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Bill Analysis

Legislative Service Commission


Am. H.B. 288
125th General Assembly
(As Passed by the General Assembly)

TABLE OF CONTENTS
Expansion of applicability of statutes to foreign associations. 2
Indemnification of person acting on behalf of an association. 3
Insurance procurements. 5
Principal place of business. 5 Clarification that associations are corporations. 6
Documents governing associations. 6 Authority of association. 7
Board of directors. 8
Vice chairpersons. 8
Meetings. 8
Winding up of voluntarily dissolved association's affairs. 8
Names. 9
Definition of "producer" 9
Municipal power agencies. 9
Technical changes. 9


ACT SUMMARY
The act makes various changes in the law governing cooperatives, which generally may be described as nonprofit corporations that often are organized so that their members, who control the cooperatives, may benefit from economies of scale by banding together. The changes are summarized below.
Please note that the term "association" is used to refer to a cooperative organized under Ohio law, "foreign association" refers to a cooperative organized under the laws of another state, the District of Columbia, or the United States, and "cooperative," unless otherwise indicated, refers to both cooperatives organized under Ohio law and cooperatives organized under those other laws (sec. 1729.01(C), (F), and (H)).
Expansion of applicability of statutes to foreign associations
(secs. 1729.01(G), (H), (I), (L), (M), and (O), 1729.18, 1729.35, 1729.36(C)(3), 1729.69(A)(1), and 1729.85)

Indemnification of person acting on behalf of an association
(secs. 1729.01(N), 1729.031(A) to (G), and 1729.23(D)) Insurance procurements
(sec. 1729.031(H)) Principal place of business
Authorization of out-of-state principal place of business
(secs. 1729.07(A)(3), 1729.47, 1729.55(F)(3), 1729.58(H), 1729.59(B), and 1729.61(A) and (D)) Elimination of term "principal office"
(secs. 1729.55(F)(3), 1729.56, 1729.58(H), 1729.59(A), and 1729.61(A) and (D)) Clarification that associations are corporations
(secs. 1729.01(C), (G), and (H), 1729.02(B), 1729.04(B), 1729.06, 1729.11, 1729.36, 1729.38(C), and 1729.42) Documents governing associations
Restatement of articles of incorporation
(sec. 1729.08(C)) Bylaws
(sec. 1729.16) Certificate of merger or consolidation
(sec. 1729.38(A)) Certificate of dissolution
(sec. 1729.56) Authority of association
(secs. 1729.01(N) and 1729.03) Board of directors
(secs. 1729.22 and 1729.28) Vice chairpersons
(sec. 1729.26) Meetings
(secs. 1729.07(A)(6), 1729.16(A), and 1729.19(A)(1) and (C)) Winding up of voluntarily dissolved association's affairs
(sec. 1729.58(D) and (E)) Names
(sec. 1729.04) Definition of "producer"
(sec. 1729.01(R)) Municipal power agencies
(secs. 1729.02(C) and 3734.058 (not in the act)) Technical changes
(secs. 1729.46 and 1729.49 and various other sections) HISTORY

ACTIONDATEJOURNAL ENTRY
    Introduced
09-25-03p. 1087
    Reported, H. Agriculture & Natural Resources

12-10-03

p. 1275
    Passed House (97-0)
01-06-04pp. 1348-1349
    Reported, S. State & Local Gov't & Veterans Affairs

04-01-04

p. 1701
    Passed Senate (33-0)
04-20-04p. 1739




04-hb288-125.doc/kl




* The Legislative Service Commission had not received formal notification of the effective date at the time this analysis was prepared. Additionally, the analysis may not reflect action taken by the Governor.
[1] The capacities are (a) service as a director, officer, employee, agent, or volunteer of the association or (b) service at the request of the association as a trustee, director, officer, employee, member, manager, agent, or volunteer of another association, entity, partnership, joint venture, trust, or other enterprise.
[2] See Footnote 1 for those capacities.
[3] The continuing aspects of the test require a director to consider the association's purposes and permit a director also to consider (a) the interests of the association's employees, suppliers, creditors, and customers, (b) the state's and nation's economy, (c) community and societal matters, and (d) the association's long-term and short-term interests (sec. 1729.23(D)(1) to (4)).
[4] A director must perform duties in good faith, in a manner the director reasonably believes to be in or not opposed to the best interests of the association, and with the care that an ordinarily prudent person in a like position would use under similar circumstances (sec. 1729.23(A)).
[5] It is possible that the word "retain" should be "retainer."
[6] See Footnote 1 for those capacities.