Texas 2009 - 81st Regular

Texas House Bill HB3820 Compare Versions

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1	1	By: Swinford H.B. No. 3820
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the governance and disclosure requirements of electric
7	7	cooperative corporations and the review of complaints of electric
8	8	cooperative corporation members by the Office of the Attorney
9	9	General.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 161.072, Utilities Code, is amended by
12	12	adding Subsections (c) through (h) to read as follows:
13	13	(c) Notwithstanding Section 161.070, if the bylaws provide
14	14	for voting by proxy:
15	15	(1) a director who is standing for reelection to the
16	16	board may not serve on a committee established under the bylaws for
17	17	the purpose of casting, or being authorized to cast, the proxy vote
18	18	of a member in a director election; and
19	19	(2) a member's proxy vote may be cast by a committee
20	20	described by Subdivision (1) in a director election only if:
21	21	(A) a proxy form is sent by regular mail to each
22	22	member of record not later than the 30th day before the date of the
23	23	meeting at which proxy votes are counted;
24	24	(B) the proxy form lists:
25	25	(i) the names of all qualified candidates
26	26	and, if the cooperative nominates or elects directors by district,
27	27	the district the member seeks to represent, or
28	28	(ii) the slate of candidates nominated at
29	29	the district meeting, if applicable;
30	30	(C) the proxy form designates each candidate who
31	31	is an incumbent director;
32	32	(D) an exact copy of the proxy form is posted on
33	33	the cooperative's Internet website, if the cooperative maintains a
34	34	website;
35	35	(E) the proxy form includes information
36	36	describing the process by which proxy votes are authorized and
37	37	cast, including:
38	38	(i) the name of each member of the committee
39	39	established under the bylaws for the purpose of casting proxy votes
40	40	in a director election;
41	41	(ii) the process prescribed in the bylaws
42	42	for selecting members to serve on the committee; and
43	43	(iii) the districts represented by each
44	44	committee member, if applicable; and
45	45	(F) the proxy form contains the following
46	46	statements, in bold type:
47	47	(i) "If you grant the committee your proxy,
48	48	you are giving the committee full authority to vote your proxy for
49	49	the candidates you selected, or, if you did not select any
50	50	candidates, to vote your proxy for candidates the committee
51	51	selects";
52	52	(ii) "You may rescind your proxy at any time
53	53	before votes are cast at the meeting to elect directors"; and
54	54	(iii) "State law prohibits any person from
55	55	using incentives or other enticements to encourage you to provide
56	56	your proxy in any board election."
57	57	(d) Subsection (c) may not be construed as limiting the
58	58	right of an individual member to collect or cast the proxy vote of
59	59	another member in a director election, if allowed by the bylaws.
60	60	(e) This section may not be construed as limiting the use of
61	61	a proxy as provided by Section 161.069 to establish a quorum to
62	62	transact business other than the election of a director.
63	63	(f) A person may not use an incentive or other enticement to
64	64	encourage a member to authorize another person to cast the member's
65	65	proxy vote in a director election.
66	66	(g) If the bylaws of a cooperative allow a committee of
67	67	members to nominate qualified members as candidates in a director
68	68	election, the bylaws must also:
69	69	(1) allow nominations to be made through one or more
70	70	written petitions by members;
71	71	(2) specify the number of printed names and dated
72	72	signatures a petition nominating a candidate must contain;
73	73	(3) specify the time period within which the names and
74	74	dated signatures may be collected; and
75	75	(4) specify the deadline by which a petition
76	76	nominating a candidate must be submitted to the cooperative.
77	77	(h) A petition submitted under Subsection (g) must provide
78	78	on the petition the name and address of the member seeking
79	79	nomination and, if the cooperative nominates or elects directors by
80	80	district, the district the member seeks to represent.
81	81	SECTION 2. Section 161.075, Utilities Code, is amended by
82	82	amending Subsection (a) and adding Subsections (d) through (g) to
83	83	read as follows:
84	84	(a) The board shall hold a regular or special board meeting
85	85	at the place and time specified in [on] the notice prescribed by
86	86	Subsection (d) and the bylaws.
87	87	(d) The board shall give members notice of the date, hour,
88	88	place, and planned agenda of a regular or special board meeting.
89	89	Notice of a board meeting must be given at least three days before
90	90	the scheduled time of the meeting by posting the notice in a
91	91	prominent place convenient to members at the cooperative's main
92	92	office and each district office, and on the cooperative's Internet
93	93	website, if the cooperative maintains a website. The board shall
94	94	provide on request a copy of the notice to a member of the
95	95	cooperative.
