6282-S

AN ACT Relating to cooperative associations; amending RCW 23.86.080 and 23.86.090; and adding a new section to chapter 23.86 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 23.86 RCW to read as follows:

(1) The association and its members may make and execute marketing contracts. The marketing contract may require the members to sell, for any period of time, all or any specified part of their agricultural products or specified commodities exclusively to, or through the association, or any facilities to be created by the association. The contract may provide that the association may sell or resell the products of its members, with or without taking title thereto; and pay over on a proportional basis or otherwise to its members the resale price (after deducting all necessary selling, overhead, and other costs and expenses), including interest, if any, on capital stock, book credits, or allocated reserves, which interest may not exceed eight percent per annum, and reserves for retiring such capital stock or book credits, if any; and other proper reserves.

(2) The marketing contract may fix and require liquidated damages to be paid by the member to the association in the event of breach of the contract by the member and may further provide that the member will pay all costs, premiums for bonds, expenses and fees in case any action is legally maintained under the contract by the association. Liquidated damages may be a percentage of the value, or a specific amount per unit of the products, goods or services involved by the breach, or a specific sum. All such provisions shall be enforced as written, whether at law or in equity, and shall be deemed proper measurement of actual damages, and not penalties or forfeitures. The association may obtain specific performance of any such contract, or enjoin its threatened or continued breach, despite the adequacy of any legal or other remedy. If the association files a verified petition, showing an actual or threatened breach of any such contract and seeking any remedy therefor, the court shall without notice or delay but on such bond as it deems proper, issue a temporary injunction against such breach or its continuance.

(3) The provisions of subsections (1) and (2) of this section shall be applicable and the rights and remedies shall be available to any corporation organized under any cooperative law of any other state of the United States now or in the future admitted to do business in this state.

Sec. 2. RCW 23.86.080 and 1989 c 307 s 10 are each amended to read as follows:

(1) Associations shall be managed by a board of not less than three directors (which may be referred to as "trustees"). The directors shall be elected by ((~~and from~~)) the members of the association at such time, in such manner, and for such term of office as the bylaws may prescribe, and shall hold office during the term for which they were elected and until their successors are elected and qualified. However, at least two-thirds of the board of directors shall be members of the association.

(2) Except as provided in RCW 23.86.087, any vacancy occurring in the board of directors, and any directorship to be filled by reason of an increase in the number of directors, may be filled by the board of directors unless the articles of incorporation or the bylaws provide that a vacancy or directorship so created shall be filled in some other manner. A director elected or appointed to fill a vacancy shall be elected or appointed for the unexpired term of the predecessor in office.

Sec. 3. RCW 23.86.090 and 1989 c 307 s 23 are each amended to read as follows:

The articles of incorporation may be amended by a majority vote of the members voting thereon, at any regular meeting or at any special meeting called for that purpose, after notice of the proposed amendment has been given to all members entitled to vote thereon, in the manner provided by the bylaws: PROVIDED, That if the total vote upon the proposed amendment shall be less than twenty-five percent of the total membership of the association, the amendment shall not be approved. At the meeting, members may vote upon the proposed amendment in person, or by written proxy, or by mailed ballot. The power to amend shall include the power to extend the period of its duration for a further definite time or perpetually, and also include the power to increase or diminish the amount of capital stock and the number of shares: PROVIDED, The amount of the capital stock shall not be diminished below the amount of the paid-up capital stock at the time such amendment is adopted. After the adoption of an amendment to its articles of incorporation, the association shall cause a copy of such amendment adopted to be ((~~recorded in the office of the secretary of state~~)) executed as provided in RCW 24.06.195, except the quorum and voting requirements set forth in this section shall control over those set forth in RCW 24.06.195, and delivered to the secretary of state as provided in RCW 24.06.200.