SB 25

This bill allows a cooperative to hold member meetings remotely, allows a

cooperative to adopt emergency bylaws, and grants a cooperative certain emergency

powers.

Under current law, a cooperative may be formed by filing articles of

incorporation with the Department of Financial Institutions. A cooperative is

organized and owned by its members and managed by a board of directors. Generally

the members may adopt, amend, and repeal bylaws that govern the operations of the

cooperative. Unless the bylaws provide otherwise, member meetings must be held

at the cooperative's principal office or another place chosen by the board of directors.

An annual member meeting must be held at the time established by the bylaws or,

in the absence of a bylaw provision, within six months after the close of the

cooperative's fiscal year. Special member meetings may also be called. Under certain

circumstances, a member who is absent from a member meeting may vote on a

meeting motion or the election or removal of directors, including voting by electronic

means if certain requirements are met.

This bill allows a cooperative to hold an annual member meeting or special

member meeting by means of remote participation. If certain conditions are

satisfied, members participating in a member meeting by means of remote

communication are considered to be present in person, and their votes cast by

electronic means are considered as votes at the member meeting.

The bill also allows, unless the articles of incorporation provide otherwise, a

cooperative's board of directors to adopt bylaws that are effective only in an

emergency. An emergency is defined as a catastrophic event that prevents a quorum

of a cooperative's directors or members from being readily assembled. Emergency

bylaws may provide special provisions or modify provisions as necessary for

managing the cooperative during the emergency and are not effective after the

emergency ends. The bill further provides emergency powers to a cooperative

allowing its board of directors or members, in anticipation of or during an emergency,

to 1) relocate its principal office or designate alternative principal offices; and 2)

unless its emergency bylaws provide otherwise, give notice of a board meeting only

to those directors whom it is practicable to reach and give this notice in any

practicable manner. Action taken by the cooperative in good faith in accordance with

the emergency bylaws or under its emergency powers binds the cooperative and may

not be used to impose liability on a director, officer, member, employee, or agent of

the cooperative.