CHAPTER 52. COOPERATIVE MARKETING ASSOCIATIONS

State Codes and Statutes

Statutes > Texas > Agriculture-code > Title-4-agricultural-organizations > Chapter-52-cooperative-marketing-associations

AGRICULTURE CODE

TITLE 4. AGRICULTURAL ORGANIZATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 52.001. POLICY. The purpose of this chapter is:

(1) to promote and encourage intelligent and orderly production,

cultivation, and care of citrus groves and marketing of

agricultural products through cooperation;

(2) to eliminate speculation and waste in the production and

marketing of agricultural products;

(3) to make production and distribution of agricultural products

as direct as effectively possible between the producer and

consumer; and

(4) to stabilize the production and marketing of agricultural

products.

Acts 1981, 67th Leg., p. 1102, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.002. DEFINITIONS. In this chapter:

(1) "Agricultural products" includes horticultural,

viticultural, forestry, dairy, livestock, poultry, and bee

products and any farm and ranch product.

(2) "Marketing association" means an association organized under

this chapter.

(3) "Member" includes a member of an association organized under

this chapter without capital stock and a holder of common stock

of an association organized under this chapter with capital

stock.

Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.003. NONPROFIT ORGANIZATION. Because a marketing

association is organized not to make money for itself or for its

members as individuals but only to make money for its members as

producers, the association is considered to be a nonprofit

organization.

Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.004. APPLICATION OF GENERAL CORPORATION LAWS. The

general corporation laws of the state apply to marketing

associations unless those laws conflict with this chapter.

Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.005. ASSOCIATIONS NOT IN RESTRAINT OF TRADE. (a) A

marketing association is not a combination in restraint of trade

or an illegal monopoly.

(b) Organizing under this chapter is not an attempt to lessen

competition or to fix prices arbitrarily.

are not illegal or in restraint of trade.

Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.006. DURATION OF EXISTENCE. Each association

incorporated and organized under this chapter after August 1,

1987, has perpetual existence unless a limited duration is

provided for and stated in its charter or articles of

incorporation or in an amendment to either of the documents. Each

association incorporated and organized under this chapter that is

in existence on August 1, 1987, has perpetual existence unless a

limited duration is provided for and stated in an amendment to

its charter or articles of incorporation.

Added by Acts 1987, 70th Leg., ch. 695, Sec. 1, eff. Aug. 31,

1987.

SUBCHAPTER B. PURPOSE AND POWERS

Sec. 52.011. PURPOSES. (a) A marketing association may be

incorporated to engage in any activity connected with:

(1) the production, cultivation, and care of citrus groves;

(2) the harvesting, preserving, drying, processing, canning,

storing, handling, shipping, marketing, selling, or use of

agricultural products of its members;

(3) the manufacturing or marketing of by-products of its

members' agricultural products;

(4) the manufacturing, selling, or supplying to its members of

machinery, equipment, or supplies; or

(5) the financing of any of the activities authorized by this

section.

(b) The activities authorized by Subsection (a) of this section

may extend to nonmembers, to the production, cultivation, and

care of lands owned or cultivated by nonmembers, and to products

of nonmembers as limited by Section 52.012 of this code.

Acts 1981, 67th Leg., p. 1103, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.012. RESTRICTIONS. (a) A marketing association shall

be operated for the mutual benefit of its members, as producers,

and shall conform to one or both of the following requirements:

(1) a member of the association may not have more than one vote

based on the member's ownership of stock or membership capital in

the association; or

(2) the association may not pay dividends on stock or membership

capital in excess of eight percent a year.

(b) A marketing association may deal in the products and

supplies of nonmembers. However, except as provided by Subsection

nonmember products and supplies that is not greater than the

value of the products that it handles for its members.

production, cultivation, and care of citrus groves or for the

processing and marketing of citrus products and for which the

principal offices are located in a county in which not less than

500 acres of land are planted in producing citrus groves may deal

in the products and supplies of nonmembers to an amount that is

greater than the value of the products that it handles for its

members for the 10-year period immediately following a natural

disaster, such as a severe freeze, during which the citrus crops

of the association's membership are substantially reduced as a

direct result of the disaster.

Acts 1981, 67th Leg., p. 1104, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 575, Sec. 1, eff. June

12, 1985; Acts 1993, 73rd Leg., ch. 147, Sec. 1, eff. Aug. 30,

1993.

