No. 143. an Act Relating to Electric Cooperatives

NO. 143Page 1

NO. 143. AN ACT RELATING TO ELECTRIC COOPERATIVES.

(S.113)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 30 V.S.A. § 3001 is amended to read:

§ 3001. DEFINITIONS

As used in this chapter, unless the context otherwise requires, the following words shall have the following meanings:

(1) “Cable television” means cable television system as defined in chapter 13 of this title.

(2) “Community development” means the economic and social development of communities through commercial and industrial development, creating job opportunities and training for rural residents, and providing better housing, health, educational, recreational and other rural community facilities.

(1)(3) "Cooperative," means a corporation organized under this chapter or which becomes subject to this chapter in the manner hereinafter provided;.

(4) “Energy” includes electrical, propane, natural gas, fossil fuels and other forms of energy.

(5) “Interactive media” means communications media that is regularly used to transmit information in two directions.

(6) "Internet" means collectively the computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected network of networks that employ the transmission control protocol/internet protocol, or any predecessor or successor protocols to such protocol, to communicate information of any kind, whether by wire or wireless means.

(7) “Internet access” means service connecting customers to the internet.

(2)(8) "Person," means a natural person, firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof, or a body politic or other entity.

(9) “Telecommunications” means one or more of the following as defined in chapter 88 of this title:

(A) basic telecommunications service;

(B) private network;

(C) public switched network;

(D) telecommunications service;

(E) telecommunications service provider.

Sec. 2. 30 V.S.A. § 3001a is added to read:

§ 3001a. PURPOSE

Cooperatives may be organized under this chapter for the purpose of creating or supplying energy, cable television, telecommunications, interactive media and internet access and facilitating and extending the use thereof, and in addition, any other lawful business not inconsistent with this chapter which utilizes the electric distribution facilities of the cooperative.

Sec. 3. 30 V.S.A. § 3002 is amended to read:

§ 3002. POWERS

A cooperative shall have power:

(1) To sue and be sued in its corporate name;

(2) To have perpetual existence;

(3) To adopt a corporate seal and alter the same;

(4) To generate, manufacture, purchase, acquire, accumulate and transmit electric energy; and to distribute, sell, supply and dispose of electric energy, cable television, telecommunications, interactive media and internet access to its members, to governmental agencies and political subdivisions, provided, however, that furnishing by a cooperative of electric cold storage or processing plant service shall not be deemed to be distributing, selling, supplying or disposing of electric energy; providing furtherprovided, however, that in the generation of electric energy by water power, a cooperative shall comply with the provisions of sections 1081-1099 of Title 10, relating to the construction and maintenance of dams; provided further, however, that a cooperative shall not distribute, sell, supply or dispose of electric energy to any person or premises receiving and using central station electric service on March 26, 1943, without the consent of the person supplying such central station electric service, or to buildings situated less than one mile, which distance shall be computed on the most direct line, from the electric distribution line located nearest such buildings and constructed and operated prior to the above named date, except with the consent of the person operating such electric distribution line or with the consent of the public service board; provided further that, if any owner or occupant of such buildings shall make written demand for electric service to such buildings from the person operating such electric distribution line, such person shall forthwith supply electric service to such buildings at rates and charges no greater than the rates and charges demanded by a cooperative for electric service to such buildings; and provided also that, in the event of the neglect or refusal of the person operating such electric distribution line to furnish electric service pursuant to this subdivision, the public service board shall forthwith approve cooperative service to such buildings, unless such neglect or refusal to furnish such service is due to governmental restrictions upon or prohibitions of the use of materials required for furnishing such service, in which event the person operating such distribution line shall not be required to furnish such service until such restrictions or prohibitions are removedand, provided further, that acooperative doing any activity governed by this title shall be regulated hereunder for that activity;

(5) To assist persons to whom electric energy is or will be supplied by the cooperative in wiring their premises and in acquiring and installing, in compliance with all applicable codes, electrical and plumbing appliances, equipment, fixtures and apparatus by the financing thereof or otherwise, and in connection therewith to wire or cause to be wired, such premises and to purchase, acquire, lease as lessor or lessee, sell, distribute, install and repair such electric and plumbing appliances, equipment, fixtures and apparatus with the intention that members of the cooperative make the most efficient use of energy;

