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A BILL TO BE ENTITLED
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AN ACT
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relating to access by the members of electric cooperatives to |
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meetings of the boards of directors and certain information of the |
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electric cooperatives. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 161.002, Utilities Code, is amended by |
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adding Subdivision (2-a) to read as follows: |
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(2-a) "Board meeting" means a deliberation between a |
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quorum of the voting board, or between a quorum of the voting board |
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and another person, during which electric cooperative business or |
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policy over which the board has responsibility is discussed or |
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considered, or during which the board takes formal action. The term |
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does not include the gathering of a quorum of the board at a social |
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function unrelated to the business of the cooperative, or the |
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attendance by a quorum of the board at a regional, state, or |
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national convention or workshop, ceremonial event, or press |
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conference, if formal action is not taken and any discussion of |
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cooperative business is incidental to the social function, |
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convention, workshop, ceremonial event, or press conference. |
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SECTION 2. Section 161.064(b), Utilities Code, is amended |
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to read as follows: |
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(b) The bylaws may contain any provision for the regulation |
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and management of the affairs of the electric cooperative that is |
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consistent with the articles of incorporation and this chapter. |
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SECTION 3. Section 161.072, Utilities Code, is amended by |
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adding Subsections (c) through (m) to read as follows: |
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(c) Director elections shall be conducted in a manner that |
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is fair and open to all members of the electric cooperative. |
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(d) A board committee of a cooperative with more than |
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210,000 members may not cast a member's proxy vote in a director |
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election. |
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(e) A director who is standing for reelection to the board |
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of a cooperative with not more than 210,000 members may not serve on |
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a committee established under the bylaws for the purpose of |
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casting, or being authorized to cast, the proxy vote of a member in |
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a director election. |
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(f) A member's proxy vote may be cast in a director election |
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only if: |
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(1) a proxy form is sent by regular mail to each member |
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of record not later than the 30th day before the date of the meeting |
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at which proxy votes are counted; |
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(2) the proxy form designates each candidate who is an |
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incumbent director; |
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(3) an exact copy of the proxy form is posted on the |
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cooperative's Internet website, if the cooperative maintains a |
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website; |
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(4) the proxy form includes information describing the |
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process by which proxy votes are authorized and cast, including: |
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(A) the name of each member of the committee, if |
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any, established under the bylaws for the purpose of casting proxy |
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votes in a director election; |
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(B) the process prescribed in the bylaws for |
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selecting members to serve on the committee; and |
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(C) the districts represented by each committee |
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member, if applicable; and |
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(5) the proxy form contains the following statements, |
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in bold type: |
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(A) "If you grant the committee your proxy, you |
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are giving the committee full authority to vote your proxy for the |
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candidates you selected, or, if you did not select any candidates, |
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to vote your proxy for candidates the committee selects"; |
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(B) "You may rescind your proxy at any time |
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before votes are cast at the meeting to elect directors"; and |
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(C) "State law prohibits any person from using |
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incentives or other enticements to encourage you to provide your |
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proxy in any board election." |
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(g) Subsections (d) and (f) may not be construed as limiting |
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the right of an individual member to collect or cast the proxy votes |
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of another member in a director election, if allowed by the bylaws. |
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(h) This section may not be construed as limiting the use of |
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a proxy as provided by Section 161.069 to establish a quorum to |
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transact business other than the election of a director. |
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(i) A person may not use an incentive or other enticement to |
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encourage a member to authorize another person to cast the member's |
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proxy vote in a director election. |
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(j) A cooperative with more than 210,000 members may elect |
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directors only by district. A member may vote for a director to |
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represent a district only if the member resides in that district. |
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(k) A cooperative with more than 210,000 members may |
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nominate qualified members as candidates in a director election |
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only through a written petition by members. The bylaws must: |
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(1) specify the number of printed names and dated |
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signatures a petition nominating a candidate must contain; |
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(2) specify a period within which a petition |
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nominating a candidate must be submitted to the cooperative; and |
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(3) specify that only members residing in a district |
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may sign a petition for the nomination of a candidate to represent |
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that district. |
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(l) If the bylaws of a cooperative with not more than |
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210,000 members allow a committee of members to nominate qualified |
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members as candidates in a director election, the bylaws must also: |
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(1) allow nominations to be made through one or more |
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written petitions by members; |
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(2) specify the number of printed names and dated |
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signatures a petition nominating a candidate must contain; and |
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(3) specify a period within which a petition |
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nominating a candidate must be submitted to the cooperative. |
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(m) A petition submitted under Subsection (l) must provide |
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on the petition the name and address of the member seeking |
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nomination and, if the cooperative nominates or elects directors by |
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district, the district the member seeks to represent. |
