CHAPTER 52. COOPERATIVE MARKETING ASSOCIATIONS
AGRICULTURE CODE
TITLE 4. AGRICULTURAL ORGANIZATIONS
CHAPTER 52. COOPERATIVE MARKETING ASSOCIATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 52.001. POLICY. The purpose of this chapter is:
(1) to promote and encourage intelligent and orderly production,
cultivation, and care of citrus groves and marketing of
agricultural products through cooperation;
(2) to eliminate speculation and waste in the production and
marketing of agricultural products;
(3) to make production and distribution of agricultural products
as direct as effectively possible between the producer and
consumer; and
(4) to stabilize the production and marketing of agricultural
products.
Acts 1981, 67th Leg., p. 1102, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.002. DEFINITIONS. In this chapter:
(1) "Agricultural products" includes horticultural,
viticultural, forestry, dairy, livestock, poultry, and bee
products and any farm and ranch product.
(2) "Marketing association" means an association organized under
this chapter.
(3) "Member" includes a member of an association organized under
this chapter without capital stock and a holder of common stock
of an association organized under this chapter with capital
stock.
Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.003. NONPROFIT ORGANIZATION. Because a marketing
association is organized not to make money for itself or for its
members as individuals but only to make money for its members as
producers, the association is considered to be a nonprofit
organization.
Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.004. APPLICATION OF GENERAL CORPORATION LAWS. The
general corporation laws of the state apply to marketing
associations unless those laws conflict with this chapter.
Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.005. ASSOCIATIONS NOT IN RESTRAINT OF TRADE. (a) A
marketing association is not a combination in restraint of trade
or an illegal monopoly.
(b) Organizing under this chapter is not an attempt to lessen
competition or to fix prices arbitrarily.
(c) Marketing contracts or agreements authorized by this chapter
are not illegal or in restraint of trade.
Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.006. DURATION OF EXISTENCE. Each association
incorporated and organized under this chapter after August 1,
1987, has perpetual existence unless a limited duration is
provided for and stated in its charter or articles of
incorporation or in an amendment to either of the documents. Each
association incorporated and organized under this chapter that is
in existence on August 1, 1987, has perpetual existence unless a
limited duration is provided for and stated in an amendment to
its charter or articles of incorporation.
Added by Acts 1987, 70th Leg., ch. 695, Sec. 1, eff. Aug. 31,
1987.
SUBCHAPTER B. PURPOSE AND POWERS
Sec. 52.011. PURPOSES. (a) A marketing association may be
incorporated to engage in any activity connected with:
(1) the production, cultivation, and care of citrus groves;
(2) the harvesting, preserving, drying, processing, canning,
storing, handling, shipping, marketing, selling, or use of
agricultural products of its members;
(3) the manufacturing or marketing of by-products of its
members' agricultural products;
(4) the manufacturing, selling, or supplying to its members of
machinery, equipment, or supplies; or
(5) the financing of any of the activities authorized by this
section.
(b) The activities authorized by Subsection (a) of this section
may extend to nonmembers, to the production, cultivation, and
care of lands owned or cultivated by nonmembers, and to products
of nonmembers as limited by Section 52.012 of this code.
Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.012. RESTRICTIONS. (a) A marketing association shall
be operated for the mutual benefit of its members, as producers,
and shall conform to one or both of the following requirements:
(1) a member of the association may not have more than one vote
based on the member's ownership of stock or membership capital in
the association; or
(2) the association may not pay dividends on stock or membership
capital in excess of eight percent a year.
(b) A marketing association may deal in the products and
supplies of nonmembers. However, except as provided by Subsection
(c) of this section, an association is restricted to an amount of
nonmember products and supplies that is not greater than the
value of the products that it handles for its members.
