Texas 2011 - 82nd Regular

Texas Senate Bill SB1743 Compare Versions

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1	1	By: Fraser S.B. No. 1743
2	2	(In the Senate - Filed March 11, 2011; March 23, 2011, read
3	3	first time and referred to Committee on Business and Commerce;
4	4	April 29, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 9, Nays 0; April 29, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1743 By: Jackson
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to access by members of certain electric cooperatives to
13	13	meetings of the boards of directors and certain information of the
14	14	electric cooperatives.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subchapter B, Chapter 161, Utilities Code, is
17	17	amended by adding Sections 161.0721, 161.0751, 161.0752, 161.080,
18	18	and 161.081 to read as follows:
19	19	Sec. 161.0721. ELECTION OF DIRECTORS IN LARGE COOPERATIVES.
20	20	(a) This section applies only to an electric cooperative with more
21	21	than 180,000 members that is partially located in a county with a
22	22	population of more than one million and less than 1.5 million.
23	23	(b) Directors may be elected only by district. The board
24	24	shall establish single-member districts from which the directors
25	25	are to be elected. In establishing districts, the board shall
26	26	attempt to have directors represent geographic areas with equal
27	27	numbers of people.
28	28	(c) A member may vote for a director to represent a district
29	29	only if the member resides in that district.
30	30	(d) Qualified members may be nominated as candidates in a
31	31	director election only through a written petition by members. The
32	32	bylaws of the electric cooperative must:
33	33	(1) specify the number of printed names and dated
34	34	signatures a petition nominating a candidate must contain;
35	35	(2) specify a period within which a petition
36	36	nominating a candidate must be submitted to the electric
37	37	cooperative; and
38	38	(3) specify that only members residing in a district
39	39	may sign a petition for the nomination of a candidate to represent
40	40	that district.
41	41	(e) A director or board committee may not cast a member's
42	42	proxy vote in a director election.
43	43	(f) Subsection (e) may not be construed as limiting the
44	44	right of an individual member to collect or cast a proxy vote of
45	45	another member in a director election to the extent allowed by the
46	46	bylaws of the electric cooperative.
47	47	(g) A person may not use an incentive or other enticement to
48	48	encourage a member to authorize another person to cast the member's
49	49	proxy vote in a director election.
50	50	(h) This section may not be construed as limiting the use of
51	51	a proxy as provided by Section 161.069 to establish a quorum to
52	52	transact business other than the election of a director.
53	53	Sec. 161.0751. BOARD MEETINGS IN CERTAIN LARGE
54	54	COOPERATIVES. (a) This section applies only to an electric
55	55	cooperative with more than 180,000 members that is partially
56	56	located in a county with a population of more than one million and
57	57	less than 1.5 million.
58	58	(b) The board shall hold a regular or special board meeting
59	59	at the place and time specified by the notice required by Section
60	60	161.0752 and the bylaws of the electric cooperative.
61	61	(c) The attendance of a director at a board meeting
62	62	constitutes a waiver of notice to the director of the meeting unless
63	63	the director attends the meeting for the express purpose of
64	64	objecting to the transaction of business at the meeting because the
65	65	meeting is not lawfully called or convened.
66	66	(d) A notice or waiver of notice of a board meeting given to
67	67	a director is not required to specify the business to be transacted
68	68	at the meeting or the purpose of the meeting.
69	69	(e) Except as provided by this section, each member of the
70	70	electric cooperative is entitled to attend a regular or special
71	71	board meeting. A person who is not a member of the electric
72	72	cooperative may not attend a regular or special board meeting
73	73	unless the person has been invited by a member.
74	74	(f) At the board's discretion, the board may convene an
75	75	executive session to which the members do not have access to
76	76	deliberate and take action on sensitive matters, including matters
77	77	involving confidential personnel information, contracts, lawsuits,
78	78	real estate transactions, competitively sensitive information,
79	79	information related to the security of the electrical system or the
80	80	electric cooperative, and other privileged, confidential, or
81	81	proprietary information.
