Bill Text: TX SB1743 | 2011-2012 | 82nd Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to access by members of certain electric cooperatives to meetings of the boards of directors and certain information of the electric cooperatives.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2011-05-16 - No action taken in committee [SB1743 Detail]
Download: Texas-2011-SB1743-Introduced.html
Bill Title: Relating to access by members of certain electric cooperatives to meetings of the boards of directors and certain information of the electric cooperatives.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2011-05-16 - No action taken in committee [SB1743 Detail]
Download: Texas-2011-SB1743-Introduced.html
82R3114 RWG-F | ||
By: Fraser | S.B. No. 1743 |
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relating to access by members of electric cooperatives to meetings | ||
of the boards of directors and certain information of the electric | ||
cooperatives. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 161.002, Utilities Code, is amended by | ||
adding Subdivision (2-a) to read as follows: | ||
(2-a) "Board meeting" means a deliberation between a | ||
quorum of the voting board, or between a quorum of the voting board | ||
and another person, during which electric cooperative business or | ||
policy over which the board has responsibility is discussed or | ||
considered, or during which the board takes formal action. The term | ||
does not include the gathering of a quorum of the board at a social | ||
function unrelated to the business of the cooperative, or the | ||
attendance by a quorum of the board at a regional, state, or | ||
national convention or workshop, ceremonial event, or press | ||
conference, if formal action is not taken and any discussion of | ||
cooperative business is incidental to the social function, | ||
convention, workshop, ceremonial event, or press conference. | ||
SECTION 2. Subchapter A, Chapter 161, Utilities Code, is | ||
amended by adding Section 161.006 to read as follows: | ||
Sec. 161.006. NONAPPLICABILITY. The following sections of | ||
this chapter do not apply to an electric cooperative that engages | ||
exclusively or primarily in the wholesale sale or transmission of | ||
electricity and does not have a certificated service area for the | ||
retail sale of electricity: | ||
(1) Sections 161.075(a), (d), (e), (f), (g), (h), (i), | ||
(j), and (k); | ||
(2) Section 161.0751; | ||
(3) Section 161.077(d); | ||
(4) Section 161.080; | ||
(5) Section 161.081; | ||
(6) Section 161.126; and | ||
(7) Section 161.127. | ||
SECTION 3. Section 161.064(b), Utilities Code, is amended | ||
to read as follows: | ||
(b) The bylaws may contain any provision for the regulation | ||
and management of the affairs of the electric cooperative that is | ||
consistent with the articles of incorporation and this chapter. | ||
SECTION 4. Section 161.072, Utilities Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) Director elections shall be conducted in a manner that | ||
is fair and open to all members of the electric cooperative. | ||
SECTION 5. Subchapter B, Chapter 161, Utilities Code, is | ||
amended by adding Sections 161.0721 and 161.0722 to read as | ||
follows: | ||
Sec. 161.0721. ELECTION OF DIRECTORS IN LARGE COOPERATIVES. | ||
(a) This section applies only to an electric cooperative with more | ||
than 170,000 members. | ||
(b) Directors may be elected only by district. The board | ||
shall establish single-member districts from which the directors | ||
are to be elected. In establishing districts, the board shall | ||
attempt to have directors represent geographic areas with equal | ||
numbers of people. | ||
(c) A member may vote for a director to represent a district | ||
only if the member resides in that district. | ||
(d) Qualified members may be nominated as candidates in a | ||
director election only through a written petition by members. The | ||
bylaws of the electric cooperative must: | ||
(1) specify the number of printed names and dated | ||
signatures a petition nominating a candidate must contain; | ||
(2) specify a period within which a petition | ||
nominating a candidate must be submitted to the electric | ||
cooperative; and | ||
(3) specify that only members residing in a district | ||
may sign a petition for the nomination of a candidate to represent | ||
that district. | ||
(e) A director or board committee may not cast a member's | ||
proxy vote in a director election. | ||
(f) Subsection (e) may not be construed as limiting the | ||
right of an individual member to collect or cast a proxy vote of | ||
another member in a director election to the extent allowed by the | ||
bylaws of the electric cooperative. | ||
(g) A person may not use an incentive or other enticement to | ||
encourage a member to authorize another person to cast the member's | ||
proxy vote in a director election. | ||
