Texas 2009 - 81st Regular

Texas House Bill HB1390 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R7843 TRH-D
2	2	By: Rose H.B. No. 1390
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to access by the members of electric cooperatives to
8	8	meetings of the boards of directors and certain information of the
9	9	electric cooperatives.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 161.002, Utilities Code, is amended by
12	12	adding Subdivision (2-a) to read as follows:
13	13	(2-a) "Board meeting" means a deliberation between a
14	14	quorum of the voting board, or between a quorum of the voting board
15	15	and another person, during which electric cooperative business or
16	16	policy over which the board has responsibility is discussed or
17	17	considered, or during which the board takes formal action. The term
18	18	does not include the gathering of a quorum of the board at a social
19	19	function unrelated to the business of the cooperative, or the
20	20	attendance by a quorum of the board at a regional, state, or
21	21	national convention or workshop, ceremonial event, or press
22	22	conference, if formal action is not taken and any discussion of
23	23	cooperative business is incidental to the social function,
24	24	convention, workshop, ceremonial event, or press conference.
25	25	SECTION 2. Section 161.064(b), Utilities Code, is amended
26	26	to read as follows:
27	27	(b) The bylaws may contain any provision for the regulation
28	28	and management of the affairs of the electric cooperative that is
29	29	consistent with the articles of incorporation and this chapter.
30	30	SECTION 3. Section 161.072, Utilities Code, is amended by
31	31	adding Subsections (c) through (m) to read as follows:
32	32	(c) Director elections shall be conducted in a manner that
33	33	is fair and open to all members of the electric cooperative.
34	34	(d) A board committee of a cooperative with more than
35	35	210,000 members may not cast a member's proxy vote in a director
36	36	election.
37	37	(e) A director who is standing for reelection to the board
38	38	of a cooperative with not more than 210,000 members may not serve on
39	39	a committee established under the bylaws for the purpose of
40	40	casting, or being authorized to cast, the proxy vote of a member in
41	41	a director election.
42	42	(f) A member's proxy vote may be cast in a director election
43	43	only if:
44	44	(1) a proxy form is sent by regular mail to each member
45	45	of record not later than the 30th day before the date of the meeting
46	46	at which proxy votes are counted;
47	47	(2) the proxy form designates each candidate who is an
48	48	incumbent director;
49	49	(3) an exact copy of the proxy form is posted on the
50	50	cooperative's Internet website, if the cooperative maintains a
51	51	website;
52	52	(4) the proxy form includes information describing the
53	53	process by which proxy votes are authorized and cast, including:
54	54	(A) the name of each member of the committee, if
55	55	any, established under the bylaws for the purpose of casting proxy
56	56	votes in a director election;
57	57	(B) the process prescribed in the bylaws for
58	58	selecting members to serve on the committee; and
59	59	(C) the districts represented by each committee
60	60	member, if applicable; and
61	61	(5) the proxy form contains the following statements,
62	62	in bold type:
63	63	(A) "If you grant the committee your proxy, you
64	64	are giving the committee full authority to vote your proxy for the
65	65	candidates you selected, or, if you did not select any candidates,
66	66	to vote your proxy for candidates the committee selects";
67	67	(B) "You may rescind your proxy at any time
68	68	before votes are cast at the meeting to elect directors"; and
69	69	(C) "State law prohibits any person from using
70	70	incentives or other enticements to encourage you to provide your
71	71	proxy in any board election."
72	72	(g) Subsections (d) and (f) may not be construed as limiting
73	73	the right of an individual member to collect or cast the proxy votes
74	74	of another member in a director election, if allowed by the bylaws.
75	75	(h) This section may not be construed as limiting the use of
76	76	a proxy as provided by Section 161.069 to establish a quorum to
77	77	transact business other than the election of a director.
78	78	(i) A person may not use an incentive or other enticement to
79	79	encourage a member to authorize another person to cast the member's
80	80	proxy vote in a director election.
81	81	(j) A cooperative with more than 210,000 members may elect
82	82	directors only by district. A member may vote for a director to
83	83	represent a district only if the member resides in that district.
