State of Illinois
92nd General Assembly

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HB4438 Engrossed                               LRB9210220DJgc

 1        AN ACT in relation to agriculture.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The Agricultural Co-Operative Act is amended
 5    by changing Sections 2, 5, 8, 9, 13, 21, 25, 32,  and  33  as
 6    follows:

 7        (805 ILCS 315/2) (from Ch. 32, par. 441)
 8        Sec. 2.  Definitions and short title.
 9        (a)  As used in this Act:
10        The  term "Director of Agriculture" means the Director of
11    the Illinois Department of Agriculture.
12          The  term   "agricultural   products"   shall   include
13    horticultural,  viticultural,  forestry,  dairy,  live stock,
14    poultry, bee and  any  farm  and  aquatic  products  and  fur
15    bearing animals raised in captivity and their products.
16          The  term  "member"  shall  include  actual  members of
17    associations without capital stock,  and  holders  of  common
18    stock in associations organized with capital stock.
19          The  term "association" means any corporation organized
20    under this Act, or any corporation formed under  any  general
21    or  special  act of this or any other state as a co-operative
22    association, organized for the mutual benefit of its members,
23    and in which the returns on the stock or  membership  capital
24    is  limited  to  an amount not to exceed 8% per annum, and in
25    which during any fiscal year thereof the  value  of  business
26    done with non-members shall not exceed the business done with
27    members  during  the  same period, and in which substantially
28    all of the issued and outstanding shares of capital stock  or
29    memberships  are  owned,  held  and  controlled  directly  or
30    indirectly, by producers of agricultural products.
31          The  term "person", except when used in reference to an
HB4438 Engrossed            -2-                LRB9210220DJgc
 1    officer or member of the board of directors, in which case it
 2    means an individual, shall  include  any  individual  or  any
 3    entity, including but not limited to a sole proprietorship, a
 4    partnership,  a corporation, a cooperative, an association, a
 5    limited liability company, an estate, or a trust individuals,
 6    firms, partnerships, corporations and associations.
 7        (b)  Associations organized  hereunder  shall  be  deemed
 8    "non-profit",  inasmuch  as  they  are  not organized to make
 9    profit for themselves, as such,  or  for  their  members,  as
10    such, but only for their members as producers.
11        (c)  This   Act   may   be  cited  as  the   Agricultural
12    Co-Operative Act.
13    (Source: P.A. 85-856; 86-1475.)

14        (805 ILCS 315/5) (from Ch. 32, par. 444)
15        Sec.  5.  Every  group  of  persons   contemplating   the
16    organization  of  an  association  under this Act is urged to
17    communicate with the Director of Agriculture, who will  share
18    any information the Department may have regarding inform them
19    whatever  a  survey of the marketing conditions affecting the
20    commodities proposed to be  handled  may  indicate  regarding
21    probable success.
22        It  is  here recognized that agriculture is characterized
23    by individual production in contrast to the group or  factory
24    system   that   characterizes   other   forms  of  industrial
25    production;  and  that  the  ordinary   form   of   corporate
26    organization  permits  industrial  groups  to combine for the
27    purpose of group production and the ensuing  group  marketing
28    and  that the public has an interest in permitting farmers to
29    bring their industry to the high  degree  of  efficiency  and
30    merchandising    skill   evidenced   in   the   manufacturing
31    industries; and that the public interest  urgently  needs  to
32    prevent  the  migration from the farm to the city in order to
33    keep up farm production  and  to  preserve  the  agricultural
HB4438 Engrossed            -3-                LRB9210220DJgc
 1    supply  of  the  nation; and that the public interest demands
 2    that the farmer be encouraged to attain a superior  and  more
 3    direct   system   of   marketing   in   the  substitution  of
 4    merchandising for the  blind,  unscientific  and  speculative
 5    selling  of  crops;  and  that  for this purpose, the farmers
 6    should secure special guidance and instructive data from  the
 7    Director of Agriculture.
 8    (Source: Laws 1923, p. 286.)

