTING BY MAIL.] In determining a 
        quorum at a meeting, on a question submitted to a vote by mail 
        or an alternative method, members present in person or 
        represented by mail vote or the alternative voting method shall 
        be counted.  The attendance of a sufficient number of members to 
        constitute a quorum shall be established by a registration of 
        the members of the cooperative present at the meeting.  The 
        registration shall be verified by the chair or the records 
        officer of the cooperative and shall be reported in the minutes 
        of the meeting. 
           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. 
           Sec. 44.  [308B.531] [REMOTE COMMUNICATIONS FOR MEMBER 
        MEETINGS.] 
           Subdivision 1.  [CONSTRUCTION AND APPLICATION.] This 
        section shall be construed and applied to: 
           (1) facilitate remote communication consistent with other 
        applicable law; and 
           (2) be consistent with reasonable practices concerning 
        remote communication and with the continued expansion of those 
        practices. 
           Subd. 2.  [MEMBER MEETINGS HELD SOLELY BY MEANS OF REMOTE 
        COMMUNICATION.] To the extent authorized in the articles, a 
        member control agreement, or the bylaws and determined by the 
        board, a regular or special meeting of members may be held 
        solely by any combination of means of remote communication 
        through which the members may participate in the meeting, if 
        notice of the meeting is given to every owner of membership 
        interests entitled to vote as would be required by this chapter 
        for a meeting, and if the membership interests held by the 
        members participating in the meeting would be sufficient to 
        constitute a quorum at a meeting.  Participation by a member by 
        that means constitutes presence at the meeting in person or by 
        proxy if all the other requirements of this chapter for the 
        meeting are met. 
           Subd. 3.  [PARTICIPATION IN MEMBER MEETINGS BY MEANS OF 
        REMOTE COMMUNICATION.] To the extent authorized in the articles 
        or the bylaws and determined by the board, a member not 
        physically present in person or by proxy at a regular or special 
        meeting of members may, by means of remote communication, 
        participate in a meeting of members held at a designated place.  
        Participation by a member by that means constitutes presence at 
        the meeting in person or by proxy if all the other requirements 
        of this chapter for the meeting are met. 
           Subd. 4.  [REQUIREMENTS FOR MEETINGS HELD SOLELY BY MEANS 
        OF REMOTE COMMUNICATION AND FOR PARTICIPATION BY MEANS OF REMOTE 
        COMMUNICATION.] In any meeting of members held solely by means 
        of remote communication under subdivision 2 or in any meeting of 
        members held at a designated place in which one or more members 
        participate by means of remote communication under subdivision 3:
           (1) the cooperative shall implement reasonable measures to 
        verify that each person deemed present and entitled to vote at 
        the meeting by means of remote communication is a member; and 
           (2) the cooperative shall implement reasonable measures to 
        provide each member participating by means of remote 
        communication with a reasonable opportunity to participate in 
        the meeting, including an opportunity to: 
           (i) read or hear the proceedings of the meeting 
        substantially concurrently with those proceedings; 
           (ii) if allowed by the procedures governing the meeting, 
        have the member's remarks heard or read by other participants in 
        the meeting substantially concurrently with the making of those 
        remarks; and 
           (iii) if otherwise entitled, vote on matters submitted to 
        the members. 
           Subd. 5.  [NOTICE TO MEMBERS.] (a) Any notice to members 
        given by the cooperative under any provision of this chapter, 
        the articles, or the bylaws by a form of electronic 
        communication consented to by the member to whom the notice is 
        given, is effective when given.  The notice is deemed given: 
           (1) if by facsimile communication, when directed to a 
        telephone number at which the member has consented to receive 
        notice; 
           (2) if by electronic mail, when directed to an electronic 
        mail address at which the member has consented to receive 
        notice; 
           (3) if by a posting on an electronic network on which the 
        member has consented to receive notice, together with separate 
        notice to the member of the specific posting, upon the later of: 
           (i) the posting; and 
           (ii) the giving of the separate notice; and 
           (4) if by any other form of electronic communication by 
        which the member has consented to receive notice, when directed 
        to the member. 
           (b) An affidavit of the secretary, other authorized 
        officer, or authorized agent of the cooperative that the notice 
        has been given by a form of electronic communication is, in the 
        absence of fraud, prima facie evidence of the facts stated in 
        the affidavit. 
           (c) Consent by a member to notice given by electronic 
        communication may be given in writing or by authenticated 
        electronic communication.  The cooperative is entitled to rely 
        on any consent so given until revoked by the member, provided 
        that no revocation affects the validity of any notice given 
        before receipt by the cooperative of revocation of the consent. 
           Subd. 6.  [REVOCATION.] Any ballot, vote, authorization, or 
        consent submitted by electronic communication under this chapter 
        may be revoked by the member submitting the ballot, vote, 
        authorization, or consent so long as the revocation is received 
        by a director or the chief executive officer of the cooperative 
        at or before the meeting or before an action without a meeting 
        is effective. 
           Subd. 7.  [WAIVER.] Waiver of notice by a member of a 
        meeting by means of authenticated electronic communication may 
        be given in the manner provided for the regular or special 
        meeting.  Participation in a meeting by means of remote 
        communication described in subdivisions 2 and 3 is a waiver of 
        notice of that meeting, except where the member objects at the 
        beginning of the meeting to the transaction of business because 
        the meeting is not lawfully called or convened, or objects 
        before a vote on an item of business because the item may not 
        lawfully be considered at the meeting and does not participate 
        in the consideration of the item at that meeting. 
           Sec. 45.  [308B.535] [ACT OF MEMBERS.] 
           Subdivision 1.  [ACTION BY AFFIRMATIVE VOTE OF MEMBERS.] (a)
        The members shall take action by the affirmative vote of the 
        members of the greater of: 
           (1) a majority of the voting power of the membership 
        interests present and entitled to vote on that item of business; 
        or 
           (2) a majority of the voting power that would constitute a 
        quorum for the transaction of business at the meeting, except 
        where this chapter, the articles or bylaws, or a member control 
        agreement require a larger proportion. 
           (b) If the articles, bylaws, or a member control agreement 
        require a larger proportion than is required by this chapter for 
        a particular action, the articles, bylaws, or the member control 
        agreement shall have control over the provisions of this chapter.
           Subd. 2.  [CLASS OR SERIES OF MEMBERSHIP INTERESTS.] In any 
        case where a class or series of membership interests is entitled 
        by this chapter, the articles, bylaws, a member control 
        agreement, or the terms of the membership interests to vote as a 
        class or series, the matter being voted upon must also receive 
        the affirmative vote of the owners of the same proportion of the 
        membership interests present of that class or series; or of the 
        total outstanding membership interests of that class or series, 
        as the proportion required under subdivision 1, unless the 
        articles, bylaws, or the member control agreement require a 
        larger proportion.  Unless otherwise stated in the articles, 
        bylaws, or a member control agreement, in the case of voting as 
        a class or series, the minimum percentage of the total voting 
        power of membership interests of the class or series that must 
        be present is equal to the minimum percentage of all membership 
        interests entitled to vote required to be present under section 
        308B.525. 
           Subd. 3.  [GREATER QUORUM OR VOTING REQUIREMENTS.] (a) The 
        articles or bylaws adopted by the members may provide for a 
        greater quorum or voting requirement for members or voting 
        groups than is provided for by this chapter. 
           (b) An amendment to the articles or bylaws that adds, 
        changes, or deletes a greater quorum or voting requirement shall 
        meet the same quorum requirement and be adopted by the same vote 
        and voting groups required to take action under the quorum and 
        voting requirements then in effect or proposed to be adopted, 
        whichever is greater. 
           Sec. 46.  [308B.541] [ACTION WITHOUT A MEETING.] 
           Subdivision 1.  [METHOD.] An action required or permitted 
        to be taken at a meeting of the members may be taken by written 
        action signed, or consented to by authenticated electronic 
        communication, by all of the members.  If the articles, bylaws, 
        or a member control agreement so provide, any action may be 
        taken by written action signed, or consented to by authenticated 
        electronic communication, by the members who own voting power 
        equal to the voting power that would be required to take the 
        same action at a meeting of the members at which all members 
        were present. 
           Subd. 2.  [EFFECTIVE TIME.] The written action is effective 
        when signed or consented to by authenticated electronic 
        communication by the required members, unless a different 
        effective time is provided in the written action. 
           Subd. 3.  [NOTICE AND LIABILITY.] When written action is 
        permitted to be taken by less than all members, all members must 
        be notified immediately of its text and effective date.  Failure 
        to provide the notice does not invalidate the written action.  A 
        member who does not sign or consent to the written action has no 
        liability for the action or actions taken by the written action. 
           Sec. 47.  [308B.545] [MEMBER VOTING RIGHTS.] 
           Subdivision 1.  [MEMBER HAS ONE VOTE; OR PATRONAGE VOTING.] 
        A patron member of a cooperative is only entitled to one vote on 
        an issue to be voted upon by members holding patron membership 
        interests, except that if authorized in the articles or bylaws a 
        patron member may be entitled to additional votes based on 
        patronage criteria in section 308B.551.  On any matter of the 
        cooperative, the entire patron members voting power shall be 
        voted collectively based upon the vote of the majority of patron 
        members voting on the issue and the collective vote of the 
        patron members shall be a majority of the vote cast unless 
        otherwise provided in the bylaws.  The bylaws may not reduce the 
        collective patron member vote to less than 15 percent of the 
        total vote on matters of the cooperative.  A nonpatron member 
        has the voting rights in accordance to his nonpatron membership 
        interests as granted in the bylaws, subject to the provisions of 
        this chapter. 
           Subd. 2.  [RIGHT TO VOTE AT MEETING.] A member or delegate 
        may exercise voting rights on any matter that is before the 
        members as prescribed in the articles or bylaws 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. 
           Subd. 3.  [VOTING METHOD.] A member's vote at a members' 
        meeting shall be in person or by mail if a mail vote is 
        authorized by the board or by alternative method if authorized 
        by the board and not by proxy, except as provided in subdivision 
        4. 
           Subd. 4.  [MEMBERS REPRESENTED BY DELEGATES.] (a) The 
        provisions of this subdivision apply to members represented by 
        delegates. 
           (b) A cooperative may provide in the articles or bylaws 
        that units or districts of members are entitled to be 
        represented at members' meetings by delegates chosen by the 
        members of the unit or district.  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.
           (c) 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. 
           (d) Patron members may be represented by the proxy of other 
        patron members. 
           (e) Nonpatron members may be represented by proxy if 
        authorized in the bylaws. 
           Subd. 5.  [ABSENTEE BALLOTS.] (a) The provisions of this 
        subdivision apply to absentee ballots. 
           (b) A member who is or will be absent from a members' 
        meeting may vote by mail or by an approved alternative method on 
        the ballot prescribed in this subdivision on any motion, 
        resolution, or amendment that the board submits for vote by mail 
        or alternative method to the members. 
           (c) 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) the text of the motion, resolution, or amendment for 
        which the member may indicate an affirmative or negative vote. 
           (d) The member shall express a choice by marking an 
        appropriate choice on the ballot and mail, deliver, or otherwise 
        submit the ballot to the cooperative in a plain, sealed envelope 
        inside another envelope bearing the member's name or by an 
        alternative method approved by the board. 
           (e) A properly executed ballot shall be accepted by the 
        board and counted as the vote of the absent member at the 
        meeting. 
           Sec. 48.  [308B.551] [PATRON MEMBER VOTING BASED ON 
        PATRONAGE.] 
           Subdivision 1.  [PATRON MEMBERS TO HAVE AN ADDITIONAL 
        VOTE.] A cooperative may authorize by the articles or the bylaws 
        for patron members to have an additional vote for: 
           (1) a stipulated amount of business transacted between the 
        patron member and cooperative; 
           (2) a stipulated number of patron members in a member 
        cooperative; 
           (3) a certain stipulated amount of equity allocated to or 
        held by a patron member cooperative in the cooperative's central 
        organization; or 
           (4) a combination of methods in clauses (1) to (3). 
           Subd. 2.  [DELEGATES ELECTED BY PATRONS TO HAVE AN 
        ADDITIONAL VOTE.] A cooperative that is organized into units or 
        districts of patron members may, by the articles or the bylaws, 
        authorize the delegates elected by its patron members or have an 
        additional vote for: 
           (1) a stipulated amount of business transacted between the 
        patron members in the units or districts and the cooperative; 
           (2) a certain stipulated amount of equity allocated to or 
        held by the patron members of the units or districts of the 
        cooperative; or 
           (3) a combination of methods in clauses (1) and (2). 
           Sec. 49.  [308B.555] [VOTING RIGHTS.] 
