CHAPTER 301. COOPERATIVE ASSOCIATIONS

State Codes and Statutes

Back To Homepage

State Codes and Statutes

Statutes > Texas > Health-and-safety-code > Title-4-health-facilities > 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;

(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;

(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.

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.

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.

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.

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;

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;

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.

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.

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.

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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

Loading..

Loading, Please Wait!