By: Fraser S.B. No. 1743
(In the Senate - Filed March 11, 2011; March 23, 2011, read
first time and referred to Committee on Business and Commerce;
April 29, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; April 29, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1743 By: Jackson
A BILL TO BE ENTITLED
AN ACT
relating to access by members of certain electric cooperatives to
meetings of the boards of directors and certain information of the
electric cooperatives.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 161, Utilities Code, is
amended by adding Sections 161.0721, 161.0751, 161.0752, 161.080,
and 161.081 to read as follows:
Sec. 161.0721. ELECTION OF DIRECTORS IN LARGE COOPERATIVES.
(a) This section applies only to an electric cooperative with more
than 180,000 members that is partially located in a county with a
population of more than one million and less than 1.5 million.
(b) Directors may be elected only by district. The board
shall establish single-member districts from which the directors
are to be elected. In establishing districts, the board shall
attempt to have directors represent geographic areas with equal
numbers of people.
(c) A member may vote for a director to represent a district
only if the member resides in that district.
(d) Qualified members may be nominated as candidates in a
director election only through a written petition by members. The
bylaws of the electric cooperative must:
(1) specify the number of printed names and dated
signatures a petition nominating a candidate must contain;
(2) specify a period within which a petition
nominating a candidate must be submitted to the electric
cooperative; and
(3) specify that only members residing in a district
may sign a petition for the nomination of a candidate to represent
that district.
(e) A director or board committee may not cast a member's
proxy vote in a director election.
(f) Subsection (e) may not be construed as limiting the
right of an individual member to collect or cast a proxy vote of
another member in a director election to the extent allowed by the
bylaws of the electric cooperative.
(g) A person may not use an incentive or other enticement to
encourage a member to authorize another person to cast the member's
proxy vote in a director election.
(h) This section may not be construed as limiting the use of
a proxy as provided by Section 161.069 to establish a quorum to
transact business other than the election of a director.
Sec. 161.0751. BOARD MEETINGS IN CERTAIN LARGE
COOPERATIVES. (a) This section applies only to an electric
cooperative with more than 180,000 members that is partially
located in a county with a population of more than one million and
less than 1.5 million.
(b) The board shall hold a regular or special board meeting
at the place and time specified by the notice required by Section
161.0752 and the bylaws of the electric cooperative.
(c) The attendance of a director at a board meeting
constitutes a waiver of notice to the director of the meeting unless
the director attends the meeting for the express purpose of
objecting to the transaction of business at the meeting because the
meeting is not lawfully called or convened.
(d) A notice or waiver of notice of a board meeting given to
a director is not required to specify the business to be transacted
at the meeting or the purpose of the meeting.
(e) Except as provided by this section, each member of the
electric cooperative is entitled to attend a regular or special
board meeting. A person who is not a member of the electric
cooperative may not attend a regular or special board meeting
unless the person has been invited by a member.
(f) At the board's discretion, the board may convene an
executive session to which the members do not have access to
deliberate and take action on sensitive matters, including matters
involving confidential personnel information, contracts, lawsuits,
real estate transactions, competitively sensitive information,
information related to the security of the electrical system or the
electric cooperative, and other privileged, confidential, or
proprietary information.
(g) The board shall reconvene the open session of the
regular or special board meeting to announce the final action taken
on a matter discussed in executive session, except matters
involving confidential personnel information, real estate
transactions, competitively sensitive information, or security
information.
(h) The board secretary or a person designated by the
secretary shall make and keep written minutes of each regular or
special board meeting.
(i) The board shall adopt and comply with procedures for
providing a member with access to the entirety of a regular or
special board meeting, other than an executive session.
(j) The board secretary or person designated by the
secretary shall make and keep a written or audio record of each
executive session. The secretary shall preserve the record for at
least two years after the session. The record must include:
(1) a statement of the subject matter of each
deliberation;
(2) a record of any further action taken; and
(3) an announcement by the presiding director at the
beginning and end of the session indicating the date and time.
Sec. 161.0752. NOTICE OF BOARD MEETINGS IN CERTAIN
COOPERATIVES. (a) This section applies only to an electric
cooperative with more than 180,000 members that is partially
located in a county with a population of more than one million and
less than 1.5 million.
(b) The board shall give members notice of the date, hour,
place, and planned agenda of a regular or special board meeting.
Notice of a board meeting must be given at least three days before
the scheduled time of the meeting by:
(1) posting a notice on a bulletin board in a place
convenient to members at the electric cooperative's main office and
at each district office;
(2) posting a notice on the electric cooperative's
Internet website, if the cooperative maintains a website; and
(3) providing a copy of the notice to a member upon a
member's request.
(c) In the event of an emergency or urgent matter, notice
may be given in the manner prescribed by Subsection (b) at any time
before a regular or special board meeting is convened. An action
taken by the board at a meeting for which notice is given under this
subsection must be ratified by the board at the next meeting for
which notice is given under Subsection (b).
