15 Pa.C.S. Ch. 75

in effect

15 Pa.C.S. § 7501 Short title of chapter.

This chapter shall be known and may be cited as the Cooperative Agricultural Association Law of 1990.

15 Pa.C.S. § 7502 Application of chapter.

(a) General rule.--Except as otherwise provided in subsections (b) and (c), this chapter applies to and the word "association" in this chapter means a corporation with or without capital stock incorporated under any of the following: (1) The act of June 12, 1919 (P.L.466, No.238), relating to cooperative agricultural associations without capital stock. (2) The act of April 30, 1929 (P.L.885, No.394), relating to cooperative agricultural associations with capital stock. (3) The act of June 12, 1968 (P.L.173, No.94), known as the Cooperative Agricultural Association Act. (4) This chapter. (b) Acceptance of chapter.--Any other domestic corporation for profit or corporation not-for-profit incorporated under any prior statute relating to cooperative corporations may become an association subject to this chapter by filing in the Department of State a certificate of election of cooperative agricultural association status which shall be executed by the corporation and shall set forth: (1) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office. (2) The statute under which the corporation was incorporated and the date of incorporation. (3) A statement that the members or shareholders of the corporation have elected, by a majority vote of the members or shareholders present and voting at a meeting called for that purpose at which a quorum is present, to accept the provisions of this chapter for the government and regulation of the affairs of the corporation. (c) Foreign corporations.--This chapter shall apply to and the word "association" in this chapter shall include a foreign corporation for profit or corporation not-for-profit incorporated with or without capital stock under any general or special statute as a cooperative agricultural association for the mutual benefit of its members, shareholders, patrons and producers. A foreign association shall not transact business as an association in this Commonwealth unless permitted to do so by this chapter, and any violation of this provision may be enjoined upon the application of any domestic association or qualified foreign association.

15 Pa.C.S. § 7503 Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Agricultural products." Includes all livestock and livestock products, dairy and dairy products, poultry and poultry products, horticultural, floricultural and viticultural products, forestry and forestry products, seeds, nuts, mushrooms and bee products and any and all kinds of farm products. "Board." The board of directors of an association. "Delegate." A member elected in the manner provided by section 7531(b) (relating to election by districts) to represent a local group of members and having the powers and duties specified in the bylaws. "Department." The Department of Agriculture of the Commonwealth. "Engaging in agriculture." Includes engaging in dairying, livestock raising, poultry raising, furbearing animal raising, horticulture, floriculture, viticulture, forestry, beekeeping, seed growing, nut growing, mushroom growing and engaging in any and all kinds of farming and other allied occupations. "Member." The holder of a membership in an association without capital stock or the holder of voting shares in an association organized with capital stock. "Patron." A person using the facilities of an association for the marketing of agricultural products or a person using the facilities of an association for the purchase of supplies or the rendering of services. "Producer." A person engaging in agriculture. "Supplies." Includes any and all types of supplies, machinery and equipment used or consumed by persons engaging in agriculture.

15 Pa.C.S. § 7504 Policy.

(a) General rule.--It is the policy of this Commonwealth, as one means of improving the economic position of agriculture, to encourage the organization of producers of agricultural products into effective cooperative agricultural associations under the control of the producers for their mutual benefit, and to that end this chapter shall be liberally construed. Where applicable to this chapter and to Chapter 71 (relating to cooperative corporations generally), Subparts B (relating to business corporations) and C (relating to nonprofit corporations) of Part II shall be construed, wherever possible, consistent with law applicable to cooperative agricultural associations in general. (b) Associations not in restraint of trade.-- (1) No association complying with this chapter shall be deemed to be a conspiracy, or a combination in restraint of trade, or an illegal monopoly, or be deemed to have been formed for the purpose of lessening competition or fixing prices arbitrarily, nor shall the contracts between the association and its producers, or any agreements authorized in this chapter, be construed as an unlawful restraint of trade, or as a part of a conspiracy or combination to accomplish an improper or illegal purpose or act. (2) An association may acquire, exchange, interpret and disseminate past, present and prospective crop, market, statistical, economic and other similar information relating to the business of the association either directly or through an agent created or selected by it or by other associations acting in conjunction with it. (3) An association may advise its members in respect to the adjustment of their current and prospective production of agricultural commodities and its relation to the prospective volume of consumption, selling prices and existing or potential surplus to the end that every market may be served from the most convenient productive areas under a program of orderly marketing that will assure adequate supplies without undue enhancement of prices or the accumulation of any undue surplus of agricultural products.

