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ARTICLE 19. OPERATION AT COST AND MEMBERS' CAPITAL.
19.01
Operation at Cost. The Corporation
shall at all times be operated on a cooperative service-at-cost basis for
the mutual benefit of its member patrons.
19.02 Margin Allocation.
In order to induce patronage and to assure that this Corporation will operate
on a service-at-cost basis in all its transactions with its members, the
Corporation is obligated to account on a patronage basis to all member patrons
on an annual basis for all amounts received from business conducted with
members on a patronage basis, over and above the cost of providing such
services, making reasonable additions to reserves, and redeeming capital
credits. Such allocation shall be on the basis of the number of one million
gallon per year allocation units committed to the Corporation. The Corporation
is hereby obligated to pay all such amounts to the patrons in cash or by
credits to a capital account of each member patron.
19.03 Per-Unit Retains.
The Board of Directors may require members to make capital contributions.
In such case, each member also agrees to provide capital in such amounts
as determined by the board of directors based on the number of one million
gallon per year acre allocation units committed to the Corporation. Such
per-unit retains shall be allocated to the member's capital credit account.
19.04 Dividends.
No dividends shall be paid on any capital credits.
19.05 Records and
Documentation. The books and records of the Corporation shall be
set up and kept in such a manner that at the end of each fiscal year, the
amount of capital, if any, so furnished by each member is clearly reflected
and credited in an appropriate record to the capital account of each member.
The Corporation shall,
within 8-1/2 months after the close of each fiscal year, notify each member
of the capital so credited to the member's account. The notice shall be
in the form of a written notice of allocation or per-unit retain certificate
(as those terms are used in Subchapter T of the Internal Revenue Code) or
other appropriate written document. The board shall have discretion to issue
such notices and certificates in either "qualified" or "non- qualified"
form as permitted by the Internal Revenue Code and other applicable law.
19.06
Fiscal Year. The fiscal
year of this Corporation shall commence on the first day of July and end
on the last day of June.
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