Sec. 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, Sec. 1, eff. Jan. 1, 2006.
Last modified: September 28, 2016