|
|
|
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. 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 of which one or |
|
more members is another electric cooperative: |
|
(1) Sections 161.072(d) through (m); |
|
(2) Sections 161.075(a), (d), (e), and (f); |
|
(3) Section 161.0751; |
|
(4) Section 161.077(d); |
|
(5) Section 161.080; |
|
(6) Section 161.081; |
|
(7) Section 161.082; |
|
(8) Section 161.126; and |
|
(9) Section 161.127. |
|
SECTION 3. Subsection (b), Section 161.064, 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 Subsections (c) through (m) 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. |
|
(d) A board committee of a cooperative with more than |
|
170,000 members may not cast a member's proxy vote in a director |
|
election. |
|
(e) A director who is standing for reelection to the board |
|
of a cooperative with not more than 170,000 members may not serve on |
|
a committee established under the bylaws for the purpose of |
|
casting, or being authorized to cast, the proxy vote of a member in |
|
a director election. |
|
(f) 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 |
|
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 for the purpose of casting proxy |
|
votes in a director election; |
|
(B) the process prescribed in the bylaws for |
|
selecting members to serve on the committee; and |
|
(C) the districts 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." |
|
(g) Subsections (d) and (f) may not be construed as limiting |
|
the right of an individual member to collect or cast the proxy votes |
|
of another member in a director election, if allowed by the bylaws. |
|
(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. |
|
(i) 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. |
|
(j) A cooperative with more than 170,000 members may elect |
|
directors only by district. A member may vote for a director to |
|
represent a district only if the member resides in that district. |
|
(k) A cooperative with more than 170,000 members may |
|
nominate qualified members as candidates in a director election |
|
only through a written petition by members. The bylaws 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 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. |
|
(l) If the bylaws of a cooperative with not more than |
|
170,000 members 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 cooperative. |
|
(m) A petition submitted under Subsection (l) must provide |
|
on the petition the name and address of the member seeking |
|
nomination and, if the cooperative nominates or elects directors by |
|
district, the district the member seeks to represent. |
|
SECTION 5. 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 in |
|
[on] the notice required by Section 161.0751 and [prescribed by] |
|
the bylaws. |
|
(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 cooperative may |
|
not attend a regular or special board meeting. |
|
(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 |
|
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 (e), (f), (g), (h), and (i) apply to an |
|
electric cooperative with more than 170,000 members. |
|
(k) Each electric cooperative with not more than 170,000 |
|
members shall hold an election every five years on the question of |
|
whether to make Subsections (e), (f), (g), (h), and (i) applicable |
|
to the electric cooperative. |
|
SECTION 6. 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 cooperative's Internet |
|
website, if the cooperative maintains a website; and |
|
(3) providing a copy of the notice to a member on a |
|
request by the member. |
|
(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 7. 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 8. Subchapter B, Chapter 161, Utilities Code, is |
|
amended by adding Sections 161.080, 161.081, and 161.082 to read as |
|
follows: |
|
Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS. (a) (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 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 the law or 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 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 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) whistleblower 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 |
|
such an audit. |
|
Sec. 161.082. COMPLAINTS BY MEMBERS. (a) A member may file |
|
a written complaint with the general manager of the electric |
|
cooperative if the member is aggrieved by an action of the board or |
|
by an employee of the board or of the cooperative that the member |
|
alleges infringes on a right of the member under Sections 161.072, |
|
161.075, 161.0751, 161.080, 161.081, and 161.126. |
|
(b) Not later than the 20th day after the date the general |
|
manager receives a complaint under Subsection (a), the general |
|
manager shall take corrective action regarding the complaint, if |
|
the general manager determines that the action complained of |
|
infringed on the member's rights under Sections 161.072, 161.075, |
|
161.0751, 161.080, 161.081, and 161.126. |
|
(c) If the general manager determines that the action |
|
complained of did not infringe on the member's rights under this |
|
chapter, or if the general manager otherwise fails to resolve the |
|
member's complaint to the member's satisfaction before the 21st day |
|
after the general manager receives the member's complaint, the |
|
member may file a written complaint with the attorney general's |
|
consumer protection division. A complaint filed with the attorney |
|
general under this subsection must: |
|
(1) identify the electric cooperative by name and |
|
address; |
|
(2) describe in detail the nature of the member's |
|
complaint; and |
|
(3) include copies of documents relevant to the |
|
member's complaint, including: |
|
(A) any relevant written request made by the |
|
member to the cooperative; |
|
(B) the written complaint made by the member to |
|
the general manager under Subsection (a); and |
|
(C) any relevant response from the cooperative |
|
regarding a request or complaint. |
|
(d) In reviewing a member's complaint under this section, |
|
the attorney general may request that the cooperative provide to |
|
the attorney general any information relevant to the complaint. |
|
The attorney general must give a cooperative a reasonable |
|
opportunity to inspect and copy the requested information before |
|
providing the information to the attorney general. The attorney |
|
general shall designate an employee of the office of the attorney |
|
general to be the person responsible for receiving, inspecting, or |
|
copying information received under this subsection. |
|
(e) An electric cooperative shall cooperate with a request |
|
for information under Subsection (d) and promptly provide the |
|
requested information to the attorney general's designated |
|
employee. The attorney general may not disclose to any person |
|
information provided by a cooperative in response to the request |
|
unless: |
|
(1) the attorney general is required by a court to |
|
provide the information to the person; |
|
(2) the person is an authorized employee of the office |
|
of the attorney general; or |
|
(3) the cooperative that provided the information |
|
consents to the disclosure. |
|
(f) The attorney general shall return to a cooperative any |
|
information provided under this section that is confidential or |
|
sensitive to the cooperative. |
|
SECTION 9. 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 |
|
cooperative creating or acquiring an interest in an entity that |
|
does not generate, transmit, or distribute electricity, the |
|
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 cooperative's electric energy rates or |
|
prices. |
|
SECTION 10. (a) The changes in law made by Section 161.072, |
|
Utilities Code, as amended 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 by 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 Sections 161.080 and 161.082, |
|
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 11. Not later than December 31, 2010, each electric |
|
cooperative with not more than 170,000 members shall hold an |
|
election as required by Section 161.075(k), as added by this Act. |
|
SECTION 12. This Act takes effect September 1, 2009. |