1998 Coopmanual

The CooperaTive
an alTernaTive
agriCulTural Business sTruCTure
Maine resourCe guide
Maine deparTMenT of agriCulTure
Edited by
Jennifer Hill
October 1998
The Cooperative: An Alternative Agricultural Business Structure
2
PuBlished By
Market & Product develoPMent division
Maine dePartMent of agriculture, food and
rural resources
28 state House station
augusta, Maine 04333
207-287-3491 PHone
207-287-7548 fax
e-Mail: www.state.me.us/agriculture
sTaff
Howard Jones, director
JoHn Harker, Business develoPMent sPecialist
deanne HerMon, Market develoPMent sPecialist
dave averill, agricultural develoPMent agent
steve Belyea, agricultural engineer
karen BickerMan, suPPort staff
phoTograph
sue Hill, farMington, Maine
minimal revisions to layout
only in September, 2005
3
1. Foreword & Acknowledgements.................................................................................... 5
2. What to Consider When Starting a Co-op
1. wHy co-oP develoPMent in Maine?............................................................................... 6
2. is tHe co-oP structure rigHt for you?....................................................................... 7
3. wHat is an agricultural Marketing co-oP?................................................................ 19
3. Laying the Groundwork
1. wHat to consider wHen starting a co-oP..................................................................... 23
2. How to avoid tHe Pitfalls.............................................................................................. 25
3. Maine co-oP PersPectives................................................................................................ 26
4. Sources of Capital............................................................................................................... 33
5. Local, Regional and National Resources.......................................................................... 39
6. Maine Co-op Directory....................................................................................................... 43
7. Maine Law on Cooperatives.............................................................................................. 67
8. SpecifcAdvicefromtheFeds
1. usda How to start a co-oP.....................................................................................booklet
2. usda sources of inforMation.......................................................................................booklet
TaBle of ConTenTs
4
5
InterestincompilingaCo-opManualforthe
State of Maine intensifed in the summer of
1997, with a draft report on Maines current
traditional agricultural cooperatives and possi-
bilities for future, alternatively structured agri-
cultural cooperatives written by an intern from
the University of Maine, Scott G. Kenney. Scotts
preliminary list of Co-ops in the State of Maine
was the springboard for the directory of co-ops
found in this manual.
In addition, signifcant mention needs to be
made of a resource brought to my attention early
on in this project, How to Organize Agricul-
tural Marketing Cooperatives, a handbook
prepared in the late 1970s by Smith, Stein &
Bernotavicz for the Maine State Planning Offce.
This handbook provided such readable guidance
that portions of it were copied practically word-
for-word in this manual. While currently out of
print, the handbook in its entirity can be found at
the Maine State Library (P69.5: Ho678 c.3).
Bill Patrie, Executive Director of a rural electri-
cal cooperative from North Dakota and William
Jorgensen, a private food industry consultant
fromMassachusettscametoMainetospeak
on cooperatives in 1997. Their ideas about key
ingredients that make for a successful cooperative
development strategy for Maine are included in
thismanual.
aCknowledgeMenTs
Additionally, Dennis Johnson provided input
from his article that I found on the Internet.
I went to many sources for help in compiling the
list of cooperatives and would like to acknowl-
edge the USDA Rural Business Cooperative
Service, the Maine Bureau of Corporations,
Elections and Commissions, the Maine Blue
berry Commission of Maine, Larry Dansinger,
Fedco Seeds, Inc., Russ Libby, Deanne Herman,
Northeast Public Power Association, Maine
Credit Union League, and many other individu-
als who, after reviewing our list, provided the
nameof missingco-ops.
Togetherwithotherswhocametomeetings,
spoke with me over the telephone, volunteered
their opinions and judgements and otherwise
aided in this project, I mention here Ray Nowak,
Alan Daigle, Jane Livingston, and Jim Lieby.
Thanks also to Karen Bickerman for her sup-
port in getting arranging for printing and putting
togetherthemanuals.
Finally, I wish to thank John Harker who was
my point of contact at the Department of
Agriculture throughout the process of editing
this manual and who provided much needed
guidance on the project. Also, a special thanks
to Deanne Herman and Howard Jones of the
Maine Department of Agriculture for their help
with the fnal editing.
Jennifer Hill
under special services to the
Maine Department of Agriculture
Fall, 1998
6
why Co-op developMenT in Maine?
CooperativesinMainearemorenumerousandsuccessfulthanmanypeoplethink.
Mainefarmers,if willingandable,cantakeadvantageof thisstructure.
adaPted froM: working togetHer to Market Maine agriculture By scott g. kenney,
working togetHer to Market Maine agriculture By williaM Patrie and
new Breed of co-oPs keePs farMers and dollars Back on tHe farM By Jane Braxton little
1. New generation co-ops focus on creating
value-added products for niche markets.
Elimination of the middle man puts more
money in the growers pockets and, more
importantly, allows growers to communicate
directly with the people who purchase their
commodity.
2. The cost of constructing and operating a
facility for adding value to a product is often
not feasible for individuals.
3. A group of people can reach more markets
than individuals.
4. The more supplies you purchase to add
value to your products, the cheaper is their
cost.
In addition, members are usually able to take
advantage of more liberal lending policies:
1. Since a co-op reduces risk to the individual
member, fnancial institutions are more will-
ing to lend them money.
2. Jane Braxton Little: Buying shares in a
cooperative carries many of the risks of
planting seeds, but members of a coopera-
tive take the risk with others.
Finally, rural communities experience benefts
from co-ops. If the co-op involves starting a pro-
cessing plant, local ownership of the value-added
plants creates wealth for the community.
Cooperatives are businesses owned and con-
trolled by the people who use them. Co-ops are
far more successful than people realize. In fact,
one in every three people in the United States
belongs to a co-op, such as a food, rural utility,
credit union, housing or child care co-op.
Nearly 2,000,000 farmers in the United States
are members of more than 4,000 local co-ops.
Farmers co-ops account for 86% of this coun-
trys milk, 40% of all our grains and oilseeds,
41% of our cotton, 20% of our fruits and veg-
etables, and 13% of the livestock we produce.
Bill Patrie, former Economic Development
Director for the State of North Dakota, chal-
lenges Maine farmers to consider our economic
necessities. Recently, Maine farmers have expe-
rienced a marketplace where their share of food
prices have become insignifcant to the end price
of food. As the farmers share of the farm gate
shrinks, profts grow disproportionally for com-
modity handlers, food processors, wholesalers,
and retailers.
Grower-owned, vertically integrated co-ops ap-
pear to be one logical solution to solving some of
the problems Maine agriculture is experiencing.
The rewards of co-ops are enticing. Consider
some of the reasons co-ops put more revenue
into their members checkbooks:
7
a. sole proprieTorship
Although a Sole Proprietorship is not an associa-
tion since it involves only one person, it is the
form of business under which many small agri-
cultural producers operate. An understanding of
what it is and how it differs from other forms of
business associations will prove helpful in decid-
ing what form is best for you.
As the name suggests, a Sole Proprietorship is a
business which is solely owned by one individual
who is personally responsible and liable for every
aspect of the business operation. For example,
Mr. John Smith owns a small dairy farm. He has
100 head of milking cows, 300 acres of pasture
and $200,000 of farm equipment, a house, a
100-acre wood lot, and a camp on a nearby lake,
a new Chevrolet, and a power boat which he
keeps at the camp. If Mr. Smith runs his dairy
farm as a Sole Proprietorship, he has advantages
and drawbacks:
Some Advantages of a Sole Proprietorship
It is the most simple form of business and sim-
plicity and ease of management are its principle
advantages. Mr. Smith must, of course, still
maintain an effcient bookkeeping and account-
ing system, fll out federal tax forms and comply
with all state and federal regulations relating to
businesses. However, in a Sole Proprietorship
there is generally less paperwork and accounting
than in other business organizations.
Some Drawbacks
The disadvantages to Mr. Smith are that he
cannot separate his personal property (his home,
camp, power boat, etc.) from his business prop-
erty. He is personally liable for all his business
debts.
This means that the creditors of his business
may sue him personally and attach any property
belonging to him in order to satisfy any debts
incurred by his business. If Mr. Smiths dairy
farm were to go bankrupt, his creditors could get
everything he owns. In a corporation, as will be
discussed later, only the property of the corpora-
tion may be attached or sold to satisfy the debts
of thebusiness.Thismeansthatif thebusiness
fails, the owners personal property cannot be at-
tached by the creditors.
Another disadvantage is that a Sole Proprietor-
ship can only raise capital through personal loans
or personal savings.
B. parTnerships
A partnership is the carrying on of a business
by two or more people. There is no limit to the
numberof partnerswhocanformapartnership.
A partnership agreement generally sets out the
individual partners rights and responsibilities
regarding each other.
Therearetwoformsof partnerships--general
and limited.
1. General Partnership
In a general partnership, the business is owned
jointly and severally by each one of the partners.
This means that each partner is jointly liable and
individually liable for all the debts of the part-
nership.
Suppose John Smiths brother, Wayne, has a
dairy farm of equal size next to his brother. John
and Wayne decide to form a partnership to run
the farms. They reach an agreement regarding
how income will be apportioned and how profts
is The Co-op sTruCTure righT for you?
Beforestartinganybusiness,itisagoodideatoevaluatethevariousbusinessstructures.Thefollowingoutlinedescribes
severaltypesof businessstructuresandrelatesthemtothecooperativemodel.
adaPted froM: How to organize agricultural Marketing cooPeratives, By sMitH, stein and Bernotavicz
8
will be distributed. A separate bookkeeping and
accounting system is set up for the partnership. It
isimportanttorememberthatapartnershipisa
separate legal entity from any of the partners.
The Smith Brothers partnership (Smith Bros.)
will have its own federal identifcation number, it
will have to fle a partnership income tax return
and comply with all state and federal regulations
relatingtopartnerships.
Some Advantages of a Partnership
The main advantage of a partnership is that the
responsibility of running the business is shared.
The resources of the individual partners all
contribute to the business, and the organization
has the beneft of a team approach to business
rather than an individual approach. Smith Bros.
consists of a 200-head dairy farm, with 600 acres
of pasture, $400,000 worth of equipment and
two experienced dairy farmers to combine their
knowledge and experience in the operation of
thebusiness.
Some Drawbacks
The disadvantages are that the partners per-
sonal liability is still not separated from business
liability. Each partner is personally liable for the
debts of the partnership. This means that if the
SmithBrothersbusinessweretogobankrupt,
the creditors could attach the personal property
of both John and Wayne Smith. In addition,
eachpartnerisliablefortheactsof theother
partners if those acts relate to the carrying on of
the business. If Wayne, without consulting John,
purchases new milking equipment, John is liable
for that debt.
2. Limited Partnership
Suppose the Smiths have another brother, Elton.
Elton is a successful car dealer in Massachusetts
and wants to invest $50,000 in his brothers dairy
farm partnership. John and Wayne both want
the money, but realize that their brother, Elton,
knows nothing about dairy farming and do not
want him to be involved with the operation of
the business. If John, Wayne and Elton form a
limited Smith Brothers partnership, their needs
canbemet.
John and Wayne can be the general partners
who run the business and who are totally respon-
sible and liable for its operation. Elton can be
the limited partner, who, by law, has no say in
the operation and whose liability is limited to the
amount of money he invests.
If this business were to fail, John and Wayne, the
general partners, would still be personally liable
for all the outstanding debts and creditors could
reach their personal property. Elton, on the other
hand, would have no personal liability, but would
lose his $50,000 investment.
C. CapiTal sToCk CorporaTion
A Capital Stock Corporation is the most widely
used form of business association in America.
Thisisbecauseitprotectsitsownersfromper-
sonal liability and because the laws are extremely
fexible and allow a corporation to be structured
in many different ways to meet different needs.
Thebasicstructureof aCapitalStockCorpora-
tion is that each investor purchases certain shares
of stock. The money paid by the investors be-
comesthecapitalof thecorporation.Inreturn,
the investor (shareholder) receives an interest in
the corporation equal to his proportionate share
of allthestockof thecorporation.
The corporation is run by a board of directors
who are responsible for the management and
policy decisions. Day-to-day operations of the
corporation are run by a manager and staff.
Theseelementsareshownininthetableonthe
next page.
The simplest kind of stock corporation is one
owned by one person.
For example, John Smith could run his dairy
farm as a corporation instead of a Sole Propri-
etorship. To do this, he would fle the necessary
papers with the Secretary of State saying that
the starting assets of the corporation would be
100 owner head of cows, a barn, pasture and
9
farm equipment. In return for giving all those as-
sets to the corporation, John Smith would receive
all the shares of the corporation and would be
the sole owner (shareholder) in the John Smith
Corporation.
He would own 100% of the shares, could elect
himself to the Board of Directors and appoint
himself manager of the organization. The ad-
vantages of this form of organization over a Sole
Proprietorship is that he no longer has personal
liability.
If thecorporationwentbankrupt,JohnSmith
could lose his barn, his cows, his pasture, and his
farm equipment, but his personal property (his
home, camp, etc.) would be protected.
Suppose the two Smith Brothers, John and
Wayne, decided to form a corporation (SMITH
BROS., INC.) instead of a general partnership,
(SMITH BROS.). If each gives $100,000, they
could each receive 100 shares at $1,000. The
value given to a share when setting up a new cor-
poration is entirely up to the person or persons
incorporating. The only guideline is the value of
the total amount of shares should equal the value
of theassetsof thecorporation.
John and Wayne would, therefore, each own
50% of the corporation as joint stockholders.
CapiTal sToCk CorporaTion
who? does whaT?
Stockholders 1. Purchase Shares
2. Vote (in proportion to shares) to elect Board
3. Receive dividends (in proportion to shares)
4. Other powers are per bylaws
Board of Directors 1.Voteto
set policy
make management decisions
hirestaff
other powers as per bylaws
Manager/Staff 1. Run the organization
They would have an equal number of votes and
would probably appoint themselves as the Board
of Directors and managers of the corporation.
At the end of the year, when the corporation
makes a proft, the Board of Directors decides
how much of that proft will be kept in the
corporation and used as operating capital and
how much will be paid out to shareholders in the
form of dividends. The advantage of SMITH
BROS., INC. over a general partnership is again
the issue of personal liability. The personal prop-
erty of the two brothers is protected from any
potentialfailureof thebusiness.
Suppose the three Smith Brothers, John, Wayne
and Elton, decide to form a Capital Stock Cor-
poration (SMITH BROS., INC.) instead of a
limited partnership. A description of how this
might operate follows:
exaMple #1
CAPITAL STOCK CORPORATION
SMITH BROS., INC.
A. Stockholders
John Smith contributes $100,000 in assets to the
corporation; Wayne Smith contributes $100,000
in assets; Elton Smith contributes $50,000 in
cash. They are shareholders in the business. John
10
and Wayne own 1,000 shares each at $100 per
share. Elton owns 500 shares. Under this ar-
rangement, John owns 40% of the corporation,
Wayne owns 40% of the corporation, and Elton
owns 20%.
B. Board of Directors
The three brothers, John, Wayne, and Elton,
form the Board of Directors. They meet twice a
year.
C. Manager/Staff
John and Wayne are joint managers of the or-
ganization, each responsible for the day-to-day
operationsof hisownfarm.
D.Distributionof Proft
In 1979, the corporation makes a gross proft
of $120,000. After corporate taxes are paid,
this is reduced to $80,000. The Board of Direc-
tors meets and decides to retain $20,000 in the
business and to pay out the remaining $60,000
in dividends. Since there are 2,500 outstand-
ing shares, the $60,000 must be divided equally,
resulting in a dividend of $24 per share. There-
fore, John and Wayne would each receive
$24,000, and Elton would receive $12,000. This
is summarized in the table on page 12.
Note that all three brothers must now pay in-
come tax on their return. However, as the exam-
ple illustrates Elton received an equal return in
proportion to his investment, despite the fact that
he has not worked in the business.
This is an extremely simplifed description of
how a corporation works fnancially. There are
many variations to this general theme. In the
example, only one kind of stock (common) was
used, but it is possible to structure a corporation
using several kinds of stock. Stock may differ
according to voting rights, cost, how much it can
be redeemed (cashed in) for, the priority in which
it can be redeemed, and the priority to which
dividends are paid.
Some Advantages of Corporations
A Capital Stock Corporation provides several
fnancing options: it can borrow from banks,
sell stock, borrow from investors, issue deben-
tures (promissory notes payable with interest by
the corporation at the end of a certain number
of years). A corporation also provides fexible
growth possibilities and will exist forever, regard-
less of the death of the members or the share-
holders.
Some Drawbacks
The disadvantages of a corporation are that all
profts are taxable to the corporation according
to corporate rates, which are generally higher
than individual rates. The dividends which are
distributed to the shareholders are also taxable to
them when they are received. This results in pay-
ing taxes twice on the same money, or double
taxation.
Also, control in a Capital Stock Corporation is
generally in the hands of the person who has the
largest dollar investment. Large corporations will
also be subjected to state and federal registration
requirements for their securities (shares of stock).
d. non-profiT CorporaTion
A non-proft corporation is a corporation which
cannot distribute its profts or its assets to its
members or shareholders.
The structure of a non-proft corporation is simi-
lartothatof aCapitalStockCorporationin
that it is run by a Board of Directors elected by
its members (shareholders).
Non-proft corporations are generally set up for
charitable, educational, or scientifc purposes and
notforoperatingabusiness.
Some Advantages of the Non-Proft
The primary advantage is that the corporation
may qualify as a tax exempt organization. This
means that the organization does not have to
pay income tax on its profts and is exempt from
security registration and regulations.
11
shareholders invesTMenT
John $100,000 ---- 1,000 shares and votes
Wayne $100,000 ---- 1,000 shares and votes
Elton $ 50,000 ---- 500 shares and votes
Total Business Transacted : $300,000
Gross Proft : $120,000
Corporate Taxes : $ 40,000
Reinvestment : $ 20,000
Net Proft : $ 60,000
Dividends on Shares :
John $24,000} 24% return
Wayne $24,000} on
Elton $12,000} investment
Some Drawbacks
Although a non-proft corporation can compen-
sate its members for materials or services provid-
ed to it, it cannot pay dividends to its members
on any capital they invest in the association or
return to them in any manner any of the profts
it makes as an organization. If the organization
prospers, the members cannot beneft fnancially
fromthatgrowthsincetheassetsof thecor-
poration can never, by law, go to the beneft of
the members. A non-proft corporation is also
severely restricted by federal laws and regulations
as to the extent of its operation.
e. CooperaTives
Cooperatives are very similar to corporations
in their structure. In fact, generally speaking,
cooperatives are corporations. Cooperatives, like
corporations, are run by a Board of Directors
chosen by the membership of the cooperative.
Like corporations, the individual members of
the cooperative have no personal liability for the
debts of the cooperative.
The differences between a cooperative and a
Capital Stock Corporation are in the way it
operates and the way the profts are paid out. In-
stead of shareholders, a cooperative is composed
of members, with each member having only one
vote. The members usually pay an entrance fee,
and enter into a membership agreement and
sometimesamarketingagreementwiththecoop-
erative. At the end of the year, they receive their
share of the profts of the cooperative in the
form of patronage refunds. Patronage means the
amount of business done with the cooperative,
either time or volume of product transacted.
Inacorporation,theshareholder receives his/
her share of the profts in proportion to the
number of shares he has (stock dividends).In a
cooperative, the member receives her/his share
of the profts in proportion to the amount of
business s/he does with the cooperative (patron-
age refund).
In a corporation, each shareholder has as many
votes as s/he has shares of stock. In a coopera-
tive, each member has only one vote.
In addition to having members, cooperatives
may be set up as Capital Stock Cooperatives.
Thismeansthat,likeCapitalStockCorpora-
12
tions, they can issue shares of stock to both
members and nonmembers. However, dividends
on this capital stock are generally limited by law
toeightpercent.
In a Capital Stock Cooperative, when the net
proft is determined, at the end of the year, the
Board of Directors determines how much will
stay in the cooperative; how much will be paid
in dividends to the shareholders; and how much
will be paid to members in patronage refunds.
The elements of a Capital Stock Cooperative are
showninthetableonthefollowingpage.
Suppose the three Smith Brothers decided to as-
sociate with a dairy cooperative (Tacoma Dairy
Cooperative) rather than forming a partnership
orcorporation.Thefollowingillustrateshowthis
might work:
exaMple #2
TACOMA DAIRY COOPERATIVE
A. Members
There are four existing members in the coopera-
tive. John and Wayne each pay a membership fee
of $100 bringing the total membership to six.
B. Stockholders
One hundred seventy-fve shares of stock at $100
per share are already owned in the cooperative.
John and Wayne each purchase $5,000 worth (50
shares). Elton, as a nonmember, purchases 100
shares ($10,000 worth)
C. Board of Directors
The six working members of the cooperative
elect the Board of Directors.
CAPITAL STOCK COOPERATIVE
who? does whaT?
Members 1. Pay membership fee
2. Vote (1 vote per person) to elect Board
3. Do business with cooperative
4. Receive patronage refunds in proportion to
business done
Stockholders 1. Purchase shares
2. Receive dividends (limited to maximum of
8% return)
Board of Directors 1. Vote to
set policy
make management decisions
hirestaff
other powers as per bylaws
Manager/Staff 1. Run the organization
13
D.Distributionof Proft
In 1979, John sells $150,000 of milk to the co-
operative (his total output). Wayne sells $75,000
of milk to the cooperative (the rest of his
produce is sold through a separate agreement
to a local retailer). The other members bring
the total value of milk sold to the cooperative to
$600,000. The cooperative in turn sells milk to
retailers for $840,000. Of this, the gross proft
is $240,000. The Board of Directors decides
to retain $37,000 in the business, pay an eight
percent dividend on shares (the maximum allowed
by law), and to distribute the rest of the proft in
patronage refunds.
As shareholders, John and Wayne would each
receive 8% on their $5,000 investment, i.e. $400;
Elton would also receive 8% on his $10,000, i.e.
$800; not a very attractive return compared to the
potentialreturninaCapitalStockCorporation
indicated in the frst example.
Patronage refunds would be calculated as follows:
Total Patronage $600,000 = 100%
John Smith $150,000 = 25%
Wayne Smith $ 75,000 = 12.5%
Other Members $375,000 = 62.5%
This example is summarized in the chart below:
Stockholders:
Investment:
John $ 5,000 - 50 shares
Wayne $ 5,000 - 50 shares
Elton $10,000 - 100 shares
Others $17,500 - 175 shares
Members: 6 individuals
Total Sales of Milk by Co-op to Retailers: $840,000
Gross Proft : $240,000
Corporate Taxes : - none -
Reinvestment : $ 37,000
Net Proft : $203,000
Dividends on Shares:
John : $ 400}
Wayne : $ 400} 8% return
Elton : $ 800} on
Others : $1,400} investment
Total : $3,000}
Patronage Refund : (on remaining $200,000)
John 25% - $ 50,000
Wayne 12.5% - $ 25,000
Elton None - - none -
Others 62.5% - $125,000
14
In addition, John and Wayne as working mem-
bers would receive patronage refunds in propor-
tion to the value of milk they sold to the coop-
erative.
As the example illustrates, cooperatives favor
working members. In a corporation, investors re-
ceive compensation in proportion to the amount
of money invested. In a cooperative, the mem-
bers who do the most business with the coopera-
tive receive the best return.
There are many different kinds of cooperatives.
Some examples pertinent to agriculture are:
consuMer cooPerativeswhichpurchase
consumer goods at wholesale prices and sell
them to the members at cost plus expenses.
Maine has several food cooperatives (e.g.
the Belfast Co-op) which are examples of
consumer cooperatives.
suPPly and service cooPerativeswhich
provide supplies and service to various types
of business. For example, an agricultural
grain cooperative purchases agricultural
supplies for its farmer members and sells
them to the members for cost plus expenses.
Agway is an example of an agricultural
supplies cooperative.
Marketing cooPeratives,wherethemem-
bers sell their commodities to the coopera-
tive. The cooperative in turn will sell the
commodity, and after deducting expenses,
distribute the profts to its members. Maine
Potato Growers, Inc. is an example of a
marketing cooperative.
Although the various forms are distinguished
by the service they provide to their members,
their basic overall operation is the same. They
are all self-help business associations owned and
operated for the beneft of the people using the
services.
This is an important distinction which separates
the cooperative from the Capital Stock Corpora-
tion.
Some Advantages of Cooperatives
Cooperatives have been given several advantages
in the area of taxation which are not available
to regular Capital Stock Corporations. They are
the primary reason why a cooperative is a desir-
able form of business enterprise for producers of
agricultural products. Simply, the tax advantage
is that the cooperative itself is not taxed on the
proft it makes as a business, only the members
are taxed when they receive their patronage
refunds. This eliminates the problem of double
taxation which exists with Capital Stock Corpo-
rations.
Some Drawbacks
Co-ops require cooperation and, given the com-
plexities of human relationships, they can be dif-
fcult to manage. Decision making is not handed
down, but requires persuasion, communication
and, ultimately, agreement.
Another drawback is the reluctance of many
individuals to commit themselves to the terms of
membership and marketing agreements which
are part of joining a cooperative.
The differences between cooperatives and non-
cooperative forms of business associations are
summarized on the following pages. In addition
to these general advantages, there are specifc
reasons why farmers and other producers of ag-
ricultural products may wish to consider forming
a cooperative.
15
Differences Between cooperatives anD non-cooperative corporations
differenCes

Purpose
Organization
Control
CooperaTives
To maximize net and real income
of member users and provide goods
and/or services at cost to member
users.
To serve its members primarily.
Organized under state coopera-
tive law, some such as federal credit
unions, under federal charter also.
Organized around mutual interests
of itsmemberusers.
Organized and owned by member
users.
No public sale of common voting
stock, none listed on stock exchang-
es.
By member patrons.
Policies made by member users and
directors. Voting in local associations
usually on one-person-one-vote basis
or patronage basis. In federations,
locals vote either on number of
members represented or on volume
of business done with central orga-
nization.
Generally, no proxy voting. Seldom
that internal cliques can get control.
sTandard CorporaTion
To earn profts for investors, in-
crease value of shares, and pro-
vide employment for owners of
smallcorporations.
To service public generally.
Incorporated under state general
corporation law, no federal char-
ter.
Except for closely held corpora-
tions, anyone may own stock.
Organized and owned by inves-
tors.
Stock of large corporations sold
on stock exchanges or over the
counter.
By investors, the stockholders.
Policies determined by stockhold-
ers and directors. Voting on basis
of stock ownership according to
number of shares held.
Proxy voting permitted. Frequent-
ly control is exercised by inside
cliques.
16
differenCes

Sources
of Capital
Distribution of
Net Margins
Stock
Dividends
Operating Prac-
tices
CooperaTives
From member users primarily.
Fromnetearningsonsuccessful
operations with reinvestment of part
or all of savings.
Topatronsonapatronagebasisafter
modest dividends on stock have been
paid; reserves and, in some cases,
an educational fund and bonuses to
employees are set aside.
Limited to a nominal amount -- gen-
erally does not exceed 8 percent.
Use revolving capital plan of fnanc-
ing based on amount of business
transacted with patrons in addition
to conventional fnancing proce-
dures.
Usually pool sales receipts and pay
average prices by grade for products
received.
Business done primarily and in
many marketing associations using
marketing contracts exclusively --
withmembers.
Not only interested in operational
effciency, but in pricing effciency,
so that differential pricing by grades
may reveal to producers ultimate
consumer preferences, tastes, and
purchases.
Charge either competitive or break-
even pries in purchasing associa-
tions.
From investing public.
Fromsuccessfulbusinessopera-
tions with all or part of profts
reinvested.
To stockholders in proportion to
number of shares of stock held.
No limit -- depends on amount of
profts and distribution policy.
Use conventional methods of
fnancing -- sale of stock, issuance
of bonds, bank loans, and rein-
vestment of part or all of profts.
Usually purchase products on cash
basis.
Business done with public general-
ly and not restricted as to clientele
except in exceptional cases.
Primarily interested in operational
effciency, to cut costs -- less inter-
ested in pricing effciency.
Charge competitive prices or what
the traffc will bear.
17
differenCes

Initial
Transaction
Tax
Treatment
CooperaTives
Thepurchaseorsaleis,inasense,a
conditional transaction subject to a
refund or additional payment at the
end of the accounting period, if net
earnings or savings are needed.
Also subject to many different kinds
of taxes. However, cooperatives
organized under Chapter 185 do not
have to pay a state corporate income
tax, and if, about 10 restrictions are
met, can also be exempt from pay-
ing federal corporate income taxes.
Net earnings are taxable to farmer
recipients.
Rural electric cooperatives in Wis-
consin are taxed on gross income,
rather than on assessed property
value.
Thepurchaseorsaleiscomplete
transaction.
Subject to many kinds of taxes,
including state and federal corpo-
rate income taxes.
Privately owned electric utilities
are subject to property taxes on
realestate.
18
19
Agricultural Marketing Cooperatives differ from
other types of cooperatives in the requirements
listed below and the special treatment they re-
ceive under the various antitrust, tax, and securi-
ties laws. This section discusses:
A. The requirements of Agricultural
Marketing Cooperatives
B. Antitrust considerations
C. Tax considerations
D. Securities considerations
E. Financing available
F. Accounting considerations
G. Membership and marketing agree-
ment considerations.
An Agricultural Marketing Cooperative is au-
thorized by the Maine Agricultural Cooperative
Act. This law allows producers of agricultural
products to set up an association with or without
capitalstock,forthepurposesof engagingin
any cooperative activity in connection with:
1. Producing, selling, etc.
Producing, assembling, marketing, buying
or selling agricultural products, or harvest-
ing, preserving, drying, processing, manu-
facturing, blending, canning, packing, gin-
ning, grading, storing, warehousing, han-
dling, shipping or utilizing such products,
or manufacturing the by-products thereof;
2. equiPMent, feed, fertilizer, etc.
Manufacturing, buying for or supplying to
its members and other patrons, machinery
equipment, feed, fertilizer, fuel, seeds and
other agricultural and household supplies;
3. Business or educational services.
Performing or furnishing business or edu-
cational services, on a cooperative basis, for
or to its members and other patrons;
4. financing.
Financing any of the above enumerated
activities for its members.
a. whaT are The requireMenTs?
The primary requirements of an Agricultural
Marketing Cooperative relate to membership,
purpose of the organization and structure of the
organization.
1. Membership
According to the law, members of an Agricul-
tural Marketing Cooperative must be engaged in
agriculture as bona fde producers of agricultural
products: Floricultural, horticultural, viticultur-
al, forestry, nut, dairy, livestock, poultry, bee and
any farm products. (Section 1774). Producers
are defned simply as Independent agricultural
contractors. Independent agricultural contrac-
tors are defned as A person who grows under
contract as his primary activity or as part of a
general agricultural activity. As a general rule of
thumb, then, producers are those who:
a. have a fnancial investment in the land,
equipment, and facilities needed to raise the
products;
b. areincontrolof theoperation;i.e.,thework
can be done by hired hands;
c. are subject to the fnancial risks involved in
farming (market fuctuations, weather, etc.)
Only persons who take the risks and responsibili-
ties of growing crops or livestock are producers.
The owner of farm land who operates the farm
is a producer. An owner who rents out the land
is not a producer. A tenant farmer is a producer.
whaT is an agriCulTural MarkeTing Co-op?
InMaine,asinmanyotherstates,producersof agriculturalproductshavebeenauthorizedbythestatelegislatureto
formcooperativeassociationscalledAgriculturalMarketingCooperatives.
adaPted froM: How to organize agricultural Marketing cooPeratives, By sMitH, stein and Bernotavicz
20
Salaried farm managers and hired hands are
not producers.
The questions of who is a producer becomes
more complex as the product leaves its natural
state and begins the process by which it will ulti-
mately reach the consumer. Then the distinction
between producer and handler becomes impor-
tant.
John Smith, the dairy farmer, is obviously a
producer of an agricultural product. But, the
independent trucker who picks up the milk and
delivers it to the processing plant is not. A farmer
who grows corn on his farm is also a producer,
but the owner of the grain elevator where the
corn is sold or stored is not. Other examples of
handlers would be meat packers, brokers, pro-
cessors,wholesalers,etc.
The cooperative laws and their accompanying spe-
cial treatment status are meant only for the beneft
of those people involved in the actual produc-
tion phase, not the handling phase of agricul-
tural products. The special treatment reserved for
agricultural cooperatives is specifcally aimed at
benefting farmers and other true producers. The
laws were not intended to give this favorable treat-
ment to the middle people, the handlers, who are
primarily business entrepreneurs.
However, there are no laws to prevent an Ag-
ricultural Marketing Cooperative from itself
engaging in handling an agricultural product.
For example, the cooperative could have a receiv-
ing, storing, grading and marketing facility which
was owned or leased by the cooperative, and
staffed by the cooperative. The law prohibits hav-
ing as members of the cooperative (individuals
or corporations) who have nothing to do with the
production of agricultural products.
For example, the Tacoma Dairy Cooperative
could pick up and transport the milk, own the
milk processing facility, process the milk at its
own facility and market the milk at either a
wholesale or a retail level. However, the people
involved in this work do not qualify as produc-
ers of agricultural products and cannot be
members of this cooperative.
2. Purpose of the Organization
Under Maine law, an Agricultural Marketing
Cooperative must be, by defnition, an organiza-
tion for the mutual self-help of its members and
not an investment organization.
The primary purpose of the organization
is not to pay dividends on capital stock and
investment, but to render service and provide
means and facilities by or through which the
producers of agricultural products may mar-
ket their products and obtain farm supplies
and other services.
Congress and the legislature have given agricul-
tural cooperatives special treatment under the
laws. The lawmakers believed that farmers and
other producers of agricultural products were
economically at a disadvantage. They believed
that the large corporations involved with the
handling of food and other agricultural products
had an advantage because of their size and their
control over the marketplace.
The Agricultural Cooperative laws were passed
to equalize the bargaining power of farmers and
other producers with that of large corporations.
Under these laws, special tax benefts and other
special treatment are provided.
To qualify for this favored treatment, a coop-
erative must require a personal commitment,
not merely a monetary one, from its member-
ship. Patronage, not money, is the currency of
a cooperative. Agricultural Cooperatives are
unique because the benefts accrue to those who
work and produce and not just to those who have
invested money in the enterprise. Incentives are
built into the laws so that the more a cooperative
member uses the cooperative, the more benefts
are obtained. The corporate structure of the
cooperative must refect this distinction or the co-
operative will fail to qualify for special treatment.
3. Structure of the Organization
The structure of an agricultural cooperative is
similartothatof aregularbusinesscorporation
in that it is comprised of a group of members
who elect a Board of Directors responsible for
the management and policy decisions of the
21
organization. The Board chooses a general
manager or executive director who, alone or with
a staff, runs the day-to-day operations of the
organization.
Maine law does not requireaonemember,one
vote provision; however, in an Agricultural Co-
operative, even a Capital Stock Cooperative, the
members will generally have one vote. Maine law
does require that an eight percent limitation on
stock be included in the bylaws of an Agricultur-
al Marketing Cooperative. The law also includes
specifc requirements relating to the following:
1. Incorporators
2. Articles of Incorporation
3. Amendments
4. Meetings
5. Directors
6. Offcers
7. Members
8. Dividends
9. Net Income of Association
10. Termination of Membership
B. anTiTrusT ConsideraTions
Federal and state antitrust laws forbid the asso-
ciationof twoormorepersonsforthepurpose
of fxing prices, controlling markets or product
supplies,ormakingotheragreementswhichun-
necessarily restrict trade or restrain competition
in any way.
Agricultural Marketing Cooperatives are made
up of people who have agreed to accept one
price for their goods and to sell their product as
aunitratherthancompetingwithoneanother.
Therefore, they could be held to be in violation
of antitrust laws. Because both federal and state
legislative bodies have chosen to encourage the
formation of cooperatives, both federal and state
laws specifcally exempt agricultural coopera-
tives for certain purposes and declare that their
formation does not violate the antitrust laws.
However, once formed, a cooperative is subject
to the same requirements for legitimate market-
ing practices as any other business organization.
1. Exemptions for Agricultural Marketing
Cooperatives
Federal law provides two exemptions for agricul-
tural cooperatives. The frst is Section 6 of the
Clayton Act, which provides:
That the labor of a human is not a com-
modity, or articles of commerce. Noth-
ing contained in the antitrust laws shall be
construed to forbid the existence and opera-
tionof labor,agriculturalorhorticultural
associations, instituted for the purpose of
mutual help, and not having capital stock or
conducted for proft, or to forbid or restrain
individual members of such organizations
from lawfully carrying out the legitimate ob-
jectives thereof; nor shall such organization
or the members thereof, be held or construed
tobeillegalcombinationsorconspiraciesin
restraint of trade, under the antitrust laws.
Since this section only exempted those coopera-
tives that were nonproft and noncapital stock,
Congress passed the Capper-Volstead Act in
1922 which provided:
That persons engaged in the production of
agricultural products as farmers, planters, ranch
men, dairy men, nut or fruit growers may act
togetherinassociations,corporateorotherwise,
with or without capital stock, and collectively
processing , preparing for market, handling, and
marketing in interstate and foreign commerce,
such products of persons so engaged. Such as-
sociations may have marketing agencies in com-
mon; and such associations and their members
may take the necessary contracts and agreements
to effect such purposes. Provided, however, that
such associations are operated for the mutual
beneft of the members thereof, as such produc-
ers, and conformed to one or all of the following
requirements:
1. No member of the association is allowed
more than one vote because of the amount
of stock or membership capital he may own
therein,or
2. That the association does not pay dividends
on stock of membership capital in excess of
8% per annum.
22
3. That the association shall not deal in the
products of non-members to an amount
greater in value than goods that are han-
dled by it for members.