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SECTION 4. Section 161.075, Utilities Code, is amended to |
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read as follows: |
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Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a |
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regular or special board meeting at the place and on [the] notice as |
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provided by Section 161.0751 and [prescribed by] the bylaws. |
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Except as provided by Section 161.0752, each member of the electric |
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cooperative is entitled to attend a regular or special board |
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meeting. |
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(b) The attendance of a director at a board meeting |
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constitutes a waiver of notice to the director of the meeting unless |
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the director attends the meeting for the express purpose of |
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objecting to the transaction of business at the meeting because the |
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meeting is not lawfully called or convened. |
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(c) A notice or waiver of notice of a board meeting given to |
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a director is not required to specify the business to be transacted |
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at the meeting or the purpose of the meeting. |
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(d) The board shall keep a record of each regular or special |
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board meeting, in the form of written minutes or a taped recording |
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of the meeting. A record of a meeting must state the subject of each |
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deliberation and indicate each vote, order, decision, or other |
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action taken by the board. The board shall make meeting records |
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available to a member for inspection and copying on the member's |
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written request to the board secretary or to a person the secretary |
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designates. |
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(e) A member attending a regular or special board meeting |
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may record all or part of the meeting by any means of audio or visual |
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reproduction, including a tape recorder or video camera. |
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(f) The board may adopt reasonable rules to maintain order |
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at a regular or special board meeting, including rules relating to |
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the location of recording equipment and the manner in which |
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recording may be conducted. A rule adopted by the board under this |
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section may not prevent or unreasonably impair a member from |
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exercising a right granted by this section. |
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SECTION 5. Subchapter B, Chapter 161, Utilities Code, is |
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amended by adding Sections 161.0751 and 161.0752 to read as |
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follows: |
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Sec. 161.0751. NOTICE OF BOARD MEETINGS. (a) The board |
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shall give members and the media written notice of the date, hour, |
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place, and subject of a regular or special board meeting. Notice of |
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a board meeting must be given at least 72 hours before the scheduled |
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time of the meeting by: |
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(1) posting a notice on a bulletin board in a place |
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convenient to members, at the electric cooperative's headquarters |
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and at each district office; |
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(2) posting a notice on the cooperative's Internet |
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website, if the cooperative maintains a website; and |
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(3) sending a notice by electronic mail to members of |
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the media who, before the time notice is required by this section, |
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requested notification of meetings. |
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(b) If the board recesses a regular or special board meeting |
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to continue the following regular business day, the board is not |
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required to post notice of the continued meeting if the recess is |
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taken in good faith and not to circumvent this section and Section |
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161.075. If a regular or special board meeting is continued to the |
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following regular business day, and on that following day the board |
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continues the meeting to another day, the board shall give written |
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notice as required by this section of the meeting continued to that |
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other day. |
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(c) In the event of an emergency or urgent necessity that |
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requires immediate board action to meet a reasonably unforeseeable |
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situation, notice may be given in the manner prescribed by |
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Subsection (a) at least two hours before a regular or special board |
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meeting is convened, in order to: |
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(1) call an emergency board meeting; or |
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(2) add a subject to the agenda of a previously |
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scheduled board meeting. |
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(d) Notice under Subsection (c) shall clearly identify the |
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emergency or urgent necessity for which the notice is given. If the |
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board adds a subject to the agenda of a previously scheduled regular |
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or special board meeting, the board secretary or person the |
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secretary designates shall post a copy of the revised agenda on the |
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electric cooperative's Internet website, if the cooperative |
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maintains a website, and physically at the cooperative's |
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headquarters and each district office, not less than two hours |
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before the meeting convenes. |
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(e) If, at a regular or special board meeting, a member |
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makes an inquiry regarding a subject for which notice has not been |
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given as required by this section, the notice provisions of this |
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section do not apply to: |
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(1) a statement by the board of specific factual |
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information given in response to the inquiry; or |
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(2) a recitation of existing policy in response to the |
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inquiry. |
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(f) Any deliberation of or decision relating to the subject |
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of an inquiry made under Subsection (e) shall be limited to a |
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proposal to place the subject on the agenda for a subsequent board |
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meeting. |
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Sec. 161.0752. EXECUTIVE SESSIONS. (a) Before the board |
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calls an executive session, the board shall convene in a regular or |
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special board meeting for which notice has been given as provided by |
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Section 161.0751. During that board meeting, the presiding director |
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may call an executive session by announcing that an executive |
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session will be held to deliberate a matter described by Subsection |
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(d) and identifying the specific subdivision of Subsection (d) |
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under which the executive session will be held. |
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(b) Except as provided by Subsection (c), a final action, |
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decision, or vote on a matter deliberated in an executive session |
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may only be made in a regular or special board meeting for which |
