EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0015*
HOUSE BILL 15
C1 5lr1228
(PRE–FILED) CF SB 144
By: Delegates Qi and Charkoudian
Requested: October 16, 2024
Introduced and read first time: January 8, 2025
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted with floor amendments
Read second time: March 6, 2025
CHAPTER ______
AN ACT concerning 1
Corporations and Associations – Limited Worker Cooperative Associations – 2
Authorization 3
(Maryland Limited Worker Cooperative Association Act) 4
FOR the purpose of authorizing the formation of limited worker cooperative associations; 5
establishing rules and procedures for the formation, governance, conversion, and 6
dissolution of limited worker cooperative associations; and generally relating to 7
limited worker cooperative associations. 8
BY repealing and reenacting, without amendments, 9
Article – Corporations and Associations 10
Section 1–101(a) and 1–203(a) 11
Annotated Code of Maryland 12
(2014 Replacement Volume and 2024 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Corporations and Associations 15
Section 1–101(p), 1–203(b)(3) through (5) and (8), 1–401, 1–404, and 1–503(a) 16
Annotated Code of Maryland 17
(2014 Replacement Volume and 2024 Supplement) 18
BY adding to 19
Article – Corporations and Associations 20 2 HOUSE BILL 15
Section 1–502(g); and 4A–12A–01 through 4A–12A–22 to be under the new subtitle 1
“Subtitle 12A. Maryland Limited Worker Cooperative Association Act” 2
Annotated Code of Maryland 3
(2014 Replacement Volume and 2024 Supplement) 4
BY repealing and reenacting, with amendments, 5
Article – Insurance 6
Section 2–108 7
Annotated Code of Maryland 8
(2017 Replacement Volume and 2024 Supplement) 9
BY repealing and reenacting, with amendments, 10
Article – Tax – General 11
Section 4–301(c), 9–314(f), 10–906(d), and 11–601(d) 12
Annotated Code of Maryland 13
(2022 Replacement Volume and 2024 Supplement) 14
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
That the Laws of Maryland read as follows: 16
Article – Corporations and Associations 17
1–101. 18
(a) In this article, unless the context clearly requires otherwise, the following 19
words have the meanings indicated. 20
(p) “Governing document” means: 21
(1) The charter and the bylaws of a Maryland corporation or a foreign 22
corporation; 23
(2) The articles of organization or certificate of formation and the operating 24
agreement or limited liability company agreement of a domestic limited liability company 25
or a foreign limited liability company; 26
(3) The partnership agreement of an other entity that is a partnership or 27
limited partnership, any statement of partnership authority of a partnership, the certificate 28
of limited partnership of a limited partnership, and the certificate of limited liability 29
partnership of a limited liability partnership; 30
(4) The declaration of trust or governing instrument of a business trust or 31
a real estate investment trust; [or] 32
(5) THE ARTICLES OF ORGAN IZATION AND THE COOP ERATIVE 33
AGREEMENT OF A LIMITED WORKER COOPE RATIVE ASSOCIATION ; OR 34
HOUSE BILL 15 3
[(5)] (6) A similar governing document or instrument of any other type of 1
entity. 2
1–203. 3
(a) In addition to any organization and capitalization fee required under § 1–204 4
of this subtitle, subject to subsection (c) of this section, the Department shall collect the fees 5
specified in subsection (b) of this section. 6
(b) (3) (i) For each of the following documents which are filed but not 7
recorded, the nonrefundable processing fee is as indicated: 8
Reservation of a corporate, limited partnership, limited liability partnership [or], 9
limited liability company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N 10
name......................................................................................................................................$25 11
Original registration of name of a foreign corporation to end of calendar year…$100 12
Renewal of registration of name of a foreign corporation for 1 calendar year..... $100 13
Documents in connection with the qualification of a foreign corporation to do 14
intrastate business in this State ...................................................................................... $100 15
Application for registration of a foreign limited partnership, a foreign limited 16
liability partnership, or a foreign limited liability company ........................................... $100 17
Other documents ........................................................................................................ $6 18
(ii) Except as provided in paragraph (13) of this subsection, for each 19
of the following documents which are filed but not recorded, the filing fee is as indicated: 20
Annual report of a Maryland corporation, except a charitable or benevolent 21
institution, nonstock corporation, savings and loan corporation, credit union, family farm, 22
and banking institution .................................................................................................... $300 23
Annual report of a foreign corporation subject to the jurisdiction of this State, except 24
a national banking association, savings and loan association, credit union, nonstock 25
corporation, and charitable and benevolent institution .................................................. $300 26
Annual report of a Maryland savings and loan association, banking institution, or 27
credit union or of a foreign savings and loan association, national banking association, or 28