15 Pa.C.S. § 7505 Number and qualifications of incorporators.

Five or more individuals of full age engaging in agriculture or two or more cooperative agricultural associations may incorporate an association. If an association is incorporated by individuals, at least three of the individuals shall be residents of this Commonwealth. If an association is incorporated by cooperative agricultural associations, at least one of the associations shall be a domestic association.

15 Pa.C.S. § 7506 Purposes.

An association may be incorporated under this chapter for the purpose of engaging in any cooperative activity for producers of agricultural products in connection with: (1) Producing, assembling, marketing, buying, selling, bargaining or contracting for agricultural products, or harvesting, preserving, drying, processing, manufacturing, blending, canning, packing, ginning, grading, storing, warehousing, handling, transporting, shipping or utilizing such products, or manufacturing or marketing the by-products thereof. (2) Manufacturing, processing, storing, transporting, delivering, handling, buying for or furnishing supplies to its members and patrons. (3) Performing or furnishing business, educational, recreational or other services, including the services of labor, buildings, machinery, equipment, trucks, trailers and tankers, or any other services connected with the purposes set forth in paragraphs (1) and (2) on a cooperative basis. (4) Financing any of the activities set forth in paragraphs (1) through (3).

15 Pa.C.S. § 7507 Articles of incorporation.

Articles of incorporation of an association incorporated under this chapter shall comply with the applicable provisions of this part except that, if organized without capital stock, the articles shall state whether the property rights and interests of each member are equal or unequal and, if unequal, the priorities of those rights and interests.

15 Pa.C.S. § 7521 Special powers and limitations.

(a) General rule.--Each association shall have power (in addition to or limitation of the powers conferred by section 1502 (relating to general powers) or 5502 (relating to general powers)): (1) To act as agent, broker or attorney-in-fact for its members and patrons and for any subsidiary or affiliated person. (2) To hold chapter for its members and patrons and for subsidiary and affiliated persons to property handled or managed by the association on their behalf. (3) In furtherance of association purposes, to make loans or advances to its members and patrons or to subsidiary and affiliated persons or their members. (4) To establish and accumulate reserves and surplus to capital and such other funds as may be authorized by the articles of association or the bylaws. (5) To issue membership certificates and to foster membership in the association and to solicit patrons by advertising or by educational or other lawful means. (6) To issue and to sell common and preferred stock. (7) To own shares of the capital stock of, to hold membership in and to hold bonds or other obligations of other persons engaged in any related activity or engaged in producing, manufacturing, warehousing or marketing any of the products handled by the association or engaged in financing its activities or those of its members. (8) To deal in products of and handle machinery, equipment, supplies and perform services for nonmembers to an amount not greater in annual value than such as are dealt in, handled or performed for or on behalf of its members. (b) Enumeration unnecessary.--It shall not be necessary to set forth in the articles of the association the powers enumerated in this chapter.

15 Pa.C.S. § 7522 Records of salary or other payments.

Every association shall keep a record of all salaries, per diem payments or other remuneration paid to each officer and director by the association in addition to remuneration received for agricultural commodities marketed through the association.

15 Pa.C.S. § 7523 Members.

An association shall admit to membership only persons who are engaging in agriculture, including both tenants and landlords receiving a share of the crop, and cooperative agricultural associations of such producers who agree to patronize the association in accordance with the uniform terms prescribed by it, and only such persons shall be regarded as eligible members of an association. The bylaws may prescribe additional qualifications for membership but shall not enlarge the class eligible for membership specified in this section.