(6) To assist persons to whom electric energy is or will be supplied by the cooperative in constructing, equipping, maintaining and operating electric cold storage or processing plants, by financing the same or otherwiseTo work cooperatively with governmental entities or private sector institutions, or a combination of both, for purposes of economic or community development, to benefit cooperative members in their communities;

(7) To construct, purchase, lease as lessee or lessor, or otherwise acquire, and to equip, maintain and operate; and to sell, assign, convey, mortgage, pledge or otherwise dispose of or encumber electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, lands, buildings, structures, dams, plants, equipment and any other real or personal property tangible or intangible, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized. However, in the generation of electric energy by water power, a cooperative shall comply with the provisions of sections 1081-1099 of Title 10, relating to the construction and maintenance of dams;

(8) To purchase, lease as lessee or otherwise acquire and to use and exercise and to sell, assign, convey, mortgage, pledge or otherwise dispose of or encumber, franchises, rights, privileges, licenses and easements;

(9) To borrow money and otherwise contract indebtedness and to issue notes, bonds and other evidences of indebtedness; and to secure the payment thereof by mortgage, pledge or deed of trust of, or other encumbrance upon, any or all of its then owned or after-acquired real or personal property, assets, franchises, revenues or income;

(10) To construct, maintain and operate electric transmission and distribution lines along, upon, under and across publicly owned land and public thoroughfares, including, without limitation, all roads, highways, streets, alleys, bridges and causeways in the manner provided by chapters 71, 73 and 75 of this title;

(11) To become a member of other cooperatives formed pursuant to this chapter, subject however, to the rights of creditors and minority members of each cooperative, and in the event that one cooperative proposes to become a member of another cooperative, upon the majority vote of the members of each cooperative. If any creditor or minority member or group of members of either or both cooperatives feels that its interests will be adversely affected thereby, it may appeal to the superior court, of the county wherein the office or principal place of business of either cooperative is located, for relief. A minority group in or a member of a cooperative formed under this chapter may apply for relief to the superior court in the county in which the cooperative of which such person or group is a member has its office or principal place of business, if such person or group believes that its interests on matters of policy, consolidation, merger or dissolution are to be adversely affected by the action of the majority or the governing body of the cooperativeTo become a member of one or more other cooperatives formed under this chapter or under the laws of another state or the District of Columbia, to own all or part-ownership interest in a domestic or foreign corporation, and to hold all or part- ownership in a partnership, joint venture, or other entity, provided that such stock or other ownership interest shall be limited to entities with business purposes or operations which are consistent with the purposes set out in section 3001a of this title for which a cooperative may be organized and which will provide products or services to members of the cooperative;

(12) To conduct its business and exercise its powers within or without this state;

(13) To adopt, amend and repeal bylaws;

(14) To do and perform any other acts and things and to have and exercise any other powers which may be necessary or appropriate to accomplish the purpose for which the cooperative is organized; and

(15) ToFor purposes of providing electric power, to condemn property within the state, or easements or other limited rights therein, in the manner provided for public service corporations by sections 111-124 of this title, when it is necessary in order that it may render adequate electric service to the publicin the conduct of its business.

Sec. 4. 30 V.S.A. § 3003 is amended to read:

§ 3003. NAME

The name of a cooperative governed by this chapter shall include the words "electric” “energy” or a word designating any specific form of energy such as “electric”, “propane” or “natural gas” and "cooperative" and the abbreviation "inc." unless, in an affidavit made by its president or vice president and filed with the secretary of state, or in an affidavit made by a person signing articles of incorporation, consolidation, merger or conversion, which relate to such cooperative and filed, together with such articles, with the secretary of state, it shall appear that the cooperative desires to do business in another state and is or would be precluded therefrom by reason of the inclusion of such words or either thereof in its name. The name of a cooperative shall be distinct from the name of any other cooperative or corporation organized under the laws of, or authorized to do business in, this state. Only a cooperative or corporation doing business in this state pursuant to this chapter shall use both the words "electric" and "cooperative" in its name.

