§421H-4  Use of corporate equity.  (a) The corporate equity shall not be used for distribution to members, but onlyfor the following purposes, and only to the extent authorized by the board,subject to the provisions and limitations of the charter of incorporation andbylaws:

(1)  For the benefit of the corporation or theimprovement of the real property, including its use as collateral for loans.

(2)  For expansion of the corporate equity byacquisition of additional interest in real property for purposes consistentwith its charter.

(3)  For public benefit or charitable purposes.

(b)  Upon sale of the property, dissolution ofthe corporation, or occurrence of a condition requiring termination of thetrust or reversion of title to the real property, the corporate equity shall berequired by the charter, bylaws, or trust or title conditions to be paid out,or title to the property transferred, subject to outstanding encumbrances andliens, and the transfer value of membership shares, for use for public orcharitable purposes.

(c)  The membership shares and cooperative feesare interests in real property for purposes of:

(1)  Cooperative housing corporations under section216 of the federal Internal Revenue Code of 1954, as amended; and

(2)  Exemption from state general excise tax undersection 237-24(16). [L 1987, c 105, pt of §1; am L 1989, c 14, §16; am L 1993,c 350, §16]