15 Pa.C.S. § 7524 Issuance of shares.

(a) General rule.--Every association without capital stock shall issue a certificate of membership to each member. Every association with capital stock shall issue a certificate of common shares to each member certifying the number of shares of stock held by him. An association shall issue common shares or a membership certificate only to persons eligible for membership upon such terms and conditions as shall be provided in the bylaws. Fractional shares may be issued. (b) Voting rights.--Each eligible member shall be entitled to only one vote on each question that may be presented at any meeting of the members regardless of the number of shares or amount of membership capital owned by him. (c) Preferred stock.--An association may issue preferred shares to any person upon such terms and conditions as shall be provided in the bylaws. The preferred shares shall carry no voting rights other than as provided by section 7529(a)(3) (relating to fundamental changes). (d) Consideration.--No association shall issue a certificate of membership, and no certificate for common shares shall be issued until fully paid for, but promissory notes may be accepted by the association as full or partial payment. The association shall hold the membership certificate or shares as security for the payment of the note, but such retention as security shall not affect the right of the member to vote and hold office. (e) Evidence of equity in assets.--The association may, from time to time, issue to any patron a certificate or other evidence of the equity of the patron in any fund, capital investment or other asset of the association. The certificate or other evidence of equity may bear interest at a rate not in excess of two points under the average treasury bill rate for the 12 months preceding the date on which the payment is made and may be transferred only to the association or to such other person as may be approved by the association. (f) Dividends.--Dividends may be paid on any shares and dividends on preferred shares may be cumulative if so provided in the articles. An association shall have a lien on all of its issued shares and dividends declared or accrued thereon for all indebtedness of the holders thereof to the association if provision therefor is stated on the face of the share certificate.

15 Pa.C.S. § 7525 Sale, transfer or redemption of shares.

(a) General rule.--The common shares of an association may be transferred only with the consent of the association and on the books of the association and then only to persons eligible to own shares in the association. No purported assignment or transfer of the shares shall pass to any ineligible person any right or privilege on account of the shares or any vote or voice in the management or affairs of the association. (b) Redemption or conversion.--In the event a holder of common shares has done no business with an association for a period of 12 months or in the event the board of directors of an association finds that any of the common shares has come into the hands of any person who is not eligible for membership or that the holder thereof has ceased to be an eligible member, the holder shall have no rights or privileges on account of the shares or vote or voice in the management or the affairs of the association (other than the right to participate in accordance with law in case of dissolution and to receive the book or par value of the shares, whichever is less, in the event of its sale or transfer as provided in this subsection), and the association shall have the right at its option: (1) to redeem the shares at their book or par value, whichever is less; (2) to require the transfer of any such shares at such book or par value, whichever is less, to any person eligible to hold the shares; or (3) to require the holder of any such shares to convert the shares into preferred shares of equal value. In exercising its right to redeem or to require the transfer or conversion of shares, if the holder fails to deliver the certificate evidencing the shares for cancellation or transfer, an association may cancel the certificate on its books and issue a new certificate for common or preferred shares, as the case may be, to the party entitled thereto. (c) Preferred shares.--The preferred shares of an association may be transferred only on the books of the association, and the bylaws may provide that the association shall have the option, at any time, to redeem the preferred shares at par value, plus declared or accrued dividends. (d) Notice on certificates.--Any restriction or option which an association places upon the transfer or sale of any of its outstanding shares and any association option retained thereon shall be printed on each share certificate. (e) Force majeure.--A member shall not lose his membership in the association under this section by his failure to do business with it if the failure is due to an act of God unless the period of time involved is at least 24 months.

15 Pa.C.S. § 7526 Termination of membership.

(a) General rule.--Under the terms and conditions prescribed in the bylaws, a member of an association without capital stock shall lose his membership and his right to vote if he ceases to belong to the class eligible for membership or has done no business with an association for a period of 12 months. (b) Valuation of and payment for membership.--After a member has notified an association without capital stock of his withdrawal or after the adoption of a resolution by the board terminating his membership, the board shall appraise the value in money of his membership interest in the association and shall determine and fix the manner in which the association shall pay him the value of his interest unless the member, with the consent of the association, transfers his certificate of membership. Certificates of membership in an association without capital stock shall not be transferred without the consent of the association. (c) Force majeure.--A member shall not lose his membership in the association under this section by his failure to do business with it if the failure is due to an act of God unless the period of time involved is at least 24 months.