credit union that is subject to the jurisdiction of this State ............................................ $300 29
Annual report of a Maryland limited liability company, limited liability partnership, 30
limited partnership, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N, or of a foreign 31
limited liability company, foreign limited liability partnership, or foreign limited 32
partnership, except a family farm .................................................................................... $300 33 4 HOUSE BILL 15
Annual report of a business trust .......................................................................... $300 1
Annual report of a real estate investment trust or foreign statutory trust doing 2
business in this State ........................................................................................................ $300 3
Annual report of a family farm .............................................................................. $100 4
(4) For each of the following documents recorded or filed the nonrefundable 5
processing fee is $100: 6
(i) Certificate of limited partnership, certificate of limited liability 7
partnership, articles of organization of a limited liability company, ARTICLES OF 8
ORGANIZATION OF A LI MITED WORKER COOPERA TIVE ASSOCIATION , certificate of 9
trust of a business trust, including certificates of amendment, certificates of reinstatement, 10
and articles of reinstatement; and 11
(ii) Any statement filed by a partnership under Title 9A of this 12
article. 13
(5) For issuing each of the following certificates, the nonrefundable 14
processing fee is as indicated: 15
Type of Instrument Special Fee 16
Certificate of status of a corporation, partnership, limited partnership, limited 17
liability partnership, [or] limited liability company, OR LIMITED WORKER CO OPERATIVE 18
ASSOCIATION of this State or of a foreign corporation, foreign partnership, foreign limited 19
partnership, foreign limited liability partnership, or foreign limited liability company....$20 20
Certified list of the charter papers of a corporation of this State or any certificates of 21
a limited partnership, limited liability partnership, [or a] limited liability company, OR 22
LIMITED WORKER COOPE RATIVE ASSOCIATION of this State recorded or filed with the 23
Department ......................................................................................................................... $20 24
Certificate of compliance by a foreign corporation, foreign limited partnership, 25
foreign limited liability partnership, or foreign limited liability company with requirements 26
of law in respect of qualification or registration ................................................................ $20 27
Certificate of withdrawal of registration or qualification ....................................... $20 28
Certificate of any paper recorded or filed in the Department’s office .................... $20 29
(8) Subject to § 1–203.2(c) of this subtitle, for processing each of the 30
following documents on an expedited basis, the additional fee is as indicated: 31
HOUSE BILL 15 5
Recording any document, including financing statements, or submitting for 1
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 2
under § 1–203.2(b)(1) of this subtitle is requested............................................................. $425 3
Recording any document, including financing statements, or submitting for 4
preclearance any document listed in paragraph (1) or (4) of this subsection, if processing 5
under § 1– 203.2(b)(1) of this subtitle is not requested ..................................................... $50 6
Certificate of status of a corporation, partnership, limited partnership, limited 7
liability partnership, [or] limited liability company, OR LIMITED WORKER CO OPERATIVE 8
ASSOCIATION, or a name reservation ............................................................................... $20 9
Certified list of the charter documents of a Maryland corporation or any certificate 10
of a Maryland limited partnership, limited liability partnership, [or] limited liability 11
company, OR LIMITED WORKER CO OPERATIVE ASSOCIATIO N recorded or filed with the 12
Department........................................................................................................................... $20 13
A copy of any document recorded or filed with the Department, or a corporate 14
abstract ................................................................................................................................ $20 15
Application for a ground rent redemption or a ground rent extinguishment, or 16
payment of a redemption or extinguishment amount to the former owner of the ground 17
rent.........................................................................................................................................$50 18
1–401. 19
(a) Service of process on the resident agent of a corporation, partnership, limited 20
partnership, limited liability partnership, limited liability company, LIMITED WORKER 21
COOPERATIVE ASSOCIAT ION, or real estate investment trust, or any other person 22
constitutes effective service of process under the Maryland Rules on the corporation, 23
partnership, limited partnership, limited liability partnership, limited liability company, 24
LIMITED WORKER COOPE RATIVE ASSOCIATION , or real estate investment trust, or other 25
person in any action, suit, or proceeding which is pending, filed, or instituted against it 26