(h) This section may not be construed as limiting the use of | ||
a proxy as provided by Section 161.069 to establish a quorum to | ||
transact business other than the election of a director. | ||
Sec. 161.0722. ELECTION OF DIRECTORS IN SMALL COOPERATIVES. | ||
(a) This section applies only to an electric cooperative with not | ||
more than 170,000 members. | ||
(b) A director who is standing for reelection may not serve | ||
on a committee established under the bylaws of the electric | ||
cooperative for the purpose of casting, or being authorized to | ||
cast, the proxy vote of a member in a director election. | ||
(c) A member's proxy vote may be cast in a director election | ||
only if: | ||
(1) a proxy form is sent by regular mail to each member | ||
of record not later than the 30th day before the date of the meeting | ||
at which proxy votes are counted; | ||
(2) the proxy form designates each candidate who is an | ||
incumbent director; | ||
(3) an exact copy of the proxy form is posted on the | ||
electric cooperative's Internet website, if the cooperative | ||
maintains a website; | ||
(4) the proxy form includes information describing the | ||
process by which proxy votes are authorized and cast, including: | ||
(A) the name of each member of the committee, if | ||
any, established under the bylaws of the electric cooperative for | ||
the purpose of casting proxy votes in a director election; | ||
(B) the process prescribed by the bylaws of the | ||
electric cooperative for selecting members to serve on the | ||
committee; and | ||
(C) the district represented by each committee | ||
member, if applicable; and | ||
(5) the proxy form contains the following statements, | ||
in bold type: | ||
(A) "If you grant the committee your proxy, you | ||
are giving the committee full authority to vote your proxy for the | ||
candidates you selected, or, if you did not select any candidates, | ||
to vote your proxy for candidates the committee selects."; | ||
(B) "You may rescind your proxy at any time | ||
before votes are cast at the meeting to elect directors."; and | ||
(C) "State law prohibits any person from using | ||
incentives or other enticements to encourage you to provide your | ||
proxy in any board election." | ||
(d) Subsection (c) may not be construed as limiting the | ||
right of an individual member to collect or cast a proxy vote of | ||
another member in a director election to the extent allowed by the | ||
bylaws of the electric cooperative. | ||
(e) A person may not use an incentive or other enticement to | ||
encourage a member to authorize another person to cast the member's | ||
proxy vote in a director election. | ||
(f) This section may not be construed as limiting the use of | ||
a proxy as provided by Section 161.069 to establish a quorum to | ||
transact business other than the election of a director. | ||
(g) If the bylaws of the electric cooperative allow a | ||
committee of members to nominate qualified members as candidates in | ||
a director election, the bylaws must also: | ||
(1) allow nominations to be made through one or more | ||
written petitions by members; | ||
(2) specify the number of printed names and dated | ||
signatures a petition nominating a candidate must contain; and | ||
(3) specify a period within which a petition | ||
nominating a candidate must be submitted to the electric | ||
cooperative. | ||
(h) A petition submitted under Subsection (g) must provide | ||
on the petition the name and address of the member seeking | ||
nomination and, if the electric cooperative nominates or elects | ||
directors by district, the district the member seeks to represent. | ||
SECTION 6. Section 161.075, Utilities Code, is amended to | ||
read as follows: | ||
Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a | ||
regular or special board meeting at the place and time specified by | ||
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the bylaws of the electric cooperative. | ||
(b) The attendance of a director at a board meeting | ||
constitutes a waiver of notice to the director of the meeting unless | ||
the director attends the meeting for the express purpose of | ||
objecting to the transaction of business at the meeting because the | ||
meeting is not lawfully called or convened. | ||
(c) A notice or waiver of notice of a board meeting given to | ||
a director is not required to specify the business to be transacted | ||
at the meeting or the purpose of the meeting. | ||
(d) Except as provided by this section, each member of the | ||
electric cooperative is entitled to attend a regular or special | ||
board meeting. A person who is not a member of the electric | ||
cooperative may not attend a regular or special board meeting | ||
unless the person has been invited by a member. | ||
(e) At the board's discretion, the board may convene an | ||
executive session to which the members do not have access to | ||
