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Ag society vote brings group into state compliance

The Harrison County Agricultural Society took its ‘lumps’ last week and became a ‘public benefit’ corporation to be in compliance with Indiana law. The organization, founded in 1859, had been non-compliant since 1991 when a change in state law said nonprofit groups could not have stockholders.
Officers for the ag society learned earlier this year, while applying for grants, that the group was out of compliance. They attempted to remedy the situation at the organization’s annual meeting last month; however, the majority of stockholders, during a standing-room-only meeting at Farm Bureau Insurance, voted to table any action and put the rest of the meeting on hold to allow more research.
Indiana State Rep. Rhonda Rhoads, who attended last month’s meeting, volunteered to contact the Indiana Attorney General’s office to seek answers to questions provided by stockholders. She reported her findings last Tuesday night when the meeting resumed, this time at the Purdue Extension Building at the Harrison County Government Center complex. Again, the turnout of stockholders filled the room.
The Attorney General’s office summarized that the ‘Harrison County Agricultural Society would need to change from a shareholder to a membership organization in order to comply with state law but not with federal law,’ which doesn’t require the change. However, if the change was not made, the ag society could choose how to dissolve ‘as long as the process is written in its articles of incorporation or bylaws.’ (No such provision existed.)
To the question of whether the Attorney General’s office would decide how assets would be dispersed, Rhoads said the answer was that office ‘is involved … only when the AG is seeking a judicial dissolution because the corporation has committed fraud, exceeded or abused authority, misapplied or wasted assets or cannot carry out the corporation’s objectives any more.’
Rhoads said additional questions were submitted, including one asking how groups find out about changes in the law.
Todd Uhl, who was the immediate past board president, said the group didn’t have anyone to look over its bylaws until the board hired Leslie Vidra, a New Albany attorney who specializes in nonprofit groups, late this fall when it realized it was out of compliance.
‘It could be an annual review,’ Vidra said of checking for future needed changes.
She later added that she believed the new proposed bylaws ‘provided everything.’
In response to someone asking if, under the new structure, someone who pays membership dues have a say who serves on the board, Uhl said each member would have one vote.
Vidra elaborated that each October nominations would be sought for board members ‘so that by the (annual) meeting, members would know the slate’ of candidates.
A proxy for a deceased member can only be cast at the first meeting following the member’s death was the answer to another question.
Uhl reiterated that usually there isn’t a large turnout for the ag society’s annual meeting.
‘Normally, we have to call people to get them to the meeting to vote,’ he said. ‘We don’t normally have this kind of scrutiny. … I hope you can see we’ve not tried to hide anything.’
The new bylaws, which were approved before the meeting ended, allows for three types of members: emeritus ‘ those former shareholders who will receive lifetime voting rights but do not pay dues (membership is not transferable); regular ‘ those who pay annual dues of $25, can vote at the annual meeting in November (provided they are active members as of Oct. 1 of that year) and receive one free weeklong pass of general admission to the fairgrounds and grandstand for the annual Harrison County Fair (this membership is non-transferable); and junior ‘ those who are in grades 3 through 12 in any Harrison County school and do not pay dues nor receive a free fair pass (when they are 18, they can become a regular or emeritus member).
Aaron Haggard asked what the dues will be used for, to which, Uhl said for things such as insurance and maintenance of the fairgrounds.
One man asked what would happen if the stockholders failed to vote to change the group’s structure.
‘I guess we’d have to go to circuit court and decide how it will be dissolved,’ Uhl said.
Tim Harmon added that the county’s 4-H program would not be able to have its fair, which takes place in conjunction with the ag society’s fair, because it has a lease with the Harrison County Agricultural Society.
‘My husband said you have to take your lumps,’ Betty Magner said. ‘If we don’t decide (to pass this), we’ll be illegal. …
‘We have to pass this, people, or we’re in trouble,’ she said. ‘Let’s take our lumps and pass it.’
One hundred sixty votes were cast, by paper ballot, with 136 votes cast to change the corporation’s status; 24 votes objected to the change. Uhl encouraged anyone with questions about the ag society to call any board member.
The newly-passed bylaws increased the board to no more than 15 members (a minimum of three board members is required) with each person eligible to serve up to two five-year terms. The board, which meets the second Wednesday of each month, can fill officer and board member vacancies until the next annual meeting.
Other changes in the bylaws include:
‘The fiscal year is changed to Jan. 1 through Dec. 31.
‘An annual audit of the books and records of the organization will be presented at the annual meeting.
‘If, for any reason, the organization is dissolved, the assets will be distributed by a grant to the Harrison County 4-H Club Association Inc.
Bruce Windell asked what will be done with the $75,000 from the Rita Windell estate left to the organization. Jeff Byerly, the ag society’s new president, said the board hopes to use the funds for projects such as repairs to the Homecomers Hall. He added that the money has to be approved by the executor of Windell’s estate.
As of yesterday (Tuesday), the board had not worked out details as to how memberships will be issued.
Byerly said they hope to work out details at the Jan. 14 meeting.