Sec. 52.013. GENERAL POWERS. A marketing association may:

(1) engage in any activity connected with:

(A) the production, cultivation, and care of citrus groves;

(B) the marketing, selling, harvesting, preserving, drying,

processing, canning, packing, storing, handling, or use of any

agricultural products produced or delivered to it by its members;

by-products of those agricultural products;

(D) the purchase, hiring, or use by its members of supplies,

machinery, or equipment; and

(E) the financing of an activity enumerated by Paragraphs (A)

through (D) of this subdivision;

(2) borrow money and make advances to its members;

(3) act as an agent or representative of any member in an

activity authorized by Subdivision (1) or (2) of this section;

(4) acquire, hold, own, exercise all rights of ownership in,

sell, transfer, or pledge shares of capital stocks or bonds of a

corporation or association, including a bank for cooperatives

organized under the Farm Credit Act of 1933, engaged in an

activity related to that of the association incorporated under

this chapter or engaged in the handling or marketing of a product

handled by the association;

(5) establish reserves and invest the money in those reserves in

bonds or other property as provided by the association's bylaws;

(6) buy, hold, and exercise all privileges of ownership over

real or personal property that is determined by the association

to be necessary or convenient for, or incidental to, conducting

and operating its business;

(7) perform, in or outside this state, acts that are necessary,

suitable, or proper to accomplish the purposes and objectives

permitted by this section or that are conducive to or expedient

for the interest or benefit of the association, and may contract

for the performance of those acts;

(8) possess and exercise, in or outside this state, all powers,

rights, and privileges necessary for or incidental to the

purposes for which the association is organized or the activities

in which it is engaged;

(9) exercise the rights, powers, and privileges that are granted

by the laws of the state to general corporations and that are not

inconsistent with this chapter; and

(10) deliver money to a scholarship fund for rural students.

Acts 1981, 67th Leg., p. 1104, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1997, 75th Leg., ch. 904, Sec. 3, eff.

Sept. 1, 1997.

Sec. 52.014. INTEREST IN OTHER CORPORATIONS. (a) A marketing

association may organize, operate, own, control, have an interest

in, own stock of, or be a member of any other corporation,

organized with or without capital stock, that is engaged in

preserving, drying, pressing, canning, packing, storing,

handling, shipping, using, manufacturing, marketing, or selling

agricultural products handled by the association or the

by-products of those products.

(b) If a corporation described by Subsection (a) of this section

is a warehousing corporation, it may issue a legal warehouse

receipt to the association or to any person. The receipt is

adequate collateral limited to the current value of the commodity

represented by the receipt. If a warehouse is licensed or

licensed and bonded under the laws of this state or of the United

States, its warehouse receipts may not be challenged or

discriminated against because of the association's total or

partial ownership or control of it.

Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.015. CONTRACTS AND AGREEMENTS WITH OTHER ASSOCIATIONS.

(a) A marketing association, by resolution of its board of

directors, may make all necessary stipulations, agreements,

contracts, and arrangements with any other cooperative

corporation or association formed in this or any other state for

the cooperative and more economical conduct of its business or a

part of its business.

(b) Two or more marketing associations, jointly or separately,

may use the same methods and agencies to conduct their respective

businesses.

Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.016. MARKETING CONTRACT. (a) A marketing association

may execute a marketing contract with its members requiring the

members to sell, for a period not exceeding 10 years, all or a

specified part of their agricultural products or specified

commodities exclusively to or through the association or any

facilities to be created by the association.

(b) The contract may provide that the association may:

(1) sell or resell its members' products with or without taking

title to the products; and

(2) pay to its members the resale price less necessary expenses.

under Subsection (b) of this section include:

(1) sales, overhead, and other expenses;

(2) interest on preferred stock, not exceeding eight percent a

year;

(3) interest on common stock, not exceeding eight percent a

year; and

(4) reserves, including reserves for redeeming any stock issued.

(d) A marketing association's bylaws and marketing contract may:

(1) fix as liquidated damages specific amounts to be paid by a

member if the member breaches the marketing contract regarding

the sale, delivery, or withholding of products; and

(2) provide that the member will pay all costs, premiums for

bonds, expenses, and fees if the association brings an action on

the contract.

Acts 1981, 67th Leg., p. 1105, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER C. INCORPORATION

Sec. 52.031. INCORPORATORS. Five or more persons who produce

agricultural products or three or more marketing associations may

form a marketing association under this chapter.

Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.032. PRELIMINARY INVESTIGATION. (a) Every group of

persons considering the organization of a marketing association

is urged to communicate with the department.

