Download this document in MS Word 97 format

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 further]* provided, 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 removed]* and, provided further, that a cooperative 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 otherwise]* To 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 cooperative]* To 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) *[To]* For 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 public]* *[in 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 *[trustees]* directors; 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 *[trustees]* directors 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 *[trustees]* directors 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 use]* *[electric]* uses 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 *[agrees]* ceases 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 t*[rustees]* directors, by three *[trustees]* directors 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 *[five]* ten percent of all members*[, present in person]*, and of a cooperative having more than one thousand members, shall be *[fifty]* 100 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. *[TRUSTEES]* DIRECTORS, QUALIFICATIONS

The business of a cooperative shall be managed by a board of not less than five *[trustees]* directors, each of whom shall be a member of the cooperative or of another cooperative which is a member thereof, shall not be an employee of the cooperative, and *[a majority of whom]* shall reside in this state. The bylaws shall prescribe the number of *[trustees]* directors, their qualifications, other than those prescribed in this chapter, the manner of holding meetings of the board of *[trustees]* directors and of electing successors to *[trustees]* directors who shall resign, die or otherwise be incapable of acting. The bylaws may also provide for the removal of *[trustees]* directors 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 *[trustees]* directors 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 *[trustees]* directors.

(b) Existing bylaws shall govern until duly amended. Those cooperatives which have in the past in compliance with their bylaws elected their *[trustees]* directors 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, *[clerk]* secretary and treasurer, who shall be elected annually by and from the board of *[trustees]* directors. *[The clerk shall be a resident of this state.]* When a person holding office ceases to be a *[trustee]* director, he or she shall cease to hold such office. The offices of *[clerk]* secretary and treasurer may be held by the same person. A vacancy in the office of *[clerk]* secretary may be filled by the board of *[trustees]* directors, 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 *[clerk]* secretary shall record all votes and proceedings of the members and *[trustees]* directors 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 *[trustees]* directors 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.

Sec. 15. 30 V.S.A. § 3018 is amended to read:

§ 3018. AMENDMENT OF ARTICLES

A cooperative may amend its articles of incorporation by complying with the following requirements: The proposed amendment shall be presented to a meeting of the members, the notice of which shall set forth or have attached thereto the proposed amendment. If the proposed amendment, with changes, is approved by the affirmative vote of not less than two-thirds of those members voting thereon at such meeting, a certificate of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its seal shall be affixed thereto and attested by its *[clerk]* secretary. The certificate of amendment shall recite that it is executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; and (3) the amendment to its articles of incorporation. The president or vice president executing such certificate of amendment shall make and annex thereto an affidavit stating that the provisions of this section in respect of the amendment set forth in such articles were duly complied with.

Sec. 16. 30 V.S.A. § 3020 is amended to read:

§ 3020. CONSOLIDATION

Two or more cooperatives licensed in this state under this law, each of which is hereinafter designated a "consolidating cooperative," may consolidate into a new cooperative, hereinafter designated the "new cooperative," by complying with the following requirements:

(1) The proposition for the consolidation of the consolidating cooperatives into the new cooperative and proposed articles of consolidation to effect the same shall be submitted to a meeting of the members of each consolidating cooperative, the notice of which shall have attached thereto a copy of the proposed articles of consolidation;

(2) If the proposed consolidation and the proposed articles of consolidation, with amendments, are approved by the affirmative vote of not less than two-thirds of the members of each consolidating cooperative voting thereon at each such meeting, articles of consolidation in the form approved shall be executed and acknowledged on behalf of each consolidating cooperative by its president or vice president and its seal shall be affixed thereto and attested by its *[clerk]* secretary. The articles of consolidation shall recite that they are executed pursuant to this chapter and shall state: (A) the name of each consolidating cooperative and the address of its principal office; (B) the name of the new cooperative and the address of its principal office; (C) a statement that each consolidating cooperative agrees to the consolidation; (D) the names and addresses of the *[trustees]* directors of the new cooperative; and (E) the terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner in which members of the consolidating cooperative may or shall become members of the new cooperative; and may contain provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the new cooperative. The president or vice president of each consolidating cooperative executing such articles of consolidation shall make and annex thereto an affidavit stating that the provisions of this section in respect of such articles were duly complied with by such cooperative.

