CHAPTER 301. COOPERATIVE ASSOCIATIONS
HEALTH AND SAFETY CODE
TITLE 4. HEALTH FACILITIES
SUBTITLE E. COOPERATIVE ASSOCIATIONS
CHAPTER 301. COOPERATIVE ASSOCIATIONS
SUBCHAPTER A. HOSPITAL LAUNDRY COOPERATIVE ASSOCIATIONS
Sec. 301.001. DEFINITIONS. In this subchapter:
(1) "Eligible institution" means an entity engaged in
health-related pursuits that, except for cooperative
associations, is exempt from federal income tax and includes
only:
(A) a municipality;
(B) a political subdivision of the state;
(C) a state-supported health-related institution, including:
(i) The Texas A&M University System;
(ii) The University of Texas System; and
(iii) Texas Woman's University;
(D) a nonprofit health-related institution; or
(E) a cooperative association created under Subchapter B, a unit
of which is located in a county with a population of more than
2.5 million.
(2) "Laundry system" includes:
(A) buildings in which soiled or infected clothing, uniforms, or
linens are laundered;
(B) land and interests in land as sites for buildings or access
to buildings;
(C) equipment and appliances for a laundry operation;
(D) supplies for a laundry operation;
(E) clothing, uniforms, and linens;
(F) automotive and other personal property appropriate for
delivery and pickup services; and
(G) other property and equipment incidental or appropriate to
the operation of laundry facilities.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1991, 72nd Leg., ch. 597, Sec. 74, eff. Sept. 1,
1991.
Sec. 301.002. CREATION OF HOSPITAL LAUNDRY COOPERATIVE
ASSOCIATION. (a) Eligible institutions may create a hospital
laundry cooperative association to establish, operate, and
maintain a laundry system on a nonprofit, cooperative basis
solely for the use and benefit of eligible institutions.
(b) An association is created under the terms prescribed by the
governing bodies of the respective eligible institutions.
(c) An association created under this subchapter shall include
as part of its name "Hospital Laundry Cooperative Association."
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.003. ARTICLES OF INCORPORATION. (a) Eligible
institutions creating a hospital laundry cooperative association
may file articles of incorporation under the general corporation
law of this state, including the Texas Business Corporation Act.
(b) An association incorporated as provided by this section is
governed by the law under which it is incorporated except to the
extent that that law conflicts with this subchapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.004. USE OF PUBLIC FUNDS PROHIBITED. Public funds
appropriated to a state department or to a state institution may
not be used to create a hospital laundry cooperative association
under this subchapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.005. MEMBERSHIP; MEMBERSHIP PRIVILEGES; EXPULSION OF
MEMBERS. (a) An eligible institution may be elected to
membership in a hospital laundry cooperative association by:
(1) the organizers of the association at the time of
organization; or
(2) the board of directors of the association according to the
association's bylaws.
(b) Only an eligible institution may become a member of an
association created under this subchapter.
(c) A membership certificate is transferable only to an eligible
institution in the manner provided by the rules prescribed in the
bylaws.
(d) Each member has voting rights in the management of an
association as prescribed in the bylaws.
(e) A member may be suspended or expelled for misconduct under
the rules prescribed in the bylaws.
(f) An association shall pay an expelled member for cancellation
of the membership if the member's contractual obligations pledged
to the payment of the association's notes, bonds, or other
obligations have been fully paid or other provision has been
made. The amount and date of payment are as prescribed in the
bylaws.
