By: Duncan S.B. No. 1619
97S0815/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the disposition of unclaimed funds by nonprofit
1-2 cooperative corporations.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter D, Chapter 74, Property Code, is
1-5 amended by adding Section 74.3013 to read as follows:
1-6 Sec. 74.3013. DELIVERY OF MONEY FOR RURAL SCHOLARSHIP AND
1-7 ECONOMIC DEVELOPMENT. (a) Notwithstanding and in addition to any
1-8 other provision of this chapter or other law, a nonprofit
1-9 cooperative corporation may deliver reported money to a scholarship
1-10 fund for rural students or to stimulate rural economic development
1-11 instead of delivering the money to the comptroller as prescribed in
1-12 Section 74.301.
1-13 (b) A nonprofit cooperative corporation may deliver the
1-14 money under this section only:
1-15 (1) to a scholarship fund established by one or more
1-16 nonprofit cooperative corporations in this state to enable students
1-17 from rural areas to attend college, technical school, or other
1-18 postsecondary educational institution; and
1-19 (2) to an economic development fund for the
1-20 stimulation and improvement of business and commercial activity for
1-21 economic development in rural communities.
1-22 (c) A nonprofit cooperative corporation shall file with the
1-23 comptroller a verification of money delivered under this section
2-1 that complies with Section 74.302.
2-2 (d) A claim for money delivered under this section must be
2-3 filed with the nonprofit cooperative corporation that delivered the
2-4 money. A nonprofit cooperative corporation shall forward the claim
2-5 to the administrator of the fund to which the money was delivered.
2-6 The fund shall pay the claim if the fund determines in good faith
2-7 that the claim is valid. A person aggrieved by a claim decision
2-8 may file a suit against the fund in a district court in the county
2-9 in which the administrator of the fund is located in accordance
2-10 with Section 74.506.
2-11 (e) The comptroller shall prescribe forms and procedures
2-12 governing this section, including forms and procedures relating to:
2-13 (1) notice of presumed abandoned property;
2-14 (2) delivery of reported money to a scholarship or
2-15 economic development fund;
2-16 (3) filing of a claim; and
2-17 (4) procedures to allow equitable opportunity for
2-18 participation by each nonprofit cooperative corporation in the
2-19 state.
2-20 (f) During a state fiscal year the total amount of money
2-21 that may be transferred by all nonprofit cooperative corporations
2-22 under this section may not exceed $1 million. No more than 20
2-23 percent of each nonprofit cooperative's funds eligible for delivery
2-24 under this section shall be used for economic development. The
2-25 comptroller shall adopt procedures to record the total amount of
3-1 money transferred annually to allow equitable opportunity for
3-2 participation with preference given to corporations already
3-3 providing similar scholarship opportunities in other states.
3-4 (g) Nonprofit cooperative corporations may combine economic
3-5 development funds from other sources with any economic development
3-6 funds delivered under this section. In addition, such cooperatives
3-7 may engage in other business and commercial activities, in their
3-8 own behalf or through such subsidiaries and affiliates as deemed
3-9 necessary, in order to provide and promote educational
3-10 opportunities and to stimulate rural economic development.
3-11 (h) In this section, a nonprofit cooperative corporation
3-12 means a cooperative corporation organized under Chapters 51 and 52,
3-13 Agriculture Code, the Texas Non-Profit Corporation Act (Article
3-14 1396-1.01 et seq., Vernon's Texas Civil Statutes), the Cooperative
3-15 Association Act (Article 1396-50.01, Vernon's Texas Civil
3-16 Statutes), and the Electric Cooperative Corporation Act (Article
3-17 1528b, Vernon's Texas Civil Statutes).
3-18 SECTION 2. Subsection (a), Section 51.004, Agriculture Code,
3-19 is amended to read as follows:
3-20 (a) A society may:
3-21 (1) borrow money and discount notes, not to exceed a
3-22 total amount equal to five times its working capital;
3-23 (2) lend money to its members, on terms and with
3-24 security as provided by its bylaws;
3-25 (3) act as an agent for its members in selling the
4-1 members' agricultural products and in purchasing machinery and
4-2 supplies for its members, including fire, livestock, hail, cyclone,
4-3 and storm insurance;
4-4 (4) own and operate machinery and tools necessary to
4-5 produce, harvest and prepare for market farm and ranch products;
4-6 [and]
4-7 (5) exercise any of the powers granted to cooperative
4-8 marketing associations under Section 52.013 of this code; and
4-9 (6) deliver money to a scholarship fund for rural
4-10 students.