           Subdivision 1.  [DETERMINATION.] The board may fix a date 
        not more than 60 days, or a shorter time period provided in the 
        articles or bylaws, before the date of a meeting of members as 
        the date for the determination of the owners of membership 
        interests entitled to notice of and entitled to vote at the 
        meeting.  When a date is so fixed, only members on that date are 
        entitled to notice of and permitted to vote at that meeting of 
        members. 
           Subd. 2.  [VOTING POWER.] Unless otherwise provided in the 
        articles, bylaws, or a member control agreement, members have 
        voting power as provided in section 308B.545. 
           Subd. 3.  [NONMEMBERS.] The articles or bylaws may give or 
        prescribe the manner of giving a creditor, security holder, or 
        other person a right to vote on patron membership interests 
        under this section. 
           Subd. 4.  [JOINTLY OWNED MEMBERSHIP INTERESTS.] Membership 
        interests owned by two or more members may be voted by any one 
        of them unless the cooperative receives written notice from any 
        one of them denying the authority of that person to vote those 
        membership interests. 
           Subd. 5.  [MANNER OF VOTING AND PRESUMPTION.] Except as 
        provided in subdivision 4, an owner of a nonpatron membership 
        interest or a patron membership interest with more than one vote 
        that is entitled to vote may vote any portion of the membership 
        interest in any way the member chooses.  If a member votes 
        without designating the proportion voted in a particular way, 
        the member is considered to have voted all of the membership 
        interest in that way. 
           Sec. 50.  [308B.561] [VOTING BY ORGANIZATIONS AND LEGAL 
        REPRESENTATIVES.] 
           Subdivision 1.  [MEMBERSHIP INTERESTS HELD BY ANOTHER 
        ORGANIZATION.] Membership interests of a cooperative reflected 
        in the required records as being owned by another domestic or 
        foreign business entity may be voted by the chair, chief 
        executive officer, or another legal representative of that 
        organization. 
           Subd. 2.  [MEMBERSHIP INTERESTS HELD BY SUBSIDIARY.] Except 
        as provided in subdivision 3, membership interests of a 
        cooperative reflected in the required records as being owned by 
        a subsidiary are not entitled to be voted on any matter. 
           Subd. 3.  [MEMBERSHIP INTERESTS CONTROLLED IN A FIDUCIARY 
        CAPACITY.] Membership interests of a cooperative in the name of, 
        or under the control of, the cooperative or a subsidiary in a 
        fiduciary capacity are not entitled to be voted on any matter, 
        except to the extent that the settlor or beneficiary possesses 
        and exercises a right to vote or gives the cooperative or, with 
        respect to membership interests in the name of or under control 
        of a subsidiary, the subsidiary, binding instructions on how to 
        vote the membership interests. 
           Subd. 4.  [VOTING BY CERTAIN REPRESENTATIVES.] Subject to 
        section 308B.545, membership interests under the control of a 
        person in a capacity as a personal representative, an 
        administrator, executor, guardian, conservator, or the like may 
        be voted by the person, either in person or by proxy, without 
        reflecting in the required records those membership interests in 
        the name of the person. 
           Subd. 5.  [VOTING BY TRUSTEES IN BANKRUPTCY OR 
        RECEIVER.] Membership interests reflected in the required 
        records in the name of a trustee in bankruptcy or a receiver may 
        be voted by the trustee or receiver either in person or by 
        proxy.  Membership interests under the control of a trustee in 
        bankruptcy or a receiver may be voted by the trustee or receiver 
        without reflecting in the required records the name of the 
        trustee or receiver, if authority to do so is contained in an 
        appropriate order of the court by which the trustee or receiver 
        was appointed.  The right to vote of trustees in bankruptcy and 
        receivers is subject to section 308B.545. 
           Subd. 6.  [MEMBERSHIP INTERESTS HELD BY OTHER 
        ORGANIZATIONS.] Membership interests reflected in the required 
        records in the name of a business entity not described in 
        subdivisions 1 to 5 may be voted either in person or by proxy by 
        the legal representative of that business entity. 
           Subd. 7.  [GRANT OF SECURITY INTEREST.] The grant of a 
        security interest in a membership interest does not entitle the 
        holders of the security interest to vote. 
           Sec. 51.  [308B.565] [PROXIES.] 
           Subdivision 1.  [AUTHORIZATION.] (a) A patron member may 
        only grant a proxy to vote to another patron member. 
           (b) A member may cast or authorize the casting of a vote by:
           (1) filing a written appointment of a proxy with the board 
        at or before the meeting at which the appointment is to be 
        effective; or 
           (2) telephonic transmission or authenticated electronic 
        communication, whether or not accompanied by written 
        instructions of the member, of an appointment of a proxy with 
        the cooperative or the cooperative's duly authorized agent at or 
        before the meeting at which the appointment is to be effective. 
           (c) The telephonic transmission or authenticated electronic 
        communication must set forth or be submitted with information 
        from which it can be determined that the appointment was 
        authorized by the member.  If it is reasonably concluded that 
        the telephonic transmission or authenticated electronic 
        communication is valid, the inspectors of election or, if there 
        are not inspectors, the other persons making that determination 
        shall specify the information upon which they relied to make 
        that determination.  A proxy so appointed may vote on behalf of 
        the member, or otherwise participate, in a meeting by remote 
        communication under section 308B.531, to the extent the member 
        appointing the proxy would have been entitled to participate by 
        remote communication if the member did not appoint the proxy. 
           (d) A copy, facsimile, telecommunication, or other 
        reproduction of the original writing or transmission may be 
        substituted or used in lieu of the original writing or 
        transmission for any purpose for which the original transmission 
        could be used, if the copy, facsimile, telecommunication, or 
        other reproduction is a complete and legible reproduction of the 
        entire original writing or transmission. 
           (e) An appointment of a proxy for membership interests 
        owned jointly by two or more members is valid if signed or 
        consented to by authenticated electronic communication, by any 
        one of them, unless the cooperative receives from any one of 
        those members written notice or an authenticated electronic 
        communication either denying the authority of that person to 
        appoint a proxy or appointing a different proxy. 
           Subd. 2.  [DURATION.] The appointment of a proxy is valid 
        for 11 months unless a longer period is expressly provided in 
        the appointment.  No appointment is irrevocable unless the 
        appointment is coupled with an interest in the membership 
        interests or the cooperative. 
           Subd. 3.  [TERMINATION.] An appointment may be terminated 
        at will unless the appointment is coupled with an interest, in 
        which case it shall not be terminated except in accordance with 
        the terms of an agreement, if any, between the parties to the 
        appointment.  Termination may be made by filing written notice 
        of the termination of the appointment with a manager of the 
        cooperative or by filing a new written appointment of a proxy 
        with a manager of the cooperative.  Termination in either manner 
        revokes all prior proxy appointments and is effective when filed 
        with a manager of the cooperative. 
           Subd. 4.  [REVOCATION BY DEATH OR INCAPACITY.] The death or 
        incapacity of a person appointing a proxy does not revoke the 
        authority of the proxy, unless written notice of the death or 
        incapacity is received by a manager of the cooperative before 
        the proxy exercises the authority under that appointment. 
           Subd. 5.  [MULTIPLE PROXIES.] Unless the appointment 
        specifically provides otherwise, if two or more persons are 
        appointed as proxies for a member: 
           (1) any one of them may vote the membership interests on 
        each item of business in accordance with specific instructions 
        contained in the appointment; and 
           (2) if no specific instructions are contained in the 
        appointment with respect to voting the membership interests on a 
        particular item of business, the membership interests must be 
        voted as a majority of the proxies determine.  If the proxies 
        are equally divided, the membership interests must not be voted. 
           Subd. 6.  [VOTE OF PROXY ACCEPTED AND LIABILITY.] Unless 
        the appointment of a proxy contains a restriction, limitation, 
        or specific reservation of authority, the cooperative may accept 
        a vote or action taken by a person named in the appointment.  
        The vote of a proxy is final, binding, and not subject to 
        challenge, but the proxy is liable to the member for damages 
        resulting from a failure to exercise the proxy or from an 
        exercise of the proxy in violation of the authority granted in 
        the appointment. 
           Subd. 7.  [LIMITED AUTHORITY.] If a proxy is given 
        authority by a member to vote on less than all items of business 
        considered at a meeting of members, the member is considered to 
        be present and entitled to vote by the proxy only with respect 
        to those items of business for which the proxy has authority to 
        vote.  A proxy who is given authority by a member who abstains 
        with respect to an item of business is considered to have 
        authority to vote on the item of business for purposes of this 
        subdivision. 
           Sec. 52.  [308B.571] [SALE OF PROPERTY AND ASSETS.] 
           Subdivision 1.  [MEMBER APPROVAL NOT REQUIRED.] A 
        cooperative may, by affirmative vote of a majority of the board 
        present, upon those terms and conditions and for those 
        considerations, which may be money, securities, or other 
        instruments for the payment of money or other property, as the 
        board considers expedient and without member approval: 
           (1) sell, lease, transfer, or otherwise dispose of all or 
        substantially all of its property and assets in the usual and 
        regular course of its business; 
           (2) sell, lease, transfer, or otherwise dispose of all or 
        substantially all of its property and assets not in the usual 
        and regular course of its business if: 
           (i) the cooperative's accountant has given an opinion that 
        the cooperative cannot continue as an ongoing business and the 
        cooperative is under financial duress; 
           (ii) the cooperative has given notice to the members of the 
        impending or potential disposition prior to the disposition; and 
           (iii) the board has determined that failure to proceed with 
        the disposition would be adverse to the interests of the members 
        and the cooperative; 
           (3) grant a security interest in all or substantially all 
        of its property and assets whether or not in the usual and 
        regular course of its business; 
           (4) transfer any or all of its property to a business 
        entity all the ownership interests of which are owned by the 
        cooperative; or 
           (5) for purposes of debt financing, transfer any or all of 
        its property to a special purpose entity owned or controlled by 
        the cooperative for an asset securitization. 
           Subd. 2.  [MEMBER APPROVAL REQUIRED.] Except as provided in 
        subdivision 1, a cooperative, by affirmative vote of a majority 
        of the board present, may sell, lease, transfer, or otherwise 
        dispose of all or substantially all of its property and assets, 
        including its good will, not in the usual and regular course of 
        its business, upon those terms and conditions and for those 
        considerations, which may be money, securities, or other 
        instruments for the payment of money or other property, as the 
        board considers expedient, when approved at a regular or special 
        meeting of the members by the affirmative vote of the owners of 
        a majority of the voting power of the interests entitled to 
        vote.  Written notice of the meeting must be given to all 
        members whether or not they are entitled to vote at the 
        meeting.  The written notice must state that a purpose of the 
        meeting is to consider the sale, lease, transfer, or other 
        disposition of all or substantially all of the property and 
        assets of the cooperative. 
           Subd. 3.  [CONFIRMATORY DOCUMENTS.] Confirmatory deeds, 
        assignments, or similar instruments to evidence a sale, lease, 
        transfer, or other disposition may be signed and delivered at 
        any time in the name of the transferor by its current chair of 
        the board or authorized agents. 
           Subd. 4.  [LIABILITY OF TRANSFEREE.] The transferee is 
        liable for the debts, obligations, and liabilities of the 
        transferor only to the extent provided in the contract or 
        agreement between the transferee and the transferor or to the 
        extent provided by law. 
           Sec. 53.  [308B.575] [VOTE OF OWNERSHIP INTERESTS HELD BY 
        COOPERATIVE.] 
           A cooperative that holds ownership interests of another 
        business entity may, by direction of the cooperative's board, 
        elect or appoint a person to represent the cooperative at a 
        meeting of the business entity.  The representative has 
        authority to represent the cooperative and may cast the 
        cooperative's vote at the business entity's meeting. 
                              MEMBERSHIP INTERESTS
           Sec. 54.  [308B.601] [MEMBERSHIP INTERESTS.] 
           Subdivision 1.  [AMOUNTS AND DIVISIONS OF MEMBERSHIP 
        INTERESTS.] The authorized amount and divisions of patron 
        membership interests and, if authorized, nonpatron membership 
        interests may be increased, decreased, established, or altered, 
        in accordance with the restrictions in this chapter by amending 
        the articles or bylaws at a regular members' meeting or at a 
        special members' meeting called for the purpose of the amendment.
           Subd. 2.  [ISSUANCE OF MEMBERSHIP INTERESTS.] Authorized 
        membership interests may be issued on terms and conditions 
        prescribed in the articles, bylaws, or if authorized in the 
        articles or bylaws as determined by the board.  The cooperative 
        shall disclose to any person or entity acquiring membership 
        interests to be issued by the cooperative, the organization, 
        capital structure, and known business prospects and risks of the 
        cooperative, the nature of the governance and financial rights 
        of the membership interest being acquired and of other classes 
        of membership and membership interests.  The cooperative shall 
        notify all members of the membership interests being issued by 
        the cooperative.  A membership interest may not be issued until 
        the subscription price of the membership interest has been paid 
        for in money or property with the value of the property to be 
        contributed approved by the board. 
