(a) Revenues of a corporation for any fiscal year may be used to:

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Terms Used In Tennessee Code 65-29-121

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Telephone service: means any communication service whereby communication through the electric or electronic transmission of impulses by or through any media such as wireless technology, wires, cables, microwaves, radio waves, light waves or any combination of such media or any other future transmission technology which may become available to improve communication services, is the principal intended use thereof, and includes all telephone lines, facilities or systems used in the rendition of such service. See Tennessee Code 65-29-103
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) Defray expenses of the cooperative and of the operation and maintenance of its facilities during such fiscal year;
(2) Pay the interest and principal obligations of the cooperative coming due in such fiscal year;
(3) Finance, or to provide a reserve for the financing of, the construction or acquisition by, the cooperative of additional facilities to the extent determined by the board of directors;
(4) Provide a reasonable reserve for working capital;
(5) Provide a reserve for the payment of indebtedness of the cooperative maturing more than one (1) year after the date of issuance of such indebtedness in an amount not less than the total of the interest and principal payments in respect thereof required to be made during the next following fiscal year;
(6) Provide a fund for education and the dissemination of information concerning the effective use of telephone service and other services made available by the cooperative; and
(7) Provide reserves against the contingencies of catastrophe or calamity, including, but not limited to, ice breaks, cyclone, tornado, high winds, snows, etc.; reserves for bad debt losses, major service losses, such as discontinuance of service by large plants or government installations with a large number of telephones.
(b) All operating revenues in excess of the amounts necessary to pay expenses of operating and maintenance of its facilities and interest during the fiscal year shall be distributed by the cooperative to its patrons as either:

(1) A refund to the patrons, which refund may in the discretion of the governing body be:

(A) A credit on the books of the cooperative as a capital credit;
(B) In cash; or
(C) A combination of subdivisions (b)(1)(A) and (B); or
(2) A general rate reduction.
(c) The amount of each individual patron’s credit as in subdivision (b)(1) shall be the same percentage of the total funds available for credit to patrons as such patron contributed to the total patronage of the cooperative for the period involved.
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