4-11 SECTION 3. Section 52.013, Agriculture Code, is amended to
4-12 read as follows:
4-13 Sec. 52.013. General Powers. A marketing association may:
4-14 (1) engage in any activity connected with:
4-15 (A) the production, cultivation, and care of
4-16 citrus groves;
4-17 (B) the marketing, selling, harvesting,
4-18 preserving, drying, processing, canning, packing, storing,
4-19 handling, or use of any agricultural products produced or delivered
4-20 to it by its members;
4-21 (C) the production, manufacturing, or marketing
4-22 of the by-products of those agricultural products;
4-23 (D) the purchase, hiring, or use by its members
4-24 of supplies, machinery, or equipment; and
4-25 (E) the financing of an activity enumerated by
5-1 Paragraphs (A) through (D) of this subdivision;
5-2 (2) borrow money and make advances to its members;
5-3 (3) act as an agent or representative of any member in
5-4 an activity authorized by Subdivision (1) or (2) of this section;
5-5 (4) acquire, hold, own, exercise all rights of
5-6 ownership in, sell, transfer, or pledge shares of capital stocks or
5-7 bonds of a corporation or association, including a bank for
5-8 cooperatives organized under the Farm Credit Act of 1933, engaged
5-9 in an activity related to that of the association incorporated
5-10 under this chapter or engaged in the handling or marketing of a
5-11 product handled by the association;
5-12 (5) establish reserves and invest the money in those
5-13 reserves in bonds or other property as provided by the
5-14 association's bylaws;
5-15 (6) buy, hold, and exercise all privileges of
5-16 ownership over real or personal property that is determined by the
5-17 association to be necessary or convenient for, or incidental to,
5-18 conducting and operating its business;
5-19 (7) perform, in or outside this state, acts that are
5-20 necessary, suitable, or proper to accomplish the purposes and
5-21 objectives permitted by this section or that are conducive to or
5-22 expedient for the interest or benefit of the association, and may
5-23 contract for the performance of those acts;
5-24 (8) possess and exercise, in or outside this state,
5-25 all powers, rights, and privileges necessary for or incidental to
6-1 the purposes for which the association is organized or the
6-2 activities in which it is engaged; [and]
6-3 (9) exercise the rights, powers, and privileges that
6-4 are granted by the laws of the state to general corporations and
6-5 that are not inconsistent with this chapter; and
6-6 (10) deliver money to a scholarship fund for rural
6-7 students.
6-8 SECTION 4. Section 4, Electric Cooperative Corporation Act
6-9 (Article 1528b, Vernon's Texas Civil Statutes), is amended to read
6-10 as follows:
6-11 Sec. 4. Powers of Corporation. Each corporation shall have
6-12 power:
6-13 (1) To sue and be sued, complain and defend, in its
6-14 corporate name;
6-15 (2) To have perpetual succession unless a limited
6-16 period of duration is stated in its articles of incorporation;
6-17 (3) To adopt a corporate seal which may be altered at
6-18 pleasure, and to use it, or a facsimile thereof, as required by
6-19 law;
6-20 (4) To generate, manufacture, purchase, acquire, and
6-21 accumulate electric energy and to transmit, distribute, sell,
6-22 furnish, and dispose of such electric energy to its members only,
6-23 and to construct, erect, purchase, lease as lessee and in any
6-24 manner acquire, own, hold, maintain, operate, sell, dispose of,
6-25 lease as lessor, exchange, and mortgage plants, buildings, works,
7-1 machinery, supplies, equipment, apparatus, and transmission and
7-2 distribution lines or systems necessary, convenient, or useful;
7-3 (5) To assist its members only to wire their premises
7-4 and install therein electrical and plumbing fixtures, machinery,
7-5 supplies, apparatus, and equipment of any and all kinds and
7-6 character, and in connection therewith and for such purposes, to
7-7 purchase, acquire, lease, sell, distribute, install, and repair
7-8 electrical and plumbing fixtures, machinery, supplies, apparatus,
7-9 and equipment of any and all kinds and character and to receive,
7-10 acquire, endorse, pledge, hypothecate, and dispose of notes, bonds,
7-11 and other evidences of indebtedness;
7-12 (6) To furnish to other corporations organized under
7-13 this Act, or to the members thereof, electric energy, wiring
7-14 facilities, electrical and plumbing equipment, and services
7-15 convenient or useful;
7-16 (7) To acquire, own, hold, use, exercise, and, to the
