81R4465 TRH-D

By: Bolton H.B. No. 1002

A BILL TO BE ENTITLED

AN ACT

relating to access by the 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. 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 on [the] notice as provided by Section 161.0751 and [prescribed by] the bylaws. Except as provided by Section 161.0752, each member of the electric cooperative is entitled to attend a regular or special board meeting.

(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) The board shall keep a record of each regular or special board meeting, in the form of written minutes or a taped recording of the meeting. A record of a meeting must state the subject of each deliberation and indicate each vote, order, decision, or other action taken by the board. The board shall make meeting records available to a member for public inspection and copying on the member's written request to the board secretary or to a person the secretary designates.

(e) A member attending a regular or special board meeting may record all or part of the meeting by any means of audio or visual reproduction, including a tape recorder or video camera.

(f) The board may adopt reasonable rules to maintain order at a regular or special board meeting, including rules relating to the location of recording equipment and the manner in which recording may be conducted. A rule adopted by the board under this section may not prevent or unreasonably impair a member from exercising a right granted by this section.

SECTION 3. Subchapter B, Chapter 161, Utilities Code, is amended by adding Sections 161.0751, 161.0752, 161.0753, 161.080, and 161.081 to read as follows:

Sec. 161.0751. NOTICE OF BOARD MEETINGS. (a) The board shall give members written notice of the date, hour, place, and subject of a regular or special board meeting. Notice of a board meeting must be posted at least 72 hours before the scheduled time of the meeting:

(1) on a bulletin board in a place convenient to members, at the electric cooperative's headquarters and at each district office; and

(2) on the cooperative's Internet website, if the cooperative maintains a website.

(b) If the board recesses a regular or special board meeting to continue the following regular business day, the board is not required to post notice of the continued meeting if the recess is taken in good faith and not to circumvent this section and Section 161.075. If a regular or special board meeting is continued to the following regular business day, and on that following day the board continues the meeting to another day, the board shall give written notice as required by this section of the meeting continued to that other day.

(c) In the event of an emergency or urgent necessity that requires immediate board action to meet a reasonably unforeseeable situation, notice may be given in the manner prescribed by Subsection (a) at least two hours before a regular or special board meeting is convened, in order to:

(1) call an emergency board meeting; or

(2) add a subject to the agenda of a previously scheduled board meeting.

(d) Notice under Subsection (c) shall clearly identify the emergency or urgent necessity for which the notice is given. If the board adds a subject to the agenda of a previously scheduled regular or special board meeting, the board secretary or person the secretary designates shall post a copy of the revised agenda on the electric cooperative's Internet website, if the cooperative maintains a website, and physically at the cooperative's headquarters and each district office, not less than two hours before the meeting convenes.

(e) If, at a regular or special board meeting, a member makes an inquiry regarding a subject for which notice has not been given as required by this section, the notice provisions of this section do not apply to:

(1) a statement by the board of specific factual information given in response to the inquiry; or

(2) a recitation of existing policy in response to the inquiry.

(f) Any deliberation of or decision relating to the subject of an inquiry made under Subsection (e) shall be limited to a proposal to place the subject on the agenda for a subsequent board meeting.

Sec. 161.0752. EXECUTIVE SESSIONS. (a) The board may hold an executive session to which the members do not have access to deliberate:

(1) anticipated or pending litigation, settlement offers, or interpretations of the law with the electric cooperative's legal counsel and with any other person the board considers necessary;

(2) the purchase, exchange, lease, or value of real property, if the board determines in good faith that deliberation in an open board meeting may have a detrimental effect on the electric cooperative;

(3) business and financial issues relating to the negotiation of a contract, if the board determines in good faith that deliberation in an open board meeting may have a detrimental effect on the position of the electric cooperative;

(4) personnel issues, and complaints or charges against a director or electric cooperative employee or consultant, unless the director or employee who is the subject of the deliberation requests a public hearing;

(5) utility-related matters and commercial information that the board determines in good faith are related to the electric cooperative's competitive activity and that, if disclosed, could give an advantage to competitors or potential competitors; or

(6) issues related to security of the electric cooperative, including security personnel, security devices, and security audits.

(b) Before the board calls an executive session, the board shall convene in a regular or special board meeting for which notice has been given as provided by Section 161.0751. During that board meeting, the presiding director may call an executive session by announcing that an executive session will be held to deliberate a matter described by Subsection (a) and identifying the specific subdivision of Subsection (a) under which the executive session will be held.

