1-1 By: Counts (Senate Sponsor - Duncan) H.B. No. 3203
1-2 (In the Senate - Received from the House April 21, 1997;
1-3 April 23, 1997, read first time and referred to Committee on
1-4 Finance; May 17, 1997, reported favorably, as amended, by the
1-5 following vote: Yeas 10, Nays 0; May 17, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Zaffirini
1-7 Amend HB 3203 as follows:
1-8 On page 4, lines 19 through 22, strike everything after the
1-9 word "organized" on line 19 and substitute the following:
1-10 , including other or additional purposes benefiting members and
1-11 non-members, whether directly or through affiliates, described in
1-12 Article 2.01(A), Texas Non-Profit Corporation Act (Article
1-13 1396-2.01(A), Vernon's Texas Civil Statutes).
1-14 A BILL TO BE ENTITLED
1-15 AN ACT
1-16 relating to the disposition of unclaimed funds by nonprofit
1-17 cooperative corporations.
1-18 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-19 SECTION 1. Subchapter D, Chapter 74, Property Code, is
1-20 amended by adding Section 74.3013 to read as follows:
1-21 Sec. 74.3013. DELIVERY OF MONEY FOR RURAL SCHOLARSHIP AND
1-22 ECONOMIC DEVELOPMENT. (a) Notwithstanding and in addition to any
1-23 other provision of this chapter or other law, a nonprofit
1-24 cooperative corporation may deliver reported money to a scholarship
1-25 fund for rural students or to stimulate rural economic development
1-26 instead of delivering the money to the comptroller as prescribed in
1-27 Section 74.301.
1-28 (b) A nonprofit cooperative corporation may deliver the
1-29 money under this section only:
1-30 (1) to a scholarship fund established by one or more
1-31 nonprofit cooperative corporations in this state to enable students
1-32 from rural areas to attend college, technical school, or other
1-33 postsecondary educational institution; and
1-34 (2) to an economic development fund for the
1-35 stimulation and improvement of business and commercial activity for
1-36 economic development in rural communities.
1-37 (c) A nonprofit cooperative corporation shall file with the
1-38 comptroller a verification of money delivered under this section
1-39 that complies with Section 74.302.
1-40 (d) A claim for money delivered under this section must be
1-41 filed with the nonprofit cooperative corporation that delivered the
1-42 money. A nonprofit cooperative corporation shall forward the claim
1-43 to the administrator of the fund to which the money was delivered.
1-44 The fund shall pay the claim if the fund determines in good faith
1-45 that the claim is valid. A person aggrieved by a claim decision
1-46 may file a suit against the fund in a district court in the county
1-47 in which the administrator of the fund is located in accordance
1-48 with Section 74.506.
1-49 (e) The comptroller shall prescribe forms and procedures
1-50 governing this section, including forms and procedures relating to:
1-51 (1) notice of presumed abandoned property;
1-52 (2) delivery of reported money to a scholarship or
1-53 economic development fund;
1-54 (3) filing of a claim; and
1-55 (4) procedures to allow equitable opportunity for
1-56 participation by each nonprofit cooperative corporation in the
1-57 state.
1-58 (f) During a state fiscal year the total amount of money
1-59 that may be transferred by all nonprofit cooperative corporations
1-60 under this section may not exceed $1 million. No more than 20
1-61 percent of each nonprofit cooperative's funds eligible for delivery
1-62 under this section shall be used for economic development. The
1-63 comptroller shall adopt procedures to record the total amount of
1-64 money transferred annually to allow equitable opportunity for
2-1 participation with preference given to corporations already
2-2 providing similar scholarship opportunities in other states.
2-3 (g) Nonprofit cooperative corporations may combine economic
2-4 development funds from other sources with any economic development
2-5 funds delivered under this section. In addition, such cooperatives
2-6 may engage in other business and commercial activities, in their
2-7 own behalf or through such subsidiaries and affiliates as deemed
2-8 necessary, in order to provide and promote educational
2-9 opportunities and to stimulate rural economic development.
2-10 (h) In this section, a nonprofit cooperative corporation
2-11 means a cooperative corporation organized under Chapters 51 and 52,
2-12 Agriculture Code, the Texas Non-Profit Corporation Act (Article
2-13 1396-1.01 et seq., Vernon's Texas Civil Statutes), the Cooperative
2-14 Association Act (Article 1396-50.01, Vernon's Texas Civil
2-15 Statutes), and the Electric Cooperative Corporation Act (Article
2-16 1528b, Vernon's Texas Civil Statutes).
