Relating to multiple housing cooperatives, including by providing for the conversion to a cooperative under the Iowa cooperative associations Act and merger with a limited liability company

BACKGROUND.102(24)).501). Under general principles of agricultural cooperative law, shares of common stock (memberships) must be held by patrons, and specifically persons who meet certain requirements: (1) producing a product marketed by the association, (2) customarily consuming or using the supplies or commodities that the association handles, or (3) using the services that the association renders. Savings (margins) generated from these arrangements (patronage) are refunded to members or used to provide capital for the cooperative’s operations. Thus, an important restriction is based on a principle of member participation, control, and benefits which also restricts outside investment.810). The ICAA provides for traditional cooperatives which are agricultural cooperatives organized under Code chapters 497, 498, 499, and 501. A domestic cooperative includes a 501A cooperative as well as a traditional cooperative.1101).1015).1005) which includes the adoption of a plan of merger. BILL’S PROVISIONS. The bill provides for a nonagricultural cooperative organized for purposes of owning multiple housing residential properties under Code chapter 499A (499A cooperative). The bill provides that a 499A cooperative is defined as both a traditional and domestic cooperative under the ICAA and as a domestic cooperative under the RULPA. However, the bill does not amend a number of corresponding provisions in the ICAA relating to domestic business entities, foreign cooperatives, securities and liens held in connection with a conversion, and a 501A’s organizational purposes.