Maine State law exempts agricultural coopera-
tives (Section 1829 of the Agricultural Coopera-
tive Act) and specifcally provides:
No association complying with the terms
hereof shall be deemed to be a conspiracy, or
a combination and restraint of trade or any
legal monopoly; or be deemed to have been
formed for the purpose of lessening com-
petition or fxing prices arbitrarily, nor shall
the contracts between the association and its
members, or any agreements authorized in
this subchapter, be construed a an unlawful
restraint of trade or as part of a conspiracy
orcombinationtoaccomplishanimproper
or illegal purpose or act.
The courts have been very clear in saying that
the antitrust exemptions will not apply if the as-
sociationhasmemberswhoarenotproducers of
agricultural products. Although the cooperative
itself may engage in non-producing activities,
its membership cannot include people whose
only interest is in the handling and processing
stage of production.
2. What the Exemption Means
The federal and state exemptions from the anti-
trust laws apply only to the organization of any
agricultural cooperative. Once the association
is organized, it becomes subject to the antitrust
laws in the same way as any other business or-
ganization or individual. That means the orga-
nization cannot enter into any agreements with
nonmembers which fx prices, or engage in any
unfair business practices such as boycotts.
The courts have been very clear in saying that
the federal and state exemptions are not a privi-
lege to set up a monopoly position, or to suppress
competition among independent producers and
processors. The purpose of the exemption is
to permit farmers to compete on a more equi-
table basis with large corporations. There have
been cases where cooperatives have been found
to have been engaged in unfair trade practices
which were restricting competition and attempt-
ing to set up a monopoly. These kinds of prac-
tices were held to be in violation of the antitrust
laws:
where cooperative members coerced local
truckersintoagreeingnottotransportthe
milkof non-members;
where cooperative members organized con-
sumer boycotts of milk produced by non-
members;
where the cooperative owned the only milk
processing facility in the area and refused to
buy the milk from non-members.
These unfair practices are forbidden to all
business organizations, including cooperatives.
Prospective cooperators should understand that
they cannot take unfair advantage in the market-
place just because they are a cooperative.
The purpose of the antitrust exemptions is to
allow the formation of cooperatives, not drive
otherpeopleoutof themarketplace.
3. How Do You Make Sure that Your Coop-
erative Qualifes for the Exemption?
Toensurethatanagriculturalmarketingcoop-
erative will not be subject to antitrust litigation,
the association should be set up with the follow-
ing requirements in mind. It should be:
1. an association of agricultural producers
2. operated so as not to retain profts itself
3. for the mutual beneft of its members as
producers
4. not dealing in a greater dollar volume of
non-members products than the value of
products handled by it for members, and
either
5. conducted on a one-member, one-vote ba-
sis,
6. not paying dividends on capital in excess of
eight percent (8%) per year.
23
To succeed in any business venture, a solid basis
of support from potential members and a sound
economic justifcation for entering into that ven-
ture are needed. Generally, a committee system
is utilized to fnd out whether there is economic
need and suffcient interest. An Organizing
Committee made up of interested people is usu-
ally set up. This Organizing Committee is then
divided into various subcommittees, each hav-
ing responsibility for gathering the information
required to answer the following questions and
reporting back to the Organizing Committee.
Also critical is fnding the talent, early on, of an
experienced organizational agent to perform the
three necessary functions in the development of
a co-op:
a. Communicatebetweenpotentialmembers,
lawyers, accountants and others involved
withtheplanningprocess;
b. Bring together qualifed resource people
who have previously organized a co-op;
these may include consultants, fnance
people,etc.;
c. Act as a catalyst for the process, providing
guidance in timing for the various phases of
development.
To determine the level of interest, you will fnd
it helpful to hold a meeting with people knowl-
edgeable about cooperatives and other forms of
business organizations. The Maine State Depart-
ment of Agriculture, Cooperative Extension,
USDA-RD and the Cooperative Development
Institute have representatives, including coopera-
tive development specialists, who could attend
suchameeting.
The following points should be covered at the
general meeting:
Information on how cooperatives and other
formsof businessassociationsareorga-
nized;
Some advantages of group action;
Somelimitationsof anassociation.
If enough interest is generated at this meeting,
subcommittees should be appointed to gather
the information needed to decide whether or not
the venture is workable. The following questions
are the general questions which ought to be an-
swered before deciding to form an association.
a. is There inTeresT?
Share the vision. Develop a group of individu-
als with shared vision and ability to produce,
process and market the business. According to
William Patrie A shared vision is not an idea. It
is not even an important idea such as freedom.
It is rather a force in peoples hearts, a force
of impressive power. It may be inspired by an
idea, but once it goes further - if it is compelling
enough to acquire the support of more than one
person-thenitisnolongeranabstraction.Itis
palpable. People begin to see it as if it exists. Few,
if any, forces in human affairs are as powerful as
shared vision.
B. are eConoMiC CondiTions righT?
You need to fnd out if the business venture is
economically worthwhile enough to make join-
ing together as a co-op a viable option. Generally
economic conditions are favorable for creating
an association if:
whaT To Consider when sTarTing a Co-op
The frst questions which arise in deciding whether to form an association are economic and organizational. These issues
areextremelyimportantandoftentakemonthsof meetingsanddiscussionstoresolve.
adaPted froM: How to organize agricultural Marketing cooPeratives, By sMitH, stein and Bernotavicz,
working togetHer to Market Maine agriculture By scott g. kenney and working togetHer to Market Maine
agriculture By williaM Patrie
24
existing commercial facilities and services
are inadequate;
capital costs prevent individuals from going
intobusiness;
the cost of service is too high;
the prices being received by producers are
toolow;
there is a potential for increasing the indi-
viduals marketing capability.
C. is iT workaBle?
Several areas need to be examined carefully. The
frst is to get specifc economic data to help put
together a business plan. A cooperative develop-
ment specialist, fnancial advisor and/or inde-
pendent consultant can be helpful in suggesting
techniques for making this analysis.
An informal income/expense statement, market
projections and cash fow analysis will be needed
to determine economic feasibility. Also, at this
point the group needs to conduct a market and
production feasibility study. The market and
production research phase must be accomplished
early on to determine the economic viability of
the proposed business.
This step is typically performed by an indepen-
dent agency which is usually funded entirely
by outside grant money or personal savings of
participants.
d. will There Be suffiCienT voluMe?
The anticipated volume of production must be
large enough to support the overhead and oper-
ating costs of the new organization. To
ensure volume, it is recommended that members
sign a pre-organizational agreement. This agree-
ment should specify that the association will
be formed only if the stated number of persons
sign up as members. Add this data to the busi-
nessplan.
e. is There enough finanCing?
It is essential that the association have enough
money to cover anticipated costs and contingen-
cies. Members should be encouraged to provide
asmuchof astakeaspossible.Themoreof their
own money they invest, the more likely they are
to work hard to ensure the success of the opera-
tion.
In certain cases, however, sweat equity (hours
of work) can defray start-up and operating costs
and should be assessed when evaluating the
necessary membership commitment. Local lend-
ing institutions and private sources also should be
explored fully.
Another way to obtain fnancing is to conduct an
Equity Drive. Farmers, frst and foremost, must
have a substantial equity investment. However,
most projects will involve substantial investment
dollars and an equity drive may be necessary.
f. Can you geT good ManageMenT?
The day-to-day operations of the association will
most likely be run by a manager. It is imperative
to the success of your venture that you select the
right person for this position. Good managers
are hard to fnd, but essential to the success of a
business organization. A well-qualifed, well-paid,
full-time manager should be provided for in your
budgeting plans.
25
how To avoid The piTfalls
Dontbefooledintothinkingco-opsdontwork.Avoidthepitfallsandco-opscanbeverysuccessful.Adoptgoodbusi-
nesspracticesandthebusinessof theco-opwillsucceed.
adaPted froM: surfing tHe new-wave cooPeratives By dennis a. JoHnson, st. Paul Bank for cooPeratives
1. loCal leadership-Co-opsaresuccessfulif
theyre created from the ground up. This
requires local leadership with the vision,
spirit, time and commitment to develop the
idea, solicit the support and create the new
organization.
2. realisTiC goals and assuMpTions - Objec-
tives of the new organization must be achiev-
able.
3. honesT, open CoMMuniCaTions - All in-
volved stakeholders must have a clear under-
standing of what is expected and how it is to
be achieved.
4. realisTiC MarkeT-enTry sTraTegies -Mar-
keting the fnished product is a major chal-
lenge for all cooperatives. For a new player
entering an established market, the ability to
market the end product successfully is critical
tosuccess.
5. experienCed ConsulTanTs - Co-ops require
experienced outside resources for the due-
diligence process - attorneys, accountants,
lenders and knowledgeable industry experts
who can develop reasonable and appropriate
organizational structures and business and
fnancial plans.
6. CoMprehensive Business plan - A business
plan that addresses challenges and opportu-
nities is critical in demonstrating potential for
the project, determining required capital rais-
ing equity capital and securing needed debt
fnancing.
7. engineering and design - Many new
ventures are based on technology to process
raw commodities into value-added products.
Plant design and engineering are critical to
successful plant operation and to production
of quality products, if a plant is part of the
plan.
8. CapaBle ManageMenT-Managementmust
be capable of successfully implementing and
managing a sound, comprehensive business
plan.
9. suffiCienT MeMBer equiTy - Owners will
beneft most from success and must bear
the risk. Equity capital from members must
be suffcient to attract needed debt fnanc-
ing to support the entire business, especially
through start-up operations. Depending on
the risk analysis, a 40- to 50-percent mem-
ber equity position is often specifed for new
cooperatives.
10. CoMMiTMenT To pooling - New ventures
are generally structured so that members
are paid on a progressive basis as the crop is
received, processed, and -- most important of
all -- marketed.
26
A BOOKKEEPERS PERSPECTIVE
The bookkeeper of a Maine co-op in The process
of disbanding has agreed To Tell her sTory in The
inTeresTs of helping oThers who are sTarTing a co-
op avoid The piTfalls Their group encounTered.
Thisagriculturalco-opbeganoperatingin
rural Maine in 1986. The real problems began
in 1994, however, when the group decided to
engage the services of a New York broker and a
broker from Florida. Excited by the prospect of
selling their crops all along the eastern seaboard,
the group of farmers were too trusting. If you
hire a broker to sell your product, check them
out through the PACA (perishable commodities
act).
Be careful who you take in. Not everybody is a
good guy. Maine people tend to trust too soon.
A guy from Massachusetts joined the co-op and
didnt know that he had to burn the land ev-
ery year. We got a call from someone who had
purchased his blueberries under our label from a
roadside stand and found maggots in them. That
was quite a scene.
When you organize a co-op, organize the by-
laws into rules made for everybody, not just a
few. It only takes a couple of people to create
a problem and the greed of a few can put you
under real quick. People passing the buck, be-
ing greedy, making poor decisions because the
original by-laws were never followed, this is what
happened to us.
We had a president that took control of ev-
erything and would borrow from the credit line
without telling the membership why and just
what he borrowed. Then, he expected them to
signtheirnamesonthebankpaperwork.Theco-
op worked on a credit line that should have been
zero at the end of the season. That is when bills
needed to be paid and profts taken.
This wasnt how it happened with us, though.
In April, when everybody had their chests puffed
out, they would have a membership meeting and
start talking about the season. They would vote
then to take from .50 to .70 a pint, before the
product was ever sold. They took advance money
before the berries were sold. You cant do this
with produce; its just too iffy a product.
Our credit line was supposed to be for working
capital -- which was why many wanted to start
the co-op in the frst place -- but the members
should have paid it off at the end of the season.
It was always the next load will make up for it.
In our co-op, we had too many bosses. Every-
body and their wives would come to Board meet-
ings and cause nothing but discontent and ha-
tred. Everybody has an opinion, but if you dont
have the facts to back it up, youre just wasting
peoples time. Too many bosses, all with different
ideas and personalities -- it just doesnt work. You
need a structure of decision makers.
The personalities of members can create quite
the comedy and potential problems. An alcoholic
dentist would come to the meetings blasted and
be just horrible. Im 51 years old and have been
in a lot of businesses, but this was the most eye-
opening venture Ive ever been involved with.
The co-op worked in the very beginning. A
woman helped organize our co-op, but they end-
Maine Co-op perspeCTives
inTerviews By Jennifer hill, Maine deparTMenT of agriCulTure
Experienceisagoodteacher.
Listeningisagoodskill.
Co-opswillbesuccessfulif bothareused.
27
ed up fring her because she was a woman who
was telling them what to do. She knew this wasnt
any way to do business. She knew what she was
doing. I went back to her records and found how
they got into trouble. She told them early on to
consolidate their loans and make good on them.
They fred her because of it. They were not will-
ing to listen, and that helped do in the co-op.
A LOBSTER CO-OP MANAgERS
PERSPECTIVE
This successful co-op works hard on MaTTers of
personaliTies and business pracTices.
Our co-op is 50 years old. We issue common
stock to members, which has two purposes, vot-
ing rights and dividends based on pound per
product that you sell to the co-op. Members need
to work together, selling and supporting the co-
op. The by-laws were written in 1948, revised in
1973 and again this year.
The co-op is a wonderful mechanism theoreti-
cally, though its diffcult to make them work.
When I frst came to work here, I made a lot
of mistakes. I had no business experience. The
Board had every reason not to keep me on, but
they did. In the past few years, Ive helped the
co-op make lots of money. Making this co-op
workhastakenacommitmentthatfewpeople
would make, unless it was their own business.
Boards of Directors are critical to the success of
co-ops. Boards rarely understand that their role
is to set policy and oversee fnances. They too
often get into petty politics, getting involved in
thewrongissues.
Members of our Board are good fshermen, but
they dont necessarily understand business. These
guys can get mean and ugly. Ive been here 16
years and Ive found that you need a strong per-
sonality to withstand all this stuff.
The members and Board dont understand how
powerful they are in setting prices. They keep the
local entrepreneurs honest. A greedy few makes
for big problems in a co-op. We had to rewrite
It would have been a good thing if when they
were small, they would have stayed small, with
their quality product. A Maine-based business
has to be real small and youve got to have some-
body who has some degree of sense to run it.
the bylaws to protect the co-op from members
who want it all for themselves. The members
want creative people working here, people with
drive and energy.
The attitude of the Board is that theyre the
boss and Im the worker. In 1983, the frst year I
was here, I was trying to build a lobster car. Six
to eight guys were sitting around watching. When
I asked for some help, everyone left in a hurry.
You could hear those pick-up trucks moving out
of theparkinglot,allatonce.Youaskthemto
do something, well, its their business and you
think theyd help out.
A co-op is very political. Youre not just about
doing a job, but youve got to keep people happy.
You cant just start doing something without con-
sulting with your members.
Im learning to reach out more aggressively,
even though Im basically an outgoing person.
Generally you have a mental picture of fsher-
men,thinkingof themasmachomales.But
theyre not. Its bravado. This is a competitive
business. Sometimes catches arent good and
they dont know where their next meal is com-
ing from. A lot of them dont know anything but
fshing.
There never seems to be enough money, even
though this is a multi-million dollar business
-- the largest of its kind in town. Debt has been
a big problem for us. One time a guy from New
Jersey wanted to buy some lobsters and I kept
putting him off. He fnally assured me that he
would pay with a cashiers check, on delivery. I
sent down a driver, telling him to look for ca-
shiers check on the check. The guy had rigged
28
LEE EgERSTROM, PROfESSOR
AND jOuRNALIST fROM
ST. PAuL, MINNESOTA
discussing The cliMaTe in Maine for co-ops.
Robert Frost is often misunderstood when
his good fences make good neighbors poem
is quoted. The modern assumption is that the
fence line keeps people apart, making them good
neighbors. What is missing is the fact old New
England fences were made from stone rolled off
the felds. They would break down in the winter
and in the spring the neighboring farms would
walk together up the fence line, rebuilding the
fence.Thatwascooperation.Thatwaswhat
made good neighbors.
When a co-op fails because people stop being
cooperative and stop listening to their neigh-
bors, the co-op has a cultural problem. It isnt
an inherent problem of the cooperative business
structure.
Why are cooperatives successful in Minne-
sota (and other Upper Midwest states)? It is a
ground-up pooling of resources and talents. It
isnt a result of a domineering, top-down lead-
ershipinapatriarchalculture.Youngwomen
are becoming visible in the community-based,
New Generation Cooperatives that are springing
up throughout Minnesota and North Dakota.
These cooperatives do not appeal to every farm-
er or everyone in a community. But when you
have people investing in a new business venture
with their neighbors, you have strong, common
interests in making the cooperative a success.
Cooperatives were created initially as a defen-
sive business structure. Either markets were not
working, or they were not working for the beneft
a stamp for the check that said cashiers check
and the driver took it. The check bounced. You
take reasonable risks and still you lose some-
times. Another thing weve found is that when
someone gets behind in paying, we dont let it
grow. Sending the product along when past pay-
ments just trickle in is a big mistake. You have to
cut your losses.
A personal stand Ive had to take is to declare,
the cost of doing business. Over the years, vari-
ous people have come and gone who wanted me
to pay people under the table, foregoing workers
comp and the like. Im sure it is because thats the
way they handle their own business, but I want to
go home and sleep at night.
of individual producers/members. Business
schools and economists refer to this as correcting
market imperfections. New Generation Coopera-
tives, a seventh type of cooperative that has been
defned and made popular in the 1990s, is an
offensive business structure. In this instance, the
member invests like he/she would in an investor-
owned frm (IOF) with the intent of enhancing
revenue from value-added processing or securing
better services than possible by merely correcting
a faw in markets.
Some cooperatives do run out of steam, just like
frms with other ownership structures. The frst
generationownersof abusinesscreatethestruc-
ture for a good reason. By the third or fourth gen-
eration, the benefts of membership can get fuzzy.
Business schools have names for problems that set
in: horizon problem, portfolio problem, and free-
rider problems. But in the end, most problems
arise when benefts no longer are transparent to
allmembers.Communicationsareessentialas
members and co-op leaders continually question
their reason for being and memberships must be
kept informed about where the frm is going and
why.
Co-ops were designed at the same time as public
stock corporations. Both modern business struc-
tures trace their origins to 1844 in England, and
werecapitalisticresponsestothesameproblems
with the Industrial Revolution that prompted
Karl Marxs theories of communism. Far from
embracingtheconceptof socialism,co-opswere
formed to gain countervailing power in markets
for small businesses and individuals. This helped
them compete against powerful and dominant
forces in markets, and to spread risks of doing
business.
29
While Europe and Canada are far ahead of
the United States in cooperative development,
the Dutch and the Danes are probably the most
pragmatic about it. In the Netherlands, for
instance, academics (at Waugeningen Agricul-
tural University and Nijenrode University) argue
that the new community is the society that you
invest in. It usually has a fnancial investment. It
can be a purely emotional investment. In the
United States, a school district is a community
with both fnancial and emotional investments.
A cooperative business society can be another.
In a time with disappearing state and national
boundaries, internet business and friendship ties,
free trade, and rapid movement of people, the
Dutch view is probably correct. Financial obliga-
tions and responsibilities, coupled with a strong
emotional investment, make for a strong society
-- a society that cannot function with passive
investment.
In the Minneapolis-St. Paul area, the presence
of so many large food and agribusiness company
headquarters contributes to farmers and rural
residents working together in cooperatives. We
have several hundred such frms based in the
state. The top 25 such frms have annual world-
wide sales of more than $200 billion. With these
businesses in sight, even our largest farmers know
they are small players in the emerging world food
system. As a result, they may be more willing
to pool resources, share risks and unite in coop-
eratives than is true of farmers in some other
regions of the country.
Markets are working as the economists say they
should right now. Farm prices for most com-
modities have fallen, but that is a supply-demand
imbalance; it isnt a market failure that can be
blamed on monopolists. The market correcting
mechanism of a cooperative has changed. This
clouds the glass and makes the benefts of mem-
bershipnotastransparentaswastrueearlier.For
instance, members of a lobster cooperative that
has been in existence for 40 or more years may
losesiteof reasonsfortheco-op.If lobstersare
scarce, buyers will be at the docks bidding up the
price. Members, who would be called free-rid-
ers in business schools, are lured away from the
co-op and sell their catch directly to the buyers.
This is a problem with dairy in a number of Eu-
ropean countries. But if the lobster co-op decid-
ed it wanted to make value-added products from
its members catches, and build a plant to make
lobster stew, the members would once again see
the reasons for solidarity in the co-op structure.
Lee Egerstrom, Business Writer,
ST. PAUL PIONEER PRESS
Author, MakeNoSmallPlans:ACooperative
RevivalforRuralAmerica
LADDIE LuSHIN, VERMONT ATTOR-
NEY-AT-LAw, SPECIALIzINg IN CO-
OP fORMATIONS
discussing The need To prepare for precisely The
co-op you wanT To sTarT.
hinT: donT borrow soMeone elses by-laws!
Co-ops are the very opposite of investor-con-
trolled, proft-seeking entities. They are instead
owned and controlled by their member-patrons
and they operate to serve their mutual beneft,
with due concern for the communities in which
they function.
Organizing a cooperative requires legal assis-
tance often specialized legal assistance. Pre-
paring articles of incorporation is virtually never
asimplematterof gettinginformationfromthe
secretary of states offce and then flling in the
blanks on a pre-printed form. Co-op incorpora-
tion statutes often provide choices among tech-
nical alternatives or permit the co-op to adopt
structures or procedures that differ from the
generalrule,aswellaspresentingopportunities
to utilize special advantages, such as limiting the
liability of directors. If not properly claimed or
stated in the articles, the advantage is lost or the
co-op is forced to comply with default rules that
may not be appropriate or favorable.
The articles of incorporation, like the bylaws of
a co-op, also need to be technically sophisticated
in a broader sense. There are many areas of the
law that potentially affect co-ops adversely and
the same or other areas that provide advanta-
30
geous exceptions, exemptions and other favor-
able treatment. Typical of such areas are taxa-
tion, securities and unclaimed property laws. An
important function of organizing documents is to
skillfully avoid the problem areas and judiciously
take advantage of the opportunities that are
available. The degree of care and skill applied to
organizing documents can make the difference
between documents that beg for legal trouble
and ones that skilfully avoid or minimize such
problems.Bylaws present a special problem. In
addition to being technically sophisticated, they
need to be well organized, readable and easy to
use so that they can be utilized on a regular and
continuing basis as a guide to proper procedures.
Operating a business in a democratic manner
demands no less. Bylaws must conform to the
requirements of state incorporation law. If they
dont, decisions made and actions taken will be
considered void if challenged. Bylaws must, of
course, be complete; but for maximum fexibility
and ease of use they should avoid unnecessary
detail. Bylaws also need to meet the needs of
your particular co-op. If they are not relevant to
the history, demographics, operations and style
of governance of your co-op, they are useless for
any practical purpose.
In preparing organizing documents, the worst
thing to do is to have a committee do the actual
preparation of the documents. The result will
inevitably be a disaster. The second worst ap-
proach is to use model bylaws or borrow the
documents of another co-op. This avoids ex-
pense, but you generally get what you pay for.
Preparing organizing documents inevitably in-
volves a high level of skill and experience, as well
as creative draftsmanship to some extent, often
to a considerable extent. Your local lawyer is at a
disadvantage because sources of technical infor-
mation about small co-ops are very limited and
not generally available. The participation of your
local lawyer is nonetheless important because he
or she knows local laws and practices and under-
stands the history and needs of the co-op better
than any outside specialist.
Outside of legal assistance, one of the big-
gest problems for co-ops is obtaining necessary
capital. Preliminary start-up funds are important
for assessing the feasibility of the co-op, planning
for capital and income needs, doing organiza-
tional work, setting up democratic structures and
procedures, etc. Funds are then needed forneces-
sary equipment, facilities, inventory and work-
ing capital. And capital needs tend to increase
signifcantly as the co-op grows and develops.
Grants are hard to fnd, especially because co-
ops are not charitable organizations (except in
very unusual circumstances). Its often diffcult
foranewco-optoobtainbankloansbecause
adequate collateral is usually not available and
banks expect personal loan guarantees from
ownersinstart-upsituations.Banksarestill
somewhat unfamiliar and uncomfortable with
cooperative structures, and are generally unwill-
ing to make exceptions necessary to accommo-
date unusual forms of doing business. There is a
national co-op bank in Washington, D.C., but it
tends to focus on big projects.
Resolving these problems often leads to creative
meansof raisingcapitalfrommembers,suchas
member loan programs and soliciting discre-
tionary capital contributions from members. All
these approaches to raising capital funds, includ-
ing the design of general member equity require-
ments, require careful planning and expert legal
assistance to comply with or avoid federal and
statesecuritieslaws.
Devoting resources to the education of mem-
bers, and perhaps also the community, regarding
cooperative principles and practices is also of
considerable importance, particularly for worker
co-ops. Our society exposes us to very little be-
yond conventional business structures with rigid
hierarchiesthatoperateonthepresumptionthat
only providers of capital funds have the right to
exercise control of a business. Alternative ways
of doing business often require training and
some degree of inspiration as to the possibilities
of self-management by consumers, workers and
others.
31
MILTON ROSS, uSDA IN
PRESquE ISLE
The most important thing you need to start
a co-op is a critical mass of people. Whatever
youre trying to do, success depends on fnding
enough resources, fnancial and leadership, to get
started. Remember, co-ops are businesses and
75% of all small businesses fail within the frst 3
to 4 years of their inception. You need enough
resourcestogetthroughthecriticalbeginning
stages.
Supporting co-ops through their infancy makes
good sense for rural communities because co-
op development occurs in rural areas and their
money stays at home. Another advantage is that
no one is going to buy out a rural co-op, leaving
the community high and dry.
Determine what your needs are and how you
will, as a group, be able to address them.
People start co-ops to address a common prob-
lems that they cannot, as individuals, solve. In
Aroostook County, a group of businesses formed
a co-op for marketing their ventures.
Because they werent in direct competition with
one another, they shared key business informa-
tion. People just starting out got to learn the
ropes from people who had been in business for
awhile. Additionally, those who couldnt afford
expensive travel to trade shows sent their prod-
ucts along with more established businesses,
which opened new products to key market sec-
tors.
Where there is competition between co-op
members, you need a marketing agreement that
is legally enforceable. A non-compete clause
should be written into the by-laws at the outset
by the attorney setting up the legal structure.
Another important element of the successful co-
opisaprofessionalmanagerwhohasnobuilt-in
bias. An effective manager with solid professional
business background and management skills can
lead a group to success, if the manager is super-
vised by a board of directors that is experienced
in leadership.
When you vote for a Board of Directors, dont
make it a popularity contest. Often its best to cast
your vote for the old curmudgeon from down the
road who isnt afraid to speak his or her mind.
Backing up the manager and Board of Di-
rectors, you need an infrastructure that only
government can supply. Maine is in its infancy
with regard to this key element in the survival
of co-ops. We can look to North Dakota, where
farmers give a percentage of their off-the-road
gasoline tax refund, USDA Rural Development
donates money and a bank owned by the state
gives money to an Agricultural Product Utiliza-
tionCommission.
This commission helps farmers by funding
their good ideas, providing 50% of the cost of
re-searching and writing a feasibility study and
businessplan.Imagineif Mainebanks,farmers
and fnancial institutions like FAME got together
to provide such backing to good ideas here in
Maine! Consider the beneft to us all.
There are two handicaps people in Maine face
when starting a co-op and that is the lack of
lawyers and accountants experienced in co-op
law. While Maine law hasnt changed much with
regard to co-ops, a few years ago there was a
signifcant change to limited liability companies.
It used to be that if a co-op wanted to get start-
ed and didnt have the money, they might go to a
local potential investor and ask them for money.
If the individual, as a public service, gave them
money, they only got 6% interest and preferred
stock, but the donor couldnt vote if she or he
wasnt a farmer.
Now, in Maine, we have limited liability com-
panies, single tax entities with one member/one
vote. Now when you go to the local potential
investor, you can offer ownership, together with
payback at the prevailing interest rate. The vote
is proportional to the amount of money given.
32
jOE LALLANDE, MANAgER Of
MAINE POTATO gROwERS
In its 66th year, Maine Potato Growers co-op is
an established association with 500 active grower
members. To be a member, you must be a per-
son, partnership or corporation who is associated
with agriculture and you must own at least one
share of stock ($25).
Key to any successful organization is gover-
nance. The Board of Directors needs to under-
stand its role as the long-term visionaries for
creating objectives and policy. When new mem-
bers are elected to our Board, we have an orien-
tation program that helps them to understand
theirrole.
Hiring a professional manager is important.
One who understands how to run a business, and
who can stand up to the pressure of individual
interests. Management, in turn, must carry out
the objectives set by the Board. When Boards at-
SANDY CATON, VICE PRESIDENT
Of MADE IN AROOSTOOK
COOPERATIVE
Our co-op has been around since 1996. We
joined forces to try and help each other to adver-
tise and promote our various value-added prod-
ucts.
We meet every month, usually at someones
house. Weve all gotten along pretty well. Sharing
ideas is the best part of being part of the co-op.
What works for somebody else may work for you.
You may never have thought about doing it that
way.
I make Native Maine driftwood Santas, follow-
ing the natural shapes of driftwood. I get the
driftwood from northern Maine lakes. Since Ive
been a part of the co-op, Ive begun selling my
products wholesale.
Last year, one of our members went to a trade
show in Madison, Wisconsin. It cost $1,000 for a
space, so fve co-op members paid $200 each and
she took our products along. Working together gave
us the ability to test the market there, to see if it
would be a worthwhile venue for our products.
We are looking forward to having a presence
at next springs Northern New England Trade
Show. By pooling our resources, many of us who
wouldnt have been able to participate otherwise
willbeabletogo.
It costs $100 to join our co-op and $50 mem-
bership dues a year thereafter. We all volunteer
our time and that does create some problems.
Some members dont go to meetings, dont
participate at all, other than paying their dues.
Belonging to a co-op means giving of yourself
and your time to work with other members. Its a
give and take situation.
The couple who were the experienced force
behind the co-op are moving out of Aroostook
County, so we wont have their expertise any lon-
ger. We will probably be looking to USDAs Rural
Services for help. Im not really savvy. We need
more involvement. If people really want it, it will
happen. We will be putting out a press release,
saying that we are opening up to new members.
It is easy to get isolated in this rural part of the
state. Time will tell if the co-op will survive this
latest transition. It takes people to keep it going.
tempt to involve themselves in day-to-day opera-
tions, management must draw a line in the sand
and say, This is what youre paying me to do.
Co-ops have a mission that is different from for-
proft corporations. Our bottom line takes into
account the long-term interest of growers and of
our community as a whole.
Communications is our greatest challenge.
Whether its iterating to our membership the
benefts of being part of a co-op or extolling the
benefts to our community of doing business with
us, we could always do more. Getting a newslet-
ter together to do this is on my list of to-dos.
The co-op structure is not a panacea. Ad-
equately capitalized, well-managed, overseen by
a Board who doesnt try to micromanage their
management, but who demands performance,
co-ops can prove a successful model. Ive been
here for 1 1/2 years and Im quite happy.
33
The problems of fnancing a new agricultural
co-op are similar to those of any new business
venture. The primary difference is that the fed-
eral government has developed several programs
aimed specifcally at assisting agricultural pro-
ducers in obtaining fnancing.
Both public and private lending institutions agree
that for a cooperative to succeed, the individual
members must have a substantial stake in the
venture. They feel that if the individual members
do not have a fnancial commitment to the coop-
erative, the cooperative will not succeed.
The success of a cooperative depends on how
much its members use it. Financial organizations
believe that unless the members have a fnancial
investment in the venture, they will use the orga-
nization only when it suits them. If the market
fuctuates and a better deal is available elsewhere,
they will take the better deal. If members have
a fnancial commitment to the cooperative as an
organization, they will stick with it through the
hard times, especially in the beginning.
Before making a decision to form an association,
and after carefully studying the feasibility to form
an association, you should contact several poten-
tial sources of fnancing and get specifc informa-
tion on what monies are available, what terms
and rates are presently available, whether a direct
loan or guarantee is available, what the eligibility
criteria of the respective agencies are, etc. This
information will help you in deciding how to set
up your association. Following are several poten-
tial sources of fnancing.
1. puBliC sourCes, naTional
National Consumer Cooperative Bank
This bank is the newest federal program for f-
nancing cooperatives. At the present time, ninety
percent (90%) of its funds have been earmarked
for consumer cooperatives, and only ten percent
(10%) for other types. This ten percent, however,
is a substantial amount and this bank should
be considered a potential source for funding.
Indeed, the percentage allocated for producer
cooperatives may be increased if it appears that
there is a signifcantly large demand.
USDA Department of Agriculture Rural
Development Business and Industry Loan
Guarantees
This loan guarantee bolsters your credit by guar-
anteeing your loan. Eligible lenders include:
Farm Credit Bank/Farm Credit Sys-
tem direct lender
Mortgage company (part of a bank-
holding company)
Credit unions (subject to NCUA or
state supervision)
Insurancecompaniesthatareregu-
lated by a national insurance regula-
tory agency or state
National Rural Utilities Cooperative
FinanceCorporation
Any federal- or state-chartered bank
Bank for Cooperatives
Savings and Loan Association
Guarantee limits are generally 80% for loans
up to $5,000,000 and 70% for loans between
$5,000,001 and $10,000,000.
These loan guarantees are for any business pur-
pose, except the following:
Payment to owner who will retain an
interest
Transfer of employment areas
Charitable,religiousorfraternal
organizations
Lending, investment or insurance
institutions
Government or military personnel
owning 20% or more
Loans made by other federal agencies
sourCes of CapiTal
inforMation coMPiled By Jennifer Hill and JoHn Harker of tHe Maine dePartMent of agriclutlre
34
Businesses deriving more than 10%
gross revenues from gambling
Residential housing, except with
healthcare or assisted living
Tax-exempt obligations
Golf courses or racetracks
Overproduction
Illegal activities
Guarantee of lease payments
Line of credit
Rates and terms of your loan will be negotiated
between you and your lender. USDA accepts
fxed and/or variable loans, but will not approve
balloon installments. The rate on the guaranteed
portion of your loan cannot exceed that on the
unguaranteed.
Terms are for useful life of the collataral or:
Real estate max. 30 years
Machinery & equipment max. 15 years
Working capital max. 7 years
Your lender will be responsible for determining
credit quality, but USDA will analyze their deter-
mination. USDA will be looking for:
sound cash fow, which includes a
reasonably assured repayment
suffcient collateral to protect the
interest of both the lender and the
government
the current status and outlook of
your industry
suffcient investment in equity by
owners to provide creditors with rea-
sonableprotection
adequately trained and experienced
management.
Annual statements prepared by an accountant
will be required. Audited statements may be re-
quired for loan balances exceeding $3 million.
Formoreinformationaboutthisloanguaranteeprogram,
contact:
United States Department of Agriculture
Rural Development
444 Stillwater Avenue, Suite 2, P.O. Box 405
Bangor, Maine 04402-0405
207-990-9168 phone
e-mail: adaigle@rurdev.usda.gov
USDA Farm Services Center
The USDA has a number of programs to assist
development of rural businesses or cooperatives.
In general, the applicant must demonstrate that
they have the following:
1. A history of meeting credit obligations.
2. Suffcient education, training or experience
inmanagingoroperatingafarmorranch
(within 1 of the last 5 years)
3. Industry and ability needed to succeed in
farming.
4. United States citizenship (or legal resident
alien status)
5. The inability to obtain suffcient credit else
where at reasonable rates and terms to
fnance actual needs
6. Ownership, or operations of a family farm
as a tenant after the loan has closed.
Farm Services agency personnel and the appli-
cant determine the amount of farm operating
credit that is needed for the operation. The limit
on farm operating loans made directly by FmHA
is $200,000. The agency can guarantee loans of
up to $400,000 for operating purposes.
Economic Development Administration
(EDA)
Both direct loans and loan guarantees are avail-
able from the EDA. The EDA has a history of
making some loans to agricultural cooperatives.
The EDAs primary concern is with projects which
will produce jobs and serve to enhance the overall
economic development of an area. Areas of the
state which have been classifed as economically
distressed qualify for low interest loans.
Furtherinformationcanbeobtainedbycontactingthe
EDArepresentativeinAugusta.
USDA Alternative Agricultural
Research and Commercialization
(AARC) Corporation
35
The AARC Corporation is a venture capital frm
that makes investments in companies to help
commercialize biobased industrial products (non-
food, non-feed) from agricultural and forestry
materials and animal by-products. Because these
bio-based products are made from agricultural
materials, they are, by their very nature, envi-
ronmentally friendly. In many instances, these
products replace petroleum, or make use of an
agriculturalwastematerial.
Their average initial investment in a company is
$300,000. This is not a grants program! Appli-
cants are expected to bring at least a 1:1 match
when seeking funding from the program.
While any private individual or company may
apply for assistance through the AARC Corpo-
rationprogratm,mostsuccessfulrecipientsare
small, rural-based frms.
Applications may be submitted at any time. If
youre successful, you are likely to receive funds
approximately 4 to 6 months after your submis-
sion.
Submit fve unbound copies of your pre-proposal
frst (the AARC Corporation provides forms
for both the pre-proposal and the full proposal
-- contact them at the numbers below). Dont
send a cover letter with either proposal, nor any
samples, videos, etc. You can send these later, if
requested.
The committee reviewing your pre-proposal
will determine if you are asked to submit a full
proposal. If considered, your full proposal will
be reviewed by three outside reviewers and the
AARC Corporation staff.
At this point in the process, the committee who
reviewed your pre-proposal takes a look at your
full proposal and decides whether or not to pay
you a visit. If they decide to come visit, and
the visit is successful, your application will be
re-ferred to the AARC Corporations Board of
Directors for fnal approval.
Tips for completing your pre-proposal and full
proposal are included with the booklet contain-
ing the forms. Read them carefully and have
your dynamite business plan prepared and ready
to include.