2-17 SECTION 2. Subsection (a), Section 51.004, Agriculture Code,
2-18 is amended to read as follows:
2-19 (a) A society may:
2-20 (1) borrow money and discount notes, not to exceed a
2-21 total amount equal to five times its working capital;
2-22 (2) lend money to its members, on terms and with
2-23 security as provided by its bylaws;
2-24 (3) act as an agent for its members in selling the
2-25 members' agricultural products and in purchasing machinery and
2-26 supplies for its members, including fire, livestock, hail, cyclone,
2-27 and storm insurance;
2-28 (4) own and operate machinery and tools necessary to
2-29 produce, harvest and prepare for market farm and ranch products;
2-30 [and]
2-31 (5) exercise any of the powers granted to cooperative
2-32 marketing associations under Section 52.013 of this code; and
2-33 (6) deliver money to a scholarship fund for rural
2-34 students.
2-35 SECTION 3. Section 52.013, Agriculture Code, is amended to
2-36 read as follows:
2-37 Sec. 52.013. General Powers. A marketing association may:
2-38 (1) engage in any activity connected with:
2-39 (A) the production, cultivation, and care of
2-40 citrus groves;
2-41 (B) the marketing, selling, harvesting,
2-42 preserving, drying, processing, canning, packing, storing,
2-43 handling, or use of any agricultural products produced or delivered
2-44 to it by its members;
2-45 (C) the production, manufacturing, or marketing
2-46 of the by-products of those agricultural products;
2-47 (D) the purchase, hiring, or use by its members
2-48 of supplies, machinery, or equipment; and
2-49 (E) the financing of an activity enumerated by
2-50 Paragraphs (A) through (D) of this subdivision;
2-51 (2) borrow money and make advances to its members;
2-52 (3) act as an agent or representative of any member in
2-53 an activity authorized by Subdivision (1) or (2) of this section;
2-54 (4) acquire, hold, own, exercise all rights of
2-55 ownership in, sell, transfer, or pledge shares of capital stocks or
2-56 bonds of a corporation or association, including a bank for
2-57 cooperatives organized under the Farm Credit Act of 1933, engaged
2-58 in an activity related to that of the association incorporated
2-59 under this chapter or engaged in the handling or marketing of a
2-60 product handled by the association;
2-61 (5) establish reserves and invest the money in those
2-62 reserves in bonds or other property as provided by the
2-63 association's bylaws;
2-64 (6) buy, hold, and exercise all privileges of
2-65 ownership over real or personal property that is determined by the
2-66 association to be necessary or convenient for, or incidental to,
2-67 conducting and operating its business;
2-68 (7) perform, in or outside this state, acts that are
2-69 necessary, suitable, or proper to accomplish the purposes and
3-1 objectives permitted by this section or that are conducive to or
3-2 expedient for the interest or benefit of the association, and may
3-3 contract for the performance of those acts;
3-4 (8) possess and exercise, in or outside this state,
3-5 all powers, rights, and privileges necessary for or incidental to
3-6 the purposes for which the association is organized or the
3-7 activities in which it is engaged; [and]
3-8 (9) exercise the rights, powers, and privileges that
3-9 are granted by the laws of the state to general corporations and
3-10 that are not inconsistent with this chapter; and
3-11 (10) deliver money to a scholarship fund for rural
3-12 students.
3-13 SECTION 4. Section 4, Electric Cooperative Corporation Act
3-14 (Article 1528b, Vernon's Texas Civil Statutes), is amended to read
3-15 as follows:
3-16 Sec. 4. Powers of Corporation. Each corporation shall have
3-17 power:
3-18 (1) To sue and be sued, complain and defend, in its
3-19 corporate name;
3-20 (2) To have perpetual succession unless a limited
3-21 period of duration is stated in its articles of incorporation;
3-22 (3) To adopt a corporate seal which may be altered at
3-23 pleasure, and to use it, or a facsimile thereof, as required by
3-24 law;
3-25 (4) To generate, manufacture, purchase, acquire, and
3-26 accumulate electric energy and to transmit, distribute, sell,
3-27 furnish, and dispose of such electric energy to its members only,
3-28 and to construct, erect, purchase, lease as lessee and in any
3-29 manner acquire, own, hold, maintain, operate, sell, dispose of,
3-30 lease as lessor, exchange, and mortgage plants, buildings, works,
3-31 machinery, supplies, equipment, apparatus, and transmission and
3-32 distribution lines or systems necessary, convenient, or useful;
3-33 (5) To assist its members only to wire their premises
3-34 and install therein electrical and plumbing fixtures, machinery,
