SECTIONS 54031-54042 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 54031-54042

54031. The purpose of this chapter is to do all of the following:
(a) Promote, foster, and encourage the intelligent and orderly
marketing of agricultural products through cooperation.
(b) Eliminate speculation and waste.
(c) Make the distribution of agricultural products between
producer and consumer as direct as can be efficiently done.
(d) Stabilize the marketing of agricultural products.

54032. The following are all here recognized:
(a) Agriculture is characterized by individual production in
contrast to the group or factory system that characterizes other
forms of individual production.
(b) The ordinary form of corporate organization permits industrial
groups to combine for the purpose of group production and the
ensuing group marketing, and the public has an interest in permitting
farmers to bring their industry to the high degree of efficiency and
merchandising skill evidenced in the manufacturing industries.
(c) The public interest urgently needs to prevent the migration
from the farm to the city in order to keep up farm production and to
preserve the agricultural supply of the nation.
(d) The public interest demands that the farmer be encouraged to
attain a superior and more direct system of marketing in the
substitution of merchandising for the blind, unscientific, and
speculative selling of crops.

54033. Associations which are organized pursuant to this chapter
are "nonprofit," since they are not organized to make profit for
themselves, as such, or for their members, as such, but only for
their members as producers.

54034. Any provisions of law which are in conflict with this
chapter do not apply to any association which is provided for in this
chapter.

54035. Any exemption under any existing law which applies to any
agricultural product in the possession, or under the control, of the
individual producer, shall apply similarly and completely to such
product which is delivered by its farmer members that are in the
possession, or under the control, of the association.

54036. A person, firm, corporation, or association, that is
hereafter organized or doing business in this state, may not use the
word "cooperative" as part of its corporate name or other business
name or title for producers' cooperative marketing activities, unless
it has complied with this chapter.

54037. Any corporation or association which is organized pursuant
to previously existing statutes for the purpose of cooperatively
marketing products as defined in this chapter or under Title 23
(commencing with Section 653aa), Part 4, Division 1 of the Civil Code
shall be deemed to be organized and existing pursuant to, and by
virtue of, this chapter, and all of the provisions of this chapter,
and any of the restrictions and benefits of such provisions, shall
apply to such corporation.

54038. Any association which is organized pursuant to this chapter
is not any of the following:
(a) A conspiracy, a combination in restraint of trade, or an
illegal monopoly.
(b) An attempt to lessen competition, to fix prices arbitrarily,
or to create a combination or pool in violation of any law of this
state.

54039. The marketing contracts and agreements between an
association which is organized pursuant to this chapter and its
members and any agreements authorized in this chapter are not
illegal, in restraint of trade, or contrary to any statute which is
enacted against pooling or combinations.

54040. The General Corporation Law (Division 1 (commencing with
Section 100) of Title 1 of the Corporations Code) as added by Chapter
682 of the Statutes of 1975 and as heretofore or hereinafter amended
and all powers and rights under such law applies to each association
which is organized pursuant to this chapter, except where such
provisions are in conflict with or inconsistent with the express
provisions of this chapter. For the purpose of associations organized
without shares of stock, the members shall be deemed to be
"shareholders" as the term is used in the General Corporation Law.

54041. (a) Subject to subdivision (c), Chapter 7 (commencing with
Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure
does not apply to any proprietary interest in an association
organized in accordance with this chapter. Any proprietary interest
that would otherwise escheat to the state pursuant to Chapter 7
(commencing with Section 1500) of Title 10 of Part 3 of the Code of
Civil Procedure shall instead become the property of the association.
(b) This section shall apply to all proprietary interests which as
of January 1, 1988, have not yet been paid or delivered to the
Controller pursuant to the provisions of Chapter 7 (commencing with
Section 1500) of Title 10 of Part 3 of the Code of Civil Procedure.
(c) Notwithstanding subdivision (a), no proprietary interest shall
become the property of the association under this section unless all
of the following requirements are satisfied:
(1) At least 60 days prior notice of the proposed transfer of the
proprietary interest to the association is given to the affected
member by first-class or certified mail to the last address of the
member shown on the association's records, and by publication in a
newspaper of general circulation in the county in which the member
last resided as shown on the association's records. Notice given in
that manner constitutes actual notice.
(2) No written notice objecting to the transfer is received by the
association from the affected member or, if the member is deceased,
from the member's heirs or the executor or executrix of the estate,
prior to the date of the proposed transfer.
(d) "Proprietary interest" means and includes any membership,
membership certificate, membership share, share certificate, or
equity or dividend certificate of any class representing a
proprietary interest in, and issued by, the association together with
all accrued and unpaid earnings, dividends, and patronage
distributions relating thereto.

54042. (a) An association organized pursuant to this chapter may
request the board of supervisors of the county in which the
association's principal place of business is located to issue a
certificate stating that the association meets the requirements of
subdivision (b). When the certificate is provided by the board of
supervisors to the association, the Franchise Tax Board shall exempt
the association from the minimum franchise tax as provided in
paragraph (2) of subdivision (c) of Section 23153 of the Revenue and
Taxation Code.
(b) The board of supervisors shall issue a certificate if all of
the following conditions are met:
(1) The association is located in an economically distressed area.
(2) At least 90 percent of the association's members are, or have
been, within the previous 12 months unemployed or dependent on public
social services for their income.
(3) The request is made during the association's first income
year.
(c) The certificate issued by the board of supervisors shall be
retained by the association. The association shall forward a copy of
the certificate to the Franchise Tax Board upon request.
(d) As used in this section, "economically distressed area" means
a county in which the unemployment rate is either 9 percent, or 2
percent above the statewide average, whichever is greater; or in
which 8 percent of the residents are dependent on public social
services for their income, or 2 percent more of the residents than
the statewide average are dependent on public social services for
their income, whichever is greater.