15 Pa.C.S. § 7527 Voting by proxy or mail.

(a) General rule.--Unless otherwise provided in the bylaws, no member may vote by proxy or by mail. No unrevoked proxy shall be valid more than 11 months from the date of its execution. If voting by mail is permitted, absent members may, under rules prescribed by the bylaws, be permitted to vote on specific questions by written ballot prepared by the association and sent by mail to or deposited with the secretary or other designated officer of the association. (b) Action on marketing programs.--Except for day-to-day operating decisions relating to existing programs, no association shall vote for its members on any new programs or substantially modified proposals other than those regulated by Federal or State agencies affecting existing marketing or marketing development programs or amendments thereto unless it has either first obtained approval of the delegates or conducted a mail poll of its membership, and in such later event apprised the members of their rights to cast a vote and method of voting under the program and notified its membership of the results and its intentions at least five days prior to casting its vote. If proxy voting is allowed by the bylaws of the association, the proxy shall be valid only for the particular date and the specific issue for which the vote is called.

15 Pa.C.S. § 7528 Meetings.

There shall be at least one meeting of members or delegates each year. Annual and special membership or delegate meetings shall be governed by the bylaws.

15 Pa.C.S. § 7529 Fundamental changes.

(a) General rule.--An association, by action of its members or delegates, may amend its articles of incorporation in the manner provided by the applicable provisions of this part except that: (1) No amendment shall be adopted without the affirmative vote of two-thirds of the members or delegates voting thereon. (2) No amendment affecting the priority or preferential rights of any outstanding stock shall be adopted without the affirmative vote of two-thirds of the holders of the outstanding stock affected. (3) Any association not having capital stock may convert into an association with capital stock by amending its articles to set forth a description of the shares of each class which are to be issued and a statement of the voting rights, preferences, limitations and relative rights granted to or imposed upon the shares of each class but only if the conversion is proposed by three-fourths of the board of directors. (b) Procedure.--Written notice shall, not less than 15 days before the meeting of members or delegates called for the purpose of considering the proposed amendment or any other fundamental change, be given to each member or shareholder of record. A notice of an amendment under subsection (a)(3) shall set forth, in addition to the information otherwise required by the appropriate provisions of this part, a complete description of the shares proposed to be issued upon the conversion and the manner of carrying the conversion into effect. (c) Post-approval report.--Whenever an amendment of the articles of an association is approved, the association shall notify each member within 30 days after the filing of articles of amendment by sending to each member a copy of the filed amendment and, in the case of a conversion, a complete description of the shares issued by the association. Cross References. Section 7529 is referred to in section 7524 of this title.

15 Pa.C.S. § 7530 Bylaws.

(a) General rule.--The bylaws may provide for the following matters: (1) The time, place and manner of calling and conducting meetings of the members or delegates and the number of members or delegates (which may be less than a majority) that shall constitute a quorum. (2) The manner of voting and the conditions upon which members or delegates may vote at general and special meetings. (3) Subject to any provision thereon in the articles of association and in this chapter, the number, qualifications, eligibility requirements, manner of nomination, duties and terms of office of directors and officers, the time of their election and mode and manner of giving notice thereof. (4) The time, place and manner for calling and holding meetings of the directors and any executive committee and the number that shall constitute a quorum. (5) Rules consistent with law and the articles of association for the management of the association, the establishment of any election districts, the making of contracts, the issuance, redemption and transfer of shares, the relative rights, duties, interests and preferences of members and shareholders and the mode, manner and effect of expulsion of a member. (6) Any other provisions deemed necessary or proper to carry out the purposes of the association. (7) Penalties for violations of the bylaws. (b) Procedure.--Bylaws authorized to be made by the board of directors may be amended or repealed and new bylaws may be adopted by the members or delegates. Delegates may prescribe that any bylaw made by them shall not be amended or repealed by the directors, and members may provide that any bylaw made by them shall not be amended or repealed by either the directors or the delegates. The association shall notify each member of a proposed change in the bylaws by sending to each member, at least 15 days prior to any vote on the proposed change, a copy of the proposed bylaw along with the time, date, place and manner of voting for the proposed changes. Members may amend or repeal bylaws adopted by the directors or the delegates by filing with the secretary of the association a petition signed by 25% of the voting membership and setting forth the text of the proposed change. The secretary shall call a special meeting or special vote of the association within 30 days of the receipt of the petition. When a special meeting is called, at least 10% of the voting membership shall be present to change the bylaws. Whenever a proposed bylaw change is approved, the association shall mail each member a copy of the approved bylaw within 30 days of the approval.

