§421C-25  Allocation and distribution of net
savings.  (a)  At least once a year the members, the directors, or both, as
the articles or bylaws provide, shall apportion the net savings of the
association to one or more of the following categories; except that not less
than ten per cent shall be placed in a surplus fund until such time as the fund
shall equal at least fifty per cent of the paid-up share or membership capital:



(1)  Interest-dividends, within the limitations of
section 421C-19 may be paid upon share or membership capital;



(2)  A portion of the net savings as determined by the
articles or bylaws, may be allocated to an educational fund to be used to
further the understanding of the practices and principles of cooperation;



(3)  The association may also choose to pay a
patronage refund from net savings and this shall be allocated at the same
uniform rate to either the members or to all patrons of the association in
proportion to their individual patronage, and according to the federal Internal
Revenue Code of 1954, as amended; provided that:



(A)  In the case of a member patron, the
patron's proportionate amount of patronage refund shall be distributed to the
patron;



(B)  In the case of nonmember patrons, their
proportionate amount of patronage refund, as the articles or bylaws may
provide, may be distributed to them or, if requested by them, credited to their
account until the amount of share or membership capital subscribed for has been
fully paid.



(4)  The association may also choose to retain some or
all its net savings and allocate it in the manner in which it will benefit the
general welfare of all the members of the association.



(b)  The surplus fund established in subsection
(a) may be expended for capital improvements or emergencies upon a two-thirds
majority vote of the directors, or may be expended under section 421C-22,
421C-23, or 421C-24, by majority vote of the directors. [L 1982, c 97, pt of
§2; am L 2001, c 129, §66]