EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*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
Committee Report: Favorable
Senate action: Adopted
Read second time: February 2, 2025
CHAPTER ______
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 2 SENATE BILL 561
BY adding to 1
Article – Corporations and Associations 2
Section 5–650.1 3
Annotated Code of Maryland 4
(2014 Replacement Volume and 2024 Supplement) 5
SECTION 1. BE IT ENACTE D BY THE GENERAL ASSEMBLY OF MARYLAND, 6
That the Laws of Maryland read as follows: 7
Article – Commercial Law 8
17–304. 9
(b) Any stock or other certificate of ownership, or any dividend, profit, 10
distribution, interest, payment on principal, or other sum held by a business association for 11
or to a shareholder, certificate holder, member, bondholder or other security holder, or 12
participating patron of a cooperative is presumed abandoned 3 years after the later of: 13
(1) The date the holder is deemed to no longer have a valid address for the 14
owner of the property; or 15
(2) The date the owner last communicated with the business association 16
regarding the property if: 17
(i) It is held by a business association organized under the laws of 18
or created in this State; 19
(ii) It is held by a business association doing business in this State 20
but not organized under the laws of this State, and the records of the business association 21
indicate that the last known address of the person entitled to it is in this State; or 22
(iii) It is held by a business association not doing business in this 23
State and not organized under the laws of this State, but the records of the business 24
association indicate that the last known address of the person entitled to it is in this State. 25
(g) This section does not apply to [any]: 26
(1) ANY stock or other intangible ownership interest enrolled in a plan that 27
provides for the automatic reinvestment of dividends, distributions, or other sums payable 28
as a result of the interest unless the records available to the Administrator of the plan 29
show, with respect to any intangible ownership interest not enrolled in the reinvestment 30
plan, that: 31
[(1)] (I) The holder is deemed to no longer have a valid address for the 32
owner of the stock or other intangible ownership interest; or 33
SENATE BILL 561 3
[(2)] (II) The owner has not within 3 years communicated in any manner 1
described in subsection (c)(2) of this section; OR 2
(2) NONESCHEAT CAPITAL CR EDITS, AS DEFINED IN § 5–650.1 OF THE 3
CORPORATIONS AND ASSOCIATIONS ARTICLE. 4
Article – Corporations and Associations 5
5–601. 6
(a) In this subtitle the following words have the meanings indicated. 7
(c) “Cooperative” means a corporation that: 8
(1) Is organized under this subtitle; or 9
(2) Becomes subject to this subtitle in the manner provided in this subtitle. 10
5–605. 11
A cooperative, nonprofit, membership corporation may be organized under this 12
subtitle for the purpose of supplying, promoting, and extending the use of electricity. 13
5–650.1. 14
(A) IN THIS SECTION, “NONESCHEAT CAPITAL C REDITS” MEANS MONEY : 15
(1) DUE TO ANY PAST MEMBER OF A COO PERATIVE IN RETIREME NT 16
OF CAPITAL ALLOCATED ON A PATRONAGE BASIS TO THE ACCOUNT OF TH E PAST 17
MEMBER FOR AMOUNTS R ECEIVED AND RECEIVAB LE BY THE COOPERATIV E IN 18
EXCESS OF OPERATING COSTS AND EXPENSES ; 19
(2) FOR WHICH AT LEAST 5 YEARS HAVE PASSED SINCE THE CRE DITS 20
WERE RETIRED ; AND 21
(3) THAT HAS NOT BEEN CLA IMED BY THE PAST MEM BER. 22
(B) A COOPERATIVE MAY USE NONESCHEAT CAPITAL C REDITS ONLY TO: 23
(1) ASSIST MEMBERS OF THE COOPERATIVE IN ACCOR DANCE WITH 24
THE POWERS GRANTED T O THE COOPERATIV E UNDER § 5–607 OF THIS SUBTITLE ; 25
OR 26
(2) MAKE DONATIONS TO NON PROFIT, CHARITABLE ORGANIZAT IONS 27
APPROVED BY THE COOP ERATIVE’S BOARD OF DIRECTORS . 28 4 SENATE BILL 561
(C) NOTHING IN THIS SECTI ON MAY BE CONSTRUED TO RELIEVE A 1
COOPERATIVE OF THE O BLIGATION TO REFUND NONESCHE AT CAPITAL CREDITS O N 2
APPLICATION OF A PAS T MEMBER. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 4
October 1, 2025. 5
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.