Sec. 161.080. MEMBER'S RIGHT OF ACCESS TO RECORDS IN
CERTAIN COOPERATIVES. (a) This section applies only to an
electric cooperative with more than 180,000 members that is
partially located in a county with a population of more than one
million and less than 1.5 million.
(b) Except as provided by Subsection (d), a member of an
electric cooperative may, at any reasonable time and on written
request that states a proper purpose for the request, inspect and
copy the books and records of the electric cooperative relevant to
that purpose.
(c) An electric cooperative may charge a member for the cost
of providing information under Subsection (b).
(d) An electric cooperative may limit or deny a member's
request to inspect its books and records if the member:
(1) seeks information the release of which would
unduly infringe on or invade the privacy of a person;
(2) seeks information related to a trade secret;
(3) seeks personnel information the disclosure of
which would violate other law or would constitute a clearly
unwarranted invasion of personal privacy;
(4) seeks information related to:
(A) pending or reasonably anticipated
litigation;
(B) a real estate transaction for a project that
has not been formally announced or for which contracts have not been
formally awarded;
(C) the electric cooperative's competitive
activity, including commercial information and utility-related
matters that would, if disclosed, give an advantage to a competitor
or prospective competitor; or
(D) the security of the electric cooperative's
electrical system; or
(5) seeks information that is confidential,
privileged, or proprietary.
Sec. 161.081. POLICIES AND AUDIT IN CERTAIN COOPERATIVES.
(a) This section applies only to an electric cooperative with more
than 180,000 members that is partially located in a county with a
population of more than one million and less than 1.5 million.
(b) The board shall adopt written policies relating to:
(1) travel expenditures for board members, officers,
and employees;
(2) reimbursement of expenses for board members,
officers, and employees;
(3) conflicts of interest for board members, officers,
and employees;
(4) whistle-blower protections;
(5) criteria and procedures for the selection,
monitoring, review, and evaluation of outside vendors or contracted
professional services;
(6) budgets for use in planning and controlling costs;
and
(7) the creation of a committee that audits the
actions of the board.
(c) An electric cooperative shall provide for an
independent financial audit, to be performed annually by an
unaffiliated entity that is professionally qualified to perform the
audit.
SECTION 2. Subchapter C, Chapter 161, Utilities Code, is
amended by adding Sections 161.126 and 161.127 to read as follows:
Sec. 161.126. PROHIBITION ON ACQUISITION OF GENERATOR
CAPACITY BY CERTAIN ELECTRIC COOPERATIVES. (a) This section
applies only to an electric cooperative with more than 180,000
members that is partially located in a county with a population of
more than one million and less than 1.5 million.
(b) An electric cooperative may not acquire equipment
capable of generating electricity for sale unless the Public
Utility Commission of Texas first approves of the acquisition. The
commission by rule shall establish the standards and procedures by
which it will approve an electric cooperative's acquisition of
electric generation capacity.
Sec. 161.127. NOTIFICATION OF CERTAIN INVESTMENTS.
(a) This section applies only to an electric cooperative with more
than 180,000 members that is partially located in a county with a
population of more than one million and less than 1.5 million.
(b) Not later than the 30th day following the completion of
a transaction that results in an electric cooperative or an
affiliate of the electric cooperative creating or acquiring an
interest in an entity that does not generate, transmit, or
distribute electricity, the electric cooperative shall provide a
notice to members that contains:
(1) the name of the entity;
(2) a description of the entity;
(3) the reasons for the decision to enter into the
transaction;
(4) a description of the costs associated with the
transaction, and the method of financing for those costs; and
(5) a description of the anticipated effect the
transaction will have on the electric cooperative's electric energy
rates or prices.
SECTION 3. (a) The changes in law made by Section
161.0721, Utilities Code, as added by this Act, apply only to a
director election held on or after the effective date of this Act.
A director election held before the effective date of this Act is
subject to the law in effect on the date the election is held, and
that law is continued in effect for that purpose.
(b) The changes in law made by Sections 161.0751 and
161.0752, Utilities Code, as added by this Act, apply only to a
meeting convened on or after the effective date of this Act. A
meeting convened before the effective date of this Act is subject to
the law in effect on the date the meeting is held, and that law is
continued in effect for that purpose.
(c) The changes in law made by Section 161.080, Utilities
Code, as added by this Act, apply only to a request to inspect
records submitted on or after the effective date of this Act. A
request submitted before the effective date of this Act is subject
to the law in effect on the date of the request, and that law is
continued in effect for that purpose.
(d) The changes in law made by Section 161.127, Utilities
Code, as added by this Act, apply only to a transaction that is
completed on or after the effective date of this Act. A transaction
that is completed before the effective date of this Act is subject
to the law in effect on the date the transaction is completed, and
that law is continued in effect for that purpose.
SECTION 4. This Act takes effect September 1, 2011.
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