 9        (805 ILCS 315/8) (from Ch. 32, par. 447)
10        Sec. 8.  Each association organized under this Act, shall
11    prepare and file articles of incorporation, setting forth:
12        (a)  The  name  of  the  association which may or may not
13    include the word co-operative or any abbreviation thereof.
14        (b)  The purpose for which it is formed.
15        (c)  The place where  its  principal  office  within  the
16    State will be located.
17        (d)  The  term  for  which  it  is to exist, which may be
18    perpetual.
19        (e)  The minimum number of directors thereof, which  must
20    be  not less than 5  and may be any number in excess thereof;
21    the term of office of  such  directors,  and  the  names  and
22    addresses   of  those  who  are  to  serve  as  incorporating
23    directors for the first term, and/or until the  election  and
24    qualification of their successors.
25        (f)  If  organized  without  capital  stock,  whether the
26    property rights and interest of each member shall be equal or
27    unequal; if unequal the general rule or rules  applicable  to
28    all  members  by  which  the  property  rights  and interest,
29    respectively of each member may and shall be  determined  and
30    fixed,  and  provision  for the admission of new members, who
31    shall be entitled to share in the property of the association
32    with the old members, in accordance with such general rule or
33    rules.  This  provision  or  paragraph  of  the  articles  of
HB4438 Engrossed            -4-                LRB9210220DJgc
 1    incorporation may not be altered, amended or repealed, except
 2    by the written consent or vote of 3/4 of the members.
 3        (g)  If  organized with capital stock, the amount of such
 4    stock and the number of shares into which the  capital  stock
 5    is  to be divided; whether all or part of the same shall have
 6    par value, and if so, the par value thereof, which shall  not
 7    be  less than one dollar, nor more than $1,000 per share, and
 8    whether all or part of the same shall have no par value,  and
 9    if  there  is  to  be more than one class of stock created, a
10    description of the different classes, the number of shares in
11    each class, and the relative rights, interest and preferences
12    each class shall represent; and if the same shall be desired,
13    a provision that any or all classes of preferred stock may be
14    issued in series and that dividends  shall  be  payable  with
15    respect  to any such series at such rate not exceeding 8% per
16    annum, or such lesser amount as may be fixed in the  articles
17    of  incorporation,  or  any  amendment  thereof, and that the
18    shares of such series may be reduced at such redemption price
19    and  bear  such  particular  designation  as  the  board   of
20    directors,  subject to such restrictions as may be imposed in
21    the articles of  incorporation,  or  any  amendment  thereof,
22    shall  by resolution, determine and fix prior to the issue of
23    any stock of such series.  Such articles of incorporation  or
24    any  amendment  thereto, may provide, that in the case of any
25    share of stock in such association, issued  thereby,  to  any
26    bona  fide  producer  of  agricultural  products,  or  to any
27    co-operative association as defined in this  Act,  that  such
28    share is subject to the condition, that the directors of such
29    association  shall  be  trustees  of such share of stock upon
30    such  producer  becoming  a  non-producer   of   agricultural
31    products,  or  such  co-operative  association  ceasing to be
32    operated as a co-operative association; and that in the  case
33    of  any  share  of  stock issued in the first instance to any
34    non-producer of agricultural products, or to any  corporation
HB4438 Engrossed            -5-                LRB9210220DJgc
 1    not  operating as a co-operative association, that such share
 2    is subject to  the  condition  that  the  directors  of  such
 3    association shall be the trustees of such share of stock; and
 4    that  in either of such cases, thereupon the trustees of such
 5    share of stock shall be vested with the legal  and  equitable
 6    title  thereto,  and  the  stock  certificate  held  by  such
 7    producer who has become a non-producer, or such non-producer,
 8    or   such   corporation,  not  operating  as  a  co-operative
 9    association, as the case may be, shall legally become or be a
10    participation certificate entitling the holder thereof to any
11    dividends  provided  for  in  such  certificate,  any  moneys
12    accruing by virtue thereof, and any pecuniary rights accruing
13    thereunder, under  the  provisions  of  this  Act;  that  the
14    trustees   of  such  certificate  shall  pay  over  all  such
15    dividends and moneys to the certificate  holder  and  protect
16    and execute all such pecuniary rights; that the voting power,
17    and  all  other  legal  and  beneficial interests, other than
18    those  given  to  the  certificate  holder   as   hereinabove
19    provided,  shall  be  held by such trustees and exercised and
20    managed by them by vote of a majority of such  trustees;  and
21    that  in  case such certificate holder, thereafter, becomes a
22    bona  fide  producer   of   agricultural   products,   or   a
23    co-operative  association,  that  affidavit  be  made to such
24    effect and filed with the directors thereof,  and  thereupon,
25    such trustees shall be discharged and the legal and equitable
26    title to such share and all other interests whatsoever, shall
27    vest  in  such  certificate  holder  and  all  the powers and
28    privileges pertaining to such share of stock may be exercised
29    thereby.
30        (h)  In  addition  to  the  foregoing,  the  articles  of
31    incorporation of any association incorporated  hereunder  may
32    contain  any  provision  consistent  with law with respect to
33    management, regulation, government, financing,  indebtedness,
34    membership,  the  establishment  of  voting districts and the
HB4438 Engrossed            -6-                LRB9210220DJgc
 1    election  of  delegates  for  representative  purposes,   the
 2    issuance,  retirement,  and  transfer of the stock, if formed
 3    with capital stock, or any provisions relative to the way  or
 4    manner  in  which  it  shall  operate  or with respect to its
 5    members, officers  or  directors  and  any  other  provisions
 6    relating to its affairs.
 7        The articles shall be subscribed by the incorporators and
 8    acknowledged  by  one of them before an officer authorized by
 9    law  to  take  and  certify  acknowledgments  of  deeds   and
10    conveyances,  and  shall  be  filed  in  the  office  of  the
11    Secretary   of   State;   when  so  filed,  the  articles  of
12    incorporation, or certified copies thereof, shall be received
13    in all the courts of this State, and other places,  as  prima
14    facie evidence of the facts contained therein, and of the due
15    incorporation  of  such association.  A certified copy of the
16    articles of  incorporation  shall  also  be  filed  with  the
17    Director of Agriculture by the Secretary of State.
18    (Source: P.A. 79-207.)