(c) A marketing association that is organized primarily for the
production, cultivation, and care of citrus groves or for the
processing and marketing of citrus products and for which the
principal offices are located in a county in which not less than
500 acres of land are planted in producing citrus groves may deal
in the products and supplies of nonmembers to an amount that is
greater than the value of the products that it handles for its
members for the 10-year period immediately following a natural
disaster, such as a severe freeze, during which the citrus crops
of the association's membership are substantially reduced as a
direct result of the disaster.
Acts 1981, 67th Leg., p. 1104, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1985, 69th Leg., ch. 575, Sec. 1, eff. June
12, 1985; Acts 1993, 73rd Leg., ch. 147, Sec. 1, eff. Aug. 30,
1993.
Sec. 52.013. GENERAL POWERS. A marketing association may:
(1) engage in any activity connected with:
(A) the production, cultivation, and care of citrus groves;
(B) the marketing, selling, harvesting, preserving, drying,
processing, canning, packing, storing, handling, or use of any
agricultural products produced or delivered to it by its members;
(C) the production, manufacturing, or marketing of the
by-products of those agricultural products;
(D) the purchase, hiring, or use by its members of supplies,
machinery, or equipment; and
(E) the financing of an activity enumerated by Paragraphs (A)
through (D) of this subdivision;
(2) borrow money and make advances to its members;
(3) act as an agent or representative of any member in an
activity authorized by Subdivision (1) or (2) of this section;
(4) acquire, hold, own, exercise all rights of ownership in,
sell, transfer, or pledge shares of capital stocks or bonds of a
corporation or association, including a bank for cooperatives
organized under the Farm Credit Act of 1933, engaged in an
activity related to that of the association incorporated under
this chapter or engaged in the handling or marketing of a product
handled by the association;
(5) establish reserves and invest the money in those reserves in
bonds or other property as provided by the association's bylaws;
(6) buy, hold, and exercise all privileges of ownership over
real or personal property that is determined by the association
to be necessary or convenient for, or incidental to, conducting
and operating its business;
(7) perform, in or outside this state, acts that are necessary,
suitable, or proper to accomplish the purposes and objectives
permitted by this section or that are conducive to or expedient
for the interest or benefit of the association, and may contract
for the performance of those acts;
(8) possess and exercise, in or outside this state, all powers,
rights, and privileges necessary for or incidental to the
purposes for which the association is organized or the activities
in which it is engaged;
(9) exercise the rights, powers, and privileges that are granted
by the laws of the state to general corporations and that are not
inconsistent with this chapter; and
(10) deliver money to a scholarship fund for rural students.
Acts 1981, 67th Leg., p. 1104, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1997, 75th Leg., ch. 904, Sec. 3, eff.
Sept. 1, 1997.
Sec. 52.014. INTEREST IN OTHER CORPORATIONS. (a) A marketing
association may organize, operate, own, control, have an interest
in, own stock of, or be a member of any other corporation,
organized with or without capital stock, that is engaged in
preserving, drying, pressing, canning, packing, storing,
handling, shipping, using, manufacturing, marketing, or selling
agricultural products handled by the association or the
by-products of those products.
(b) If a corporation described by Subsection (a) of this section
is a warehousing corporation, it may issue a legal warehouse
receipt to the association or to any person. The receipt is
adequate collateral limited to the current value of the commodity
represented by the receipt. If a warehouse is licensed or
licensed and bonded under the laws of this state or of the United
States, its warehouse receipts may not be challenged or
discriminated against because of the association's total or
partial ownership or control of it.
Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.015. CONTRACTS AND AGREEMENTS WITH OTHER ASSOCIATIONS.
(a) A marketing association, by resolution of its board of
directors, may make all necessary stipulations, agreements,
contracts, and arrangements with any other cooperative
corporation or association formed in this or any other state for
the cooperative and more economical conduct of its business or a
part of its business.
(b) Two or more marketing associations, jointly or separately,
may use the same methods and agencies to conduct their respective
businesses.
Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.016. MARKETING CONTRACT. (a) A marketing association
may execute a marketing contract with its members requiring the
members to sell, for a period not exceeding 10 years, all or a
specified part of their agricultural products or specified
commodities exclusively to or through the association or any
facilities to be created by the association.
(b) The contract may provide that the association may:
(1) sell or resell its members' products with or without taking
title to the products; and
(2) pay to its members the resale price less necessary expenses.
(c) The expenses that may be deducted from the resale price
under Subsection (b) of this section include:
(1) sales, overhead, and other expenses;
(2) interest on preferred stock, not exceeding eight percent a
year;
(3) interest on common stock, not exceeding eight percent a
year; and
(4) reserves, including reserves for redeeming any stock issued.
(d) A marketing association's bylaws and marketing contract may:
(1) fix as liquidated damages specific amounts to be paid by a
member if the member breaches the marketing contract regarding
the sale, delivery, or withholding of products; and
(2) provide that the member will pay all costs, premiums for
bonds, expenses, and fees if the association brings an action on
the contract.
Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER C. INCORPORATION
Sec. 52.031. INCORPORATORS. Five or more persons who produce
agricultural products or three or more marketing associations may
form a marketing association under this chapter.
Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.032. PRELIMINARY INVESTIGATION. (a) Every group of
persons considering the organization of a marketing association
is urged to communicate with the department.
(b) On request, the department shall inform the group of:
(1) the results of a survey of the marketing conditions
affecting the commodities to be handled by the proposed
association; and
(2) the probability of the association's success as determined
from those results.
Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.033. EXECUTION OF ARTICLES OF INCORPORATION. (a) Each
marketing association shall prepare and file articles of
incorporation signed by each incorporator.
(b) One of the incorporators shall acknowledge the articles
before an officer authorized by the laws of the state to take and
certify acknowledgments of deeds and conveyances.
Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.034. CONTENTS OF ARTICLES OF INCORPORATION. (a) The
articles of incorporation must state:
(1) the name of the association;
(2) the term of existence, if it is limited;
(3) the purpose for which the association is formed;
(4) the location and street address of the association's
principal place of business;
(5) the number of directors; and
(6) the term of office of each director.
(b) If the association is organized without capital stock, the
articles must state whether property rights and interests of each
member are equal or unequal, and if unequal, the general rules
applicable to all members by which the property rights and
interests of each are determined and fixed.
(c) If the association is organized with capital stock, the
articles must state:
(1) the amount of capital stock authorized;
(2) the number of shares authorized;
(3) the par value of the shares; and
(4) if preferred stock is to be issued, the number of shares of
common stock, the number of shares of preferred stock, the
rights, preferences, and privileges granted, and the conditions
under which the association may redeem the preferred stock.
Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1981, 67th Leg., p. 2605, ch. 693, Sec. 24,
eff. Aug. 31, 1981; Acts 1987, 70th Leg., ch. 695, Sec. 2, eff.
Aug. 31, 1987.
Sec. 52.035. FILING OF ARTICLES OF INCORPORATION. (a) The
incorporators shall file the articles of incorporation in
accordance with the general corporation laws of the state.
(b) Repealed by Acts 2009, 81st Leg., R.S., Ch. 506, Sec.
5.35(5), eff. September 1, 2009.
(c) If the association is formed with capital stock, the
incorporators are not required to obtain subscriptions or payment
for any part of the association's capital stock as a prerequisite
of filing the articles.
Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
506, Sec. 5.35(5), eff. September 1, 2009.
Sec. 52.036. EFFECT OF FILING ARTICLES OF INCORPORATION. When
the articles of incorporation are filed with the secretary of
state, all courts shall receive the articles or a certified copy
of the articles as prima facie evidence of:
(1) facts stated in the articles; and
(2) compliance with requirements for incorporation under this
chapter.
Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.037. AMENDMENT OF ARTICLES OF INCORPORATION. (a) A
marketing association may amend the articles of incorporation at
any regular meeting of the association or at a special meeting
for that purpose, at which at least 10 percent of the members are
voting in person or by proxy or mail.
