GEC H.B. 3203 75(R)BILL ANALYSIS BUSINESS & INDUSTRY H.B. 3203 By: Counts 4-3-97 Committee Report (Amended) BACKGROUND Under current law, agricultural cooperatives and electric cooperatives must report and deliver all fUnds unclaimed or abandoned by their members to the comptroller. The sources of the unclaimed or abandoned funds are primarily capital credits (money that members are entitled to receive back from their cooperative) and customer deposits; they become unclaimed when the cooperative members can no longer be found because they have moved away or passed away. Since the funds were generated in their local communities in the first place, members of the cooperatives believe that retaining the money for use in local communities is a better use of the money than sending it to Austin. This bill closely mirrors legislation passed by the 74th Legislature for nonprofit telephone cooperatives. PURPOSE This bill would give nonprofit agricultural and electric cooperatives the option of retaining unclaimed funds for local scholarships or to stimulate rural economic development. RULEMAKING AUTHORITY Rulemaking authority is granted to the comptroller in Section 1 (Section 74.3013(e) and (f), Property Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 74, Property Code, by adding new Section 74.3013 establishing the guidelines for delivery of the money to a rural scholarship fund or a rural economic development fund. Authorizes a nonprofit cooperative corporation to deliver reported money to a scholarship fund for rural students or to stimulate economic development instead of delivering the money to the comptroller as prescribed in Section 74.301. Authorizes delivery of money only to a scholarship fund established by one or more nonprofit cooperative corporations in Texas to enable students from rural areas to attend college, technical school, or other postsecondary educational institution and to an economic development fund for the stimulation and improvement of business and commercial activity for economic development in rural communities. Requires that a nonprofit cooperative corporation file with the comptroller a verification of money delivered that complies with Section 74.302. Requires that a claim for money delivered under this section be filed with the nonprofit cooperative corporation that delivered the money. Requires that the nonprofit cooperative corporation forward the claim to the administrator of the fund to which the money was delivered. Requires that the fund pay the claim if the fund determines in good faith that the claim is valid. Authorizes a person aggrieved by a claim decision to file suit against the fund in a district court in the county in which the administrator is located in accordance with Section 74.506. Authorizes the comptroller to prescribe forms and procedures relating to notice of presumed abandoned property, delivery of reported money to a scholarship or economic development fund, filing of a claim, and procedures to allow equitable opportunity for participation by each nonprofit cooperative corporation in the state. Caps the total amount of money that may be transferred by all nonprofit cooperative corporations at $1 million. No more than 20 percent of each nonprofit cooperative corporation's funds eligible for delivery under this section shall be used for economic development. The comptroller is authorized to adopt procedures to record the total amount of money transferred annually to allow equitable opportunity for participation with preference given to corporations already providing similar scholarship opportunities in other states. Nonprofit cooperative corporations are authorized to combine economic development funds from other sources with any economic development funds delivered under this section. Authorizes cooperatives to engage in other business and commercial activities, in their own behalf or through such subsidiaries and affiliates as deemed necessary, in order to provide and promote educational opportunities and to stimulate rural economic development. Eligible nonprofit cooperative corporations include those organized under Chapters 51 and 52, Agriculture Code, the Texas Non-Profit Corporation Act (Article 1396-1.01 ct seq., Vernon's Texas Civil Statutes), the Cooperative Association Act (Article 139650.01, Vernon's Texas Civil Statutes), and the Electric Cooperative Corporation Act (Article 1528b, Vernon's Texas Civil Statutes). SECTION 2. Amends Subsection (a), Section 51.004, Agriculture Code, to authorize delivery of money to a scholarship fund for rural students. SECTION 3. Amends Section 52.013, Agriculture Code, to authorize delivery of money to a scholarship fund for rural students. SECTION 4. Amends Section 4, Electric Cooperative Corporation Act (Article 1528b, Vernon's Texas Civil Statutes), to authorize delivery of money to a scholarship fund for rural students. SECTION 5. Amends Section A, Article 2.02, Texas Non-Profit Corporation Act (Article 1396-2.02, Vernon's Texas Civil Statutes), to authorize delivery of money to a scholarship fund for rural students. SECTION 6. Amends Section 6, Cooperative Association Act (Article 1396-50.01, Vernon's Texas Civil Statutes), to authorize delivery of money to a scholarship fund for rural students. SECTION 7. Effective Date. SECTION 8. Emergency Clause. EXPLANATION OF AMENDMENTS Committee Amendment #1 amends H.B. 3203, on page 9, line 7, striking the semicolon after "organized" and subscetion 19 on lines 8-9 and substitute the following: organized, including such other or additional purpose or purposes as may be engaged in by a corporation organized under Article 2.01, Texas Non-Profit Corporation Act.