84	84	(k) A cooperative with more than 210,000 members may
85	85	nominate qualified members as candidates in a director election
86	86	only through a written petition by members. The bylaws must:
87	87	(1) specify the number of printed names and dated
88	88	signatures a petition nominating a candidate must contain;
89	89	(2) specify a period within which a petition
90	90	nominating a candidate must be submitted to the cooperative; and
91	91	(3) specify that only members residing in a district
92	92	may sign a petition for the nomination of a candidate to represent
93	93	that district.
94	94	(l) If the bylaws of a cooperative with not more than
95	95	210,000 members allow a committee of members to nominate qualified
96	96	members as candidates in a director election, the bylaws must also:
97	97	(1) allow nominations to be made through one or more
98	98	written petitions by members;
99	99	(2) specify the number of printed names and dated
100	100	signatures a petition nominating a candidate must contain; and
101	101	(3) specify a period within which a petition
102	102	nominating a candidate must be submitted to the cooperative.
103	103	(m) A petition submitted under Subsection (l) must provide
104	104	on the petition the name and address of the member seeking
105	105	nomination and, if the cooperative nominates or elects directors by
106	106	district, the district the member seeks to represent.
107	107	SECTION 4. Section 161.075, Utilities Code, is amended to
108	108	read as follows:
109	109	Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a
110	110	regular or special board meeting at the place and on [the] notice as
111	111	provided by Section 161.0751 and [prescribed by] the bylaws.
112	112	Except as provided by Section 161.0752, each member of the electric
113	113	cooperative is entitled to attend a regular or special board
114	114	meeting.
115	115	(b) The attendance of a director at a board meeting
116	116	constitutes a waiver of notice to the director of the meeting unless
117	117	the director attends the meeting for the express purpose of
118	118	objecting to the transaction of business at the meeting because the
119	119	meeting is not lawfully called or convened.
120	120	(c) A notice or waiver of notice of a board meeting given to
121	121	a director is not required to specify the business to be transacted
122	122	at the meeting or the purpose of the meeting.
123	123	(d) The board shall keep a record of each regular or special
124	124	board meeting, in the form of written minutes or a taped recording
125	125	of the meeting. A record of a meeting must state the subject of each
126	126	deliberation and indicate each vote, order, decision, or other
127	127	action taken by the board. The board shall make meeting records
128	128	available to a member for inspection and copying on the member's
129	129	written request to the board secretary or to a person the secretary
130	130	designates.
131	131	(e) A member attending a regular or special board meeting
132	132	may record all or part of the meeting by any means of audio or visual
133	133	reproduction, including a tape recorder or video camera.
134	134	(f) The board may adopt reasonable rules to maintain order
135	135	at a regular or special board meeting, including rules relating to
136	136	the location of recording equipment and the manner in which
137	137	recording may be conducted. A rule adopted by the board under this
138	138	section may not prevent or unreasonably impair a member from
139	139	exercising a right granted by this section.
140	140	SECTION 5. Subchapter B, Chapter 161, Utilities Code, is
141	141	amended by adding Sections 161.0751 and 161.0752 to read as
142	142	follows:
143	143	Sec. 161.0751. NOTICE OF BOARD MEETINGS. (a) The board
144	144	shall give members and the media written notice of the date, hour,
145	145	place, and subject of a regular or special board meeting. Notice of
146	146	a board meeting must be given at least 72 hours before the scheduled
147	147	time of the meeting by:
148	148	(1) posting a notice on a bulletin board in a place
149	149	convenient to members, at the electric cooperative's headquarters
150	150	and at each district office;
151	151	(2) posting a notice on the cooperative's Internet
152	152	website, if the cooperative maintains a website; and
153	153	(3) sending a notice by electronic mail to members of
154	154	the media who, before the time notice is required by this section,
155	155	requested notification of meetings.
156	156	(b) If the board recesses a regular or special board meeting
157	157	to continue the following regular business day, the board is not
158	158	required to post notice of the continued meeting if the recess is
159	159	taken in good faith and not to circumvent this section and Section
160	160	161.075. If a regular or special board meeting is continued to the
161	161	following regular business day, and on that following day the board
162	162	continues the meeting to another day, the board shall give written
163	163	notice as required by this section of the meeting continued to that
164	164	other day.