FormoreinformationaboutAARCCorporationfunding,
contact:
The Alternative Agricultural Research and
Commercialization Corporation
0156 South Building
1400 Independence Avenue, S.W.
Washington, DC 20250-0401
202-690-1644 or 202-690-1633 phone
202-690-1655 fax; e-mail: www.usda.gov/aarc.
2. puBliC sourCes, sTaTe
The Agricultural Marketing Loan Fund
(AMLF)
The Agricultural Marketing Loan Fund (AMLF)
provides a lower cost source of fnancing to as-
sist Maine-based agriculture. The AMLF has a
special provision for Maine co-ops, too, so take
notice!
Financing from the AMLF may be used for new
or existing facilities, improvements to land, build-
ings, vessels, as well as to purchase or retroft
machinery and equipment that help improve the
quality and marketability of Maine-made products.
It is not for working capital, refnancing or non-
project related expenses. This is for permanent,
take-out fnancing after the construction phase
of the project is completed.
Financing from this fund may be used for up to
55% of the costs of an eligible project. The loan
applicant must secure remaining project funding
from other sources. A minimum equity contribu-
tion of 10% of total project costs is required.
Thats where the co-ops become the exception. For
agricultural co-ops, only 5% of the total project
cost is required! What a deal!
The Agricultural Marketing Loan Fund consists of
three programs tailored to achieve specifc goals:
The Loan Fund
The maximum loan available under the Agricul-
tural Marketing Loan Fund is $250,000.
36
Loans are made at an interest rate of Prime less
2%. The actual rate is fxed at the time of the
loan commitment. However, your interest rate
will never exceed 8% or be lower than 5%.
fees & Other Expenses: A 1% origination
fee will be charged on Agricultural Marketing
Fund loans of $50,000 or more. The Borrower
is responsible for all loan closing costs, including
legal expenses.
Repayment Terms: Loan repayment terms
will vary to refect the useful life of the assets be-
ing fnanced.
Loan fund Sample Project Cost
$120,000 New state-of-the-art apple
storage facility
$ 5,000 Machinery & equipment
$125,000 Total project cost
$ 56,250 Funds from AMLF (45%)
$ 56,250 Funds from lender (45%)
$ 12,500 Owner equity (10%)*
$125,000 Total funding sources
Origination fee of 1% for AMLF loan of
$56,250 x 1% = $562.50
Technical Assistance Grants
Technical Assistance Grants of up to $5,000 are
available for adopting a new or innovative tech-
nology designed to support the manufacturing,
marketing, or production of Maine-made prod-
ucts. The project must be an agricultural, aqua-
culture, or natural resource-based enterprise.
Technical Assistance Grants of up to $5,000
are available for organizations and associations
whose primary purpose is the promotion of
Maine-based agricultural, aquaculture, and natu-
ral resource-based enterprises.
Typically, these Technical Assistance Grants are
made in conjunction with a loan application
where further assistance is needed to evaluate
and adopt a new technology, or to modify the
technology to better suit conditions related to
the manufacturing, marketing, or production of
products in Maine.
Research Grants
Research Grants are available for funding pro-
duction and market research related to the
development of new and innovative technology
and the establishment of new markets to beneft
agricultural, aquaculture, and natural resource-
based businesses in Maine.
Entities eligible to receive Research Grants
include the Technology Transfer and Special
Research Projects Program and the Market Re-
search and Development Program of the Divi-
sion of Market and Production Development.
Application Procedures
Step I: Contact the Maine Department of Ag-
riculture or Mark Butterfeld at FAME to deter-
mine if your project is eligible or to request a
loanapplicationpackage.
Step II: Complete the application, including all
necessary fnancial information and schedules as
outlined in the loan application package. For-
ward your application to the Maine Department
of Agriculture. Once it has been determined that
your project is eligible, the Maine Department of
Agriculture will forward copies of the complete
loan application package to the Finance Au-
thority of Maine for fnancial review and credit
analysis.
Step III: The Finance Authority of Maine will
review your loan applications for completeness
and credit underwriting.
Step IV: An eight-person committee will review
your loan request and make a credit recommen-
dation to the Commissioner of the Maine De-
partment of Agriculture for fnal action.
Formoreinformation
Contact Program Specialist with the Maine
Department of Agriculture at 28 State
House Station, Augusta, Maine 04333. Tele-
phone: 207-287-7620 or 207-287-3491. His
fax is 207-287-5576; e-mail him at amlf@state.
me.us. Web Site: www.state.me.us/agriculture.
Or, contact Agricultural Marketing Loan
fund Program Specialist at the finance
Authority of Maine, 83 Western Avenue, P.O.
37
Box 949, Augusta, Maine 04332-0949. His
phone number is 207-623-3263; his fax, 207-
623-0095; tty, 207-626-271; e-mail, info@fame-
maine.com and his web site, www.famemaine.
com.
Finance Authority of Maine (FAME)
The Finance Authority of Maine has a program
of interest to prospective cooperators. This is a
state loan guarantee program for eligible proj-
ects defned at Title 10 of the Maine Revised
Statues at Section 703 (3).
The loan guarantees are for money borrowed to
purchase land and/or buildings in connection
with an economic development project. An agri-
cultural cooperative could, in certain situations,
qualify as an economic development project,
provided it met the requirements of the law.
These requirements are:
1. The purpose of the project being fnanced
is to enlarge opportunities for jobs and
stimulate private investment and expand
agricultural and other industrial enterprises.
2. The project involves the construction or de-
velopment of buildings and/or lands which
will be used for processing or manufactur-
ing of raw products for the marketplace.
This is a bricks and mortar program and
would not be available when the need is for op-
erating capital. Note also that since it is a loan
guarantee program, you would have to acquire
theactualloanfromanothersource.
3. oTher sourCes
Farm Credit of Maine
Farm Credit of Maine is a lending cooperative
specializing in meeting the fnancial needs of
people in the farming, fshing and forest products
industries. Affliated with strong national and
regional Farm Credit organizations, they are able
to provide credit and related services to meet the
needs of small and large businesses. Customers
of Farm Credit have available to them a variety
of services and benefts that come with being a
member of a cooperative organization.
Services:
Flexible Lines of Credit with terms
tailored to meet customers needs
Equipment Leasing Program
Appraisal Services
Credit Life and Crop Insurance
Benefts:
Lending professionals who thor-
oughly understand the industries they
serve
Staff and directors are actively in-
volved in industry organizations
Patronage dividends. During the past
two years, Farm Credit has refunded
more than $1 million to their mem-
bers
Local loan offcers work with custom-
ersattheirplaceof business
Loans are never turned over to an
out-of-state customer service repre-
sentative
Farm Credit is more than a bank. Farm Credit
is committed to long-term relationships: working
withcustomersface-to-face;peopletalkingwith
people.
Formoreinformation,contact:
Farm Credit of Maine
615 Minot Avenue
Auburn, Maine 04210
207-784-0193 or 800-831-4230 (in state)
207-784-0195 fax
Community Development Corporations
(CDC)
Community Development Corporations are
also a viable option for new cooperatives. Most
have money specifcally committed for assisting
economicenterpriseswiththeirstart-upcosts.In
addition, CDCs can provide new cooperatives
withawealthof technicalassistance.
Private Foundations
Foundations are another source of private funds
which may be available to cooperatives. A list of
foundations and their areas of interest is avail-
able at the State Law Library in Augusta, and
at the Research Center Library, University of
Southern Maine in Portland.
38
39
loCal, regional & naTional resourCes
federal governMenT agenCies
usda rural developMenT/Co-op serviCes
Stop 3250
202-720-7558 phone
202-720-4641 fax
e-mail: coopinfo@rurdev.usda.gov
web site: www.rurdev.usda.gov/rbs/coops/cswhat.
htm
John Wells
STOP 3254, 1400 Independence Avenue SW
202-720-3350 phone
e-mail: jwells@rurdev.usda.gov
usda rural developMenT
(forMerly farMers hoMe adMinisTraTion)
Alden Turner
254 Goddard Road
P.O. Box 1938
Lewiston, Maine 04241-1938
207-753-9400 (press 4) phone
207-784-1335 fax
e-mail: arturner@rdmail.rural.usda.gov
Alan Daigle
444 Stillwater Avenue
Bangor, Maine 04401
207-990-9160 phone
207-990-9129 fax
e-mail: adaigle@rurdev.usda.gov
Milton Ross
99 Fort Fairfeld Road
Presque Isle, Maine 04769
207-764-4157 phone
207-762-2246 fax
e-mail: meross@rdmail.rural.usda.gov
sTaTe governMenT agenCies
Maine deparTMenT of agriCulTure
Market and Product Development Division
28 State House Station
Augusta, Maine 04333
John Harker, Business Development Specialist
207-287-7620 phone
207-287-5576 fax
e-mail: john.harker@state.me.us
Deanne Herman, Market Development Specialist
207-287-7561 phone
207-287-5030 fax
e-mail: deanne.herman@state.me.us
Howard Jones, Director
207-287-9072 phone
207-287-5576 fax
e-mail: howard.jones@state.me.us
Maine deparTMenT of Marine resourCes
Susan Inches, Director of Marketing
21 State House Station
207-624-6550 phone
207-624-6024 fax
e-mail: sue.inches@state.me.us
universiTy of Maine CooperaTive exTension
Jim McConnen, Business and Economic
Specialist
5741 Libby Hall
Orono, Maine 04469
207-581-3165 phone
800-287-0274 (in Maine)
207-581-1387 fax
e-mail: jimm@umce.umext.maine.edu
40
Richard Brzozowski, Extension Educator
P.O. Box 9300
Portland, Maine 04104-9300
207-780-4205 phone
800-287-1471 (in Maine)
207-780-4382 fax
e-mail: rbrz@umce.umext.maine.edu
Deanna Potter, Extension Educator
13 Hall Street
Fort Kent, Maine 04743-7131
207-834-3905 phone
800-287-1421 (in Maine)
207-834-3906 fax
e-mail: dpotter@umce.umext.maine.edu
finanCing
naTional CooperaTive Bank
1401 Eye Street Northwest, #700
Washington, DC 20005
202-336-7700 phone
farM CrediT of Maine
Raymond Nowak, President
615 Minot Avenue
Auburn, Maine 04210
207-784-0193 phone
207-784-0195 fax
finanCe auThoriTy of Maine (faMe)
Mark Butterfeld, Senior Commercial Loan Of-
fcer
83 Western Avenue
P.O. Box 949
Augusta, Maine 04332-0949
207-623-3263 phone
207-623-0095 fax
e-mail: markbu@famemaine.com
web site: www.famemaine.com
CoasTal enTerprises, inC.
P.O. Box 268
Wiscasset, Maine 04578
207-882-7552 phone
regional & naTional
Co-op assoCiaTions
CooperaTive developMenT insTiTuTe
Andrew Ferguson
76 East Catamount Hill
Colrain, Massachusetts 01340
413-624-3791 phone
413-624-5503 fax
e-mail: aferguson@tcn.org
Jane Livingston
33 Oak Grove Street
Veazie, Maine 04401
207-947-4117
norTheasT CooperaTive CounCil
Brian Henehan, Executive Secretary, Extension
Associate
357 Warren Hall
Ithaca, New York 14853-7801
607-255-8800 phone
607-255-9984 fax
CooperaTive enTerprise prograM
Bruce Anderson, Assoc. Professsor
357 Warren Hall
Ithaca, New York 14853-7801
607-255-7600 phone
607-255-9984 fax
naTional CooperaTive Business assoCiaTion
1401 New York Avenue NW, #1100
Washington, DC 20005
1-800-636-6222 phone
202-638-6222 phone
www.cooperative.org
41
aCCounTanTs
saM davidson, MBa, Cpa
Davidson Associates
2 Portland Fish Pier, S5205
Portland, Maine 04101
207-773-7122 phone
207-761-3847 fax
e-mail: samdavidson@msn.com
web site: www.mallofmaine.com/sdcpa.htm
roBerT lighTfooT, Cpa
specializinginworkerandconsumerco-ops
1 India Street
207-775-6377 phone
aTTorneys
ed Bradley, esq.
P.O. Box 267 DTS
207-773-0788 phone
207-775-3282 fax
dave fleTCher
Fletcher & Mahar
68 North Street
Calais, Maine 04619
207-454-7641 phone
207-454-2454 fax
Cliff goodall
Attorney-at-Law
45 Memorial Circle
207-622-3693 phone
207-622-4417 fax
laddie lushin
Attorney-at-Law
RD1, Braintree Hill Road
Randolph, Vermont 05060-9415
802-728-9728 phone & fax
e-mail: lushin@quest-net.com
fred sToCking
Stocking & Crotteau, LLC
346 Lamoine Beach Road
Lamoine, Maine 04605
207-667-6009 phone
207-667-6407 fax
e-mail: stocking@acadia.net
ConsulTanTs
seneChal, Jorgenson, hale & Co.
BillJongensen
11 Cherry Street
Danvors, Massachusetts 01923-2724
978-774-8660 phone
978-750-9880 fax
e-mail: sjh@sjandco.com
oTher farM organizaTions
Maine farM Bureau
John Olsen
RR 5, Box 1254
207-622-4111 phone
Maine organiC farMers and gardeners as-
soCiaTion (Mofga)
Russell Libby
P.O. Box 2176
207-622-3118 phone
42
43
Coulee region organiC produCe pool
(Cropp)
Maine Branch:
Greg Harriman, Coordinator
RR1, Box 1140
Troy, Maine 04987
207-948-5612 phone & fax
e-mail: Harrimans@uninets.net
A Maine branch the national organic co-op has
been active for one year, sourcing grains for or-
ganic dairy farms.
Crown o Maine organiC CooperaTive (Co-
MoC)
Jim Cook, Marketing Director
P.O. Box 565
Madawaska, Maine 04756
800-743-7783 phone
COMOC is an association of small family farms
located in Aroostook County, Maine that farm
the land according to organic methods and coop-
eratively market potatoes and other root crops.
CuMBerland CounTy Beef produCers
CooperaTive (CCBpC)
Clayton Haskell, President
Harriet Drive
Windham, Maine 04062
207-892-5396
CCBPC is a major producer of natural beef,
looking to expand into other value added beef
products. Membership includes 10 individual
farmers. 7 are active in the co-op.
Maine Co-op direCTory
CoMpiled By: Jennifer hill, Maine deparTMenT of agriCulTure
agriCulTure
agri-Mark
Bob Wellington, Senior Vice President
P.O. Box 5800
Lawrence, Massachusetts 01842
100 Milk Street
Methuen, Massachusetts 01844
978-689-4442 phone
978-794-8304 fax
aroosTook organiC farMers CooperaTive
P.O. Box 1907
Gordon Hammond, President
800-361-4144 phone
207-532-7660 fax
e-mail: hoardac@ainop.com
A group of 7 organic farmers starting their frst
full season as a co-op. They sell through Han-
naford Brothers and through a couple of whole-
salers in New Jersey and Pennsylvania. Products
include bread wheat, dry beans, broccoli, carrots,
cabbage, beets, onions, and Swedish turnips.
Co-op des produCeurs de suCre aMeriCain
de dorChesTer
Guy Labonte, Acting Secretary
P.O. Box 581
Jackman, Maine 04945
418-625-9501 phone
418-625-3450 fax
e-mail: glabonte@amotarius.net
A 75-year-old association of 40 maple syrup
producers, organized primarily for cooperative
woodlands leasing and labor relations.
44
downeasT BlueBerry CooperaTive (deBCo)
David Kilton
RR1, Box 273
Machias, Maine 04654
207-255-4709 phone
Originally part of the National Farmers Organi-
zation, a corporation was formed 12 to 15 years
ago to run the receiving station. DEBCO has 55
active members at present.
farMingTon farMers union
John Wilbur, Manager
P.O. Box 431
Farmington, Maine 04938
207-778-4520 phone
207-778-0763 fax
FFU has 3,100 members of whom around 2,000
are active. Owned by shareholders, FFU has
been in business for 85 years and sell TrueServe
Hardware, Blue Seal Feeds and Just Ask Rentals
(tools, machinery, etc.)
fedCo seeds, inC.
Joanna Linden, Outreach Coordinator
P.O. Box 520
Waterville, Maine 04903-0520
207-873-7333 phone & fax
Founded in 1979, Fedco Seeds is a highbred
consumer/worker cooperative; customers share
60% and workers share 40% of the companys
net profts. Customers may join the cooperative
for $1.00. Members may vote for the Board of
Directors and attend the Annual Meeting. All
qualifed customers -- member or not -- receive
patronage dividends. FEDCO offers untreated
seeds, farm & garden supplies, seed potatoes,
trees & shrubs, perennial plants and fower bulbs
through three seasonal catalogs. The majority of
the business is mail order.
foggy BoTToM wild BlueBerries
Mike Look, President
P.O. Box 569
East Machias, Maine 04630
207-255-4167 phone
hanCoCk CounTy organiC growers Co-op
Nancy Veilleux, Board Member
HC 64, Box 484
Brooklin, Maine 04616
207-359-2152 phone 326-0798 farm phone
Started in 1996 and in their third season togeth-
er, seven different farms from Hancock County
joined together to develop a storefront and a
wholesalebusiness.
knox CounTy BlueBerry growers
Richard Brodis, Sr., President
367 Buzzell Hill Road
Hope, Maine 04847
207-785-4433 phone
In existence since 1969, the co-op currently has
20 members.
Maine agriCulTural Bargaining CounCil
Vernon L. DeLong, Manager
744 Main Street, Room 6
207-764-3380
The MABC is a state sanctioned bargaining unit
for farmers who need to negotiate price contracts
with food processing companies.
Maine organiC BlueBerry growers Co-op
Tom Taylor-Lash, Facilitator
320 Front Ridge Road
Orland, Maine 04472-4344
207-469-3003 phone and fax
e-mail: grampsfarm@aol.com
45
Maine organiC BlueBerry growers Co-op,
ConTinued
Founded 20 years ago in 1978, they are a co-op
with 5 to 6 active members. Individuals grow
their crops, doing their own cleaning and pack-
ingof theblueberries,buttruckthemtogether
and use uniform packaging.
Maine poTaTo growers
Joseph G. Lallande, General Manager
P.O. Drawer 271
207-764-3131 phone
207-764-8450 fax
web page: www.mpgco-op.com/
MPG is a diversifed agricultural supply and
marketing cooperative serving the needs of
Northern Maine potato growers and the Maine
blueberry industry. Marketing activities consist
primarily of the purchase and resale of pota-
toes and grain. Supply division activities consist
primarily of sales of agricultural supplies and
services including crop inputs and services, bags,
farm equipment, light duty vehicles, petroleum
products and retail sales.
Maine speCialTy poTaTo farMers Co-op
Chris Holmes, Manager
13 Rice Street, Room 2
207-769-2110 phone
The main purpose of this co-op is to provide
marketing and related services to its members
and other patrons with respect to their agri-
cultural products, creating a niche market for
varietal, farm-identifed potatoes in Aroostook
County at large. The object of their public rela-
tions program is to create a rising tide for all
Mainepotatoes.
new england venison Co-op
Steve Hobart, President
RR1, Box 73
Abbot Village, Maine 04406
207-997-3922 phone
e-mail: fallow@kynd.net
Farm-raised Maine and New England venison,
processed from top quality fallow deer, are sold
by this co-op. The product is natural, chem-free;
no hormones or stimulants are used.
peninsula algae growers Co-op
Denis Moran, President
Curtis Cove Road
P.O. Box 73
East Blue Hill, Maine 04629
207-374-8859 phone
This newly-formed co-op is in the process of do-
ing research to determine whether there are
marketable quantities of algae off the Hancock
County shores.
pleasanT river Canning CoMpany
Merton Allen, President
P.O. Box 277
Columbia Falls, Maine 04623
207-483-6683 phone
e-mail: merton@nemaine.com
In business since 1916, the company was a can-
ning plant at one time under the Rosemary label.
They receive blueberries and sell them exclusive-
ly to Jasper Wymans and Sons. The co-op has 28
stockholders and 17 non-member growers.
sunrise CounTy wild BlueBerry assoCia-
Tion, inC.
Sanford Kelley, President
P.O. Box 284
Cherryfeld, Maine 04622
207-497-2846 phone
46
sunrise CounTy wild BlueBerry
assoCiaTion, inC., ConTinued
A co-op that deals primarily with fresh frozen
product under the brand Maine Select Wild
Blueberries. They began as part of Pleasant
River Canning Company and are in the 2nd
year on their own. Presently serving the north-
east, membership totals 12, 4 of whom have
their own processing lines; the other 8 are farm-
ers.
CrafTs
aCadian CrafTs
TheresaViolette,Manager
29St.CatherineStreet
207-728-3295
In business since 1970, this knitting and crochet-
ing co-op began with 80 members; only three are
currently producing.
Bar harBor arTisans
Diane Doherty, President
164 Main Street
Bar Harbor, Maine 04609
207-288-4584 phone
BooThBay harBor arTisans
Carol Daignault, President
11 Grainery Way
Boothbay Harbor, Maine 04538
207-633-1152 phone
h.o.M.e.
Lucy Poulin, Founder
P.O. Box 10
Orland, Maine 04472
207-469-7961
e-mail: homecoop@earthling.net
web site: www.downeast.net/home
H.O.M.E. Inc., established in 1970 as a craft
cooperative, is a multi-faceted organization
involved in economic reconstruction and social
rehabilitation. In its 28 years of existence, it has
grownfromthesingleretailstorewherehome
crafters could sell their goods, into a small com-
munity offering jobs, food, education, temporary
shelter and home ownership to people and fami-
lies in need. H.O.M.E. now includes fve shelters
for the homeless, and a social outreach program
that touches the lives of several hundred per-
sons annually, in addition to a food bank, a soup
kitchen, a recovery barn and thrift store (clothes
and household goods) and free frewood for those
who need it. Saw mill, shingle mill, land trusts,
home building, organic gardening, greenhouse,
cashmere goats and Norwegian fjords workhorses
are also a part of H.O.M.E.
island arTisans
Trudie Van Lente, Manager
99MainStreet
Bar Harbor, Maine 04609
207-288-4214 phone
In existence for 18 years, Island Artisans has 7
members and show 50-60 craftspeoples work.
Maine arTisans ColleCTive
Lincolnville, Maine 04849
207-789-5376 phone
web site: mainemarketplace.com/lincoln.html
Maine poTTery MarkeT
Gretchen Hardy, Manager
376 Fore Street
207-774-1633 phone
sawyer sTreeT sTudios
Abby Huntoon
131 Sawyer Street
South Portland, Maine 04106
207-767-4394 phone
soCieTy of souThern Maine CrafTsMen
Joann Kenyon, President
RR1, Box 339
Waterboro, Maine 04087
207-247-3642 phone
47
sTone soup arTisans
232 Main Street
Saco, Maine 04072
283-4715 phone
sTone soup arTisans
Vernon & Center
Auburn, Maine 04210
783-4281 phone
sTone soup arTisans
102 Main Street
Brunswick, Maine 04011
798-5841 phone
spindleworks
Independence Association
7LincolnStreet
207-725-8820 phone
e-mail: women@gwi.net
web site: www.spindleworks.org
waldo CounTy CrafTs Co-op
Joni Wardell, General Manager
Route 1
Searsport, Maine 04974
207-548-6686 phone
In existence for close to thirty years the Waldo
County Crafts Co-op currently has 30 members.
yankee arTisans
Patty Sullivan, President
56 Front Street
Bath, Maine 04530
207-443-6215 phone
eleCTriC
easTern Maine eleCTriC Co-op
James L. Dean, III, General
Manager
P.O. Box 217
Calais, Maine 04619
207-853-2978 phone
P.O. Box 425, 9 Union Street
Calais, Maine 04619
800-696-7444 phone
207-454-7555 phone in Calais or
outside Maine
e-mail: emecoop@nemaine.com
web page: www.emec.com/index.html
Eastern Maine Electric Co-op is a non-proft
consumer-owned electric utility serving parts of
Aroostook, Penobscot, and Washington Counties
on Maines eastern border with Canada. The
primary goal of this rural electric cooperative is
to provide quality electric service to their mem-
ber-ownersatthelowestcostconsistentwith
sound management.
fox islands eleCTriC CooperaTive, inC.
Ronald Lord, General Manager
Main Street, P.O. Box 527
Vinalhaven, Maine 04863
207-863-4636 phone
207-863-4526 fax
Founded in 1975, Fox Islands Electric Coopera-
tive serves customers in Vinalhaven and North
Haven.
isle au hauT eleCTriC power CoMpany
Patrick Tully, Treasurer
One Landing Lane
Isle-au-Haut, Maine 04645
207-335-2991 phone
207-335-2981 fax
Serving the people in Isle au Haut since 1968,
Isle au Haut Electric Power Company has 115
customers, less than 100 of whom are members.
swans island eleCTriC Co-op, inC.
P.O. Box 14, 8 Quarry Wharf Road
Swans Island, Maine 04685
207-526-4336 phone
207-526-4331 fax
e-mail: LSTOCKB.102@aol.com
48
swans island eleCTriC Co-op, inC., ConTin-
ued
With 434 people in its membership, Swans
Island Electric Co-op has been in business for 48
years.
finanCe
farM CrediT of Maine
615 Minot Avenue
Auburn, Maine 04210
207-784-0193 phone
or 800-831-4230 (in state)
207-784-0195 fax
Branch:
26 Rice Street
207-764-6431 phone
or 800-831-4640 (in state)
207-764-7526 fax
Farm Credit of Maine is a Maine co-op serv-
ing the agricultural, aquatic and forest products
industries with commercial lines of credit, mort-
gage lending, and leasing. They also specialize in
appraisals for natural resource-based businesses.
finanCe: Maine CrediT unions
Biw five CounTy CrediT union
Richard Dupuis, Manager
765 Washington St., P.O. Box 598
Bath, Maine 04530
800-750-0959 phone
207-443-8176 fax
web site: www.fvecounty.com
Branches:
1BeanpotCircle
207-774-1537 phone
207-774-6334 fax
40A Commercial Street
207-773-8408 phone
207-774-1667 fax
3 Hamilton Court
Topsham, Maine 04086
207-721-8647 phone
207-721-8555 fax
Following the traditional philosophy of credit
unions, BIW Five County Credit Union is a
non-proft cooperative where members pool their
fnancial assets to provide funds for loans and
other fnancial services available to members
only.
ChesTnuT CrediT union
Richard Lachance, Manager
P.O. Box 604
207-623-8396 phone
207-623-0188 fax
Branch:
241 Water Street
Hallowell, Maine 04347
207-623-8161 phone
207-623-2605 fax
CoasT line CrediT union
Matthew Griffths, Manager
333 Cottage Road
207-799-7245 phone
207-799-9329 fax
e-mail: coastcu@aol.com
CoMMuniTy CrediT union
Donna Steckino, Manager
P.O. Box 7810, 144 Pine Street
Lewiston, Maine 04240
207-783-2096 phone
207-783-2093 fax
e-mail: donnas@exploremaine.com
49
CoMMuniTy CrediT union, ConTinued
Branch:
40 Stanley street
Auburn, Maine 04210
207-783-2096 phone
207-783-2064 fax
A member-owned organization which has
provided over ffty years of fnancial service to
members, Community Credit Union began
with a modest start as St. Pierre Credit Union
in 1945. Since that time, they have secured a
market niche in the Lewiston/Auburn area, serv-
ing members who live, work, or attend school in
Lewiston/Auburn, including members of their
immediate families.
governMenT eMployees CrediT union of
Maine
John Greenlaw, Manager
50 Industrial Parkway, P.O. Box 777
207-878-6200 phone
207-878-6211 fax
e-mail: info@gecume.org
Branches:
1000 Burbank Avenue, Room 113
207-729-1831 phone
207-725-2779 fax
45 Memorial Circle
207-623-1001 phone
207-623-3639 fax
Maine eduCaTion CrediT union
Jacqueline Fortunato, Manager
36 Community Drive, P.O. Box 1096
207-623-3857 phone
207-622-7258 fax
web site: www.maine-edcu.org
A nonproft, member-owned credit union, mem-
bers include anyone employed in the feld of
education who is eligible for membership in the
Maine Education Association. Family members
of educators are also eligible for membership.
Maine sTaTe eMployees CrediT union
Normand Dubreuil, Manager
P.O. Box 5659
207-623-1851 phone
207-623-4082 fax
e-mail: msecu@msecu.org
web site: www.msecu.org
Branch:
A.M.H.I. Complex Adm. Building
207-621-6060 phone
Created in 1935 to provide friendly and af-
fordable fnancial services to State employees
and their families, today they serve over 19,000
members statewide, with a range of valuable ser-
vices that include sharedraft accounts, checking
accounts, ATM cards, personal loans, auto loans,
mortgages, credit cards, debit cards, and share
certifcates among others.
saBaTTus regional CrediT union
Charles Hinkley, Manager
9 High Street, P.O. Box 250
Sabattus, Maine 04280
207-375-6538 phone
207-375-8409 fax
Branch:
16A Main Street
Lisbon Falls, Maine 04252
207-353-8783 phone
207-353-8799 fax
50
saCo valley CrediT union
Carrie A. Shaw, Manager
P.O. Box 740, 312 Main Street
Saco, Maine 04072
207-282-6169 phone
207-282-1601 fax
Established in February of 1947, Saco Valley
Credit Union serves the communities of Buxton,
West Buxton, Dayton, Hollis, South Hollis, Ly-
man, Saco, Waterboro and North Waterboro.
s.d. warren CrediT union
TuckerCole,Manager
35 Cumberland Street
Westbrook, Maine 04092
207-854-5822 phone
207-854-1730 fax
Branch:
844 Roosevelt Trail
Windham, Maine 04062
207-892-4694 phone
207-892-4058 fax
universiTy CrediT union
Howard Dunn, Manager
Rangeley Road
Orono, Maine 04469-5779
207-581-1458 phone
207-581-1452 fax
web site: www.maine.edu/~univcu
UCUs Board of Directors consists of seven
people: six unpaid volunteers and the president
of UCU. All Board members are elected by the
membership. Each credit union member receives
one vote as long as they maintain a $25 mini-
mum balance in their savings account and are
eighteen years old or older.
Branch:
391 Forest Avenue
207-772-1906 phone
207-772-1852 fax
unuM eMployees CrediT union
SusanMottice,Manager
2211CongressStreet
207-770-6248 phone
207-770-2326 fax
finanCe: federal CrediT unions
Bangor federal CrediT union
Steve Clark, Manager
339 Hogan Road, P.O. Box 1161
Bangor, Maine 04401
207-947-0375 phone
207-990-0760 fax
Branch:
601 Hammond Street
Bangor, Maine 04401
207-990-6761 phone
207-941-9675 fax
Bangor hydro federal CrediT union
Darla King, Manager
193 Broad Street
Bangor, Maine 04401
207-945-6264 phone
941-1145 fax
BansCo federal CrediT union
SueCross,Manager
P.O. Box 943
87-89 Hillside Avenue, Suite 3
Bangor, Maine 04401
207-945-5000 phone
207-990-1633 fax
BarCo federal CrediT union
John Reed, Manager
P.O. Box 347, 101 Western Avenue
Hampden, Maine 04444
207-862-6500 phone
207-862-6502 fax
51
BarCo federal CrediT union, ConTinued
Branches:
Route One
Ellsworth, Maine 04605
207-667-8502 phone
207-667-1263 fax
100 Park Street
Milo, Maine 04463
207-943-2134 phone
207-943-7301 fax
Main Road
Corinth, Maine 04427
207-285-3365 phone
207-285-3363 fax
Founded in 1961, BARCO is Maines fourth-
largest credit union and serves nearly 18,000
members in Eastern Maine with offces in Milo,
Corinth, Hampden, Ellsworth, and inside the
Jackson Laboratory. BARCO offers a full line of
fnancial services including savings, IRAs, free
checking, auto loans, mortgages, student loans,
VISA credit and debit cards, and home equity
loans.
Blue Cross and Blue shield of Maine eM-
ployees federal CrediT union
Cynthia Burke, Manager
2 Gannett Drive
207-822-7483 phone
207-822-7603 fax
Branch:
110 Free Street
207-822-4704 phone
BowdoinhaM federal CrediT union
Daniel Daggett, Manager
20 Main Street, P.O. Box 73
Bowdoinham, Maine 04008
207-666-5612 phone
207-666-5609 fax
Brewer federal CrediT union
Barry Jordan, Manager
P.O. Box 189, 237 Wilson Street
Brewer, Maine 04412
207-989-7240 phone
207-989-3440 fax
CapiTal area federal CrediT union
Beth Oliver, Manager
P.O. Box 2626, 23 Maple Street
207-622-3442 phone
207-623-2276 fax
CenTral Maine power eMployees federal
CrediT union
Judy Griffn, Manager
44 Edison Drive
207-623-1134 phone
207-626-9827 fax
Branches:
162 Canco Road
207-828-2875 phone
207-828-2877 fax
Bailey Point
Ferry Road
Wiscasset, Maine 04578
207-882-4963 phone
CuMBerland CounTy TeaChers federal
CrediT union
Scott Harriman, Manager
173 Gray Road
Falmouth, Maine 04105
207-878-3441 phone
207-878-5327 fax
Branch:
Vocation Drive
207-854-9850 phone
207-854-9844 fax
web site: www.cctfcu.com
52
CuMBerland CounTy TeaChers federal
CrediT union, ConTinued
Cumberland County Teachers Federal Credit
Union was founded in 1954 to provide quality
cost effective fnancial services to school depart-
ment employees and their families. In 1973
they expanded to provide fnancial services to
Cumberland County municipal employees and
their families. In the early years they offered only
shares (savings) and loans. Today they are a full
service fnancial institution offering a wide range
of services to their members.
dexTer regional federal CrediT union
Rhonda Taylor, Manager
Dexter, Maine 04930
207-924-5544 phone
207-924-7527 fax
Branches:
Hudson Avenue, P.O. Box 697
Guilford, Maine 04443
207-876-4041 phone
207-876-3701 fax
Route 15 & 16, P.O. Box 507
Dover-Foxcroft, Maine 04426
207-564-8644 phone
207-564-3920 fax
Indian Hill Plaza
P.O. Box 1267
Greenville, Maine 04441
207-695-0316 phone
207-695-8939 fax
easTern Maine MediCal CenTer federal
CrediT union
Ralph Ferland, Manager
489 State Street
Bangor, Maine 04401
207-945-3632 phone
207-945-0793 & 207-973-7134 fax
Branch:
849 Stillwater Avenue
Bangor, Maine 04401
207-945-3632 phone
207-945-0793 fax
easTMill federal CrediT union
Daniel Byron, Manager
60 Main Street
East Millinocket, Maine 04430
207-746-3428 phone
207-746-5881 fax
Branch:
Main Street, P.O. Box 481
Patten, Maine 04765
207-528-6222 phone
207-528-6224 fax
forT kenT federal CrediT union
Bernadette Michaud, Manager
6 East Main Street
Fort Kent, Maine 04743
207-834-6167 phone
207-834-6190 fax
e-mail: bern.fkfcu@ainop.com
web site: www.themainlink.com/fkfcu
Fort Kent FCU is a non-proft fnancial institu-
tion frst chartered in 1963, serving the towns
of Fort Kent, Eagle Lake, New Canada, Wal-
lagrass, Soldier Pond and Winterville, in Aroos-
took County. They also serve students attend-
ing school in these areas and members of their
families, offering savings, checking, certifcates of
deposit, savings bonds, travelers checks, money
orders, gift checks, wire transfers, and loans of all
kinds.
franklin CounTy federal CrediT union
Richard Peters, Manager
R.R. 4, Box 5061, Wilton Road
Farmington, Maine 04938
207-778-4452 phone
207-778-4986 fax
53
franklin CounTy federal CrediT union,
ConTinued
Branch:
Route 27, P.O. Box 606
Kingfeld, Maine 04947
207-265-4027 phone
207-265-4028 fax
fraser federal CrediT union
Harold Violette, Manager
207-728-7555 phone
207-728-6731 fax
e-mail: fraserfcu@ncil.net
web site: www.fraserfcu.org
Branches:
Eagle Lake, Maine 04739
207-444-4545 phone
207-444-4540 fax
Portage, Maine 04768
207-435-2176 phone
207-435-2176 fax
Founded March 9, 1941, Fraser Federal Credit
Union is a member owned, not-for-proft, fnan-
cial cooperative association proudly serving over
7,000 members. Since credit unions are not-for-
proft fnancial institutions, profts are returned to
themembershipintheformof lowerloanrates,
higher savings rates and other benefcial savings.
gardiner federal CrediT union
Phil Bergeron, Manager
R.R. 5, Box 105, 8 Brunswick Road
Gardiner, Maine 04345
207-582-2676 phone
207-582-3108 fax
e-mail: info@gardinerfcu.org
web site: www.gardinerfcu.org
GFCU was established in 1953 to serve employer
groups in the communities of West Gardiner,
Pittston, Randolph, Farmingdale, Hallowell,
and Chelsea. Currently they are an $11,000,000
entity serving 2700 members.
gaTeway federal CrediT union
Howard Ayotte, Manager
306 Main Street
Van Buren, Maine 04785
207-868-5484 phone
207-868-2860 fax
e-mail: gfcu@ainop.com
web site: www.themainelink.com/gateway/index.
html
Proudly serving its members for over 33 years,
Gateway serves persons who live or work in
Aroostook County, Maine within a 10-mile ra-
dius of the Van Buren, Maine post offce.
gorhaM regional CrediT union
LukeLabbe,Manager
Gorham, Maine 04038
888-395-5588 phone
207-839-5413 fax
e-mail: info@GorhamCU.com
web site: www.GorhamCU.com
Branch:
451 North East Road
Sebago Lake, Maine 04075
207-642-5177 phone
207-642-5903 fax
Serving those who live or work in the towns
of Gorham, South Windham, Buston, Hollis,
Standish, Steep Falls and Sebago Lake. Faculty,
staff, students and alumni of the University of
SouthernMainearealsoeligibletojoin.The
mission of Gorham Regional Credit Union is to
provide their members with convenient, person-
alized, quality fnancial services.