under the provisions of this article. 27
(b) (1) Any notice required by law to be served by personal service on a 28
resident agent or other agent or officer of any Maryland or foreign corporation, partnership, 29
limited partnership, limited liability partnership, limited liability company, LIMITED 30
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust required by 31
statute to have a resident agent in this State may be served on the corporation, partnership, 32
limited partnership, limited liability partnership, limited liability company, LIMITED 33
WORKER COOPERATIVE A SSOCIATION, or real estate investment trust in the manner 34
provided by the Maryland Rules relating to the service of process on corporations. 35
(2) Service under the Maryland Rules is equivalent to personal service on 36
a resident agent or other agent or officer of a corporation, partnership, limited partnership, 37 6 HOUSE BILL 15
limited liability partnership, limited liability company, LIMITED WORKER COOPE RATIVE 1
ASSOCIATION, or real estate investment trust mentioned in paragraph (1) of this 2
subsection. 3
1–404. 4
(a) Any person who owns, operates, or directs an unincorporated organization, 5
firm, association, or other entity which includes in its name the word “corporation”, 6
“incorporated”, or, except as provided in subsection (b) of this section, “limited” or an 7
abbreviation of any of these words or which holds itself out to the public as a corporation is 8
guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500. 9
(b) This section does not prohibit: 10
(1) A limited partnership from using the term “limited partnership” in its 11
name; 12
(2) A limited liability company from using the terms “limited liability 13
company” or “L.L.C.” in its name; [or] 14
(3) A limited liability partnership from using the terms “limited liability 15
partnership” or “L.L.P.” in its name; OR 16
(4) A LIMITED WORKER COOPE RATIVE ASSOCIATION F ROM USING 17
THE TERMS “LIMITED WORKER COOPE RATIVE ASSOCIATION ” OR “L.W.C.A.” IN ITS 18
NAME. 19
1–502. 20
(G) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION MUST 21
INCLUDE: 22
(1) THE WORDS “LIMITED WORKER COOPE RATIVE ASSOCIATION”; 23
(2) L.W.C.A.; OR 24
(3) LWCA. 25
1–503. 26
(a) An entity name may not contain language stating or implying that the entity 27
is organized for a purpose other than that allowed by the entity’s: 28
(1) Articles of incorporation, if the entity is a corporation; 29
HOUSE BILL 15 7
(2) Articles of organization, if the entity is a limited liability company OR 1
LIMITED WORKER COOPE RATIVE ASSOCIATION ; 2
(3) Certificate of limited liability partnership, if the entity is a limited 3
liability partnership; 4
(4) Certificate of limited partnership, if the entity is a limited partnership; 5
or 6
(5) Articles of incorporation, if the entity is a professional corporation. 7
SUBTITLE 12A. MARYLAND LIMITED WORKER COOPERATIVE ASSOCIATION ACT. 8
4A–12A–01. 9
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 10
INDICATED. 11
(B) “ASSEMBLY” MEANS ALL MEMBERS OF A LIMITED WORKER 12
COOPERATIVE ASSOCIAT ION WHO HAVE VOTING RIGHTS UNDER THIS SU BTITLE AND 13
THE LIMITED WORKER C OOPERATIVE ASSOCIATI ON’S COOPERATIVE AGREEM ENT. 14
(C) “COLLECTIVE WORKER COOPERAT IVE” MEANS A LIMITED WORK ER 15
COOPERATIVE ASSOCIAT ION THAT HAS ONLY ON E CLASS OF MEMBERS C ONSISTING 16
OF WORKER MEMBERS WH O MANAGE ALL OF THE AFFAIRS OF THE ASSOC IATION. 17
(D) “COOPERATIVE AGREEMENT ” MEANS THE OPERATING AGREEMENT OF 18
A LIMITED WORKER COOPERATIV E ASSOCIATION. 19
(E) “FOREIGN WORKER COOPER ATIVE” MEANS AN ENTITY FORM ED UNDER 20
THE LAWS OF A STATE OTHER THAN THIS STATE THAT IS SIMILAR TO AN ENTITY 21
FORMED UNDER THIS SU BTITLE. 22
(F) “INVESTOR MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 23
COOPERATIVE ASSOCIAT ION WHO IS NOT REQUI RED OR PERMITTED TO CONDUCT 24
PATRONAGE WITH THE A SSOCIATION IN THE ME MBER’S CAPACITY AS AN INV ESTOR 25
MEMBER IN ORDER TO RECEIVE OR RETAIN THE MEMBER ’S INTEREST IN THE 26
ASSOCIATION. 27
(G) “LIMITED WORKER COOPER ATIVE ASSOCIATION” MEANS A MARYLAND 28
LIMITED LIABILITY CO MPANY THAT ELECTS TO BE A LIMITED WORKER 29
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH THIS SUBTITLE . 30
8 HOUSE BILL 15
(H) “PATRON MEMBER ” MEANS A MEMBER OF A LIMITED WORKER 1
COOPERATIVE ASSOCIAT ION WHO IS REQUIRED OR PERMITTED TO CONDUCT 2
PATRONAGE WITH THE A SSOCIATION. 3
(I) “PATRONAGE” MEANS BUSINESS TRANS ACTIONS BETWEEN A LI MITED 4
WORKER COOPERATIVE A SSOCIATION AND A PER SON THAT ENTITLES TH E PERSON 5
TO RECEIVE FINANCIAL RIGHTS BASED ON THE VALUE OR QUANTITY OF BUSINESS 6
BETWEEN T HE ASSOCIATION AND T HE PERSON. 7
(J) “REPRESENTATIVE ” MEANS A PERSON SERVI NG ON THE BOARD OF 8
REPRESENTATIVES OF A LIMITED WORKER COOPE RATIVE ASSOCIATION . 9
(K) “VOTING POWER ” MEANS THE PROPORTION OF TOTAL VOTES ENTIT LED 10
TO BE CAST ON A MATT ER THAT ARE HELD BY A PARTICULAR MEMB ER OR A GROUP 11
OR CLASS OF MEMBERS . 12
(L) “WORKER MEMBER ” MEANS A PATRON MEMBE R OF A LIMITED WORKE R 13
COOPERATIVE ASSOCIAT ION WHO IS A NATURAL PERSON AND WHOSE PAT RONAGE 14
CONSISTS OF OR INCLU DES LABOR CONTRIBUTE D TO OR FOR THE ASSO CIATION. 15
4A–12A–02. 16
(A) THE PROVISIONS OF THI S SUBTITLE APPLY TO LIMITED WORKER 17
COOPERATIVE ASSOCIAT IONS EXCEPT TO THE E XTENT THAT: 18
(1) THE CONTEXT OF A PROV ISION CLEARLY REQUIR ES OTHERWISE ; 19
OR 20
(2) A SPECIFIC PROVISION O F THIS TITLE PROVIDE S OTHERWISE. 21
(B) THIS SUBTITLE APPLIES ONLY TO A LIMITED WO RKER COOPERATIVE 22
ASSOCIATION. 23