19        (805 ILCS 315/9) (from Ch. 32, par. 448)
20        Sec.  9.  The articles of incorporation may be altered or
21    amended at any regular meeting, or any special meeting called
22    for that purpose. An amendment may be adopted by the approval
23    of two-thirds of the directors followed by a  favorable  vote
24    or the written consent thereto representing a majority of all
25    the members and/or shareholders of the association, or by the
26    written  consent  of  two-thirds  of  all  the members of the
27    association without the approval of the directors. Amendments
28    to the articles of incorporation when so  adopted,  shall  be
29    filed  in  the  office of the Secretary of State. A certified
30    copy of every amendment shall be filed with the  Director  of
31    Agriculture by the Secretary of State.
32    (Source: Laws 1931, p. 390.)
HB4438 Engrossed            -7-                LRB9210220DJgc
 1        (805 ILCS 315/13) (from Ch. 32, par. 452)
 2        Sec.  13.  The directors shall elect from their number, a
 3    president, and one or more vice-presidents. They  shall  also
 4    elect a secretary and treasurer, who need not be directors or
 5    members  of  the  association,  and  they may combine the two
 6    latter  offices  and  designate  the   combined   office   as
 7    secretary-treasurer,  or  unite  both functions and titles in
 8    one person. The treasurer may be a bank  or  any  depository,
 9    and  as such, shall not be considered as an officer, but as a
10    function of  the  board  of  directors.  In  such  case,  the
11    secretary  shall  perform  the usual accounting duties of the
12    treasurer, except that the funds shall be deposited  only  as
13    and  where  authorized by the board of directors. The by-laws
14    may  provide  for  the  election   of   the   president   and
15    vice-presidents by the members at annual meetings.
16        Within  30 days after the first election of officers, the
17    association  shall  file  a  report  with  the  Director   of
18    Agriculture  on  forms  to  be  furnished  by the Director of
19    Agriculture.  The report shall contain the following:
20             (1) The name of the association.
21             (2) The names and  addresses  of  the  association's
22        principal officers and directors.
23             (3) The association's principal place of business.
24             (4)   A   general  statement  of  the  association's
25        proposed business operations.
26             (5) The end of  the  association's  proposed  fiscal
27        year.
28    (Source: Laws 1929, p. 280.)

29        (805 ILCS 315/21) (from Ch. 32, par. 460)
30        Sec.  21.  Each  association  formed  or authorized to do
31    business in Illinois under this Act shall  prepare  and  make
32    out an annual report on forms to be furnished by the Director
33    of  Agriculture  containing  the name of the association; the
HB4438 Engrossed            -8-                LRB9210220DJgc
 1    names and addresses of its principal officers and  directors;
 2    its  principal  place of business; and a general statement of
 3    its business operations during the fiscal year,  showing  the
 4    amount   of   capital   stock  paid  up  and  the  number  of
 5    stockholders of a stock association or the number of  members
 6    and  amount  of  membership  fees  received,  if  a non-stock
 7    association; the total expenses of operations; the amount  of
 8    its  indebtedness  or liabilities, and its balance sheets and
 9    income statement for the most recently completed fiscal  year
10    before the filing of the report.
11    (Source: Laws 1923, p. 286.)

