The Cooperative Economy Act.

Existing law authorizes and regulates the formation and operation of various corporations, including a nonprofit mutual benefit corporation. Existing law , the Nonprofit Mutual Benefit Corporation Law, provides that subject to any other provision of law of this state applying to the particular class of corporation or line of activity, a corporation may be formed as a nonprofit mutual benefit corporation for any lawful purpose, except when a corporation's assets are irrevocably dedicated to charitable, religious, or public purposes and which as a matter of law or according to its articles or bylaws are required, upon dissolution, to distribute its assets to a person carrying on a charitable, religious, or public purpose. Existing law creates in the Department of Industrial Relations, the Division of Labor Standards Enforcement. Under existing law, the Division of Labor Standards Enforcement is under the direction of the Labor Commissioner, who is authorized to investigate employee complaints and charged with the enforcement of labor laws. This bill would require the Labor Commissioner to organize, and members to maintain, a corporation under the Nonprofit Mutual Benefit Corporation Law named the "Federation of California Worker Cooperatives" (federation) or a substantially similar name. The bill would require the federation to function as a membership organization for worker cooperatives. This bill would require the Governor to appoint the initial board of directors, to serve for one year or until the first regular meeting of the members, whichever comes later. This bill would provide that the federation is a nonpublic entity, does not constitute a public agency or state employer for any purpose, and that once the Labor Commissioner organizes the federation as a nonprofit mutual benefit corporation and the Governor chooses the first board of directors, there shall be no further involvement in the operation of the federation by any governmental entity. This bill would require the members in the federation to be restricted to legal entities with certain characteristics, including, but not limited to, uniform hiring and ownership eligibility criteria and for whom a majority of the work is performed by worker-owners, at least 51% of the workers are worker-owners, and a majority of the voting ownership interest is held by worker-owners. The bill would also require the federation to set labor policies of the members and provide all management to the members. The bill would provide that the federation is the employer of the management professionals and each member's workers and worker-owners for purposes of federal law and that the federation and the member are both employers of the workers and worker-owners for purposes of state law.