54
grand isle CoMMuniTy federal CrediT
union
Anne Beaulieu, Manager
P.O. Box 199
Grand Isle, Maine 04746
207-895-3410 phone
207-895-3410 fax -- call frst
greaT falls regional federal CrediT union
Nancy S. Bard, Manager
34 Bates Street
207-782-7192 phone
207-782-5501 fax
Branch:
33 Dunn Street
Auburn, Maine 04210
207-783-3552 phone
207-784-8494 fax
greaTer porTland MuniCipal federal Cred-
iT union
Mariann Goff, Manager
799 Broadway
207-799-0074 phone
207-799-0183 fax
web site: www.greaterportland.com
Organized in 1937 as a federally chartered,
fnancial cooperative, their membership includes
municipal employees of the Cities of Portland
and South Portland and the Town of Cape
Elizabeth, Maine. In addition, they serve several
small employee groups.
Branches:
City Hall, Room 20
207-874-8795 phone
935 Brighton Avenue
207-828-1716 phone
207-828-1749 fax
guy ganneTT eMployees federal CrediT union
Jennifer Hartel, Manager
P.O. Box 7702
207-774-4307 phone
207-791-6924 fax
hannaford BroThers federal CrediT union
Jeff Vachon,Manager
P.O. Box 1440
207-883-3630 phone
207-883-8629 fax
e-mail: hafcu@aol.com
houlTon federal CrediT union
Kathleen Smith, Manager
13 Market Square
Houlton, Maine 04730
207-532-7325 phone
207-532-7658 fax
howland enfield federal CrediT union
J. Patricia Brillant, Manager
4 Coffn Street, Box 405
Howland, Maine 04448-0405
207-732-4898 phone
207-732-4874 fax
e-mail: hefcu@relplus.net
infiniTy federal CrediT union
Kenneth E. Williams, Manager
202 Larrabee Road
P.O. Box 9742
Branches:
4 Davis Farm Road
207-854-6000 phone
207-854-6074 fax
193 Broad Street
Bangor, Maine 04401
207-945-4284 phone
207-945-4857 fax
55
kv federal CrediT union
Beverly Beaucage, Manager
316 Northern Avenue, P.O. Box 2108
207-623-5171 phone
207-626-2853 fax
Branches:
3 St. Catherine Street
207-622-2353 phone
207-622-2559 fax
24 Oak Street
Oakland, Maine 04963
207-465-4423 phone
207-465-9456 fax
kaTahdin federal CrediT union
Don Casko, Manager
1000 Central Street
Millinocket, Maine 04462
207-723-9718 phone
207-723-8426 fax
keso federal CrediT union
Tonia Westman, Acting Manager
P.O. Box 298
Fairfeld, Maine 04937
207-453-7643 phone
207-453-6155 fax
keyes fiBre federal CrediT union
Anne Boulette, Manager
222 College Avenue
Waterville, Maine 04901
207-872-5602 phone
207-872-5776 fax
Branch:
135 Waldo Avenue
Belfast, Maine 04915
207-338-5160 phone
207-338-6129 fax
knox CounTy federal CrediT union
Alvera Bosica, Manager
Rockland, Maine 04841
207-594-8830 phone
207-596-7627 fax
la valle federal CrediT union
Eddie Plourde, Manager
794MainStreet
207-728-4121 phone
207-728-7029 fax
e-mail: lvfcu@ainop.com
lewisTon MuniCipal federal CrediT union
P.O. Box 60, 291 Pine Street
207-783-3991 phone
207-783-4178 fax -- must call frst
linColn Maine federal CrediT union
David Brillant, Manager
Outer West Broadway, P.O. Box 220
Lincoln, Maine 04457
207-794-8623 phone
207-794-8187 fax
Branch:
Willow Street
Mattawamkeag, Maine 04459
207-736-2188 phone
207-736-2190 fax
lisBon CoMMuniTy federal CrediT union
George Roy, Manager
P.O. Box 878, 325 Lisbon Road
Lisbon Center, Maine 04251
207-353-4144 phone
207-353-7615 fax
e-mail: lisboncu@mail.exploremaine.com
Madison-anson CoMMuniTy federal CrediT
union
Charisse Keach, Manager
Madison, Maine 04950-0249
56
Madison-anson CoMMuniTy federal CrediT
union, ConTinued
207-696-3691 phone
800-294-9601 toll-free
207-696-8147 fax
Serving members since 1955, people who reside
or work in Madison, Anson, Bingham, Starks,
New Portland, Embden, and North Anson are
welcome to join. Currently 1,344 members enjoy
the many products and services offered.
Maine faMily federal CrediT union
Ronald Fournier, Manager
555 Sabattus Street
800-783-2071 phone
207-786-8765 fax
MeBs federal CrediT union
Pat Bickford, Manager
P.O. Box 4060, Station A
1 Congress Square
207-772-0181 phone
207-828-6610 fax
MediCal serviCes federal CrediT union
Kenneth Acker, Manager
272 Park Avenue, P.O. Box 10659
207-772-0808 phone
207-772-5684 fax
web site: www.msfcu.com
Branch:
Mercy Hospital
144StateStreet
207-879-3399 phone
On January 12, 1955, seven employees of the
Maine General Hospital united for a common
purpose: to establish a cooperative fnancial in-
stitution that was owned by and operated in the
best interest of its members. A similar effort
at Mercy Hospital resulted in a separate credit
union, and in 1971 the two organizations
merged. Two mergers in 1986 brought members
of the Thomas Laughlin and Sanborns Credit
Unions into the Medical Services Federal Credit
Union family. Currently serving more than ffty
companies, including Maine Medical Center
and Mercy Hospital.
Mid Maine MediCal CenTer federal CrediT
union
Deborah Pomeroy, Manager
9 Quarry Road
207-877-9474 phone
207-877-6615 fax
MidCoasT federal CrediT union
Albert Seguin, Manager
P.O. Box 780, 831 Washington Street
Bath, Maine 04530
207-443-5531 phone
207-443-1337 fax
Branches:
210 Main Street
207-729-8737 phone
207-729-8738 fax
U.S. Route 1
Edgecomb, Maine 04556
207-882-7919 phone
207-882-7834 fax
MonMouTh federal CrediT union
Catherina Pinard, Manager
P.O. Box 150
Monmouth, Maine 04259
207-933-2667 phone
207-933-3261 fax
nissen eMployees federal CrediT union
Emma Mezzanotte, Manager
56 Washington Avenue
207-773-3624 phone
207-773-3624 fax - please call frst
57
nopar federal CrediT union
Raymond Glover, Manager
P.O. Box 274
South Paris, Maine 04281
207-743-5410 phone
Chartered in 1957 and serving the communities
of Bethel, Greenwood, Woodstock, West Paris,
Paris, Norway and Oxford.
noTre daMe waTerville federal CrediT
union
JeanMoulton,Manager
61 Grove Street
207-872-2771 phone
207-877-0555 fax
oTis federal CrediT union
Roland Poirier, Manager
Jay, Maine 04239
207-897-0900 phone
207-897-3927 fax
e-mail: rpoirier@otisfcu.org
web site: www.otisfcu.org
In April 1954, a group of people associated
themselves as OTIS Federal Credit Union under
the provision of the Federal Credit Union Act.
Those charter members devoted their effort and
time because they believed in the credit union
philosophy of a cooperative fnancial institution
withmemberownership.
oxford federal CrediT union
Doreen MacMahan, Manager
Mexico, Maine 04257-0252
207-369-9976 phone
207-364-8962 fax
e-mail: oxford@ofcu.org
Chartered in 1938, this is a member-owned,
non-proft fnancial co-op that provides low cost
fnancial products and services to over 12,000
consumers in the Rumford, Mexico, and Dixfeld
area.
penoBsCoT federal CrediT union
Judy Wilcox, Manager
260 North Main Street, P.O. Box 434
Old Town, Maine 04468
207-827-4209 phone
207-827-6674 fax
peoples regional federal CrediT union
James Lemieux, Manager
P.O. Box 10
Pittsfeld, Maine 04967
207-487-5576 phone
207-487-3129 fax
Branch:
Route 7
Newport, Maine 04953
207-368-4940 phone
207-368-4751 fax
porTland Maine poliCe deparTMenT
federal CrediT union
Hosea Carpenter, Manager
109 Middle Street
207-773-0726 phone
207-773-0726 fax - please call frst
porTland Maine TransiT federal CrediT
union
Robert Hill, Manager
41 Allen Avenue Extension
Falmouth, Maine 04105
207-797-3907 phone
porTland regional federal CrediT union
BertBeaulieu,Manager
1345 Washington Avenue
P.O. Box 6693
207-797-6492 phone
207-797-7470 fax
58
porTland regional federal CrediT union,
ConTinued
Branch:
13-15 Main Street
Gray, Maine 04039
207-657-4777 phone
207-657-6352 fax
Serving those who work or reside in Portland,
Falmouth, Yarmouth, Cumberland or Gray.
r.C.h. federal CrediT union
LillianTurner,Manager
420 Franklin Street
Rumford, Maine 04276
207-364-4581, ext. 314 phone
207-369-0834 fax
rainBow federal CrediT union
Philippe Moreau, Manager
207-784-5435 phone
207-786-0495 fax
Branches:
20 Washington Street
Auburn, Maine 04210
207-783-0351 phone
207-786-0523 fax
1LewistonStreet
Mechanic Falls, Maine 04256
207-346-3001 phone
207-346-3012 fax
201 Lincoln Street
207-784-4762 phone
207-783-8024 fax
riverview federal CrediT union
Donald Sansouci, Manager
15 Depot Street
Gardiner, Maine 04345
207-582-7352 phone
207-588-0304 fax
sT. agaTha federal CrediT union
Mary Ann Chamberlain, Manager
P.O. Box 130, Main Street
Saint Agatha, Maine 04772
207-543-7383 phone
207-543-7811 fax
sT. Croix federal CrediT union
David W. Tozier, Manager
P.O. Box 130
Woodland, Maine 04694
207-427-3333 phone
207-427-3808 fax
Branch:
7 East Main Street
Machias, Maine 04654
207-255-0172 phone
207-255-0756 fax
sT. franCis CoMMuniTy federal CrediT
union
Theresa LItalien, Manager
P.O. Box 38
Saint Francis, Maine 04774
207-398-3421 phone
207-398-3492 fax
sT. franCis de sales federal CrediT union
Barbara Haynes, Manager
50 Elm Street
207-873-5159 phone
207-873-5150 fax
sT. Johns (BrunswiCk) federal CrediT
union
Steve J. Obrin, Manager
55 Cushing Street
P.O. Box 188
207-725-8728 phone
800-834-0432 toll-free
207-725-1290 fax
59
sT. Johns (BrunswiCk) federal CrediT
union, ConTinued
Branch:
36 Mallett Drive
P.O. Box 506
Freeport, Maine 04032
207-865-2830 phone
207-865-2841 fax
St. Johns (Brunswick) Federal Credit Union is
a full-service fnancial cooperative which was
chartered in 1941 serving 16,520 members with
assets of $110 million.
sT. Josephs (Biddeford) federal CrediT
union
Andrew Michaud, Manager
P.O. Box 463
Biddeford, Maine 04405
207-282-4156 phone
207-282-1735 fax
Branches:
369 Elm Street
Biddeford, Maine 04005
207-284-8483 phone
207-282-8647 fax
201 Main Street
Sanford, Maine 04073
207-490-2000 phone
207-490-2058 fax
sTe. Croix regional federal CrediT union
Daniel St. Hilaire, Manager
P.O. Box 1746, 100 Lisbon Street
207-783-1475 phone
207-777-1914 fax
seaBoard federal CrediT union
Kyle Casburn, Manager
531 Main Street
Bucksport, Maine 04416
207-469-6341 phone
207-469-2866 fax
Founded in 1940, current membership totals
7,800 people. This full-service credit union serves
the employees and family members of Cham-
pion International, offering savings, checking,
VISA, mortgage loans, auto loans and personal
lines of credit.
seMiConduCTor of Maine federal CrediT
union
Thomas Benvie, Manager
333 Western Avenue
207-775-8371 phone
207-761-6139 fax
e-mail: TKBenvie@aol.com
shaws eMployees federal CrediT union
Debra Hegarty, Manager
205 Spencer Drive
Wells, Maine 04090
207-646-9616 phone
207-646-5673 fax
skowhegan CoMMuniTy federal CrediT
union
Karen L. Greenleaf, Operations Manager
43 Leavitt Street, P.O. Box 157
Skowhegan, Maine 04976
207-474-3331 phone
207-474-0709 fax
Incorporated in 1963, the present membership
stands at 3,431. Open to persons who reside or
work in the towns of Athens, Canaan, Cornville,
Norridgewock, Skowhegan, and Solon, and to
employees of Moose River Lumber Company in
Jackman, offering a wide variety of savings and
loanplans.
sprague-sanford federal CrediT union
Bok K. Cho, Manager
P.O. Box 231, Route 109
207-324-4140 phone
207-490-1379 fax
60
TaConneT federal CrediT union
Sidney Wilder, Manager
60 Benton Avenue
Winslow, Maine 04901
207-872-7909 phone
207-872-7815 fax
e-mail: taconnet@mint.net
Branch:
Route 201
Skowhegan, Maine 04976
207-474-2254 phone
207-453-7154 fax
The CounTy federal CrediT union
Patrick St. Peter, Manager
82 Bennett Drive
Caribou, Maine 04751
207-498-8756 phone
207-498-4109 fax
Branches:
224MainStreet
Fort Fairfeld, Maine 04742
207-472-5710 phone
207-472-1140 fax
Caribou Road
207-768-5051 phone
207-764-5267 fax
Town & CounTry federal CrediT union
Chris Daudelin, Manager
207-773-5656 phone
207-772-3624 fax
web site: www.tcfcu.com
Branches:
257 U.S. Route 1
Scarborough, Maine 04074
207-883-7751 phone
207-883-8939 fax
170 Ocean Street
207-767-7419 phone
207-767-5799 fax
Town & Country Federal Credit Union was
chartered in 1953, originally serving the mem-
bers of St. Johns parish in South Portland. Serv-
ing over 16,000 members who live and work in
Cape Elizabeth, Scarborough and South Port-
land.
vassalBoro federal CrediT union
LeoBinette,Manager
North Vassalboro, Maine 04962-0189
207-873-0886 phone
207-873-0106 fax
waldo CoMMuniTy developMenT federal
CrediT union
Barbara Hileman, Manager
133 High Street, PO Box 812
207-338-0043 phone
207-338-4712 fax
A member-owned co-op of people helping
people to improve the economic well being of
Waldo County. Maines frst community develop-
ment credit union, membership is open to nearly
all Waldo County residents, and non-residents
can also become depositers. A wide range of af-
fordable fnancial services are offered.
winslow CoMMuniTy federal CrediT union
Lewis Raymond, Manager
P.O. Box 8117
Winslow, Maine 04901
207-872-2636 phone
207-873-7003 fax
winThrop area federal CrediT union
Jeff Seguin,Manager
P.O. Box 55, Highland Avenue
Winthrop, Maine 04364
61
winThrop area federal CrediT union, Con-
Tinued
207-377-2124 phone
207-377-2767 fax
e-mail: wafcu@ctel.net
web site: www.ctel.net/~wafcu
The Winthrop Area Federal Credit Union was
chartered in 1937.
york CounTy TeaChers federal CrediT
union
Jim Nelson, Manager
124MainStreet
207-324-7511 phone
207-490-5064 fax
e-mail: yorkcounty@yorkcountytfcu.com
web site: www.yorkcountytfcu.com/
Branches:
22 Thornton Avenue
Saco, Maine 04072
207-282-2962 phone
207-282-3147 fax
518 U.S. Route 1, Suite 7
Kittery, Maine 03904
207-439-3124 phone
207-439-3180 fax
Hussey Manufacturing Company
North Berwick, Maine 03906
207-676-2771, ext. 299 phone
The York County Teachers Federal Credit Union
has been serving its members fnancial needs
since 1954. Membership includes staff of York
County medical facilities, Hussey Manufacturing
Co. Inc., JHM Enterprises, Notre Dame De-
Lourdes Roman Catholic Parish and members,
York County students, many other diversifed
organizations and businesses, and their families.
fisherMen
Beals & JonesporT Co-op, inC.
Stephen Peabody, Manager
P.O. Box 195, Wharf Street
Jonesport, Maine 04649
207-497-2020 phone
207-497-2858 fax
A lobster fshermans co-op, both wholesale and
retail, handling 500,000 to 800,000 pounds of
lobster and 200,000-400,000 of live crabs a year.
Scallops in the winter months are sold, allow-
ing sea urchin fshermen to use the facility in the
winter months. Bait, marine supplies, fuel and
gas and wholesale picked crabmeat are also sold.
BooThBay region loBsTerMen Co-op, inC.
Donn Page, President
Butch Cressey, Manager
97 Atlantic Avenue
Boothbay Harbor, Maine 04538
207-633-4900 phone
207-633-4077 fax
web site: www.mainelobstercoop.com
Founded in 1947 with 36 members, the co-op
now has 9 board members and 31 non-members
from whom they buy seafood. Lobsters are sold
all year round, as far as Boston and New York.
Fresh Maine shrimp is sold in the winter. A 250-
seat restaurant with indoor and outdoor dining is
on the waterfront, selling a variety of seafood.
Corea loBsTer CooperaTive, inC.
Dwight Rodgers, Manager
P.O. Box 99, Crowley Island Road
Corea, Maine 04624
207-963-7936 phone
207-963-5952 fax
Wholesale lobster has been sold in the northeast
U.S. for 28 years. 41 members.
62
CranBerry isles fisherMens Co-op
Marc Nightman, Manager
P.O. Box 258
Islesford, Maine 04646
207-244-5438 phone
In business since 1978, currently numbering
22 members, the co-op buys and sells lobsters,
wholesale and retail, in Maine and elsewhere the
northeastU.S.
georgeTown fisherMens Co-op
Angus Crosby, President
HC33, Box 471A, Gotts Cove
Georgetown, Maine 04548
207-371-2950 offce phone
207-371-2722 (crab) wharf
In business for 12 years, currently totalling 15
full-time fshermen members, the co-op buys bait
for members use and sell the lobsters they catch.
Some years shrimp is processed in the winter
months. A snack bar with lobster, clams, fsh, etc.
on the wharf; diesel fuel; diving service; and weld
repairs are available on site.
inTersTaTe loBsTer Co-op
P.O. Box 269
Harpswell, Maine 04079
207-833-5516 phone
isle au hauT loBsTerMens assoCiaTion
Jack MacDonald, Manager
69 Island Road
Isle au Haut, Maine 04645
nophone
In existence since 1984, at last count this co-op
had around 20 members. A lot are young mem-
bers; some are active and some are not.
new harBor fisherMens Co-op
Ken Tonneson, Manager
P.O. Box 125, North Route 32
New Harbor, Maine 04554
207-677-2791 phone
207-677-3835 fax
In business for a good 25 years, they cant say
how many members they have at present, be-
cause theyre going through a buy out. The co-
op buys lobsters and shrimp, selling them to the
northeast region of the country.
peMaquid fisherMens Co-op assoCiaTion
Charles Blaisdell, Manager
32 Co-op Road
Pemaquid Harbor, Maine 04558
207-677-2801 phone
207-677-2818 fax
Founded in 1947, members fsh for lobster and
shrimp, in season. 30 active members.
pine poinT fisherMans CooperaTive
Gary Johnson, President
96 King Street
P.O. Box 2247
207-883-3588 phone
207-883-6772 fax
e-mail: lobworld@aol.com
web page: in progress
A lobstermans co-op with a seasonal retail mar-
ket and a seasonal restaurant, the rest of the time
they wholesale on trucks up and down the east
coast.Membersarelobstermen.
porT Clyde fisherMens Co-op
Donnie Schwab, Manager
P.O. Box 103
Port Clyde, Maine 04855
207-372-8922 phone
With 20 members, around for 25 years, this co-
op buys lobsters, selling them to a company in
Maine.
souTh BrisTol fisherMens Co-op
Albert Farrin, Manager
P.O. Box 63
South Bristol, Maine 04568
207-644-8246
63
Buy and sell lobsters. In the winter, they do
shrimp. A store here sells hardware for fshing.
Established in the early 70s, they currently have
12 to 15 members.
spruCe head fisherMens Co-op
BobBaines,Manager
HC 33, Box 1179
South Thomaston, Maine 04858
207-594-7527 phone
Wholesaling lobsters in the State of Maine for 24
years. Membership numbers 45, though all are
not active.
sToningTon loBsTer CooperaTive
Skip Greenlaw, Manager
P.O. Box 87, Indian Point Road
Stonington, Maine 04681-0087
207-367-2286 phone
800-315-6625 out-of-state phone line
207-367-2802 fax
Buying and selling lobsters, clams, mussels, scal-
lops, crabmeat and shrimp, primarily wholesale.
Selling some retail seafood. Membership num-
bers approximately 160 fshermen (75 active).
Seafood is shipped to homes and offces via UPS
and Fedex, daily.
swans island fisherMens Co-op
Kathy Clark, Manager
P.O. Box 116
Swans Island, Maine 04685
207-526-4327
Sellinglobsters,scallops,clams,marinesupplies,
gasoline, and diesel fuel. With 35 members at
present, the co-op has been in business for over
20 years.
vinalhaven fisherMens Co-op
Norah Warren, Manager
P.O. Box 366
Vinalhaven, Maine 04863
207-863-2263 and 207-863-4373 phone
207-863-2724 fax
Buying lobsters and selling them in New England
and Canada. In business for 24 years and this
fshermens co-op has 200 members.
winTer harBor loBsTer Co-op
Winter Harbor, Maine 04693
207-963-5857
17 members as of July 22, 1998.
food
There are a nuMber of pre-order, consuMer food
cooperaTives ThaT are noT lisTed here. Though
They are invisible To The general public and we
have noT Made conTacT wiTh TheM, we would like
To acknowledge Their exisTence.
BelfasT Co-op
Gary Skigen, Manager
123 High Street
207-338-2532 phone
207-338-5234 fax
e-mail: belfastcoop@agate.net
web site: www.agate.net/~belfastcoop
The Belfast Co-op is a full-service cooperative
natural foods supermarket with a gourmet deli
serving weekend brunch, lunch and dinner. They
carry everything from organic fresh produce
to a complete selection of fne wine and beer
-- bulk grains, beans, nut butters and hundreds
of Made-in-Maine products. The goals are to
provide healthy food at the most reasonable
priceswhileofferingaplaceforsocialmeetings
and gatherings -- political, musical, philosophi-
cal, environmental, etc.
Blue hill food Co-op
Colleen Bunker, Gail Bartlett, Peter Williams,
Lynn Arnold, Co-Managers
Green Hill Place
Blue Hill, Maine 04614
207-374-2165 phone
207-374-3757 fax
64
Blue hill food Co-op, ConTinued
Primarily a whole foods co-op, selling bulk prod-
ucts with a focus on the organic. 630 members at
present.
CasTine Co-op
Heidi Williams, Manager
P.O. Box 267
Castine, Maine 04421
207-326-8760 phone
207-326-8760 fax, call frst
Fine selection of natural and organic foods and
local organic produce. Membership totals 55 at
present.
fair-share MarkeT (Co-op)
Jean E. Federico, Manager
18 Tannery Street
Norway, Maine 04268
207-743-9044 phone
Fresh organic milk and produce. Promoting local
businesses and individualism selling a variety of
bulk foods, herbs and spices, also supplements
and health & beauty aids. Membership is 250+
memberfamilies.
good Tern Co-op
Sheryl Cooper, Manager
216 South Main Street
Rockland, Maine 04841
207-594-9286 phone
A natural food store, carrying organic produce
and bulk food items. Membership numbers
around 300 members.
uniTy Co-op (previously known as Main
sTreeT MarkeT)
Kip Penney and Chris of Coventree, Co-Manag-
ers
P.O. Box 148, Depot Street
Unity, Maine 04988
207-948-6161 phone
Member-owned natural foods cooperative and
cafe, featuring organic and locally grown pro-
duce and other local products. About 120 house-
holds as members.
rising Tide Co-op
Linda Cot-Small, Manager
RR1, Box 38
Damariscotta, Maine 04543
207-563-5556 phone
207- 563-3012 offce/fax
e-mail: rtcoop@tidewater.net or rtbuyer@tide-
water.net
Natural, organic food when available is sold here,
including produce, vitamins, groceries, and fro-
zen items. Dairy alternatives are also sold. With a
membership numbering 500 this co-op has been
in business for 23 years. (The address will be
changing in October of 1998.)
hospiTal
SYNERNET
Debbie Kuzia
222 St. John Street, Suite 329
207-771-3456 phone
207-775-3415 fax
e-mail: dkuzia@synernet.net
web site: www.synernet.net
SYNERNET is a cooperative of hospitals and
hospital networks. Through a wide range of col-
laborative programs and services, the goal is to
help shape the course of healthcare delivery.
housing
friendship Co-op
Roger Griffth
105 Darling Road
Hudson, Maine 04449
207-884-7629 phone
e-mail: griffth@mint.net
65
Maine sheep Breeders assoCiaTion
c/o Brant Miller, President
67 Post Road
Bowdoinham, Maine 04008
207-666-3270 phone
e-mail: bsmiller@gwi.net
A commodity group acting as a co-op while sell-
ing products through a wool pool. Around 200
members.
naTional farMers organizaTion
Northeast Region
Ray Achilles, Northeast Manager
101 Erie Street
Amsterdam, New York 12010
800-221-1718 phone
518-842-1793 fax
In existence nationwide for 42 years, with
roughly 500 members in the northeast, this co-op
markets 40 million pounds of milk per month.
friendship Co-op, ConTinued
A tax-exempt non-proft organization buys an
apartment and a co-op is formed. There are cur-
rently eight units in Saco and Biddeford.
TogeTher plaCe housing
9 and 16 Center Street Avenue
Bangor, Maine 04401
address inquiries to:
Fred Stocking, Clerk
Stocking & Crotteau, LLC
346 Lamoine Beach Road
Lamoine, Maine 04605
207-667-6009 phone
207-667-6407 fax
e-mail: stocking @acadia.net
Owning 11 units and 3 apartment buildings and
operating much like the Friendship Co-op (see
above).
MarkeTing
Made in aroosTook
Sandy Caton
P.O. Box 187
Ashland, Maine 04732
207-435-6082
The co-op started in the mid-90s. A marketing
co-op, they joined forces to try and help adver-
tise and promote their products. 12 members at
present.
66
67
TiTle 13: CorporaTions
parT 2: CorporaTions wiThouT CapiTal
ChapTer 85: CooperaTives
suBChapTer i: ConsuMer CooperaTives
arTiCle 1: general provisions
13 1501. definiTions
Inthissubchapter,unlessthesubjectmatter
requires otherwise:
1. assoCiaTion. Association means a group
enterprise legally incorporated under this
subchapter and shall be deemed to be a non-
proft corporation.
2. CooperaTive Basis. Cooperative basis as
applied to any incorporated or unincorpo-
rated group referred to in subsequent sections
of this subchapter means:
A. That each member has one vote and only
one vote, except as may be altered in the
articles or bylaws by provisions for voting
by member organizations;
B. That the maximum rate at which any
return is paid on share or membership
capital is limited to not more than 6%;
and
C. That the net savings after payment, if
any, of said limited return on capital and
after making provision for such separate
funds as may be required or specifcally
permitted by statute, articles or bylaws
shall be allocated or distributed to mem-
berpatrons,ortoallpatrons,inpropor-
tion to their patronage; or retained by
theenterprisefortheactualorpotential
expansion of its services or the reductions
of itschargestothepatrons,orforother
purposesnotinconsistentwithitsnon-
proft character.
3. MeMBer. Member means not only a
memberinanonshareassociationbutalsoa
memberinashareassociation.
4. neT savings. Net savings means the total
incomeof anassociationminusthecostsof
operation.
5. savings reTurns. Savings returns means
the amount returned to the patrons in pro-
portiontotheirpatronageorotherwisein
accordance with this subchapter.
13 1502. exisTing CooperaTive groups
Any group incorporated under the law of this
State and operating on a cooperative basis or any
unincorporated group operating on such a basis
in this State may elect by a vote of 2/3 of the
members voting to secure the benefts of and be
bound by this subchapter, and shall thereupon
amend such of its articles and bylaws as are not
in conformity with the provisions hereof. A certi-
fed copy of the amended articles shall be fled
and recorded with the Secretary of State and a
fee of $5 shall be paid.
13 1503. foreign CorporaTions doing Busi-
ness in sTaTe
A foreign corporation or association operating
on a cooperative basis and complying with the
applicable laws of the state or District of Colum-
bia wherein it is organized shall be entitled to
do business in the State as a foreign cooperative
corporation or association upon complying with
law for foreign corporations doing business in
thisState.
Maine Co-op law
all coPyrigHts and otHer rigHts to statutory text are reserved By tHe state of Maine. tHe text included in tHis PuBlication
is current to tHe end of tHe first sPecial session of tHe 118tH legislature (laws enacted Before January 1, 1998) But is suBJect
to cHange witHout notice. it is a version tHat Has not Been officially certified By tHe secretary of state. refer to tHe
Maine revised statutes annotated and suPPleMents for certified text.
68
13 1504. laws noT appliCaBle
No law of the State conficting or inconsistent
with any part of this subchapter shall, to the ex-
tent of the confict or inconsistency, be construed
as applicable to associations formed under this
subchapter; nor shall any law of the State inap-
propriatetothepurposesof suchassociationsbe
so construed.
13 1505. TaxaTion
Associations formed under this subchapter and
foreign corporations and associations admitted
to do business in the State and entitled to the
benefts of this subchapter shall pay the annual
license fee required of other business corpora-
tions and foreign corporations.
13 1506. regisTraTion as dealers in seCuri-
Ties
Associations organized under this subchapter
shall be subject to Title 32, chapter 13. The fee
charged for registration or renewal shall be $10.
13 1507. liMiTaTion on reTurn on CapiTal
The return upon capital shall not exceed 6%
per year upon the paid-up capital and shall be
noncumulative.
Total return upon capital distributed for any
single period shall not exceed 50% of the net
savings for that period.
ArTiCle 2: organizaTion and Bylaws
13 1551. arTiCles of inCorporaTion; firsT
MeeTing; fees
Articles of incorporation for the formation of an
association under this subchapter shall be drawn
up and fled in the same manner and under the
same provisions as for organizing business corpo-
rations under the general law, except where such
procedure would be inconsistent with this sub-
chapter. The same provision shall apply under
said general law to associations organized under
this subchapter in respect to the frst meeting of
the corporation, and as to fees payable to the
State.
13 1552. who May inCorporaTe
Any 3 or more natural persons or 2 or more
associations may incorporate in this State under
thissubchapter.
13 1553. purposes
An association may be incorporated under this
subchapter to engage in any one or more law-
ful mode or modes of acquiring, producing,
building, operating, manufacturing, furnishing,
exchanging or distributing any type or types of
property, commodities, goods or services for the
primary and mutual beneft of the patrons of the
association, or their patrons, if any, as ultimate
consumers.
13 1554. powers
An association shall have the capacity to act pos-
sessed by natural persons and the authority to do
anything required or permitted by this subchap-
ter and also:
1. ConTinuaTion. Tocontinueasacorporation
for the time specifed in its articles;
2. seal. To have a corporate seal and to alter
thesameatpleasure;
3. sue and Be sued. To sue and be sued in its
corporatename;
4. Bylaws. To make bylaws for the government
and regulation of its affairs;
5. aCquire and dispose of properTy.Toac-
quire, own, hold, sell, lease, pledge, mortgage
or otherwise dispose of any property incident
to its purposes and activities;
6. own oTher CorporaTions. To own and
hold membership in and share capital of
other associations and any other corporations
and any types of bonds or other obligations;
and while the owner thereof to exercise all
therightsof ownership;
69
7. Borrow Money; Make ConTraCTs.Tobor-
row money, contract debts and make con-
tracts, including agreements of mutual aid
or federation with other associations, other
groups organized on a cooperative basis and
other nonproft groups;
8. operaTe wiThin and wiThouT sTaTe.To
conduct its affairs within or without this
State;
9. powers of ordinary Business Corpora-
Tions. To exercise in addition any power
granted to ordinary business corporations,
save those powers inconsistent with this sub-
chapter; and
10.oTher powers. To exercise all powers not
inconsistent with this subchapter which may
be necessary, convenient or expedient for the
accomplishment of its purposes, and to that
end, the powers enumerated in this section
shall not be deemed exclusive.
13 1555. Bylaws
Bylaws shall be adopted, amended or repealed
by at least a majority vote of the members vot-
ing.
13 1556. MeeTings
Regular meetings shall be held as prescribed in
the bylaws, but shall be held at least once a year.
Special meetings may be demanded by a major-
ity vote of the directors or by written petition of
at least 3/10 of the membership, in which case
it shall be the duty of the secretary to call such
meeting to take place within 30 days after such
demand.
arTiCle 3: voTing
13 1601. one MeMBer, one voTe
Each member of an association shall have one
and only one vote, except that where an associa-
tion includes among its members any number of
other associations or groups organized on a co-
operative basis, the voting rights of such member
associations or groups may be as prescribed in
the articles or bylaws.
No voting agreement or other device to evade
the one-member-one-vote rule shall be enforce-
able by a civil action.
13 1602. no proxies (repealed)
section History: 1997, c. 7, 1 (rP).
13 1603. appliCaTion of provisions To voT-

ing By delegaTes
If an association has provided for voting by del-
egates, any provision of this subchapter referring
to votes cast by the members shall apply to votes
cast by delegates; but this shall not permit del-
egates to vote by mail.
13 1604. voTing By proxy
Unless specifed otherwise in an associations
articles of incorporation or bylaws, members
are permitted to vote by proxy. [1997, c. 7, 2
(new).]
1. appoinTMenT of agenT.Theappointment
of one or more agents to vote on behalf of
the member must be by written proxy ex-
ecuted by the member or by the members
duly authorized attorney-in-fact. A telegram,
cablegram or facsimile appearing to have
been transmitted may be considered to satisfy
this requirement.
[1997, c. 7, 2 (new).]
2. duraTion. A proxy is valid for only 11
months from the date of its execution, unless
otherwise expressly and conspicuously pro-
vided in the proxy.
[1997, c. 7, 2 (new).]
3. revoCaTion. A proxy is revocable at the
pleasure of the person executing it. A proxy
may be revoked, without limitation, by an
instrument that in terms revokes the proxy or
by a subsequent duly executed proxy. The
authority of a proxy holder is not revoked by
death or supervening incapacity of the mem-
ber executing the proxy unless, before
70
the authority is exercised, written notice of
death or incapacity is fled with the corpo-
rate offcer responsible for maintaining the
listof members.Thepresenceatamem-
bers meeting of the member appointing a
proxy does not of itself revoke the proxy.
A member may revoke an appointment of
a proxy by giving notice to the corporate
offcer responsible for maintaining a list of
members or by giving notice in open meet-
ingof themembers.
[1997, c. 7, 2 (new).]
section History: 1997, c. 7, 2 (new).
arTiCle 4: MeMBers
13 1641. eligiBiliTy and adMission To MeM-
Bership
Any natural person, association, incorporated or
unincorporated group organized on a coopera-
tive basis or any nonproft group shall be eligible
formembershipinanassociation,if ithasmet
the qualifcations for eligibility, if any, stated
in the articles or bylaws and shall be deemed a
member upon payment in full for the par value
of theminimumamountof shareormember-
ship capital stated in the articles as necessary to
qualify for membership.
13 1642. suBsCriBers
Any natural person or group eligible for mem-
bership and legally obligated to purchase a share
orsharesof,ormembershipin,anassociation
shall be deemed a subscriber. The articles or by-
laws may determine whether, and the conditions
under which, any voting rights or other rights of
membership shall be granted to subscribers.
13 1643. liaBiliTy of MeMBers
Members shall not be jointly or severally li-
able for any debts of the association, nor shall a
subscriber be so liable except to the extent of the
unpaid amount on the shares or membership
certifcates subscribed by him. No subscriber
shall be released from such liability by reason
of any assignment of his interest in the shares or
membership certifcate, but shall remain jointly
and severally liable with the assignee until the
shares or certifcates are fully paid-up.
13 1644. expulsion
A member may be expelled by the vote of a
majority of the members voting at a regular or
specialmeeting.Thememberagainstwhomthe
charges are to be preferred shall be informed
thereof in writing at least 10 days in advance of
the meeting, and shall have an opportunity to
be heard in person or by counsel at said meet-
ing. On decision of the association to expel a
member, the board of directors shall purchase
the members holdings at par value, if and when
there are suffcient reserve funds.
13 1645. alloCaTion and disTriBuTion of
neT savings
At least once a year the members or the di-
rectors, or both, as the articles or bylaws may
provide, shall apportion the net savings of the
association in the following order.
1. reserve fund. Not less than 10% shall
be placed in a reserve fund until such time
as the fund shall equal at least 50% of the
paid-up capital; and such fund may be used
in the general conduct of the business. The
amounts apportioned to the reserve fund
shall be allocated on the books of the associa-
tiononapatronagebasis,orinlieuthereof,
the books and records of the association
shall afford a means for doing so in order
that upon dissolution or earlier, if deemed
advisable, such reserves may be returned to
the patrons who have contributed the same,
subjecttothelimitationsof thesectionon
dissolution herein;
2. reTurn upon CapiTal. A return upon capi-
tal, within the limitations of sections 1507, 16
to 1644, 1691 and 1692, may be paid upon
sharecapital;butsuchreturnuponcapital
may be paid only out of the surplus of the
aggregate of the assets over the aggregate
of the liabilities, including in the latter the
71
amount of the capital stock, after deducting
fromsuchaggregateof theassetstheamount
by which such aggregate was increased by
unrealized appreciation in value or revalua-
tion of fxed assets.