Sec. 5. 30 V.S.A. § 3005 is amended to read:

§ 3005. ARTICLES OF INCORPORATION, CONTENTS

Articles of incorporation of a cooperative shall recite that they are executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; (3) the names and addresses of the incorporators; and (4) the names and addresses of its trusteesdirectors; and may contain provisions not inconsistent with this chapter deemed necessary or advisable for the conduct of its business and not repugnant to the constitution or laws of this state. Such articles shall be signed by each incorporator and acknowledged by at least two of the incorporators, or on their behalf, if they are cooperatives. It shall not be necessary to recite in the articles of incorporation of a cooperative the purpose for which it is organized or its corporate powers. The purposes of the cooperative shall be set forth in the articles of incorporation, but it is not necessary to set forth its corporate powers.

Sec. 6. 30 V.S.A. § 3006 is amended to read:

§ 3006. BYLAWS

The board of trusteesdirectors shall adopt bylaws of a cooperative to be adopted following an incorporation, conversion, merger or consolidation. Thereafter the members shall adopt, amend or repeal the bylaws pursuant to the provisions thereof but in no case by the vote of less than a majority of those members voting thereon at a meeting of the members. The bylaws shall set forth the rights and duties of members and trusteesdirectors and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this chapter or with its articles of incorporation.

Sec. 7. 30 V.S.A. § 3007 is amended to read:

§ 3007. MEMBERS, QUALIFICATIONS

Each incorporator of a cooperative shall be a member thereof, but no other person may become a member thereof unless such other person agrees to useelectricuses electric energy or other services, goods or products furnished by the cooperative when they are made available through its electric distribution facilities. A member of a cooperative who agreesceases to use electric energy shall cease to be a member if he or she does not use electric energy supplied by the cooperative within six months after it is made available to him, or if electric energy is not made available to him by the cooperative within two years after he or she becomes a member or some lesser period as the bylaws of the cooperative may provide. A husband and wife may hold a joint membership in a cooperative. Two or more owners or occupants of property served by a cooperative may hold a joint membership in a cooperative. Membership in a cooperative shall not be transferable, except as provided by the bylaws. The bylaws may prescribe additional qualifications and limitations in respect to membership.

Sec. 8. 30 V.S.A. § 3008 is amended to read:

§ 3008. MEETINGS

An annual meeting of the members of a cooperative shall be held at such time and place as shall be provided in the bylaws. Special meetings of the members may be called by the president, by the board of trusteesdirectors, by three trusteesdirectors or by not less than ten percent of the members. All meetings of members shall be called at and held in some convenient public place in this state.

Sec. 9. 30 V.S.A. § 3010 is amended to read:

§ 3010. MEMBERS NECESSARY FOR QUORUM

Unless the bylaws prescribe the presence of a greater percentage or greater number of members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than one thousand members, shall be fiveten percent of all members, present in person, and of a cooperative having more than one thousand members, shall be fifty100 members, present in person. For the purpose of determining the presence of a quorum under this section, all members shall be counted who are either present in person or who vote on business transacted at the meeting in a manner allowed under section 3011 of this title. If less than a quorum is present at a meeting, a majority of those present in person may adjourn the meeting from time to time without further notice but no business may validly be enacted at any meeting without the presence of a quorum.

Sec. 10. 30 V.S.A. § 3011 is amended to read:

§ 3011. VOTING

Each member shall be entitled to one vote on each matter submitted to a vote at a meeting of the members. Voting shall be in person, but if the bylaws so provide, may also be by proxy or, by mail, telephonically, or electronically. If the bylaws provide for voting by proxy or, by mail, telephonically, or electronically, they shall also prescribe the conditions under which such voting shall be permitted. No person shall vote as proxy for more than three members at any meeting. If the bylaws of a cooperative provide for voting by proxy or, by mail, telephonically or electronically, such vote shall have full force and effect as if voted in person by a member at a meeting of the members in accordance with the provisions of the bylaws and as specifically referred to under this title and chapter. Nothing contained in this section shall alter the provisions of section 3016 of this title.