(b) On request, the department shall inform the group of:

(1) the results of a survey of the marketing conditions

affecting the commodities to be handled by the proposed

association; and

(2) the probability of the association's success as determined

from those results.

Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.033. EXECUTION OF ARTICLES OF INCORPORATION. (a) Each

marketing association shall prepare and file articles of

incorporation signed by each incorporator.

(b) One of the incorporators shall acknowledge the articles

before an officer authorized by the laws of the state to take and

certify acknowledgments of deeds and conveyances.

Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.034. CONTENTS OF ARTICLES OF INCORPORATION. (a) The

articles of incorporation must state:

(1) the name of the association;

(2) the term of existence, if it is limited;

(3) the purpose for which the association is formed;

(4) the location and street address of the association's

principal place of business;

(5) the number of directors; and

(6) the term of office of each director.

(b) If the association is organized without capital stock, the

articles must state whether property rights and interests of each

member are equal or unequal, and if unequal, the general rules

applicable to all members by which the property rights and

interests of each are determined and fixed.

articles must state:

(1) the amount of capital stock authorized;

(2) the number of shares authorized;

(3) the par value of the shares; and

(4) if preferred stock is to be issued, the number of shares of

common stock, the number of shares of preferred stock, the

rights, preferences, and privileges granted, and the conditions

under which the association may redeem the preferred stock.

Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., p. 2605, ch. 693, Sec. 24,

eff. Aug. 31, 1981; Acts 1987, 70th Leg., ch. 695, Sec. 2, eff.

Aug. 31, 1987.

Sec. 52.035. FILING OF ARTICLES OF INCORPORATION. (a) The

incorporators shall file the articles of incorporation in

accordance with the general corporation laws of the state.

(b) Repealed by Acts 2009, 81st Leg., R.S., Ch. 506, Sec.

5.35(5), eff. September 1, 2009.

incorporators are not required to obtain subscriptions or payment

for any part of the association's capital stock as a prerequisite

of filing the articles.

Acts 1981, 67th Leg., p. 1106, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

506, Sec. 5.35(5), eff. September 1, 2009.

Sec. 52.036. EFFECT OF FILING ARTICLES OF INCORPORATION. When

the articles of incorporation are filed with the secretary of

state, all courts shall receive the articles or a certified copy

of the articles as prima facie evidence of:

(1) facts stated in the articles; and

(2) compliance with requirements for incorporation under this

chapter.

Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.037. AMENDMENT OF ARTICLES OF INCORPORATION. (a) A

marketing association may amend the articles of incorporation at

any regular meeting of the association or at a special meeting

for that purpose, at which at least 10 percent of the members are

voting in person or by proxy or mail.

(b) An amendment must first be approved by two-thirds of the

directors and then, except as provided by Subsection (c) of this

section, adopted by:

(1) a simple majority vote when 50 percent or more of the

members vote in person or by proxy or mail;

(2) a two-thirds majority vote when less than 50 percent but 25

percent or more of the members vote in person or by proxy or

mail; or

(3) a three-fourths majority vote when less than 25 percent but

10 percent or more of the members vote in person or by proxy or

mail.

this code for determining the property rights and interests of

members of a marketing association formed without capital stock

may be adopted by a vote or written consent of two-thirds of the

members who are present at a meeting of the association at which

a quorum is present or who are voting by proxy or mail as

prescribed by an association bylaw.

(d) After an amendment is adopted, the amendment shall be filed

in accordance with the general corporation laws of the state.

Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1550, ch. 296, Sec. 1,

eff. June 14, 1983.

Sec. 52.038. EXISTING CORPORATIONS AND ASSOCIATIONS. Any

corporation or association organized under prior law before March

1, 1921, may elect, by a majority vote of its members or

stockholders, to adopt this chapter and become subject to it by:

(1) adopting the restrictions provided by this chapter; and

(2) executing, in duplicate on forms supplied by the secretary

of state, an instrument, signed and acknowledged by its

directors, stating that the entity, by a majority vote of its

members or stockholders, has decided to accept the benefits of

and be bound by this chapter.

Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

506, Sec. 5.08, eff. September 1, 2009.

SUBCHAPTER D. BYLAWS

Sec. 52.051. ADOPTION. (a) A marketing association shall adopt

bylaws before the 31st day after the day on which the articles of

incorporation are filed with the secretary of state.

(b) The initial bylaws may be adopted by a two-thirds vote of

the incorporating directors and then:

(1) a simple majority vote when 50 percent or more of the

members vote in person or by proxy or mail;

(2) a two-thirds majority vote when less than 50 percent but 25

percent or more of the members vote in person or by proxy or

mail; or

(3) a three-fourths majority vote when less than 25 percent but

10 percent or more of the members vote in person or by proxy or

mail.