(C) (1) THE EXISTENCE OF THIS SUBTITLE DOES NOT OF ITSELF CREATE 24
ANY IMPLICATION THAT A CONTRARY OR DIFFER ENT RULE OF LAW IS O R WOULD BE 25
APPLICABLE TO A LIMI TED LIABILITY COMPAN Y THAT IS NOT A LIMITE D WORKER 26
COOPERATIVE ASSOCIAT ION. 27
(2) THIS SUBTITLE DOES NO T AFFECT ANY STATUTE OR RULE OF LAW 28
AS IT APPLIES TO A L IMITED LIABILITY COM PANY THAT IS NOT A L IMITED WORKER 29
COOPERATIVE ASSOCIAT ION. 30
HOUSE BILL 15 9
(D) A PROVISION OF THE ART ICLES OF ORGANIZATION OR COOPE RATIVE 1
AGREEMENT OF A LIMIT ED WORKER COOPERATIV E ASSOCIATION MAY NO T BE 2
INCONSISTENT WITH AN Y PROVISION OF THIS SUBTITLE. 3
4A–12A–03. 4
UNLESS OTHERWISE PROV IDED IN THIS SUBTITL E, THE POLICY OF THIS 5
SUBTITLE IS TO GIVE MAXIMUM EFFECT TO THE PRINCIPLE OF DEM OCRATIC 6
SELF–MANAGEMENT OF A LIMI TED WORKER COOPERATI VE ASSOCIATION BY IT S 7
WORKER MEMBERS . 8
4A–12A–04. 9
(A) A LIMITED LIABILITY CO MPANY MAY ELECT TO B E A LIMITED WORKER 10
COOPERATIVE ASSOCIAT ION UNDER THIS SUBTI TLE BY INCLUDING IN ITS ARTICLES 11
OF ORGANIZATION A ST ATEMENT THAT THE LIM ITED LIABILITY COMPA NY IS A 12
LIMITED WORKER COOPE RATIVE ASSOCIATION . 13
(B) A LIMITED LIABILITY CO MPANY THAT HAS ELECT ED TO BE A LIMITED 14
WORKER COOPERATIVE A SSOCIATION MAY FURTH ER ELECT TO BE A COL LECTIVE 15
WORKER COOPERATIVE BY IN CLUDING IN ITS ARTIC LES OF ORGANIZATION A 16
STATEMENT THAT IT IS A COLLECTIVE WORKER COOPERATIVE . 17
(C) UNLESS THE LIMITED WO RKER COOPERATIVE ASS OCIATION HAS 18
ELECTED TO BE A COLL ECTIVE WORKER COOPER ATIVE, THE ARTICLES OF 19
ORGANIZATION OF A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL INCLUDE 20
THE NAMES OF THOSE I NDIVIDUALS WHO WILL SERVE AS REPRESENTAT IVES UNTIL 21
THEIR SUCCESSORS ARE ELECTED AND QUALIFY . 22
(D) THE NAME OF A LIMITED WORKER COOPERATIVE A SSOCIATION SHALL 23
COMPLY WITH THE REQU IREMENTS OF TITLE 1, SUBTITLE 5 OF THIS ARTICLE. 24
4A–12A–05. 25
(A) THIS SECTION DOES NOT APPLY TO A COLLECTIV E WORKER 26
COOPERATIVE . 27
(B) AFTER A LIMITED WORKE R COOPERATIVE ASSOCI ATION IS FORMED : 28
(1) IF INITIAL REPRESENTA TIVES ARE NAMED IN THE ART ICLES OF 29
ORGANIZATION, THE INITIAL REPRESEN TATIVES SHALL HOLD AN ORGANI ZATIONAL 30
MEETING TO ADOPT THE COOPERATIVE AGREEMEN T AND CARRY ON ANY O THER 31
BUSINESS NECESSARY O R PROPER TO COMPLETE THE ORGANIZATION OF THE 32
ASSOCIATION; OR 33 10 HOUSE BILL 15
(2) IF INITIAL REPRESENTA TIVES ARE NOT NAMED IN THE ARTIC LES 1
OF ORGANIZATION , THE PERSON WHO HAS C AUSED THE ARTICLES T O BE EXECUTED 2
AND FILED FOR RECORD SHALL DESIGNATE THE INITIAL REPRESENTATI VES AND 3
CALL A MEETING OF TH E INITIAL REPRESENTA TIVES TO ADOPT AN INITIAL 4
COOPERATIVE AGREEMEN T AND CARRY OUT ANY OTHER BUSINESS NECESSARY A ND 5
PROPER TO COMPLETE T HE ORGANIZATION OF T HE ASSOCIATION . 6
(C) UNLESS PROVIDED OTHER WISE IN THE ARTICLES OF ORGANIZATION , 7
THE INITIAL REPRESEN TATIVES MAY CAUSE THE LIMITE D WORKER COOPERATIVE 8
ASSOCIATION TO ACCEP T MEMBERS. 9
(D) INITIAL REPRESENTATIV ES OF A LIMITED WORKER COOPERATIVE 10
ASSOCIATION NEED NOT BE MEMBERS OF THE AS SOCIATION. 11
(E) AN INITIAL REPRESENTA TIVE SERVES UNTIL: 12
(1) A SUCCESSOR IS ELECTED AND QUALIFIES AT AN ASSEMBLY 13
MEETING; OR 14
(2) THE REPRESENTATIVE IS REMOVED. 15
4A–12A–06. 16
AFTER A COLLECTIVE WO RKER COOPERATIVE IS FORMED, THE INITIAL 17
WORKER MEMBERS SHALL HOLD AN ORGANIZATION AL MEETING TO ADOPT THE 18
COOPERATIVE AGREEMEN T AND CONDUCT ANY OT HER BUSINESS NECESSA RY OR 19
PROPER TO COMPLETE T HE ORGANIZATION OF THE COLLECTIVE WORKER 20
COOPERATIVE . 21
4A–12A–07. 22
CLEAR REFERENCE TO TH E FACT THAT A LIMITE D LIABILITY COMPANY IS A 23
LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL APPEAR PROMINEN TLY: 24
(1) AT THE HEAD OF THE AR TICLES OF ORGANIZATI ON OR AN 25
AMENDMENT MADE TO THE A RTICLES OF ORGANIZAT ION IN WHICH THE ELE CTION 26
TO BE A LIMITED WORK ER COOPERATIVE ASSOC IATION IS MADE; 27
(2) AT THE HEAD OF EACH S UBSEQUENT ARTICLES O F ORGANIZATION 28
OF THE LIMITED WORKE R COOPERATIVE ASSOCI ATION; AND 29
(3) ON EACH CERTI FICATE REPRESENTING OUTSTANDING 30
MEMBERSHIP INTERESTS IN THE LIMITED WORKE R COOPERATIVE ASSOCI ATION. 31 HOUSE BILL 15 11
4A–12A–08. 1
(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , A LIMITED WORKER 2
COOPERATIVE ASSOCIAT ION MAY TERMINATE IT S STATUS AS A LIMITE D WORKER 3
COOPERATI VE ASSOCIATION BY AM ENDING ITS ARTICLES OF ORGANIZATION TO 4
DELETE THE STATEMENT S REQUIRED BY § 4A–12A–04 OF THIS SUBTITLE. 5
(B) ANY TERMINATION OF A LIMITED WORKER COOPE RATIVE 6
ASSOCIATION’S STATUS SHALL BE SU BJECT TO THE APPROVA L OF TWO–THIRDS OF 7
THE VOTING POWER OF WORKER M EMBERS AND TWO –THIRDS OF ALL MEMBERS 8
ENTITLED TO VOTE ON THE MATTER. 9
4A–12A–09. 10
(A) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 11
ASSOCIATION SHALL IN CLUDE: 12
(1) A STATEMENT OF THE CAP ITAL STRUCTURE OF TH E ASSOCIATION; 13
(2) THE CLASSES OR OTHER TYPES OF MEMBERSHIP INTERESTS AND 14
RELATIVE RIGHTS , PREFERENCES , AND RESTRICTIONS GRA NTED TO OR IMPOSED 15
ON EACH CLASS OR OTH ER TYPE OF MEMBERSHI P INTEREST, INCLUDING: 16
(I) A STATEMENT CONCERNING : 17
1. THE MANNER IN WHICH PROFITS AND LOSSES A RE 18
ALLOCATED AND DISTRI BUTIONS ARE MADE AMO NG MEMBERS ; AND 19
2. IF INVESTOR MEMBERS A RE AUTHORIZED , THE 20
MANNER IN WHICH PROF ITS AND LOSSES ARE A LLOCATED AND DISTRIB UTIONS ARE 21
MADE AMONG INVESTOR MEMBERS; AND 22
(II) A STATEMENT DESI GNATING VOTING AND O THER 23
GOVERNANCE RIGHTS OF EACH CLASS OR OTHER TYPE OF MEMBERSHIP I NTEREST, 24
INCLUDING WHICH MEMB ERS HAVE VOTING POWE R AND ANY RESTRICTIO NS ON 25