165	165	(c) In the event of an emergency or urgent necessity that
166	166	requires immediate board action to meet a reasonably unforeseeable
167	167	situation, notice may be given in the manner prescribed by
168	168	Subsection (a) at least two hours before a regular or special board
169	169	meeting is convened, in order to:
170	170	(1) call an emergency board meeting; or
171	171	(2) add a subject to the agenda of a previously
172	172	scheduled board meeting.
173	173	(d) Notice under Subsection (c) shall clearly identify the
174	174	emergency or urgent necessity for which the notice is given. If the
175	175	board adds a subject to the agenda of a previously scheduled regular
176	176	or special board meeting, the board secretary or person the
177	177	secretary designates shall post a copy of the revised agenda on the
178	178	electric cooperative's Internet website, if the cooperative
179	179	maintains a website, and physically at the cooperative's
180	180	headquarters and each district office, not less than two hours
181	181	before the meeting convenes.
182	182	(e) If, at a regular or special board meeting, a member
183	183	makes an inquiry regarding a subject for which notice has not been
184	184	given as required by this section, the notice provisions of this
185	185	section do not apply to:
186	186	(1) a statement by the board of specific factual
187	187	information given in response to the inquiry; or
188	188	(2) a recitation of existing policy in response to the
189	189	inquiry.
190	190	(f) Any deliberation of or decision relating to the subject
191	191	of an inquiry made under Subsection (e) shall be limited to a
192	192	proposal to place the subject on the agenda for a subsequent board
193	193	meeting.
194	194	Sec. 161.0752. EXECUTIVE SESSIONS. (a) Before the board
195	195	calls an executive session, the board shall convene in a regular or
196	196	special board meeting for which notice has been given as provided by
197	197	Section 161.0751. During that board meeting, the presiding director
198	198	may call an executive session by announcing that an executive
199	199	session will be held to deliberate a matter described by Subsection
200	200	(d) and identifying the specific subdivision of Subsection (d)
201	201	under which the executive session will be held.
202	202	(b) Except as provided by Subsection (c), a final action,
203	203	decision, or vote on a matter deliberated in an executive session
204	204	may only be made in a regular or special board meeting for which
205	205	notice has been given as provided by Section 161.0751.
206	206	(c) The board may take action in an executive session for
207	207	matters described by Subsections (d)(2), (4), and (5).
208	208	(d) The board may hold an executive session to which the
209	209	members do not have access to deliberate:
210	210	(1) anticipated or pending litigation, settlement
211	211	offers, or interpretations of the law with the electric
212	212	cooperative's legal counsel and with any other person the board
213	213	considers necessary;
214	214	(2) the purchase, exchange, lease, or value of real
215	215	property, if the board determines in good faith that deliberation
216	216	in an open board meeting may have a detrimental effect on the
217	217	electric cooperative;
218	218	(3) business and financial issues relating to the
219	219	negotiation of a contract, if the board determines in good faith
220	220	that deliberation in an open board meeting may have a detrimental
221	221	effect on the position of the electric cooperative;
222	222	(4) personnel issues, and complaints or charges
223	223	against a director or electric cooperative employee or consultant,
224	224	unless the director or employee who is the subject of the
225	225	deliberation requests a public hearing;
226	226	(5) utility-related matters and commercial
227	227	information that the board determines in good faith are related to
228	228	the electric cooperative's competitive activity but only to the
229	229	extent the board specifically determines that disclosure of the
230	230	information could give an advantage to competitors or potential
231	231	competitors; or
232	232	(6) issues related to security of the electric
233	233	cooperative, including security personnel, security devices, and
234	234	security audits.
235	235	(e) The board secretary or a person the secretary designates
236	236	shall make and keep a written or audio record of each executive
237	237	session. The secretary shall preserve the record for at least two
238	238	years following the session. The record must include:
239	239	(1) a statement of the subject matter of each
240	240	deliberation;
241	241	(2) a record of any further action taken; and
242	242	(3) an announcement by the presiding director at the
243	243	beginning and end of the session indicating the date and time.
244	244	SECTION 6. Section 161.077, Utilities Code, is amended by
245	245	adding Subsection (d) to read as follows:
246	246	(d) The provisions of this chapter that apply to the board
247	247	also apply to the executive committee.
