The bill would make a handful of changes to what cooperative businesses can do. One of the more controversial: allowing directors who are not members to join the board.
State Rep. Gary Tauchen is an author of the bill. He says it provides necessary updates to dated co-op rules.
“This legislation is designed to provide more flexibility, improve resource management and respond to the financial needs of member-owners,” Tauchen says.
Lori Meinholz with Blue Star Dairy Farms in Middleton says outside directors will help co-ops.
“Outside directors are so very valuable because they provide independent and objective perspective to the board deliberations,” Meinholz says.
But others are worried it will open the door for conflicts of interest.
Laura Daniels is a dairy farmer and member of Dairy Business Milk Marketing Cooperative. She points to one of their co-op’s advisory board members, who is also the vice president of Grassland. That’s the dairy processor that dropped dozens of small farms earlier this year, leaving them scrambling to find a new buyer for their milk — with little notice.
“Advisers are a good thing,” Daniels says. “However, many advisers bring with them a conflict of interest by the nature of them having associated business.”
The bill would cap the number of outside board members at 20 percent or two members — whichever’s smaller.
The measure would also kill the “one member one vote” rule for co-ops. It would give a greater number of votes to members who use the co-op more. Plus, it would lift the 8 percent cap for returns to capital investors.
That has many in the co-op community worried their organizations will start to function less and less like co-ops. President of the Columbia County Farmers Union Sarah Lloyd says lifting that cap for investors would do just that.
“Co-ops are not about profit taking,” Lloyd says. “Co-ops are about supporting the members that need these services, and they’re a way of keeping the economy close to the ground.”
Most of the bills sponsors are republican, but it has received some bipartisan support.