Acts 1981, 67th Leg., p. 1107, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 2,

eff. June 14, 1983.

Sec. 52.052. CONTENTS. The bylaws may provide for one or more

of the following:

(1) the time, place, and manner of calling and conducting

meetings of the association;

(2) the number and qualifications of the members;

(3) the number of members constituting a quorum;

(4) the right of members to vote by proxy, mail, or both and the

conditions, method, and effects of the vote;

(5) the method by which a member that is an association may cast

its vote;

(6) the number of directors constituting a quorum;

(7) the qualifications, compensation, duties, and terms of

directors and officers;

(8) the time of the election of directors and officers and the

method of giving notice of the election;

(9) the penalties for violations of the bylaws;

(10) the amount of entrance, organization, and membership fees,

if any, the method of collecting the fees, and the purposes for

which the association must use the fees;

(11) the amount, if any, that each member must pay for the

association's cost of conducting business;

(12) the amount that each member is required to pay for services

rendered to the member by the association, the time of payment,

and the method of collecting the payment;

(13) the marketing contract between the association and its

members;

(14) the requirements for ownership of common stock;

(15) the time and method by which a member may withdraw from the

association or may assign or transfer common stock;

(16) the method of assignment and transfer of a member's

interest or shares of common stock;

(17) the time and conditions on which membership ceases;

(18) the automatic suspension of a member's rights if the member

ceases to be eligible for membership;

(19) the method and effect of expulsion of a member;

(20) the purchase by the association of a member's interest on

the death, withdrawal, or expulsion of the member, on forfeiture

of a membership, or at the option of the association; and

(21) the method by which the value of a member's interest is

determined by conclusive appraisal by the board of directors.

Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER E. MEMBERSHIP CERTIFICATES AND STOCK

Sec. 52.061. STOCK. A marketing association may be organized

with or without capital stock.

Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.062. ISSUANCE OF MEMBERSHIP CERTIFICATES. When a member

of a marketing association organized without capital stock has

paid the membership fee in full, the association shall issue to

the member a certificate of membership.

Acts 1981, 67th Leg., p. 1108, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.063. ISSUANCE OF SHARES. (a) Subject to this section,

a marketing association organized with capital stock may from

time to time sell and issue shares of capital stock in the manner

and under the terms prescribed by its bylaws.

(b) A marketing association may issue common stock only to a

person who satisfies the membership requirements prescribed by

Section 52.081 of this code.

preferred stock to a person who is not a member of the

association unless the association first complies with The

Securities Act, as amended (Article 581-1 et seq., Vernon's Texas

Civil Statutes).

(d) A marketing association may not issue shares of stock to a

member until the member has fully paid for the shares.

(e) A marketing association may accept promissory notes of

members as full or partial payment for stock. The association

shall hold the stock as security for payment of the note. The

association's retention of the stock does not affect the member's

right to vote.

Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.064. COMMON STOCK. (a) If a marketing association

consists of fewer than 20 stockholders, a stockholder may not own

more than one share of the marketing association's issued common

stock. If the marketing association consists of 20 or more

stockholders, a stockholder may not own more than one-twentieth

of a marketing association's issued common stock. A marketing

association with more than 20 stockholders, by its bylaws, may

limit the amount of common stock that one stockholder may own to

an amount less than one-twentieth of the issued common stock.

(b) At any time, except when the association's debts exceed 50

percent of its assets, a marketing association may purchase its

common stock at the book value conclusively determined by its

board of directors and pay cash for the stock within one year

thereafter.

association to a person who does not produce agricultural

products handled by the association. The association shall state

this restriction in its bylaws and shall print the restriction on

each common stock certificate.

Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 3,

eff. June 14, 1983.

Sec. 52.065. PREFERRED STOCK. (a) A marketing association

organized with capital stock may issue preferred stock with or

without the right to vote.

(b) The association may redeem preferred stock on conditions

provided by the association's articles of incorporation and

printed on the face of the stock certificates.

Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.066. STOCK ISSUED ON PURCHASE OF PROPERTY. (a) If a

marketing association organized with capital stock purchases

stock, property, or an interest in property, it may discharge its

obligations, in whole or part, by exchanging for its acquisition

shares of preferred stock the par value of which equals the value

of the purchased property as determined by the board of

directors.

