The Alaskan Cooperative Law, under the Alaska Cooperative Corporation Act (ACCA), establishes a structured framework for a wide range of cooperative entities such as agricultural, producer, consumer, and worker co-ops. This legal framework not only governs the formation of cooperatives but also navigates the complexities of their structures, including naming the cooperative to establishing bylaws to guide their operations.
Cooperative Law Generally
In 1959 Alaska became a part of the United States and adopted The Alaska Cooperative Corporation Act (“ACCA”). The Alaska Cooperative Corporation Act establishes a framework for establishing a cooperative business, although co-ops can be legally run as an LLC, S-corporation, or C-corporation. There are no specific legal entities for different types of co-ops (e.g. agricultural co-ops, producer co-ops, consumer co-ops, electricity co-ops, or worker co-ops).
The ACCA states that only a cooperative corporation may use the words “cooperative” or “co-op” in its name. ACCE gives individual cooperatives the ability to sue non-cooperative businesses to prevent them from using the term cooperative. However, that part of the law has not been enforced. Therefore, some active, non-cooperative Alaskan businesses use the words “cooperative” or “co-op” in their name. Note that ACCA allows for cooperatives that furnish electric or telephone or related telecommunications services to use the term “cooperative” in their name even though they may not be incorporated under ACCA and must instead be organized under the Electric and Telephone Cooperative Act (more below).
Most Alaskan co-ops are registered as cooperative corporations. However, there are a handful of active co-ops registered as non-profit corporations, corporations, and limited liability companies.
To date, there have not been any major legal cases regarding co-ops or co-operative law. Occasionally, however, there are amendments to the statutes regulating utility cooperatives.
Statutes
Alaska Cooperative Corporation Act (Alaska Statutes 10.15.005 – 10.15.600)
The ACCA does not distinguish between consumer co-ops, worker co-ops, consumer co-ops, producer co-ops, or non-profit co-ops. However, it does contain certain provisions that would apply only to certain kinds of cooperatives. For example, there are provisions that allow a co-op to file liens using a single form against a number of its producer members. This is something that a marketing cooperative might use so that it can guarantee deliveries from producer members. The lien is, in effect, a notice to any other buyers that the co-op has a contractual right to buy whatever it is the member is producing.The Act is more modern than most cooperative corporation acts in other states since Alaska only became a state in 1959. It was likely passed in response to most other states already having a legal guideline for cooperatives corporations.
ACCA requires that three or more natural persons at least 19 years of age must join together to act as incorporators of a cooperative. Similarly, it require that a cooperative have at least 3 board membersCorporations in Alaska could at one time convert into cooperatives under the ACCA. However, this ability has been revoked as of 2013.
Electric and Telephone Cooperative Act (Alaska Statutes 10.25.010 - 10.25.650)
Instead of being organized under the Alaska Cooperative Corporation Act, electric and telephone cooperatives must be organized under the Electric and Telephone Cooperative Act. These cooperatives are nonprofit membership corporations, unlike other cooperative corporations in Alaska.
Electric and telephone cooperatives share a nexus with the state of Alaska that other cooperative corporations do not. For example, they may exercise eminent domain power and they may install transmission lines along, on, under, or across publicly owned lands. They must also remain neutral as regards candidates for director by refraining from using cooperative funds to promote or oppose the candidacy of a candidate for director. The name of an electric or telephone cooperative must include either the word “cooperative” or “association.”
Electric or telephone cooperatives must be organized by five or more persons (natural or legal), including cooperatives. They must also have a board of directors composed of at least five directors.
The Golden Valley Electric Association (GVEA) in Fairbanks, Alaska is an example of an Alaskan utility co-op. Unlike private utility companies in South East Alaska, GVEA is legally a “COOP Electric and Utility” and tries to operate like a co-op with capital credit distributions and democratic board member elections, even though it was founded with money from the government in a “top down” manner unlike how many other co-ops are formed.
Legal Entities
While corporations may not convert to cooperative corporations under the Alaska Cooperative Corporation Act, corporations may convert to electric or telephone cooperatives under the Electric and Telephone Cooperative Act.
Governance & Management
Sample Bylaws
The Alaska Beauty Peony Cooperative is a collective of farmers who are part of a growing movement to provide premium ‘slow flowers’ to the flower market. They have graciously provided their bylaws here to serve as an example: BYLAWS OF ALASKA BEAUTY PEONY COOPERATIVE INC.
Cooperative Support Organizations
Alaska Small Business Development Center– Providing business guidance, services, and resources to Alaskan entrepreneurs.
Phone: (907) 786-7201
Email: info@aksbdc.org
University of Alaska Anchorage Center for Cooperative Development– created in 2006 with the goal of promoting and supporting cooperative businesses in Alaska. It is the only organization in the state solely dedicated to assisting and promoting the cooperative business model. The Center assists new and existing cooperative businesses in Alaska.
Executive Director: Andrew Crow
Phone: 907-786-5447
Email: accrow@gmail.com
State of Alaska Small Business Assistance Center – mission to promote economic opportunities.
Phone: (907) 269-8150
Northwest Cooperative Development Center– primarily supports cooperatives in Oregon, Washington, and Idaho but has also supported projects as far away as Alaska and Hawai’i. Founded by cooperatives in 1979, the Center has grown into the Northwest’s leading provider of services for co-op business development. We have a long history of collaborating with communities, governments, economic development agencies and other cooperatives, sharing expertise and building cross-sector support for new and existing cooperatives.
Author
Callen Christensen is a founding member of the Chaga Co-operative, Alaska’s only foraging cooperative. With a cut-out-the-middleman approach to distributing Alaska’s wild foods, Callen and the co-op have provided jobs and educational opportunities to locals while making nutritious wild foods more accessible. Learn more at chagacoop.com.
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