3. eduCaTional fund. A portion of the re-
mainder, as determined by the articles or
bylaws, shall be allocated to an educational
fund to be used in teaching cooperation, and
a portion may be allocated to funds for the
generalwelfareof themembersof theas-
sociation.
4. paTronage. The remainder shall be allocat-
ed at the same uniform rate to all patrons of
the association in proportion to their indi-
vidual patronage:
A. Inthecaseof amemberpatron,his
proportionate amount of savings returns
shall be distributed to him unless he
agrees that the association should credit
the amount to his account toward the
purchase of an additional share or shares
or additional membership capital;
B. Inthecaseof asubscriberpatron,his
may, as the articles or bylaws provide, be
distributed to him or credited to his ac-
countuntiltheamountof capitalsub-
scribed for has been fully paid;
C. Inthecaseof anonmemberpatron,his
shall be set aside in a general fund for
such patrons and shall be allocated to
individual nonmember patrons only upon
request and presentation of evidence of
the amount of their patronage. Any sav-
ings returns so allocated shall be credited
to such patron toward payment of the
minimumamountof shareormember-
ship capital necessary for membership, or
may be paid to such patron. When a sum
equal to this amount has been accumu-
lated and so credited at any time within
a period of time specifed in the bylaws,
such patron shall be deemed and become
amemberof theassociationif heso
agrees or requests and complies with any
provisions in the bylaws for admission to
membership. The certifcates of shares or
membership to which he is entitled shall
then be issued to him;
D. If within any periods of time specifed in
the articles or bylaws:
(1) Any subscriber has not accumulated
and paid in the amount of capital
subscribed for; or
(2) Any nonmember patron has not ac-
cumulated in his individual account
the sum necessary for membership; or
(3) Any nonmember patron has accumu-
lated the sum necessary for member-
ship, but neither requests nor agrees
tobecomeamemberorfailstocom-
ply with the provisions of the bylaws,
if any, for admission to membership;
then the amounts so accumulated or paid
in shall go to the educational fund, and
thereafternomemberorotherpatron
shall have any rights in said paid-in
capital or accumulated savings returns as
such. Nothing in this section shall prevent
an association operating under this sub-
chapter, which is engaged in rendering
services, from disposing of the net savings
from the rendering of such services in
such manner as to lower the fees charged
for services or otherwise to further the
common beneft of the members. Noth-
ing in this section shall prevent an associ-
ation from adopting a system whereby the
payment of savings returns, which would
otherwise be distributed, shall be deferred
for a fxed period of months or years;
nor from adopting a system whereby the
savings returns distributed shall be partly
in cash, partly in shares, such shares to be
retired at a fxed future date in the order
of the serial number or date of issue.
72
arTiCle 5: shares
13 1691. issuanCe and ConTenTs
No certifcate for share or membership capital
shall be issued until the par value thereof has
been paid for in full. There shall be printed upon
each certifcate issued by an association a full
or condensed statement of the requirements of
sections pertaining to one-member-one-vote, no
proxy and transfer of shares and membership.
13 1692. Transfer of shares and MeMBer-
ship; wiThdrawal
If a member desires to withdraw from the as-
sociation or dispose of any or all of his holdings,
the directors shall have the power to purchase
such holdings by paying him the par value of
any or all of the holdings offered. The directors
shall then reissue or cancel the same. A vote of
the majority of the members voting at a regular
or special meeting may order the directors to
exercise this power to purchase.
If the association fails, within 60 days of the
original offer, to purchase all or any part of the
holdings offered, the member may dispose of
the unpurchased interest elsewhere, subject to
the approval of the transferee by a majority
vote of the directors. Any would-be transferee
not approved by the directors may appeal to the
members at their frst regular or special meeting
thereafter, and the action of the meeting shall
be fnal. If such transferee is not approved, the
directors shall exercise their power to purchase,
if and when such purchase can be made without
jeopardizing the solvency of the association.
arTiCle 6: dissoluTion
13 1731. proCedure
An association may, at any regular or special
meeting legally called, be directed to dissolve by
a vote of 2/3 of the entire membership. By a
vote of a majority of the members voting, 3 of
their number shall be designated as trustees, who
shall, on behalf of the association and within
a time fxed in their designation or within any
extension thereof, liquidate its assets and shall
distribute them in the manner set forth in this
section. In case of any dissolution of an associa-
tion, its assets shall be distributed in the following
manner and order:
1. paying deBTs and expenses. By paying its
debts and expenses;
2. aMounTs paid By MeMBers. By returning to
the members the par value of their shares or
of their membership certifcates, returning
to the subscribers the amounts paid on their
subscriptions and returning to the patrons
the amount of savings returns credited to
their accounts toward the purchase of shares
or membership certifcates; and
3. paying paTrons or giving To nonprofiT
assoCiaTions. By distributing any surplus in
either or both of the following ways as the
articles may provide:
A. Among those patrons who have been
members or subscribers at any time dur-
ing the past 6 years, on the basis of their
patronage during that period; or
B. As a gift to any consumers cooperatives
association or other nonproft enterprise
which may be designated in the articles.
suBChapTer i-a: CooperaTive affordaBle
housing ownership (heading: pl 1993, C.
300, 1 (new))
13 1741. shorT TiTle
This subchapter may be known and cited as the
Maine Cooperative Affordable Housing Own-
ership Act. [1993, c. 300, 1 (new).]
As used in this subchapter, unless the context
otherwise indicates, the following terms have the
following meanings. [1993, c. 300, 1 (new).]
73
1. Conversion. Conversion means a change
in character of residential real property from
arentaltoanownershipbasis.Creationof a
cooperative affordable housing corporation
to own property formerly rented for dwell-
ing purposes is considered such a change in
character.
[1993, c. 300, 1 (new).]
2. CooperaTive affordaBle housing Corpo-
raTion. Cooperative affordable housing
corporation means a domestic corporation
that is organized under or elects to be gov-
erned by the provisions of this subchapter.
[1993, c. 300, 1 (new).]
3. CooperaTive inTeresT. Cooperative inter-
est means the ownership interest in a coop-
erative affordable housing corporation that is
evidenced by a membership share.
[1993, c. 300, 1 (new).]
4. CooperaTive properTy. Cooperative prop-
erty means the real and personal property,
including mobile and manufactured homes,
in this State owned or leased by a coopera-
tive affordable housing corporation for the
primary purpose of residential use.
[1993, c. 300, 1 (new).]
5. lender. Lender includes, but is not
limited to, the following institutional lenders
whose policies and procedures are subject to
governmental supervision:
A. A federal, state or local housing fnance
agency; [1993, c. 300, 1 (new).]
B. A bank, including savings and loan asso-
ciations or insured credit unions; [1993,
c. 300, 1 (new).]
C. Insurance companies; [1993, c. 300, 1
(new).]
D. Pension and proft-sharing funds or trusts;
or [1993, c. 300, 1 (new).]
E. Any combination of the lenders listed in
paragraphs A to D. [1993, c. 300, 1
(new).]
Lender also includes a community loan
fund or similar nonproft lender to housing
projects.
[1993, c. 300, 1 (new).]
6. liMiTed equiTy CooperaTive. Limited
equity cooperative means a cooperative
affordable housing corporation organized in
accordance with section 1754.
[1993, c. 300, 1 (new).]
7. liMiTed equiTy forMula. Limited equity
formula means a rule or method for de-
termining the transfer value of a share in a
limited equity cooperative.
[1993, c. 300, 1 (new).]
8. low inCoMe. Low income means income
that is less than or equal to 80% of median
income for the area, adjusted for family
size, in accordance with federal standards
generally accepted at the time of incorpora-
tion under this subchapter and comparable
to standards of the federal Department of
Housing and Urban Development in exis-
tence on the effective date of this section.
[1993, c. 300, 1 (new).]
9. MeMBer. Member means a person who
owns a cooperative interest.
[1993, c. 300, 1 (new).]
10. ModeraTe inCoMe. Moderate income
means income that is less than or equal to
100% of median income for the area, ad-
justed for family size, in accordance with
federal standards generally accepted at the
time of incorporation under this subchapter
and comparable to standards of the federal
Department of Housing and Urban Devel-
opment in existence on the effective date of
thissection.
[1993, c. 300, 1 (new).]
74
11. proprieTary lease. Proprietary lease
means an agreement with a cooperative af-
fordable housing corporation governing a
members right to occupancy under which a
member has an exclusive possessory interest
inaunit.
[1993, c. 300, 1 (new).]
12. residenT. Resident means any occupant
of space owned by the cooperative affordable
housingcorporation.
[1993, c. 300, 1 (new).]
13. share loan. Share loan means an agree-
ment entered into by a member and a lender
to fnance the members acquisition of the
members cooperative interest.
[1993, c. 300, 1 (new).]
14. suBsCripTion agreeMenT. Subscription
agreement means a written agreement
between a prospective member and a coop-
erative affordable housing corporation for the
purchase and sale of a cooperative interest.
[1993, c. 300, 1 (new).]
15. uniT. Unit means a portion of the cooper-
ative property leased for exclusive occupancy
by a member under a proprietary lease or
leased to a tenant by lease agreement.
[1993, c. 300, 1 (new).]
13 1743. appliCaTion
1. nonprofiT. Cooperative affordable housing
corporations are considered nonproft inas-
much as they are not organized to make a
proft for themselves or for their members.
[1993, c. 300, 1 (new).]
2. appliCaBiliTy. Except as otherwise provided
in this subchapter, cooperative affordable
housing corporations in the State are gov-
erned by and have all the rights, privileges
and powers established in Title 13-A. With-
out limiting the applicability of federal law
to any other corporation or unincorporated
association that provides housing on a coop-
erative basis, it is the intent that cooperative
affordable housing corporations governed by
this subchapter qualify as cooperative hous-
ing corporations under federal law.
[1993, c. 300, 1 (new).]
3. eleCTion. Any corporation governed by
Title 13-A may elect by a vote of 2/3 of the
members voting to secure the benefts of and
be bound by this subchapter and must then
amend its articles of incorporation to con-
formwiththissubchapter.
[1993, c. 300, 1 (new).]
4. exeMpTion. Any corporation or unincor-
porated association that does not elect to be
governed under this subchapter may not be
restricted from providing housing on a coop-
erative basis whether as a consumer coopera-
tive under subchapter I or otherwise.
[1993, c. 300, 1 (new).]
13 1744. naMe; use of CooperaTive
A person, frm, corporation or association, do-
mesticorforeign,commencingbusinessinthis
State after the effective date of this section may
not use the word cooperative or co-op as a
part of its corporate name unless it has complied
with this subchapter or any other law of this
State relating to cooperative associations. A for-
eign association organized under and complying
with the cooperative laws of the state in which it
was created is entitled to use the term coopera-
tive or co-op in this State if it has obtained
the privilege of doing business or carrying on
activities in this State. [1993, c. 300, 1 (new).]
75
13 1745. properTy ClassifiCaTion of Coop-
eraTive inTeresT
1. personal properTy. A cooperative interest
is personal property.
[1993, c. 300, 1 (new).]
2. nonseveraBle inTeresT. The possessory
interest evidenced by a proprietary lease is a
part of and may not be severed from a coop-
erative interest.
[1993, c. 300, 1 (new).]
13 1746. perfeCTion of seCuriTy inTeresTs
in CooperaTive inTeresTs
1. Creation of security interest. Security inter-
ests in shares of cooperative affordable hous-
ing corporations may be created, perfected
and enforced in the same manner as security
interests in certifcated securities under Title
11, articles 8 and 9. A lender may perfect
such a security interest by possession of
shares or by any other method under which
security interests in certifcated securities may
be perfected pursuant to Title 11, article 8.
[1993, c. 300, 1 (new).]
2. Notation of secured party. Upon the request
of a secured party, a cooperative affordable
housingcorporationshallnoteonitsbooks
and records the interest of the secured party
in a cooperative interest. Such a request or
notation is not required to perfect a security
interest in a cooperative interest.
[1993, c. 300, 1 (new).]
13 1747. arTiCles of inCorporaTion; Mini-
MuM requireMenTs
Articles of incorporation of a cooperative af-
fordable housing corporation must contain the
following provisions in addition to those required
by Title 13-A: [1993, c. 300, 1 (new).]
1. one Class of sToCk. A statement that the
cooperative affordable housing corporation
has only one class of stock;
[1993, c. 300, 1 (new).]
2. resTriCTions on Transfers. A statement of
restrictions, if any, upon transfers of shares;
[1993, c. 300, 1 (new).]
3. raTe of dividend. The rate of dividend, if
any, allocable to membership shares, which
may not exceed 6% per annum on invested
capital;
[1993, c. 300, 1 (new).]
4. aCquire MeMBership. The conditions, if
any, under which the cooperative affordable
housing corporation reserves the right to
acquire membership shares;
[1993, c. 300, 1 (new).]
5. disTriBuTion upon dissoluTion.Thebasis
for distribution of assets in the event of dis-
solution;
[1993, c. 300, 1 (new).]
6. alloCaTion of ownership and voTing in-
TeresTs. The method of allocation of own-
ership and voting interests in the cooperative
affordable housing corporation; and
[1993, c. 300, 1 (new).]
7. righT of firsT refusal. The conditions, if
any, under which the cooperative affordable
housing corporation has a right of frst re-
fusal upon proposed transfers of cooperative
interest.
[1993, c. 300, 1 (new).]
13 1748. organizaTional MeeTing
Within 6 months after the frst conveyance of a
share to a member, an organizational meeting of
76
the cooperative affordable housing corporation
must be held for the purpose of adopting bylaws,
electing offcers and transacting such other busi-
ness as may come before the meeting. [1993, c.
300, 1 (new).]
13 1749. MeMBership
1. CapiTal sToCk. A cooperative affordable
housing corporation must be organized on a
membershipbasiswithcapitalstock.
[1993, c. 300, 1 (new).]
2. requireMenTs. A cooperative affordable
housing corporation must have one class of
stock and one class of members. The desig-
nation, qualifcations, requirements, method
of acceptance and incidents of membership
mustbesetforthinthearticlesof incorpora-
tion or the bylaws.
[1993, c. 300, 1 (new).]
3. Transfers. A member may not transfer
membership except as permitted in the ar-
ticles of incorporation or the bylaws.
[1993, c. 300, 1 (new).]
4. TerMinaTion.Thearticlesof incorporation
or the bylaws may provide for termination of
membership and the conditions and terms of
termination.
[1993, c. 300, 1 (new).]
13 1750. Bylaws; MiniMuM requireMenTs
The bylaws of a cooperative affordable hous-
ing corporation must contain procedures under
which the cooperative affordable housing corpo-
rations possessory remedy will be pursued in the
event of a members default and the rights of a
defaulting member, in accordance with section
1755, subsection 2. [1993, c. 300, 1 (new).]
13 1751. MeMBership shares; require-
MenTs
A cooperative affordable housing corporation
shall issue shares to its members as evidence
of their ownership of a cooperative interest.
The shares must be in a form prescribed in the
articles of incorporation or bylaws of the coop-
erative affordable housing corporation. Restric-
tions upon transfers of shares must be noted on
the face of the certifcates representing shares.
Membership shares may not be issued under this
section and proprietary leases may not be issued
under section 1755 before fling of the articles of
incorporation as a cooperative affordable hous-
ing corporation. [1993, c. 300, 1 (new).]
13 1752. voTing
1. one voTe per MeMBer. Except as provided
in subsection 5, the votes in a cooperative
affordable housing corporation must be as-
signed so that each member has one vote.
[1993, c. 300, 1 (new).]
2. nonMeMBers on Board. Nonmembers may
be elected by the membership of the cooper-
ative affordable housing corporation to serve
on the board of directors of the cooperative
affordable housing corporation, except that
no more than 1/3 of the directors may be
nonmembers.
[1993, c. 300, 1 (new).]
3. proxy voTing. Voting by proxy may be
permitted in cooperative affordable housing
corporations,subjecttothefollowinglimita-
tions:
A. Proxies must be assigned to members;
and [1993, c. 300, 1 (new).]
B. No more than one proxy may be voted by
any member on any question. [1993, c.
300, 1 (new).]
[1993, c. 300, 1 (new).]
77
4. aBsenTee BalloTs. Voting by absentee bal-
lots may be permitted in cooperative afford-
ablehousingcorporations.
[1993, c. 300, 1 (new).]
5. alTernaTive voTing sCheMe. Notwithstand-
ing subsection 1, a cooperative affordable
housing corporation not organized as a lim-
ited equity cooperative pursuant to section
1754 may adopt in its articles of incorpora-
tion or bylaws a voting scheme other than
one vote per member, except that decisions
to merge a cooperative affordable housing
corporation with another entity, to dissolve
it or to amend its articles of incorporation
or bylaws must be made on the basis of one
vote per member.
[1993, c. 300, 1 (new).]
13 1753. Merger; ConsolidaTion
may not consolidate or merge with another
corporation other than a cooperative affordable
housing corporation. Two or more cooperative
affordable housing corporations may consolidate
or merge in accordance with TiTle 13-a, Chap-
Ter 9. Cooperative affordable housing corpora-
tions may not engage in mergers or consolidation
if such an action is undertaken for the purpose
of circumventing section 1754, 1757, 1758 or
1761. [1993, c. 300, 1 (new).]
13 1754. liMiTed equiTy CooperaTives
may organize as a limited equity cooperative in
order to fulfll the public purpose of providing
and preserving housing for persons and house-
holds of low income and moderate income at the
time that they purchase their memberships. In
addition to safeguarding the public purpose, a
limited equity cooperative must meet the follow-
ing requirements. [1993, c. 300, 1 (new).]
1. sale of inTeresT Based on liMiTed equiTy
forMula.Thearticlesof incorporationmust
require that cooperative interests be sold at
no more than a transfer value determined by
a limited equity formula contained in the ar-
ticles. That value must be consistent with the
object of maintaining long-term affordability
of cooperative interests for persons or house-
holds of low income and moderate income.
[1993, c. 300, 1 (new).]
2. MainTenanCe of affordaBiliTy. A limited
equity formula, once established by a coop-
erative affordable housing corporation in its
articles of incorporation, may be amended
only if that amendment does not make the
cooperative membership unaffordable for
classes of low-income or moderate-income
households for which the cooperative af-
fordable housing corporation was originally
incorporated. A cooperative affordable
housing corporation once organized under
this section may not reorganize as other than
a limited equity cooperative without frst dis-
solving.
[1993, c. 300, 1 (new).]
3. uphold puBliC purpose. A limited equity
cooperative may not sell all or substantially
all of its assets if such sale is intended to cir-
cumvent the public purpose of this section.
[1993, c. 300, 1 (new).]
4. righT To repurChase.Thearticlesof in-
corporation must require that the cooperative
affordable housing corporation has the frst
right to repurchase a members cooperative
interest.
[1993, c. 300, 1 (new).]
5. liMiT on CapiTal disTriBuTion. Thear-
ticles of incorporation must require that the
total distribution of capital to a member not
exceed the transfer value.
[1993, c. 300, 1 (new).]
78
6. disTriBuTion upon dissoluTion.The
articles of incorporation must require that
upon dissolution of the cooperative afford-
able housing corporation any assets remain-
ing after retirement of corporate debts and
distribution to members must be distributed
to a charitable organization described in
the Internal Revenue Code of 1986, Sec-
tion 501(c)(3), as amended, a public agency
or another limited equity cooperative whose
formula for determining transfer value is no
less restrictive than that of the cooperative af-
fordable housing corporation being dissolved.
[1993, c. 300, 1 (new).]
7. suBlease liMiTaTions.Thearticlesof
incorporation must require that a sublease
of a unit may not require monthly payments
by the sublessee in excess of 100% of the
monthly payments for the unit required in
the proprietary lease.
[1993, c. 300, 1 (new).]
8. MiniMuM oCCupanCy requireMenT. At least
80% of a limited equity cooperatives occu-
pied units must be occupied by members.
[1993, c. 300, 1 (new).]
9. residenTs only. Voting authority may not
be assigned to nonresidents, except for any
assignment as security for a share loan or as
security for a loan for construction, acquisi-
tion or permanent fnancing of cooperative
property.
[1993, c. 300, 1 (new).]
13 1755. proprieTary lease
Every member of a cooperative affordable hous-
ing corporation is entitled to receive from the
cooperative affordable housing corporation a
written proprietary lease that must include the
following: [1993, c. 300, 1 (new).]
1. personal properTy seCuriTy inTeresT. A
provision that the collateral for a loan against
the members cooperative interest is in the
nature of a personal property security inter-
est and any default of such a loan entitles the
lender to treat the default in the same man-
ner as a default of a loan secured by personal
property;
[1993, c. 300, 1 (new).]
2. reMedy for defaulT. A description of the
cooperative affordable housing corporations
possessory remedy in the event of default.
Good cause is required for termination of the
right of occupancy. Good cause includes
nonpayment of loans, fees, costs or assess-
ments pertaining to the cooperative interest
or material violation of bylaws, rules or pro-
prietary lease that continues following rea-
sonable notice and reasonable opportunity to
cure the alleged material violations; and
[1993, c. 300, 1 (new).]
3. MainTenanCe and Carrying Charges.
Provisions for determining maintenance and
carrying charges for the unit.
[1993, c. 300, 1 (new).]
13 1756. offering of CooperaTive inTer-
esTs; suBsCripTion agreeMenT; disClosures
required
1. Materials provided to prospective members.
Inconjunctionwiththeofferingof coop-
erative interests to prospective members, a
person or entity offering to sell cooperative
interests shall provide to a purchaser prior to
the execution of a subscription agreement
by the purchaser a copy of the proposed or
adopted articles of incorporation and bylaws
of the cooperative affordable housing cor-
poration,asubscriptionagreementorsales
agreement, a proposed proprietary lease and
the most current corporate fnancial state-
ments, if any exist.
[1993, c. 300, 1 (new).]
79
2. ConTenTs of agreeMenTs. Thesubscription
agreement or sales agreement must contain:
A. Provisions detailing the cost of acquisi-
tion of a cooperative interest, the rights
and privileges of membership in the co-
operative affordable housing corporation
and terms and conditions of occupancy
of a unit in the cooperative affordable
housing corporation; [1993, c. 300, 1
(new).]
B. Provisions, if any, under which the sub-
scriptionagreementorsalesagreement
is subordinated to other agreements or
otherwise encumbered; [1993, c. 300, 1
(new).]
C. Provisions for cancellation of the agree-
ment by either party; and [1993, c. 300,
1 (new).]
D. A legally suffcient description of the
property. [1993, c. 300, 1 (new).]
[1993, c. 300, 1 (new).]
3. CanCellaTion.Thesubscriberorpurchaser
hastherighttocancelthesubscriptionagree-
ment or sales agreement without penalty
upon provision of written notice to the offer-
or within 10 days of the date of signing the
agreement. In the event of a cancellation, all
money paid by the subscriber or purchaser
to the offeror must be returned to the sub-
scriber or purchaser by the offeror within 14
days of receipt of the notice of cancellation.
Theofferorshallinformthesubscriberor
purchaserinwritingof therightof cancella-
tion.
[1993, c. 300, 1 (new).]
Notwithstanding any other provision of law to
the contrary, the offer of membership, shares or
other ownership interests in a cooperative afford-
able housing corporation or any other corpora-
tion or unincorporated association organized for
the primary purpose of providing housing on
a cooperative basis as a consumer cooperative
under subchapter I or otherwise is not the offer
of a security pursuant to Title 32, chapter 105 or
any other provision of law.
[1993, c. 300, 1 (new).]
13 1757. ConsuMer proTeCTion; enforCe-
MenT
Failure or neglect to provide to purchasers the
documents and disclosures required by section
1756 is considered a violation of Title 10, chap-
ter 206.
[1993, c. 300, 1 (new).]
13 1758. dissoluTion
By vote of at least 80% of its members or any
larger percentage specifed in the articles of
incorporation or bylaws, a cooperative affordable
housing corporation may vote to dissolve and
terminate its proprietary leases. [1993, c. 300, 1
(new).]
13 1759. loans
Any lender is authorized to make loans secured
by shares in a cooperative affordable housing
corporation, including limited equity coopera-
tives. For purposes of Title 9-A, section 1-202,
subsection (8), a loan secured by shares of a
cooperative affordable housing corporation must
be considered a loan secured by a mortgage on
real estate. [1993, c. 300, 1 (new).]
13 1760. neT inCoMe; apporTionMenT
1. apporTionMenT.Subjecttosubsection2,
the board of directors of a cooperative af-
fordable housing corporation may apportion
annually the remainder of its net income in
one or more of the following ways:
A. As a reserve fund for the general opera-
tion of the cooperative affordable hous-
ing corporation; or [1993, c. 300, 1
(new).]
80
B. As a dividend not to exceed 6% per an-
num on invested capital. [1993, c. 300,
1 (new).]
[1993, c. 300, 1 (new).]
2. CosT reduCTion. This section does not
prevent a cooperative affordable housing
corporation from disposing of its net income
by reducing the cost of facilities or services or
by applying the net income otherwise for the
common beneft of its members.
[1993, c. 300, 1 (new).]
13 1761. nondisCriMinaTion
Title 5, chapter 337, subchapter IV applies to all
cooperative affordable housing corporations in
the State. [1993, c. 300, 1 (new).]
13 1762. properTy Tax provisions
1. Property not tax-exempt. Notwithstanding
any provision of law to the contrary, coopera-
tive property does not qualify for property
tax exemption under Title 36, section 652,
subsection 1, paragraph A.
[1993, c. 300, 1 (new).]
2. eligiBiliTy for properTy Tax relief. With-
out limiting the eligibility of members of any
other corporation or unincorporated associa-
tion that provides housing on a cooperative
basis for tax relief, a member of a coopera-
tive affordable housing corporation is eligible
for any relief afforded to property taxpayers
under law.
[1993, c. 300, 1 (new).]
3. hoMesTead exeMpTion froM aTTaChMenT
and exeCuTion. Title14,section4422ap-
plies to cooperative interests in cooperative
affordable housing corporations.
[1993, c. 300, 1 (new).]
suBchapter ii: agricultural Marketing anD
Bargaining
arTiCle i: general provisions
This subchapter may be cited as the Uniform
Agricultural Cooperative Association Act.
13 1772. poliCy
It is the declared policy of this State, as one
means of improving the economic position of
agriculture, to encourage the organization of
producers of agricultural products into effective
associations under the control of such producers,
and to that end this subchapter should be liber-
ally construed.
13 1773. uniforMiTy of inTerpreTaTion
This subchapter shall be so interpreted and
construed as to effectuate its general purpose
tomakeuniformthelawof thosestateswhich
enactit.
otherwise indicates, the following
terms shall have the following mean-
ings. [1979, c. 541, Pt. A, 133
(amd).]
1. agriCulTural produCTs. Agricultural
products include foricultural, horticultur-
al, viticultural, forestry, nut, dairy, livestock,
poultry, bee and any farm products.
2. arTiCles. Articles means the articles of
incorporation.
3. assoCiaTion. Association means a corpo-
ration organized under this subchapter, or
a similar domestic corporation, or a foreign
association or corporation if authorized to
do business in this State, organized under
any general or special Act as a coopera-
tive association for the mutual beneft of its
members, as agricultural producers, and
which confnes its operations to purposes
authorized by this subchapter and restricts
81
thereturnonthestockormembership
capital and the amount of its business with
nonmembers to the limits placed thereon
by this subchapter for associations orga-
nized hereunder.
[1993, c. 316, 10 (amd).]
4. Board. Board means the board of direc-
tors.
5. doMesTiC assoCiaTion. Domestic associ-
ation means an association or corporation
formed under the laws of this State.
6. foreign assoCiaTion. Foreign associa-
tion means an association or corporation
not formed under the laws of this State.
6-a. independenT agriCulTural ConTraCTor.
Independent agricultural contractor
means a person who grows under contract
as his primary activity or as part of a gen-
eral agricultural activity.
[1971, c. 502 (new).]
6-B. MarkeTing ConTraCT. Marketing con-
tract includes a contract related to the
marketing of agricultural products and a
contract by an independent agricultural
contractor for furnishing services and
facilitiesinraisingorgrowingagricultural
products.
[1971, c. 502 (new).]
7. MeMBer. Member includes the holder
of amembershipinanassociationwithout
capital stock and the holder of common
stock in an association organized with capi-
talstock.
8. person. Person includes an individual, a
partnership, a corporation and an associa-
tion.
8-a. produCers. Producers includes inde-
pendent agricultural contractors.
[1971, c. 502 (new).]
9. suBChapTer. This subchapter means the
Uniform Agricultural Cooperative Asso-
ciation Act.
Section History: 1971, c. 502 (AMD). 1979, c. 541,
A133 (AMD). 1993, c. 316, 10 (AMD).
13 1775. exisTing assoCiaTions

Any existing association formed under any law
of this State as a cooperative agricultural associa-
tion may elect, by a vote of 2/3 of the members
voting thereon at a legal meeting, to secure the
benefts of and be bound by this subchapter, and
shall thereupon amend such of its articles and
bylaws as are not in conformity with this sub-
chapter. A certifcate of the action taken at such
meeting shall be fled with the Secretary of State
within 20 days after such meeting, and a fee of
$5 shall be paid.
13 1776. use of word CooperaTive
No person, frm, corporation or association, do-
mesticorforeign,hereaftercommencingbusiness
in this State shall use the word cooperative as
apartof itscorporateorbusinessnameunlessit
has complied with this subchapter or some other
statute of this State relating to cooperative as-
sociations. A foreign association organized under
and complying with the cooperative law of the
state of such associations creation shall be en-
titled to use the term cooperative in this State
if it has obtained the privilege of doing business
inthisState.
13 1777. foreign assoCiaTions
A foreign corporation that can qualify as an
association, as defned in section 1774, may be
authorized to do business in this State under this
subchapter by complying with the laws relating
to foreign corporations doing business in the
State. It shall pay the same fees and charges as
domestic associations. Upon such compliance
it shall have all the rights and privileges of like
domestic associations.
82
13 1778. induCing BreaCh of ConTraCT;
spreading false reporTs; penalTy
Any person or any corporation whose offcers
or employees knowingly induce or attempt to
induce any member or stockholder of an as-
sociation to violate his marketing contract with
the association, or who maliciously and know-
ingly spread false reports about the fnances or
management thereof, shall be guilty of a misde-
meanor and shall be subject to a fne of not less
than $100 nor more than $1,000 for each such
offense; and shall be liable to the association ag-
grieved in a civil action in the penal sum of $500
foreachsuchoffense.
13 1779. liCense fees
Domestic associations and foreign associations
admitted to do business in this State shall pay an
annual license fee of $10, which shall be in lieu
of all other corporation and franchise taxes.
13 1780. savings Clause
This subchapter shall not impair or affect any act
done, offense committed or right accruing, ac-
crued or acquired, or liability, penalty, forfeiture
or punishment incurred prior to July 21, 1945,
but the same may be enjoyed, asserted, enforced,
prosecuted or inficted as fully and to the same
extent as if this subchapter had not been passed.
13 1781. nonprofiT assoCiaTions
An association is deemed nonproft, as the
association is not organized to make a proft for
that association or for its members, but only for
its members as producers of agricultural prod-
ucts. [1993, c. 316, 11 (new).]
13 1782. general CorporaTion law; appli-
CaBiliTy
The provisions of the laws related to business
corporations and all powers and rights under
those laws apply to associations, except when
those provisions are in confict with or inconsis-
tent with the express provisions of this chapter.
[1993, c. 316, 11 (new).]
arTiCle 2: organizaTion and powers
13 1821. inCorporaTors
Five or more adult persons, engaged in agricul-
ture as bona fde producers of agricultural prod-
ucts, or 2 or more associations of such producers,
may form an association with or without capital
stock.
13 1822. purposes
Such association may be organized for the pur-
pose of engaging in any cooperative activity for
producers of agricultural products in connection
with:
1. produCing, selling, eTC. Producing, as-
sembling, marketing, buying or selling agri-
cultural products, or harvesting, preserving,
drying, processing, manufacturing, blending,
canning, packing, ginning, grading, storing,
warehousing, handling, shipping or utilizing
such products, or manufacturing or market-
ing the by-products thereof;
2. equipMenT, feed, ferTilizer, eTC.Manu-
facturing, buying for or supplying to its mem-
bers and other patrons, machinery, equip-
ment, feed, fertilizer, fuel, seeds and other
agricultural and household supplies;
3. Business or eduCaTional serviCes. Per-
forming or furnishing business or educational
services, on a cooperative basis, for or to its
members and other patrons; or
4. finanCing. Financing any of the above
enumerated activities for its members, subject
to the limitations of Title 9-B, section 466.
[1977, c. 564, 66 (amd).]
83
section History: 1977, c. 564, 66 (aMd).
13 1823. arTiCles of inCorporaTion
Articles of incorporation shall be signed by each
of the incorporators and acknowledged by at
least 3 of them if natural persons, and by the
president and secretary if associations, before an
offcer authorized to take acknowledgments, and
shall state:
1. naMe.Thenameof theassociationwhich
may or may not include the word coopera-
tive;
2. purposes.Itspurposes;
3. duraTion. Its duration;
4. loCaTion of offiCe. The location and post-
offce address of its registered offce in this
State;
5. naMe and address of inCorporaTors;
nuMBer of shares. The name and post-
offce address of the incorporators, and if
organized with capital stock, a statement of
the number of shares subscribed by each,
which shall not be less than one, and the class
of sharesforwhicheachsubscribes;
6. naMes and addresses of firsT direCTors.
The names of the frst directors and their
post-offce addresses;
7. wiTh or wiThouT CapiTal sToCk; if wiTh,
par value shares. Whether organized with
or without capital stock; and if organized
with capital stock the total authorized num-
ber of par value shares and the par value of
each share, and if any of its shares have no
par value, the authorized number of such
shares; and if more than one class of stock
is authorized, a description of the classes of
shares,thenumberof sharesineachclass,
the relative rights, preferences and restric-
tions granted to or imposed upon the shares
of each class and the dividends to which each
class shall be entitled;
8. if wiThouT, righTs and inTeresTs of
MeMBers. If organized without capital stock,
whether the property rights and interests
of each member are equal or unequal; if
unequal, the rule by which such rights and
interests shall be determined; and
9. oTher provisions. The articles may con-
tain any other provisions, consistent with law
for regulating the associations business or
the conduct of its affairs, the establishment
of voting districts, the election of delegates
to represent such districts and the members
residing therein, for voting by proxy, and
issuance, retirement and transfer of member-
ships and stock.
13 1824. filing and reCording CerTifiCaTe
of inCorporaTion
Before commencing business, the president,
treasurer and a majority of the directors or
trustees of every corporation organized under
this subchapter shall prepare a certifcate set-
ting forth the articles of incorporation and the
names and addresses of the offcers, and shall
sign and make oath to it. Said certifcate shall be
presented to the Secretary of State accompanied
by a copy thereof or by a data sheet containing
all of the information required. After said cer-
tifcate has been examined by the Secretary of
State, and been by him certifed to be properly
drawn and signed and to be conformable to the
Constitution and laws, it shall be recorded in the
registry of deeds in the county where said corpo-
ration is located, in a book kept for that purpose,
and within 60 days after the day of the meeting
at which such corporation is organized, a copy
thereof certifed by such register shall be fled in
the offce of the Secretary of State, who shall en-
ter the date of fling thereon, and on the original
certifcate to be kept by the corporation and shall
record said copy in a book kept for that purpose.
A fee of $5 shall be paid to the Secretary of
State and a fee of $8 shall be paid to registers of
deeds for recording such certifcate and certify-
ing copies thereof for fling with the Secretary of
State. [1977, c. 522, 8 (amd).]
84
13 1825. aMendMenT of arTiCles
1. proCedure. An association may amend its
articles of incorporation by the affrmative
vote of 2/3 of the members voting thereon
at any regular meeting, or at a special meet-
ing called for the purpose, or if the associa-
tion permits its members to vote on the basis
of patronage, by the affrmative vote of a
majority of the members representing 2/3 of
the membership patronage voting thereon.
A written or printed notice of the proposed
amendment and of the time and place of
holding such meetings shall be delivered to
each member, or mailed to his last known
address as shown by the books of the associa-
tion, at least 30 days prior to any such meet-
ings. No amendment affecting the prefer-
ential rights of any outstanding stock shall
be adopted until the written consent of the
holders of 2/3 of the outstanding preference
shares has been obtained.
2. CerTifiCaTe reCorded. After an amend-
ment has been adopted, a certifcate shall be
prepared setting forth the amendment and
the adoption thereof, and shall be signed and
sworn to by the president or vice-president
and by the treasurer or secretary or assistant
secretary, and fled, recorded and indorsed as
in the case of original certifcate of incorpo-
ration. For fling or recording an amendment
to the articles, the association shall pay to
the registers of deeds a fee of $5, and a fee
of $5 shall be paid to the Secretary of State.
[1977, c. 522, 9 (amd).]
13 1826. Bylaws
The members of the association may adopt by-
laws not inconsistent with law or the articles, and
they may alter and amend the same from time to
time. The bylaws must be adopted by a majority
of the members voting thereon, or if the associa-
tion permits its members to vote on the basis of
patronage, then by a majority of members and
a majority of the patronage voting thereon. The
bylaws may provide for:
1. MeeTings; quoruM. The time, place and
manner of calling and conducting meetings
of the members, and the number of mem-
bers that shall constitute a quorum;
2. Manner of voTing. The manner of voting
and the condition upon which members may
vote at general and special meetings and by
mail or by delegates elected by district groups
or other associations, and the voting power
of votes based on patronage;
3. provisions as To direCTors and offiCers.
