§ 15-4-513 - Nonprofit operation -- Payment of indebtedness.
15-4-513. Nonprofit operation -- Payment of indebtedness.
(a) (1) Each corporation organized under the provisions of this act shall be operated without profit to its members.
(2) All revenues of the corporation derived from lands subject to mortgage or deed of trust given to secure the payment of bonds or other obligations of the corporation shall be devoted:
(A) First to the payment of taxes, insurance, and, in the instance of damage to the mortgaged property of the corporation caused by acts of God, to the extent of the amount in excess of insurance recovery as shall be required to restore the property to its condition prior to the time of the damage;
(B) Then to the payment of interest on and principal of the bonds or other obligations of the corporation secured by the mortgage or deed of trust as they mature and according to the terms of the mortgage or deed of trust; and
(C) Thereafter to the encouragement and promotion of the economic, agricultural, and industrial development of its city, town, or county.
(b) However, revenues of the corporation may be used also to refund the amounts paid by members of the corporation, as evidenced by its register of membership certificates, and the refunds may be made concurrently with the payment of bonds or other obligations of the corporation.
(c) Notwithstanding the fact that refunds from time to time may be made as provided in subsection (b) of this section, no prior legal right to such revenues of the corporation shall ever attach for the purpose of making refunds on membership certificates so long as any bonds or other obligations of the corporation remain outstanding.