           Subd. 3.  [PATRON MEMBERSHIP INTERESTS.] The patron 
        membership interests collectively shall have not less than 60 
        percent of the cooperative's financial rights to profit 
        allocations and distributions.  If authorized in the original 
        articles as filed, or articles or bylaws adopted by an 
        affirmative vote of the patron members, or the articles or 
        bylaws are amended by the affirmative vote of patron members, 
        then the cooperative's financial rights to profit allocations 
        and distributions to patron members collectively may be not less 
        than 15 percent. 
           Subd. 4.  [TRANSFERRING OR SELLING MEMBERSHIP 
        INTERESTS.] After issuance by the cooperative, membership 
        interests in a cooperative may only be sold or transferred with 
        the approval of the board.  The board may adopt resolutions 
        prescribing procedures to prospectively approve transfers. 
           Subd. 5.  [NONPATRON MEMBERSHIP INTERESTS.] If authorized 
        by the articles, the cooperative may solicit and issue nonpatron 
        membership interests on terms and conditions determined by the 
        board and disclosed in the articles, bylaws, or by separate 
        disclosure to the members.  Each member acquiring nonpatron 
        membership interests shall sign a member control agreement or 
        agree to the conditions of the bylaws, either of which shall 
        describe the rights and obligations of the member as it relates 
        to the nonpatron membership interests, the financial and 
        governance rights, the transferability of the nonpatron 
        membership interests, the division and allocations of profits 
        and losses among the membership interests and membership 
        classes, and financial rights upon liquidation.  If the articles 
        or bylaws do not otherwise provide for the allocation of the 
        profits and losses between patron membership interests and 
        nonpatron membership interests, then the allocation of profits 
        and losses among nonpatron membership interests individually and 
        patron membership interests collectively shall be allocated on 
        the basis of the value of contributions to capital made 
        according to the patron membership interests collectively and 
        the nonpatron membership interests individually to the extent 
        the contributions have been accepted by the cooperative.  
        Distributions of cash or other assets of the cooperative shall 
        be allocated among the membership interests as provided in the 
        articles and bylaws, subject to the provisions of this chapter.  
        If not otherwise provided in the articles or bylaws, 
        distributions shall be made on the basis of value of the capital 
        contributions of the patron membership interests collectively 
        and the nonpatron membership interests to the extent the 
        contributions have been accepted by the cooperative. 
           Subd. 6.  [COOPERATIVE FIRST RIGHT TO PURCHASE MEMBERSHIP 
        INTERESTS.] The articles or bylaws may provide that the 
        cooperative or the patron members, individually or collectively, 
        have the first privilege of purchasing the membership interests 
        of any class of membership interests offered for sale.  The 
        first privilege to purchase membership interests may be 
        satisfied by notice to other members that the membership 
        interests are for sale and a procedure by which members may 
        proceed to attempt to purchase and acquire the membership 
        interests.  A membership interest acquired by the cooperative 
        may be held to be reissued or may be retired and canceled. 
           Subd. 7.  [PAYMENT FOR NONPATRON MEMBERSHIP 
        INTERESTS.] Subject to the provisions in the articles and 
        bylaws, a member may dissent from and obtain payment for the 
        fair value of the member's nonpatron membership interests in the 
        cooperative if the articles or bylaws are amended in a manner 
        that materially and adversely affects the rights and preferences 
        of the nonpatron membership interests of the dissenting member.  
        The dissenting member shall file a notice of intent to demand 
        fair value of the membership interest with the records officer 
        of the cooperative within 30 days after the amendment of the 
        bylaws and notice of the amendment to members, otherwise the 
        right of the dissenting member to demand payment of fair value 
        for the membership interest is waived.  If a proposed amendment 
        of the articles or bylaws must be approved by the members, a 
        member who is entitled to dissent and who wishes to exercise 
        dissenter's rights shall file a notice to demand fair value of 
        the membership interest with the records officer of the 
        cooperative before the vote on the proposed action and shall not 
        vote in favor of the proposed action, otherwise the right to 
        demand fair value for the membership interest by the dissenting 
        member is waived.  After receipt of the dissenting member's 
        demand notice and approval of the amendment, the cooperative has 
        60 days to rescind the amendment or otherwise the cooperative 
        shall remit the fair value for the member's interest to the 
        dissenting member by 180 days after receipt of the notice.  Upon 
        receipt of the fair value for the membership interest, the 
        member has no further member rights in the cooperative. 
           Sec. 55.  [308B.605] [ASSIGNMENT OF FINANCIAL RIGHTS.] 
           Subdivision 1.  [ASSIGNMENT OF FINANCIAL RIGHTS PERMITTED.] 
        Except as provided in subdivision 3, a member's financial rights 
        are transferable in whole or in part. 
           Subd. 2.  [EFFECT OF ASSIGNMENT OF FINANCIAL RIGHTS.] An 
        assignment of a member's financial rights entitles the assignee 
        to receive, to the extent assigned, only the share of profits 
        and losses and the distributions to which the assignor would 
        otherwise be entitled.  An assignment of a member's financial 
        rights does not dissolve the cooperative and does not entitle or 
        empower the assignee to become a member, to exercise any 
        governance rights, to receive any notices from the cooperative, 
        or to cause dissolution.  The assignment shall not allow the 
        assignee to control the member's exercise of governance or 
        voting rights. 
           Subd. 3.  [RESTRICTIONS OF ASSIGNMENT OF FINANCIAL 
        RIGHTS.] (a) A restriction on the assignment of financial rights 
        may be imposed in the articles, in the bylaws, in a member 
        control agreement, by a resolution adopted by the members, by an 
        agreement among or other written action by the members, or by an 
        agreement among or other written action by the members and the 
        cooperative.  A restriction is not binding with respect to 
        financial rights reflected in the required records before the 
        adoption of the restriction, unless the owners of those 
        financial rights are parties to the agreement or voted in favor 
        of the restriction. 
           (b) Subject to paragraph (c), a written restriction on the 
        assignment of financial rights that is not manifestly 
        unreasonable under the circumstances and is noted conspicuously 
        in the required records may be enforced against the owner of the 
        restricted financial rights or a successor or transferee of the 
        owner, including a pledgee or a legal representative.  Unless 
        noted conspicuously in the required records, a restriction, even 
        though permitted by this section, is ineffective against a 
        person without knowledge of the restriction. 
           (c) With regard to restrictions on the assignment of 
        financial rights, a would-be assignee of financial rights is 
        entitled to rely on a statement of membership interest issued by 
        the cooperative under section 308B.611.  A restriction on the 
        assignment of financial rights, which is otherwise valid and in 
        effect at the time of the issuance of a statement of membership 
        interest but which is not reflected in that statement, is 
        ineffective against an assignee who takes an assignment in 
        reliance on the statement. 
           (d) Notwithstanding any provision of law, articles, bylaws, 
        member control agreement, other agreement, resolution, or action 
        to the contrary, a security interest in a member's financial 
        rights may be foreclosed and otherwise enforced, and a secured 
        party may assign a member's financial rights in accordance with 
        chapter 336, without the consent or approval of the member whose 
        financial rights are subject to the security interest. 
           Sec. 56.  [308B.611] [NATURE OF A MEMBERSHIP INTEREST AND 
        STATEMENT OF INTEREST OWNED.] 
           Subdivision 1.  [GENERALLY.] A membership interest is 
        personal property.  A member has no interest in specific 
        cooperative property.  All property of the cooperative is 
        property of the cooperative itself. 
           Subd. 2.  [STATEMENT OF MEMBERSHIP INTEREST.] At the 
        request of any member, the cooperative shall state in writing 
        the particular membership interest owned by that member as of 
        the date the cooperative makes the statement.  The statement 
        must describe the member's rights to vote, if any, to share in 
        profits and losses, and to share in distributions, restrictions 
        on assignments of financial rights under section 308B.605, 
        subdivision 3, or voting rights under section 308B.555 then in 
        effect, as well as any assignment of the member's rights then in 
        effect other than a security interest. 
           Subd. 3.  [TERMS OF MEMBERSHIP INTERESTS.] All the 
        membership interests of a cooperative must: 
           (1) be of one class, without series, unless the articles or 
        bylaws establish or authorize the board to establish more than 
        one class or series within classes; 
           (2) be ordinary patron membership interests and if 
        authorized nonpatron membership interest subject to this chapter 
        entitled to vote as provided in section 308B.555, and have equal 
        rights and preferences in all matters not otherwise provided for 
        by the board and to the extent that the articles or bylaws have 
        fixed the relative rights and preferences of different classes 
        and series; and 
           (3) share profits and losses and are entitled to 
        distributions as provided in sections 308B.721 and 308B.725. 
           Subd. 4.  [RIGHTS OF JUDGMENT CREDITOR.] On application to 
        a court of competent jurisdiction by any judgment creditor of a 
        member, the court may charge a member's or an assignee's 
        financial rights with payment of the unsatisfied amount of the 
        judgment with interest.  To the extent so charged, the judgment 
        creditor has only the rights of an assignee of a member's 
        financial rights under section 308B.605.  This chapter does not 
        deprive any member or assignee of financial rights of the 
        benefit of any exemption laws applicable to the membership 
        interest.  This section is the sole and exclusive remedy of a 
        judgment creditor with respect to the judgment debtor's 
        membership interest. 
           Subd. 5.  [PROCEDURE FOR FIXING TERMS.] (a) Subject to any 
        restrictions in the articles or bylaws, the power granted in 
        this subdivision may be exercised by a resolution or resolutions 
        establishing a class or series, setting forth the designation of 
        the class or series, and fixing the relative rights and 
        preferences of the class or series.  Any of the rights and 
        preferences of a class or series established in the articles, 
        bylaws, or by resolution of the board: 
           (1) may be made dependent upon facts ascertainable outside 
        the articles or bylaws or outside the resolution or resolutions 
        establishing the class or series, if the manner in which the 
        facts operate upon the rights and preferences of the class or 
        series is clearly and expressly set forth in the articles or 
        bylaws or in the resolution or resolutions establishing the 
        class or series; and 
           (2) may include by reference some or all of the terms of 
        any agreements, contracts, or other arrangements entered into by 
        the cooperative in connection with the establishment of the 
        class or series if the cooperative retains at its principal 
        executive office a copy of the agreements, contracts, or other 
        arrangements or the portions will be included by reference. 
           (b) A statement setting forth the name of the cooperative 
        and the text of the resolution and certifying the adoption of 
        the resolution and the date of adoption must be given to the 
        members before the acceptance of any contributions for which the 
        resolution creates rights or preferences not set forth in the 
        articles or bylaws.  Where the members have received notice of 
        the creation of membership interests with rights or preferences 
        not set forth in the articles or bylaws before the acceptance of 
        the contributions with respect to the membership interests, the 
        statement may be filed any time within one year after the 
        acceptance of the contributions.  The resolution is effective 
        three days after delivery to the members is deemed effective by 
        the board, or, if the statement is not required to be given to 
        the members before the acceptance of contributions, on the date 
        of its adoption by the directors. 
           Subd. 6.  [SPECIFIC TERMS.] Without limiting the authority 
        granted in this section, a cooperative may have membership 
        interests of a class or series: 
           (1) subject to the right of the cooperative to redeem any 
        of those membership interests at the price fixed for their 
        redemption by the articles or bylaws or by the board; 
           (2) entitling the members to cumulative, partially 
        cumulative, or noncumulative distributions; 
           (3) having preference over any class or series of 
        membership interests for the payment of distributions of any or 
        all kinds; 
           (4) convertible into membership interests of any other 
        class or any series of the same or another class; or 
           (5) having full, partial, or no voting rights, except as 
        provided in section 308B.555. 
           Subd. 7.  [GRANT OF A SECURITY INTEREST.] For the purpose 
        of any law relating to security interests, membership interests, 
        governance or voting rights, and financial rights are each to be 
        characterized as provided in section 336.8-103, paragraph (c). 
           Subd. 8.  [POWERS OF ESTATE OF A DECEASED OR INCOMPETENT 
        MEMBER.] (a) If a member who is an individual dies or a court of 
        competent jurisdiction adjudges the member to be incompetent to 
        manage the member's person or property, or an order for relief 
        under the bankruptcy code is entered with respect to the member, 
        the member's executor, administrator, guardian, conservator, 
        trustee, or other legal representative may exercise all of the 
        member's rights for the purpose of settling the estate or 
        administering the member's property.  If a member is a business 
        entity, trust, or other entity and is dissolved, terminated, or 
        placed by a court in receivership or bankruptcy, the powers of 
        that member may be exercised by its legal representative or 
        successor. 