7-17 extent permitted by law, to sell, mortgage, pledge, hypothecate,
7-18 and in any manner dispose of franchises, rights, privileges,
7-19 licenses, rights of way, and easements necessary, useful, or
7-20 appropriate;
7-21 (8) To purchase, receive, lease as lessee, or in any
7-22 other manner acquire, own, hold, maintain, sell, exchange, and use
7-23 any and all real and personal property or any interest therein;
7-24 (9) To borrow money and otherwise contract
7-25 indebtedness, to issue its obligations therefor, and to secure the
8-1 payment thereof by mortgage, pledge, or deed of trust of all or any
8-2 of its property, assets, franchises, revenues, or income;
8-3 (10) To sell and convey, mortgage, pledge, lease as
8-4 lessor, and otherwise dispose of all or any part of its property
8-5 and assets;
8-6 (11) To have and exercise the power of eminent domain
8-7 for the purpose and in the manner provided by the condemnation laws
8-8 of this State for acquiring private property for public use, such
8-9 right to be paramount except as to property of the State, or of any
8-10 political subdivision thereof;
8-11 (12) To accept gifts or grants of money, services, or
8-12 property, real or personal;
8-13 (13) To make any and all contracts necessary or
8-14 convenient for the exercise of the powers granted in this Act;
8-15 (14) To fix, regulate, and collect rates, fees, rents,
8-16 or other charges for electric energy and any other facilities,
8-17 supplies, equipment, or services furnished by the corporation;
8-18 (15) To conduct its business, and have offices within
8-19 or without this State;
8-20 (16) To elect or appoint officers, agents, and
8-21 employees of the corporation, and to define their duties and fix
8-22 their compensation;
8-23 (17) To make and alter by-laws, not inconsistent with
8-24 the articles of incorporation or with the laws of this State for
8-25 the administration and regulation of the affairs of the
9-1 corporation;
9-2 (18) To do and perform, either for itself or its
9-3 members, or for any other corporation organized under this Act, or
9-4 for the members thereof, any and all acts and things, and to have
9-5 and exercise any and all powers as may be necessary, convenient, or
9-6 appropriate to effectuate the purpose for which the corporation is
9-7 organized;
9-8 (19) To deliver money to a scholarship fund for rural
9-9 students.
9-10 SECTION 5. Section A, Article 2.02, Texas Non-Profit
9-11 Corporation Act (Article 1396-2.02, Vernon's Texas Civil Statutes),
9-12 is amended to read as follows:
9-13 A. Subject to the provisions of Sections B and C of this
9-14 Article, each corporation shall have power:
9-15 (1) To have perpetual succession by its corporate
9-16 name, unless a limited period of duration is stated in its articles
9-17 of incorporation. Notwithstanding the articles of incorporation,
9-18 the period of duration for any corporation incorporated before
9-19 August 10, 1959, is perpetual if all fees and franchise taxes have
9-20 been paid as provided by law.
9-21 (2) To sue and be sued, complain and defend, in its
9-22 corporate name.
9-23 (3) To have a corporate seal which may be altered at
9-24 pleasure, and to use the same by causing it, or a facsimile
9-25 thereof, to be impressed on, affixed to, or in any manner
10-1 reproduced upon, instruments of any nature required to be executed
10-2 by its proper officers.
10-3 (4) To purchase, receive, lease, or otherwise acquire,
10-4 own, hold, improve, use, or otherwise deal in and with, real or
10-5 personal property, or any interest therein, wherever situated, as
10-6 the purposes of the corporation shall require, or as shall be
10-7 donated to it.
10-8 (5) To sell, convey, mortgage, pledge, lease,
10-9 exchange, transfer, and otherwise dispose of all or any part of its
10-10 property and assets.
10-11 (6) To lend money to and otherwise assist its
10-12 employees and officers, but not its directors, if the loan or
10-13 assistance may reasonably be expected to benefit, directly or
10-14 indirectly, the corporation providing the assistance. Loans made to
10-15 officers must be:
10-16 (a) made for the purpose of financing the
10-17 principal residence of the officer; or
10-18 (b) made during the first year of that officer's
10-19 employment, in which case the original principal amount may not
10-20 exceed 100 percent of the officer's annual salary; or
10-21 (c) made in any subsequent year, in which case
10-22 the original principal amount may not exceed 50 percent of the
10-23 officer's annual salary.
