Public Act 93-0197

HB2889 Enrolled                      LRB093 05602 LCB 08430 b

    AN ACT in relation to agriculture.

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

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

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

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

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

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

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

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

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

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

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