           (b) If an event referred to in paragraph (a) causes the 
        termination of a member's membership interest and the 
        termination does not result in dissolution, then subject to the 
        articles and bylaws: 
           (1) as provided in section 308B.605, the terminated 
        member's interest will be considered to be merely that of an 
        assignee of the financial rights owned before the termination of 
        membership; and 
           (2) the rights to be exercised by the legal representative 
        of the terminated member will be limited accordingly. 
           Subd. 9.  [LIABILITY OF SUBSCRIBERS AND MEMBERS WITH 
        RESPECT TO MEMBERSHIP INTERESTS.] A subscriber for membership 
        interests or a member of a cooperative is under no obligation to 
        the cooperative or its creditors with respect to the membership 
        interests subscribed for or owned, except to pay to the 
        cooperative the full consideration for which the membership 
        interests are issued or to be issued. 
           Sec. 57.  [308B.615] [CERTIFICATED MEMBERSHIP INTERESTS.] 
           Subdivision 1.  [CERTIFICATED; UNCERTIFICATED.] The 
        membership interests of a cooperative shall be either 
        certificated or uncertificated.  Each holder of certificated 
        membership interests issued is entitled to a certificate of 
        membership interest.  
           Subd. 2.  [SIGNATURE REQUIRED.] Certificates shall be 
        signed by an agent or officer authorized in the articles or 
        bylaws to sign share certificates or, in the absence of an 
        authorization, by the chair or records officer of the 
        cooperative.  
           Subd. 3.  [SIGNATURE VALID.] If a person signs or has a 
        facsimile signature placed upon a certificate while the chair, 
        an officer, transfer agent, or records officer of a cooperative, 
        the certificate may be issued by the cooperative, even if the 
        person has ceased to have that capacity before the certificate 
        is issued, with the same effect as if the person had that 
        capacity at the date of its issue.  
           Subd. 4.  [FORM OF CERTIFICATE.] A certificate representing 
        membership interests of a cooperative shall contain on its face: 
           (1) the name of the cooperative; 
           (2) a statement that the cooperative is organized under the 
        laws of this state and this chapter; 
           (3) the name of the person to whom the certificate is 
        issued; 
           (4) the number and class of membership interests, and the 
        designation of the series, if any, that the certificate 
        represents; 
           (5) a statement that the membership interests in the 
        cooperative are subject to the articles and bylaws of the 
        cooperative; and 
           (6) any restrictions on transfer, including approval of the 
        board, if applicable, first rights of purchase by the 
        cooperative, and other restrictions on transfer, which may be 
        stated by reference to the back of the certificate or to another 
        document.  
           Subd. 5.  [LIMITATIONS SET FORTH.] A certificate 
        representing membership interest issued by a cooperative 
        authorized to issue membership interests of more than one class 
        or series shall set forth upon the face or back of the 
        certificate, or shall state that the cooperative will furnish to 
        any member upon request and without charge, a full statement of 
        the designations, preferences, limitations, and relative rights 
        of the membership interests of each class or series authorized 
        to be issued, so far as they have been determined, and the 
        authority of the board to determine the relative rights and 
        preferences of subsequent classes or series.  
           Subd. 6.  [PRIMA FACIE EVIDENCE.] A certificate signed as 
        provided in subdivision 2 is prima facie evidence of the 
        ownership of the membership interests referred to in the 
        certificate.  
           Subd. 7.  [UNCERTIFICATED MEMBERSHIP INTERESTS.] Unless 
        uncertificated membership interests are prohibited by the 
        articles or bylaws, a resolution approved by the affirmative 
        vote of a majority of the directors present may provide that 
        some or all of any or all classes and series of its membership 
        interests will be uncertificated membership interests.  The 
        resolution does not apply to membership interests represented by 
        a certificate until the certificate is surrendered to the 
        cooperative.  Within a reasonable time after the issuance or 
        transfer of uncertificated membership interests, the cooperative 
        shall send to the new member the information required by this 
        section to be stated on certificates.  This information is not 
        required to be sent to the new holder by a publicly held 
        cooperative that has adopted a system of issuance, recordation, 
        and transfer of its membership interests by electronic or other 
        means not involving an issuance of certificates if the system 
        complies with section 17A of the Securities Exchange Act of 
        1934.  Except as otherwise expressly provided by statute, the 
        rights and obligations of the holders of certificated and 
        uncertificated membership interests of the same class and series 
        are identical.  
           Sec. 58.  [308B.621] [LOST CERTIFICATES; REPLACEMENT.] 
           Subdivision 1.  [ISSUANCE.] A new membership interest 
        certificate may be issued under section 336.8-405 in place of 
        one that is alleged to have been lost, stolen, or destroyed.  
           Subd. 2.  [NOT OVERISSUE.] The issuance of a new 
        certificate under this section does not constitute an overissue 
        of the membership interests it represents.  
           Sec. 59.  [308B.625] [RESTRICTION ON TRANSFER OR 
        REGISTRATION OF MEMBERSHIP INTERESTS.] 
           Subdivision 1.  [HOW IMPOSED.] A restriction on the 
        transfer or registration of transfer of membership interests of 
        a cooperative may be imposed in the articles, in the bylaws, by 
        a resolution adopted by the members, or by an agreement among or 
        other written action by a number of members or holders of other 
        membership interests or among them and the cooperative.  A 
        restriction is not binding with respect to membership interests 
        issued prior to the adoption of the restriction, unless the 
        holders of those membership interests are parties to the 
        agreement or voted in favor of the restriction.  
           Subd. 2.  [RESTRICTIONS PERMITTED.] A written restriction 
        on the transfer or registration of transfer of membership 
        interests of a cooperative that is not manifestly unreasonable 
        under the circumstances may be enforced against the holder of 
        the restricted membership interests or a successor or transferee 
        of the holder, including a pledgee or a legal representative, if 
        the restriction is either: 
           (1) noted conspicuously on the face or back of the 
        certificate; 
           (2) included in this chapter or the articles or bylaws; or 
           (3) included in information sent to the holders of 
        uncertificated membership interests.  
        Unless a restriction is in this chapter, the articles, bylaws, 
        noted conspicuously on the face or back of the certificate, or 
        included in information sent to the holders of uncertificated 
        membership interests, a restriction, even though permitted by 
        this section, is ineffective against a person without knowledge 
        of the restriction.  A restriction under this section is deemed 
        to be noted conspicuously and is effective if the existence of 
        the restriction is stated on the certificate and reference is 
        made to a separate document creating or describing the 
        restriction.  
                 CONTRIBUTIONS, ALLOCATIONS, AND DISTRIBUTIONS
           Sec. 60.  [308B.701] [AUTHORIZATION, FORM, AND ACCEPTANCE 
        OF CONTRIBUTIONS.] 
           Subdivision 1.  [BOARD OF DIRECTORS MAY AUTHORIZE.] Subject 
        to any restrictions in this chapter regarding patron and 
        nonpatron membership interests or in the articles or bylaws, and 
        only when authorized by the board, a cooperative may accept 
        contributions, which may be patron or nonpatron membership 
        contributions as determined by the board under subdivisions 2 
        and 3, make contribution agreements under section 308B.711, and 
        make contribution allowance agreements under section 308B.715. 
           Subd. 2.  [PERMISSIBLE FORMS.] A person may make a 
        contribution to a cooperative: 
           (1) by paying money or transferring the ownership of an 
        interest in property to the cooperative or rendering services to 
        or for the benefit of the cooperative; or 
           (2) through a written obligation signed by the person to 
        pay money or transfer ownership of an interest in property to 
        the cooperative or to perform services to or for the benefit of 
        the cooperative.  
           Subd. 3.  [ACCEPTANCE OF CONTRIBUTIONS.] No purported 
        contribution is to be treated or considered as a contribution, 
        unless: 
           (1) the board accepts the contribution on behalf of the 
        cooperative and in that acceptance describes the contribution, 
        including terms of future performance, if any, and states the 
        value being accorded to the contribution; and 
           (2) the fact of contribution and the contribution's 
        accorded value are both reflected in the required records of the 
        cooperative.  
           Subd. 4.  [VALUATION.] The determinations of the board as 
        to the amount or fair value or the fairness to the cooperative 
        of the contribution accepted or to be accepted by the 
        cooperative or the terms of payment or performance, including 
        under a contribution agreement in section 308B.711, and a 
        contribution allowance agreement in section 308B.715, are 
        presumed to be proper if they are made in good faith and on the 
        basis of accounting methods, or a fair valuation or other 
        method, reasonable in the circumstances.  Directors who are 
        present and entitled to vote, and who, intentionally or without 
        reasonable investigation, fail to vote against approving a 
        consideration that is unfair to the cooperative, or overvalue 
        property or services received or to be received by the 
        cooperative as a contribution, are jointly and severally liable 
        to the cooperative for the benefit of the then members who did 
        not consent to and are damaged by the action, to the extent of 
        the damages of those members.  A director against whom a claim 
        is asserted under this subdivision, except in case of knowing 
        participation in a deliberate fraud, is entitled to contribution 
        on an equitable basis from other directors who are liable under 
        this subdivision.  
           Sec. 61.  [308B.705] [RESTATEMENT OF VALUE OF PREVIOUS 
        CONTRIBUTIONS.] 
           Subdivision 1.  [DEFINITION.] As used in this section, an 
        "old contribution" is a contribution reflected in the required 
        records of a cooperative before the time the cooperative accepts 
        a new contribution.  
           Subd. 2.  [RESTATEMENT REQUIRED.] Whenever a cooperative 
        accepts a new contribution, the board shall restate, as required 
        by this section, the value of all old contributions.  
           Subd. 3.  [RESTATEMENT AS TO PARTICULAR SERIES OR CLASS TO 
        WHICH NEW CONTRIBUTION PERTAINS.] (a) Unless otherwise provided 
        in the articles or bylaws, this subdivision sets forth the 
        method of restating the value of old contributions that pertain 
        to the same series or class to which the new contribution 
        pertains.  To restate the value:  
           (1) state the value the cooperative has accorded to the new 
        contribution under section 308B.701, subdivision 3, clause (1); 
           (2) determine what percentage the value stated under clause 
        (1) will constitute, after the restatement required by this 
        subdivision, of the total value of all contributions that 
        pertain to the particular series or class to which the new 
        contribution pertains; 
           (3) divide the value stated under clause (1) by the 
        percentage determined under clause (2), yielding the total 
        value, after the restatement required by this subdivision, of 
        all contributions pertaining to the particular series or class; 
           (4) subtract the value stated under clause (1) from the 
        value determined under clause (3), yielding the total value, 
        after the restatement required by this subdivision, of all the 
        old contributions pertaining to the particular series or class; 
           (5) subtract the value, as reflected in the required 
        records before the restatement required by this subdivision, of 
        the old contributions from the value determined under clause 
        (4), yielding the value to be allocated among and added to the 
        old contributions pertaining to the particular series or class; 
        and 
           (6) allocate the value determined under clause (5) 
        proportionally among the old contributions pertaining to the 
        particular series or class, add the allocated values to those 
        old contributions, and change the required records accordingly.  
           (b) The values determined under clause (5) and allocated 
        and added under clause (6) may be positive, negative, or zero.  
           Subd. 4.  [RESTATEMENT METHOD FOR OTHER SERIES OR CLASS.] 
        Unless otherwise provided in the articles or bylaws, this 
        subdivision sets forth the method of restating the value of old 
        contributions that do not pertain to the same series or class to 
        which the new contribution pertains.  To restate the value:  
           (1) determine the percentage by which the restatement under 
        subdivision 3 has changed the total contribution value reflected 
        in the required records for the series or class to which the new 
        contribution pertains; and 
           (2) as to each old contribution that does not pertain to 
        the same series or class to which the new contribution pertains, 
        change the value reflected in the required records by the 
        percentage determined under clause (1).  The percentage 
        determined under clause (1) may be positive, negative, or zero.  
           Subd. 5.  [NEW CONTRIBUTIONS MAY BE AGGREGATED.] If a 
        cooperative accepts more than one contribution pertaining to the 
        same series or class at the same time, then for the purpose of 
        the restatement required by this section, the cooperative may 
        consider all the new contributions a single contribution.  
           Sec. 62.  [308B.711] [CONTRIBUTION AGREEMENTS.] 
           Subdivision 1.  [SIGNED WRITING.] A contribution agreement, 
        whether made before or after the formation of the cooperative, 
        is not enforceable against the would-be contributor unless it is 
        in writing and signed by the would-be contributor.  