(g) Amounts paid or property conveyed or transferred to an
association by an expelled member and not required to be returned
to the member under Subsection (f) may be retained by the
association. Facilities or property acquired by the association
remains the property of the association and the expelled member
does not have a lien or other right to the facilities or
property.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.006. MEMBERSHIP NOT REQUIRED. A component institution
of a state-supported institution is not required to be a member
of a hospital laundry cooperative association created under this
subchapter but may be a member of one or more associations.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.007. POWERS OF HOSPITAL LAUNDRY COOPERATIVE
ASSOCIATION. A hospital laundry cooperative association may:
(1) acquire, own, and operate a laundry system on a cooperative
basis solely for the benefit of eligible institutions, regardless
of whether the eligible institution is a member of the
association, and may engage in activities for the benefit of
eligible institutions that are necessarily related to the
acquisition, ownership, operation, and maintenance of a laundry
system;
(2) acquire by purchase, lease, or other method land and
interests in land appropriate or reasonably incidental to a
laundry system and may own, hold, improve, develop, and manage
land and interests in land acquired;
(3) construct, improve, enlarge, and equip buildings or other
structures on that land;
(4) encumber or dispose of any land or interests in land,
buildings, or structures owned or held by the association;
(5) acquire by lease, purchase, manufacture, or other method any
personal property appropriate or reasonably incidental to a
laundry system, including property for the cleaning, washing,
steaming, bleaching, dry cleaning, and disinfecting of all types
of clothing and fabrics, and the transportation and distribution
of those articles;
(6) encumber and dispose of any personal property owned or held
by the association;
(7) acquire by purchase or other method uniforms, clothing, or
linen for its members;
(8) borrow or raise money without limit as to amount;
(9) sell, grant security interest in, pledge, or otherwise
dispose of and collect on accounts receivable, contract rights,
and other choses in action; and
(10) make, draw, accept, endorse, execute, and issue bonds,
debentures, notes, or other obligations for money borrowed or
payment of property purchased, and may secure the payment by
mortgage on, creation of security interests in, or pledge of or
conveyance of assignment in trust of all or part of any property
held by the association.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.008. COST OF SERVICES. A hospital laundry cooperative
association may determine the amount to be charged for providing
laundry services through its laundry system to eligible
institutions.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.009. BONDS, NOTES, OR OTHER OBLIGATIONS. (a) A
hospital laundry cooperative association may borrow money from
public or private sources or issue bonds, notes, or other
obligations in amounts necessary to create, enlarge, maintain, or
operate a laundry system.
(b) The association shall pay bonds, notes, or other obligations
of the association solely from revenue received from the
operation of a laundry system or from funds specifically provided
for that purpose from other sources. An association may pledge
its revenues or funds to secure payment of the bonds, notes, or
other obligations.
(c) Bonds, notes, or other obligations issued by an association
do not constitute indebtedness of the state or of any eligible
institution that is a member of the association. Holders of
bonds, notes, or other obligations may not demand or enforce
payment of principal of or interest on the bonds, notes, or other
obligations out of funds other than those specifically pledged to
secure payment of those bonds, notes, or other obligations.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.010. BONDS AS INVESTMENTS. Bonds issued by a hospital
laundry cooperative association under this subchapter are legal
and authorized investments for:
(1) a bank;
(2) a savings and loan association;
(3) an insurance company;
(4) a fiduciary;
(5) a trustee; and
(6) a sinking fund of a municipality, county, school district,
or other political subdivision or corporation of the state or
other public fund of the state or a state agency, including the
permanent school fund.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.011. BONDS AS SECURITY FOR DEPOSITS. A hospital
laundry cooperative association's bonds may secure the deposits
of public funds of the state or a municipality, county, school
district, or other political subdivision or corporation of the
state. The bonds are lawful and sufficient security for those
deposits in an amount up to their face value, if accompanied by
all appurtenant unmatured coupons.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.012. LIABILITY TO CREDITORS. Except as provided by
this subchapter, a member of a hospital laundry cooperative
association is not liable to the association or its creditors in
excess of the amount contracted for by the member. When the
contract is paid in the amount and at the time specified in the
contract, the member's liability ceases.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.013. TAX EXEMPTION. (a) A hospital laundry
cooperative association created under this subchapter is not
required to pay a tax or assessment on its property or on any
purchase made by the association.
(b) Except as provided by Subsection (c), an association is not
required to pay an annual franchise tax.
(c) An association is exempt from the franchise tax imposed by
Chapter 171, Tax Code, only if the association is exempted by
that chapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.014. ANNUAL REPORT. A hospital laundry cooperative
association shall file an annual report with the secretary of
state showing the assets and conditions of the association's
affairs.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.015. SURPLUS REVENUE. The directors of a hospital
laundry cooperative association may, in accordance with the
association's bylaws, deposit to the credit of the surplus fund
any surplus revenue derived from the laundry system or divide the
surplus revenue among the patrons in proportion to the patrons'
respective contributions to the working capital of the
association and their patronage.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.016. LOANS TO MEMBERS PROHIBITED. A hospital laundry
cooperative association may not loan money to a member.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
SUBCHAPTER B. MISCELLANEOUS COOPERATIVE ASSOCIATIONS
Sec. 301.031. DEFINITIONS. In this subchapter:
(1) "Eligible institution" means an entity engaged in
health-related pursuits that, except for cooperative
associations, is exempt from federal income tax and includes
only:
(A) a municipality;
(B) a political subdivision of the state;
(C) a health-related institution supported by the state or
federal government or by a federal department, division, or
agency, including:
(i) The Texas A&M University System;
(ii) The University of Texas System;
(iii) Texas Woman's University; and
(iv) the Children's Nutrition Research Center;
(D) a nonprofit health-related institution; and
(E) a cooperative association created to provide a system, a
unit of which is located in a county that has a population of
more than 1.3 million and in which a municipality with a
population of more than one million is primarily located, or in a
county contiguous to a county having those characteristics.