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notice has been given as provided by Section 161.0751. |
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(c) The board may take action in an executive session for |
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matters described by Subsections (d)(2), (4), and (5). |
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(d) The board may hold an executive session to which the |
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members do not have access to deliberate: |
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(1) anticipated or pending litigation, settlement |
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offers, or interpretations of the law with the electric |
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cooperative's legal counsel and with any other person the board |
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considers necessary; |
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(2) the purchase, exchange, lease, or value of real |
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property, if the board determines in good faith that deliberation |
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in an open board meeting may have a detrimental effect on the |
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electric cooperative; |
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(3) business and financial issues relating to the |
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negotiation of a contract, if the board determines in good faith |
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that deliberation in an open board meeting may have a detrimental |
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effect on the position of the electric cooperative; |
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(4) personnel issues, and complaints or charges |
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against a director or electric cooperative employee or consultant, |
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unless the director or employee who is the subject of the |
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deliberation requests a public hearing; |
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(5) utility-related matters and commercial |
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information that the board determines in good faith are related to |
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the electric cooperative's competitive activity but only to the |
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extent the board specifically determines that disclosure of the |
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information could give an advantage to competitors or potential |
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competitors; or |
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(6) issues related to security of the electric |
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cooperative, including security personnel, security devices, and |
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security audits. |
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(e) The board secretary or a person the secretary designates |
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shall make and keep a written or audio record of each executive |
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session. The secretary shall preserve the record for at least two |
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years following the session. The record must include: |
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(1) a statement of the subject matter of each |
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deliberation; |
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(2) a record of any further action taken; and |
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(3) an announcement by the presiding director at the |
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beginning and end of the session indicating the date and time. |
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SECTION 6. Section 161.077, Utilities Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) The provisions of this chapter that apply to the board |
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also apply to the executive committee. |
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SECTION 7. Subchapter B, Chapter 161, Utilities Code, is |
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amended by adding Sections 161.080, 161.081, 161.082, and 161.083 |
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to read as follows: |
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Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS. (a) |
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Except as provided by Subsection (c), a member of an electric |
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cooperative may, at any reasonable time and on written request that |
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states the purpose of the request: |
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(1) inspect books and records of the cooperative |
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relevant to that purpose; and |
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(2) at the member's own expense, copy records the |
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member is entitled to inspect under this section. |
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(b) An electric cooperative may charge a reasonable fee to |
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the member if fulfilling the member's request will require a large |
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amount of employee time. |
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(c) An electric cooperative may reject or limit a member's |
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request to inspect its books and records if: |
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(1) the member refuses to warrant and furnish to the |
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electric cooperative, on the electric cooperative's request, an |
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affidavit that: |
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(A) the inspection is desired for a purpose |
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reasonably related to the business of the cooperative; or |
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(B) the member does not intend to sell or offer to |
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sell any list of members of the cooperative or assist another person |
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in obtaining a list of members for that purpose; |
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(2) the release of the information sought by the |
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member, such as individual member information or personnel |
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information, would unduly infringe on or invade the privacy of a |
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person; |
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(3) the inspection is sought for a dishonest purpose; |
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or |
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(4) the records sought to be inspected pertain to |
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trade secrets or information that is privileged, confidential, or |
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proprietary. |
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Sec. 161.081. POLICIES AND AUDITS. (a) The board shall |
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adopt written policies relating to: |
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(1) travel expenditures for board members, officers, |
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and employees; |
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(2) reimbursement of expenses for board members, |
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officers, and employees; |
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(3) conflicts of interest for board members, officers, |
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and employees; |
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(4) whistleblower protections; |
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(5) criteria and procedures for the selection, |
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monitoring, review, and evaluation of outside vendors or contracted |
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professional services; |
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(6) budgets for use in planning and controlling costs; |
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and |
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(7) the creation of a committee that audits the |
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actions of the board. |
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(b) A cooperative shall provide for an independent |
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financial audit, to be performed annually by an unaffiliated entity |
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that is professionally qualified to perform such an audit. |
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(c) The state auditor may audit the financial transactions |
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and operations of a cooperative, at the cooperative's expense. |
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Sec. 161.082. COMPLAINTS BY MEMBERS. (a) In this section, |
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"commission" means the Public Utility Commission of Texas. |
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(b) A member may file a written complaint with the general |
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manager of the cooperative if the member is aggrieved by an action |
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of the board or by an employee of the board or of the cooperative |
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that the member alleges infringes on a right of the member under |
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this chapter. |
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(c) Not later than the 20th day after the date the general |