VOTING POWER ; 26
(3) A STATEMENT OF THE MET HOD OF ADMISSION OF MEMBERS; 27
(4) A STATEMENT THAT A MEMBERSHIP INTERES T IS TRANSFERABLE , 28
IF IT IS TO BE TRANS FERABLE, AND A STATEMENT OF T HE CONDITIONS UNDER 29
WHICH IT MAY BE TRAN SFERRED; 30
12 HOUSE BILL 15
(5) A STATEMENT CONCERNING WHETHER AND HOW PERS ONS THAT 1
ARE NOT MEMBERS BUT CONDUCT BUSINESS WIT H THE ASSOCIATION M AY BE 2
ALLOWED TO SHARE IN ALLOCATIONS OF PROFI TS AND LOSSES AND RE CEIVE 3
DISTRIBUTIONS ; 4
(6) A STATEMENT OF THE NUM BER AND TERMS OF 5
REPRESENTATIVES OR THE METHOD BY WHI CH THE NUMBER AND TE RMS ARE 6
DETERMINED ; 7
(7) A STATEMENT ADDRESSING MEMBERS’ CONTRIBUTIONS; AND 8
(8) A STATEMENT ON WHETHER THE LIMITED WORKER C OOPERATIVE 9
ASSOCIATION WILL ELE CT TO BE TAXED AS A PARTNERSHIP OR A COR PORATION FOR 10
FEDERAL AND STATE INCOME TAX PURP OSES THAT INCLUDES A N EXPLANATION OF 11
THE TAX IMPLICATIONS OF THE ELECTION FOR THE WORKER MEMBERS . 12
(B) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 13
ASSOCIATION MAY CONT AIN ANY PROVISION FO R MANAGING AND REGUL ATING THE 14
AFFAIRS OF THE ASSOC IATION NOT INCONSIST ENT WITH ITS ARTICLE S OF 15
ORGANIZATION OR THIS TITLE. 16
(C) A PERSON THAT BECOMES A MEMBER OF A LIMITED WORKER 17
COOPERATIVE ASSOCIAT ION IS DEEMED TO ASS ENT TO THE COOPERATI VE 18
AGREEMENT OF THE ASS OCIATION. 19
(D) THE COOPERATIVE AGREE MENT OF A LIMITED WO RKER COOPERATIVE 20
ASSOCIATION MAY BE E NTERED INTO BEFORE , AFTER, OR AT THE TIME OF FILING 21
OF ARTICLES OF ORGAN IZATION AND MAY BE M ADE EFFECTIVE AS OF : 22
(1) THE TIME OF FORMATION OF THE ASSOCIATION ; OR 23
(2) THE TIME OR DATE PROV IDED IN THE COOPERAT IVE AGREEMENT . 24
4A–12A–10. 25
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION MAY INCLUDE 26
MULTIPLE CLASSES OF MEMBERS WHOSE RIGHTS AND MEMBERSHIP INTER ESTS 27
SHALL BE DETERMINED BY THE COOPERATIVE A GREEMENT. 28
(B) TO BEGIN BUSINESS , A LIMITED WORKER COO PERATIVE ASSOCIATION 29
MUST HAVE AT LEAST T HREE WORKER MEMBERS UNLESS THE SOLE MEMB ER IS A 30
LIMITED WORKER COOPE RATIVE ASSOCIATION . 31
HOUSE BILL 15 13
(C) A PERSON BECOMES A MEM BER OF A LIMITED WOR KER COOPERATIVE 1
ASSOCIATION: 2
(1) AS PROVIDED IN THE AR TICLES OF ORGANIZATI ON OR 3
COOPERATIVE AGREEMEN T; 4
(2) AS THE RESULT OF A ME RGER UNDER SUBTITLE 7 OF THIS TITLE; 5
(3) AS A RESULT OF A CONV ERSION UNDER THIS AR TICLE, IN WHICH 6
ANOTHER ENTITY ELECT S TO BE A LIMITED WO RKER COOPERATIVE ASS OCIATION 7
UNDER THIS SUBTITLE ; OR 8
(4) WITH THE CONSENT OF A LL OF THE WORKER MEM BERS. 9
(D) A MEMBER MAY NOT ACT F OR OR BI ND THE LIMITED WORKE R 10
COOPERATIVE ASSOCIAT ION SOLELY BY REASON OF BEING A MEMBER . 11
(E) UNLESS THE ARTICLES O F ORGANIZATION PROVI DE OTHERWISE , A 12
DEBT, AN OBLIGATION , OR ANY OTHER LIABILI TY OF A LIMITED WORK ER 13
COOPERATIVE ASSOCIAT ION IS SOLELY THAT O F THE ASSOCIATION AND IS NO T THE 14
DEBT, OBLIGATION, OR LIABILITY OF A ME MBER. 15
(F) (1) THE ORGANIZATION OF A LIMITED WORKER COOPE RATIVE 16
ASSOCIATION UNDER TH IS SUBTITLE DOES NOT CREATE A PRESUMPTION THAT 17
WORKER MEMBERS ARE E MPLOYEES OF THE ASSO CIATION FOR ANY PURP OSE. 18
(2) IF A LIMITED WORKER C OOPERATIVE ASSOCIATI ON IS TAXED AS A 19
PARTNERSHIP FOR FEDE RAL AND STATE INCOME TAX PURP OSES, THAT FACT MAY 20
NOT BE CONSTRUED TO REQUIRE THAT A WORKE R MEMBER BE CONSIDER ED AN 21
EMPLOYEE UNDER ANY STATE LAW. 22
4A–12A–11. 23
(A) IN THIS SECTION , “ACTUAL PAYROLL VALUE ” MEANS THE TOTAL 24
AMOUNT OF MONEY PAID TO AN EMPLOYEE AFTER TAXES AND DEDUCTIONS AND 25
INCLUDES THE BASE SA LARY, BONUSES, OVERTIME, LEAVE BENEFITS , 26
COMMISSIONS , AND TIPS. 27
(A) (B) AN INSURER, AS DEFINED IN § 1–101 OF THE INSURANCE 28
ARTICLE, THAT PROVIDES WORKER S’ COMPENSATION INSURAN CE TO MEMBERS OF 29
A LIMITED WORKER COO PERATIVE ASSOCIATION FORMED UNDER THIS SU BTITLE 30
SHALL CALCULATE PREM IUMS FOR MEMBERS WHO ARE COVERED EMPLOYEE S: 31
14 HOUSE BILL 15
(1) IN ACCORDANCE WITH TITLE 11, SUBTITLE 3 AND TITLE 19, 1
SUBTITLE 4 OF THE INSURANCE ARTICLE; AND 2
(2) BASED ON THE COVERED EMPLOYEE’S ACTUAL PAYROLL VAL UE. 3
(B) (C) (1) THE MARYLAND INSURANCE COMMISSIONER MAY 4
ENFORCE THIS SECTION . 5
(2) ALL HEARINGS , ORDERS, AND APPEALS ARISING UNDER THIS 6
SECTION SHALL BE GOV ERNED BY TITLE 11, SUBTITLE 5 OF THE INSURANCE 7
ARTICLE. 8
(D) THIS SECTION MAY NOT BE CONSTRUED TO PROH IBIT A LIMITED 9
WORKER COOPERATIVE A SSOCIATION FROM ACQU IRING OTHER FORMS OF 10
INSURANCE. 11
4A–12A–12. 12
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION SHALL HAVE AN 13
ASSEMBLY AS CONSTITU TED BY THE BODY OF A LL VOTING MEMBERS . 14
(B) AN INDIVIDUAL IS NOT AN AGENT OF A LIMITE D WORKER COOPERATIVE 15
ASSOCIATION SOLELY B Y BEING A MEMBER OF THE ASSEMBLY . 16
(C) A DEBT, AN OBLIGATION , OR ANY OTHER LIAB ILITY OF A LIMITED 17
WORKER COOPERATIVE A SSOCIATION IS SOLELY THAT OF THE ASSOCIAT ION AND IS 18
NOT A DEBT, AN OBLIGATION , OR A LIABILITY OF A MEMBER OF THE ASSEMB LY 19
SOLELY BY REASON OF BEING A VOTING MEMBE R. 20
4A–12A–13. 21
(A) THE ASSEMBLY SHALL ME ET ANNUALLY AT A TIME: 22
(1) PROVIDED IN THE ARTIC LES OF ORGANIZATION OR COOPERATIVE 23
AGREEMENT ; OR 24
(2) SET BY THE BOARD OF R EPRESENTATIVES THAT IS CONSISTENT 25
WITH THE ARTICLES OF ORGANIZATION OR COOP ERATIVE AGREEMENT . 26
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOP ERATIVE AGREEMENT , 27
MEMBERS MAY ATTEND O R CONDUCT THE ANNUAL ASSEMBLY MEETING THR OUGH 28
ANY MEANS OF COMMUNI CATION IF ALL MEMBER S ATTENDING THE MEET ING ARE 29
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 30