Sec. 17. 30 V.S.A. § 3021 is amended to read:

§ 3021. MERGER, REQUIREMENTS

One or more cooperatives, each of which is hereinafter designated a "merging cooperative," may merge into another cooperative, hereinafter designated the "surviving cooperative," by complying with the following requirements:

(1) The proposition for the merger of the merging cooperatives into the surviving cooperative and proposed articles of merger to give effect thereto shall be submitted to a meeting of the members of each merging cooperative and of the surviving cooperative, the notice of which shall have attached thereto a copy of the proposed articles of merger;

(2) If the proposed merger and the proposed articles of merger, with amendments, are approved by the affirmative vote of not less than two-thirds of those members of each cooperative voting thereon at each such meeting, articles of merger in the form approved shall be executed and acknowledged on behalf of each such cooperative by its president or vice president and its seal shall be affixed thereto and attested by its *[clerk]* secretary. The articles of merger shall recite that they are executed pursuant to this chapter and shall state: (A) the name of each merging cooperative and the address of its principal office; (B) the name of the surviving cooperative and the address of its principal office; (C) a statement that each merging cooperative and the surviving cooperative agree to the merger; (D) the names and addresses of the *[trustees]* directors of the surviving cooperative; and (E) the terms and conditions of the merger and the mode of carrying the same into effect, including the manner in which members of the merging cooperatives may become members of the surviving cooperative. Such articles may contain provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the surviving cooperative. The president or vice president of each cooperative executing such articles of merger shall make and annex thereto an affidavit stating that the provisions of this section in respect to such articles were duly complied with by such cooperative.

Sec. 18. 30 V.S.A. § 3026 is amended to read:

§ 3026. PRIVATE CORPORATION, CHANGE

A corporation organized under the laws of this state and supplying or authorized to supply *[electric]* energy may be converted into a cooperative by complying with the following requirements and shall thereupon become subject to this chapter with the same effect as if originally organized under this chapter:

(1) The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be submitted to a meeting of the members or stockholders of such corporation, the notice of which shall have attached thereto a copy of the proposed articles of conversion;

(2) If the proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion, with amendments, are approved by the affirmative vote of not less than two-thirds of those members of such corporation voting thereon at such meeting, or, if such corporation is a stock corporation, by the affirmative vote of the holders of not less than two-thirds of the shares of the capital stock of such corporation represented at such meeting and voting thereon, articles of conversion in the form approved shall be executed and acknowledged on behalf of such corporation by its president or vice president and its seal shall be affixed thereto and attested by its *[clerk]* secretary.

(3) The articles of conversion shall recite that they are executed pursuant to this chapter and shall state: (A) the name of the corporation and the address of its principal office prior to its conversion into a cooperative; (B) the statute or statutes under which it was organized; (C) a statement that such corporation elects to become a cooperative*[, nonprofit, nonstock membership corporation]* subject to this chapter; (D) its name as a cooperative; (E) the address of the principal office of the cooperative; (F) the names and addresses of the *[trustees]* directors of the cooperative; and (G) the manner in which members or stockholders of such corporation may become members of the cooperative; and may contain any provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the cooperative. The president or vice president executing such articles of conversion shall make and annex thereto an affidavit stating that the provisions of this section were duly complied with in respect of such articles. The articles of conversion shall be deemed to be the articles of incorporation of the cooperative.

Sec. 19. 30 V.S.A. § 3028 is amended to read:

§ 3028. *[CORPORATION COMMENCING BUSINESS]* DISSOLUTION OF COOPERATIVES

A cooperative which has commenced business may be dissolved in the following manner: The members at a meeting shall approve, by the affirmative vote of not less than two-thirds of the members voting thereon at such meeting, a proposal that the cooperative be dissolved. Upon such approval, a certificate of election to dissolve, hereinafter designated the "certificate," executed under oath and acknowledged on behalf of the cooperative by its president or vice president under its seal, attested by its *[clerk]* secretary, and stating: (1) the name of the cooperative; (2) the address of its principal office; and (3) that the members of the cooperative have duly voted that the cooperative be dissolved, shall be filed with the secretary of state. Upon filing of such certificate by the secretary of state, the cooperative shall cease to carry on its business except to the extent necessary for the winding up thereof, but its corporate existence shall continue until a certificate of dissolution has been filed by the secretary of state. The board of *[trustees]* directors shall immediately cause notice of the dissolution proceedings to be mailed to each known creditor of and claimant against the cooperative and to be published once a week for two successive weeks in a newspaper of general circulation in the county in which the principal office of the cooperative is located. The board of *[trustees]* directors shall wind up and settle the affairs of the cooperative, collect sums owing to it, liquidate its property and assets, pay and discharge its debts, obligations and liabilities, and do all other things required to wind up its business. After paying or discharging or adequately providing for the payment or discharge of all its debts, obligations and liabilities, the board shall distribute any remaining sums among its members and former members in proportion to the patronage of the respective members or former members during the seven years next preceding the date of the filing of the certificate by the secretary of state, or if the cooperative has not been in existence for such period, then during the period of its existence prior to such filing. The board of *[trustees]* directors shall thereupon authorize the execution of a certificate of dissolution, which shall be executed and acknowledged on behalf of the cooperative by its president or vice president, and its seal shall be affixed thereto and attested by its *[clerk]* secretary. The certificate of dissolution shall recite that it is executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; (3) the date on which the certificate of election to dissolve was filed by the secretary of state; (4) that there are no actions or suits pending against the cooperative; (5) that all debts, obligations and liabilities of the cooperative have been paid and discharged or that adequate provision has been made therefor; and (6) that the provisions of this chapter relative to dissolution have been duly complied with. The president or vice president executing the certificate of dissolution shall make and annex thereto an affidavit stating that the statements made therein are true.

Sec. 20. 30 V.S.A. § 3030 is amended to read:

§ 3030. REVENUES, USE OF

Revenues of a cooperative for a fiscal year in excess of the amount thereof necessary:

(1) To defray the expenses of the operation and maintenance of the facilities of the cooperative during such fiscal year;

(2) To pay interest and principal obligations of the cooperative coming due in such fiscal year;

(3) To 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 *[trustees]* directors;

(4) To provide a reasonable reserve for working capital;

(5) To provide a reserve for the payment of indebtedness of the cooperative 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; and

(6) To provide a fund, hereinafter designated as the "cooperative education fund," for education in cooperation and for the dissemination of information concerning the effective use of *[electric]* energy and other services, goods or products made available by the cooperative, shall, unless otherwise determined by a vote of the members, be distributed by the cooperative to its members and to other persons to whom the cooperative supplies *[electric]* energy or other services, goods or products made available through its electric distribution facilities, as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members and such other persons, paid for during such fiscal year, provided, however, such distribution shall not be made to such other person until he has become a member of the cooperative. If such other person does not become a member of the cooperative within one year after the amount of his distributive share or accumulated distributive shares equals the membership fee required by the bylaws of the cooperative, or, if no membership fee is required, within two years after the declaration of such patronage refund, he shall cease to be entitled to such share or shares, which shall, in such case, be paid into the cooperative education fund. The cooperative shall make such additional provision, in the bylaws or otherwise, relative to the disposition of the revenues of the cooperative as may be necessary and appropriate to establish and maintain the nonprofit character of the cooperative. Nothing herein contained shall be construed to prohibit the payment by a cooperative of all or any part of its indebtedness prior to the date when the same shall become due.

Sec. 21. 30 V.S.A. § 3031 is amended to read:

§ 3031. MORTGAGE AND INVESTMENT

(a) The board of *[trustees]* directors of a cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board of *[trustees]* directors shall determine, to secure indebtedness of the cooperative *[to the United States of America or an agency or instrumentality thereof, or to a national financing institution in which the cooperative holds membership, organized on a cooperative plan for the purpose of financing its memberships' programs, projects and undertakings]* in the ordinary course of the cooperative’s electric business.

