Section 203.183. Agricultural cooperative associations

(a) Pursuant to the authority contained in section 203(r) of the act (70 P. S. § 1-203(r)), the Commission finds that it is not in the public interest or necessary for the protection of investors to require the registration under section 201 of the act (70 P. S. § 1-201) of securities issued by an agricultural cooperative association in transactions where all of the following conditions are met:

(1) Such securities are issued by the agricultural cooperative association.

(2) Such securities are offered and sold only to persons who are, at the time of any such offer and sale, members of the agricultural cooperative association or to persons who, upon sale of such securities to them, thereby become members of the agricultural cooperative association.

(3) The transfer of such securities for value is restricted to members of the agricultural cooperative association.

(4) No person receives any commission or other compensation as a result of or based upon the sale of such securities other than in connection with the solicitation of nonmembers for membership in the agricultural cooperative association.

(b) The following words and terms, have, for the purposes of this section, the following meanings:

(1) Agricultural cooperative association—An association which admits to membership only persons who are engaged in agriculture and which is organized and operated for the purpose of engaging in any cooperative activity for persons engaged in agriculture in connection with:

(i) Producing, assembling, marketing, buying, selling, bargaining or contracting for agricultural products; harvesting, preserving, drying, processing, manufacturing, blending, canning, packing, ginning, grading, storing, warehousing, handling, transporting, shipping or utilizing the products; or manufacturing or marketing the by-products thereof.

(ii) Manufacturing, processing, storing, transporting, delivering, handling, buying for or furnishing supplies to its members and patrons.

(iii) Performing or furnishing business, educational, recreational or other services, including the services of labor, buildings, machinery, equipment, trucks, trailers and tankers, or other services connected with the purposes set forth in clauses (i) and (ii) on a cooperative basis. The term agricultural cooperative association shall also include a federation of agricultural cooperative associations if the federation possesses no greater powers or purposes and engages in operations no more extensive than an individual agricultural cooperative association.

(2) Members—For purposes of subsection (a)(2) only, includes patrons to the extent that the organic law or another law to which the agricultural cooperative association is subject requires the patrons to be treated as members.

(3) Securities—Membership agreements, capital stock, membership certificates and an instrument or form of advice which evidences:

(i) A member’s equity in a fund, capital investment or other asset of the agricultural cooperative association.

(ii) The apportionment, distribution or payment to a member or patron of the net proceeds or savings of the agricultural cooperative association.

(4) Engaged in agriculture—Persons engaged in farming, dairying, livestock raising, poultry raising, floriculture, mushroom growing, beekeeping, horticulture and allied occupations shall be deemed to be engaged in agriculture.

The provisions of this § 203.183 adopted October 1, 1976, effective October 2, 1976, 6 Pa.B. 2447; amended December 30, 1999, effective January 1, 2000, 30 Pa.B. 18; transferred and renumbered from 64 Pa. Code § 203.183, December 14, 2012, effective December 15, 2012, 42 Pa.B. 7533. Immediately preceding text appears at serial pages (324415) to (324416).

Notation

Authority

The provisions of this § 203.183 amended under sections 202(g) and (i), 203(d), (i.1), (j) and (n)—(t), 204(a), 205(b), 207(g), (j.1) and (n), 209(b), 211(a) and (b), 504(d), 513, 603(a), 606(d) and 609(a) of the Pennsylvania Securities Act of 1972 (70 P. S. § § 1-202(g) and (i), 1-203(d), (i.1), (j) and (n)—(t), 1-204(a), 1-205(b), 1-207(g), (j.1) and (n), 1-209(b), 1-211(a) and (b), 1-504(d), 1-513, 1-603(a), 1-606(d) and 1-609(a)).