On Nov. 27, Gov. Scott Walker signed the following bill into law that changes the way cooperatives can operate.
Assembly Bill 353 (Act 76) makes several changes to the organization and operation of cooperatives:
- Current law does not allow for individuals who are not members of a cooperative to be a director. The bill changes this restriction to allow cooperatives to have outside (appointed) directors with voting rights, as long as these directors do not exceed two directors or 20 percent of all directors, whichever is less. The outside directors have the same voting rights as directors as all other directors.
- Current law provides there can only be one vote per member. This bill allows a cooperative holding company to base their members’ voting power on members’ current or recent financial support of the cooperative or use of the cooperative’s services.
- Current law does not allow a cooperative to exceed 8 percent annually on any dividend, which is a distribution of profits from a corporation to its shareholders. This bill eliminates that limit.
- Under current law, when a member makes a financial records request, there is no time limit on how far back that request can go. This bill limits a members’ right to examine a cooperative’s financial records to 5 years.
- Under current law, the members of a cooperative may, by a two-thirds vote, authorize the disposition of all or substantially all of a cooperative’s fixed assets if appropriate notice is given before a members’ meeting. This bill applies this provision to all assets, not just fixed assets.
- The legislation simplifies electric co-ops’ existing authority to make consumer loans to their members for expenses specifically related to wiring safety, energy efficiency, conservation and emergency back-up generation. These limited types of loans will generally help low-income families make energy efficiency and energy conservation upgrades to their homes, and provides an avenue of assistance to other members to replace unsafe electric wiring.
- Under the legislation, an electric cooperative may contract with a third party to perform a function permitted of the electric cooperative, including the provision of financing.
Authored by Sen. Patrick Testin (R—Stevens Point) and Rep. Greg Tauchen (R—Bonduel), the bill passed the Senate on a voice vote and was concurred by the Assembly on a vote of 74-18.