(b) The board of directors of a cooperative shall have full power and authority, with the approval of two-thirds of the members of the cooperative voting on such authorization, to authorize the execution and delivery of a mortgage or mortgages or a deed of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, upon such terms and conditions as the board of directors shall determine, to secure indebtedness of the cooperative for purposes authorized by statute other than operation of the cooperative’s electric business.

(c) No more than 50 percent of the member equity of an electric cooperative subject to the provisions of this chapter may be used to invest in all business activities authorized by statute, other then electric business activities. Each individual investment by the electric cooperative in a business activity authorized by statute, other than electric, exceeding three percent of the members’ equity, may be made only with approval of two-thirds of the members voting on such proposal.

(d) Business activities authorized by statute, other than electric, shall be geographically limited to any county in which the cooperative has authority to sell energy or other services furnished by the cooperative when they are made available through its electric distribution facilities, or any county in which an authorized business is presently serving.

Sec. 22. 30 V.S.A. § 3032 is amended to read:

§ 3032. --*[COOPERATIVE MAY MORTGAGE, WHEN]* SALE OR LEASE OF ASSETS

A cooperative may not *[otherwise]* sell, *[mortgage,]* lease or otherwise dispose of *[or encumber]* all or a substantial portion of its property unless such sale, *[mortgage,]* lease or other disposition *[or encumbrance]* is authorized by the affirmative vote of not less than a majority of all the members of the cooperative. *[However, notwithstanding other provisions of law or this chapter, the board of trustees, upon the authorization of a majority of the members of the cooperative present at a meeting, may sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative or a foreign corporation doing business in this state pursuant to this chapter or to the holder or holders of notes, bonds or other evidences of]* *[indebtedness issued to the United States of America or an agency or instrumentality thereof.]* Members may vote in person or in a manner authorized under section 3011 of this title.

Sec. 23. 30 V.S.A. § 3035 is amended to read:

§ 3035. SAFETY STANDARDS

As a minimum requirement *[construction and maintenance of electric lines by a cooperative shall comply with the standards of the national electric safety code in effect at the time of such construction]* for any activity authorized by this chapter, the cooperative shall adhere to all applicable federal, state, or local safety codes, regulations or standards.

Sec. 24. 30 V.S.A. § 3036 is amended to read:

§ 3036. ACKNOWLEDGMENTS, MEMBERS AUTHORIZED

A person who is authorized to take acknowledgments under the laws of this state shall not be disqualified from taking acknowledgments of instruments executed in favor of a cooperative or to which it is a party, by reason of being an officer, *[trustee]* director or member of such cooperative.

Sec. 25. 30 V.S.A. § 3042 is amended to read:

§ 3042. ANNUAL REPORTS

Each cooperative formed under the provisions of this chapter shall prepare and submit to its annual meeting a report containing the name of the cooperative, its principal place of business, a general statement of its business operations during the fiscal year, including a statement of its assets and liabilities, the amount of its indebtedness secured by mortgage or pledge of the corporate property or part thereof, the names of the *[trustees]* directors, officers and *[clerk]* secretary. A copy of the annual report attested by the *[clerk]* secretary shall be filed with the secretary of state within *[thirty]* 30 days after the annual meeting.

Sec. 26. 30 V.S.A. § 3043 is amended to read:

§ 3043. FORMATION OF COOPERATIVES BY COOPERATIVES

(a) Notwithstanding any other provision of this chapter, one or more cooperatives formed under the provisions of this chapter may organize and control a cooperative having as its principal purpose the generation, manufacture, purchase, acquisition, accumulation, transmission, sale, supply and disposal of *[electric]* energy, cable television, telecommunications, interactive media, and internet access. Such a cooperative shall have all of the powers of cooperatives formed under the provisions of this chapter.

(b) Members of a cooperative organized pursuant to subsection (a) of this section shall be the cooperative or cooperatives organizing it and may include any individual, partnership, association, corporation, municipality or cooperative engaged in the generation, transmission or distribution of *[electric]* energy within or without the state of Vermont. The bylaws of a cooperative organized pursuant to subsection (a) of this section may provide for more than one class of membership, including a class or classes with no rights or with limited rights to vote on matters requiring the vote of members under this chapter, and including a class or classes with no rights or limited rights to receive distributions of patronage refunds.