248	248	SECTION 7. Subchapter B, Chapter 161, Utilities Code, is
249	249	amended by adding Sections 161.080, 161.081, 161.082, and 161.083
250	250	to read as follows:
251	251	Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS. (a)
252	252	Except as provided by Subsection (c), a member of an electric
253	253	cooperative may, at any reasonable time and on written request that
254	254	states the purpose of the request:
255	255	(1) inspect books and records of the cooperative
256	256	relevant to that purpose; and
257	257	(2) at the member's own expense, copy records the
258	258	member is entitled to inspect under this section.
259	259	(b) An electric cooperative may charge a reasonable fee to
260	260	the member if fulfilling the member's request will require a large
261	261	amount of employee time.
262	262	(c) An electric cooperative may reject or limit a member's
263	263	request to inspect its books and records if:
264	264	(1) the member refuses to warrant and furnish to the
265	265	electric cooperative, on the electric cooperative's request, an
266	266	affidavit that:
267	267	(A) the inspection is desired for a purpose
268	268	reasonably related to the business of the cooperative; or
269	269	(B) the member does not intend to sell or offer to
270	270	sell any list of members of the cooperative or assist another person
271	271	in obtaining a list of members for that purpose;
272	272	(2) the release of the information sought by the
273	273	member, such as individual member information or personnel
274	274	information, would unduly infringe on or invade the privacy of a
275	275	person;
276	276	(3) the inspection is sought for a dishonest purpose;
277	277	or
278	278	(4) the records sought to be inspected pertain to
279	279	trade secrets or information that is privileged, confidential, or
280	280	proprietary.
281	281	Sec. 161.081. POLICIES AND AUDITS. (a) The board shall
282	282	adopt written policies relating to:
283	283	(1) travel expenditures for board members, officers,
284	284	and employees;
285	285	(2) reimbursement of expenses for board members,
286	286	officers, and employees;
287	287	(3) conflicts of interest for board members, officers,
288	288	and employees;
289	289	(4) whistleblower protections;
290	290	(5) criteria and procedures for the selection,
291	291	monitoring, review, and evaluation of outside vendors or contracted
292	292	professional services;
293	293	(6) budgets for use in planning and controlling costs;
294	294	and
295	295	(7) the creation of a committee that audits the
296	296	actions of the board.
297	297	(b) A cooperative shall provide for an independent
298	298	financial audit, to be performed annually by an unaffiliated entity
299	299	that is professionally qualified to perform such an audit.
300	300	(c) The state auditor may audit the financial transactions
301	301	and operations of a cooperative, at the cooperative's expense.
302	302	Sec. 161.082. COMPLAINTS BY MEMBERS. (a) In this section,
303	303	"commission" means the Public Utility Commission of Texas.
304	304	(b) A member may file a written complaint with the general
305	305	manager of the cooperative if the member is aggrieved by an action
306	306	of the board or by an employee of the board or of the cooperative
307	307	that the member alleges infringes on a right of the member under
308	308	this chapter.
309	309	(c) Not later than the 20th day after the date the general
310	310	manager receives a complaint under Subsection (b), the general
311	311	manager shall take corrective action regarding the complaint, if
312	312	the general manager determines that the action complained of
313	313	infringed on the member's rights under this chapter.
314	314	(d) If the general manager determines that the action
315	315	complained of did not infringe on the member's rights under this
316	316	chapter, or if the general manager otherwise fails to resolve the
317	317	member's complaint to the member's satisfaction before the 21st day
318	318	after the general manager receives the member's complaint, the
319	319	member may file a written complaint with the commission. A
320	320	complaint filed with the commission under this subsection must:
321	321	(1) identify the electric cooperative by name and
322	322	address;
323	323	(2) describe in detail the nature of the member's
324	324	complaint; and
325	325	(3) include copies of documents relevant to the
326	326	member's complaint, including:
327	327	(A) any relevant written request made by the
328	328	member to the cooperative;
329	329	(B) the written complaint made by the member to
330	330	the general manager under Subsection (b); and
331	331	(C) any relevant response from the cooperative
332	332	regarding a request or complaint.
333	333	(e) In reviewing a member's complaint under this section,
334	334	the commission may request that the cooperative provide to the
335	335	commission any information relevant to the complaint. The
336	336	commission must give a cooperative a reasonable opportunity to
337	337	inspect and copy the requested information before providing the
338	338	information to the commission. The commission shall designate an
339	339	employee of the commission to be the person responsible for
340	340	receiving, inspecting, or copying information received under this
341	341	subsection.
