S.B. 2738 Summary

• Establishes a new Hawaii Cooperative Law (chapter in HRS) enabling agricultural entities and other organizations with common interests to incorporate as general cooperatives with limited member liability.

• Defines cooperative structure including requirements for annual member meetings, board governance (minimum 3 directors), voting rights (one member, one vote), and patronage-based profit distribution rather than stock-based dividends.

• Authorizes specialized cooperative types including renewable energy cooperatives (generating and selling electricity at wholesale) and worker cooperatives with alternative governance structures like capital account or collective board models.

• Requires cooperatives to maintain records, file annual reports with the director of commerce and consumer affairs, and allows members to inspect records and enforce marketing/purchasing contracts with specific performance remedies.

• Provides dissolution procedures and allows existing cooperatives to elect coverage under this law; specifies that cooperatives are not restraints of trade under antitrust law.