3-35 supplies, apparatus, and equipment of any and all kinds and
3-36 character, and in connection therewith and for such purposes, to
3-37 purchase, acquire, lease, sell, distribute, install, and repair
3-38 electrical and plumbing fixtures, machinery, supplies, apparatus,
3-39 and equipment of any and all kinds and character and to receive,
3-40 acquire, endorse, pledge, hypothecate, and dispose of notes, bonds,
3-41 and other evidences of indebtedness;
3-42 (6) To furnish to other corporations organized under
3-43 this Act, or to the members thereof, electric energy, wiring
3-44 facilities, electrical and plumbing equipment, and services
3-45 convenient or useful;
3-46 (7) To acquire, own, hold, use, exercise, and, to the
3-47 extent permitted by law, to sell, mortgage, pledge, hypothecate,
3-48 and in any manner dispose of franchises, rights, privileges,
3-49 licenses, rights of way, and easements necessary, useful, or
3-50 appropriate;
3-51 (8) To purchase, receive, lease as lessee, or in any
3-52 other manner acquire, own, hold, maintain, sell, exchange, and use
3-53 any and all real and personal property or any interest therein;
3-54 (9) To borrow money and otherwise contract
3-55 indebtedness, to issue its obligations therefor, and to secure the
3-56 payment thereof by mortgage, pledge, or deed of trust of all or any
3-57 of its property, assets, franchises, revenues, or income;
3-58 (10) To sell and convey, mortgage, pledge, lease as
3-59 lessor, and otherwise dispose of all or any part of its property
3-60 and assets;
3-61 (11) To have and exercise the power of eminent domain
3-62 for the purpose and in the manner provided by the condemnation laws
3-63 of this State for acquiring private property for public use, such
3-64 right to be paramount except as to property of the State, or of any
3-65 political subdivision thereof;
3-66 (12) To accept gifts or grants of money, services, or
3-67 property, real or personal;
3-68 (13) To make any and all contracts necessary or
3-69 convenient for the exercise of the powers granted in this Act;
4-1 (14) To fix, regulate, and collect rates, fees, rents,
4-2 or other charges for electric energy and any other facilities,
4-3 supplies, equipment, or services furnished by the corporation;
4-4 (15) To conduct its business, and have offices within
4-5 or without this State;
4-6 (16) To elect or appoint officers, agents, and
4-7 employees of the corporation, and to define their duties and fix
4-8 their compensation;
4-9 (17) To make and alter by-laws, not inconsistent with
4-10 the articles of incorporation or with the laws of this State for
4-11 the administration and regulation of the affairs of the
4-12 corporation;
4-13 (18) To do and perform, either for itself or its
4-14 members, or for any other corporation organized under this Act, or
4-15 for the members thereof, any and all acts and things, and to have
4-16 and exercise any and all powers as may be necessary, convenient, or
4-17 appropriate to effectuate the purpose for which the corporation is
4-18 organized[;], including such other or additional purpose or
4-19 purposes as may be engaged in by a corporation organized under
4-20 Article 2.01, Texas Non-Profit Corporation Act (Article 1396-2.01,
4-21 Vernon's Texas Civil Statutes).
4-22 SECTION 5. Section A, Article 2.02, Texas Non-Profit
4-23 Corporation Act (Article 1396-2.02, Vernon's Texas Civil Statutes),
4-24 is amended to read as follows:
4-25 A. Subject to the provisions of Sections B and C of this
4-26 Article, each corporation shall have power:
4-27 (1) To have perpetual succession by its corporate
4-28 name, unless a limited period of duration is stated in its articles
4-29 of incorporation. Notwithstanding the articles of incorporation,
4-30 the period of duration for any corporation incorporated before
4-31 August 10, 1959, is perpetual if all fees and franchise taxes have
4-32 been paid as provided by law.
4-33 (2) To sue and be sued, complain and defend, in its
4-34 corporate name.
4-35 (3) To have a corporate seal which may be altered at
4-36 pleasure, and to use the same by causing it, or a facsimile
4-37 thereof, to be impressed on, affixed to, or in any manner
4-38 reproduced upon, instruments of any nature required to be executed
4-39 by its proper officers.
4-40 (4) To purchase, receive, lease, or otherwise acquire,
4-41 own, hold, improve, use, or otherwise deal in and with, real or
4-42 personal property, or any interest therein, wherever situated, as
4-43 the purposes of the corporation shall require, or as shall be
4-44 donated to it.
4-45 (5) To sell, convey, mortgage, pledge, lease,
4-46 exchange, transfer, and otherwise dispose of all or any part of its
4-47 property and assets.