10-24 (7) To purchase, receive, subscribe for, or otherwise
10-25 acquire, own, hold, vote, use, employ, mortgage, lend, pledge, sell
11-1 or otherwise dispose of, and otherwise use and deal in and with,
11-2 shares or other interests in, or obligations of, other domestic or
11-3 foreign corporations, whether for profit or not for profit,
11-4 associations, partnerships, or individuals, or direct or indirect
11-5 obligations of the United States or of any other government, state,
11-6 territory, government district, or municipality, or of any
11-7 instrumentality thereof.
11-8 (8) To make contracts and incur liabilities, borrow
11-9 money at such rates of interest as the corporation may determine,
11-10 issue its notes, bonds, and other obligations, and secure any of
11-11 its obligations by mortgage or pledge of all or any of its
11-12 property, franchises, and income.
11-13 (9) To lend money for its corporate purposes, invest
11-14 and reinvest its funds, and take and hold real and personal
11-15 property as security for the payment of funds so loaned or
11-16 invested.
11-17 (10) To conduct its affairs, carry on its operations,
11-18 and have officers and exercise the powers granted by this Act in
11-19 any state, territory, district, or possession of the United States,
11-20 or any foreign country.
11-21 (11) To elect or appoint officers and agents of the
11-22 corporation for such period of time as the corporation may
11-23 determine and define their duties and fix their compensation.
11-24 (12) To make and alter by-laws, not inconsistent with
11-25 its articles of incorporation or with the laws of this State, for
12-1 the administration and regulation of the affairs of the
12-2 corporation.
12-3 (13) To make donations for the public welfare or for
12-4 charitable, scientific, or educational purposes and in time of war
12-5 to make donations in aid of war activities.
12-6 (14) To cease its corporate activities and terminate
12-7 its existence by voluntary dissolution.
12-8 (15) Whether included in the foregoing or not, to have
12-9 and exercise all powers necessary or appropriate to effect any or
12-10 all of the purposes for which the corporation is organized.
12-11 (16) Any religious, charitable, educational, or
12-12 eleemosynary institution organized under the laws of this State may
12-13 acquire, own, hold, mortgage, and dispose of and invest its funds
12-14 in real and personal property for the use and benefit and under the
12-15 discretion of, and in trust for any convention, conference or
12-16 association organized under the laws of this State or another state
12-17 with which it is affiliated, or which elects its board of
12-18 directors, or which controls it, in furtherance of the purposes of
12-19 the member institution.
12-20 (17) To pay pensions and establish pension plans and
12-21 pension trusts for all of, or class, or classes of its officer and
12-22 employees, or its officers or its employees.
12-23 (18) To deliver money to a scholarship fund for rural
12-24 students.
12-25 SECTION 6. Section 6, Cooperative Association Act (Article
13-1 1396-50.01, Vernon's Texas Civil Statutes), is amended to read as
13-2 follows:
13-3 Sec. 6. Powers. An association may exercise all the powers
13-4 granted to a nonprofit corporation under Article 2.02, Texas
13-5 Non-Profit Corporation Act and may:
13-6 (1) own and hold membership in and share capital of
13-7 other associations or corporations, and own and exercise ownership
13-8 rights in bonds or other obligations;
13-9 (2) make agreements of mutual aid or federation with
13-10 other associations, other groups organized on a cooperative basis,
13-11 and other nonprofit groups;
13-12 (3) exercise all powers not inconsistent with this Act
13-13 that are necessary or convenient for the accomplishment of its
13-14 purposes, and to that end the enumeration of powers in this section
13-15 is not exclusive; [and]
13-16 (4) not engage, either directly or indirectly, in
13-17 insurance companies of every type or character as the insurance
13-18 business is defined and regulated by the Insurance Code, as
13-19 amended, health maintenance organizations, or prepaid legal service
13-20 corporations; and
13-21 (5) deliver money to a scholarship fund for rural
13-22 students.
13-23 SECTION 7. This Act takes effect September 1, 1997.
13-24 SECTION 8. The importance of this legislation and the
13-25 crowded condition of the calendars in both houses create an
14-1 emergency and an imperative public necessity that the
14-2 constitutional rule requiring bills to be read on three several
14-3 days in each house be suspended, and this rule is hereby suspended.