HOUSE BILL 15 15
(C) THE BOARD OF REPRESEN TATIVES SHALL REPORT, OR CAUSE TO BE 1
REPORTED, AT THE ANNUAL ASSEMB LY MEETING THE ASSOC IATION’S BUSINESS 2
AND FINANCIAL CONDIT ION AS OF THE CLOSE OF THE MOST RECENT F ISCAL YEAR. 3
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 4
THE BOARD OF REPRESE NTATIVES SHALL DESIGNATE THE PRESIDING OFFICER OF 5
THE ANNUAL ASSEMBLY MEETING. 6
(E) FAILURE TO HOLD AN AN NUAL ASSEMBLY MEETIN G DOES NOT AFFECT 7
THE VALIDITY OF ANY ACTION TAKEN BY THE LIMITED WORKER COOPE RATIVE 8
ASSOCIATION. 9
(F) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION, A LIMITED 10
WORKER COOPERATIVE A SSOCIATION SHALL NOT IFY EACH MEMBER OF T HE TIME, 11
DATE, AND PLACE OF A MEETI NG OF THE MEMBERS AT LEAST 10 AND NOT MORE 12
THAN 60 DAYS BEFORE THE ANNU AL ASSEMBLY MEETING . 13
(2) IF THE NOTICE IS OF A MEETING OF THE MEMBERS IN ONE OR 14
MORE CLASSES OF MEMB ERS, THE NOTICE SHALL BE GIVEN ONLY TO MEMBER S IN 15
THOSE CLASSES . 16
4A–12A–14. 17
(A) (1) A SPECIAL MEETING OF T HE ASSEMBLY MAY BE C ALLED ONLY: 18
(I) AS PROVIDED FOR IN TH E COOPERATIVE AGREEM ENT; 19
(II) BY A MAJORITY OF VOTES OF THE BOAR D OF 20
REPRESENTATIVES ON A PROPOSAL STATIN G THE PURPOSE OF THE SPECIAL 21
MEETING; OR 22
(III) BY DEMAND IN A RECORD SIGNED BY MEMBERS HO LDING 23
AT LEAST 20% OF THE VOTING POWER OF THE PERSONS ENTIT LED TO VOTE ON THE 24
MATTER THAT IS THE PURPOSE OF THE SPECI AL MEETING. 25
(2) A DEMAND UNDER PARAGRA PH (1)(III) OF THIS SUBSECTION 26
SHALL BE SUBMITTED T O: 27
(I) THE OFFICER OF THE LI MITED WORKER COOPERA TIVE 28
ASSOCIATION CHARGED WITH KEEPING THE REC ORDS OF THE ASSOCIAT ION; OR 29
(II) IF NO OFFICER HAS BEEN CHARGED WITH KEEPING THE 30
RECORDS OF THE ASSOC IATION, A REPRESENTATIVE . 31
16 HOUSE BILL 15
(3) ANY VOTING MEMBER MAY WITHDRAW THE MEMBER ’S DEMAND 1
UNDER PARAGRAPH (1)(III) OF THIS SUBSECTION B EFORE RECEIPT BY THE LIMITED 2
WORKER COOPERATIVE A SSOCIATION OF DEMAND S SUFFICIENT TO REQU IRE A 3
SPECIAL MEETING OF T HE ASSEMBLY. 4
(B) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 5
MEMBERS MAY ATTEND O R CONDUCT THE SPECIA L ASSEMBLY MEETING T HROUGH 6
ANY MEANS OF COMMUNI CATION IF ALL MEMBER S ATTENDING THE MEET ING ARE 7
ABLE TO COMMUNICATE WITH EACH OTHER DURI NG THE MEETING . 8
(C) ONLY BUSINESS WITHIN THE PURPOSES STATED IN THE NOTICE OF 9
SPECIAL MEETING MAY BE CONDUCTED AT THE MEETING. 10
(D) EXCEPT AS OTHERWISE P ROVIDED IN THE COOPE RATIVE AGREEMENT , 11
THE PRESIDING OFFIC ER OF A SPECIAL MEET ING SHALL BE DESIGNA TED BY THE 12
BOARD OF REPRESENTAT IVES. 13
4A–12A–15. 14
(A) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT MAY 15
ALLOCATE VOTING POWE R AMONG MEMBERS ON T HE BASIS OF ONE OR M ORE OF 16
THE FOLLOWING : 17
(1) ONE MEMBER, ONE VOTE; 18
(2) IF A MEMBER IS A COOP ERATIVE, THE NUMBER OF ITS ME MBERS; 19
OR 20
(3) SUBJECT TO SUBSECTION (B) OF THIS SECTION , USE OR 21
PATRONAGE . 22
(B) IF VOTING POWER IS AL LOCATED ON THE BASIS OF USE OR PATRONAGE 23
AND A WORKER MEMBER WOULD BE DENIED A VO TE BECAUSE THE WORKER 24
MEMBER DID NOT USE T HE LIMITED WORKER CO OPERATIVE ASSOCIATIO N OR 25
CONDUCT PATRONAGE WI TH IT, THE WORKER MEMBER SHALL BE ALLO CATED A 26
VOTE EQUAL TO AT LEA ST THE MINIMUM VOTIN G POWER ALLOCATED TO WORKER 27
MEMBERS WHO USED THE ASSOCIATION OR CO NDUCTED PATRONAGE WI TH IT. 28
(C) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT MAY 29
PROVIDE FOR THE ALLO CATION OF MEMBER VOT ING POWER BY CLASS . 30
(D) INVESTOR MEMBERS ARE NOT ENTITLED TO VOTE UNLESS THE 31
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT PROVIDES O THERWISE. 32
HOUSE BILL 15 17
(E) (1) THIS SUBSECTION DOES NOT APPLY WHERE THIS TITLE OR THE 1
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT REQUIRE A HIGHER 2
VOTING THRESHOLD THA N IS REQUIRED BY PAR AGRAPH (2) OF THIS SUBSECTION . 3
(2) NOTWITHSTANDING ANY PROVISION OF THE ARTICLES OF 4
ORGANIZATION OR COOP ERATIVE AGREEMENT , ALL REPRESENTATIVES SHALL BE 5
ELECTED AND ALL OTHE R DECISIONS WITHIN T HE AUTHORITY OF THE ASSEMBLY 6
SHALL BE MADE BY A M AJORITY VOTE OF : 7
(I) THE WORKER MEMBERS OF THE ASSOCIATION ; AND 8
(II) THE VOTING POWER OF M EMBERS ENTITLED TO V OTE ON 9
THE ELECTION OR DECI SION. 10
4A–12A–16. 11
(A) THIS SECTION DOES NOT APPLY TO A COLLECTIV E WORKER 12
COOPERATIVE . 13
(B) A LIMITED WORKER COOPE RATIVE ASSOCIATION S HALL HAVE A BOARD 14
OF REPRESENTATIVES CONSISTING OF AT LEAST T HREE INDIVIDUALS . 15
(C) (1) THE AFFAIRS OF A LIMI TED WORKER COOPERATI VE ASSOCIATION 16
SHALL BE MANAGED BY THE BOARD OF REPRESE NTATIVES OR INDIVIDUALS TO 17
WHOM THE BOARD DELEG ATES SUCH DUTIES . 18
(2) THE BOARD OF REPRESEN TATIVES MAY ADOPT POLICIES AND 19
PROCEDURES CONSISTEN T WITH THE ARTICLES OF ORGANIZATION , THE 20
COOPERATIVE AGREEMEN T, OR THIS TITLE. 21
(D) AN INDIVIDUAL IS NOT AN AGENT OF A LIMITE D WORKER COOPERATIVE 22
ASSOCIATION SOLELY B Y BEING A REPRESENTA TIVE. 23
(E) A DEBT, AN OBLIGATION , OR ANY OTHER LIABILIT Y OF A LIMITED 24
WORKER COOPERATIVE A SSOCIATION IS SOLELY THAT OF THE ASSOCIAT ION AND IS 25
NOT A DEBT, AN OBLIGATION , OR A LIABILITY OF A REPRESENTATIVE SOLELY BY 26
REASON OF BEING A RE PRESENTATIVE . 27
(F) REPRESENTATIVES SHALL BE ELECTED FOR TERMS DETERMINED BY 28
THE COOPERATIVE AGRE EMENT. 29
4A–12A–17. 30
18 HOUSE BILL 15
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION I S DISSOLVED AND 1
SHALL COMMENCE THE W INDING UP OF ITS AFF AIRS ON THE FIRST TO OCCUR OF 2
THE FOLLOWING : 3
(1) AT THE TIME OR ON THE HAPPENING OF THE EV ENTS SPECIFIED 4