Subject to any provision thereon in the
articles and in this subchapter, the number,
qualifcations, compensation, duties and
terms of offce of directors and offcers; the
time of their election and the mode and
manner of giving notice thereof;
4. MeeTings of direCTors and exeCuTive
CoMMiTTee; quoruM. The time, place and
manner for calling and holding meetings of
the directors and executive committee, and
the number that shall constitute a quorum;
5. rules. Rules consistent with law and the
articlesforthemanagementof theassocia-
tion, the establishment of voting districts, the
makingof contracts,theissuance,retirement
and transfer of stock, and the relative rights,
interests and preferences of members and
shareholders; and
6. penalTies. Penalties for violation of the by-
laws.
13 1827. general and speCial MeeTings
An association may provide in its bylaws for one
or more regular meetings each year, which may
be held within or without the State at the time
and place designated in the bylaws. Special meet-
ings of the members may be called by the board
of directors, and it shall be their duty to call such
meetings when 10% of the members fle with the
85
secretary a petition demanding a special meet-
ing and specifying the business to be considered
at such meeting. Notice of all meetings, except
as otherwise provided by law, or the articles or
bylaws, shall be mailed to each member at least
10 days prior to the meeting, and in case of spe-
cialmeetingsthenoticeshallstatethepurposes
for which it is called, but the bylaws may require
that all notices, except of proposed amendments
to the articles, shall be given by publication in
a periodical published by or for the association,
to which substantially all its members are sub-
scribers,orinanewspaperornewspaperswhose
combined circulation is general in the territory in
whichtheassociationoperates.
13 1828. powers
1. CapaCiTy To aCT. An association formed un-
der this subchapter, or an association which
might be formed under this subchapter and
which existed at the time this Act took ef-
fect, shall have the capacity to act possessed
by natural persons, but such association shall
have authority to perform only such acts as
are necessary or proper to accomplish the
purposes as set forth in its articles and which
arenotrepugnanttolaw.
2. auThoriTy. Without limiting or enlarging
the grant of authority contained in subsec-
tion 1, it is specifcally provided that every
such association shall have authority:
A. To act as agent, broker or attorney in
fact for its members and other patrons,
and for any subsidiary or affliated as-
sociation, and otherwise to assist or join
with associations engaged in any one or
more of the activities authorized by its
articles, and to hold title for its members
and other patrons and for subsidiary and
affliated associations to property handled
or managed by the association on their
behalf;
B. To make contracts, and to exercise by
its board or duly authorized offcers or
agents, all such incidental powers as may
be necessary, suitable or proper for the
accomplishmentof thepurposesof the
association and not inconsistent with law
or its articles, and that may be conducive
to or expedient for the interest or beneft
of theassociation;
C. To make loans or advances to members
or producer-patrons against products de-
livered or to be delivered to the associa-
tion,ortothemembersof anassociation
which is itself a member or subsidiary
thereof; to purchase, otherwise acquire,
indorse, discount or sell any evidence of
debt, obligation or security, but it shall
notengageinbanking;
D. To establish and accumulate reserves;
E. To own and hold membership in or
sharesof thecapitalstockof otherasso-
ciations and corporations and the bonds
or other obligations thereof, engaged
in any related activity; or, in producing,
warehousingormarketingorpurchas-
ing any of the products handled by the
association; or, in fnancing its activities,
and while the owner thereof, to exercise
all the rights of ownership, including the
right to vote thereon;
F. To acquire, hold, sell, dispose of, pledge
or mortgage any property which its pur-
poses may require, subject to any limita-
tion prescribed by law or its articles;
G. To borrow money and to give its notes,
bonds or other obligations therefor and
secure the payment thereof by mortgage
or pledge;
H. To deal in products of, and handle ma-
chinery, equipment, supplies and perform
services for nonmembers to an amount
not greater in annual value than such as
are dealt in, handled or performed for or
on behalf of its members, but the value
of the annual purchases made for persons
who are neither members nor producers
86
shall not exceed 15% of the value of all
itspurchases;
I. To have a corporate seal and to alter the
sameatpleasure;
J. Tocontinueasacorporationforthetime
limited in its articles, and if no time limit
is specifed, then perpetually;
K. To sue and be sued in its corporate name;
L. To conduct business in this State and
elsewhere as may be permitted by law;
and
M. To dissolve and settle its affairs.
13 1829. inforMaTion and adviCe for MeM-
Bers
1. noT in resTrainT of Trade. No association
complying with the terms hereof shall be
deemed to be a conspiracy, or a combination
in restraint of trade or an illegal monopoly;
or be deemed to have been formed for the
purpose of lessening competition or fx-
ing prices arbitrarily, nor shall the contracts
between the association and its members, or
any agreements authorized in this subchap-
ter, be construed as an unlawful restraint of
trade or as part of a conspiracy or combina-
tiontoaccomplishanimproperorillegal
purposeoract.
2. inforMaTion. An association may acquire,
exchange, interpret and disseminate to its
members, to other cooperative associations
and otherwise, past, present and prospective
crop, market, statistical, economic and other
similarinformationrelatingtothebusiness
of the association, either directly or through
an agent created or selected by it or by other
associationsactinginconjunctionwithit.
3. adviCe. An association may advise its mem-
bers in respect to the adjustment of their
current and prospective production of agri-
cultural commodities and its relation to the
prospective volume of consumption, selling
prices and existing or potential surplus, to the
end that every market may be served from
the most convenient productive areas under a
program of orderly marketing that will assure
adequate supplies without undue enhance-
ment of prices or the accumulation of any
undue surplus.
arTiCle 3: offiCers and direCTors
13 1871. direCTors
1. MeMBership; TerM.Thebusinessof the
association shall be managed by a board of
not less than 3 directors. The directors shall
be members of the association or offcers,
general managers, directors or members of a
member association. A director shall hold of-
fce for the term for which he was named or
elected and until his successor is elected and
qualifed.
2. naMes; suCCessors. The names of the frst
directors shall be stated in the articles. Their
successors shall be elected by the members as
prescribed by the articles or bylaws.
3. duTies, eTC. presCriBed By arTiCles or
Bylaws. The number, qualifcations, terms
of offce, manner of election, time and place
of meeting and the powers and duties of the
directors may, subject to this subchapter, be
prescribed by the articles or bylaws.
4. disTriCT direCTors. The bylaws may
provide, if not restricted by the articles, that
the territory in which the association has
members shall be divided into districts and
that the directors shall be elected according
to such districts, either directly or by district
delegates elected by the members in that
district. In such case, the bylaws shall specify
or vest in the board of directors authority
to determine the number of directors to be
elected by each district and the manner and
method of apportioning the directors and
of districting and redistricting the territory
covered by the association. The bylaws may
provide that primary elections shall be held
87
in each district to nominate the directors
apportioned thereto and that the result of all
such primary elections may be ratifed by the
next regular meeting of the association or
may be considered as a fnal election.
5. exeCuTive CoMMiTTee. The bylaws may
provide for an executive committee to be
elected by the board of directors from their
number and may allot to such committee all
the functions and powers of the board, sub-
ject to its general direction and control.
13 1872. reMoval
Any member may ask for the removal of a direc-
tor by fling charges with the secretary or
president of the association, together with a peti-
tion signed by 5% of the members requesting the
removal of the director in question. The removal
shall be voted upon at the next meeting of the
members, and by 2/3 of the voting power voting
thereon the association may remove the director.
The director whose removal is requested shall be
served with a copy of the charges not less than
10 days prior to the meeting and shall have an
opportunity at the meeting to be heard in person
and by counsel and to present evidence. The per-
sons requesting the removal shall have the same
opportunity. In case the bylaws provide for elec-
tion of directors by districts, then the petition for
removal of a director must be signed by 20% of
the members residing in the district from which
he was elected. The board must call a special
meeting of the members residing in that district
to consider the removal of the director, and by
2/3 of the voting power of the members of that
district voting thereon the director in question
may be removed from offce.
13 1873. offiCers
The board shall elect a president, a secretary
and a treasurer, and may elect one or more vice-
presidents, and such other offcers as may be
authorized in the bylaws. The president and at
least one of the vice-presidents must be members
and directors, but a vice-president who is not a
director cannot succeed to or fll the offce of
president. Any 2 of the offces of vice-president,
secretary and treasurer may be combined in one
person.
13 1874. reMoval
Any member may bring charges of misconduct
or incompetency against an offcer by fling them
with the secretary or president of the association,
together with a petition signed by 10% of the
members requesting the removal of the offcer
in question. The directors shall vote upon the
removal of the offcer at the frst meeting of the
board held after the hearing on the charges, and
the offcer may be removed by a majority vote,
notwithstanding any contract the offcer may
have with the association, which shall terminate
upon his removal, anything in the contract to the
contrary notwithstanding. The offcer against
whom such charges are made shall be served
with a copy of the charges not less than 10 days
prior to the meeting, and shall have an opportu-
nity at the meeting to be heard in person and by
counsel, and to present evidence, and the persons
making the charges shall have the same opportu-
nity.
13 1875. referenduM
The articles or bylaws may provide that upon de-
mand of 2/5 of all the directors, any matter of
policy that has been approved or passed by the
board must be referred to the members for their
approval before it becomes effective. No refer-
endum shall be allowed unless it is demanded by
the required number of directors at the meet-
ing at which the matter of policy in question is
adopted.
arTiCle 4: MeMBers and Chairs
13 1911. MeMBers
1. produCers of agriCulTural produCTs.
An association may admit as members only
bona fde producers of agricultural products,
including tenants and landlords receiving a
share of the crop, and cooperative associa-
88
tions of such producers. The incorporators
named in the articles are thereby made mem-
bers of the association, and they shall pay for
theirmembershiporstockthesameamount
and in the same manner as may be required
inthecaseof othermembers.
2. liMiT of CoMMon sToCk. The articles may
limittheamountof commonstockwhicha
member may own.
3. voTe; liaBiliTy. Under the terms and con-
ditions prescribed in the bylaws, a member
shall lose his vote if he ceases to belong to
the class eligible to membership under this
section, but he shall remain subject to any
liability incurred by him while a member of
theassociation.
4. personal liaBiliTy. No member shall be
personally liable for any debt or liability of
theassociation.
5. one voTe.Unlessthearticlesotherwisepro-
vide, no member shall have more than one
vote.
6. MeMBer defined.Inagriculturalassocia-
tions organized under this subchapter the
term member in associations without
capital stock may, by the bylaws, include any
agricultural producer, either corporate or in-
dividual, with whom the association shall do
business, either directly or through a member
cooperative association, amounting to at least
$100 during any fscal year, and may, by the
bylaws, include employees.
7. requireMenTs of sTaTuTe MeT. When-
ever under this subchapter an association is
permitted to take any action, provided such
action is authorized by a vote of the mem-
bers or the vote of a specifed proportion of
the voting power based on patronage, the
requirements of the statute shall be deemed
to have been met by an association which
has established voting districts and provided
for the election of delegates, if such action is
authorized by a vote of the delegates repre-
senting such members or such voting power.
13 1912. CerTifiCaTes; Transfers; divi-
dends; preferred sToCk
1. CerTifiCaTe for MeMBership or sToCk.
No certifcate for membership or stock shall
be issued until fully paid for, but bylaws may
provide that a member may vote and hold of-
fce prior to payment in full for his member-
shiporstock.
2. dividends. Dividends in excess of 8% on
the actual cash value of the consideration re-
ceived by the association shall not be paid on
common or preferred stock or membership
capital, but dividends may be cumulative.
3. neT inCoMe disTriBuTed. Net income in
excess of dividends and additions to reserves
shall be distributed on the basis of patron-
age, and the books of the association shall
show the interest of patrons in the reserves.
The bylaws may provide that any distribu-
tiontoanonmember,eligibleformember-
ship, may be credited to such nonmember
until the amount thereof equals the value of
a membership certifcate or a share of the
associations common stock. The distribution
credited to the account of a nonmember may
be transferred to the reserve fund at the op-
tion of the board if, after 6 years, the amount
is less than the value of the membership
certifcate or a share of common stock.
4. value of MeMBers inTeresT afTer wiTh-
drawal or TerMinaTion. The bylaws may
fx a time within which a member shall
receive from the association, after he has
notifed the association of his withdrawal,
or after the adoption of a resolution by the
board terminating his membership, the value
in money of his membership interest in the
association as appraised by the board of
directors. If the board of directors approves
the members designation of a transferee of
hismembershipinterest,theassociationshall
be under no obligation to pay him the value
of hisinterest.
89
5. preferred sToCk. An association may issue
preferred stock to members and nonmem-
bers. Preferred stock may be redeemed or
retired by the association on such terms and
conditions as may be provided in the articles
and printed on the stock certifcate. Preferred
stockholders shall not be entitled to vote,
but no change in their priority or preference
rights shall be effective until the written con-
sent of the holders of 2/3 of the preferred
stock has been obtained. Payment for pre-
ferred stock may be made in cash, services or
property on the basis of the fair value of the
stock, services and property as determined by
the board.
arTiCle 5: ConsolidaTion and dissoluTion
13 1951. ConsolidaTion proCedure
Any 2 or more associations organized with or
without capital stock and existing under this
subchapter may consolidate into a single as-
sociation which may be either one or any one
of said associations, or a new association under
this subchapter to be formed by means of such
consolidation. Such a consolidation may be
effected by a vote of the directors, trustees or
managing board, however designated, of each
of said associations at a legal meeting thereof
ratifying a proposed agreement of consolidation
and approved by the affrmative vote of 2/3 of
the members of each of said associations voting
thereon at any regular meeting or at a special
meeting called for the purpose, which agreement
shall then be submitted to the Secretary of State
for his certifcation as conformable to the laws of
this State and when certifed by him shall then be
recorded in the registry of deeds in the county
where the consolidated association is located
and in the county or counties where each of the
constituent associations is located and a copy
thereof certifed by the register of deeds shall be
fled in the offce of the Secretary of State. When
said agreement is so certifed, recorded and fled,
the separate existence of all of the constituent
associations,orallof suchconstituentassocia-
tions except the one into which such constituent
associations shall have been consolidated, shall
cease and the constituent associations, whether
consolidated into a new association or merged
intooneof suchconstituentassociations,as
the case may be, shall become the consolidated
association by the name provided in said agree-
ment, possessing all the rights, privileges, powers,
franchises and immunities as well of a public as
of a private nature, and being subject to all the
liabilities, restrictions and duties of each of such
associations so consolidated and all and singu-
lar the rights, privileges, powers, franchises and
immunities of each of said associations, and all
property, real, personal and mixed, and all debts
due to any of said constituent associations on
whatever account, and all other things in ac-
tion of or belonging to each of said associations
shall be vested in the consolidated association.
All property, rights, privileges, powers, franchises
and immunities, and all and every other interest
shall be thereafter as effectually the property of
the consolidated association as they were of the
several and respective constituent associations,
and the title to any real estate, whether by deed
or otherwise, under the laws of this State, vested
in any of such constituent associations, shall
not revert or be in any way impaired by reason
thereof. All rights of creditors and all liens upon
the property of any of said constituent associa-
tions shall be preserved unimpaired, limited to
the property affected by such liens at the time of
the consolidation, and all debts, liabilities and
duties of the respective constituent associations
shall henceforth attach to said consolidated as-
sociation and may be enforced against it to the
same extent as if said debts, liabilities and duties
had been incurred or contracted by it. [1977, c.
522, 10 (amd).]
13 1952. volunTary dissoluTion
1. dissoluTion.
A. The members of an association may at
any regular meeting, or any special meet-
ing called for the purpose, upon 30 days
90
notice of the time, place and object of
the meeting having been given as pre-
scribed in the bylaws, by 2/3 of the vot-
ing power voting thereon, discontinue the
operations of the association and direct
that the association be dissolved and its
affairs settled. The meeting shall by like
vote designate a committee of 3 members
who,astrusteesonbehalf of theassocia-
tion and within the time fxed in their
designation or any extension thereof,
shall liquidate its assets, pay its debts and
divide any remainder among the mem-
bers or other patrons in accordance with
their respective rights and interests under
their contracts with the association and
the articles and bylaws. Upon fnal settle-
ment by such trustees, the association
shall be deemed dissolved and shall cease
to exist. The trustees shall make a report,
in quadruplicate, of the proceedings had
under this section, which shall be signed
and sworn to and fled as required for the
fling of the articles of incorporation.
B. The trustees may bring and defend all
actions by them deemed necessary to pro-
tect and enforce the rights of the associa-
tion.
C. Any vacancies in the trusteeship may be
flled by the remaining trustees.
2. power of CourTs.Inthecaseof anas-
sociation dissolving pursuant to this section,
theSuperiorCourt,uponthepetitionof the
trustees or a majority of them, or a proper
case upon the petition of a creditor or mem-
ber, or upon the petition of the Attorney
General, upon notice to all of the trustees
and to such other interested persons as the
court may specify, from time to time may
order and adjudge in respect to the following
matters:
A. The giving of notice by publication or
otherwise of the time and place for the
presentation of all claims and demands
againsttheassociation,whichnotice
may require all creditors of and claim-
antsagainsttheassociationtopresentin
writing and in detail at the place specifed
in their respective accounts and demands
to the trustees by a day therein specifed,
which shall not be less than 40 days from
the service or frst publication of such
notice;
B. The payment or satisfaction in whole or
in part of claims and demands against
theassociationortheretentionof mon-
eys for such purpose;
C. The presentation and fling of intermedi-
ate and fnal accounts of the trustees, the
hearing thereon, the allowance or disal-
lowance thereof and the discharge of the
trustees, or any of them, from their duties
and liabilities;
D. The administration of any trust or the
disposition of any property held in trust
by or for the association;
E. The sale and disposition of any remain-
ing property of the association and the
distribution or division of such property
or its proceeds among the members or
persons entitled thereto; and
F. Such matters as justice may require.
3. orders and JudgMenTs Binding. All orders
and judgments shall be binding upon the as-
sociation, its property and assets, its trustees,
members, creditors and all claimants against
it.
4. appliCaTion of seCTion.Thissectionshall
apply to all associations heretofore or hereaf-
ter incorporated in this State.
arTiCle 6: Maine agriCulTural MarkeTing
and Bargaining aCT of 1973
13 1953. legislaTive findings and purpose
Because agricultural products are produced by
numerous individual farmers, the marketing and
bargaining position of individual farmers will
91
be adversely affected unless they are free to join
together voluntarily in cooperative organizations
as authorized by law. Furthermore, membership
by a farmer in a cooperative organization can
only be meaningful, if a handler of agricultural
products is required to bargain in good faith with
an agricultural cooperative organization as the
representative of the members of such organiza-
tion who have had a previous course of dealing
with such handler. The purpose of this Article
is to provide standards for the qualifcation of
agricultural cooperative organizations for bar-
gaining purposes, to defne the mutual obligation
of handlers and agricultural cooperative organi-
zations to bargain with respect to the production,
sale and marketing of agricultural products and
to provide for the enforcement of such obliga-
tion. [1973, c. 621, 1 (new).]
Article 6 shall be known and may be cited as the
Maine Agricultural Marketing and Bargaining
Act of 1973. [1973, c. 621, 1 (new).]
As used in this Article, unless the context other-
wise requires, the following words shall have the
following meanings. [1973, c. 621, 1 (new).]
1. assoCiaTion of produCers. Association of
producers means any association of produc-
ers of agricultural products organized and
existing under this subchapter. [1973, c.
621, 1 (new).]
2. Board. Board means the Maine Agricul-
tural Bargaining Board provided for in this
Article. [1973, c. 621, 1 (new).]
3. handler. Handler, in the case of pota-
toes, means processor as defned under
Title 7, section 1012, subsection 14 and in
the case of other agricultural products means
any person engaged in the business or prac-
tice of:
A. Acquiring agricultural products from
producers or associations of producers
for processing or sale; [1973, c. 621, 1
(new).]
B. Grading, packaging, handling, storing or
processing agricultural products received
from producers or associations of produc-
ers; [1973, c. 621, 1 (new).]
C. Contractingornegotiatingcontractsor
otherarrangements,writtenororal,with
or on behalf of producers or associations
of producers with respect to the produc-
tion or marketing of any agricultural
product; or [1973, c. 621, 1 (new).]
D. Acting as an agent or broker for a han-
dler in the performance of any function
or act specifed in paragraph A, B or C.
[1973, c. 621, 1 (new).]
[1973, c. 621, 1 (new).]
4. person. Person includes one or more
individuals, partnerships, corporations and
associations. [1973, c. 621, 1 (new).]
5. produCer. Producer means a person en-
gaged in the production of agricultural prod-
ucts, excluding forest products, as a farmer,
planter, rancher, poultryman, dairyman,
fruit, vegetable or nut grower, or independent
agricultural contractor as specifed in section
1774, subsections 6-A and 8-A. If producer is
also a handler, he shall be considered only a
handler for the purposes of this Act. [1973,
c. 621, 1 (new).]
6. qualified assoCiaTion. Qualifed associa-
tion means an association of producers
accredited in accordance with section 1957.
[1973, c. 621, 1 (new).]
92
13 1956. Maine agriCulTural Bargaining
Board
1. Board. The Maine Agricultural Bargain-
ing Board, established by Title 5, section
12004-B, subsection 7, and located in the
Department of Agriculture, Food and Rural
Resources, shall administer this article.
[1989, c. 503, Pt. B, 69 (amd).]
2. MeMBership. The Maine Agricultural
Bargaining Board established by Title 5,
section 12004-B, subsection 7, shall consist
of 5 members and 2 alternates, who shall be
appointed by the Governor. One member
and one alternate shall be appointed from
a list of names submitted by agricultural
producer organizations organized under this
subchapter and chapter 81. One member
and one alternate shall be appointed from
a list of names submitted by processors of
agricultural products. In appointing these
members and alternates, the Governor shall
seek to represent as many different agricul-
tural products as possible and a member and
the alternate for that member may not be as-
sociated with the same agricultural product,
unlesssuitablepersonscannototherwisebe
appointed. An alternate shall serve when for
any reason the respective member is unable
to serve. Three members shall be representa-
tives of the public. A public member may not
hold any interest or stock or securities in any
producer, dealer, processor or other person
whose activities are subject to the jurisdiction
of the board.
A. The term of offce for all members and
alternates shall be 3 years. Members se-
lected from lists submitted by agricultural
producer organizations and by proces-
sors of agricultural products may serve
nomorethan2termsinsuccession,not
to include the current term of a member
serving at the time this section becomes
effective. The limitation to 2 successive
terms may not apply to the public mem-
bers or to alternates. [1989, c. 703, 1
(amd).]
B. Board members serving at the time this
section becomes effective shall continue
as members for the duration of their
present terms. The Governor shall ap-
point 2 alternate members in accordance
withthissubsection.Theinitialtermsof
these alternates expire at the same time
as that of the current respective mem-
bers. The Governor shall designate one
of the public members to be the boards
chair. In the event of a vacancy, the Gov-
ernorshall,withinonemonth,appointa
successor to fll the unexpired term. All
appointments to the board must be made
in conformity with the foregoing plan.
Members shall take the oath of offce
prescribed for state offcers. [1989, c.
503, Pt. B, 70 (amd); c. 703, 1 (amd).]
[1989, c. 503, Pt. B, 70 (amd); c. 703, 1
(amd).]
3. reMoval. Members of the board shall be re-
moved by the Commissioner of Agriculture,
Food and Rural Resources upon notice and
hearing for neglect of duty or malfeasance in
offce but for no other cause. If a member
is absent from 3 successive meetings of the
board and if the board fnds the members
reasonsfortheabsencetobewithoutmerit,
that members conduct shall be considered to
be neglect of duty. [1987, c. 155, 3 (amd).]
4. quoruM. A vacancy in the board shall not
impairtherightof theremainingmembers
to exercise all of the powers of the board.
Three members of the board shall, at all
times, constitute a quorum of the board, pro-
vided that reasonable notice has been given
to all members of the board of the subject
matter and date of any meeting at which the
board is to exercise any of its powers.
[1973, c. 621, 1 (new).]
93
5. expenses. Members and alternate members
of the board shall be compensated according
to the provisions of Title 5, chapter 379 and
shall receive necessary expenses.
[1987, c. 155, 4 (amd).]
6. rules. The board shall have authority from
time to time to adopt, amend and repeal, in
the manner prescribed by the Maine Admin-
istrative Procedure Act, such rules and regu-
lations as may be necessary or appropriate to
carry out this Article. The board shall act as
expeditiously as possible to adopt interpre-
tive and procedural rules for carrying out the
purposesof thisarticle.
[1987, c. 155, 5 (amd).]
7. Boards sTaff and aTTorney.Inhearings
under sections 1958 and 1965, neither the
boards staff nor its attorney shall function as
an advocate for any party.
[1987, c. 155, 6 (new).]
8. annual reporT. The board shall issue an
annual report to the Commissioner of Agri-
culture, Food and Rural Resources and to the
joint standing committee of the Legislature
having jurisdiction over agriculture on or
before January 15th of each year regarding
theoperationof thissubchapter.Thisan-
nual report shall take into consideration the
following issues as the Maine Agricultural
Bargaining Board reviews the effectiveness
of the Maine Agricultural Marketing and
Bargaining Act of 1973:
A. Unfair practices; [1987, c. 155, 6
(new).]
B. Qualifcation of grower associations;
[1987, c. 155, 6 (new).]
C. Funding of the Maine Agricultural Bar-
gaining Board; [1987, c. 155, 6 (new).]
D. Investigation and hearing procedures;
[1987, c. 155, 6 (new).]
E. Any other issues relating to this subchap-
ter; and [1987, c. 155, 6 (new).]
F. Any recommended changes to this sub-
chapter. [1987, c. 155, 6 (new).]
[1987, c. 155, 6 (new).]
section History: 1973, c. 621, 1 (new). 1977,
c. 564, 67,68 (aMd). 1977, c. 694, 277 (aMd).
1979, c. 731, 19 (aMd). 1983, c. 812, 95,96
(aMd). 1987, c. 155, 2-6 (aMd). 1989, c. 503,
B69,B70 (aMd). 1989, c. 703, 1 (aMd).
13 1957. qualifiCaTion of assoCiaTions of
produCers
1. qualifiCaTion. Only those associations of
producers that have been qualifed in accor-
dance with this section shall be entitled to the
benefts provided by this Article.
[1973, c. 621, 1 (new).]
2. peTiTion. An association of producers desir-
ing qualifcation shall fle with the board a
petition for qualifcation. The petition shall
contain such information and be accompa-
nied by such documents as shall be required
by the regulations of the board.
[1973, c. 621, 1 (new).]
3. hearing. The board shall provide notice
and opportunity for a hearing, provided in a
manner consistent with the provisions as to
adjudicatory proceedings of the Maine Ad-
ministrative Procedure Act. The board shall
qualify such association, if based upon the
evidence at such hearing, the board fnds:
A. That under the charter documents or the
bylaws of the association, the association
is directly or indirectly producer-owned
and controlled; [1973, c. 621, 1 (new).]
B. Theassociationhasmembershipagree-
ments signed by each of its members
which authorize the association to repre-
sentthememberforthepurposesof this
article; [1987, c. 155, 7 (amd).]
C. The association is fnancially sound and
has suffcient resources and management
94
to carry out the purposes for which it was
organized; [1973, c. 621, 1 (new).]
D. The association represents 51% of the
producers or produced at least 1/2 of the
volume of a particular agricultural prod-
uct for a specifc handler involved with
those producers and that agricultural
product during the previous 12 months,
not including any volume produced by
the handler, its subsidiaries, agents or
employees or procured by the handler
from sources other than producers; for
thepurposesof thisarticle,membersof
farmer cooperatives are counted as indi-
vidual farmer members; if the board has
reasonable cause to question such repre-
sentation, the board shall require a secret
ballot election to certify the percentage
of representation; and [1991, c. 116
(amd).]
E. Theassociationhasasoneof itsfunc-
tionsactingasprincipaloragentforits
producer-members in negotiations with
handlers for prices and other terms of
contracts with respect to the production,
sale and marketing of their product.
[1973, c. 621, 1 (new).]
[1991, c. 116 (amd).]
4. refiling of peTiTion.If afterthehear-
ing, the board does not deem an association
qualifed, it shall, in a manner consistent with
the Maine Administrative Procedure Act,
Title 5, chapter 375, clearly specify the rea-
sons for such failure to qualify in its decision
and, upon the refling of the petition, shall
reconsider its decision within 30 days after
the date on which the petition was fled. An
association seeking reconsideration shall refle
its petition within 30 days of receipt of the
boards initial decision.
[1987, c. 155, 8 (amd).]
5. noTiCe. After the board qualifes such as-
sociation, it shall give notice of such quali-
fcation to all known handlers that, in the
ordinary courseof business,purchasethe
agricultural commodities that such associa-
tionrepresents.
[1973, c. 621, 1 (new).]
6. annual reporT. A qualifed association shall
fle an annual report with the board in such
form as shall be required by the regulations
of the board. The annual report shall contain
such information as will enable the board to
determine whether the association continues
to meet the standards for qualifcation, except
that an association which the board has de-
termined to be qualifed shall not be required
to have its qualifcation redetermined until
it has negotiated and entered into a contract
with a handler, with or without resort to arbi-
tration.
[1985, c. 578, 1 (amd).]
7. revoCaTion. If a qualifed association ceases
to maintain the standards for qualifcations
set forth in subsection 3, the board shall, in
a manner consistent with the Maine Admin-
istrative Procedure Act, apply to the Admin-
istrative Court to revoke the qualifcation of
such association, except that the board shall
not seek revocation of an associations qualif-
cation during the period set out in subsection
6 in which the association cannot be required
to have its qualifcation redetermined.
[1985, c. 578, 2 (amd).]
8. ConfidenTialiTy. Information provided to
the board by an association regarding the
identifcation of its members and informa-
tion provided to the board by a handler
regarding its volume of purchases of agri-
cultural products and the identifcation of
producers from whom it purchased those
products shall be treated by the board as
confdential information not to be disclosed
to the adverse party or any other person
withouttheconsentof theassociationorthe
handler, respectively, until the board has ren-
dered its fnal decision as to the qualifcation
of the association. After a fnal decision has
95
been rendered, the information is no longer
confdential information, but its disclosure
shall be governed by Title 1, section 402,
subsection 3, paragraph B.
[1987, c. 155, 9 (new).]
section History: 1973, c. 621, 1 (new). 1977, c.
694, 278-280 (aMd). 1985, c. 578, 1,2 (aMd).
1987, c. 155, 7-9 (aMd). 1991, c. 116 (aMd).
13 1958. Bargaining
1. definiTion. As used in this article, bargain-
ing is the mutual obligation of a handler
and a qualifed association to meet at reason-
able times and negotiate in good faith with
respecttotheprice,termsof sale,compen-
sation for commodities produced or sold,
or both, under contract and other contract
provisions relative to the commodities that
such qualifed association represents and the
execution of a written contract incorporat-
ing any agreement reached if requested by
either party. Such obligation on the part of
any handler shall extend only to a qualifed
association that represents producers with
whom such handler has had a prior course
of dealing. Such obligation does not require
either party to agree to a proposal or to make
aconcession.Theobligationtobargaincon-
tinues until the commencement of required
mediation, as provided in section 1958-B,
subsection 2. [1987, c. 155, 10 (amd).]
2. prior Course of dealing. A handler shall
be deemed to have had a prior course of
dealing with a producer if such handler has
purchased commodities produced by such
producer in any 2 of the preceding 3 years,
provided that the sale by a handler of his
business shall not negate any prior course
of dealing that producers have had with this
business. [1973, c. 621, 1 (new).]
3. ConTraCTs. Nothing in this Article shall
be deemed to prohibit a qualifed bargain-
ingassociationfromenteringintocontracts
with handlers to supply the full agricultural
production requirements of such handlers.
[1973, c. 621, 1 (new).]
4. liMiTaTion. [1987, c. 155, 11 (rp).]
5. furTher liMiTaTion.Itshallbeunlawfulfor
a handler to purchase a product from other
persons under terms more favorable to such
persons than those terms negotiated with
a qualifed bargaining association for such
product, unless such handler has frst offered
to purchase said product under said more
favorable terms from the members of the
qualifed association of producers and said
members have failed to supply the required
product within a reasonble time according to
said more favorable terms. [1973, c. 621, 1
(new).]
6. noTiCe; opporTuniTy for hearing. When-
ever it is charged that a qualifed association
or handler refuses to bargain, as that term is
defned in subsection 1, the board shall pro-
vide that person with notice and opportunity
to be heard, in a manner consistent with the
Maine Administrative Procedure Act, Title
5, chapter 375, as to adjudicatory hearings.
[1987, c. 155, 12 (amd).]
7. hearing. Hearings held pursuant to subsec-
tion 6 shall be held in a manner consistent
with the Maine Administrative Procedure
Act as to adjudicatory hearings. The board
shall request that the Attorney General, or
any attorney in his department designated by
him, be present at these hearings and shall
advise the board on procedure and on the
admissibility of any evidence. [1977, c. 694,
282 (rpr).]
8. findings. If, upon a preponderance of the
evidence, the board determines that the per-
son complained of has refused to bargain, in
violation of this article, it shall state its
fndings of fact and shall issue an order re-
quiring him to bargain as that term is defned
in subsection 1 and shall order such further
affrmative action, excluding an award of
96
damages, as will effectuate the policies of this
article. Failure to comply with such an order
is a violation of this article. If the board de-
termines that the person complained of has
not refused to bargain, it shall state its fnd-
ings of fact and shall issue an order dismiss-
ing the charges. [1987, c. 155, 13 (amd).]
9. disMissal. [1977, c. 694, 283 (rp).]
10. ModifiCaTion. Until the record in a case
has been fled in a court, as provided in sec-
tion 1959, the board may at any time, upon
reasonable notice and in such manner as it
deems proper, modify or set aside, in a whole
or in part, any fnding or order made or is-
sued by it. [1973, c. 621, 1 (new).]
c. 694, 281-283 (aMd). 1987, c. 155, 10-13
(aMd).
13 1958-a. final offer arBiTraTion for The
poTaTo indusTry (repealed)
section History: 1981, c. 274 (new). 1985, c. 578,
3,4 (aMd). 1987, c. 155, 14 (rP).
13 1958-B. dispuTe resoluTion
1. volunTary MediaTion. At any time prior to
the commencement of required mediation
under subsection 2, a handler and a quali-
fed association may mutually agree to obtain
or may unilaterally obtain the services of a
mediator. Regardless whether mediation is
sought mutually or unilaterally, both par-
ties shall participate in mediation in good
faith. The parties must use the services of
the States Panel of Mediators for mediation
and must share all costs of mediation equally.
Costs of mediation and any applicable state
cost allocation program charges must be paid
into a special fund administered by the
Maine Labor Relations Board. The Execu-
tive Director of the Maine Labor Relations
Board shall authorize mediation services
and expenditures incurred by members of
the panel. All costs must be paid from that
special fund. The executive director may
estimate costs upon receipt of a request
for services and collect those costs prior to
providing the services. The executive di-
rectorshallbillorreimbursetheparties,as
appropriate, for any difference between the
estimated costs that were collected and the
actual costs of providing the services. Once
one party has paid its share of the estimated
cost of providing the service, the mediator
is assigned. A party who has not paid an in-
voice for the estimated or actual cost of pro-
viding services within 60 days of the date the
invoice was issued is, in the absence of good
causeshown,liablefortheamountof the
invoice together with a penalty in the amount
of 25% of the amount of the invoice. Any
penalty amount collected pursuant to this
provision remains in the special fund admin-
istered by the Maine Labor Relations Board
and that fund does not lapse. The executive
director is authorized to collect any sums
due and payable pursuant to this provision
through civil action. In such an action, the
court shall allow litigation costs, including
court costs and reasonable attorneys fees, to
be deposited in the General Fund if the ex-
ecutive director is the prevailing party in the
action. Voluntary mediation may not last for
more than 3 days for annual crops; voluntary
mediation for all other commodities may not
last more than 5 days. Mediation may be
extended by mutual agreement by the bar-
gainingparties.
[1991, c. 798, 1 (amd).]
2. required MediaTion. Any matters remain-
ing in dispute between the handler and a
qualifed association 30 days prior to the
contract date, as defned in subsection 4,
shall be submitted by the parties to required
mediation. No later than 30 days prior to the
contract date, the parties shall have mutu-
ally agreed on a mediator and on sharing the
costs of mediation or shall have notifed the
board that the services of the States Panel of
Mediators will be needed. If services of the
97
States Panel of Mediators are used, the par-
ties shall share all costs of mediation equally.
Mediation shall continue for no more than
3 days for annual crops; all other commodi-
ties shall last no more than 5 days, unless the
mediator earlier declares that resolution by
mediation is not possible. Mediation may be
extended by mutual agreement by the bar-
gaining parties. At the end of the mediation
period or upon the mediators earlier declara-
tion, the mediator shall promptly prepare a
report specifying all agreements reached in
mediation and recommending that the par-
tieseitherresumebargainingastoallmatters
remaining in dispute for a period of time not
to exceed 2 days or that the parties submit all
matters remaining in dispute to arbitration.
The parties shall proceed according to the
mediators recommendation. If the parties
aretoresumebargaining,thatbargaining
shall commence on the day after the day on
which the mediator makes his recommenda-
tion. Any matters remaining in dispute at the
end of the specifed bargaining period shall
be submitted to arbitration.
[1987, c. 155, 15 (new).]
3. differenT ConTraCT daTe. Once a contract
date has been established as provided in sub-
section 2, the parties may mutually agree to a
different contract date, provided that they do
so no less than 45 days prior to the contract
date established as provided in subsection 4.
[1987, c. 155, 15 (new).]
4. definiTion. The term contract date as
used in subsection 2, shall have the following
meaning.
