Limits the authority of the board of directors to dispose of the assets of an electrical co-op to another publicly-owned or privately-owned utility or entity and prohibits members of the board of directors from receiving anything of value from an entity which acquires a substantial portion of the cooperative's property for a period of two years following the acquisition. (8/15/10)
The proposed legislation intends to reinforce member control over the disposition of cooperative assets, ensuring that any significant decisions regarding the sale or management of these assets are subject to membership approval. Additionally, the bill introduces a two-year prohibition on board members receiving any compensation or benefits from acquiring entities following an asset sale, addressing potential conflicts of interest that could arise from such transactions.
Senate Bill 760 seeks to limit the authority of the board of directors of electrical cooperatives in the disposal of their assets. The bill mandates that any significant sale, mortgage, lease, or encumbrance of a cooperative's property to another publicly or privately owned utility can only occur with the affirmative vote of a majority of the cooperative's members. This change is aimed at ensuring that the interests of the cooperative's members are safeguarded during potential asset transactions.
The sentiment regarding SB 760 has been predominantly supportive among consumer advocacy groups and cooperative members who view the bill as a necessary protection against mismanagement and exploitation. However, some cooperative board members may perceive the restrictions as overly burdensome, arguing that the existing governance model adequately protects members' interests without additional legislative oversight.
Debate around SB 760 primarily revolves around the perceived need for enhanced regulatory oversight versus the operational autonomy of cooperatives. Proponents argue that member engagement is critical in decisions involving substantial assets, whereas opponents caution that increased requirements might hinder the ability of cooperatives to efficiently manage their affairs and respond quickly to market changes. Overall, this legislation aims to balance the need for accountability with the operational realities faced by electric cooperatives.