IN THE ARTICLES OF O RGANIZATION OR THE C OOPERATIVE AGREEMENT ; 5
(2) UNLESS A HIGHER THRES HOLD IS STATED IN TH E COOPERATIVE 6
AGREEMENT , AT THE TIME SPECIFIE D BY: 7
(I) A TWO–THIRDS VOTE OF THE WORKER MEMBERS ; AND 8
(II) A TWO–THIRDS VOTE OF THE VOTING POWER OF ALL 9
MEMBERS OF THE ASSEM BLY; 10
(3) AT THE TIME OF THE EN TRY OF A DECREE OF J UDICIAL 11
DISSOLUTION UNDER § 4A–903 OF THIS TITLE; OR 12
(4) UNLESS OTHERWISE AGRE ED OR AS PROVIDED IN SUBSECTION 13
(B) OF THIS SECTION , AT THE TIME THE LIMI TED WORKER COOPERATIVE 14
ASSOCIATION HAS HAD NO MEMBERS FOR A PER IOD OF 90 CONSECUTIVE DAYS . 15
(B) (1) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY NOT BE 16
DISSOLVED OR REQUIRE D TO WIND UP ITS AFF AIRS IF WITHIN 90 DAYS AFTER THERE 17
ARE NO REMAINING MEM BERS OF TH E LIMITED WORKER COO PERATIVE 18
ASSOCIATION OR WITHI N THE PERIOD OF TIME PROVIDED IN THE COOP ERATIVE 19
AGREEMENT : 20
(I) THE LAST REMAINING ME MBER’S SUCCESSOR OR ASSIG NEE 21
AGREES IN WRITING TO CONTINUE THE LIMITED WORKER COOPERATIVE 22
ASSOCIATION AND TO B E ADMITTED AS A MEMBER OR TO APPOINT A DESIGNEE A S A 23
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEM BER CEASED 24
TO BE A MEMBER ; OR 25
(II) A MEMBER IS ADMITTED T O THE LIMITED WORKER 26
COOPERATIVE ASSOCIAT ION IN THE MANNER SE T FORTH IN THE COOPE RATIVE 27
AGREEMENT TO BE EFFECT IVE AS OF THE TIME T HE LAST REMAINING ME MBER 28
CEASED TO BE A MEMBE R UNDER A PROVISION IN THE COOPERATIVE A GREEMENT 29
THAT PROVIDES FOR TH E ADMISSION OF A MEM BER AFTER THERE ARE NO 30
REMAINING MEMBERS . 31
(2) IF A NEW MEMBER IS NO T ADMITTED T O THE LIMITED WORKER 32
COOPERATIVE ASSOCIAT ION IN ACCORDANCE WI TH PARAGRAPH (1) OF THIS 33
SUBSECTION, AND THE LAST REMAINI NG MEMBER CEASED TO BE A MEMBER UNDER 34 HOUSE BILL 15 19
§ 4A–606(5) OF THIS TITLE , THE LAST REMAINING M EMBER’S PERSONAL 1
REPRESENTATIVE OR GU ARDIAN SHALL AUT OMATICALLY BE ADMITT ED AS A NEW 2
MEMBER OF THE LIMITE D WORKER COOPERATIVE ASSOCIATION, EFFECTIVE 3
IMMEDIATELY ON THE H APPENING OF THE EVEN T DESCRIBED IN § 4A–606(5) OF 4
THIS TITLE, UNLESS WITHIN 90 DAYS AFTER THE PERSO NAL REPRESENTATIVE O R 5
GUARDIAN FIRST HAS KNOWLEDGE OF THE EVE NT, THE PERSONAL 6
REPRESENTATIVE OR GU ARDIAN: 7
(I) RENOUNCES THAT ADMISS ION IN WRITING; OR 8
(II) DESIGNATES A PERSON T O BECOME A NEW MEMBE R, AND 9
THE DESIGNEE ACCEPTS THE DESIGNEE ’S ADMISSION IN WRITI NG OR BY 10
ELECTRONIC COMMUNICATION TO THE PERSONAL REPRESENTAT IVE OR GUARDIAN . 11
(C) A COOPERATIVE AGREEMEN T MAY PROVIDE THAT T HE LAST REMAINING 12
MEMBER’S PERSONAL REPRESENT ATIVE, GUARDIAN, SUCCESSOR, OR ASSIGNEE 13
SHALL BE OBLIGATED T O AGREE IN WRITING T O CONTINUE THE LIMIT ED LIABILITY 14
COMPANY AND TO BE AD MITTED AS A MEMBER O R TO APPOINT A DESIG NEE AS A 15
MEMBER TO BE EFFECTI VE AS OF THE TIME TH E LAST REMAINING MEM BER CEASED 16
TO BE A MEMBER . 17
(D) UNLESS OTHERWISE AGRE ED AND SUBJECT TO TH E PROVISIONS OF 18
SUBSECTIONS (A)(4) AND (B) OF THIS SECTION, THE TERMINATION OF A PERSON’S 19
MEMBERSHIP MAY NOT C AUSE A LIMITED WORKE R COOPERATIVE ASSOCI ATION TO 20
BE DISSOLVED OR TO W IND UP ITS AFFAIRS A ND THE LIMITED WORKE R 21
COOPERATIVE ASSOCIAT ION SHALL CONTINUE I N EXISTENCE FOLLOWIN G THE 22
TERMINATION OF A PERSON’S MEMBERSHIP . 23
4A–12A–18. 24
IF A MEMBER DIES , THE DECEASED MEMBER ’S PERSONAL REPRESENT ATIVE 25
MAY EXERCISE , FOR THE PURPOSE OF S ETTLING THE ESTATE , THE RIGHTS THE 26
DECEASED MEMBER WAS ENTITLED TO UNDER § 4A–406 OF THIS TITLE. 27
4A–12A–19. 28
(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 29
THE PROFITS AND LOSS ES OF A LIMITED WORK ER COOPERATIVE ASSOC IATION 30
SHALL BE APPORTIONED AND DISTRIBUTED IN T HE MANNER SPECIFIED BY THE 31
ARTICLES OF ORGANIZA TION OR COOPERATIVE AGREEMENT . 32
(2) PROFITS DECLARED AS PATRONAG E ALLOCATIONS WITH 33
RESPECT TO A PERIOD OF TIME AND PAID OR CREDITED TO PATRON M EMBERS 34
SHALL BE APPORTIONED AMONG THE PATRON MEM BERS IN ACCORDANCE W ITH THE 35 20 HOUSE BILL 15
RATIO OF EACH PATRON MEMBER’S PATRONAGE DURING T HE APPLICABLE TIME 1
PERIOD TO THE TOTAL PATRONAGE BY A LL PATRON MEMBERS DU RING THAT 2
PERIOD. 3
(B) THE APPORTIONMENT , DISTRIBUTION, AND PAYMENT OF NET 4
EARNINGS OF THE LIMI TED WORKER COOPERATI VE ASSOCIATION MAY B E IN CASH, 5
CREDITS, OR WRITTEN NOTICES O F ALLOCATION ISSUED BY THE ASSOCIATION . 6
4A–12A–20. 7
(A) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY ESTABLISH , 8
THROUGH THE ARTICLES OF ORGANIZATION OR C OOPERATIVE AGREEMENT , A 9
SYSTEM OF INTERNAL C APITAL ACCOUNTS TO R EFLECT THE BOOK VALU E AND TO 10
DETERMINE THE REDEMP TION PRICE OF MEMBER SHIP INTERESTS AND WRITTEN 11
NOTICES OF ALLOCATIO N. 12
(B) THE ARTICLES OF ORGAN IZATION OR COOPERATI VE AGREEMENT : 13
(1) MAY ALLOW THE PERIODI C REDEMPTION OF WRIT TEN NOTICES 14
OF ALLOCATION ; AND 15
(2) SHALL PROVIDE FOR REC ALL AND REDEMPTION O F MEMBERSHIP 16
INTERESTS ON TERMINATION OF MEMBE RSHIP IN THE LIMITED WORKER 17
COOPERATIVE ASSOCIAT ION. 18
(C) (1) A LIMITED WORKER COOPE RATIVE ASSOCIATION M AY ALLOCATE 19
A PORTION OF RETAINE D NET EARNINGS AND N ET LOSSES TO A COLLE CTIVE 20
RESERVE ACCOUNT . 21
(2) EARNINGS OF A LIMITED WORKER COOPERATIVE ASSOCIAT ION 22
ASSIGNED TO A COLLEC TIVE RESERVE ACCOUNT MAY BE USED FOR ANY PURPOSE 23
DETERMINED BY : 24
(I) IN THE CASE OF A COLL ECTIVE WORKER COOPER ATIVE, THE 25
MEMBERS; OR 26
(II) IN THE CASE OF A LIMI TED WORKER COOPERATI VE 27
ASSOCIATION OTHER TH AN A COLLECTIVE WORKER COOPERATIVE , THE BOARD OF 28
REPRESENTATIVES . 29
4A–12A–21. 30
