EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0561*
SENATE BILL 561
C1, C5 5lr1220
SB 510/24 – JPR CF HB 227
By: Senators Hershey and Mautz
Introduced and read first time: January 23, 2025
Assigned to: Judicial Proceedings
A BILL ENTITLED
AN ACT concerning 1
Corporations and Associations – Electric Cooperatives – Nonescheat Capital 2
Credits 3
FOR the purpose of providing that certain unclaimed money held by an electric cooperative 4
and due to a past member is not considered abandoned property; authorizing an 5
electric cooperative to use this money only for certain purposes; and generally 6
relating to electric cooperatives and nonescheat capital credits. 7
BY repealing and reenacting, without amendments, 8
Article – Commercial Law 9
Section 17–304(b) 10
Annotated Code of Maryland 11
(2013 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, with amendments, 13
Article – Commercial Law 14
Section 17–304(g) 15
Annotated Code of Maryland 16
(2013 Replacement Volume and 2024 Supplement) 17
BY repealing and reenacting, without amendments, 18
Article – Corporations and Associations 19
Section 5–601(a) and (c) and 5–605 20
Annotated Code of Maryland 21
(2014 Replacement Volume and 2024 Supplement) 22
BY adding to 23
Article – Corporations and Associations 24
Section 5–650.1 25
Annotated Code of Maryland 26
(2014 Replacement Volume and 2024 Supplement) 27 2 SENATE BILL 561
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – Commercial Law 3
17–304. 4
(b) Any stock or other certificate of ownership, or any dividend, profit, 5
distribution, interest, payment on principal, or other sum held by a business association for 6
or to a shareholder, certificate holder, member, bondholder or other security holder, or 7
participating patron of a cooperative is presumed abandoned 3 years after the later of: 8
(1) The date the holder is deemed to no longer have a valid address for the 9
owner of the property; or 10
(2) The date the owner last communicated with the business association 11
regarding the property if: 12
(i) It is held by a business association organized under the laws of 13
or created in this State; 14
(ii) It is held by a business association doing business in this State 15
but not organized under the laws of this State, and the records of the business association 16
indicate that the last known address of the person entitled to it is in this State; or 17
(iii) It is held by a business association not doing business in this 18
State and not organized under the laws of this State, but the records of the business 19
association indicate that the last known address of the person entitled to it is in this State. 20
(g) This section does not apply to [any]: 21
(1) ANY stock or other intangible ownership interest enrolled in a plan that 22
provides for the automatic reinvestment of dividends, distributions, or other sums payable 23
as a result of the interest unless the records available to the Administrator of the plan 24
show, with respect to any intangible ownership interest not enrolled in the reinvestment 25
plan, that: 26
[(1)] (I) The holder is deemed to no longer have a valid address for the 27
owner of the stock or other intangible ownership interest; or 28
[(2)] (II) The owner has not within 3 years communicated in any manner 29
described in subsection (c)(2) of this section; OR 30
(2) NONESCHEAT CAPITAL CR EDITS, AS DEFINED IN § 5–650.1 OF THE 31
CORPORATIONS AND ASSOCIATIONS ARTICLE. 32 SENATE BILL 561 3
Article – Corporations and Associations 1
5–601. 2
(a) In this subtitle the following words have the meanings indicated. 3
(c) “Cooperative” means a corporation that: 4
(1) Is organized under this subtitle; or 5
(2) Becomes subject to this subtitle in the manner provided in this subtitle. 6
5–605. 7
A cooperative, nonprofit, membership corporation may be organized under this 8
subtitle for the purpose of supplying, promoting, and extending the use of electricity. 9
5–650.1. 10
(A) IN THIS SECTION, “NONESCHEAT CAPITAL C REDITS” MEANS MONEY : 11
(1) DUE TO ANY PAST MEMBE R OF A COOPERATIVE I N RETIREMENT 12
OF CAPITAL ALLOCATED ON A PATRONAGE BASIS TO THE ACCOUNT OF TH E PAST 13
MEMBER FOR AMOUNTS R ECEIVED AND RECEIVAB LE BY THE COOPERATIV E IN 14
EXCESS OF OPERATI NG COSTS AND EXPENSE S; 15
(2) FOR WHICH AT LEAST 5 YEARS HAVE PASSED SI NCE THE CREDITS 16
WERE RETIRED ; AND 17
(3) THAT HAS NOT BEEN CLA IMED BY THE PAST MEM BER. 18
(B) A COOPERATIVE MAY USE NONESCHEAT CAPITAL C REDITS ONLY TO: 19
(1) ASSIST MEMBERS OF THE COOPERATIVE IN ACCOR DANCE WITH 20
THE POWERS GRANTED T O THE COOPERATIVE UN DER § 5–607 OF THIS SUBTITLE ; 21
OR 22
(2) MAKE DONATIONS TO NON PROFIT, CHARITABLE ORGANIZAT IONS 23
APPROVED BY THE COOP ERATIVE’S BOARD OF DIRECTORS . 24
(C) NOTHING IN THIS SECTI ON MAY BE CONS TRUED TO RELIEVE A 25
COOPERATIVE OF THE O BLIGATION TO REFUND NONESCHEAT CAPITAL C REDITS ON 26
APPLICATION OF A PAS T MEMBER. 27
4 SENATE BILL 561
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
October 1, 2025. 2