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Texas Business Organizations Code - Section 251.302. Allocation And Distribution Of Net Savings

Legal Research Home > Texas Lawyer > Business Organizations Code > Texas Business Organizations Code - Section 251.302. Allocation And Distribution Of Net Savings

§ 251.302. ALLOCATION AND DISTRIBUTION OF NET 
SAVINGS.  (a) At least once each year the members or directors of a 
cooperative association, as provided by the certificate of 
formation or bylaws of the cooperative association, shall apportion 
the net savings of the cooperative association in the following 
order:
		(1)  subject to Section 251.301, investment dividends 
payable from the surplus of the total assets over total liabilities 
may be paid on invested capital or, if authorized by the bylaws, may 
be paid on the membership certificates;
		(2)  a portion of the remainder, as determined by the 
certificate of formation or bylaws, may be allocated to an 
educational fund to be used in teaching cooperation;
		(3)  a portion of the remainder may be allocated to 
funds for the general welfare of the members of the cooperative 
association;
		(4)  a portion of the remainder may be allocated to 
retained earnings;  and 
		(5)  the remainder shall be allocated at the same 
uniform rate to each patron of the cooperative association in 
proportion to individual patronage as follows:
			(A)  for a member patron, the proportionate amount 
of savings return distributed to the member may be any combination 
of cash, property, membership certificates, or investment 
certificates;  and
			(B)  for a subscriber patron, the patron's 
proportionate amount of savings returns as provided by the 
certificate of formation or bylaws may be distributed to the 
subscriber patron or credited to the subscriber patron's account 
until the amount of capital subscribed for has been fully paid.
	(b)  This section does not prevent a cooperative association 
engaged in rendering services from disposing of the net savings 
from the rendering of services in a manner that lowers the fees 
charged for services or furthers the common benefit of the members.
	(c)  A cooperative association may adopt a system in which:                    
		(1)  the payment of savings returns that would 
otherwise be distributed are deferred for a fixed period;  or
		(2)  the savings returns distributed are partly in cash 
or partly in shares, to be retired at a fixed future date, in the 
order of the shares' serial numbers or issuance dates.

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006.                     

Last modified: August 11, 2007