(2) "System" includes all property and facilities, including
buildings and land and interests in land, necessary, incidental,
or appropriate to provide the following services for the benefit
of members of a cooperative association:
(A) laundering services;
(B) central heating and cooling services, including steam and
chilled water supply;
(C) communication services, including broadcast and other
electronic communications, cable television, and transmission of
X-rays, records, and documents;
(D) facilities and services for parking and traffic control,
including the installation of appropriate traffic control devices
on private streets;
(E) preparation, processing, delivery, and service of food,
including food necessary for special diets;
(F) central administrative, financial, billing, conference, and
educational services;
(G) child care services for the children of employees,
consultants, students, and volunteers of cooperative association
members, and temporary child care services for the children of
patients and customers of those members;
(H) waste removal and disposal services of all types, including
incineration and the removal, disposal, and abatement of
hazardous wastes, including asbestos, lead, and other toxic
substances;
(I) generation, cogeneration, purchase, sale, and pooling of
energy in any form to the extent reasonably necessary to support
the activities of a cooperative association;
(J) production and publication of educational or research
materials;
(K) storage and warehousing services;
(L) transportation services;
(M) police and security services; and
(N) housing for employees, consultants, students, volunteers,
and patients of members of the cooperative association.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by Acts 1989, 71st Leg., ch. 1100, Sec. 5.05(a), eff.
Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 597, Sec. 75, eff. Sept.
1, 1991; Acts 2001, 77th Leg., ch. 669, Sec. 38, eff. Sept. 1,
2001.
Sec. 301.032. CREATION OF COOPERATIVE ASSOCIATION. (a)
Eligible institutions may create a cooperative association to
establish, operate, and maintain a system on a nonprofit,
cooperative basis solely for the use and benefit of eligible
institutions.
(b) An association is created under the terms prescribed by the
governing bodies of the respective eligible institutions.
(c) An association created under this subchapter shall include
as part of its name "Cooperative Association."
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.033. ARTICLES OF INCORPORATION. (a) Eligible
institutions creating a cooperative association may prepare and
file articles of incorporation under the general corporation law
of this state, including the Texas Business Corporation Act.
(b) An association incorporated as provided by this section is
governed by the law under which it is incorporated except to the
extent that that law conflicts with this subchapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.034. USE OF PUBLIC FUNDS PROHIBITED. Public funds
appropriated to a state department or to a state institution may
not be used to create a cooperative association under this
subchapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.035. MEMBERSHIP; MEMBERSHIP PRIVILEGES; EXPULSION OF
MEMBERS. (a) An eligible institution may be elected to
membership in a cooperative association by:
(1) the organizers of the association at the time of
organization; or
(2) the board of directors of the association according to the
association's bylaws.
(b) Only an eligible institution may become a member of an
association created under this subchapter.
(c) A membership certificate is transferable only to an eligible
institution in the manner provided by the rules prescribed in the
bylaws.
(d) Each member has voting rights in the management of an
association as prescribed in the bylaws.
(e) A member may be suspended or expelled for misconduct under
the rules prescribed in the bylaws.
(f) An association shall pay an expelled member for cancellation
of the membership, if the member's contractual obligations
pledged to the payment of the association's notes, bonds, or
other obligations have been fully paid or other provision has
been made. The amount and date of payment are as prescribed in
the bylaws.
(g) Amounts paid or property conveyed or transferred to an
association by an expelled member and not required to be returned
to the member under Subsection (f) may be retained by the
association. Facilities or property acquired by the association
remains the property of the association and the expelled member
does not have a lien or other right to the facilities or
property.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.036. MEMBERSHIP NOT REQUIRED. A component institution
of an institution that is supported by the federal or state
government or a department, division, or agency of the federal
government is not required to be a member of a cooperative
association created under this subchapter but may be a member of
one or more associations.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.037. POWERS OF COOPERATIVE ASSOCIATION. To carry out
the purposes of this subchapter, a cooperative association may:
(1) acquire, own, and operate a system on a cooperative basis
solely for the benefit of eligible institutions, regardless of
whether the eligible institution is a member of the association,
and may engage in activities for the benefit of eligible
institutions that are necessarily related to the acquisition,
ownership, operation, and maintenance of a system;
(2) acquire by purchase, lease, or other method land and
interests in land appropriate or reasonably incidental to a
system and may own, hold, improve, develop, and manage any land
and interests in land acquired;
(3) construct, improve, enlarge, or equip buildings or other
structures on that land;
(4) encumber or dispose of any land or interests in land,
buildings, or structures owned or held by the association;
(5) acquire by lease, purchase, manufacture, or other method any
personal property appropriate or reasonably incidental to a
system;
(6) borrow or raise money;
(7) sell, grant security interest in, pledge, or otherwise
dispose of and collect on accounts receivable, contract rights,
and other choses in action; and
(8) make, draw, accept, endorse, execute, and issue bonds,
debentures, notes, or other obligations for money borrowed or
payment of property purchased, and may secure the payment by
mortgage on, creation of security interests in, or pledge of or
conveyance of assignment in trust of all or part of any property
held by the association.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.038. PROVISION OF SERVICES; COSTS. (a) A cooperative
association may provide services from a system to eligible
institutions and may determine the amount to be charged for
providing the services.