15 Pa.C.S. § 7531 Directors.

(a) General rule.--The business and affairs of the association shall be managed under the direction of a board of not less than five directors who shall be natural persons of full age. All directors shall be members. The first directors shall serve until the first annual meeting of the association at which time their successors shall be elected by the members of the association. Thereafter, a director shall hold office for a term of not less than one year nor more than three years and until his successor has been elected and qualified. Every election for a director shall be by secret ballot. A director may succeed himself. (b) Election by districts.--The bylaws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts, either directly or by district delegates elected by the members in that district. In such case, the bylaws shall specify or the board of directors shall determine the number of directors to be elected by each district and the manner and method of dividing the directors and of districting and redistricting of the territory in which the association has members. The board of directors may use such standards as are reasonable for assigning directors and districting and redistricting the territory in which the association has members. The bylaws or the board of directors may provide for dividing districts into locals and for the election of district delegates at local meetings of members. The bylaws shall prescribe the procedures by which districts shall elect directors. The board of directors shall hear and decide any controversy arising out of a district election and its decisions shall be incontestable except for fraud. In any case in which the election of directors is by districts, the board shall fill a vacancy with a person who resides in or is a member of a local in the district in which the vacancy exists. (c) Classified board.--If the bylaws so provide, the directors of an association may be classified in respect to the time for which they severally hold office. In such case, each class shall be as nearly equal in number as possible, the term of office of at least one class shall expire in each year, and the members of a class shall not be elected for a shorter period than one year or for a longer period than three years. If, at any meeting, directors of more than one class are to be elected, each class of directors to be elected shall be elected in a separate election. (d) Educational program.--The Department of Agriculture, in cooperation with the College of Agriculture of The Pennsylvania State University, shall develop and implement an educational program relating to the powers, duties, functions and responsibilities of directors of associations. The Secretary of Agriculture shall appoint an advisory council consisting of nine individuals, including members and directors of associations, two association managers and other interested individuals, who shall advise the department on the development of the educational program. Two members of the advisory council shall be managers of associations. In addition, the department shall furnish to each association director, free of charge, when first elected as a director, an updated copy of this chapter and annually thereafter any amendments or replacements thereof. Cross References. Section 7531 is referred to in section 7503 of this title.

15 Pa.C.S. § 7532 Removal of directors.

A director may be removed from office by the affirmative vote of not less than a majority of the members present and voting at any regular or special meeting called for that purpose or, where the bylaws provide for the election of directors by districts, by the affirmative vote of not less than a majority of the members or delegates residing in or representing the district from which he was elected. The bylaws shall provide for the filing of charges, the giving of notice thereof, an opportunity to be heard and the procedures under which a director may be removed.

15 Pa.C.S. § 7533 Officers.

The board shall elect a president, a secretary and a treasurer and may elect one or more vice presidents and any other officers as may be authorized in the bylaws. The president and at least one of the vice presidents must be members. Any two of the offices of vice president, secretary and treasurer may be combined in one person.