82	82	(g) The board shall reconvene the open session of the
83	83	regular or special board meeting to announce the final action taken
84	84	on a matter discussed in executive session, except matters
85	85	involving confidential personnel information, real estate
86	86	transactions, competitively sensitive information, or security
87	87	information.
88	88	(h) The board secretary or a person designated by the
89	89	secretary shall make and keep written minutes of each regular or
90	90	special board meeting.
91	91	(i) The board shall adopt and comply with procedures for
92	92	providing a member with access to the entirety of a regular or
93	93	special board meeting, other than an executive session.
94	94	(j) The board secretary or person designated by the
95	95	secretary shall make and keep a written or audio record of each
96	96	executive session. The secretary shall preserve the record for at
97	97	least two years after the session. The record must include:
98	98	(1) a statement of the subject matter of each
99	99	deliberation;
100	100	(2) a record of any further action taken; and
101	101	(3) an announcement by the presiding director at the
102	102	beginning and end of the session indicating the date and time.
103	103	Sec. 161.0752. NOTICE OF BOARD MEETINGS IN CERTAIN
104	104	COOPERATIVES. (a) This section applies only to an electric
105	105	cooperative with more than 180,000 members that is partially
106	106	located in a county with a population of more than one million and
107	107	less than 1.5 million.
108	108	(b) The board shall give members notice of the date, hour,
109	109	place, and planned agenda of a regular or special board meeting.
110	110	Notice of a board meeting must be given at least three days before
111	111	the scheduled time of the meeting by:
112	112	(1) posting a notice on a bulletin board in a place
113	113	convenient to members at the electric cooperative's main office and
114	114	at each district office;
115	115	(2) posting a notice on the electric cooperative's
116	116	Internet website, if the cooperative maintains a website; and
117	117	(3) providing a copy of the notice to a member upon a
118	118	member's request.
119	119	(c) In the event of an emergency or urgent matter, notice
120	120	may be given in the manner prescribed by Subsection (b) at any time
121	121	before a regular or special board meeting is convened. An action
122	122	taken by the board at a meeting for which notice is given under this
123	123	subsection must be ratified by the board at the next meeting for
124	124	which notice is given under Subsection (b).
125	125	Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS IN
126	126	CERTAIN COOPERATIVES. (a) This section applies only to an
127	127	electric cooperative with more than 180,000 members that is
128	128	partially located in a county with a population of more than one
129	129	million and less than 1.5 million.
130	130	(b) Except as provided by Subsection (d), a member of an
131	131	electric cooperative may, at any reasonable time and on written
132	132	request that states a proper purpose for the request, inspect and
133	133	copy the books and records of the electric cooperative relevant to
134	134	that purpose.
135	135	(c) An electric cooperative may charge a member for the cost
136	136	of providing information under Subsection (b).
137	137	(d) An electric cooperative may limit or deny a member's
138	138	request to inspect its books and records if the member:
139	139	(1) seeks information the release of which would
140	140	unduly infringe on or invade the privacy of a person;
141	141	(2) seeks information related to a trade secret;
142	142	(3) seeks personnel information the disclosure of
143	143	which would violate other law or would constitute a clearly
144	144	unwarranted invasion of personal privacy;
145	145	(4) seeks information related to:
146	146	(A) pending or reasonably anticipated
147	147	litigation;
148	148	(B) a real estate transaction for a project that
149	149	has not been formally announced or for which contracts have not been
150	150	formally awarded;
151	151	(C) the electric cooperative's competitive
152	152	activity, including commercial information and utility-related
153	153	matters that would, if disclosed, give an advantage to a competitor
154	154	or prospective competitor; or
155	155	(D) the security of the electric cooperative's
156	156	electrical system; or
157	157	(5) seeks information that is confidential,
158	158	privileged, or proprietary.
159	159	Sec. 161.081. POLICIES AND AUDIT IN CERTAIN COOPERATIVES.