96	96	(e) In the event of an emergency or urgent matter, notice
97	97	may be given in the manner prescribed by Subsection (d) less than
98	98	three days before a regular or special board meeting is convened.
99	99	(f) An action taken by the board at a meeting for which
100	100	notice was provided less than three days before a regular or special
101	101	board meeting is convened must be ratified by the board at the next
102	102	board meeting.
103	103	(g) A member of the electric cooperative is entitled to
104	104	attend a regular or special board meeting for the duration of the
105	105	period specified in the meeting notice for member comments and to
106	106	have a reasonable opportunity to comment on any matter on the
107	107	meeting agenda or related to cooperative business. Only a member of
108	108	the electric cooperative is entitled to attend a regular or special
109	109	board meeting for the duration of the period specified in the
110	110	meeting notice for member comments.
111	111	SECTION 3. Subchapter B, Chapter 161, Utilities Code, is
112	112	amended by adding Sections 161.080 and 161.081 to read as follows:
113	113	Sec. 161.080. ANNUAL FINANCIAL AUDIT. (a) The board
114	114	annually, at the electric cooperative's expense, shall have an
115	115	independent financial audit made of the cooperative's books and
116	116	records.
117	117	(b) The audit must be performed by a qualified, independent,
118	118	professional entity.
119	119	(c) The board shall make the results of the audit available
120	120	to any member of the cooperative upon request.
121	121	Sec. 161.081. MEMBER'S RIGHT OF ACCESS TO INFORMATION. (a)
122	122	A member of an electric cooperative may, at any reasonable time and
123	123	on written request that states a proper purpose, inspect and copy
124	124	the books and records of the cooperative relevant to that purpose.
125	125	(b) The cooperative may charge the member for the cost of
126	126	providing the information.
127	127	(c) An electric cooperative may not limit or deny a
128	128	member's request to inspect its books and records unless the
129	129	member:
130	130	(1) does not meet the requirements of Subsection (a);
131	131	(2) seeks information the release of which would
132	132	unduly infringe on or invade the privacy of a person;
133	133	(3) seeks information related to a trade secret;
134	134	(4) seeks personnel information the disclosure of
135	135	which would violate the law or constitute a clearly unwarranted
136	136	invasion of personal privacy;
137	137	(5) seeks information related to:
138	138	(A) pending or reasonably anticipated
139	139	litigation;
140	140	(B) real estate transactions for projects that
141	141	have not been formally announced or for which contracts have not
142	142	been formally awarded;
143	143	(C) the cooperative's competitive activity,
144	144	including commercial information and utility-related matters, that
145	145	would, if disclosed, give advantage to competitors or prospective
146	146	competitors; or
147	147	(D) the security of the electrical system; or
148	148	(6) seeks information that is confidential,
149	149	privileged, or proprietary.
150	150	SECTION 4. Subchapter C, Chapter 161, Utilities Code, is
151	151	amended by adding Section 161.126 to read as follows:
152	152	Sec. 161.126. NOTIFICATION OF INVESTMENT IN CERTAIN
153	153	BUSINESS ENTITIES. If an electric cooperative or an affiliate of
154	154	the cooperative enters into a transaction in which the cooperative
155	155	creates or acquires an interest in a business entity that does not
156	156	generate, transmit, or distribute electricity, the cooperative
157	157	shall, not later than the 30th day following the completion of the
158	158	transaction, provide a notice to members that contains:
159	159	(1) the name of the entity;
160	160	(2) a description of the entity;
161	161	(3) the reasons for the decision to enter into the
162	162	transaction;
163	163	(4) a description of the cost and method of financing
164	164	the transaction; and
165	165	(5) a description of the anticipated effect the
166	166	transaction will have on the cooperative's electricity rates.
167	167	SECTION 5. Chapter 161, Utilities Code, is amended by
168	168	adding Subchapter G to read as follows:
169	169	SUBCHAPTER G. ATTORNEY GENERAL REVIEW
170	170	Sec. 161.301. MEMBER COMPLAINTS. (a) A member may file a
171	171	written complaint with an electric cooperative that the cooperative
172	172	or an officer or agent of the cooperative failed or refused to
173	173	follow Section 161.072, 161.075, 161.080, 161.081, or 161.126.
174	174	(b) If the electric cooperative does not resolve the
175	175	complaint to the member's satisfaction before the 21st day after
176	176	the date the complaint is received by the cooperative, the member
177	177	may file a written complaint with the consumer protection division
178	178	of the office of the attorney general. The complaint must identify
179	179	the name and address of the electric cooperative, describe the
180	180	problem in detail, and provide copies of documents relevant to the
181	181	complaint, including any request the member provided to the
182	182	cooperative, the written complaint the member filed with the
183	183	cooperative, and any response from the cooperative.