(b) An amendment must first be approved by two-thirds of the
directors and then, except as provided by Subsection (c) of this
section, adopted by:
(1) a simple majority vote when 50 percent or more of the
members vote in person or by proxy or mail;
(2) a two-thirds majority vote when less than 50 percent but 25
percent or more of the members vote in person or by proxy or
mail; or
(3) a three-fourths majority vote when less than 25 percent but
10 percent or more of the members vote in person or by proxy or
mail.
(c) An amendment of the rules required by Section 52.034(b) of
this code for determining the property rights and interests of
members of a marketing association formed without capital stock
may be adopted by a vote or written consent of two-thirds of the
members who are present at a meeting of the association at which
a quorum is present or who are voting by proxy or mail as
prescribed by an association bylaw.
(d) After an amendment is adopted, the amendment shall be filed
in accordance with the general corporation laws of the state.
Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1983, 68th Leg., p. 1550, ch. 296, Sec. 1,
eff. June 14, 1983.
Sec. 52.038. EXISTING CORPORATIONS AND ASSOCIATIONS. Any
corporation or association organized under prior law before March
1, 1921, may elect, by a majority vote of its members or
stockholders, to adopt this chapter and become subject to it by:
(1) adopting the restrictions provided by this chapter; and
(2) executing, in duplicate on forms supplied by the secretary
of state, an instrument, signed and acknowledged by its
directors, stating that the entity, by a majority vote of its
members or stockholders, has decided to accept the benefits of
and be bound by this chapter.
Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
506, Sec. 5.08, eff. September 1, 2009.
SUBCHAPTER D. BYLAWS
Sec. 52.051. ADOPTION. (a) A marketing association shall adopt
bylaws before the 31st day after the day on which the articles of
incorporation are filed with the secretary of state.
(b) The initial bylaws may be adopted by a two-thirds vote of
the incorporating directors and then:
(1) a simple majority vote when 50 percent or more of the
members vote in person or by proxy or mail;
(2) a two-thirds majority vote when less than 50 percent but 25
percent or more of the members vote in person or by proxy or
mail; or
(3) a three-fourths majority vote when less than 25 percent but
10 percent or more of the members vote in person or by proxy or
mail.
Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 2,
eff. June 14, 1983.
Sec. 52.052. CONTENTS. The bylaws may provide for one or more
of the following:
(1) the time, place, and manner of calling and conducting
meetings of the association;
(2) the number and qualifications of the members;
(3) the number of members constituting a quorum;
(4) the right of members to vote by proxy, mail, or both and the
conditions, method, and effects of the vote;
(5) the method by which a member that is an association may cast
its vote;
(6) the number of directors constituting a quorum;
(7) the qualifications, compensation, duties, and terms of
directors and officers;
(8) the time of the election of directors and officers and the
method of giving notice of the election;
(9) the penalties for violations of the bylaws;
(10) the amount of entrance, organization, and membership fees,
if any, the method of collecting the fees, and the purposes for
which the association must use the fees;
(11) the amount, if any, that each member must pay for the
association's cost of conducting business;
(12) the amount that each member is required to pay for services
rendered to the member by the association, the time of payment,
and the method of collecting the payment;
(13) the marketing contract between the association and its
members;
(14) the requirements for ownership of common stock;
(15) the time and method by which a member may withdraw from the
association or may assign or transfer common stock;
(16) the method of assignment and transfer of a member's
interest or shares of common stock;
(17) the time and conditions on which membership ceases;
(18) the automatic suspension of a member's rights if the member
ceases to be eligible for membership;
(19) the method and effect of expulsion of a member;
(20) the purchase by the association of a member's interest on
the death, withdrawal, or expulsion of the member, on forfeiture
of a membership, or at the option of the association; and
(21) the method by which the value of a member's interest is
determined by conclusive appraisal by the board of directors.
Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER E. MEMBERSHIP CERTIFICATES AND STOCK
Sec. 52.061. STOCK. A marketing association may be organized
with or without capital stock.
Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.062. ISSUANCE OF MEMBERSHIP CERTIFICATES. When a member
of a marketing association organized without capital stock has
paid the membership fee in full, the association shall issue to
the member a certificate of membership.
Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.063. ISSUANCE OF SHARES. (a) Subject to this section,
a marketing association organized with capital stock may from
time to time sell and issue shares of capital stock in the manner
and under the terms prescribed by its bylaws.
(b) A marketing association may issue common stock only to a
person who satisfies the membership requirements prescribed by
Section 52.081 of this code.
(c) A marketing association may not sell and issue shares of
preferred stock to a person who is not a member of the
association unless the association first complies with The
Securities Act, as amended (Article 581-1 et seq., Vernon's Texas
Civil Statutes).
(d) A marketing association may not issue shares of stock to a
member until the member has fully paid for the shares.
(e) A marketing association may accept promissory notes of
members as full or partial payment for stock. The association
shall hold the stock as security for payment of the note. The
association's retention of the stock does not affect the member's
right to vote.
Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.064. COMMON STOCK. (a) If a marketing association
consists of fewer than 20 stockholders, a stockholder may not own
more than one share of the marketing association's issued common
stock. If the marketing association consists of 20 or more
stockholders, a stockholder may not own more than one-twentieth
of a marketing association's issued common stock. A marketing
association with more than 20 stockholders, by its bylaws, may
limit the amount of common stock that one stockholder may own to
an amount less than one-twentieth of the issued common stock.
(b) At any time, except when the association's debts exceed 50
percent of its assets, a marketing association may purchase its
common stock at the book value conclusively determined by its
board of directors and pay cash for the stock within one year
thereafter.
(c) A person may not transfer common stock of a marketing
association to a person who does not produce agricultural
products handled by the association. The association shall state
this restriction in its bylaws and shall print the restriction on
each common stock certificate.
Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 3,
eff. June 14, 1983.
Sec. 52.065. PREFERRED STOCK. (a) A marketing association
organized with capital stock may issue preferred stock with or
without the right to vote.
(b) The association may redeem preferred stock on conditions
provided by the association's articles of incorporation and
printed on the face of the stock certificates.
Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.066. STOCK ISSUED ON PURCHASE OF PROPERTY. (a) If a
marketing association organized with capital stock purchases
stock, property, or an interest in property, it may discharge its
obligations, in whole or part, by exchanging for its acquisition
shares of preferred stock the par value of which equals the value
of the purchased property as determined by the board of
directors.
(b) In the transaction described by Subsection (a) of this
section, the transfer of the purchased property to the
association is considered payment in cash for the issued shares
of preferred stock.
Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER F. MEMBERS
Sec. 52.081. MEMBERSHIP. (a) Membership of a marketing
association is limited to persons who produce agricultural
products handled by or through the association, including the
lessees and tenants of land used to produce those products and
any lessors and landlords who receive as rent part of the crop
raised on the leased land. A marketing association may be a
member of another marketing association.
(b) A marketing association shall admit members under terms and
conditions prescribed in its bylaws.
(c) If a member of a marketing association organized without
capital stock is not a natural person, the member may be
represented by any individual, an associate officer, or one of
its members, authorized in writing to act for it.
Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.082. NEW MEMBERS. (a) A marketing association
organized without capital stock may admit new members.
(b) If the property rights of the association's members are
unequal, a new member is entitled to share the property of the
association with the old members in accordance with the general
rules stated in the articles of incorporation.
Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.083. MEETINGS. (a) As prescribed by its bylaws, a
marketing association annually shall hold one or more regular
meetings of its members.
(b) The board of directors may call a special meeting of the
association at any time.
(c) If, at any time, 10 percent or more of the members file with
the board of directors a petition demanding a special meeting of
the association and stating the specific business to be
considered at the meeting, the board shall call the meeting.
Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.084. NOTICE OF MEETINGS. Not later than the 10th day
before the day of a meeting of a marketing association, the
association shall:
(1) mail to each member notice of the meeting and a statement of
the purpose of the meeting; or
(2) if the bylaws so provide, publish notice of the meeting in a
newspaper of general circulation in the area in which the
association's principal place of business is located.
Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.085. VOTING. (a) Except as provided by Subsection (b)
of this section, a member of a marketing association is entitled
to one vote.
(b) A marketing association may provide in its articles of
incorporation or bylaws for a member association or group to have
more than one vote if the association providing for the vote:
(1) is organized primarily for the production, cultivation, and
care of citrus groves or for processing and marketing citrus
products and:
(A) has its principal office in a county that has at least 500
acres of land planted in citrus groves; and
(B) includes as members one or more associations or groups
organized on a cooperative basis; or
(2) is organized primarily for the harvesting, preserving,
drying, processing, canning, storing, handling, shipping,
marketing, selling, or use of grain or grain-related products.
(c) A marketing association that provides for a member
association or group to have more than one vote under Subsection
(b) shall comply with Section 52.012(a)(2).
(d) In accordance with a bylaw adopted under Section 52.052 of
this code, a marketing association may provide for its members to
vote by proxy or by mail.
Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1995, 74th Leg., ch. 419, Sec. 1.11, eff.
Sept. 1, 1995; Acts 1999, 76th Leg., ch. 339, Sec. 1, eff. May
29, 1999.
Sec. 52.086. TERMINATION OR SUSPENSION OF MEMBERSHIP. In
accordance with its articles of incorporation or a bylaw adopted
under Section 52.052 of this code, a marketing association may
provide for the termination or suspension of membership in the
association and for the purchase of a member's common or
preferred stock, if any, and all other property interest in the
association.
Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 4,
eff. June 14, 1983.
Sec. 52.087. LIABILITY OF MEMBERS. Except for debts contracted
with the association, a member of a marketing association is not
liable for the debts of the association in an amount that exceeds
the amount that is unpaid on the member's membership fee or
subscription to capital stock, including any unpaid balance on
promissory notes given in payment for the stock.
Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER G. ADMINISTRATION
Sec. 52.101. BOARD OF DIRECTORS. (a) A board of directors
shall manage a marketing association.
(b) The board shall be composed of five or more directors who
are elected by the members of the association.
(c) Except as provided by Subsection (d) of this section, a
person must be a member of the association to be eligible to
serve as a director.
(d) As prescribed by the bylaws of the association that is
holding the meeting, a marketing association that is a member of
the association may designate any of its members to vote on
behalf of the member association or to serve as a director of the
association holding the meeting.
Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.102. OFFICERS. (a) The directors shall elect:
(1) a president or chairman;
(2) one or more vice-presidents or vice-chairmen;
(3) a secretary; and
(4) a treasurer.
(b) To be eligible to serve as president, chairman,
vice-president, or vice-chairman, a person must be a director.
(c) The directors may combine the offices of secretary and
treasurer as secretary-treasurer.
(d) A bank or depository may serve as treasurer but is not
considered to be an officer. If a bank or depository serves as
treasurer, the secretary shall perform the usual accounting
duties of the treasurer except that the secretary may deposit
money only as authorized by the board of directors.
Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.103. REMOVAL OF OFFICER OR DIRECTOR. (a) Except as
provided by Subsection (f) of this section, a member of a
marketing association may initiate removal of an officer or
director by filing in writing with the association's secretary:
(1) the charges; and
(2) a petition that is signed by 10 percent of the members and
that requests the removal of the officer or director in question.
(b) The members of the association shall vote on the removal at
the next regular or special meeting of the association.
(c) Before the meeting the association, in writing, shall inform
the officer or director of the charges.
(d) At the meeting the association shall give the officer or
director and the person bringing the charges an opportunity to be
heard in person or by counsel and to present witnesses.