(b) Notwithstanding Sections 301.032 and 301.037, a cooperative
association may provide from a system central heating and cooling
services, including steam and heated and chilled water supply, to
persons other than eligible institutions and may determine the
amount to be charged for providing services.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
939, Sec. 10, eff. September 1, 2007.
Sec. 301.039. BONDS, NOTES, OR OTHER OBLIGATIONS. (a) A
cooperative association may borrow money from public or private
sources or issue bonds, notes, or other obligations in amounts
necessary to create, enlarge, maintain, or operate a system.
(b) The association shall pay the bonds, notes, or other
obligations of the association solely from revenue received from
the operation of a system or from funds specifically provided for
that purpose from other sources. An association may pledge its
revenues or funds to secure payment of the bonds, notes, or other
obligations.
(c) Bonds, notes, or other obligations issued by an association
do not constitute indebtedness of the state or of any eligible
institution that is a member of the association. Holders of
bonds, notes, or other obligations may not demand or enforce
payment of principal of or interest on the bonds, notes, or other
obligations out of funds other than those specifically pledged to
secure payment of those bonds, notes, or other obligations.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.040. BONDS AS INVESTMENTS. Bonds issued by a
cooperative association under this subchapter are legal and
authorized investments for:
(1) a bank;
(2) a savings and loan association;
(3) an insurance company;
(4) a fiduciary; and
(5) a trustee.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.041. LIABILITY TO CREDITORS. (a) Except as provided
by this subchapter, a member of a cooperative association is not
liable to the association or its creditors in excess of the
amount contracted for by the member. When the contract is paid in
the amount and at the time specified in the contract, the
member's liability ceases.
(b) This subchapter does not authorize a state-supported
health-related institution to make a financial commitment beyond
the current budget period for the institution.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.042. TAX EXEMPTION. (a) A cooperative association
created under this subchapter is not required to pay a tax or
assessment on its property or on any purchase made by the
association.
(b) Except as provided by Subsection (c), an association is not
required to pay an annual franchise tax.
(c) An association is exempt from the franchise tax imposed by
Chapter 171, Tax Code, only if the association is exempted by
that chapter.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.043. ANNUAL REPORT. A cooperative association shall
file an annual report with the secretary of state showing the
assets and conditions of the association's affairs.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.044. SURPLUS REVENUE. The directors of a cooperative
association may, in accordance with the association's bylaws,
deposit to the credit of the surplus fund any surplus revenue
derived from a system or divide the surplus revenue among the
patrons in proportion to the patrons' respective contributions to
the working capital of the association and their patronage.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.045. LOANS TO MEMBERS PROHIBITED. A cooperative
association may not loan money to a member.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.046. LIBERAL CONSTRUCTION. This subchapter shall be
liberally construed.
Acts 1989, 71st Leg., ch. 678, Sec. 1, eff. Sept. 1, 1989.
Sec. 301.047. CONSTRUCTION OF SUBCHAPTER. (a) This subchapter
does not prevent a cooperative association from:
(1) creating recourse or nonrecourse debt in the form of bonds,
debentures, notes, or any other form of obligation;
(2) encumbering, mortgaging, pledging, or granting a security
interest in any property of the cooperative association;
(3) refunding existing debt or obligations by any means
available under this subchapter; or
(4) otherwise exercising all express or implied powers granted
by Section 301.033(b), 301.037, 301.038, 301.039, or 301.044, or
granted by state corporation laws.
(b) This section only clarifies the powers of cooperative
associations and does not expand their powers.
Added by Acts 1993, 73rd Leg., ch. 902, Sec. 1, eff. June 19,
1993.