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



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



(2)  For expansion of the corporate equity by
acquisition of additional interest in real property for purposes consistent
with its charter.



(3)  For public benefit or charitable purposes.



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



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



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



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