           Subd. 2.  [IRREVOCABLE PERIOD.] Unless otherwise provided 
        in the contribution agreement, or unless all of the would-be 
        contributors and, if in existence, the cooperative, consent to a 
        shorter or longer period, a contribution agreement is 
        irrevocable for a period of six months.  
           Subd. 3.  [CURRENT AND DEFERRED PAYMENT.] A contribution 
        agreement, whether made before or after the formation of a 
        cooperative, must be paid or performed in full at the time or 
        times, or in the installments, if any, specified in the 
        contribution agreement.  In the absence of a provision in the 
        contribution agreement specifying the time at which the 
        contribution is to be paid or performed, the contribution must 
        be paid or performed at the time or times determined by the 
        board, but a call made by the board for payment or performance 
        on contributions must be uniform for all membership interests of 
        the same class or for all membership interests of the same 
        series.  
           Subd. 4.  [FAILURE TO PAY REMEDIES.] (a) Unless otherwise 
        provided in the contribution agreement, in the event of default 
        in the payment or performance of an installment or call when 
        due, the cooperative may proceed to collect the amount due in 
        the same manner as a debt due the cooperative.  If a would-be 
        contributor does not make a required contribution of property or 
        services, the cooperative shall require the would-be contributor 
        to contribute cash equal to that portion of the value, as stated 
        in the cooperative required records, of the contribution that 
        has not been made.  
           (b) If the amount due under a contribution agreement 
        remains unpaid for a period of 20 days after written notice of 
        demand for payment has been given to the delinquent would-be 
        contributor, the membership interests that were subject to the 
        contribution agreement may be offered for sale by the 
        cooperative for a price in money equaling or exceeding the sum 
        of the full balance owed by the delinquent would-be contributor 
        plus the expenses incidental to the sale.  
           If the membership interests that were subject to the 
        contribution agreement are sold according to this paragraph, the 
        cooperative shall pay to the delinquent would-be contributor or 
        to the delinquent would-be contributor's legal representative 
        the lesser of:  
           (1) the excess of net proceeds realized by the cooperative 
        over the sum of the amount owed by the delinquent would-be 
        contributor plus the expenses incidental to the sale, less any 
        penalty stated in the contribution agreement, which may include 
        forfeiture of the partial contribution; and 
           (2) the amount actually paid by the delinquent would-be 
        contributor.  
        If the membership interests that were subject to the 
        contribution agreement are not sold according to this paragraph, 
        the cooperative may collect the amount due in the same manner as 
        a debt due the cooperative or cancel the contribution agreement 
        according to paragraph (c).  
           (c) If the amount due under a contribution agreement 
        remains unpaid for a period of 20 days after written notice of 
        demand for payment has been given to the delinquent would-be 
        contributor and the membership interests that were subject to 
        the defaulted contribution agreement have not been sold 
        according to paragraph (b), the cooperative may cancel the 
        contribution agreement, the cooperative may retain any portion 
        of the contribution agreement price actually paid as provided in 
        the contribution agreement, and the cooperative shall refund to 
        the delinquent would-be contributor or the delinquent would-be 
        contributor's legal representatives any portion of the 
        contribution agreement price as provided in the contribution 
        agreement.  
           Subd. 5.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
        provided in the articles or bylaws, a would-be contributor's 
        rights under a contribution agreement may not be assigned, in 
        whole or in part, to a person who was not a member at the time 
        of the assignment, unless all the members approve the assignment 
        by unanimous written consent.  
           Sec. 63.  [308B.715] [CONTRIBUTION RIGHTS AGREEMENTS.] 
           Subdivision 1.  [AGREEMENTS PERMITTED.] Subject to any 
        restrictions in the articles or bylaws, a cooperative may enter 
        into contribution rights agreements under the terms, provisions, 
        and conditions fixed by the board.  
           Subd. 2.  [WRITING REQUIRED AND TERMS TO BE STATED.] Any 
        contribution rights agreement must be in writing and the writing 
        must state in full, summarize, or include by reference all the 
        agreement's terms, provisions, and conditions of the rights to 
        make contributions.  
           Subd. 3.  [RESTRICTIONS ON ASSIGNMENT.] Unless otherwise 
        provided in the articles or bylaws, a would-be contributor's 
        rights under a contribution rights agreement may not be 
        assigned, in whole or in part, to a person who was not a member 
        at the time of the assignment, unless all the members approve 
        the assignment by unanimous written consent.  
           Sec. 64.  [308B.721] [ALLOCATIONS AND DISTRIBUTIONS TO 
        MEMBERS.] 
           Subdivision 1.  [ALLOCATION OF PROFITS AND LOSSES.] The 
        bylaws shall prescribe the allocation of profits and losses 
        between patron membership interests collectively and any other 
        membership interests.  If the bylaws do not otherwise provide, 
        the profits and losses between patron membership interests 
        collectively and other membership interests shall be allocated 
        on the basis of the value of contributions to capital made by 
        the patron membership interests collectively and other 
        membership interests and accepted by the cooperative.  The 
        allocation of profits to the patron membership interests 
        collectively shall not be less than 50 percent of the total 
        profits in any fiscal year, except that if authorized in the 
        original articles as filed or in articles or bylaws that are 
        adopted by an affirmative vote of the patron members or the 
        articles or bylaws are amended by the affirmative vote of the 
        patron members, the allocation of profits to the patron 
        membership interests collectively may not be less than 15 
        percent of the total profits in any fiscal year.  
           Subd. 2.  [DISTRIBUTION OF CASH OR OTHER ASSETS.] The 
        bylaws shall prescribe the distribution of cash or other assets 
        of the cooperative among the membership interests of the 
        cooperative.  If not otherwise provided in the bylaws, 
        distribution shall be made to the patron membership interests 
        collectively and other members on the basis of the value of 
        contributions to capital made and accepted by the cooperative, 
        by the patron membership interests collectively, and other 
        membership interests.  The distributions to patron membership 
        interests collectively shall not be less than 50 percent of the 
        total distributions in any fiscal year, except that if 
        authorized in the articles or bylaws adopted by the affirmative 
        vote of the patron members, or the articles or bylaws are 
        amended by the affirmative vote of the patron members, the 
        distributions to patron membership interests collectively shall 
        not be less than 15 percent of the total distributions in any 
        year.  
           Sec. 65.  [308B.725] [ALLOCATIONS AND DISTRIBUTIONS TO 
        PATRON MEMBERS.] 
           Subdivision 1.  [DISTRIBUTION OF NET INCOME.] A cooperative 
        may set aside a portion of net income allocated to the patron 
        membership interests as the board determines advisable to create 
        or maintain a capital reserve.  
           Subd. 2.  [RESERVES.] In addition to a capital reserve, the 
        board may, for patron membership interests:  
           (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.  
           Subd. 3.  [PATRONAGE DISTRIBUTIONS.] Net income allocated 
        to patron members in excess of dividends on equity and additions 
        to reserves shall be distributed to patron members on the basis 
        of patronage.  A cooperative may establish allocation units, 
        whether the units are functional, divisional, departmental, 
        geographic, or otherwise and pooling arrangements and may 
        account for and distribute net income to patrons on the basis of 
        allocation units and pooling arrangements.  A cooperative may 
        offset the net loss of an allocation unit or pooling arrangement 
        against the net income of other allocation units or pooling 
        arrangements.  
           Subd. 4.  [FREQUENCY OF DISTRIBUTION.] Distribution of net 
        income shall be made at least annually.  The board shall present 
        to the members at their annual meeting a report covering the 
        operations of the cooperative during the preceding fiscal year.  
           Subd. 5.  [FORM OF DISTRIBUTION.] A cooperative may 
        distribute net income to patron members in cash, capital 
        credits, allocated patronage equities, revolving fund 
        certificates, or its own or other securities.  
           Subd. 6.  [ELIGIBLE NONMEMBER PATRONS.] The cooperative may 
        provide in the bylaws that nonmember patrons are allowed to 
        participate in the distribution of net income payable to patron 
        members on equal terms with patron members.  
           Subd. 7.  [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.  The board may issue a certificate 
        of interest to reflect the credited amount.  After the patron is 
        issued a certificate of interest, the patron may participate in 
        the distribution of income on the same basis as a patron member. 
           Sec. 66.  [308B.627] [MEMBER CONTROL AGREEMENTS.] 
           Subdivision 1.  [AUTHORIZATION.] A written agreement among 
        persons who are then members, including a sole member, or who 
        have signed subscription or contribution agreements, relating to 
        the control of any phase of the business and affairs of the 
        cooperative, its liquidation, dissolution and termination, or 
        the relations among members or persons who have signed 
        subscription or contribution agreements is valid as provided in 
        subdivision 2.  Wherever this chapter provides that a particular 
        result may or must be obtained through a provision in the 
        articles or bylaws, the same result can be accomplished through 
        a member control agreement valid under this section or through a 
        procedure established by a member control agreement valid under 
        this section.  
           Subd. 2.  [VALID EXECUTION.] Other than patron member 
        voting control under section 308B.545 and patron member 
        allocation and distribution provisions under sections 308B.721 
        and 308B.725, a written agreement among persons described in 
        subdivision 1 that relates to the control of or the liquidation, 
        dissolution, and termination of the cooperative; the relations 
        among them; or any phase of the business and affairs of the 
        cooperative, including, without limitation, the management of 
        its business; the declaration and payment of distributions; the 
        sharing of profits and losses; the election of directors; the 
        employment of members by the cooperative; or the arbitration of 
        disputes, is valid, if the agreement is signed by all persons 
        who are then the members of the cooperative, whether or not the 
        members all have voting power, and all those who have signed 
        contribution agreements, regardless of whether those signatories 
        will, when members, have voting power.  
           Subd. 3.  [OTHER AGREEMENTS NOT AFFECTED.] This section 
        does not apply to, limit, or restrict agreements otherwise 
        valid, nor is the procedure set forth in this section the 
        exclusive method of agreement among members or between the 
        members and the cooperative with respect to any of the matters 
        described.  
           Sec. 67.  [308B.735] [DISTRIBUTION OF UNCLAIMED PROPERTY.] 
           Subdivision 1.  [ALTERNATE PROCEDURE TO DISBURSE PROPERTY.] 
        A cooperative may, in lieu of paying or delivering to the state 
        the unclaimed property specified in its report of unclaimed 
        property, distribute the unclaimed property to a business entity 
        or organization that is exempt from taxation.  A cooperative 
        making the election to distribute unclaimed property shall file 
        with the secretary of state:  
           (1) a verified written explanation of the proof of claim of 
        an owner establishing a right to receive the abandoned property; 
           (2) any error in the presumption of abandonment; 
           (3) the name, address, and exemption number of the business 
        entity or organization to which the property was or is to be 
        distributed; and 
           (4) the approximate date of distribution.  
           Subd. 2.  [REPORTING AND CLAIMING PROCEDURE NOT 
        AFFECTED.] This subdivision does not alter the procedure 
        provided by law for cooperatives to report unclaimed property to 
        the state and the requirement that claims of owners are made to 
        the cooperatives for a period following the publication of lists 
        of abandoned property.  
           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.  
                                     MERGER
           Sec. 68.  [308B.801] [MERGER AND CONSOLIDATION.] 
           Subdivision 1.  [AUTHORIZATION.] Unless otherwise 
        prohibited, cooperatives organized under the laws of this state, 
        including cooperatives organized under this chapter or chapter 
        308A, may merge or consolidate with each other, a Minnesota 
        limited liability company under the provisions of section 
        322B.755, or other business entities organized under the laws of 
        another state by complying with the provisions of this section 
        and the law of the state where the surviving or new business 
        entity will exist.  A cooperative may not merge or consolidate 
        with a business entity organized under the laws of this state, 
        other than a cooperative organized under chapter 308A, unless 
        the law governing the business entity expressly authorizes 
        merger or consolidation with a cooperative.  This subdivision 
        does not authorize a foreign business entity to do any act not 
        authorized by the law governing the foreign business entity. 
           Subd. 2.  [PLAN.] To initiate a merger or consolidation of 
        a cooperative, a written plan of merger or consolidation shall 
        be prepared by the board or by a committee selected by the board 
        to prepare a plan.  The plan shall state: 
           (1) the names of the constituent domestic cooperatives, the 
        name of any Minnesota limited liability company that is a party 
        to the merger, to the extent authorized under section 322B.755, 
        and any foreign business entities; 
           (2) the name of the surviving or new domestic cooperative, 
        Minnesota limited liability company as required by section 
        322B.755, or other foreign business entity; 
           (3) the manner and basis of converting membership or 
        ownership interests of the constituent domestic cooperatives, 
        the surviving Minnesota limited liability company as provided in 
        section 322B.755, or foreign business entities into membership 
        or ownership interests in the surviving or new domestic 
        cooperative, the surviving Minnesota limited liability company 
        as authorized in section 322B.755, or foreign business entity; 
           (4) the terms of the merger or consolidation; 
           (5) the proposed effect of the consolidation or merger on 
        the members and patron members of each constituent domestic 
        cooperative; and 
           (6) for a consolidation, the plan shall contain the 
        articles of the entity or organizational documents to be filed 
        with the state in which the entity is organized or, if the 
        surviving organization is a Minnesota limited liability company, 
        the articles of organization.  