A. Where, on the effective date of this sec-
tion, there is no contract under this ar-
ticle in existence between the parties, the
contract date shall be the date set by the
board, in consultation with the parties,
as the date by which a contract must be
signed by both parties. After that date, as
between those parties, the contract date
shall be the anniversary of the date set
by the board initially. [1987, c. 155, 15
(new).]
B. Where, on the effective date of this sec-
tion, a contract under this article exists
between the parties, the contract date
shall be the anniversary of the date upon
which that contract was signed by both
parties. [1987, c. 155, 15 (new).]
[1987, c. 155, 15 (new).]
5. arBiTraTion. The parties shall notify the
board and the Commissioner of Agriculture,
Food and Rural Resources at the commence-
ment of required mediation and an arbitra-
tor must be selected as provided in paragraph
D. One day after the mediator recommends
arbitration or one day after the conclusion of
the period of further bargaining, as provided
in subsection 2, each party shall submit to
the arbitrator its fnal offer in which it shall
identify all matters as to which the parties
agreewithcontractuallanguagesettingforth
these agreements, and all matters as to which
the parties do not agree with contractual
language setting forth the partys fnal offer
for resolution of those disagreements.
A. For all matters submitted to arbitration,
thearbitratorshallchoosebetweenthe
fnal offers of the parties. If the parties
reach an agreement on the matters under
arbitrationbeforethearbitratorissuesa
decision, they may submit a joint fnal
offer that the arbitrator shall accept and
render as the decision. The arbitrator
may hold hearings and administer oaths,
examine witnesses and documents, take
testimony and receive evidence, and issue
subpoenas to compel the attendance of
witnesses and the production of records.
A person who fails to obey the subpoena
of an arbitrator may be punished for
contempt of court on application by the
arbitratortotheSuperiorCourtforthe
county in which the failure occurs. The
arbitrator may utilize other information
98
in addition to that provided by or elicited
fromtheparties.Thearbitratorshall
issue a decision within 10 days of the
commencement of arbitration and that
decision shall be binding on the parties.
If thepartiesreachanagreementonthe
matters in the arbitrators decision prior
to signing the contract, they may submit
a joint fnal offer to the arbitrator. The
arbitrator shall rescind the previous deci-
sion and accept and render the joint fnal
offer as the decision. [1989, c. 201, 1,2
(amd); c. 703, 2 (rpr).]
B. Within 5 days of the arbitrators decision,
the board shall prepare a contract which
must include all terms agreed to by the
parties in bargaining or settled by volun-
tary or required mediation or by arbitra-
tion and must present the contract to the
partieswhoshallsignthecontractwithin
2 days of its presentation. [1989, c. 201,
1,2 (amd); c. 703, 2 (rpr).]
C. Thecommissioner,inconsultationwith
the board, shall establish a panel of arbi-
trators, who must be qualifed byeduca-
tion, training or experience to carry out
the responsibilities of an arbitrator under
this article. [1989, c. 703, 2 (rpr).]
D. Upon notifcation by the parties as
provided in this subsection, the com-
mis-sionershallsubmittothepartiesalist
containing an odd number of names of
membersof thepanelof arbitratorswho
are available for arbitration. The parties
shall alternately strike names from the
listuntilasinglenameisleft,whoshall
be the arbitrator. The order of striking
names must be determined by chance.
[1989, c. 703, 2 (rpr).]
E. All costs of arbitration must be borne
equally by the parties. The arbitrator
shall submit a statement of charges and
expenses to the parties and to the board.
Each party shall pay the arbitrator di-
rectly. [1989, c. 703, 2 (rpr).]
[1989, c. 201, 1, 2 (amd); c. 703, 2 (rpr).]
5-A. CriTeria for arBiTraTor deCisions.
The arbitrator shall consider the following
factors in making a decision pursuant to
subsection 5:
A. Prices or projected prices for the agri-
cultural commodity paid by competing
handlers in the market area or competing
market areas; [1989, c. 703, 3 (new).]
B. The quantity of the commodity pro-
duced or projections of production in the
production area or competing market
areas; [1989, c. 703, 3 (new).]
C. The relationship between the quantity
produced and the quantity handled by
the handler; [1989, c. 703, 3 (new).]
D. The producers costs of production
including the cost that would be involved
in paying farm labor a fair wage rate;
[1989, c. 703, 3 (new).]
E. The average consumer prices for goods
and services, commonly known as the
cost of living; [1989, c. 703, 3 (new).]
F. The impact of the award on the competi-
tive position of the handler in the market
area or competing market areas; [1989,
c. 703, 3 (new).]
G. The impact of the award on the competi-
tive position of the agricultural commod-
ity in relationship to competing commod-
ities; [1989, c. 703, 3 (new).]
H. A fair return on investment; [1989, c.
703, 3 (new).]
I. The kind, quality or grade of the com-
modity involved; [1989, c. 703, 3
(new).]
J. Prior agreements of the parties; and
[1989, c. 703, 3 (new).]
K. Other factors which are normally or
traditionally taken into consideration
in determining prices, quality, quantity
99
and the costs of other services involved.
[1989, c. 703, 3 (new).]
[1989, c. 703, 3 (new).]
6. violaTion. Failure by a party to comply with
any of the requirements of this section is a
violation of this article.
[1987, c. 155, 15 (new).]
c. 201, 1,2 (aMd). 1989, c. 703, 2,3 (aMd).
1991, c. 622, o1 (aMd). 1991, c. 798, 1 (aMd)
13 1959. enforCeMenT of orders and Judi-
Cial review
1. CoMplainT. The board shall have power to
complaintotheSuperiorCourtfortheen-
forcement of its orders made under sections
1958 and 1965 and for appropriate tempo-
rary relief or restraining order, and shall fle
in the court the original or certifed copy of
the entire record in the proceeding, and shall
cause notice of such complaint to be served
upon such person, and said court shall there-
upon have jurisdiction of the proceeding and
of the question determined therein, and shall
have power to grant such temporary relief or
restraining order as it deems just and proper,
and to make and enter a judgment enforc-
ing, modifying and enforcing as so modifed,
or setting aside in whole or in part, the order
of the board. No objection that has not been
urged before the board may be considered
by the court, unless the failure or neglect to
urge such objection shall be excused because
of extraordinary circumstances. The fnd-
ings of the board with respect to questions
of fact, if supported by substantial evidence
on the record considered as a whole, shall be
conclusive. If either party shall apply to the
court for leave to adduce additional evidence
and shall show to the satisfaction of the court
that such additional evidence is material and
that there were reasonable grounds for the
failure to adduce such evidence in the hear-
ing before the board, the court may order
such additional evidence to be taken before
the board and to be made a part of the
record. The board may modify its fndings as
to the facts, or make new fndings, by reason
of additional evidence so taken and fled,
and it shall fle such modifed or new fnd-
ings, which fndings with respect to questions
of fact if supported by substantial evidence
on the record considered as a whole shall be
conclusive, and shall fle its recommenda-
tions, if any, for the modifcation or setting
aside of its original order. [1987, c. 155,
16 (amd).]
2. appeal. [1977, c. 694, 284 (rp).]
3. sTay. The provisions of Title 5, section
11004, shall govern with respect to any ap-
plication for a stay of an order of the board.
[1987, c. 155, 17 (amd).]
4. proCedure. [1977, c. 694, 286 (rp).]
5. penalTies. In an action to enforce an order
or in a separate action, the board may seek
civil penalties for violation of this article. In
any such action, a violation shall be pun-
ishable by a civil penalty of not more than
$5,000. When the violation is a refusal to
bargain under section 1958 or an unfair
practiceunder section 1965, each day that
such conduct occurred shall constitute a
separate violation. If a qualifed association
is found to have committed a violation under
sections 1958 and 1965, and if a civil penalty
is imposed, and if the court fnds that the
association is unable to pay the civil penalty,
the court shall instead issue an order sus-
pending for one year the associations rights
as a qualifed association under this article.
[1987, c. 155, 18 (new).]
788, 54 (aMd). 1977, c. 694, 284-286 (aMd).
1987, c. 155, 16-18 (aMd).
100
13 1960. Copy evidenCe; oaThs; suBpoenas
(repealed)
155, 19 (rP).
13 1961. ConTeMpT (repealed)
155, 20 (rP).
13 1962. serviCe (repealed)
155, 21 (rP).
13 1963. suBpoena
In any proceeding before the board under this
article, the board may issue subpoenas for the
attendance of witnesses, or for the production
of documents and may examine witnesses under
oath provided that: [1987, c. 155, 22 (amd).]
1. Upon written application of a party to a pro-
ceeding, the board shall issue subpoenas for
the attendance of witnesses or for the produc
tion of documents; [1973, c. 621, 1 (new).]
2. A person who fails to obey the subpoena of
the board may be punished as for contempt
of court on application by the board to the
Superior Court for the county in which such
failure occurs; [1973, c. 621, 1 (new).]
3. Witnesses who are summoned before the
board or its agents shall be entitled to the
same witness and mileage fees as are paid to
witnesses subpoenaed in the District Courts
of the State. [1973, c. 621, 1 (new).]
155, 22 (aMd).
13 1964. anTiTrusT
The activities of qualifed associations and
handlers in bargaining with respect to the price,
terms of sale, compensation for commodities
produced under contract or other contract terms
relative to agricultural commodities produced by
the members of such qualifed associations shall
be deemed not to violate any antitrust law of this
State. Nothing in this Article shall be construed
to permit handler to contract, combine or con-
spire with one another in bargaining with quali-
fed associations. [1973, c. 621, 1 (new).]
13 1965. unfair praCTiCes
1. Producers of agricultural commodities are
free to join together voluntarily in associa-
tions as authorized by law without interfer-
ence by handlers. A handler shall not engage
nor permit an employee or agent to engage
in any of the following practices, defned as
unfair practices:
A. To coerce a producer in the exercise
of his right to join and belong to or to
refrainfromjoiningorbelongingtoan
association or to refuse to deal with a
producer because of the exercise of his
right to join and belong to an associa-
tion except as provided in section 1958,
subsection 5; [1987, c. 155, 23 (amd).]
B. To discriminate against a producer with
respect to price, quantity, quality or other
terms of purchase, acquisition or other
handling of agricultural products because
of hismembershipinorcontractwithan
association; [1973, c. 621, 1 (new).]
C. To coerce or intimidate a producer to
breach,cancelorterminateamember-
shipagreementormarketingcontract
withanassociationoracontractwitha
handler; [1973, c. 621, 1 (new).]
D. To pay or loan money, give anything of
value or offer any other inducement or
regard to a producer for refusing or ceas-
ing to belong to an association; [1973, c.
621, 1 (new).]
E. To make or circulate unsubstantiated
reports about the fnances, management
or activities of associations or handlers;
[1973, c. 621, 1 (new).]
101
F. Toconspire,combine,agreeorarrange
with any other person to do or aid or
abet the doing of any practice which is in
violation of this Act; [1973, c. 621, 1
(new).]
G. To refuse to bargain with an accredited
association with whom the handler has
had prior dealings or with an accredited
association whose producers in the bar-
gaining units have had substantial dealing
with the handler prior to the accredita-
tion of the association; or [1973, c. 621,
1 (new).]
H. To negotiate with a producer included in
thebargainingunitafteranassociationis
accredited. [1973, c. 621, 1 (new).]
[1987, c. 155, 23 (amd).]
2. An association shall not engage or permit an
employee or agent to engage in the following
practices, defned as unfair practices:
A. To act in a manner contrary to the by-
laws of the association; [1973, c. 621, 1
(new).]
B. To refuse to bargain with a handler with
whom the accredited association has had
prior dealing or with whom its producers
have had substantial dealing prior to the
accreditation of the association; [1973,
c. 621, 1 (new).]
C. To coerce or intimidate a handler to
breach,cancelorterminateamember-
shipagreementormarketingcontract
withanassociationoracontractwitha
producer; [1973, c. 621, 1 (new).]
D. To make or circulate unsubstantiated
reports about the fnances, management
or activities of other associations or han-
dlers; [1973, c. 621, 1 (new).]
E. Toconspire,combine,agreeorarrange
with any other person to do or aid or
abet the doing of any practice which is in
violation of this Act; [1973, c. 621, 1
(new).]
F. To hinder or prevent, by picketing,
threats, intimidations, force or coercion
of any kind, the pursuit of any lawful
work or employment, or to obstruct or
interferewithentrancetooregressfrom
any place of employment, or to obstruct
or interfere with free and uninterrupted
use of public roads, streets, highways,
railways, airports or other ways of travel
or conveyance; [1973, c. 621, 1 (new).]
G. To exercise coercive pressure by pick-
eting,patrollingorotherwisebusiness
establishmentsotherthanthepremises
owned or controlled by the handler in
order to cause such parties to cease doing
business with such handler. [1973, c.
621, 1 (new).]
[1973, c. 621, 1 (new).]
3. noTiCe; opporTuniTy for hearing. When-
ever it is charged that a qualifed association
or a handler has committed an unfair prac-
tice under this section, the board shall pro-
vide that person with notice and opportunity
to be heard, in a manner consistent with the
Maine Administrative Procedure Act, Title 5,
chapter 375, as to adjudicatory hearings.
[1987, c. 155, 24 (new).]
4. hearing. Hearings held pursuant to subsec-
tion 3 shall be held in a manner consistent
with the Maine Administrative Procedure
Act, Title 5, chapter 375, as to adjudica-
tory hearings. The board shall request that
the Attorney General or any attorney in his
department designated by the Attorney Gen-
eral, be present at these hearings and shall
advise the board on procedure and on the
admissibility of any evidence.
[1987, c. 155, 24 (new).]
5. findings. If, upon a preponderance of the
evidence, the board determines that the
person complained of has committed an
unfair practice, in violation of this article, it
shall state its fndings of fact and shall issue
an order requiring the person to cease and
102
desist from such conduct and shall order
such further affrmative action, excluding
an award of damages, as will effectuate the
policies of this article. Failure to comply with
such an order is a violation of this article.
If the board determines that the person
complained of has not committed an unfair
practice, it shall state its fndings of fact and
shall issue an order dismissing the charges.
[1987, c. 155, 24 (new).]
6. frivolous Charges. If the board deter-
minesthatachargeof unfairpracticeis
frivolous, it shall state its fndings of fact and
may issue a reprimand to the person making
the charge. Where the board determines that
a person who made a charge which was de-
termined to be frivolous did so knowing the
charge to be frivolous, it shall state its fndings
of fact and shall issue an order requiring that
person to pay the reasonable attorneys fees
and double the amount of other reasonable
costs incurred by the person against whom
the charge was made in defending against
the charge before the board. Where it is
disputed, reasonableness shall be determined
by the board. The order shall also require
thatpersontoreimbursetheStateforthe
per diem payments made to board members
for their attendance at the hearing on the
charge. Failure to comply with such an order
is a violation of this article.
[1987, c. 155, 24 (new).]
155, 23,24 (aMd).
suBChapTer iii: eMployee CooperaTive Cor-
poraTions
13 1971. TiTle
This subchapter shall be known and may be
cited as the Employee Cooperative Corpora-
tions Act. [1983, c. 136 (new).]
section History: 1983, c. 136 (new).
otherwise indicates, the following terms have the
following meanings. [1983, c. 136 (new).]
1. eMployee CooperaTive. Employee coop-
erative means a corporation which has duly
elected to be governed by this subchapter.
[1983, c. 136 (new).]
2. MeMBer. Member means a natural person
who has been accepted for membership in
and owns a membership share issued by an
employee cooperative. [1983, c. 136 (new).]
3. MeMBership fee. Membership fee means
an initial payment made by a person to an
employee cooperative as a condition to be-
coming a member. [1983, c. 136 (new).]
4. paTronage. Patronage means the amount
of work performed as a member of an em-
ployee cooperative, measured in accordance
with the articles of incorporation or bylaws.
[1983, c. 136 (new).]
5. wriTTen noTiCe of alloCaTion. Written
notice of allocation means a written instru-
ment which discloses to a member the stated
dollar amount of that members patronage
allocation and the terms for payment of
that amount by the employee cooperative.
[1983, c. 136 (new).]
13 1973. appliCaTion of oTher laws
Except as otherwise provided in this subchapter,
employee cooperative corporations shall be gov-
erned by Title 13-A, the Maine Business Corpo-
ration Act. [1983, c. 136 (new).]
13 1974. regisTraTion of seCuriTies
Employee cooperatives are subject to Title 32,
103
chapter 13. The fee charged for registration or
renewal shall be $10. [1983, c. 136 (new).]
13 1975. forMaTion of eMployee Coopera-
Tive CorporaTion; revoCaTion
1. eleCTion. Any corporation organized under
Title 13-A may elect to be governed as an
employee cooperative under this subchapter,
by so stating in its articles of incorporation
or articles of amendment fled in accordance
with Title 13-A. [1983, c. 136 (new).]
2. revoCaTion. An employee cooperative may
revoke its election under this subchapter by a
vote of 2/3 of the members and through ar-
ticles of amendment duly fled in accordance
with Title 13-A. [1983, c. 136 (new).]
13 1976. use of words CooperaTive, Co-
op
No person, frm, corporation or association, do-
mesticorforeign,hereaftercommencingbusiness
in this State may use the word cooperative or
co-op as a part of its corporate name, unless
it has complied with this subchapter or some
otherstatuteof thisStaterelatingtocoopera-
tive associations. A foreign association organized
under and complying with the cooperative law
of the state of its creation shall be entitled to use
the term cooperative or co-op in this State if
it has obtained the privilege of doing business in
this State. [1983, c. 136 (new).]
13 1977. MeMBership in eMployee Coopera-
Tive CorporaTion
The articles of incorporation or the bylaws
shall establish qualifcations and the methods of
acceptance and termination of members. No
person may be accepted as a member unless
employed by the employee cooperative on a full-
time or part-time basis. [1983, c. 136 (new).]
13 1978. MeMBership shares; fees
1. issuanCe of shares. An employee coopera-
tive shall issue a class of voting stock desig-
nated as membership shares. [1983, c. 136
(new).]
2. payMenT. Each member of an employee
cooperative corporation shall be issued a
membership share upon payment of a mem-
bershipfee,theamountof whichshallbe
determined from time to time by the direc-
tors. Title 13-A, section 505, does not apply
to membership shares. [1983, c. 136 (new).]
3. ownership liMiTed. Each member shall
own only one membership share, and only
members may own those shares. [1983, c.
136 (new).]
4. voTing sToCk liMiTed.Unlessotherwise
provided in this subchapter or in the articles
of incorporation of an employee coopera-
tive, no other capital stock other than mem-
bership shares may have voting power. In
the event that proposed amendments to the
articles of incorporation would adversely
affect any nonvoting class of shareholders,
such action may not be taken without the
vote of those shareholders, as provided in
Title 13-A, sections 805 and 806. [1983, c.
136 (new).]
13 1979. aMendMenT of Bylaws
The bylaws of an employee cooperative may
only be amended by members, except as pro-
vided in Title 13-A, section 602. [1983, c. 136
(new).]
13 1980. earnings or losses
1. apporTionMenT.Thenetearningsorlosses
of an employee cooperative shall be appor-
tioned and distributed at such times and in
104
such manner as the articles of organization
or bylaws shall specify. Net earnings de-
clared as patronage allocations with respect
to a period of time, and paid or credited to
members, shall be apportioned among the
members in accordance with the ratio which
each members patronage during the pe-
riod involved bears to total patronage by all
members during that period. [1983, c. 136
(new).]
2. MeThod. The apportionment, distribution
and payment of net earnings required by
this section may be in cash, credits, written
notices of allocation or capital stock issued
by the employee cooperative. [1983, c. 136
(new).]
13 1981. aCCounTing for earnings or
losses
1. inTernal aCCounTs. Any employee coopera-
tive may establish in its articles of incorpora-
tion or bylaws a system of internal capital
accounts to refect the book value and to
determine the redemption price of member-
ship shares, capital stock and written notices
of allocation. [1983, c. 136 (new).]
2. redeMpTion.Thearticlesof incorporation
or bylaws of an employee cooperative may
permit the periodic redemption of written
notices of allocation and capital stock, and
must provide for recall and redemption of
themembershipshareuponterminationof
membership in the cooperative. No redemp-
tion may be made if such redemption would
result in the liability of any director or offcer
of the employee cooperative under Title 13-
A. [1983, c. 136 (new).]
3. inTeresT.Thearticlesof incorporationor
bylaws may provide for the employee cooper-
ative to pay or credit interest on the balance
in each members internal capital account.
[1983, c. 136 (new).]
4. ColleCTive reserve aCCounT.Thearticles
of incorporation or bylaws may authorize
assignment of a portion of retained net earn-
ings and net losses to a collective reserve ac-
count.Forpurposesof thischapter,acollec-
tive reserve account means an unindividuated
accountonthecorporatebooksrepresenting
the corporations entire net book value minus
balances in any other equity accounts. Earn-
ings assigned to the collective reserve account
may be used for any and all corporate pur-
poses as determined by the board of direc-
tors. [1983, c. 136 (new).]
13 1982. inTernal CapiTal aCCounT Coop-
eraTives
1. Types of aCCounTs perMiTTed. An internal
capital account cooperative is an employee
cooperative whose entire net book value is
refected in internal capital accounts, one for
each member, and a collective reserve ac-
count, and in which no persons other than
membersowncapitalstock.Inaninternal
capital account cooperative, each member
shall have only one vote in any matter requir-
ing voting by stockholders. [1983, c. 136
(new).]
2. alloCaTion To aCCounTs. An internal
capital account cooperative shall credit the
paid-in membership fee and additional
paid-in capital of a member to the members
internal capital account, and shall also record
the apportionment of retained net earnings
or net losses to the members in accordance
with patronage by appropriately crediting
or debiting the internal capital accounts of
members. The collective reserve account in
an internal capital account cooperative shall
refect any paid-in capital, net losses and
retained earnings not allocated to individual
members. [1983, c. 136 (new).]
105
3. adJusTMenT of aCCounTs.Inaninternal
capital account cooperative, the balances in
all the internal capital accounts and collective
reserve account, if any, shall be adjusted at
the end of each accounting period so that the
sum of the balances is equal to the net book
value of the employee cooperative. [1983, c.
136 (new).]
4. exCepTions. Title 13-A, section 909, does
not apply to an internal capital account co-
operative. [1983, c. 136 (new).]
13 1983. revoCaTion of eleCTion as eM-
ployee CooperaTive CorporaTion
When any employee cooperative revokes its elec-
tion in accordance with section 1975, the articles
of amendment shall provide for conversion of
membership shares and internal capital ac-
counts or their conversions to securities or other
property in a manner consistent with Title 13-A.
[1983, c. 136 (new).]
13 1984. Mergers
An employee cooperative that has not revoked
its election under this subchapter may not con-
solidate or merge with another corporation other
than an employee cooperative. Two or more em-
ployee cooperatives may consolidate or merge in
accordance with Title 13-A, chapter 9. [1983,
c. 136 (new).]
chapter 87: fish MarkeTing assoCiaTions
suBChapTer i: general provisions
This chapter shall be known as the Fish Market-
ing Act.
13 2002. purposes
This chapter is enacted in order to promote,
foster and encourage the intelligent and orderly
marketing of fsh and fshery products through
cooperation; to eliminate speculation and waste;
to make the distribution of fsh and fshery prod-
ucts between producer and consumer as direct
as can be effciently done; and to stabilize the
marketing of fsh and fshery products.
As used in this chapter:
1. assoCiaTion. Association means any cor-
poration organized under this chapter.
2. fishery produCTs. Fishery products in-
cludes fsh, crustaceans, mollusks and marine
products for human consumption.
3. MeMBer. Member includes members of
associations without capital stock and holders
of common stock in associations organized
withsharesof stock.
13 2004. nonprofiT assoCiaTions
Associations shall be deemed nonproft, inas-
much as they are not organized to make proft
for themselves, as such, or for their members, as
such, but only for their members as producers of
fshery products.
13 2005. general CorporaTion law; appli-
CaBiliTy
The provisions of the general laws relating to
business corporations and all powers and rights
thereunder, apply to associations, except where
such provisions are in confict with or inconsis-
tent with the express provisions of this chapter.
13 2006. regisTraTion as dealers in seCu-
riTies
Associations organized under this chapter shall
be subject to Title 32, chapter 13. The fee
charged for registration or renewal shall be $10.
13 2007. anTi-TrusT laws; exeMpTion
An association shall be deemed not to be a con-
spiracy nor a combination in restraint of trade
nor an illegal monopoly; nor an attempt to lessen
106
competition or to fx prices arbitrarily or to cre-
ate a combination or pool in violation of any
law of this State; and the marketing contracts
and agreements between the association and its
members and any agreements authorized in this
chapter shall be considered not to be illegal nor
in restraint of trade nor contrary to any statute
enacted against pooling or combinations.
13 2008. sTaTuTory ConsTruCTion
Any provisions of law which are in confict with
this chapter shall not be construed as applying to
associations. Any exemptions under any laws ap-
plying to fshery products in the possession or un-
der the control of the individual producer shall
apply similarly and completely to such fshery
products delivered by its members, in the posses-
sion or under the control of the association.
13 2009. Merger or ConsolidaTion
Any 2 or more associations may be merged into
one such constituent association or consolidated
intoanewassociation.Suchmergerorconsoli-
dation shall be made in the manner prescribed
for domestic business corporations.
suBChapTer ii: organizaTion
13 2051. auThoriTy To forM assoCiaTion
Five or more persons, a majority of whom are
residents of this State, engaged in the fshery
business, may form an association, with or with-
out shares of stock, under this chapter.
13 2052. arTiCles of inCorporaTion
Articles of incorporation shall be signed, ac-
knowledged and fled in the manner prescribed
for domestic business corporations.
13 2053. ConTenTs
The articles of incorporation shall state:
1. naMe.Thenameof theassociation;
2. purposes.Thepurposesforwhichitis
formed;
3. loCaTion. The municipality and county
where the principal offce for the transaction
of businessof thecorporationistobelocat-
ed;
4. direCTors. The number of directors there-
of, which shall be not less than 3 and may be
any number in excess thereof; the term of
offce of such directors; and the names and
residences of those who are to serve as direc-
tors for the frst year, or until election and
qualifcation of their successors.
13 2054. shares; nuMBer; par value
If the association is organized with shares of
stock,thearticlesshallstatethenumberof
shares which may be issued and if the shares are
to have a par value, the par value of each share,
and the aggregate par value of all shares; and if
the shares are to be without par value, it shall be
so stated.
13 2055. Classes
If the shares are to be classifed, the articles shall
contain a description of the classes of shares and
astatementof thenumberof sharesof each
kind or class and the nature and extent of the
preferences, rights, privileges and restrictions
granted to or imposed upon the holders of the
respective classes of stock.
13 2056. MeMBership; voTing power
If the association is organized without shares of
stock, the articles shall state whether the vot-
ing power and the property rights and interest
of each member are equal or unequal; and if
unequal the general rule or rules applicable to
all members by which the voting power and the
property rights and interests, respectively, of
each member may be and are determined and
fxed; and shall provide for the admission of new
members who shall be entitled to vote and to
share in the property of the association with the
old members, in accordance with such general
ruleorrules.
13 2057. aMendMenTs
The articles of incorporation of any association
107
may be altered or amended in the manner and
for the purposes prescribed for domestic corpo-
rations.
13 2058. adopTion, repeal and aMendMenT;
voTe; delegaTion of auThoriTy
Each association shall, within 30 days after its in-
corporation, adopt for its government and man-
agement a code of bylaws, not inconsistent with
this chapter. A majority vote of the members or
shares of stock issued and outstanding and en-
titled to vote, or the written assent of a majority
of the members or of stockholders representing
a majority of all the shares of stock issued and
outstanding and entitled to vote, is necessary to
adopt such bylaws and is effectual to repeal or
amend any bylaws, or to adopt additional bylaws.
The power to repeal and amend the bylaws, and
adopt new bylaws, may, by a similar vote, or simi-
lar written assent, be delegated to the board of
directors, which authority may, by a similar vote,
or similar written assent, be revoked.
13 2059. prohiBiTed Transfers
The bylaws shall prohibit the transfer of the
common stock or membership certifcates of the
associations to persons not engaged in the fshery
business.
13 2060. quoruM; voTing; qualifiCaTions
of direCTors; penalTies
The bylaws may provide:
1. quoruM.Thenumberof membersconsti-
tuting a quorum;
2. voTing. The right of members to vote by
proxy or by mail or both, and the conditions,
manner, form and effects of such votes; the
right of members to cumulate their votes and
the prohibition, if desired, of cumulative vot-
ing;
3. quoruM for direCTors. Thenumberof
directors constituting a quorum;
4. duTies, TerM, eTC. of direCTors.The
qualifcations, compensation and duties and
term of offce of directors and offcers and
thetimeof theirelection;
5. penalTies. Penalties for violations of the
bylaws.
13 2061. MeMBers; finanCial righTs and
oBligaTions
1. fees. The amount of entrance, organization
and membership fees, if any; the manner and
method of collection of the same; and the
purposes for which they may be used;
2. MeMBers payMenTs.Theamountwhich
each member shall be required to pay annu-
ally, or from time to time, if at all, to carry on
thebusinessof theassociation;thecharge,if
any, to be paid by each member for services
rendered by the association to him and the
time of payment and the manner of collec-
tion; and the marketing contract between
the association and its members which every
member may be required to sign;
3. dividends. The amount of any dividends
which may be declared on the stock or mem-
bership capital, which dividends shall not
exceed 8% per annum and which dividends
shall be in the nature of interest and shall not
affect the nonproft character of any associa-
tion organized under this chapter.
13 2062. qualifiCaTions; wiThdrawals;
Transfers; suspension; valuaTion of inTeresT
1. MeMBership. The number and qualifcation
of members of the association and the condi-
tions precedent to membership or ownership
of commonstock;
2. wiThdrawal. The method, time and man-
ner of permitting members to withdraw or
the holders of common stock to transfer their
stock;
3. Transfer of inTeresT.Themannerof
assignment and transfer of the interest of
members and of the shares of common
stock;
108
4. CessaTion of MeMBership. The conditions
upon which and time when membership of
any member shall cease;
5. suspension.Fortheautomaticsuspension
of therightsof amemberwhenheceases
tobeeligibletomembershipintheassocia-
tion; and the mode, manner and effect of the
expulsion of a member; and
6. valuaTion of inTeresT.Themannerof
determining the value of a members interest
and provision for its purchase by the asso-
ciation upon the death or withdrawal of a
member or upon the expulsion of a member
orforfeitureof hismembership,oratthe
optionof theassociation,thepurchaseat
a price fxed by conclusive appraisal by the
board of directors; and the conditions and
terms for the repurchase by the corporation
from its stockholders of their stock upon their
disqualifcation as stockholders.
13 2063. MeeTings
The bylaws may provide for the time, place and
manner of calling and conducting meetings of
theassociation.
13 2064. disTriCTing TerriTory; direCTors
froM disTriCTs; redisTriCTing
The bylaws may provide that the territory in
whichtheassociationhasmembersshallbe
divided into districts and that directors shall be
elected from the several districts. In such case,
the bylaws shall specify the number of directors
to be elected by each district, the manner and
method of reapportioning the directors and of
redistricting the territory covered by the associa-
tion.
13 2065. direCTors eleCTed By disTriCT
represenTaTives; redisTriCTing
The bylaws may provide that the territory in
whichtheassociationhasmembersshallbe
divided into districts, and that the directors shall
be elected by representatives or advisers, who
themselves have been elected by the members
from the several territorial districts. In such case,
the bylaws shall specify the number of represen-
tatives or advisers to be elected by each district,
the manner and method of reapportioning the
representatives or advisers and of redistricting
the territory covered by the association.
13 2066. direCTors; priMary eleCTions To
noMinaTe
The bylaws may provide that primary elections
shall be held to nominate directors. Where the
bylaws provide that the territory in which the
association has members shall be divided into
districts, the bylaws may provide that the results
of the primary elections in the various districts
shall be fnal and shall be ratifed at the annual
meetingof theassociation.
13 2067. sTaggered TerMs
The bylaws may provide that directors shall be
elected for terms of from one to 5 years, provid-
ed that at each annual election the same fraction
of the total number of directors shall be elected
as one year bears to the number of years of the
term of offce.
13 2068. exeCuTive CoMMiTTee
The bylaws may provide for an executive com-
mittee and may allot to such committee all the
functions and powers of the board of directors,
subject to the general direction and control of
the board.
suBChapTer iii: offiCers
13 2101. Board of direCTors
The affairs of the association shall be managed
by a board of not less than 3 directors, elected by
themembersfromtheirownnumber.
13 2102. MeeTings
Meetings of the board of directors may be held
at any place within or without the State fxed by
a quorum thereof unless otherwise provided in
the articles of incorporation or bylaws.
13 2103. vaCanCies
When a vacancy on the board of directors oc-
curs other than by expiration of term, the re-
109
maining members of the board, by a majority
vote, shall fll the vacancy, provided that when
the bylaws provide for an election of directors by
districts, the vacancy shall be flled by the elec-
tion of a director from the district in which the
vacancy occurs; or the board of directors may
callaspecialmeetingof themembersinthat
district to fll the vacancy.
13 2104. presidenT; viCe-presidenTs; seC-
reTary; Treasurer
The directors shall elect from their number a
president and one or more vice-presidents. They
shall elect a secretary and a treasurer, who need
not be directors or members of the association,
and they may combine the 2 latter offces and
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 offcer,
but as a function of the board of directors. In
such case, the secretary shall perform the usual
accounting duties of the treasurer, excepting that
the funds shall be deposited only as and where
authorized by the board of directors. Any vacan-
cy in any offce, other than that of director, shall
be flled by the board of directors.
13 2105. CoMpensaTion
An association may provide a fair remuneration
for the time actually spent by its offcers and
directors in its service and for the service of the
members of its executive committee.
13 2106. Charges; peTiTion
Any member may bring charges against an of-
fcer or director by fling them in writing with the
secretary of the association, together with a peti-
tion signed by 5% of the members, requesting
the removal of the offcer or director in question.
13 2107. noTiCe; hearing
The director or offcer, against whom such
charges have been brought, shall be informed in
writing of the charges previous to the meeting
and shall have an opportunity at the meeting to
be heard in person or by counsel and to present
witnesses; and the person or persons bringing the
charges against him shall have the same oppor-
tunity.
13 2108. voTe; TiMe; MaJoriTy required
Except as provided in section 2109, the removal
shall be voted upon at the next regular or special
meeting of the association and, by a vote of a
majority of the members, the association may
remove the offcer or director.
13 2109. disTriCT direCTors; peTiTion;
voTe of disTriCT MeMBership
If the bylaws provide for election of directors by
districts with primary elections in each district,
the petition for removal of a director shall be
signed by 20% of the members residing in the
district from which he was elected. The board
of directors shall call a special meeting of the
members residing in that district to consider the
removal of the director; and by a vote of the ma-
jority of the members of that district, the direc-
tor in question shall be removed from offce.
suBChapTer iv: MeMBers
13 2151. qualifiCaTions
Under the terms and conditions prescribed in the
bylaws, an association may admit as members,
or issue common stock to, only such persons as
are engaged in the fshery business, including
the lessees and tenants of boats and equipment
used in such fshery business and any lessors and
landlords who receive as rent all or part of the
fsh produced by such leased equipment.
If amemberof anonstockassociationisother
than a natural person, such member may be
represented by any individual duly authorized in
writing. One association may become a member
or stockholder of any other association.
13 2152. CerTifiCaTe
When a member of an association established
without shares of stock has paid his membership
fee in full, he shall receive a certifcate of mem-
bership.
13 2153. liaBiliTy for deBTs
110
No member shall be liable for the debts of the
association to an amount exceeding the sum
remaining unpaid on his membership fee or his
subscription to the capital stock, including any
unpaid balance on any promissory note given in
payment thereof.
13 2154. MeeTings; plaCe
Meetings of members shall be held at the place
as provided in the bylaws; and if no provision is
made, in the city where the principal place of
business is located at a place designated by the
board of directors.
13 2155. expulsion; payMenT for inTeresT
In case of the expulsion of a member, and where
the bylaws do not provide any procedure or
penalty, the board of directors shall equitably
and conclusively appraise his property interest in
the association and shall fx the amount thereof
in money, which shall be paid to him within one
year after such expulsion.
suBChapTer v: sToCk
13 2191. payMenT; CoMMon; ownership
liMiTaTions
No association shall issue a certifcate for stock
to a member until it has been fully paid for. The
promissory notes of the members may be accept-
ed by the association as full or partial payment.
The association shall hold the stock as security
for the payment of the note, but such retention
as security shall not affect the members right to
vote. An association, in its bylaws, may limit the
amountof commonstockwhichonemember
may own.
13 2192. CoMMon; voTing power
One class of stock shall always be known as com-
mon stock and voting power may be restricted to
holders of common stock.
13 2193. noTaTion of resTriCTion on
Transfer
There shall be printed upon each common stock
certifcate a statement that the transfer thereof to
any person not engaged in the fshery business is
prohibited by the bylaws of the association.
13 2194. purChase By assoCiaTion
An association may, at any time, as specifed in
the bylaws, except when the debts of the associa-
tion exceed 50% of its assets, buy in or purchase
its common stock at the book value thereof, as
conclusively determined by the board of direc-
tors and pay for it in cash within one year there-
after.
13 2195. disTinCTion BeTween Classes of
sToCk or holders
Except as to the matters and things stated in the
articles of incorporation no distinction shall exist
between classes of stock or the holders thereof.
13 2196. nonpar issuanCe
If an association issues nonpar value stock the
issue of such stock shall be governed by the laws
regulating the issuance of nonpar value stock in
domestic corporations.
13 2197. preferred; issuanCe in payMenT
for purChases By assoCiaTion
Whenever an association, organized with pre-
ferred shares of stock, purchases the stock or
any property or any interest in any property of
any person, it may discharge the obligations so
incurred wholly or in part, by exchanging for the
acquired interest, shares of its preferred stock to
an amount which at par value would equal the
fair market value of the stock or interest so pur-
chased, as determined by the board of directors.