Sec. 27. 30 V.S.A. § 3002a is added to read:

§ 3047. COST ALLOCATIONS; SUBSIDIZATION PROHIBITED

In carrying out the purposes of this chapter, the electric revenues received from regulated activities of a cooperative shall not subsidize any non-electric activities of the cooperative. A cooperative shall adopt cost allocation procedures to ensure that the electrical distribution revenues received from regulated activities of a cooperative do not subsidize any of the non-electric activities and that costs attributable to any non-electric activities are not included in the cooperative’s rates for electric service. A copy of the cost allocation procedures shall be available to the public upon request. Non-electric activities of the cooperative shall not be financed by loans or grants from the Rural Utilities Service of the United States Department of Agriculture or any successor federal agency.

Sec. 28. 30 V.S.A. § 209(d)(3) is amended to read:

(3) In addition to its existing authority, the board may establish by order or rule a volumetric charge to customers for the support of energy efficiency programs that meet the requirements of section 218c of this title. The charge shall be known as the energy efficiency charge, shall be shown separately on each customer's bill, and shall be paid to a fund administrator appointed by the board. When such a charge is shown, notice as to how to obtain information about energy efficiency programs approved under this section shall be provided in a manner directed by the board. This notice shall include, at a minimum, a toll free telephone number, and to the extent feasible shall be on the customer's bill and near the energy efficiency charge. *[Funds collected through an energy efficiency charge shall not be funds of the state, shall not be available to meet the general obligations of the government, and shall not be included in the financial reports of the state.]* Balances in the fund shall be ratepayer funds, shall be used to support the activities authorized in this subdivision, and shall be carried forward and remain in the fund at the end of each fiscal year. These monies shall not be available to meet the general obligations of the state. Interest earned shall remain in the fund. The board will annually provide the legislature with a report detailing the revenues collected and the expenditures made for energy efficiency programs under this section.

Sec. 29. FINDINGS; PURPOSE

The legislature finds that because of the failure of a key component of the electric transmission system, it is necessary to give the public service board special authority to be used in this instance only and for a specified and limited time. Vermont Electric Power Company (“VELCO”) has reported that the phase angle regulator that regulates the power flows on the PV 20 transmission line across Lake Champlain failed on March 22, 2000. The department of public service and VELCO indicate that if preventive emergency action is not taken by June 1, 2000, there is an increased risk of a power shortage in northwest Vermont. Therefore, notwithstanding the requirements of 30 V.S.A. § 248, and upon such notice as the public service board may require, the public service board may issue a waiver for a specified and limited time, not to extend beyond September 1, 2001, of the statutory prohibitions upon site preparation for or construction of temporary generating facilities and temporary associated gas transmission facilities to support the stability and reliability of the transmission system because of the failure of the phase angle regulator. Upon the expiration of the waiver, if a certificate of public good has not been issued under 30 V.S.A. § 248, the board shall require the removal of the facilities subject to the waiver upon its expiration.

Because the construction and operation of such generating facilities will likely require permits from the agency of natural resources and because the normal permit process would not allow preventive emergency action to be taken by June 1, 2000, the secretary of the agency of natural resources, or the commissioner of the department of environmental conservation as applicable, may reduce any notice and public comment periods to no fewer than seven days.

Sec. 30. STUDY

The legislature finds that deployment of broadband telecommunications services in Vermont, especially in rural sections of the state, is important for the economic competitiveness of the state. To encourage this investment, the department of public service shall examine the rate of deployment of broadband telecommunications services in rural areas and the need to assist smaller cable and telecommunications companies to upgrade access to the internet in their franchise areas to enable such deployment. The department and the tax department shall compare the tax burden of small cable and telecommunications companies in Vermont with other states and with other similar type industries in Vermont and make recommendations as to whether or not Vermont’s method of taxing this property should be changed. The departments shall prepare a report on the results of their work to be submitted to the legislature by December 15, 2000.

Sec. 31. EFFECTIVE DATE

Sec. 29 of this act shall take effect from passage.

Approved: May 23, 2000