           Subd. 3.  [NOTICE.] The following shall apply to notice: 
           (1) the board shall mail or otherwise transmit or deliver 
        notice of the merger or consolidation to each member.  The 
        notice shall contain the full text of the plan, and the time and 
        place of the meeting at which the plan will be considered; and 
           (2) a cooperative with more than 200 members may provide 
        the notice in the same manner as a regular members' meeting 
        notice.  
           Subd. 4.  [ADOPTION OF PLAN.] (a) A plan of merger or 
        consolidation shall be adopted by a domestic cooperative as 
        provided in this subdivision. 
           (b) A plan of merger or consolidation is adopted if: 
           (1) a quorum of the members eligible to vote is registered 
        as being present or represented by mail vote or alternative 
        ballot at the meeting; and 
           (2) the plan is approved by the patron members, or if 
        otherwise provided in the articles or bylaws is approved by a 
        majority of the votes cast in each class of votes cast, or for a 
        domestic cooperative with articles or bylaws requiring more than 
        a majority of the votes cast or other conditions for approval, 
        the plan is approved by a proportion of the votes cast or a 
        number of total members as required by the articles or bylaws 
        and the conditions for approval in the articles or bylaws have 
        been satisfied.  
           (c) After the plan has been adopted, articles of merger or 
        consolidation stating the plan and that the plan was adopted 
        according to this subdivision shall be signed by the chair, vice 
        chair, records officer, or documents officer of each cooperative 
        merging or consolidating.  
           (d) The articles of merger or consolidation shall be filed 
        in the office of the secretary of state.  
           (e) For a merger, the articles of the surviving domestic 
        cooperative subject to this chapter are deemed amended to the 
        extent provided in the articles of merger.  
           (f) Unless a later date is provided in the plan, the merger 
        or consolidation is effective when the articles of merger or 
        consolidation are filed in the office of the secretary of state 
        or the appropriate office of another jurisdiction. 
           (g) The secretary of state shall issue a certificate of 
        organization of the merged or consolidated cooperative.  
           Subd. 5.  [EFFECT OF MERGER.] For a merger that does not 
        involve a Minnesota limited liability company, the following 
        shall apply to the effect of a merger: 
           (a) After the effective date, the domestic cooperative, 
        Minnesota limited liability company, if party to the plan, and 
        any foreign business entity that is a party to the plan become a 
        single entity.  For a merger, the surviving business entity is 
        the business entity designated in the plan.  For a 
        consolidation, the new domestic cooperative, the Minnesota 
        limited liability company, if any, and any foreign business 
        entity is the business entity provided for in the plan.  Except 
        for the surviving or new domestic cooperative, Minnesota limited 
        liability company, or foreign business entity, the separate 
        existence of each merged or consolidated domestic or foreign 
        business entity that is a party to the plan ceases on the 
        effective date of the merger or consolidation. 
           (b) The surviving or new domestic cooperative, Minnesota 
        limited liability company, or foreign business entity possesses 
        all of the rights and property of each of the merged or 
        consolidated business entities and is responsible for all their 
        obligations.  The title to property of the merged or 
        consolidated domestic cooperative or foreign business entity is 
        vested in the surviving or new domestic cooperative, Minnesota 
        limited liability company, or foreign business entity without 
        reversion or impairment of the title caused by the merger or 
        consolidation. 
           (c) If a merger involves a Minnesota limited liability 
        company, this subdivision is subject to the provisions of 
        section 322B.755. 
           Sec. 69.  [308B.805] [MERGER OF SUBSIDIARY.] 
           Subdivision 1.  [WHEN AUTHORIZED; CONTENTS OF PLAN.] (a) 
        For purposes of this section, "subsidiary" means a domestic 
        cooperative, a Minnesota limited liability company, or a foreign 
        cooperative, and "cooperative" means a domestic cooperative.  A 
        Minnesota limited liability company may only participate in a 
        merger under this section to the extent authorized under section 
        322B.755.  A parent domestic cooperative or a subsidiary that is 
        a domestic cooperative may complete the merger of a subsidiary 
        as provided in this section, provided however, if either the 
        parent or the subsidiary is a business entity organized under 
        the laws of this state, the merger of the subsidiary is not 
        authorized under this section unless the law governing the 
        business entity expressly authorizes merger with a cooperative.  
        A parent cooperative owning at least 90 percent of the 
        outstanding ownership interests of each class and series of a 
        subsidiary directly, or indirectly through related 
        organizations, other than classes or series that, absent this 
        section, would otherwise not be entitled to vote on the merger, 
        may merge the subsidiary into itself or into any other 
        subsidiary at least 90 percent of the outstanding ownership 
        interests of each class and series of which is owned by the 
        parent cooperative directly, or indirectly through related 
        organizations, other than classes or series that, absent this 
        section, would otherwise not be entitled to vote on the merger, 
        without a vote of the members of itself or any subsidiary or may 
        merge itself, or itself and one or more of the subsidiaries, 
        into one of the subsidiaries under this section.  A resolution 
        approved by the affirmative vote of a majority of the directors 
        of the parent cooperative present shall set forth a plan of 
        merger that contains: 
           (1) the name of the subsidiary or subsidiaries, the name of 
        the parent, and the name of the surviving cooperative; 
           (2) the manner and basis of converting the membership 
        interests of the subsidiary or subsidiaries or parent into 
        securities of the parent, subsidiary, or of another cooperative 
        or, in the whole or in part, into money or other property; 
           (3) if the parent is a constituent cooperative but is not 
        the surviving cooperative in the merger, a provision for the pro 
        rata issuance of membership interests of the surviving 
        cooperative to the holders of membership interests of the parent 
        on surrender of any certificates for shares of the parent; and 
           (4) if the surviving cooperative is a subsidiary, a 
        statement of any amendments to the articles of the surviving 
        cooperative that will be part of the merger.  
           (b) If the parent is a constituent cooperative and the 
        surviving cooperative in the merger, it may change its 
        cooperative name, without a vote of its members, by the 
        inclusion of a provision to that effect in the resolution of 
        merger setting forth the plan of merger that is approved by the 
        affirmative vote of a majority of the directors of the parent 
        present.  Upon the effective date of the merger, the name of the 
        parent shall be changed.  
           (c) If the parent is a constituent cooperative but is not 
        the surviving cooperative in the merger, the resolution is not 
        effective unless it is also approved by the affirmative vote of 
        the holders of a majority of the voting power of all membership 
        interests of the parent entitled to vote at a regular or special 
        meeting if the parent is a cooperative, or in accordance with 
        the laws under which it is organized if the parent is a foreign 
        business entity or cooperative.  
           Subd. 2.  [NOTICE TO MEMBERS OF SUBSIDIARY.] Notice of the 
        action, including a copy of the plan of merger, shall be given 
        to each member, other than the parent and any subsidiary of each 
        subsidiary that is a constituent cooperative in the merger 
        before, or within ten days after, the effective date of the 
        merger. 
           Subd. 3.  [ARTICLES OF MERGER; CONTENTS OF ARTICLES.] 
        Articles of merger shall be prepared that contain: 
           (1) the plan of merger; 
           (2) the number of outstanding membership interests of each 
        series and class of each subsidiary that is a constituent 
        cooperative in the merger, other than the series or classes 
        that, absent this section, would otherwise not be entitled to 
        vote on the merger, and the number of membership interests of 
        each series and class of the subsidiary or subsidiaries, other 
        than series or classes that, absent this section, would 
        otherwise not be entitled to vote on the merger, owned by the 
        parent directly, or indirectly through related organizations; 
        and 
           (3) a statement that the plan of merger has been approved 
        by the parent under this section.  
           Subd. 4.  [ARTICLES SIGNED, FILED.] The articles of merger 
        shall be signed on behalf of the parent and filed with the 
        secretary of state.  
           Subd. 5.  [CERTIFICATE.] The secretary of state shall issue 
        a certificate of merger to the parent or its legal 
        representative or, if the parent is a constituent cooperative 
        but is not the surviving cooperative in the merger, to the 
        surviving cooperative or its legal representative.  
           Subd. 6.  [NONEXCLUSIVITY.] A merger among a parent and one 
        or more subsidiaries or among two or more subsidiaries of a 
        parent may be accomplished under section 308B.801 instead of 
        this section, in which case this section does not apply.  
           Sec. 70.  [308B.835] [ABANDONMENT.] 
           Subdivision 1.  [ABANDONMENT BY MEMBERS OR PLAN.] After a 
        plan of merger has been approved by the members entitled to vote 
        on the approval of the plan and before the effective date of the 
        plan, the plan may be abandoned by the same vote that approved 
        the plan. 
           Subd. 2.  [ABANDONMENT OF MERGER.] (a) A merger may be 
        abandoned: 
           (1) if the members of each of the constituent domestic 
        cooperatives entitled to vote on the approval of the plan have 
        approved the abandonment at a meeting by the affirmative vote of 
        the holders of a majority of the voting power of the membership 
        interests entitled to vote; if the merger is with a domestic 
        cooperative and a Minnesota limited liability company or foreign 
        business entity, if abandonment is approved in such manner as 
        may be required by section 322B.755 for the involvement of a 
        Minnesota limited liability company, or for a foreign business 
        entity by the laws of the state under which the foreign business 
        entity is organized; and the members of a constituent domestic 
        cooperative are not entitled to vote on the approval of the 
        plan, the board of the constituent domestic cooperative has 
        approved the abandonment by the affirmative vote of a majority 
        of the directors present; 
           (2) if the plan itself provides for abandonment and all 
        conditions for abandonment set forth in the plan are met; or 
           (3) under paragraph (b). 
           (b) A plan of merger may be abandoned before the effective 
        date of the plan by a resolution of the board of any constituent 
        domestic cooperative abandoning the plan of merger approved by 
        the affirmative vote of a majority of the directors present, 
        subject to the contract rights of any other person under the 
        plan.  If a plan of merger is with a domestic or foreign 
        business entity, the plan of merger may be abandoned before the 
        effective date of the plan by a resolution of the foreign 
        business entity adopted according to the laws of the state under 
        which the foreign business entity is organized, subject to the 
        contract rights of any other person under the plan.  If the plan 
        of merger is with a Minnesota limited liability company, the 
        plan of merger may be abandoned by the Minnesota limited 
        liability company as provided in section 322B.755, subject to 
        the contractual rights of any other person under the plan.  
           (c) If articles of merger have been filed with the 
        secretary of state, but have not yet become effective, the 
        constituent organizations, in the case of abandonment under 
        paragraph (a), clause (1), the constituent organizations or any 
        one of them, in the case of abandonment under paragraph (a), 
        clause (2), or the abandoning organization in the case of 
        abandonment under paragraph (b), shall file with the secretary 
        of state articles of abandonment that contain: 
           (1) the names of the constituent organizations; 
           (2) the provisions of this section under which the plan is 
        abandoned; and 
           (3) if the plan is abandoned under paragraph (b), the text 
        of the resolution abandoning the plan. 
                                  DISSOLUTION
           Sec. 71.  [308B.901] [METHODS OF DISSOLUTION.] 
           A cooperative may be dissolved by the members or by order 
        of the court. 
           Sec. 72.  [308B.905] [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. 
           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. 
           Subd. 3.  [DISTRIBUTION TO MEMBERS.] Tangible and 
        intangible property, including money, remaining after the 
        discharge of the debts, obligations, and liabilities of the 
        cooperative shall be distributed to the members and former 
        members as provided in the articles or bylaws, unless otherwise 
        provided by law.  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. 
           Sec. 73.  [308B.911] [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. 
           Subd. 2.  [REVOCATION BY MEMBERS.] The chair may call a 
        members' meeting to consider the advisability of revoking the 
        dissolution proceedings.  The question of the proposed 
        revocation shall 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. 
           Subd. 3.  [FILING WITH THE 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. 74.  [308B.915] [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. 
           Sec. 75.  [308B.921] [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.  The articles of 
        dissolution shall 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 allowing claims 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 under 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. 2.  [DISSOLUTION EFFECTIVE ON FILING.] The 
        cooperative is dissolved when the articles of dissolution have 
        been filed with the secretary of state. 
           Subd. 3.  [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. 
           Sec. 76.  [308B.925] [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 address is located to have the dissolution 
        conducted or continued under the supervision of the court. 