15 Pa.C.S. § 7534 Marketing arrangements.

(a) General rule.--An association and its members may make and execute contracts requiring the members to obtain all or any part of specific services from the association or to sell or deliver all or any part of their specified agricultural products to or through the association or any facilities to be created by the association. The contract may provide that the association may sell or resell the products sold or delivered by its members, with or without taking title thereto, and pay over to its members the resale price, after deducting all necessary overhead costs, expenses, valuation reserves, interest, dividends on common and preferred shares and such deductions for capital and other purposes as may be specified in the contract or bylaws of an association. Each marketing or service contract shall contain a provision which shall specify a reasonable period in each year during which any contracting member of an association, upon giving notice as prescribed in the contract, may terminate the contract. (b) Enforcement.--The bylaws or the marketing or service contract may provide: (1) For applying patronage refunds or savings allocated to any member or other patron toward the payment for liquidated damages specified in the contract to be paid to an association by the member or other patron upon the breach by him of any provision of the marketing or service contract. (2) That the member will pay all costs, premiums for bonds, expenses and fees in case any action is brought upon the contract by the association. Any such provision shall be valid and enforceable in the courts of this Commonwealth. (3) That the association shall have the option to redeem the voting shares at book value or par value, whichever is lower, plus declared dividends, or the membership certificate, whenever any contract between the association and a member has been canceled in accordance with the terms or conditions of the contract or by reason of breach of the contract by the member. (c) Injunction.--In the event of any such breach or threatened breach of the marketing contract by a member, the association shall be entitled to an injunction to prevent further breach of the contract and to specific performance thereof. Pending the adjudication of the action, and upon filing a verified complaint showing the breach or threatened breach and upon filing a sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member. The right to an injunction shall be in addition to the remedy provided in subsection (b). (d) Inducing breach; spreading false reports.--Any person who knowingly induces any member of an association to breach his marketing contract with the association shall be liable to the association for the full amount of damages sustained by it by reason of the breach, and any person who maliciously and knowingly spreads false reports about the finances or management of the association shall be liable to the association in an action for the actual damage which it may sustain by reason of the false reports and punitive damages. The association shall be entitled to an injunction against any such person to prevent further injury to the association. In any action brought by an association pursuant to this subsection, the association shall be entitled to, in addition to any other recovery or remedy, reasonable attorney fees involved in such matter. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment. Act 169 amended subsec. (a).

15 Pa.C.S. § 7535 Patronage distributions.

(a) General rule.--The net proceeds or savings of an association shall be apportioned, distributed and paid periodically on the basis of patronage to those persons entitled to receive them, at such times and in such manner as the bylaws shall provide. The bylaws may provide that the net proceeds or savings may be restricted to members or may be made at the same or a different rate for member and nonmember patrons. The bylaws may contain any reasonable provisions for the apportionment and charging of net losses except that no member shall thereby become liable for the debts of the association beyond any money or other property delivered by the member to the association. The bylaws may provide that any distribution to a nonmember eligible for membership may be credited to the nonmember until the amount thereof equals the value of a membership certificate or a common share of an association. (b) Method of disbursement.--The apportionment, distribution and payment of net proceeds or savings required by subsection (a) may be in cash, credits, capital shares, certificates of indebtedness, revolving fund certificates, letters of advice or other securities or certificates issued by an association or by any affiliated domestic or foreign association. Apportionment and distribution of its net proceeds or savings or losses may be separately determined for, and be based upon the patronage of, single or multiple pools or particular departments of an association, or as to particular commodities, supplies or services, or such apportionment and distribution may be based upon classification of patronage according to the type thereof. (c) Minimum participation.--An association may provide in its bylaws the minimum amount of any single annual patronage transaction which shall be taken into account for the purpose of participation in allocation and distribution of net proceeds or savings or net losses under this section. (d) Method of accounting.--For the purposes of this section, net proceeds or savings or net losses shall be computed in accordance with generally accepted accounting principles applicable to cooperative associations, and after deducting from gross proceeds or savings all costs and expenses of operation and any dividends paid upon capital stock and interest paid upon certificates or other evidence of equity in any fund, capital investment or other assets of an association.