342	342	(f) An electric cooperative shall cooperate with a request
343	343	for information under Subsection (e) and promptly provide the
344	344	requested information to the commission's designated employee. The
345	345	commission may not disclose to any person information provided by a
346	346	cooperative in response to the request unless:
347	347	(1) the commission is required by a court to provide
348	348	the information to the person;
349	349	(2) the person is an authorized employee of the
350	350	commission; or
351	351	(3) the cooperative that provided the information
352	352	consents to the disclosure.
353	353	(g) The commission shall give a cooperative notice before
354	354	using information provided in response to a request under
355	355	Subsection (e) in a contested case hearing. On objection by the
356	356	cooperative that the information is confidential or sensitive, the
357	357	administrative judge presiding over the contested case hearing
358	358	shall determine whether the information is admissible in the
359	359	hearing.
360	360	(h) The commission shall return to a cooperative any
361	361	information provided under this section that is confidential or
362	362	sensitive to the cooperative.
363	363	Sec. 161.083. ALTERNATIVE DISPUTE RESOLUTION. The Public
364	364	Utility Commission of Texas may refer a complaint made under
365	365	Section 161.082(d) to the State Office of Administrative Hearings
366	366	as provided by Section 14.0025 for alternative dispute resolution
367	367	if the commission determines a referral is in the public interest.
368	368	SECTION 8. Subchapter C, Chapter 161, Utilities Code, is
369	369	amended by adding Sections 161.126 and 161.127 to read as follows:
370	370	Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR
371	371	CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. An electric cooperative
372	372	with more than 210,000 members that provides retail electric
373	373	service may not acquire equipment capable of generating electricity
374	374	for sale unless the Public Utility Commission of Texas first
375	375	approves of the acquisition. The commission by rule shall
376	376	establish the standards and procedures by which it will approve an
377	377	electric cooperative's acquisition of electric generation
378	378	capacity.
379	379	Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS. Not
380	380	later than the 30th day following the completion of a transaction
381	381	that results in a cooperative or an affiliate of the cooperative
382	382	creating, acquiring, or receiving an interest in an entity that
383	383	does not generate, transmit, or distribute electricity, the
384	384	cooperative shall provide a notice to members that contains:
385	385	(1) the name of the entity;
386	386	(2) a description of the entity;
387	387	(3) the reasons for the decision to enter into the
388	388	transaction;
389	389	(4) a description of the costs associated with the
390	390	transaction, and the method of financing for those costs; and
391	391	(5) a description of the anticipated effect the
392	392	transaction will have on the cooperative's electric energy rates or
393	393	prices.
394	394	SECTION 9. (a) The changes in law made to Section 161.072,
395	395	Utilities Code, as amended by this Act, apply only to a director
396	396	election held on or after the effective date of this Act. A director
397	397	election held before the effective date of this Act is subject to
398	398	the law in effect on the date the election is held, and that law is
399	399	continued in effect for that purpose.
400	400	(b) The changes in law made by Section 161.075, Utilities
401	401	Code, as amended by this Act, and by Sections 161.0751 and 161.0752,
402	402	Utilities Code, as added by this Act, apply only to a meeting
403	403	convened on or after the effective date of this Act. A meeting
404	404	convened before the effective date of this Act is subject to the law
405	405	in effect on the date the meeting is held, and that law is continued
406	406	in effect for that purpose.
407	407	(c) The changes in law made by Sections 161.080, 161.082,
408	408	and 161.083, Utilities Code, as added by this Act, apply only to a
409	409	request to inspect records submitted on or after the effective date
410	410	of this Act. A request submitted before the effective date of this
411	411	Act is subject to the law in effect on the date of the request, and
412	412	that law is continued in effect for that purpose.
413	413	(d) The changes in law made by Section 161.127, Utilities
414	414	Code, as added by this Act, apply only to a transaction that is
415	415	completed on or after the effective date of this Act. A transaction
416	416	that is completed before the effective date of this Act is subject
417	417	to the law in effect on that date, and that law is continued in
418	418	effect for that purpose.
419	419	SECTION 10. This Act takes effect September 1, 2009.