deliberate and take action on sensitive matters, such as matters | ||
involving confidential personnel information, contracts, lawsuits, | ||
real estate transactions, competitively sensitive information, | ||
information related to the security of the electrical system or the | ||
electric cooperative, or other privileged, confidential, or | ||
proprietary information. | ||
(f) The board shall reconvene the open session of the | ||
regular or special board meeting to announce the final action taken | ||
on a matter discussed in executive session, except matters | ||
involving confidential personnel information, real estate | ||
transactions, competitively sensitive information, or security | ||
information. | ||
(g) The board secretary or person designated by the | ||
secretary shall make and keep written minutes of each regular or | ||
special board meeting. | ||
(h) The board shall adopt and comply with procedures for | ||
providing a member with access to the entirety of a regular or | ||
special board meeting, other than an executive session. | ||
(i) The board secretary or person designated by the | ||
secretary shall make and keep a written or audio record of each | ||
executive session. The secretary shall preserve the record for at | ||
least two years after the session. The record must include: | ||
(1) a statement of the subject matter of each | ||
deliberation; | ||
(2) a record of any further action taken; and | ||
(3) an announcement by the presiding director at the | ||
beginning and end of the session indicating the date and time. | ||
(j) Subsections (d), (e), (f), (g), (h), and (i) apply to an | ||
electric cooperative with more than 170,000 members. | ||
(k) An electric cooperative with not more than 170,000 | ||
members shall hold an election at the electric cooperative's first | ||
annual meeting held after December 31, 2011, on the question of | ||
whether the electric cooperative will be subject to the | ||
requirements of Subsections (d)-(i). If a majority of the members | ||
voting at the election vote in favor of the electric cooperative | ||
remaining subject to those requirements, the electric cooperative | ||
shall hold another election on the same question at every | ||
subsequent fifth annual meeting until the majority of members | ||
voting at an election under this subsection vote against the | ||
electric cooperative remaining subject to those requirements. | ||
SECTION 7. Subchapter B, Chapter 161, Utilities Code, is | ||
amended by adding Section 161.0751 to read as follows: | ||
Sec. 161.0751. NOTICE OF BOARD MEETINGS. (a) The board | ||
shall give members notice of the date, hour, place, and planned | ||
agenda of a regular or special board meeting. Notice of a board | ||
meeting must be given at least three days before the scheduled time | ||
of the meeting by: | ||
(1) posting a notice on a bulletin board in a place | ||
convenient to members at the electric cooperative's main office and | ||
at each district office; | ||
(2) posting a notice on the electric cooperative's | ||
Internet website, if the cooperative maintains a website; and | ||
(3) providing a copy of the notice to a member upon a | ||
member's request. | ||
(b) In the event of an emergency or urgent matter, notice | ||
may be given in the manner prescribed by Subsection (a) at any time | ||
before a regular or special board meeting is convened. An action | ||
taken by the board at a meeting for which notice is given under this | ||
subsection must be ratified by the board at the next meeting for | ||
which notice is given under Subsection (a). | ||
SECTION 8. Section 161.077, Utilities Code, is amended by | ||
adding Subsection (d) to read as follows: | ||
(d) The provisions of this chapter that apply to the board | ||
also apply to the executive committee. | ||
SECTION 9. Subchapter B, Chapter 161, Utilities Code, is | ||
amended by adding Sections 161.080 and 161.081 to read as follows: | ||
Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS. (a) | ||
Except as provided by Subsection (c), a member of an electric | ||
cooperative may, at any reasonable time and on written request that | ||
states a proper purpose for the request, inspect and copy the books | ||
and records of the electric cooperative relevant to that purpose. | ||
(b) An electric cooperative may charge a member for the cost | ||
of providing information under Subsection (a). | ||
(c) An electric cooperative may limit or deny a member's | ||
request to inspect its books and records if the member: | ||
(1) does not meet the requirements of Subsection (a); | ||
(2) seeks information the release of which would | ||
unduly infringe on or invade the privacy of a person; | ||
(3) seeks information related to a trade secret; | ||
(4) seeks personnel information the disclosure of | ||
which would violate other law or would constitute a clearly | ||