Sec. 11. 30 V.S.A. § 3013 is amended to read:

§ 3013. TRUSTEESDIRECTORS, QUALIFICATIONS

The business of a cooperative shall be managed by a board of not less than five trusteesdirectors, each of whom shall be a member of the cooperative or of another cooperative which is a member thereof, shall not be an employee ofthe cooperative, and a majority of whom shall reside in this state. The bylaws shall prescribe the number of trusteesdirectors, their qualifications, other than those prescribed in this chapter, the manner of holding meetings of the board of trusteesdirectors and of electing successors to trusteesdirectors who shall resign, die or otherwise be incapable of acting. The bylaws may also provide for the removal of trusteesdirectors from office and for the election of their successors. Trustees shall receive no compensation for their services as such and except in emergencies, shall not be employed by the cooperative in any capacity involving compensation without the approval of the members. However, the bylaws may provide that a fixed fee and expenses of attendance may be allowed to each trustee for attendance at each meeting of the board of trustees. If a husband and wife hold a joint membership in a cooperative, either, but not both, may be elected a trustee. Directors as such may not receive any salary for their services, but by resolution of the board of directors a fixed sum and expenses of attendance may be allowed for attendance at each meeting of the board of directors, or a committee thereof, or other customary activities necessary to carry out the duties of a director. The board of trusteesdirectors may exercise all of the powers of a cooperative not conferred upon the members by this chapter or its articles of incorporation or bylaws.

Sec. 12. 30 V.S.A. § 3014 is amended to read:

§ 3014. ELECTION AND TERM OF OFFICE

(a) The bylaws of a cooperative shall determine the method of election and term of office of the trusteesdirectors.

(b) Existing bylaws shall govern until duly amended. Those cooperatives which have in the past in compliance with their bylaws elected their trusteesdirectors to serve for staggered terms of three or four years may continue the practice.

Sec. 13. 30 V.S.A. § 3016 is amended to read:

§ 3016. DISTRICTS

The bylaws may provide for the division of the territory served or to be served by a cooperative into two or more districts for any purpose, without limitation, the nomination and election of trustees and the election and functioning of district delegates. In such case the bylaws shall prescribe the boundaries of the districts, the manner of establishing and changing such boundaries and the manner in which such districts shall function. No member at a district meeting and no district delegate at a meeting shall vote by proxy or by mail.

Sec. 14. 30 V.S.A. § 3017 is amended to read:

§ 3017. OFFICERS, DUTIES

The officers of a cooperative shall consist of a president, vice president, clerksecretary and treasurer, who shall be elected annually by and from the board of trusteesdirectors. The clerk shall be a resident of this state. When a person holding office ceases to be a trusteedirector, he or she shall cease to hold such office. The offices of clerksecretary and treasurer may be held by the same person. A vacancy in the office of clerksecretary may be filled by the board of trusteesdirectors, and the person so elected shall serve until his or her successor is elected. When a cooperative neglects for six months to appoint and have a clerk, it shall forfeit $50.00 to the person injured to be recovered in an action on this statute. The clerksecretary shall record all votes and proceedings of the members and trusteesdirectors or executive committee thereof. He or she shall have the custody of the corporate seal and of the corporate records and shall keep such records within this state. He or she shall keep a book containing a record of the names of the members, the date of their membership and of others served by the cooperative, and of the places of residence of each, which book shall always be open to the inspection of members. He or she shall procure and file in the office of the clerk of the town where the principal office is located and also keep on file in his or her own office, certified copies of all papers required by law or by this chapter to be filed with the secretary of state. The board of trusteesdirectors may also elect or appoint such other officers, agents or employees as it deems necessary or advisable and shall prescribe their powers and duties. An officer may be removed from office and his or her successor elected in the manner prescribed by the bylaws.