           Sec. 77.  [308B.931] [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 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; 
        and 
           (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; 
           (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 
           (iii) 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. 
           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 grounds that the cooperative has 
        accumulated operating net income or current operating net income.
           Subd. 3.  [DISSOLUTION AS REMEDY.] In deciding whether to 
        order dissolution of the cooperative, the court shall 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), item (ii) or (iii).  Lesser 
        relief may be ordered if it would be appropriate under the facts 
        and circumstances of the case. 
           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 attorney 
        fees and disbursements to any of the other parties. 
           Subd. 5.  [VENUE.] Proceedings under this section shall be 
        brought in a court within the county where the registered 
        address of the cooperative is located. 
           Subd. 6.  [PARTIES.] It is not necessary to make members 
        parties to the action or proceeding unless relief is sought 
        against them personally. 
           Sec. 78.  [308B.935] [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. 
           Subd. 2.  [ACTION AFTER HEARING.] After a hearing is 
        completed, upon notice to parties to the proceedings and to 
        other parties in interest designated by the court, the court may 
        appoint a receiver to collect the cooperative's assets, 
        including amounts owing to the cooperative by subscribers on 
        account of an unpaid portion of the consideration for the 
        issuance of shares.  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. 
           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: 
           (1) the costs and expense of the proceedings, including 
        attorney fees and disbursements; 
           (2) debts, taxes, and assessments due the United States, 
        this state, and other states 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 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. 
           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 under an approved liquidation plan. 
           Sec. 79.  [308B.941] [RECEIVER QUALIFICATIONS AND POWERS.] 
           Subdivision 1.  [QUALIFICATIONS.] A receiver shall be a 
        natural person or a domestic business entity or a foreign 
        business entity authorized to transact business in this state.  
        A receiver shall give a bond as directed by the court with the 
        sureties required by the court. 
           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. 
           Sec. 80.  [308B.945] [DISSOLUTION ACTION BY ATTORNEY 
        GENERAL; ADMINISTRATIVE DISSOLUTION.] 
           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 it if is 
        established that: 
           (1) the articles and certificate of organization were 
        procured through fraud; 
           (2) the cooperative was organized for a purpose not 
        permitted by this chapter or prohibited by state law; 
           (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. 
           Subd. 2.  [NOTICE TO COOPERATIVE.] An action may not be 
        commenced under subdivision 1 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. 
           Sec. 81.  [308B.951] [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. 
           Subd. 2.  [DATE TO FILE A CLAIM.] 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. 
           Subd. 3.  [FIXED DATE OR EXTENSION FOR FILING.] 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. 
           Sec. 82.  [308B.955] [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. 
           Sec. 83.  [308B.961] [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. 
           Subd. 2.  [DISSOLUTION EFFECTIVE ON FILING ORDER.] When the 
        order dissolving the cooperative or association has been 
        entered, the cooperative or association is dissolved. 
           Sec. 84.  [308B.965] [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. 
           Sec. 85.  [308B.971] [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. 
           Subd. 2.  [CERTAIN UNFILED CLAIMS ALLOWED.] Within one year 
        after articles of dissolution have been filed with the secretary 
        of state under 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. 
           Subd. 3.  [OMITTED CLAIMS ALLOWED.] Debts, obligations, and 
        liabilities incurred during dissolution proceedings shall 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 offenders, 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. 
           Sec. 86.  [308B.975] [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. 

                                   ARTICLE 2
                          SECURITIES; CROSS-REFERENCES
           Section 1.  Minnesota Statutes 2002, section 80A.14, 
        subdivision 17, is amended to read: 
           Subd. 17.  [SALE, SELL.] (1) "Sale" or "sell" includes 
        every contract of sale of, contract to sell, or disposition of, 
        a security or interest in a security for value. 
           (2) "Offer" or "offer to sell" includes every attempt or 
        offer to dispose of, or solicitation of an offer to buy, a 
        security or interest in a security for value. 
           (3) Any security given or delivered with, or as a bonus on 
        account of, any purchase of securities or any other thing is 
        considered to constitute part of the subject of the purchase and 
        to have been offered and sold for value. 
           (4) A purported gift of assessable stock is considered to 
        involve an offer and sale. 
           (5) Every sale or offer of a warrant or right to purchase 
        or subscribe to another security of the same or another issuer, 
        as well as every sale or offer of a security which gives the 
        holder a present or future right or privilege to convert into 
        another security of the same or another issuer, is considered to 
        include an offer of the other security. 
           (6) The terms defined in this subdivision do not include 
        (i) any bona fide pledge or loans; (ii) any stock dividend, 
        whether the corporation or other entity distributing the 
        dividend is the issuer of the stock or not; or (iii) a dividend 
        on equity distributed by a cooperative organized under chapter 
        308B. 
           Sec. 2.  Minnesota Statutes 2002, section 80A.15, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TRANSACTIONS EXEMPTED.] The following 
        transactions are exempted from sections 80A.08 and 80A.16: 
           (a) Any sales, whether or not effected through a 
        broker-dealer, provided that: 
           (1) no person shall make more than ten sales of securities 
        in Minnesota of the same issuer pursuant to this exemption, 
        exclusive of sales according to clause (2), during any period of 
        12 consecutive months; provided further, that in the case of 
        sales by an issuer, except sales of securities registered under 
        the Securities Act of 1933 or exempted by section 3(b) of that 
        act, (i) the seller reasonably believes that all buyers are 
        purchasing for investment, and (ii) the securities are not 
        advertised for sale to the general public in newspapers or other 
        publications of general circulation or otherwise, or by radio, 
        television, electronic means or similar communications media, or 
        through a program of general solicitation by means of mail or 
        telephone; or 
           (2) no issuer shall make more than 25 sales of its 
        securities in Minnesota according to this exemption, exclusive 
        of sales pursuant to clause (1), during any period of 12 
        consecutive months; provided further, that the issuer meets the 
        conditions in clause (1) and, in addition meets the following 
        additional conditions:  (i) files with the commissioner, ten 
        days before a sale according to this clause, a statement of 
        issuer on a form prescribed by the commissioner; and (ii) no 
        commission or other remuneration is paid or given directly or 
        indirectly for soliciting any prospective buyers in this state 
        in connection with a sale according to this clause except 
        reasonable and customary commissions paid by the issuer to a 
        broker-dealer licensed under this chapter. 
           (b) Any nonissuer distribution of an outstanding security 
        if (1) either Moody's, Fitch's, or Standard & Poor's Securities 
        Manuals, or other recognized manuals approved by the 
        commissioner contains the names of the issuer's officers and 
        directors, a balance sheet of the issuer as of a date not more 
        than 18 months prior to the date of the sale, and a profit and 
        loss statement for the fiscal year preceding the date of the 
        balance sheet, and (2) the issuer or its predecessor has been in 
        active, continuous business operation for the five-year period 
        next preceding the date of sale, and (3) if the security has a 
        fixed maturity or fixed interest or dividend provision, the 
        issuer has not, within the three preceding fiscal years, 
        defaulted in payment of principal, interest, or dividends on the 
        securities. 
           (c) The execution of any orders by a licensed broker-dealer 
        for the purchase or sale of any security, pursuant to an 
        unsolicited offer to purchase or sell; provided that the 
        broker-dealer acts as agent for the purchaser or seller, and has 
        no direct material interest in the sale or distribution of the 
        security, receives no commission, profit, or other compensation 
        from any source other than the purchaser and seller and delivers 
        to the purchaser and seller written confirmation of the 
        transaction which clearly itemizes the commission, or other 
        compensation. 
           (d) Any nonissuer sale of notes or bonds secured by a 
        mortgage lien if the entire mortgage, together with all notes or 
        bonds secured thereby, is sold to a single purchaser at a single 
        sale. 
           (e) Any judicial sale, exchange, or issuance of securities 
        made pursuant to an order of a court of competent jurisdiction. 
           (f) The sale, by a pledge holder, of a security pledged in 
        good faith as collateral for a bona fide debt. 
           (g) Any offer or sale to a bank, savings institution, trust 
        company, insurance company, investment company as defined in the 
        Investment Company Act of 1940, or other financial institution 
        or institutional buyer, or to a broker-dealer, whether the 
        purchaser is acting for itself or in some fiduciary capacity. 
           (h) An offer or sale of securities by an issuer made in 
        reliance on the exemptions provided by Rule 505 or 506 of 
        Regulation D promulgated by the Securities and Exchange 
        Commission, Code of Federal Regulations, title 17, sections 
        230.501 to 230.508, subject to the conditions and definitions 
        provided by Rules 501 to 503 of Regulation D, if the offer and 
        sale also satisfies the conditions and limitations in clauses 
        (1) to (10). 
           (1) The exemption under this paragraph is not available for 
        the securities of an issuer if any of the persons described in 
        Rule 252(c) to (f) of Regulation A promulgated by the Securities 
        and Exchange Commission, Code of Federal Regulations, title 17, 
        sections 230.251 to 230.263:  
           (i) has filed a registration statement that is the subject 
        of a currently effective order entered against the issuer, its 
        officers, directors, general partners, controlling persons, or 
        affiliates, according to any state's law within five years 
        before the filing of the notice required under clause (5), 
        denying effectiveness to, or suspending or revoking the 
        effectiveness of, the registration statement; 
           (ii) has been convicted, within five years before the 
        filing of the notice required under clause (5), of a felony or 
        misdemeanor in connection with the offer, sale, or purchase of a 
        security or franchise, or a felony involving fraud or deceit, 
        including but not limited to forgery, embezzlement, obtaining 
        money under false pretenses, larceny, or conspiracy to defraud; 
           (iii) is subject to an effective administrative order or 
        judgment entered by a state securities administrator within five 
        years before the filing of the notice required under clause (5), 
        that prohibits, denies, or revokes the use of an exemption from 
        securities registration, that prohibits the transaction of 
        business by the person as a broker-dealer or agent, that is 
        based on fraud, deceit, an untrue statement of a material fact, 
        or an omission to state a material fact; or 
           (iv) is subject to an order, judgment, or decree of a court 
        entered within five years before the filing of the notice 
        required under clause (5), temporarily, preliminarily, or 
        permanently restraining or enjoining the person from engaging in 
        or continuing any conduct or practice in connection with the 
        offer, sale, or purchase of a security, or the making of a false 
        filing with a state. 
           A disqualification under paragraph (h) involving a 
        broker-dealer or agent is waived if the broker-dealer or agent 
        is or continues to be licensed in the state in which the 
        administrative order or judgment was entered against the person 
        or if the broker-dealer or agent is or continues to be licensed 
        in this state as a broker-dealer or agent after notifying the 
        commissioner of the act or event causing disqualification. 
           The commissioner may waive a disqualification under 
        paragraph (h) upon a showing of good cause that it is not 
        necessary under the circumstances that use of the exemption be 
        denied. 
           A disqualification under paragraph (h) may be waived if the 
        state securities administrator or agency of the state that 
        created the basis for disqualification has determined, upon a 
        showing of good cause, that it is not necessary under the 
        circumstances that an exemption from registration of securities 
        under the state's laws be denied. 
           It is a defense to a violation of paragraph (h) based upon 
        a disqualification if the issuer sustains the burden of proof to 
        establish that the issuer did not know, and in the exercise of 
        reasonable care could not have known, that a disqualification 
        under paragraph (h) existed. 
           (2) This exemption must not be available to an issuer with 
        respect to a transaction that, although in technical compliance 
        with this exemption, is part of a plan or scheme to evade 
        registration or the conditions or limitations explicitly stated 
        in paragraph (h). 
           (3) No commission, finder's fee, or other remuneration 
        shall be paid or given, directly or indirectly, for soliciting a 
        prospective purchaser, unless the recipient is appropriately 
        licensed, or exempt from licensure, in this state as a 
        broker-dealer. 
           (4) Nothing in this exemption is intended to or should be 
        in any way construed as relieving issuers or persons acting on 
        behalf of issuers from providing disclosure to prospective 
        investors adequate to satisfy the antifraud provisions of the 
        securities law of Minnesota.  
           (5) The issuer shall file with the commissioner a notice on 
        form D as adopted by the Securities and Exchange Commission 
        according to Regulation D, Code of Federal Regulations, title 
        17, section 230.502.  The notice must be filed not later than 15 
        days after the first sale in this state of securities in an 
        offering under this exemption.  Every notice on form D must be 
        manually signed by a person duly authorized by the issuer and 
        must be accompanied by a consent to service of process on a form 
        prescribed by the commissioner.  