(c) Except as provided by Subsection (d), a final action, decision, or vote on a matter deliberated in an executive session may only be made in a regular or special board meeting for which notice has been given as provided by Section 161.0751.

(d) The board may take action in an executive session for matters described by Subsections (a)(2), (4), and (5).

(e) The board secretary or a person the secretary designates shall make and keep a written or audio record of each executive session. The secretary shall preserve the record for at least two years following 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.

Sec. 161.0753. TRAINING FOR DIRECTORS AND CERTAIN EMPLOYEES. (a) The general manager of an electric cooperative shall make available a course of training regarding the responsibilities of the board, directors, and employees with regard to notice, open meetings, and open records. The course of training shall be completed by a person who is:

(1) a director, advisory director, or advisory director at large, not later than the 180th day after the date the person assumes responsibilities as a director; or

(2) a general manager, assistant general manager, or other staff member recommended by the general manager, not later than the 180th day after the person's date of hire by the cooperative.

(b) The failure of one or more directors to complete the training required by this section does not affect the validity of an action taken by the board.

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 the purpose of the request:

(1) inspect books and records of the cooperative relevant to that purpose; and

(2) at the member's own expense, copy records the member is entitled to inspect under this section.

(b) An electric cooperative may charge a reasonable fee to the member if fulfilling the member's request will require a large amount of employee time.

(c) An electric cooperative may reject or limit a member's request to inspect its books and records if:

(1) the member refuses to warrant and furnish to the electric cooperative, on the electric cooperative's request, an affidavit that:

(A) the inspection is desired for a purpose reasonably related to the business of the cooperative; or

(B) the member does not intend to sell or offer to sell any list of members of the cooperative or assist another person in obtaining a list of members for that purpose;

(2) the release of the information sought by the member, such as individual member information or personnel information, would unduly infringe on or invade the privacy of a person;

(3) the inspection is sought for a dishonest purpose or to gratify mere curiosity, or is otherwise opposed to the interest of the electric cooperative, or is not reasonably germane to the interest of the member; or

(4) the records sought to be inspected pertain to trade secrets or information that is privileged, confidential, or proprietary.

Sec. 161.081. REMEDY FOR INFRINGEMENT OF CERTAIN MEMBERS RIGHTS. (a) A member aggrieved by an action of the board or by an employee of the board or cooperative that the member alleges infringes on a right of the member under Section 161.075, 161.0751, or 161.080 may file a written complaint with the board. On receiving a complaint under this subsection, the board shall:

(1) take corrective action requested by the member; or

(2) set a date for a hearing at which the member is entitled to appear and give testimony and other evidence concerning the grievance.

(b) If, after the hearing, the board determines that the action complained of infringed on the member's right under the relevant section of this chapter, the board shall take corrective action.

(c) A member who is not satisfied with the result of a hearing under Subsection (a) or who is denied a hearing under Subsection (a) is entitled to have the matter arbitrated by the office of public utility counsel in accordance with procedures adopted by the office for this purpose. If the office determines that the action complained of infringed on the member's right under the relevant section of this chapter, the office may order the board to take corrective action as the office specifies.

(d) A member who is not satisfied with the result of an arbitration under Subsection (c) or who is denied arbitration under Subsection (c) may file a petition for judicial review in a district court of the district in which the cooperative's headquarters is located. A board may file a petition for judicial review of an order of the public utility counsel under Subsection (c) to a district court of the district in which the cooperative's headquarters is located.

(e) Judicial review under this section is by trial de novo. If the court determines the action complained of by the member infringes a right of the member under the relevant section of this chapter, the court may order or award any appropriate relief, including money damages, court costs, and reasonable and necessary attorney's fees.

SECTION 4. (a) The changes in law made by Sections 161.075, 161.0751, and 161.0752, 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.

(b) The general manager of each electric cooperative shall make available the first course of training required by Section 161.0753, Utilities Code, as added by this Act, not later than October 1, 2009. A person who is employed by an electric cooperative or serving an electric cooperative as a director on the effective date of this Act and who is required by Section 161.0753 to complete training shall complete the training not later than April 1, 2010.

(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 161.081, Utilities Code, as added by this Act, apply only to a complaint filed by a member of an electric cooperative concerning an action taken on or after the effective date of this Act. A complaint filed by a member of an electric cooperative concerning an action taken before the effective date of this Act is subject to the law in effect on the date of that action, and that law is continued in effect for that purpose.

SECTION 5. This Act takes effect September 1, 2009.