15 Pa.C.S. § 7536 Audit of operations.

(a) General rule.--At the close of each fiscal year, a complete certified audit of the operations of the association shall be made by a qualified certified public accountant or by a qualified public accountant, employed by the board of directors, the written report of whom shall include the balance sheet, operating statement, commissions, salaries and other remunerations of managers and officers and other proper information and shall be submitted to the members at the next regular meeting. Within six months after the expiration of the fiscal year for which made, the secretary of the association shall file a copy of the certified audit in the Department of Agriculture upon a form prescribed by the department. The secretary of the association shall also include in the yearly audit report to the department a list of the current officers and directors and their addresses. (b) Exceptions.--The annual audit of an association with annual gross sales of $100,000 or less may be performed by an audit committee of three or more members of the association appointed by the board, at least one of whom shall be a member of the board of directors. The members of the committee need not be certified public accountants or public accountants. (c) Enforcement.--Any association which fails, within 120 days from the close of the fiscal year, to file with the department the certified audit required by subsection (a) shall be notified by certified mail by the department that the certified audit must be filed within 60 days from the date of mailing of the notice and that, upon failure to file the certified audit within the time so limited, the department will file in the Department of State a statement of dissolution under this subsection. If the certified audit is not filed in the department within such 60-day period, the department shall file in the Department of State, with respect to each such defaulting association, a statement of dissolution which shall identify the association. Upon the filing of the statement, the articles of the association shall be deemed forfeited for failure to comply with the provisions of this section. However, the forfeiture shall not prejudice the rights of creditors and members in and to any property or assets of or belonging to the association. The department shall annually, on or before April 1 of each year, furnish each existing association and make public a listing of the status of existing associations. Any association which has so automatically forfeited its articles shall be reinstated as an association under this chapter if the unfiled certified audit is submitted to the department within 90 days after such automatic forfeiture or within any extension thereof granted by the department, which shall thereupon file in the Department of State with respect to the association a notice of withdrawal of statement of dissolution stating that the association has complied with the provisions of this subsection. In such event, no statement of revival or new articles of incorporation need be filed in the Department of State, and the association shall resume its status as a subsisting corporation. The department shall review such yearly certified audits and issue such reports and recommendations to each member of the board of directors of the association as the department deems necessary. (d) Confidentiality.--No person shall, without the consent or authorization of the association, except for official purposes or in obedience to judicial process, make or permit any disclosure whereby any information contained in a certified audit may be identified as having been furnished by the association. No person shall knowingly exercise or attempt to exercise any powers, privileges or franchises for an association, given by this chapter, while the articles of the association are forfeit unless that person is, and discloses that he is, acting to reinstate the good standing of the association under this chapter or is acting to wind up the affairs of the association. A person violating the prohibitions set forth in this subsection commits a misdemeanor of the third degree. (e) Withdrawal.--A certified audit shall not be withdrawn without the approval of the board of directors.

15 Pa.C.S. § 7537 Contract assignments to association.

If any contract authorized by a cooperative contains an assignment to the association of any part or all of funds due or to become due the member during the life of the contract for any product produced or to be produced by him or for any services performed or to be performed in producing any product, any person who accepts or receives the product from the member is bound by the assignment after receiving written notice from the association and the member of the amount and duration of the assignment. However, as to any seasonal crop, if no funds are paid or become payable by any person under such an assignment for a period of two consecutive years during the life of the contract, thereafter the assignment shall not be binding upon any person who receives or accepts the product from the member until the assignment is reaffirmed by the member in writing and written notice thereof is given by the association or the member. Any such reaffirmation shall continue to be effective during the life of the contract until another lapse of two consecutive years occurs.

15 Pa.C.S. § 7538 Exemption from tax on capital stock and indebtedness.

No State or local tax shall be levied or placed upon the capital stock of an association or upon any scrip, bonds, certificates or other evidences of indebtedness issued by such association. The association shall not be required to file in the Department of Revenue, or with any other State or local official of this Commonwealth, the reports relative to such taxes as are or may be required of corporations not exempt from the payment of such taxes.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=15Fetched: 10/16/2026