160	160	(a) This section applies only to an electric cooperative with more
161	161	than 180,000 members that is partially located in a county with a
162	162	population of more than one million and less than 1.5 million.
163	163	(b) The board shall adopt written policies relating to:
164	164	(1) travel expenditures for board members, officers,
165	165	and employees;
166	166	(2) reimbursement of expenses for board members,
167	167	officers, and employees;
168	168	(3) conflicts of interest for board members, officers,
169	169	and employees;
170	170	(4) whistle-blower protections;
171	171	(5) criteria and procedures for the selection,
172	172	monitoring, review, and evaluation of outside vendors or contracted
173	173	professional services;
174	174	(6) budgets for use in planning and controlling costs;
175	175	and
176	176	(7) the creation of a committee that audits the
177	177	actions of the board.
178	178	(c) An electric cooperative shall provide for an
179	179	independent financial audit, to be performed annually by an
180	180	unaffiliated entity that is professionally qualified to perform the
181	181	audit.
182	182	SECTION 2. Subchapter C, Chapter 161, Utilities Code, is
183	183	amended by adding Sections 161.126 and 161.127 to read as follows:
184	184	Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR
185	185	CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. (a) This section
186	186	applies only to an electric cooperative with more than 180,000
187	187	members that is partially located in a county with a population of
188	188	more than one million and less than 1.5 million.
189	189	(b) An electric cooperative may not acquire equipment
190	190	capable of generating electricity for sale unless the Public
191	191	Utility Commission of Texas first approves of the acquisition. The
192	192	commission by rule shall establish the standards and procedures by
193	193	which it will approve an electric cooperative's acquisition of
194	194	electric generation capacity.
195	195	Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS.
196	196	(a) This section applies only to an electric cooperative with more
197	197	than 180,000 members that is partially located in a county with a
198	198	population of more than one million and less than 1.5 million.
199	199	(b) Not later than the 30th day following the completion of
200	200	a transaction that results in an electric cooperative or an
201	201	affiliate of the electric cooperative creating or acquiring an
202	202	interest in an entity that does not generate, transmit, or
203	203	distribute electricity, the electric cooperative shall provide a
204	204	notice to members that contains:
205	205	(1) the name of the entity;
206	206	(2) a description of the entity;
207	207	(3) the reasons for the decision to enter into the
208	208	transaction;
209	209	(4) a description of the costs associated with the
210	210	transaction, and the method of financing for those costs; and
211	211	(5) a description of the anticipated effect the
212	212	transaction will have on the electric cooperative's electric energy
213	213	rates or prices.
214	214	SECTION 3. (a) The changes in law made by Section
215	215	161.0721, Utilities Code, as added by this Act, apply only to a
216	216	director election held on or after the effective date of this Act.
217	217	A director election held before the effective date of this Act is
218	218	subject to the law in effect on the date the election is held, and
219	219	that law is continued in effect for that purpose.
220	220	(b) The changes in law made by Sections 161.0751 and
221	221	161.0752, Utilities Code, as added by this Act, apply only to a
222	222	meeting convened on or after the effective date of this Act. A
223	223	meeting convened before the effective date of this Act is subject to
224	224	the law in effect on the date the meeting is held, and that law is
225	225	continued in effect for that purpose.
226	226	(c) The changes in law made by Section 161.080, Utilities
227	227	Code, as added by this Act, apply only to a request to inspect
228	228	records submitted on or after the effective date of this Act. A
229	229	request submitted before the effective date of this Act is subject
230	230	to the law in effect on the date of the request, and that law is
231	231	continued in effect for that purpose.
232	232	(d) The changes in law made by Section 161.127, Utilities
233	233	Code, as added by this Act, apply only to a transaction that is
234	234	completed on or after the effective date of this Act. A transaction
235	235	that is completed before the effective date of this Act is subject
236	236	to the law in effect on the date the transaction is completed, and
237	237	that law is continued in effect for that purpose.
238	238	SECTION 4. This Act takes effect September 1, 2011.
239	239	* * * * *