(A) ANY MEMBERSHIP INTERE ST, PATRONAGE REFUND , PER UNIT RETAIN 31
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST 32 HOUSE BILL 15 21
ISSUED, OFFERED, OR SOLD BY A LIMITED WORKER COOPERATIVE ASSOCIAT ION IS 1
EXEMPT FROM THE REGI STRATION REQUIREMENTS OF TITLE 11 OF THIS ARTICLE. 2
(B) ANY MEMBERSHIP INTERE ST, PATRONAGE REFUND , PER UNIT RETAIN 3
CERTIFICATE, EQUITY INSTRUMENT , OR EVIDENCE OF MEMBE RSHIP INTEREST MAY 4
BE LAWFULLY OFFERED AND SOLD BY THE ISSUER OR ITS MEMBERS , 5
REPRESENTATIVES , OR SALARIED EMPLOYEE S WITHOUT THE NECESS ITY OF BEING 6
REGISTERED AS A BROK ER OR DEALER UNDER TITLE 11 OF THIS ARTICLE. 7
4A–12A–22. 8
A FOREIGN WORKER COOPE RATIVE MAY REGISTER AND DO BUSINESS IN T HE 9
STATE SUBJECT TO AND IN AC CORDANCE WITH THE PR OVISIONS OF SUBTITLE 10 10
OF THIS TITLE. 11
Article – Insurance 12
2–108. 13
In addition to any powers and duties set forth elsewhere by the laws of the State, the 14
Commissioner: 15
(1) has the powers and authority expressly conferred on the Commissioner 16
by or reasonably implied from this article; 17
(2) shall enforce this article; 18
(3) shall perform the duties imposed on the Commissioner by this article; 19
(4) in addition to examinations and investigations expressly authorized, 20
may conduct examinations and investigations of insurance matters as necessary to fulfill 21
the purposes of this article; [and] 22
(5) shall enforce § 15–103(b)(21)(vi) of the Health – General Article; AND 23
(6) SHALL ENFORCE § 4A–12A–11 OF THE CORPORATIONS AND 24
ASSOCIATIONS ARTICLE. 25
Article – Tax – General 26
4–301. 27
(c) If a limited liability company, INCLUDING A LIMITED WORKER 28
COOPERATIVE ASSOCIAT ION OR COLLECTIVE WO RKER COOPERATIVE , or limited 29
liability partnership, including a limited partnership registered as a limited liability 30
limited partnership, is required to pay the admissions and amusement tax, personal 31 22 HOUSE BILL 15
liability for the tax and interest and penalties on the tax extends to any person who 1
exercises direct control over the fiscal management of the limited liability company or 2
limited liability partnership. 3
9–314. 4
(f) If a limited liability company, INCLUDING A LIMITED WORKER 5
COOPERATIVE ASSOCIAT ION OR COLLECTIVE WO RKER COOPERATIV E, or limited 6
liability partnership, including a limited partnership registered as a limited liability 7
limited partnership, is required to pay the motor fuel tax and interest and penalties on the 8
tax, personal liability for the tax and interest and penalties on the tax extends to any person 9
who exercises direct control over the fiscal management of the limited liability company or 10
limited liability partnership. 11
10–906. 12
(d) If an employer or payor negligently fails to withhold or to pay income tax in 13
accordance with subsection (a) of this section, personal liability for that income tax extends: 14
(1) to the employer or payor; 15
(2) if the employer or payor is a corporation, to: 16
(i) any officer of the corporation who exercises direct control over its 17
fiscal management; or 18
(ii) any agent of the corporation who is required to withhold and pay 19
the income tax; and 20
(3) if the employer or payor is a limited liability company as defined under 21
Title 4A of the Corporations and Associations Article, INCLUDING A LIMITED WORKER 22
COOPERATIVE ASSOCIAT ION OR A COLLECTIVE WORKER COOPERATIVE , or a limited 23
liability partnership as defined under Title 9A of the Corporations and Associations Article, 24
including a limited partnership registered as a limited liability limited partnership, to: 25
(i) any person who exercises direct control over its fiscal 26
management; and 27
(ii) any agent of the limited liability company or limited liability 28
partnership who is required to withhold and pay the income tax. 29
11–601. 30
(d) If a buyer or vendor liable for the sales and use tax and for the interest and 31
penalties of the tax under subsection (c) of this section is a corporation or limited liability 32
company, INCLUDING A LIMITED WORKER COOPERATIVE A SSOCIATION OR A 33 HOUSE BILL 15 23
COLLECTIVE WORKER COOPERATIVE , or limited liability partnership (including a 1
limited partnership registered as a limited liability limited partnership), personal liability 2
for the sales and use tax and for the interest and penalties of the tax extends to: 3
(1) in the case of a corporation: 4
(i) the president, vice president, or treasurer of the corporation; and 5
(ii) any officer of the corporation who directly or indirectly owns 6
more than 20% of the stock of the corporation; [and] 7
(2) in the case of a limited liability company: 8
(i) if the limited liability company does not have an operating 9
agreement, all members; or 10
(ii) if the limited liability company has an operating agreement, 11
those individuals who manage the business and affairs of the limited liability company; and 12
(3) in the case of a limited liability partnership: 13
(i) if the limited liability partnership does not have a written 14
partnership agreement, all general partners; or 15
(ii) if the limited liability partnership has a written partnership 16
agreement, those individuals who manage the business and affairs of the limited liability 17
partnership. 18
SECTION 2. AND BE IT FURTHER ENACTED, That a presently existing obligation 19
or contract right may not be impaired in any way by this Act. 20
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
October 1, 2026. 22
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.