CHAPTER 55. COOPERATIVE CREDIT ASSOCIATIONS
AGRICULTURE CODE
TITLE 4. AGRICULTURAL ORGANIZATIONS
CHAPTER 55. COOPERATIVE CREDIT ASSOCIATIONS
Sec. 55.001. POWERS. An association formed under this chapter
may:
(1) borrow money for and lend money to its members;
(2) discount, rediscount, endorse, purchase, or sell notes,
bills, or other evidences of indebtedness of its members that may
be discounted or rediscounted under the rules prescribed by the
Farm Credit Administration; and
(3) exercise the powers authorized by the general corporation
laws of this state unless the law granting the power conflicts
with this chapter.
Acts 1981, 67th Leg., p. 1121, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.002. INCORPORATORS. (a) Ten or more persons who
fulfill the requirements of Subsection (b) of this section may
organize a private cooperative credit association.
(b) To be eligible to be an incorporator a person must:
(1) be a citizen of this state; and
(2) be engaged in the production, or production and marketing,
of staple agricultural products or in the raising, breeding,
feeding, fattening, or marketing of livestock.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.003. ARTICLES OF INCORPORATION. In addition to the
requirements prescribed by the general corporation laws of the
state, the articles of incorporation of an association formed
under this chapter must state that the association may not obtain
loans for, make loans to, purchase notes from, or discount notes
for a person who is not a member of the association.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.004. CAPITAL STOCK. (a) Except as provided by
Subsection (b) of this section, an association may be organized
under this chapter with or without capital stock.
(b) If an association formed under this chapter is organized to
lend money secured by chattel mortgages on livestock, the
association shall be organized with capital stock.
(c) An association formed under this chapter with capital stock
automatically shall increase its stock at the rate of 10 percent
of the amount of loans or discounts made by the association to
its members.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.005. LOANS. (a) Each applicant for a loan or discount
by an association formed under this chapter shall become a
subscriber to the association's capital stock in an amount equal
to 10 percent of the amount of the loan or discount for which
application is made.
(b) The applicant shall pay for the stock required to be
purchased by Subsection (a) of this section at or before the time
that the loan is closed or the discount is granted.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.006. RATIO OF CAPITAL TO LOANS. (a) The total amount
of the outstanding loans or discounts of an association formed
under this chapter may not exceed an amount equal to 10 times the
amount of the association's paid-up unimpaired capital stock.
(b) The articles of incorporation of an association formed under
this chapter must state the requirement of Subsection (a) of this
section.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.007. REPURCHASE OF STOCK. (a) The board of directors
of an association formed under this chapter may authorize the
purchase of the association's capital stock at the book value
conclusively determined by the board and pay cash for the stock
within one year thereafter if:
(1) the liabilities of the association are less than 50 percent
of its assets; and
(2) the directors determined that the stock may be purchased
without impairment of the association's financial condition.
(b) The board of directors in its discretion may retire pro rata
stock held by a member or group of members whose loans have been
paid in whole or part.
Acts 1981, 67th Leg., p. 1122, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.008. REPORTS. Before January 11, April 11, July 11, and
October 11, each association formed under this chapter with
capital stock shall file with the secretary of state:
(1) an accurate report showing the association's financial
condition and the amount of outstanding paid-up capital stock on
January 1, April 1, July 1, or October 1 preceding the report;
and
(2) a fee of $2.50.
Acts 1981, 67th Leg., p. 1123, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.009. FEES. (a) When the articles of incorporation of
an association formed under this chapter are filed, the
incorporators shall pay to the secretary of state a filing fee of
$10.
(b) Each association formed under this chapter without capital
stock shall pay an annual license fee of $10.
Acts 1981, 67th Leg., p. 1123, ch. 388, Sec. 1, eff. Sept. 1,
1981.
Sec. 55.010. EXEMPTION FROM FRANCHISE TAX. An association
formed under this chapter is exempt from all franchise or other
license taxes, except that:
(1) an association is not exempt from the annual license fee
under Section 55.009 of this code; and
(2) an association is exempt from the franchise tax imposed by
Chapter 171, Tax Code, only if exempted by that chapter.
Acts 1981, 67th Leg., p. 1123, ch. 388, Sec. 1, eff. Sept. 1,
1981. Amended by Acts 1981, 67th Leg., p. 2786, ch. 752, Sec.
15(c), eff. Jan. 1, 1982.