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Section 1: Not-for-Profit

The Cooperative shall operate on a not-for-profit basis, shall operate on a cooperative basis for the mutual benefit of all members, and may not pay interest or dividends on capital furnished by members.

Section 2: Allocating Capital Credits

  1. Members shall furnish and contribute to the Cooperative, and the Cooperative shall receive as capital all operating margins. Operating margins are defined to be all funds and amounts, received from its’ members for the provision of a Cooperative service, that exceed the Cooperative’s costs and expenses of providing that service.
  2. For each Cooperative service, the Cooperative shall annually allocate to each member a credit to a capital account in accordance with state law.
  3. Funds and amounts, other than operating margins that exceed the Cooperative’s costs and expenses may be:
    1.  allocated as capital credits to members in the same manner that the Cooperative allocates operating margins;
    2. retained or used by the Cooperative as permanent non-allocated capital;
    3. used to pay or offset any Cooperative cost or expense; or
    4. used as otherwise determined and approved by the Board.
  4. The amounts accumulating in each member’s capital account is known as Patronage Capital. The Cooperative shall annually notify each member of the dollar amount of capital credits allocated or credited to the member’s Patronage Capital account.

Section 3: Assignment of Capital Credits

Capital credited to the account of each member is assignable on the books of the Cooperative only pursuant to written instruction from the assignor and only to the Cooperative or to successors in interest or successors in occupancy in all or part of such member’s premises served by the Cooperative.

Section 4: Retiring and Refunding Capital Credits

  1. At any time before the Cooperative’s dissolution or liquidation, and if the Board determines that the Cooperative’s financial condition shall not be adversely impacted and it complies with any lender’s requirements, the Board may authorize the Cooperative to, and the Cooperative shall, wholly or partially retire capital credits.
  2. The Board shall determine the manner, method and timing of retiring capital credits as well as the type of distribution.
  3. A terminated member’s capital credits shall be applied to any amounts owed to the Cooperative subject to the other provisions of the Bylaws.
  4. In the closing of an account, the member may be offered a retirement of their capital credits at a discounted rate at the discretion of the Board.
  5. The Board shall also have the power to provide for the special retirement of all allocated capital credits of a deceased member or of a member who is a natural person and is 75 years of age or older, provided that such retirement shall be on a discounted basis using a rate that shall be established from time to time by the Board to determine the then-current value of each capital credit account. The special retirement of capital credits shall be made only when the finances of the Cooperative and the cash available make such a retirement possible without impairing the financial condition of the Cooperative.
  6. Upon the death of one member of a joint membership or upon the request of one member who has attained the age of 75 years or more, the joint membership shall terminate. The surviving or requesting member shall have the option of receiving Patronage Capital on a general retirement basis or ½ of the previously allocated Patronage Capital on a discounted basis.
  7. The Board shall only provide a discounted special retirement authorized by subparagraphs E and F above after the death of a member who was a natural person. No such discounted special retirement shall be made if the member was a corporation, partnership, Limited Liability Company or any other business entity authorized to conduct business in the State of Montana.
  8. Special retirements of capital credits are subject to discounting, the amount of which is retained by the Cooperative as permanent equity.