4-48 (6) To lend money to and otherwise assist its
4-49 employees and officers, but not its directors, if the loan or
4-50 assistance may reasonably be expected to benefit, directly or
4-51 indirectly, the corporation providing the assistance. Loans made
4-52 to officers must be:
4-53 (a) made for the purpose of financing the
4-54 principal residence of the officer; or
4-55 (b) made during the first year of that officer's
4-56 employment, in which case the original principal amount may not
4-57 exceed 100 percent of the officer's annual salary; or
4-58 (c) made in any subsequent year, in which case
4-59 the original principal amount may not exceed 50 percent of the
4-60 officer's annual salary.
4-61 (7) To purchase, receive, subscribe for, or otherwise
4-62 acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell
4-63 or otherwise dispose of, and otherwise use and deal in and with,
4-64 shares or other interests in, or obligations of, other domestic or
4-65 foreign corporations, whether for profit or not for profit,
4-66 associations, partnerships, or individuals, or direct or indirect
4-67 obligations of the United States or of any other government, state,
4-68 territory, government district, or municipality, or of any
4-69 instrumentality thereof.
5-1 (8) To make contracts and incur liabilities, borrow
5-2 money at such rates of interest as the corporation may determine,
5-3 issue its notes, bonds, and other obligations, and secure any of
5-4 its obligations by mortgage or pledge of all or any of its
5-5 property, franchises, and income.
5-6 (9) To lend money for its corporate purposes, invest
5-7 and reinvest its funds, and take and hold real and personal
5-8 property as security for the payment of funds so loaned or
5-9 invested.
5-10 (10) To conduct its affairs, carry on its operations,
5-11 and have officers and exercise the powers granted by this Act in
5-12 any state, territory, district, or possession of the United States,
5-13 or any foreign country.
5-14 (11) To elect or appoint officers and agents of the
5-15 corporation for such period of time as the corporation may
5-16 determine and define their duties and fix their compensation.
5-17 (12) To make and alter by-laws, not inconsistent with
5-18 its articles of incorporation or with the laws of this State, for
5-19 the administration and regulation of the affairs of the
5-20 corporation.
5-21 (13) To make donations for the public welfare or for
5-22 charitable, scientific, or educational purposes and in time of war
5-23 to make donations in aid of war activities.
5-24 (14) To cease its corporate activities and terminate
5-25 its existence by voluntary dissolution.
5-26 (15) Whether included in the foregoing or not, to have
5-27 and exercise all powers necessary or appropriate to effect any or
5-28 all of the purposes for which the corporation is organized.
5-29 (16) Any religious, charitable, educational, or
5-30 eleemosynary institution organized under the laws of this State may
5-31 acquire, own, hold, mortgage, and dispose of and invest its funds
5-32 in real and personal property for the use and benefit and under the
5-33 discretion of, and in trust for any convention, conference or
5-34 association organized under the laws of this State or another state
5-35 with which it is affiliated, or which elects its board of
5-36 directors, or which controls it, in furtherance of the purposes of
5-37 the member institution.
5-38 (17) To pay pensions and establish pension plans and
5-39 pension trusts for all of, or class, or classes of its officer and
5-40 employees, or its officers or its employees.
5-41 (18) To deliver money to a scholarship fund for rural
5-42 students.
5-43 SECTION 6. Section 6, Cooperative Association Act (Article
5-44 1396-50.01, Vernon's Texas Civil Statutes), is amended to read as
5-45 follows:
5-46 Sec. 6. Powers. An association may exercise all the powers
5-47 granted to a nonprofit corporation under Article 2.02, Texas
5-48 Non-Profit Corporation Act and may:
5-49 (1) own and hold membership in and share capital of
5-50 other associations or corporations, and own and exercise ownership
5-51 rights in bonds or other obligations;
5-52 (2) make agreements of mutual aid or federation with
5-53 other associations, other groups organized on a cooperative basis,
5-54 and other nonprofit groups;
5-55 (3) exercise all powers not inconsistent with this Act
5-56 that are necessary or convenient for the accomplishment of its
5-57 purposes, and to that end the enumeration of powers in this section
5-58 is not exclusive; [and]
5-59 (4) not engage, either directly or indirectly, in
5-60 insurance companies of every type or character as the insurance
5-61 business is defined and regulated by the Insurance Code, as
5-62 amended, health maintenance organizations, or prepaid legal service
5-63 corporations; and
5-64 (5) deliver money to a scholarship fund for rural
5-65 students.
5-66 SECTION 7. This Act takes effect September 1, 1997.
5-67 SECTION 8. The importance of this legislation and the
5-68 crowded condition of the calendars in both houses create an
5-69 emergency and an imperative public necessity that the
6-1 constitutional rule requiring bills to be read on three several
6-2 days in each house be suspended, and this rule is hereby suspended.
6-3 * * * * *