(b) In the transaction described by Subsection (a) of this

section, the transfer of the purchased property to the

association is considered payment in cash for the issued shares

of preferred stock.

Acts 1981, 67th Leg., p. 1109, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER F. MEMBERS

Sec. 52.081. MEMBERSHIP. (a) Membership of a marketing

association is limited to persons who produce agricultural

products handled by or through the association, including the

lessees and tenants of land used to produce those products and

any lessors and landlords who receive as rent part of the crop

raised on the leased land. A marketing association may be a

member of another marketing association.

(b) A marketing association shall admit members under terms and

conditions prescribed in its bylaws.

capital stock is not a natural person, the member may be

represented by any individual, an associate officer, or one of

its members, authorized in writing to act for it.

Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.082. NEW MEMBERS. (a) A marketing association

organized without capital stock may admit new members.

(b) If the property rights of the association's members are

unequal, a new member is entitled to share the property of the

association with the old members in accordance with the general

rules stated in the articles of incorporation.

Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.083. MEETINGS. (a) As prescribed by its bylaws, a

marketing association annually shall hold one or more regular

meetings of its members.

(b) The board of directors may call a special meeting of the

association at any time.

the board of directors a petition demanding a special meeting of

the association and stating the specific business to be

considered at the meeting, the board shall call the meeting.

Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.084. NOTICE OF MEETINGS. Not later than the 10th day

before the day of a meeting of a marketing association, the

association shall:

(1) mail to each member notice of the meeting and a statement of

the purpose of the meeting; or

(2) if the bylaws so provide, publish notice of the meeting in a

newspaper of general circulation in the area in which the

association's principal place of business is located.

Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.085. VOTING. (a) Except as provided by Subsection (b)

of this section, a member of a marketing association is entitled

to one vote.

(b) A marketing association may provide in its articles of

incorporation or bylaws for a member association or group to have

more than one vote if the association providing for the vote:

(1) is organized primarily for the production, cultivation, and

care of citrus groves or for processing and marketing citrus

products and:

(A) has its principal office in a county that has at least 500

acres of land planted in citrus groves; and

(B) includes as members one or more associations or groups

organized on a cooperative basis; or

(2) is organized primarily for the harvesting, preserving,

drying, processing, canning, storing, handling, shipping,

marketing, selling, or use of grain or grain-related products.

association or group to have more than one vote under Subsection

(b) shall comply with Section 52.012(a)(2).

(d) In accordance with a bylaw adopted under Section 52.052 of

this code, a marketing association may provide for its members to

vote by proxy or by mail.

Acts 1981, 67th Leg., p. 1110, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1995, 74th Leg., ch. 419, Sec. 1.11, eff.

Sept. 1, 1995; Acts 1999, 76th Leg., ch. 339, Sec. 1, eff. May

29, 1999.

Sec. 52.086. TERMINATION OR SUSPENSION OF MEMBERSHIP. In

accordance with its articles of incorporation or a bylaw adopted

under Section 52.052 of this code, a marketing association may

provide for the termination or suspension of membership in the

association and for the purchase of a member's common or

preferred stock, if any, and all other property interest in the

association.

Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1551, ch. 296, Sec. 4,

eff. June 14, 1983.

Sec. 52.087. LIABILITY OF MEMBERS. Except for debts contracted

with the association, a member of a marketing association is not

liable for the debts of the association in an amount that exceeds

the amount that is unpaid on the member's membership fee or

subscription to capital stock, including any unpaid balance on

promissory notes given in payment for the stock.

Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER G. ADMINISTRATION

Sec. 52.101. BOARD OF DIRECTORS. (a) A board of directors

shall manage a marketing association.

(b) The board shall be composed of five or more directors who

are elected by the members of the association.

person must be a member of the association to be eligible to

serve as a director.

(d) As prescribed by the bylaws of the association that is

holding the meeting, a marketing association that is a member of

the association may designate any of its members to vote on

behalf of the member association or to serve as a director of the

association holding the meeting.

Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.102. OFFICERS. (a) The directors shall elect:

(1) a president or chairman;

(2) one or more vice-presidents or vice-chairmen;

(3) a secretary; and

(4) a treasurer.

(b) To be eligible to serve as president, chairman,

vice-president, or vice-chairman, a person must be a director.

treasurer as secretary-treasurer.

(d) A bank or depository may serve as treasurer but is not

considered to be an officer. If a bank or depository serves as

treasurer, the secretary shall perform the usual accounting

duties of the treasurer except that the secretary may deposit

money only as authorized by the board of directors.