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manager receives a complaint under Subsection (b), the general |
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manager shall take corrective action regarding the complaint, if |
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the general manager determines that the action complained of |
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infringed on the member's rights under this chapter. |
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(d) If the general manager determines that the action |
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complained of did not infringe on the member's rights under this |
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chapter, or if the general manager otherwise fails to resolve the |
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member's complaint to the member's satisfaction before the 21st day |
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after the general manager receives the member's complaint, the |
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member may file a written complaint with the commission. A |
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complaint filed with the commission under this subsection must: |
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(1) identify the electric cooperative by name and |
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address; |
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(2) describe in detail the nature of the member's |
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complaint; and |
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(3) include copies of documents relevant to the |
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member's complaint, including: |
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(A) any relevant written request made by the |
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member to the cooperative; |
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(B) the written complaint made by the member to |
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the general manager under Subsection (b); and |
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(C) any relevant response from the cooperative |
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regarding a request or complaint. |
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(e) In reviewing a member's complaint under this section, |
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the commission may request that the cooperative provide to the |
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commission any information relevant to the complaint. The |
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commission must give a cooperative a reasonable opportunity to |
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inspect and copy the requested information before providing the |
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information to the commission. The commission shall designate an |
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employee of the commission to be the person responsible for |
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receiving, inspecting, or copying information received under this |
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subsection. |
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(f) An electric cooperative shall cooperate with a request |
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for information under Subsection (e) and promptly provide the |
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requested information to the commission's designated employee. The |
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commission may not disclose to any person information provided by a |
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cooperative in response to the request unless: |
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(1) the commission is required by a court to provide |
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the information to the person; |
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(2) the person is an authorized employee of the |
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commission; or |
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(3) the cooperative that provided the information |
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consents to the disclosure. |
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(g) The commission shall give a cooperative notice before |
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using information provided in response to a request under |
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Subsection (e) in a contested case hearing. On objection by the |
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cooperative that the information is confidential or sensitive, the |
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administrative judge presiding over the contested case hearing |
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shall determine whether the information is admissible in the |
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hearing. |
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(h) The commission shall return to a cooperative any |
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information provided under this section that is confidential or |
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sensitive to the cooperative. |
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Sec. 161.083. ALTERNATIVE DISPUTE RESOLUTION. The Public |
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Utility Commission of Texas may refer a complaint made under |
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Section 161.082(d) to the State Office of Administrative Hearings |
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as provided by Section 14.0025 for alternative dispute resolution |
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if the commission determines a referral is in the public interest. |
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SECTION 8. Subchapter C, Chapter 161, Utilities Code, is |
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amended by adding Sections 161.126 and 161.127 to read as follows: |
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Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR |
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CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. An electric cooperative |
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with more than 210,000 members that provides retail electric |
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service may not acquire equipment capable of generating electricity |
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for sale unless the Public Utility Commission of Texas first |
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approves of the acquisition. The commission by rule shall |
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establish the standards and procedures by which it will approve an |
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electric cooperative's acquisition of electric generation |
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capacity. |
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Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS. Not |
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later than the 30th day following the completion of a transaction |
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that results in a cooperative or an affiliate of the cooperative |
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creating, acquiring, or receiving an interest in an entity that |
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does not generate, transmit, or distribute electricity, the |
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cooperative shall provide a notice to members that contains: |
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(1) the name of the entity; |
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(2) a description of the entity; |
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(3) the reasons for the decision to enter into the |
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transaction; |
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(4) a description of the costs associated with the |
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transaction, and the method of financing for those costs; and |
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(5) a description of the anticipated effect the |
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transaction will have on the cooperative's electric energy rates or |
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prices. |
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SECTION 9. (a) The changes in law made to Section 161.072, |
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Utilities Code, as amended by this Act, apply only to a director |
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election held on or after the effective date of this Act. A director |
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election held before the effective date of this Act is subject to |
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the law in effect on the date the election is held, and that law is |
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continued in effect for that purpose. |
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(b) The changes in law made by Section 161.075, Utilities |
|
Code, as amended by this Act, and by Sections 161.0751 and 161.0752, |
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Utilities Code, as added by this Act, apply only to a meeting |
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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. |
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(c) The changes in law made by Sections 161.080, 161.082, |
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and 161.083, Utilities Code, as added by this Act, apply only to a |
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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 |
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that law is continued in effect for that purpose. |
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(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 that date, and that law is continued in |
|
effect for that purpose. |
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SECTION 10. This Act takes effect September 1, 2009. |