General Assembly: 79 (2001 Regular GA) - Chapter 142 - Cooperative associations — reversion of disbursements


Published: 2001

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CH.142 LAWS OF THE SEVENTY-NINTH G.A., 2001 SESSION

CHAPTER 142 COOPERATIVE ASSOCIATIONS - REVERSION OF DISBURSEMENTS

H.F.564

332

AN ACT providing for the reversion of dividends and distributions by certain cooperative associations.

Be It Enacted by the General Assembly of the State of Iowa:

Section 1. Section 490.140, Code 2001, is amended by adding the following new subsec- tion:

NEW SUBSECTION. 3A. "Cooperative association" means an entity which is structured and operated on a cooperative basis pursuant to 26 U.S.c. § 1381(a) and which meets the definitional requirements of an association as provided in 12 U.S.c. § 1141 (j)(a) or 7 U.S.C. § 29l.

Sec. 2. NEW SECTION. 490.629 REVERSION OF DISBURSEMENTS TO COOPERA- TIVEASSOCIATIONS.

1. As used in this section, "disbursement" means an amount of any distribution or any other increment or sum realized or accruing from stock or other equity interest in a coopera- tive association organized under this chapter.

2. Once a person's stock or other equity interest in a cooperative association organized under this chapter is deemed abandoned under section 556.5, any disbursement held by the cooperative association for or owing to the person shall be subject to the same requirements as provided in section 499.30A that applies to a cooperative association organized under chapter 499, including all of the following:

a. The retention of the disbursement in a reversion fund established by the cooperative association or the delivery of the disbursement to the treasurer of state.

b. The payment of the disbursement to a person filing a claim with the cooperative asso- ciation who asserts an interest in the disbursement.

c. The forfeiture of the disbursement to the cooperative association, and the use of the forfeited disbursement by the cooperative association in order to teach and promote coop- eration or provide for economic development, including creating economic opportunities for its shareholders.

Sec. 3. NEW SECTION. 499.30A REVERSION OF DISBURSEMENTS. 1. As used in this section, "disbursement" means an amount of any dividend, patronage

dividend, distribution including earnings distribution, or any other increment or sum real- ized or accruing from a membership or stock, subscription, or other equity interest in a cooperative association.

2. Once a person's membership or stock, subscription, or other member's equity in a cooperative association is deemed abandoned under section 556.5, the cooperative associa- tion may retain any disbursement held by the cooperative association for or owing to the person. The cooperative association may also deliver the disbursement to the treasurer of state for disposition as abandoned property pursuant to sections 556.5 and 556.11.

3. If the cooperative association elects to retain the disbursement under this section, the disbursement shall be deposited into a reversion fund established by the cooperative asso- ciation.

4. Any disbursement that is retained by the cooperative association shall be forfeited to the cooperative association if the cooperative association publishes at least one notice of the abandoned property in a publication regularly distributed to its membership or in a newspa- per having a general circulation in the county where the cooperative association is located. The notice shall include all of the following:

a. The name and address of the cooperative association.

333 LAWS OF THE SEVENTY-NINTH G.A., 2001 SESSION CH.142

b. The name of the person who has an interest in the disbursement according to the records of the cooperative association.

c. A brief description of the type of disbursement retained by the cooperative association. d. A statement that the disbursement will be forfeited to the cooperative association un-

less the person files a claim for the disbursement within the period provided for in this section.

5. a. Subject to this subsection, a person asserting an interest in the disbursement may file a claim for it with the cooperative association in a manner and according to procedures required by the cooperative association. If a person is entitled to an abandoned member- ship, stock, subscription, or other interest as provided in section 556.20 or 556.21, the coop- erative association shall also pay the person the disbursement deposited in the reversion fund that is realized or accrued from the membership or stock, subscription, or other interest.

b. If a person has not filed a claim for the disbursement within six months after the first date that the notice of abandoned property is first published as provided in this section, the disbursement shall be forfeited to the cooperative association.

6. The disbursements deposited into the reversion fund that are forfeited to the coopera- tive association shall be used as provided in this subsection. The cooperative association may authorize the payment of forfeited disbursements to persons claiming interests in for- feited disbursements as provided in the cooperative association's articles of incorporation or bylaws. Otherwise, forfeited disbursements shall be used as the directors deem suitable for any of the following purposes:

a. Teaching and promoting cooperation. The directors may deposit the amounts of dis- bursements into the education fund as provided in section 499.30.

b. Economic development including private or joint public and private investments in- volving the creation of economic opportunities for its members or the retention of existing sources of income that would otherwise be lost.

Sec. 4. Section 556.1, subsection 2, Code 2001, is amended to read as follows: 2. "Business association" means a corporation, cooperative association, joint stock com-

pany, business trust, investment company, partnership, limited liability company, trust company, mutual fund, or other business entity consisting of one or more persons, whether or not for profit.

Sec. 5, Section 556.1, Code 2001, is amended by adding the following new subsection: NEW SUBSECTION. 2A. "Cooperative association" means an entity which is structured

and operated on a cooperative basis, including an association of persons organized under chapter 497,498, or 499; an entity composed of entities organized under those chapters; a cooperative corporation organized under chapter 501; a cooperative association organized under chapter 490; or any other entity recognized pursuant to 26 U.S.C. § 1381 (a) which meets the definitional requirements of an association as provided in 12 U.S.C. § 1141 (j) (a) or 7 U.S.C. § 291.

Sec. 6. Section 556.5, subsection 4, Code 2001, is amended to read as follows: 4. At the time an interest is deemed abandoned under this section, the following shall

illID.OC ~ Except as provided in paragraph "b", any dividend, distribution, or other sum then held

for or owing to the owner as a result of the interest, and not previously deemed abandoned, is deemed abandoned.

b. A disbursement held by a cooperative association shall not be deemed abandoned under this chapter if the disbursement is retained by a cooperative association organized under chapter 490 as provided in section 490.629 or by a cooperative association organized under chapter 499 as provided in section 499.30A.

Approved May 16,2001