Acts 1981, 67th Leg., p. 1111, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.103. REMOVAL OF OFFICER OR DIRECTOR. (a) Except as

provided by Subsection (f) of this section, a member of a

marketing association may initiate removal of an officer or

director by filing in writing with the association's secretary:

(1) the charges; and

(2) a petition that is signed by 10 percent of the members and

that requests the removal of the officer or director in question.

(b) The members of the association shall vote on the removal at

the next regular or special meeting of the association.

the officer or director of the charges.

(d) At the meeting the association shall give the officer or

director and the person bringing the charges an opportunity to be

heard in person or by counsel and to present witnesses.

(e) The association, by a majority vote, may remove the officer

or director and fill the vacancy.

(f) If an association's bylaws provide for election of directors

by districts with primary elections in each district, the

petition for removal of a director must state the charges and

must be signed by 20 percent of the members residing in the

district from which the director was elected. The board of

directors shall call a special meeting of the members residing in

that district to consider removal of the director. The members in

that district, by a majority vote, may remove the director.

Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.104. BOND. (a) Each officer, employee, or agent who

handles money or property of a marketing association or any money

or property that is under the control or in possession of a

marketing association shall execute and deliver to the

association an indemnity bond that indemnifies the association

and its members against any fraudulent, dishonest, or unlawful

act by the bonded person and other acts as provided by the

association's bylaws.

(b) If the officers and directors of a marketing association

fail to require a person to execute a bond as required by

Subsection (a) of this section, each officer and director is

personally liable for all losses that would have been recovered

under the bond if the person had been bonded.

Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.105. REFERENDUM. (a) On demand of one-third of the

board of directors, the board shall refer to the entire

membership of a marketing association for decision at the next

special or regular meeting any matter that has been approved or

passed by the board.

(b) The association may call a special meeting to consider the

referred matter.

Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER H. FOREIGN COOPERATIVES

Sec. 52.121. FOREIGN COOPERATIVE CONSIDERED MARKETING

ASSOCIATION. For the purposes of this chapter, a corporation or

association organized, with or without capital stock, under a

cooperative marketing act of another state or of the United

States is considered to be a marketing association if the

corporation or association:

(1) satisfies the requirements of Section 52.012 of this

chapter; and

(2) is composed of persons who, as farmers, planters, ranchers,

dairymen, or nut or fruit growers, produce agricultural products

and who act collectively to process, prepare, handle, and market,

in interstate and foreign commerce, the members' products.

Acts 1981, 67th Leg., p. 1112, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.122. PERMITS TO DO BUSINESS. (a) Any cooperative

marketing association incorporated under the laws of another

state may apply for and be granted a permit to do business in

this state. The association shall pay as filing fee the amount

required of domestic corporations organized for a similar

purpose.

(b) A marketing association is not required to have all or part

of a paid-up capital to be entitled to a permit under Subsection

(a) of this section.

Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER I. REMEDIES

Sec. 52.131. BREACH OR THREATENED BREACH OF MARKETING CONTRACT.

(a) If a member breaches or threatens to breach a marketing

contract, the marketing association may sue and, if successful,

is entitled to:

(1) an injunction to prevent further breach of the contract; and

(2) a decree of specific performance of the contract.

(b) Pending the adjudication of an action filed under Subsection

(a) of this section, the association is entitled to a temporary

restraining order and preliminary injunction against the member

if the association files:

(1) a verified complaint showing the breach or threatened

breach; and

(2) sufficient bond.

Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 52.132. INDUCED BREACH OF MARKETING CONTRACT; FALSE

REPORTS. In a civil suit for damages, a person is liable to a

marketing association for an amount equal to three times the

amount of actual damages proven for each offense if the person,

or where the person is a corporation, if an officer or employee

of the corporation:

(1) knowingly induces or attempts to induce a member of the

association to breach the member's marketing contract with the

association; or

(2) maliciously and knowingly spreads false reports concerning

the finances or management of the association.

Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER J. FEES AND REPORTS

Sec. 52.151. TAX EXEMPTIONS. A marketing association is exempt

from all franchise or license taxes, except that a marketing

association is exempt from the franchise tax imposed by Chapter

171, Tax Code, only if exempted by that chapter.

Acts 1981, 67th Leg., p. 1113, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., p. 2785, ch. 752, Sec.

15(b), eff. Jan. 1, 1982; Acts 1995, 74th Leg., ch. 419, Sec.

2.20, eff. Sept. 1, 1995.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

506, Sec. 5.09, eff. September 1, 2009.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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