Inthatcasethetransfertotheassociationof the
stock or interest purchased shall be equivalent to
payment in cash for the shares of stock issued.
suBChapTer vi: powers
13 2231. auThorized aCTiviTies
An association may engage in any activity in con-
nection with the marketing, selling, preserving,
harvesting, drying, processing, manufacturing,
canning, packing, grading, storing, handling or
utilization of any fshery products produced or
delivered to it by its members; or the manufac-
111
turing or marketing of the by-products thereof;
or any activity in connection with the purchase,
hiring or use by its members of supplies, machin-
ery or equipment; or in the fnancing of any such
activities.
13 2232. Borrowing; advanCes To MeMBers
An association may borrow without limitation as
to amount of corporate indebtedness or liability
and may make advances to members.
13 2233. agenCy
An association may act as the agent or represen-
tative of any member or members in sections
2231 and 2232.
13 2234. reserves; invesTMenTs
An association may establish reserves and invest
the funds thereof in bonds or in such other prop-
erty as may be provided in the bylaws.
13 2235. sToCks and Bonds; aCquisiTion
and ownership
An association may purchase or otherwise ac-
quire, hold, own and exercise all rights of own-
ership in, sell, transfer or pledge the payments
of dividends or interest on, or the retirement or
redemption of, such shares of the capital stock or
bonds of any corporation or association engaged
in any related activity or in the warehousing or
handling or marketing or packing or manufac-
turingorprocessingorpreparingformarket
of any of the fshery products handled by the
association.
13 2236. properTy ownership
An association may buy, hold and exercise all
privileges or ownership over such real or person-
al property as may be necessary or convenient for
the conduct and operation of any of the business
of the association, or incidental thereto.
13 2237. assessMenTs
An association may levy assessments in the man-
ner and in the amount provided in its bylaws.
13 2238. aCTs neCessary To aCCoMplish
purposes
An association may do each and every thing nec-
essary, suitable or proper for the accomplishment
of any one of the purposes or the attainment of
any one or more of the objects enumerated in
this chapter; or conducive to or expedient for the
interest or beneft of the association; and con-
tract accordingly; and in addition exercise and
possess all powers, rights and privileges necessary
or incidental to the purposes for which the as-
sociation is organized or to the activities in which
it is engaged; and, in addition, any other rights,
powers and privileges granted by the laws of this
State to ordinary corporations, except such as
are inconsistent with the express provisions of
this chapter; and do any such thing anywhere.
13 2239. faCiliTies; use; proCeeds
An association may use or employ any of its
facilities for any purpose; provided the proceeds
arising from such use and employment go to
reduce the cost of operation for its members; but
the fshery products of nonmembers shall not be
dealt in to an amount greater in value than such
as are handled by it for its members.
13 2240. inTeresT in oTher CorporaTions;
warehousing CorporaTions; warehouse re-
CeipTs
An association may organize, form, operate,
own, control, have an interest in, own stock of,
or be a member of any other corporation or
corporations, with or without capital stock and
engaged in preserving, drying, processing, can-
ning, packing, storing, handling, shipping, utiliz-
ing,manufacturing,marketingorsellingof the
fshery products handled by the association, or
the byproducts thereof.
If suchcorporationsarewarehousingcorpora-
tions, they may issue legal warehouse receipts to
the association against the commodities delivered
by it, or to any other person and such legal ware-
house receipts shall be considered as adequate
collateral to the extent of the usual and current
value of the commodity represented thereby.
In case such warehouse is licensed or licensed
and bonded under the laws of this State or the
112
United States, its warehouse receipt delivered to
the association on commodities of the association
or its members, or delivered by the association or
its members, shall not be challenged or discrimi-
nated against because of ownership or control,
wholly or in part, by the association.
13 2241. agreeMenTs wiTh oTher assoCia-
Tions; CooperaTion
Any association may, upon resolution adopted
by its board of directors, enter into all necessary
and proper contracts and agreements and make
all necessary and proper stipulations, agreements
and contracts and arrangements with any other
cooperative or other corporation, association or
associations, formed in this or in any other state,
for the cooperative and more economical carry-
ing on of its business or any part or parts thereof.
Any 2 or more associations may, by agreements
between them, unite in employing and using or
may separately employ and use the same person-
nel, methods, means and agencies for carrying
on and conducting their respective business.
suBChapTer vii: MarkeTing ConTraCTs
13 2281. auThoriTy To ConTraCT; resTriC-
Tions
An association and its members may make
and execute marketing contracts, requiring the
members to sell, for any period of time, not over
15 years, all or any specifed part of their fshery
products or specifed commodities exclusively to
or through the association or any facilities to be
created by the association.
13 2282. TiTle To produCTs
If thememberscontractasaletotheassociation,
it shall be conclusively held that title to the prod-
ucts passes absolutely and unreservedly, except
for recorded liens, to the association upon deliv-
ery or at any other time expressly and defnitely
specifed in the contract.
13 2283. sales and resales; payMenTs To
MeMBers; deduCTions
The contract may provide that the association
may sell or resell the fshery products delivered
by its members, with or without taking title
thereto; and pay over to its members the resale
price, after deducting all necessary selling, over-
head and other costs and expenses, including
interest on preferred stock, not exceeding 8%
per annum, and reserves for retiring the stock, if
any; and other proper reserves; and interest not
exceeding 8% per annum upon common stock.
13 2284. BreaCh of ConTraCT; liquidaTed
daMages; CosTs
The marketing contract may fx, as liquidated
damages, specifc sums to be paid by the member
to the association upon the breach by him of
any provision of the marketing contract regard-
ing the sale or delivery or withholding of fsh-
ery products; and may further provide that the
member will pay all costs, premiums for bonds,
expenses and fees, in case any action is brought
upon the contract by the association; and any
such provisions shall be valid and enforceable in
the courts of this State; and such clauses provid-
ing for liquidated damages shall be enforceable
as such and shall not be regarded as penalties.
13 2285. enforCeMenT of ConTraCT; in-
JunCTion; speCifiC perforManCe
In the event of any such breach or threatened
breach of such marketing contract by a member
the association shall be entitled to an injunction
to prevent the further breach of the contract
and to a decree of specifc performance thereof.
Pending the adjudication of such an action and
upon fling a verifed complaint showing the
breach or threatened breach, and upon fling
suffcient bond, the association shall be entitled
to a temporary restraining order and preliminary
injunctionagainstthemember.
13 2286. landlord or lessor; presuMp-
Tions; reMedies againsT
In any action upon such marketing agreements,
it shall be conclusively presumed that a landlord
or lessor is able to control the delivery of fshery
products produced by his equipment by tenants,
or others, whose tenancy or possession or work
on such equipment or the terms of whose tenan-
cy or possession or labor thereon were created or
113
changed after execution by the landlord or lessor,
of such a marketing agreement; and in such ac-
tions, the foregoing remedies for nondelivery or
breach shall lie and be enforceable against such
landlord or lessor.
13 2287. speCifiC perforManCe
A contract entered into by a member of an
association, providing for the delivery to such
association of products produced or acquired by
the member, may be specifcally enforced by the
association to secure the delivery to it of such
fshery products, any provisions of law to the
contrary notwithstanding.
TiTle 35-a: puBliC uTiliTies
parT 3: eleCTriC power
ChapTer 37:rural eleCTrifiCaTion Coopera-
Tives (heading: pl 1987, C. 141, pT. a,
6 (new))
suBChapTer i: general provisions (head-
ing: pl 1987, C. 141, pT. a, 6 (new))
35a 3701. shorT TiTle
This chapter shall be known and may be cited as
the Rural Electrifcation Cooperative Enabling
Act. [1987, c. 141, Pt. A, 6 (new).]
section History: 1987, c. 141, a6 (new).
35a 3702. purpose
Cooperative nonproft membership corporations
may be organized under this chapter for the pur-
pose of supplying electricity and promoting and
extending the use of electricity. [1987, c. 141,
Pt. A, 6 (new).]
35a 3703. definiTions
As used in this chapter, unless the context oth-
erwise indicates, the following words have the
following meanings: [1987, c. 141, Pt. A, 6
(new).]
1. person. Person means person as defned
in section 102 or any public agency, state or
political subdivision or agency of the State,
or any body politic. [1987, c. 141, Pt. A, 6
(new).]
2. rural eleCTrifiCaTion CooperaTive or
CooperaTive. Rural electrifcation coopera-
tive or cooperative means any corporation
organized under this chapter or which be-
comessubjecttothischapterinthemanner
provided. [1987, c. 141, Pt. A, 6 (new).]
35a 3704. naMe
The name of a cooperative shall be distinct from
the name of any other cooperative or corpora-
tion organized under the laws of, or authorized
to do business in this State. [1987, c. 141, Pt. A,
6 (new).]
35a 3705. refunds
Revenues of a cooperative for any fscal year
shall be applied as follows: [1987, c. 141, Pt. A,
6 (new).]
1. expenses. To defray the expenses of the
operation and maintenance of the facilities
of the cooperative during the fscal year;
[1987, c. 141, Pt. A, 6 (new).]
2. inTeresT and oBligaTions. To pay interest
and principal obligations of the cooperative
coming due in the fscal year; [1987, c. 141,
Pt. A, 6 (new).]
3. reserve for ConsTruCTion of faCiliTies.
To fnance or to provide a reserve for the f-
nancing of the construction or acquisition by
the cooperative of additional facilities to the
extent determined by the board of trustees;
[1987, c. 141, Pt. A, 6 (new).]
4. reserve for working CapiTal. To provide
a reasonable reserve for working capital; and
[1987, c. 141, Pt. A, 6 (new).]
5. reserve for indeBTedness. To provide a
reserve for the payment of indebtedness of
the cooperative in an amount not less than
the total of the interest and principal pay-
ments in respect thereof required to be made
114
during the next following fscal year; [1987,
c. 141, Pt. A, 6 (new).]
Any remaining revenues shall, unless other-
wise determined by a vote of the members,
be distributed by the cooperative to its mem-
bers as patronage refunds prorated in accor-
dance with the patronage of the cooperative
by the respective members, paid for during
such fscal year. Nothing in this section pro-
hibits the payment by a cooperative of all or
any part of its indebtedness prior to the date
when it becomes due. [1987, c. 141, Pt. A,
6 (new).]
35a 3706. nonliaBiliTy of MeMBers for
deBTs of CooperaTive
No member may be liable or responsible for any
debts of the cooperative and the property of the
members may not be subject to execution for
the cooperatives debts. This section does not
apply to a generation and transmission coopera-
tive organized in accordance with subchapter IV.
[1987, c. 141, Pt. A, 6 (new).]
35a 3707. reCordaTion of MorTgages; ef-
feCT
All after-acquired property of a cooperative or
foreign corporation described or referred to as
being mortgaged or pledged in a mortgage, deed
of trustorotherinstrumentissubjecttothelien
on that property immediately upon the acquisi-
tion of the property by the cooperative or foreign
corporation, whether or not the property was
in existence at the time of the execution of the
mortgage, deed of trust or other instrument. Re-
cordation of a mortgage, deed of trust or other
instrument constitutes notice and otherwise has
the same effect with respect to the after-acquired
property owned by the cooperative or foreign
corporation at the time of the execution of the
mortgage, deed of trust or other instrument and
described or referred to in the instrument as be-
ing mortgaged or pledged. [1987, c. 141, Pt. A,
6 (new).]
35a 3708. fees
The Secretary of State shall charge and collect
for fling articles of incorporation, articles of
amendment, articles of consolidation or articles
of conversion a fee of $5, and for fling certif-
cate of election to dissolve, articles of dissolution
or certifcate of change of principal offce a fee
of $2. [1987, c. 141, Pt. A, 6 (new).]
35a 3709. CooperaTives are puBliC uTili-
Ties; JurisdiCTion of puBliC uTiliTies CoM-
Mission
Cooperatives are public utilities and subject to
this Title, notwithstanding any public or private
and special laws to the contrary. [1987, c. 141,
Pt. A, 6 (new).]
1. CoMMission To hear CoMplainTs. Any
person who has been refused membership in
or service by a cooperative or who is receiv-
ing inadequate service may complain to the
commission which may, after hearing, upon
fnding that such service may reasonably be
rendered, order the cooperative to provide
the person with reasonably adequate service.
[1987, c. 141, Pt. A, 6 (new).]
2. unreasonaBle MeMBership requireMenT.
If the commission, after hearing, determines
that a requirement of membership in a
cooperative is unreasonable or unjust, it shall
order the requirement repealed or not to be
enforced. [1987, c. 141, Pt. A, 6 (new).]
35a 3710. filing of arTiCles
1. arTiCles filed By seCreTary of sTaTe.
Articles of incorporation, amendment,
conversion or dissolution, when executed
and acknowledged and accompanied by such
affdavits as may be required by this chapter
115
shall be presented to the Secretary of State
for fling in the records of his offce. If the
Secretary of State determines that the ar-
ticles presented conform to the requirements
of this chapter he shall, upon the payment of
the fees as provided in section 3708, fle the
articles in the records of his offce. [1987, c.
141, Pt. A, 6 (new).]
2. arTiCles in effeCT upon filing. Uponthe
fling by the Secretary of State the incorpo-
ration, amendment, conversion or dissolu-
tion provided for in the articles is in effect.
[1987, c. 141, Pt. A, 6 (new).]
3. appliCaTion of This seCTion To CerTifi-
CaTes of eleCTion To dissolve. Thissection
applies to certifcates of election to dissolve
and affdavits executed in connection with
the certifcates pursuant to section 3755, sub-
section 2. [1987, c. 141, Pt. A, 6 (new).]
suBChapTer ii: organizaTion (heading:
pl 1987, C. 141, pT. a, 6 (new))
35a 3731. inCorporaTors
Five or more natural persons or 2 or more coop-
eratives may organize a cooperative in the man-
ner provided in this subchapter. [1987, c. 141,
Pt. A, 6 (new).]
This section does not apply to a generation and
transmission cooperative organized in accor-
dance with subchapter IV. [1987, c. 141, Pt. A,
6 (new).]
35a 3732. arTiCles of inCorporaTion
1. ConTenTs of arTiCles.Thearticlesof in-
corporation of a cooperative shall recite that
they are executed pursuant to this chapter
and shall state:
A. The name of the cooperative; [1987, c.
141, Pt. A, 6 (new).]
B. The address of its principal offce;
[1987, c. 141, Pt. A, 6 (new).]
C. The names and addresses of the incor-
porators; and [1987, c. 141, Pt. A, 6
(new).]
D. The names and addresses of its trustees.
[1987, c. 141, Pt. A, 6 (new).] [1987,
c. 141, Pt. A, 6 (new).]
2. arTiCles noT inConsisTenT wiTh This
ChapTer. The articles of incorporation may
contain any provisions not inconsistent with
this chapter determined necessary or advis-
able for the conduct of its business. [1987,
c. 141, Pt. A, 6 (new).]
3. arTiCles signed By inCorporaTors. The
articles shall be signed by each incorporator
and acknowledged by at least 2 of the incor-
porators, or on their behalf, if they are coop-
eratives. [1987, c. 141, Pt. A, 6 (new).]
4. purpose and CorporaTe powers.Itisnot
necessary to recite in the articles of incorpo-
ration of a cooperative the purpose for which
it is organized or any of its corporate powers.
[1987, c. 141, Pt. A, 6 (new).]
35a 3733. Bylaws
1. TrusTees adopT firsT Bylaws. The board
of trustees shall adopt the frst bylaws of
a cooperative to be adopted following an
incorporation, conversion or consolidation.
[1987, c. 141, Pt. A, 6 (new).]
2. MeMBers adopT, aMend or repeal follow-
ing Bylaws. After the frst bylaws have been
adopted, the members shall adopt, amend or
repeal the bylaws by the affrmative vote of a
majority of those members voting at a meet-
ing of the members. [1987, c. 141, Pt. A,
6 (new).]
3. ConTenTs of Bylaws. The bylaws shall set
forth the rights and duties of members and
trustees and may contain other provisions for
the regulation and management of the affairs
116
of the cooperative not inconsistent with this
chapterorwithitsarticlesof incorporation.
[1987, c. 141, Pt. A, 6 (new).]
section History: 1987, c. 141, A6 (NEW).
35a 3734. MeMBers
1. inCorporaTors are MeMBers. Each incor-
porator of a cooperative is a member of the
cooperative, but no other person may be-
comeamemberunlessthatpersonagreesto
use electric energy or other services furnished
by the cooperative when they are made avail-
able through its facilities. [1987, c. 141, Pt.
A, 6 (new).]
2. requireMenTs of MeMBership. Any mem-
ber of a cooperative who agrees to use
electric energy shall cease to be a member if
he does not use electric energy supplied by
the cooperative within 6 months after it is
made available to him or if electric energy is
not made available to him by the cooperative
within 2 years after he becomes a member or
such lesser period as the bylaws of the coop-
erative may provide. [1987, c. 141, Pt. A,
6 (new).]
3. JoinT MeMBership. A husband and wife may
hold a joint membership in a cooperative.
[1987, c. 141, Pt. A, 6 (new).]
4. MeMBership noT TransferaBle. Member-
ship in a cooperative is not transferable,
except as provided in the bylaws. [1987, c.
141, Pt. A, 6 (new).]
5. addiTional qualifiCaTions. The bylaws
may prescribe additional qualifcations and
limitations in respect to membership. [1987,
c. 141, Pt. A, 6 (new).]
35a 3735. MeeTings
1. annual MeeTings. An annual meeting of
the members of a cooperative shall be held
at such time and place as provided in the
bylaws. [1987, c. 141, Pt. A, 6 (new).]
2. speCial MeeTings.Specialmeetingsof the
members may be called by the president, by
the board of trustees, by any 3 trustees or by
not less than 10% of the members. [1987, c.
141, Pt. A, 6 (new).]
3. noTiCe. Except as otherwise provided in this
chapter, written or printed notice stating the
time and place of each meeting of the mem-
bers and, in the case of a special meeting, the
purposeorpurposesforwhichthemeetingis
called, shall be given to each member, either
personally or by mail, not less than 10 days
nor more than 25 days before the date of the
meeting. If mailed, notice shall be deemed
given when deposited in the United States
mail with postage prepaid addressed to the
member at his address as it appears on the
records of the cooperative. [1987, c. 141,
Pt. A, 6 (new).]
4. quoruM. Unless the bylaws prescribe the
presenceof agreaterpercentageornumber
of the members for a quorum, a quorum for
thetransactionof businessatallmeetingsof
the members of a cooperative, having not
more than 1,000 members, shall be 5% of all
members, present in person, and of a coop-
erative, having more than 1,000 members,
shall be 50 members, present in person. If
less than a quorum is present at any meeting,
a majority of those present in person may
adjourn the meeting from time to time with-
outfurthernotice.
This subsection does not apply to a genera-
tion and transmission cooperative organized
in accordance with subchapter IV. A quo-
rum for such a cooperative shall be speci-
fed in the bylaws. [1987, c. 141, Pt. A, 6
(new).]
5. voTing. Each member shall be entitled to
one vote on each matter submitted to a vote
atameetingof themembers.Votingshall
be in person, but, if the bylaws so provide,
may also be by proxy or by mail, or both. If
117
the bylaws provide for voting by proxy or by
mail, they shall also prescribe the conditions
under which such voting shall be permitted.
No person may vote as proxy for more than
3 members at any meeting of the members.
[1987, c. 141, Pt. A, 6 (new).]
35a 3736. waiver of noTiCe
Any person entitled to notice of a meeting may
waive the notice in writing either before or after
the meeting. If the person attends the meeting,
his attendance constitutes a waiver of notice of
themeeting,unlessthepersonparticipatesin
the meeting solely to object to the transaction of
any business because the meeting has not been
legally called or convened. [1987, c. 141, Pt. A,
6 (new).]
35a 3737. Board of TrusTees
1. nuMBer and qualifiCaTions. A board of
not less than 5 trustees shall manage the busi-
ness of a cooperative. Each trustee shall be a
member of the cooperative or of another co-
operative which is a member of the coopera-
tive. The bylaws shall prescribe the number
of trustees, their qualifcations, other than
those prescribed in this chapter, the manner
of holding meetings of the board of trustees
and of electing successors to trustees and of
electingsuccessorstotrusteeswhoresign,
die or otherwise become incapable of acting.
[1987, c. 141, Pt. A, 6 (new).]
2. reMoval and salaries. The bylaws may
provide for the removal of trustees from of-
fce and for the election of their successors.
Trustees may not receive any salaries for their
services as trustees and, except in emergen-
cies, may not be employed by the coopera-
tive in any capacity involving compensation
without the approval of the members. The
bylaws may provide that a fxed fee and
expenses of attendance be allowed to each
trustee for attendance at each meeting of the
board of trustees. [1987, c. 141, Pt. A, 6
(new).]
3. TerM of offiCe.Thetrusteesof acoopera-
tive named in the articles of incorporation
or conversion shall hold offce until the next
annual meeting of the members and until
their successors are elected and qualify. At
eachannualmeetingor,incaseof failureto
hold the annual meeting as specifed in the
bylaws, at a special meeting called for that
purpose,themembersshallelecttrusteesto
hold offce until the next annual meeting of
the members, except as otherwise provided in
this chapter. Each trustee shall hold offce for
the term for which he is elected and until his
successor is elected and qualifed. [1987, c.
141, Pt. A, 6 (new).]
4. sTaggered TerMs. Instead of electing the
whole number of trustees annually, the by-
laws may provide that the trustees be divided
into either 2 or 3 classes, each class to be as
nearly equal as possible. The term of offce
of trustees of the frst class shall expire at the
frst annual meeting of members after their
election, that of the 2nd class shall expire at
the 2nd annual meeting after their election
and that of the 3rd class, if any, shall expire
at the 3rd annual meeting after their election.
At each annual meeting after classifcation,
the number of trustees equal to the number
of the class whose term expires at the time
of the meeting shall be elected to hold offce
until the 2nd succeeding annual meeting, if
there are 2 classes, or until the 3rd succeed-
ing annual meeting, if there are 3 classes.
No classifcation of trustees may be effective
prior to the frst annual meeting of members.
[1987, c. 141, Pt. A, 6 (new).]
5. quoruM. A majority of the board of trust-
ees shall constitute a quorum. [1987, c. 141,
Pt. A, 6 (new).]
6. JoinT MeMBership. If 2 or more individuals
hold a joint membership in a cooperative,
118
only one of them, may be elected a trustee.
[1987, c. 141, Pt. A, 6 (new).]
7. powers. The board of trustees may exer-
cise all of the powers of a cooperative not
conferred upon the members by this chapter
or its articles of incorporation or bylaws.
[1987, c. 141, Pt. A, 6 (new).]
35a 3738. disTriCTs
The bylaws may provide for the division of the
territory served or to be served by a cooperative
into 2 or more districts for any purpose, includ-
ing, without limitation, the nomination and elec-
tion of trustees and the election and functioning
of district delegates. In such case, the bylaws
shall prescribe the boundaries of the districts or
the manner of establishing the boundaries, or
the manner of changing the boundaries, and the
manner in which the districts shall function. No
member at any district meeting and no district
delegate at any meeting may vote by proxy or by
mail. [1987, c. 141, Pt. A, 6 (new).]
35a 3739. offiCers
The offcers of a cooperative shall consist of a
president, vice-president, secretary and treasurer,
who shall be elected annually by and from the
board of trustees. When a person holding of-
fce ceases to be a trustee, he shall cease to hold
offce. The offces of secretary and of treasurer
may be held by the same person. The board
of trustees may elect or appoint other offcers,
agents or employees as it determines necessary
or advisable and shall prescribe their powers
and duties. Any offcer may be removed from
offce and his successor elected in the manner
prescribed in the bylaws. [1987, c. 141, Pt. A,
6 (new).]
suBChapTer iii: powers (heading: pl
1987, C. 141, pT. a, 6 (new))
35a 3751. powers generally
A cooperative may: [1987, c. 141, Pt. A, 6
(new).]
1. sue. Sue in its corporate name; [1987, c.
141, Pt. A, 6 (new).]
2. Be sued. Be sued in its corporate name;
[1987, c. 141, Pt. A, 6 (new).]
3. seal. Adopt and alter a corporate seal;
[1987, c. 141, Pt. A, 6 (new).]
4. use of eleCTriCiTy. Generate, manufacture,
purchase, acquire, accumulate and transmit
electricity, and distribute, sell, supply and
dispose of electricity to its members; [1987,
c. 141, Pt. A, 6 (new).]
5. use of eleCTriCal and pluMBing appli-
anCes. Assist persons to whom electricity
is or will be supplied by the cooperative in
wiring their premises and in acquiring and
installing electrical and plumbing appliances,
equipment, fxtures and apparatus by fnanc-
ing, or otherwise; wire or cause to be wired
the premises; and purchase, acquire, lease
as lessor or lessee, sell, distribute, install and
repair the electric and plumbing appliances,
equipment, fxtures and apparatus; [1987, c.
141, Pt. A, 6 (new).]
6. eleCTriC Cold sTorage or proCessing
planTs. Assist persons to whom electricity is
or will be supplied by the cooperative in con-
structing, equipping, maintaining and operat-
ing electric cold storage or processing plants,
by fnancing or otherwise; [1987, c. 141, Pt.
A, 6 (new).]
7. aCquire CerTain planTs and equipMenT.
Construct,purchase,leaseaslesseeorother-
wise acquire; equip, maintain and operate;
sell; assign; convey; lease as lessor; or mort-
gage, pledge or otherwise dispose of or en-
cumber electric transmission and distribution
lines or systems, electric generating plants,
electric cold storage or processing plants,
lands, buildings, structures, dams, plants and
equipment and any other real or personal
119
property, tangible or intangible, which is de-
termined necessary, convenient or appropri-
atetoaccomplishthepurposeforwhichthe
cooperative is organized. In the construction
and operation of their facilities, cooperatives
shall comply with all safety laws and regula-
tions applicable to electric utilities; [1987, c.
141, Pt. A, 6 (new).]
8. eleCTriC TransMission and disTriBuTion
lines. Construct, maintain and operate elec-
tric transmission and distribution lines along,
upon, under and across publicly owned lands
and public thoroughfares, including all roads,
highways, streets, alleys, bridges and cause-
ways, subject to chapters 23 and 25; [1987,
c. 141, Pt. A, 6 (new).]
9. franChises, liCenses, righTs and ease-
MenTs. Purchase, lease as lessee, or otherwise
acquire; use and exercise, and sell, assign,
convey, mortgage, pledge or otherwise dis-
pose of or encumber franchises, rights, privi-
leges, licenses and easements; [1987, c. 141,
Pt. A, 6 (new).]
10. ConTraCT indeBTedness. Borrow money
and otherwise contract indebtedness; issue
notes, bonds and other evidences of indebt-
edness; and secure the payment by mortgage,
pledge or deed of trust, or any other encum-
brance upon, any or all of its then owned or
after-acquired real or personal property, as-
sets, franchises, revenues or income; [1987,
c. 141, Pt. A, 6 (new).]
11. MeMBer of oTher CooperaTives.Become
a member of other cooperatives or corpora-
tions or to own stock in them; [1987, c. 141,
Pt. A, 6 (new).]
12. Bylaws. Adopt, amend and repeal bylaws;
[1987, c. 141, Pt. A, 6 (new).]
13. oTher ConsisTenT aCTs. Perform any other
acts and have and exercise any other pow-
ers which may be necessary, convenient or
appropriatetoaccomplishthepurposefor
which the cooperative is organized. [1987,
c. 141, Pt. A, 6 (new).]
35a 3752. aMendMenT of arTiCles
A cooperative may amend its articles of incor-
poration as follows. [1987, c. 141, Pt. A, 6
(new).]
1. MeeTing and noTiCe. The proposed amend-
ment shall be presented to a meeting of the
members. The proposed amendment shall
be set forth in or attached to the notice of the
meeting. [1987, c. 141, Pt. A, 6 (new).]
2. approval. If the proposed amendment, with
any changes, is approved by the affrmative
vote of not less than 2/3 of those members
voting on the amendment at the meeting,
articles of amendment shall be executed and
acknowledged on behalf of the cooperative
by its president or vice-president and its seal
shall be affxed to the articles and attested by
its secretary. [1987, c. 141, Pt. A, 6 (new).]
3. ConTenTs of arTiCles of aMendMenT.The
articles of amendment shall recite that they
are executed pursuant to this chapter and
shall state:
141, Pt. A, 6 (new).]
B. The address of its principal offce; and
[1987, c. 141, Pt. A, 6 (new).]
C. The amendment to its articles of in-
corporation. [1987, c. 141, Pt. A, 6
(new).] [1987, c. 141, Pt. A, 6 (new).]
4. affidaviT. The president or vice-president
executing the articles shall make and attach
to the articles an affdavit stating that this sec-
tion was complied with. [1987, c. 141, Pt.
A, 6 (new).]
35a 3753. Change of loCaTion of prinCipal
offiCe
A cooperative may, upon authorization of its
120
board of trustees or its members, change the lo-
cation of its principal offce by fling a certifcate
reciting the change, executed and acknowledged
by its president or vice-president under its seal,
attested by its secretary, in the offce of the Secre-
tary of State. [1987, c. 141, Pt. A, 6 (new).]
35a 3754. Conversion of exisTing Corpo-
raTions
A corporation organized on a cooperative plan
under the laws of this State and supplying or
authorized to supply electric energy may be con-
verted into a cooperative by complying with the
following requirements and shall upon compli-
ancebesubjecttothischapterwiththesameef-
fect as if originally organized under this chapter.
[1987, c. 141, Pt. A, 6 (new).]
1. MeeTing and noTiCe.Thepropositionfor
the conversion of the corporation into a co-
operative and proposed articles of conversion
shall be submitted to a meeting of the mem-
bers or stockholders of the corporation. The
proposed articles of conversion shall be at-
tached to the notice of the meeting. [1987,
c. 141, Pt. A, 6 (new).]
2. approval. If the proposition for the conver-
sion of the corporation into a cooperative
and the proposed articles of conversion,
with any amendments, are approved by the
affrmative vote of not less than 2/3 of those
members of the corporation voting on the
articlesatthemeeting,or,if thecorporation
is a stock corporation, by the affrmative vote
of the holders of not less than 2/3 of those
sharesof thecapitalstockof thecorpora-
tion represented at the meeting and voting
on the articles, articles of conversion shall be
executed and acknowledged on behalf of the
corporation by its president or vice-president
and its seal shall be affxed to the articles and
attested by its secretary. [1987, c. 141, Pt. A,
6 (new).]
3. ConTenTs of arTiCles of Conversion.The
articles of conversion shall recite that they
are executed pursuant to this chapter and
shall state:
A. The name of the corporation and the
address of its principal offce prior to its
conversion into a cooperative; [1987, c.
141, Pt. A, 6 (new).]
B. The law or laws under which it was orga-
nized; [1987, c. 141, Pt. A, 6 (new).]
C. A statement that the corporation elects to
become a cooperative, nonproft, mem-
bershipcorporationsubjecttothischap-
ter; [1987, c. 141, Pt. A, 6 (new).]
D. Its name as a cooperative; [1987, c. 141,
Pt. A, 6 (new).]
E. The address of the principal offce of the
cooperative; [1987, c. 141, Pt. A, 6
(new).]
F. The names and addresses of the trustees
of the cooperative; and [1987, c. 141,
Pt. A, 6 (new).]
G. Themannerinwhichmembersorstock-
holders of the corporation may or shall
become members of the cooperative; and
may contain any provisions not inconsis-
tent with this chapter determined neces-
sary or advisable for the conduct of the
business of the cooperative. [1987, c.
141, Pt. A, 6 (new).] [1987, c. 141, Pt.
A, 6 (new).]
4. affidaviT. The president or vice-president
executing the articles shall make and attach
to the articles an affdavit stating that this
section was complied with. The articles of
conversion shall be deemed to be the articles
of incorporation of the cooperative. [1987,
c. 141, Pt. A, 6 (new).]
35a 3755. dissoluTion generally
1. when a CooperaTive has noT CoMMenCed
Business. A cooperative which has not com-
121
menced business may be dissolved by delivery
to the Secretary of State articles of dissolu-
tion which shall be executed and acknowl-
edged on behalf of the cooperative by a
majority of the incorporators and which shall
state:
141, Pt. A, 6 (new).]
[1987, c. 141, Pt. A, 6 (new).]
C. That the cooperative has not commenced
business; [1987, c. 141, Pt. A, 6 (new).]
D. That any sums received by the coopera-
tive, less any part disbursed for expenses
of the cooperative, have been returned or
paid to those entitled to them; [1987, c.
141, Pt. A, 6 (new).]
E. That no debt of the cooperative is un-
paid; and [1987, c. 141, Pt. A, 6
(new).]
F. That a majority of the incorporators
elect that the cooperative is dissolved.
[1987, c. 141, Pt. A, 6 (new).] [1987,
c. 141, Pt. A, 6 (new).]
2. when CooperaTive has CoMMenCed Busi-
ness. A cooperative which has commenced
business may be dissolved in the following
manner.
A. The members at any meeting shall ap-
prove, by the affrmative vote of not less
than 2/3 of those members voting on the
proposalatthemeeting,aproposalthat
the cooperative be dissolved. [1987, c.
141, Pt. A, 6 (new).]
B. Upon such approval, a certifcate of elec-
tion to dissolve, executed and acknowl-
edged on behalf of the cooperative by
its president or vice-president under its
seal, attested by its secretary and stating
the name of the cooperative; the ad-
dress of its principal offce; and that the
members of the cooperative have duly
voted that the cooperative be dissolved,
shall, together with an affdavit made by
its president or vice-president executing
the certifcate, stating that the statements
in the certifcate are true, be submitted to
the Secretary of State for fling. [1987,
c. 141, Pt. A, 6 (new).]
C. Upon the fling of the certifcate and
affdavit by the Secretary of State, the
cooperative shall cease to carry on its
business, except to the extent necessary
for the winding up of its business, but its
corporate existence shall continue until
articles of dissolution have been fled by
the Secretary of State. [1987, c. 141, Pt.
A, 6 (new).] [1987, c. 141, Pt. A, 6
(new).]
3. noTiCe To CrediTors. The board of trust-
ees shall immediately cause notice of the
dissolution proceedings to be mailed to each
known creditor of and claimant against the
cooperative and to be published once a week
for 2 successive weeks in a newspaper of
general circulation in the county in which the
principal offce of the cooperative is located.
[1987, c. 141, Pt. A, 6 (new).]
4. aCTions againsT The CooperaTive. All ac-
tions against the cooperative shall be com-
menced within one year from the date of
fling the certifcate of election to dissolve.
[1987, c. 141, Pt. A, 6 (new).]
5. winding up CooperaTive affairs.The
board of trustees shall wind up and settle
the affairs of the cooperative, collect sums
owing to it, liquidate its property and assets,
pay and discharge its debts, obligations and
liabilities and perform all other acts required
to wind up its business. After paying or dis-
charging or adequately providing for the pay-
ment or discharge of all its debts, obligations
and liabilities, the board of trustees shall,
after one year from the date of fling the
certifcate to dissolve, distribute any remain-
ing sums among its members and former
122
membersinproportiontothepatronageof
the respective members or former members
during the 7 years next preceding the date
of the fling of the certifcate by the Secre-
tary of State, or if the cooperative has not
been in existence for that period, then during
the period of its existence prior to the fling.
[1987, c. 141, Pt. A, 6 (new).]
6. arTiCles of dissoluTion when a Coopera-
Tive has CoMMenCed Business. The board
of trustees shall, upon the winding up of
the cooperative, authorize the execution of
articles of dissolution, which shall be ex-
ecuted and acknowledged on behalf of the
cooperative by its president or vice-president,
and its seal shall be affxed to the articles and
attested by its secretary. The president or
vice-president executing the articles of dis-
solution shall make and attach to the articles
an affdavit stating that the statements made
in them are true. The articles of dissolution
shall recite that they are executed pursuant to
this chapter and shall state:
141, Pt. A, 6 (new).]
[1987, c. 141, Pt. A, 6 (new).]
C. The date on which the certifcate of elec-
tion to dissolve was fled by the Secretary
of State; [1987, c. 141, Pt. A, 6 (new).]
D. That there are no actions or suits pending
against the cooperative; [1987, c. 141,
Pt. A, 6 (new).]
E. That all debts, obligations and liabilities
of the cooperative have been paid and
discharged or that adequate provision
has been made for their payment or
discharge; and [1987, c. 141, Pt. A, 6
(new).]
F. That this section has been complied with.
[1987, c. 141, Pt. A, 6 (new).] [1987,
c. 141, Pt. A, 6 (new).]
suBChapTer iv: generaTion and TransMis-
sion CooperaTives (heading: pl 1987, C.
141, pT. a, 6 (new))
35a 3771.organizaTion of generaTion and
TransMission CooperaTives
One or more cooperatives formed under this
Title may organize and control a cooperative
having as its principal purpose the generation,
manufacture, purchase, acquisition, accumula-
tion, transmission, sale, supply and disposal of
electric energy. Such a cooperative shall have all
of the powers of cooperatives formed under this
Title. [1987, c. 141, Pt. A, 6 (new).]
35a 3772. JurisdiCTion of puBliC uTiliTies
CoMMission
Cooperatives formed under this subchapter are
public utilities and subject to the requirements of
this Title, except for those requirements of this
chapterwhichareinconsistentwiththeoperation
of cooperatives formed under this subchapter,
notwithstanding any public or private laws to the
contrary. Those cooperatives require the authori-
zation of the commission to transmit, sell, sup-
ply or dispose of electric energy to any member
of the cooperative. That authorization may be
granted by order or rule. [1987, c. 141, Pt. A,
6 (new).]

1998 Coopmanual

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