184	184	(c) The consumer protection division of the office of the
185	185	attorney general may review a complaint filed by a member under this
186	186	subchapter for purposes of determining if the electric cooperative
187	187	or an officer or agent of the cooperative failed or refused to
188	188	follow Section 161.072, 161.075, 161.080, 161.081, or 161.126.
189	189	(d) The consumer protection division may request from the
190	190	cooperative additional information about the complaint. The
191	191	division must identify in the request the persons authorized by the
192	192	division to receive, inspect, or copy the information.
193	193	(e) The electric cooperative shall cooperate fully with the
194	194	consumer protection division and shall provide to the authorized
195	195	employee of the division information to assist in resolving the
196	196	complaint within the time specified by the division.
197	197	Sec. 161.302. USE OF INFORMATION ACQUIRED BY ATTORNEY
198	198	GENERAL. (a) No information provided in response to a request
199	199	under Section 161.301, unless otherwise ordered by a court for good
200	200	cause shown, may be produced for inspection or copying by, nor may
201	201	its contents be disclosed to, any person other than an authorized
202	202	employee of the consumer protection division without the consent of
203	203	the electric cooperative that provided the information.
204	204	(b) The consumer protection division may use the
205	205	information or copies of the information as necessary to resolve a
206	206	complaint filed under this subchapter, including presentation
207	207	before any court in a suit filed under Section 161.303.
208	208	Confidential or sensitive information shall not be presented except
209	209	with approval of the court in which the action is pending after
210	210	adequate notice to the electric cooperative. If no suit is filed
211	211	under Section 161.303, any confidential or sensitive information
212	212	shall be returned to the electric cooperative upon request after
213	213	the complaint is closed.
214	214	Sec. 161.303. INJUNCTIVE RELIEF. (a) If the consumer
215	215	protection division determines that it is in the public interest,
216	216	the attorney general may file suit against an electric cooperative
217	217	to prevent or restrain by temporary restraining order, temporary
218	218	injunction, or permanent injunction a violation of Section 161.072,
219	219	161.075, 161.080, 161.081, or 161.126.
220	220	(b) A suit filed under this section must be filed not later
221	221	than one year after the date the member of the electric cooperative
222	222	filed the complaint with the consumer protection division, and may
223	223	be brought in a district court in Travis County or in a county in
224	224	which any part of the violation occurs.
225	225	(c) If the attorney general files suit against an electric
226	226	cooperative under this section and a temporary or permanent
227	227	injunction is granted against the cooperative or an officer or
228	228	agent of the cooperative, the attorney general may recover
229	229	reasonable expenses, court costs, investigative costs, and
230	230	attorney's fees.
231	231	SECTION 6. (a) The change in law made to Section 161.072,
232	232	Utilities Code, as amended by this Act, applies only to a director
233	233	election held on or after the effective date of this Act. A director
234	234	election held before the effective date of this Act is subject to
235	235	the law in effect on the date the election is held, and that law is
236	236	continued in effect for that purpose.
237	237	(b) The change in law made by Section 161.075, Utilities
238	238	Code, as amended by this Act, applies only to a meeting convened on
239	239	or after the effective date of this Act. A meeting convened before
240	240	the effective date of this Act is subject to the law in effect on the
241	241	date the meeting is held, and that law is continued in effect for
242	242	that purpose.
243	243	(c) The change in law made by Section 161.081, Utilities
244	244	Code, as added by this Act, applies only to a request to inspect
245	245	records submitted on or after the effective date of this Act. A
246	246	request submitted before the effective date of this Act is subject
247	247	to the law in effect on the date of the request, and that law is
248	248	continued in effect for that purpose.
249	249	(d) The change in law made by Section 161.126, Utilities
250	250	Code, as added by this Act, applies only to a transaction that is
251	251	completed on or after the effective date of this Act. A transaction
252	252	that is completed before the effective date of this Act is subject
253	253	to the law in effect on that date, and that law is continued in
254	254	effect for that purpose.
255	255	(e) The change in law made by Subchapter G, Chapter 161,
256	256	Utilities Code, as added by this Act, applies only to a complaint
257	257	filed by a member of an electric cooperative regarding an action
258	258	that occurs on or after the effective date of this Act. An action
259	259	that is completed before the effective date of this Act is subject
260	260	to the law in effect on that date, and that law is continued in
261	261	effect for that purpose.
262	262	SECTION 7. This Act takes effect September 1, 2009.