(e) The association, by a majority vote, may remove the officer
or director and fill the vacancy.
(f) If an association's bylaws provide for election of directors
by districts with primary elections in each district, the
petition for removal of a director must state the charges and
must be signed by 20 percent of the members residing in the
district from which the director was elected. The board of
directors shall call a special meeting of the members residing in
that district to consider removal of the director. The members in
that district, by a majority vote, may remove the director.
Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.104. BOND. (a) Each officer, employee, or agent who
handles money or property of a marketing association or any money
or property that is under the control or in possession of a
marketing association shall execute and deliver to the
association an indemnity bond that indemnifies the association
and its members against any fraudulent, dishonest, or unlawful
act by the bonded person and other acts as provided by the
association's bylaws.
(b) If the officers and directors of a marketing association
fail to require a person to execute a bond as required by
Subsection (a) of this section, each officer and director is
personally liable for all losses that would have been recovered
under the bond if the person had been bonded.
Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.105. REFERENDUM. (a) On demand of one-third of the
board of directors, the board shall refer to the entire
membership of a marketing association for decision at the next
special or regular meeting any matter that has been approved or
passed by the board.
(b) The association may call a special meeting to consider the
referred matter.
Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER H. FOREIGN COOPERATIVES
Sec. 52.121. FOREIGN COOPERATIVE CONSIDERED MARKETING
ASSOCIATION. For the purposes of this chapter, a corporation or
association organized, with or without capital stock, under a
cooperative marketing act of another state or of the United
States is considered to be a marketing association if the
corporation or association:
(1) satisfies the requirements of Section 52.012 of this
chapter; and
(2) is composed of persons who, as farmers, planters, ranchers,
dairymen, or nut or fruit growers, produce agricultural products
and who act collectively to process, prepare, handle, and market,
in interstate and foreign commerce, the members' products.
Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.122. PERMITS TO DO BUSINESS. (a) Any cooperative
marketing association incorporated under the laws of another
state may apply for and be granted a permit to do business in
this state. The association shall pay as filing fee the amount
required of domestic corporations organized for a similar
purpose.
(b) A marketing association is not required to have all or part
of a paid-up capital to be entitled to a permit under Subsection
(a) of this section.
Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER I. REMEDIES
Sec. 52.131. BREACH OR THREATENED BREACH OF MARKETING CONTRACT.
(a) If a member breaches or threatens to breach a marketing
contract, the marketing association may sue and, if successful,
is entitled to:
(1) an injunction to prevent further breach of the contract; and
(2) a decree of specific performance of the contract.
(b) Pending the adjudication of an action filed under Subsection
(a) of this section, the association is entitled to a temporary
restraining order and preliminary injunction against the member
if the association files:
(1) a verified complaint showing the breach or threatened
breach; and
(2) sufficient bond.
Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 52.132. INDUCED BREACH OF MARKETING CONTRACT; FALSE
REPORTS. In a civil suit for damages, a person is liable to a
marketing association for an amount equal to three times the
amount of actual damages proven for each offense if the person,
or where the person is a corporation, if an officer or employee
of the corporation:
(1) knowingly induces or attempts to induce a member of the
association to breach the member's marketing contract with the
association; or
(2) maliciously and knowingly spreads false reports concerning
the finances or management of the association.
Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,
1981.
SUBCHAPTER J. FEES AND REPORTS
Sec. 52.151. TAX EXEMPTIONS. A marketing association is exempt
from all franchise or license taxes, except that a marketing
association is exempt from the franchise tax imposed by Chapter
171, Tax Code, only if exempted by that chapter.
Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1981, 67th Leg., p. 2785, ch. 752, Sec.
15(b), eff. Jan. 1, 1982; Acts 1995, 74th Leg., ch. 419, Sec.
2.20, eff. Sept. 1, 1995.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
506, Sec. 5.09, eff. September 1, 2009.