44 DEPARTMENT OF AGRICULTURE

fully and meticulously spelled out in the organization
papers of an association.

 The provisions obhgating an association positively to
account to its patrons in the form of cash, or credits,
or certificates of some character for all amounts furn-
ished by them over and above their share of the operat-
ing and maintenance costs and expenses are entirely con-
sistent with the revolving-fund plan of financing that
has been discussed earlier. In fact, it is by means of
these mandatory provisions that excess amounts over
and above operating and maintenance costs and expenses
may be furnished, received and handled as capital. Pro-
visions of this character should provide for the refund-
mg of amounts furnished by patrons at any time the
board of directors deems it financially advisable to make
such distributions and, in any event, the organization
papers should provide for distribution at the time of
dissolution.

DEFINE PROPERTY RIGHTS CLEARLY:

 In the case of nonstick association, the statutes gen-
erally provide that the articles of incorporation shall
state the basis for determining the proper rights and
interests of members. An additional reason for obligat-
ing a nonstock association to account to its patrons for
all amounts over operating costs and expenses is the fact
that, if such an association is not so obligated, it would
appear to be quite clear that the amounts that are now
under discussion would become a part of the property
rights and interests of members. This, of course, would
operate to exclude non-members from any participation
and this would jeopardize the right of a cooperative as-
sociation to obtain exemption from the payment of fed-
eral income taxes.

 Again, if the articles of incorporation provide, as they
frequently do, that the property rights and interests of