12        (805 ILCS 315/25) (from Ch. 32, par. 464)
13        Sec.  25.  Any  co-operative  association with or without
14    capital stock as defined in this Act heretofore or  hereafter
15    organized  under  laws  of  another State shall be allowed to
16    carry on any proper activities, operations and  functions  in
17    this  State  upon  filing  with  the  Secretary  of State all
18    necessary  certificates  as  required   under   the   general
19    regulations  applicable  to  foreign  corporations,  and upon
20    payment of a filing fee of ten dollars ($10.00) and an annual
21    fee of ten dollars ($10.00) in lieu of all franchise, license
22    or corporation taxes as required  of  associations  organized
23    hereunder,  and  all  contracts  which  could  be made by any
24    association  organized  hereunder,  made  by  or  with   such
25    association  shall be legal and valid and enforceable in this
26    State with all of the remedies set forth  in  this  Act.  Any
27    foreign  co-operative  association  having  qualified  to  do
28    business  within  this  State shall file with the Director of
29    Agriculture  duplicate  certificates  as   filed   with   the
30    Secretary  of  State,  and shall file annual reports with the
31    Director of Agriculture in the manner and form  provided  for
32    in  Section 21 of this Act. The Secretary of State shall file
33    with the Director of Agriculture  duplicate  certificates  as
HB4438 Engrossed            -9-                LRB9210220DJgc
 1    filed  with  the Secretary of State by a foreign co-operative
 2    association qualified to do business within this State  under
 3    this Act.
 4    (Source: Laws 1931, p. 390.)

 5        (805 ILCS 315/32) (from Ch. 32, par. 471)
 6        Sec. 32. On or before the first day of July of Each year,
 7    within  6  months  after  the end of the association's fiscal
 8    year, each association organized hereunder or qualified to do
 9    business within this State  under  this  Act  shall  file  an
10    annual report with the Director of Agriculture as required in
11    Section  21  of  this  Act,  and  pay  the  fees  hereinafter
12    required. If the fee is not paid by August first a penalty of
13    five per centum per month shall be required until it is paid;
14    provided  that  an  association,  associations  organized, or
15    qualified to do business in this State under this Act between
16    January first and June thirtieth of each year  shall  not  be
17    required to file a balance sheet or income statement with its
18    an annual report until the association has completed one full
19    fiscal   year   second   July   following,  but  associations
20    organized, or qualified, between January first  and  February
21    twenty-eighth,  inclusive,  shall be required to pay a fee on
22    July first following.
23        Each association organized hereunder or qualified  to  do
24    business  within  this  State  shall pay an annual fee of ten
25    dollars ($10.00) only, to the Department of  Agriculture,  in
26    lieu  of  all  franchise  or  license or corporation taxes or
27    charges upon reserves held by it for members, and in case  of
28    failure, neglect or refusal of any such association to either
29    file  the  annual  report  or pay the fee as required by this
30    Act, it shall be certified by the Director of the  Department
31    of  Agriculture  to the Secretary of State 9 months after the
32    end of the associations's fiscal  year  Attorney  General  by
33    November  the fifteenth for dissolution in the same manner as
HB4438 Engrossed            -10-               LRB9210220DJgc
 1    is required under the provisions of the  general  corporation
 2    laws  Act  of this State, and the Secretary of State Attorney
 3    General  shall  proceed  in  like  manner  to  dissolve  such
 4    association or oust it from doing business within  the  State
 5    as  is  required  under  the general corporation laws of this
 6    State.
 7    (Source: Laws 1931, p. 390.)

 8        (805 ILCS 315/33) (from Ch. 32, par. 472)
 9        Sec.  33.  For  filing  articles  of  incorporation,   an
10    association  organized  hereunder  shall  pay  $100;  and for
11    filing an amendment to the articles,  $25.  Fees  for  filing
12    articles  of  incorporation  or  an amendment to the articles
13    shall be paid to the Secretary of State.
14    (Source: P.A. 81-997.)

15        Section 99.  Effective date.  This Act takes effect  upon
16    becoming law.

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