           (6) A failure to comply with a term, condition, or 
        requirement of paragraph (h) will not result in loss of the 
        exemption for an offer or sale to a particular individual or 
        entity if the person relying on the exemption shows that:  (i) 
        the failure to comply did not pertain to a term, condition, or 
        requirement directly intended to protect that particular 
        individual or entity, and the failure to comply was 
        insignificant with respect to the offering as a whole; and (ii) 
        a good faith and reasonable attempt was made to comply with all 
        applicable terms, conditions, and requirements of paragraph (h), 
        except that, where an exemption is established only through 
        reliance upon this provision, the failure to comply shall 
        nonetheless constitute a violation of section 80A.08 and be 
        actionable by the commissioner.  
           (7) The issuer, upon request by the commissioner, shall, 
        within ten days of the request, furnish to the commissioner a 
        copy of any and all information, documents, or materials 
        furnished to investors or offerees in connection with the offer 
        and sale according to paragraph (h).  
           (8) Neither compliance nor attempted compliance with the 
        exemption provided by paragraph (h), nor the absence of an 
        objection or order by the commissioner with respect to an offer 
        or sale of securities undertaken according to this exemption, 
        shall be considered to be a waiver of a condition of the 
        exemption or considered to be a confirmation by the commissioner 
        of the availability of this exemption.  
           (9) The commissioner may, by rule or order, increase the 
        number of purchasers or waive any other condition of this 
        exemption.  
           (10) The determination whether offers and sales made in 
        reliance on the exemption set forth in paragraph (h) shall be 
        integrated with offers and sales according to other paragraphs 
        of this subdivision shall be made according to the integration 
        standard set forth in Rule 502 of Regulation D promulgated by 
        the Securities and Exchange Commission, Code of Federal 
        Regulations, title 17, section 230.502.  If not subject to 
        integration according to that rule, offers and sales according 
        to paragraph (h) shall not otherwise be integrated with offers 
        and sales according to other exemptions set forth in this 
        subdivision. 
           (i) Any offer (but not a sale) of a security for which a 
        registration statement has been filed under sections 80A.01 to 
        80A.31, if no stop order or refusal order is in effect and no 
        public proceeding or examination looking toward an order is 
        pending; and any offer of a security if the sale of the security 
        is or would be exempt under this section.  The commissioner may 
        by rule exempt offers (but not sales) of securities for which a 
        registration statement has been filed as the commissioner deems 
        appropriate, consistent with the purposes of sections 80A.01 to 
        80A.31. 
           (j) The offer and sale by a cooperative organized under 
        chapter 308A or under the laws of another state, of its 
        securities when the securities are offered and sold only to its 
        members, or when the purchase of the securities is necessary or 
        incidental to establishing membership in the cooperative, or 
        when such securities are issued as patronage dividends.  This 
        paragraph applies to a cooperative organized under the laws of 
        another state only if the cooperative has filed with the 
        commissioner a consent to service of process under section 
        80A.27, subdivision 7, and has, not less than ten days prior to 
        the issuance or delivery, furnished the commissioner with a 
        written general description of the transaction and any other 
        information that the commissioner requires by rule or otherwise. 
           (l) The issuance and delivery of any securities of one 
        corporation to another corporation or its security holders in 
        connection with a merger, exchange of shares, or transfer of 
        assets whereby the approval of stockholders of the other 
        corporation is required to be obtained, provided, that the 
        commissioner has been furnished with a general description of 
        the transaction and with other information as the commissioner 
        by rule prescribes not less than ten days prior to the issuance 
        and delivery.  For purposes of this paragraph, a corporation 
        includes a cooperative organized under chapter 308B, and the 
        approval of stockholders applies to members of such a 
        cooperative. 
           (m) Any transaction between the issuer or other person on 
        whose behalf the offering is made and an underwriter or among 
        underwriters. 
           (n) The distribution by a corporation of its or other 
        securities to its own security holders as a stock dividend or as 
        a dividend from earnings or surplus or as a liquidating 
        distribution; or upon conversion of an outstanding convertible 
        security; or pursuant to a stock split or reverse stock 
        split.  For purposes of this paragraph, a corporation includes a 
        cooperative organized under chapter 308B, and the term "stock" 
        applies to interests in such a cooperative. 
           (o) Any offer or sale of securities by an affiliate of the 
        issuer thereof if:  (1) a registration statement is in effect 
        with respect to securities of the same class of the issuer and 
        (2) the offer or sale has been exempted from registration by 
        rule or order of the commissioner.  
           (p) Any transaction pursuant to an offer to existing 
        security holders of the issuer, including persons who at the 
        time of the transaction are holders of convertible securities, 
        nontransferable warrants, or transferable warrants exercisable 
        within not more than 90 days of their issuance, if:  (1) no 
        commission or other remuneration (other than a standby 
        commission) is paid or given directly or indirectly for 
        soliciting any security holder in this state; and (2) the 
        commissioner has been furnished with a general description of 
        the transaction and with other information as the commissioner 
        may by rule prescribe no less than ten days prior to the 
        transaction. 
           (q) Any nonissuer sales of any security, including a 
        revenue obligation, issued by the state of Minnesota or any of 
        its political or governmental subdivisions, municipalities, 
        governmental agencies, or instrumentalities. 
           (r) Any transaction as to which the commissioner by rule or 
        order finds that registration is not necessary in the public 
        interest and for the protection of investors. 
           (s) An offer or sale of a security issued in connection 
        with an employee's stock purchase, savings, option, profit 
        sharing, pension, or similar employee benefit plan, if the 
        following conditions are met:  
           (1) the issuer, its parent corporation or any of its 
        majority-owned subsidiaries offers or sells the security 
        according to a written benefit plan or written contract relating 
        to the compensation of the purchaser; and 
           (2) the class of securities offered according to the plan 
        or contract, or if an option or right to purchase a security, 
        the class of securities to be issued upon the exercise of the 
        option or right, is registered under section 12 of the 
        Securities Exchange Act of 1934, or is a class of securities 
        with respect to which the issuer files reports according to 
        section 15(d) of the Securities Exchange Act of 1934; or 
           (3) the issuer fully complies with the provisions of Rule 
        701 as adopted by the Securities and Exchange Commission, Code 
        of Federal Regulations, title 12, section 230.701. 
           The issuer shall file not less than ten days before the 
        transaction, a general description of the transaction and any 
        other information that the commissioner requires by rule or 
        otherwise or, if applicable, a Securities and Exchange Form S-8. 
        Annually, within 90 days after the end of the issuer's fiscal 
        year, the issuer shall file a notice as provided with the 
        commissioner. 
           (t) Any sale of a security of an issuer that is a pooled 
        income fund, a charitable remainder trust, or a charitable lead 
        trust that has a qualified charity as the only charitable 
        beneficiary. 
           (u) Any sale by a qualified charity of a security that is a 
        charitable gift annuity if the issuer has a net worth, otherwise 
        defined as unrestricted fund balance, of not less than $300,000 
        and either:  (1) has been in continuous operation for not less 
        than three years; or (2) is a successor or affiliate of a 
        qualified charity that has been in continuous operation for not 
        less than three years.  
           (v) The offer and sale by a cooperative organized under 
        chapter 308B of its securities when the securities are offered 
        and sold only to its existing members or when the purchase of 
        the securities is necessary or incidental to establishing patron 
        membership in the cooperative, or when such securities are 
        issued as patronage dividends.  This paragraph applies when 
        securities are issued as patronage dividends or otherwise only 
        when: 
           (1) the issuer, prior to the completion of the sale of such 
        securities, provides each offeree or purchaser disclosure 
        materials, which to the extent material to an understanding of 
        the issuer, its business, and the securities being offered 
        substantially meet the disclosure conditions and limitations 
        found in rule 502(b) of regulation d promulgated by the 
        Securities and Exchange Commission, Code of Federal Regulations, 
        title 17, section 230.502; and 
           (2) within 15 days after the completion of the first sale 
        in each offering completed in reliance upon this exemption, the 
        cooperative has filed with the commissioner a consent to service 
        of process under section 80A.27, subdivision 7, and has 
        furnished the commissioner with a written general description of 
        the transaction and any other information that the commissioner 
        requires by rule or otherwise. 
        A cooperative may, at or about the same time as offers or sales 
        are being completed in reliance upon this exemption from 
        registration and as part of a common plan of financing, offer or 
        sell its securities in reliance upon any other exemption from 
        registration available under this chapter.  The offer or sale of 
        securities in reliance upon this paragraph shall not be 
        considered or deemed a part of or be integrated with any offer 
        or sale of securities conducted by the cooperative in reliance 
        upon any other exemption from registration available under this 
        chapter, nor shall offers or sales of securities by the 
        cooperative in reliance upon any other exemption from 
        registration available under this chapter be considered or 
        deemed a part of or be integrated with any offer or sale 
        conducted by the cooperative in reliance upon this paragraph. 
           Sec. 3.  Minnesota Statutes 2002, section 322B.70, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MERGER.] With or without a business 
        purpose, a limited liability company may merge:  
           (1) with another limited liability company pursuant to a 
        plan of merger approved in the manner provided in sections 
        322B.71 to 322B.75; 
           (2) with a domestic corporation under a plan of merger 
        approved in the manner provided in sections 322B.71 to 322B.75, 
        and in chapter 302A; and 
           (3) with any foreign corporation or foreign limited 
        liability company pursuant to a plan of merger approved in the 
        manner provided in section 322B.76; and 
           (4) with one or more cooperatives organized under chapter 
        308A or 308B, in the manner provided by and subject to the 
        limitations in section 322B.755. 
           Sec. 4.  [322B.755] [MERGER OF DOMESTIC COOPERATIVE INTO A 
        DOMESTIC LIMITED LIABILITY COMPANY.] 
           Subdivision 1.  [DEFINITION.] As used in this section, 
        "domestic cooperative" means a cooperative organized under 
        chapter 308A or 308B.  
           Subd. 2.  [AUTHORIZATION; LIMITATIONS.] (a) A limited 
        liability company may merge with a domestic cooperative only as 
        provided by this section.  A limited liability company may merge 
        with one or more domestic cooperatives if: 
           (1) only one limited liability company and only one or more 
        domestic cooperatives are parties to the merger; 
           (2) when the merger becomes effective, the separate 
        existence of each domestic cooperative ceases and the limited 
        liability company is the surviving organization; 
           (3) as to each domestic cooperative, the plan of merger is 
        initiated and adopted, and the merger is effectuated, as 
        provided in section 308B.801; and 
           (4) as to the limited liability company, the plan of merger 
        complies with section 322B.71, the plan of merger is approved as 
        provided in section 322B.72, and the articles of merger are 
        prepared, signed, and filed as provided in section 322B.73. 
           (b) For purposes of a merger authorized by this section: 
           (1) the term "constituent organization" as used in sections 
        322B.71, subdivision 1, clause (1); 322B.71, subdivision 1, 
        clause (3), item (i); 322B.73; and 322B.75, includes a domestic 
        cooperative; 
           (2) the term "constituent organization" as used in section 
        322B.72 does not include a domestic cooperative; 
           (3) the term "ownership interests" as used in section 
        322B.71, subdivision 1, clause (3), item (i), includes 
        membership interests in a domestic cooperative; 
           (4) notwithstanding sections 322B.71, subdivision 1, clause 
        (1), item (i); 322B.71, subdivision 1, clause (4); 322B.75, 
        subdivision 2, clause (1); 322B.75, subdivision 2, clause (4), 
        item (i); and 322B.75, subdivision 2, clause (5), the surviving 
        organization must be the limited liability company; 
           (5) section 322B.75, subdivision 2, clause (3), does not 
        apply; 
           (6) the term "ownership interests" includes membership 
        interests in a domestic cooperative and the term "owners" 
        includes members of a domestic cooperative; and 
           (7) "dissenters rights" includes dissenters rights under 
        the law governing the domestic cooperative. 
           Subd. 3.  [ABANDONMENT.] Section 308B.835 governs the 
        abandonment by a domestic cooperative of a merger authorized by 
        this section.  Section 322B.74 governs the abandonment by a 
        limited liability company of a merger authorized by this 
        section, except that for the purposes of a merger authorized by 
        this section: 
           (1) the term "constituent organization" as used in section 
        322B.74, subdivision 1, clause (1), does not include a domestic 
        cooperative; 
           (2) the requirement stated in section 322B.74, subdivision 
        1, clause (1), as to a domestic corporation does not apply and 
        instead the abandonment must have been approved by the domestic 
        cooperative in the manner provided in chapter 308B; 
           (3) the reference in section 322B.74, subdivision 2, to a 
        domestic corporation does not apply and instead the abandonment 
        by the domestic cooperative may be accomplished as provided in 
        chapter 308B; and 
           (4) the term "constituent organization" as used in section 
        322B.74, subdivision 3, includes a domestic cooperative. 
           Presented to the governor May 23, 2003 
           Signed by the governor May 25, 2003, 9:54 p.m.