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TITLE 12. CORPORATIONS AND ASSOCIATIONS

CHAPTER 4. SPECIAL CORPORATIONS

PART V. COOPERATIVE HOUSING CORPORATIONS

12:499.1. Short title; purpose

A. This Part shall be known as the "Cooperative Housing Corporation Law".

B. The purpose of this Part is to foster safe, decent, and affordable housing in the state by enabling individuals to form cooperative corporations for the purpose of developing, acquiring, owning, and/or operating multi-family and single family housing units on a cooperative plan.

12:499.2. Application of chapter; amendment of articles of incorporation to comply with chapter

This Part applies to all cooperative housing corporations organized pursuant to this Part. Any corporation organized under Chapter 2 of this Title may become a cooperative housing corporation by adopting an amendment to its articles electing to become subject to this Part. The amendment shall be adopted and filed, and shall be effective, according to the Chapter under which the corporation was initially organized before its election to be subject to this Part.

12:499.3. Definitions

In this Part, the following words and phrases shall have the following meanings:

(1) "Board" means board of directors.

(2) "By-laws" means the by-laws of a cooperative housing corporation as they exist from time to time.

(3) "Cooperative housing corporation" means a corporation organized or existing under this Part.

(4) "Limited equity cooperative housing corporation" means a cooperative housing corporation organized and operated primarily for the benefit of low and moderate income persons, and whose equity, after allowance for maximum transfer value of its stock, is permanently dedicated to providing housing to persons of low or moderate income or to charitable purposes.

(5) "Member" means a person who holds voting stock of a cooperative housing corporation.

(6) "Proprietary lease" means an agreement between a cooperative housing corporation and its stockholder for the occupancy of a dwelling unit owned by the cooperative housing corporation.

(7) "Transfer value" means the value which may be paid or received upon the sale or transfer of the stock of a cooperative housing corporation.

12:499.4. Application of laws; conflict of laws

The provisions of Chapter 2 of this Title 12 shall be applicable to cooperative housing corporations, and they shall enjoy the powers and privileges, and be subject to the duties, restrictions and liabilities of other corporations except where inconsistent with this Part. This Part shall take precedence in the event of any conflict with the provisions of Chapter 2 of this Title.

12:499.5. Articles of organization

Three or more persons who are residents of this state, may organize a cooperative housing corporation by filing articles of organization with the secretary of state. The articles shall meet the requirements of Chapter 2 of this Title, and in addition, shall state the following:

(1) Whether transfer of corporation stock is restricted.

(2) Whether or not the corporation shall be authorized to pay dividends on its stock, but no cooperative housing corporation shall pay a dividend of more than six percent, noncumulative, upon its stock.

(3) Whether the transfer value of corporation stock is restricted.

12:499.6. Name

The name of each cooperative housing corporation shall comply with the provisions of Chapter 2 of this Title, and in addition, shall contain the word "cooperative".

12:499.7. Power to make, amend, or repeal by-laws

The power to make, amend, or repeal by-laws shall be reserved to the stockholders.

12:499.8. Articles or by-laws

The articles or by-laws may provide for any of the following:

(1) Election of directors and other officials by unit or district.

(2) Voting by stockholders on the basis of one vote per member or one vote per dwelling unit rather than one vote per share.

(3) That any action required or permitted to be taken at a meeting of stockholders may be taken by mail ballot.

(4) A method of membership representation of stockholders at meetings by delegates from units or districts, provided that delegates be proportional to the number of members in each unit or district.

(5) Redemption or recall of stock.

(6) Termination of membership rights and privileges of a stockholder.

(7) Standards for eligibility to become a stockholder.

(8) The allocation of net savings among the uses permitted in R.S. 12:499.9.

12:499.9. Net savings; apportionment

A. At least once a year the board of every cooperative housing corporation shall, after first setting aside an adequate portion of the net savings in a reserve fund for the general operation of the business, apportion the remainder of the net savings in one or more of the following ways: (1) As a dividend not to exceed six percent, noncumulative, upon one or more classes of stock.

(2) As an equitable distribution or refund to all patrons in proportion to their individual patronage except that:

(a) In the case of a subscriber patron, the distribution or refund may be credited to the subscriber's account until the subscription has been fully paid; and

(b) In the case of a nonmember patron, the amount otherwise distributable may be retained by the cooperative housing corporation.

B. This Section shall not prevent a cooperative housing corporation from disposing of the net savings by reducing the cost of goods, facilities, or services or by applying such net savings otherwise for the common benefit of members.

C. This Section shall not prevent a cooperative housing corporation from adopting a system by which the net savings are deferred for a fixed period of time, nor from adopting a system in which the net savings distributed are partly in cash and partly in stock.

12:499.10. Termination of proprietary leases

A cooperative housing corporation shall terminate all of its proprietary leases, only by agreement of proprietary lessees holding at least eighty percent of its stock or any larger percentage specified in the articles or by-laws.

12:499.11. Loans

Any institution supervised either by the commissioner of financial institutions or the commissioner of insurance may make loans secured by pledge of a proprietary lease and the appurtenant stock of a cooperative housing corporation upon the same terms and with the same limitations as loans secured by mortgages on real property.

12:499.12. Tax exemptions

The capital stock of a cooperative housing corporation incorporated under the provisions of this Part shall not be taxed for state purposes.

12:499.13. Homestead exemption

Property owned by a cooperative housing corporation and subject to a proprietary lease shall be subject to the homestead exemption pursuant to Article VII, Section 20 of the Constitution of Louisiana.