unwarranted invasion of personal privacy; | ||
(5) seeks information related to: | ||
(A) pending or reasonably anticipated | ||
litigation; | ||
(B) a real estate transaction for a project that | ||
has not been formally announced or for which contracts have not been | ||
formally awarded; | ||
(C) the electric cooperative's competitive | ||
activity, including commercial information and utility-related | ||
matters that would, if disclosed, give an advantage to a competitor | ||
or prospective competitor; or | ||
(D) the security of the electric cooperative's | ||
electrical system; or | ||
(6) seeks information that is confidential, | ||
privileged, or proprietary. | ||
Sec. 161.081. POLICIES AND AUDIT. (a) The board shall adopt | ||
written policies relating to: | ||
(1) travel expenditures for board members, officers, | ||
and employees; | ||
(2) reimbursement of expenses for board members, | ||
officers, and employees; | ||
(3) conflicts of interest for board members, officers, | ||
and employees; | ||
(4) whistle-blower protections; | ||
(5) criteria and procedures for the selection, | ||
monitoring, review, and evaluation of outside vendors or contracted | ||
professional services; | ||
(6) budgets for use in planning and controlling costs; | ||
and | ||
(7) the creation of a committee that audits the | ||
actions of the board. | ||
(b) An electric cooperative shall provide for an | ||
independent financial audit, to be performed annually by an | ||
unaffiliated entity that is professionally qualified to perform the | ||
audit. | ||
SECTION 10. Subchapter C, Chapter 161, Utilities Code, is | ||
amended by adding Sections 161.126 and 161.127 to read as follows: | ||
Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR | ||
CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. An electric cooperative | ||
with more than 170,000 members that provides retail electric | ||
service may not acquire equipment capable of generating electricity | ||
for sale other than equipment that uses an alternative energy | ||
resource unless the Public Utility Commission of Texas first | ||
approves of the acquisition. The commission by rule shall | ||
establish the standards and procedures by which it will approve an | ||
electric cooperative's acquisition of electric generation | ||
capacity. | ||
Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS. Not | ||
later than the 30th day following the completion of a transaction | ||
that results in an electric cooperative or an affiliate of the | ||
electric cooperative creating or acquiring an interest in an entity | ||
that does not generate, transmit, or distribute electricity, the | ||
electric cooperative shall provide a notice to members that | ||
contains: | ||
(1) the name of the entity; | ||
(2) a description of the entity; | ||
(3) the reasons for the decision to enter into the | ||
transaction; | ||
(4) a description of the costs associated with the | ||
transaction, and the method of financing for those costs; and | ||
(5) a description of the anticipated effect the | ||
transaction will have on the electric cooperative's electric energy | ||
rates or prices. | ||
SECTION 11. (a) The changes in law made by Section | ||
161.072, Utilities Code, as amended by this Act, and Sections | ||
161.0721 and 161.0722, Utilities Code, as added by this Act, apply | ||
only to a director election held on or after the effective date of | ||
this Act. A director election held before the effective date of | ||
this Act is subject to the law in effect on the date the election is | ||
held, and that law is continued in effect for that purpose. | ||
(b) The changes in law made by Section 161.075, Utilities | ||
Code, as amended by this Act, and Section 161.0751, Utilities Code, | ||
as added by this Act, apply only to a meeting convened on or after | ||
the effective date of this Act. A meeting convened before the | ||
effective date of this Act is subject to the law in effect on the | ||
date the meeting is held, and that law is continued in effect for | ||
that purpose. | ||
(c) The changes in law made by Section 161.080, Utilities | ||
Code, as added by this Act, apply only to a request to inspect | ||
records submitted on or after the effective date of this Act. A | ||
request submitted before the effective date of this Act is subject | ||
to the law in effect on the date of the request, and that law is | ||
continued in effect for that purpose. | ||
(d) The changes in law made by Section 161.127, Utilities | ||
Code, as added by this Act, apply only to a transaction that is | ||
completed on or after the effective date of this Act. A transaction | ||
that is completed before the effective date of this Act is subject | ||
to the law in effect on the date the transaction is completed, and | ||
that law is continued in effect for that purpose. | ||
SECTION 12. This Act takes effect September 1, 2011. |