Title 5. Special Types of Corporations — Subtitle 6. Electric Cooperatives

Is organized under this subtitle; or

Becomes subject to this subtitle in the manner provided in this subtitle.

That provides retail electric service to its members on the Eastern Shore of Maryland; and

Whose board of directors has passed a binding resolution to operate as a member–regulated cooperative.

“Person” has the meaning stated in § 1–101 of this article.

“Person” includes:

Sue and be sued in its corporate name;

Have perpetual existence;

Adopt and alter a corporate seal;

Generate, manufacture, purchase, acquire, accumulate, and transmit electricity;

Distribute, sell, supply, and dispose of electricity to:

Assist persons to whom the cooperative supplies or will supply electricity in wiring their premises by:

Assist persons to whom the cooperative supplies or will supply electricity in acquiring and installing electrical and plumbing appliances, equipment, fixtures, and apparatus by:

Assist persons to whom the cooperative supplies or will supply electricity in constructing, equipping, maintaining, and operating electric cold storage or processing plants, by providing financing or other assistance;

Construct, purchase, lease as lessee, or otherwise acquire electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, electric plants, and any other assets considered necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized;

Equip, maintain, and operate electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, electric plants, and any other assets considered necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized;

Sell, assign, convey, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, electric plants, and any other assets considered necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized;

Construct, maintain, or operate or allow others to construct, maintain, or operate conducting or communications facilities that furnish telecommunications, broadband Internet access, or related services, along, on, under, or across:

Purchase, lease as lessee, or otherwise acquire, use and exercise, and sell, assign, convey, mortgage, pledge, or otherwise dispose of or encumber, franchises, rights, privileges, licenses, and easements;

Borrow money and otherwise contract indebtedness, issue notes, bonds, and other evidences of indebtedness, and secure the payment of those instruments by mortgage, pledge, or deed of trust, or any other encumbrance on any of its assets, revenues, or income;

Construct, maintain, and operate electric transmission and distribution lines along, on, under, and across publicly owned lands, roadways, and public ways, with the prior consent of the governing body of the municipal corporation or county in which the lines are proposed to be constructed and under any reasonable regulations and conditions required in the consent;

Exercise the power of condemnation in the manner provided by the law of this State for the exercise of that power by other corporations that construct or operate electric transmission and distribution lines or systems;

Become a member of or own stock in other cooperatives or corporations;

Conduct its business and exercise its powers in any state, territory, district, and possession of the United States and in any foreign country;

Adopt, amend, and repeal bylaws; and

Do any other act and exercise any other power that may be necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized.

The name of the cooperative;

The address of the principal office of the cooperative;

The name and address of the resident agent of the cooperative;

The name and address of each incorporator;

The name and address of each director; and

A statement that the articles are executed in accordance with this subtitle.

Is consistent with this subtitle; and

Is considered necessary or advisable for the conduct of the business of the cooperative.

A proposed amendment shall be submitted for consideration at an annual or special meeting of the members of the cooperative.

The proposed amendment shall be included in or attached to the notice of the meeting.

The proposed amendment and any change to the proposed amendment shall be approved by the affirmative vote of not less than two-thirds of the members voting on the matter.

Articles of amendment shall be signed and acknowledged for the cooperative by its chairman or vice-chairman and attested by its secretary; and

The seal of the cooperative shall be affixed to the articles.

The name of the cooperative;

The address of the principal office of the cooperative;

The amendment to the articles of incorporation; and

A statement that the articles are executed in accordance with this subtitle.

Except as provided in paragraph (2) of this subsection, the name of a cooperative or foreign corporation doing business in the State under this subtitle shall include:

A cooperative need not use any word specified under paragraph (1) of this subsection if:

Shall state the rights and duties of members and directors; and

May contain other provisions for the regulation and management of the affairs of the cooperative that are consistent with this subtitle and the articles of incorporation.

The boundaries of the districts or the manner of establishing the boundaries;

The manner of changing the boundaries; and

The manner in which the districts shall function.

Each incorporator of a cooperative shall be a member of the cooperative.

A person other than an incorporator may become a member of the cooperative if the person agrees to use electricity or other services supplied by the cooperative when the electricity or services are made available through the cooperative’s facilities.

The member does not use electricity supplied by the cooperative within 6 months after it is made available to the member; or

The cooperative does not make electricity available to the member within 2 years after the person becomes a member or within any shorter period provided by the bylaws of the cooperative.

A member of a cooperative is not liable for the debts of the cooperative.

The property of a member of a cooperative is not subject to execution for the debts of the cooperative.

An annual meeting of the members of a cooperative shall be held at the time and place provided in the bylaws.

An annual meeting may be held:

Called by:

Held:

Except as otherwise provided in this subtitle, notice of each meeting of the members shall be mailed or provided by electronic transmission to each member not less than 10 days or more than 90 days before the date of the meeting.

The notice shall state:

A person entitled to notice of a meeting may waive notice in writing or by electronic transmission either before or after the meeting.

If a person entitled to notice of a meeting attends the meeting, the person’s presence shall constitute a waiver of notice of the meeting, unless the person participates in the meeting solely to object to the transaction of any business because the meeting has not been legally called or convened.

For a cooperative that has not more than 1,000 members, 5% of all members attending the meeting; and

For a cooperative that has more than 1,000 members, 50 members attending the meeting.

Voting may be:

Subject to subsection (c) of this section, if the bylaws provide for voting by a method other than in person, they also shall establish the conditions under which voting is allowed.

The business of a cooperative shall be managed by a board of directors.

Each cooperative shall have at least five directors.

The bylaws shall establish:

The bylaws may provide for the removal of directors from office and for the election of their successors.

A director may not receive a salary for serving as a director.

Except in emergencies, a director may not be employed by the cooperative in any capacity involving compensation without the approval of the members.

The bylaws may authorize a fixed fee and expenses to be paid to each director for attending a meeting of the board of directors.

At each annual meeting after the initial classification of the directors, a number of directors equal to the number of the class whose term expires at that meeting shall be elected to hold office for 3 years or until the third succeeding annual meeting.

The directors shall elect a secretary and a treasurer.

The secretary and treasurer need not be directors or members.

The directors may combine the offices of secretary and treasurer and designate the combined office as secretary-treasurer.

The board of directors may elect or appoint any other officers, agents, or employees it considers necessary or advisable.

The board shall establish the powers and duties of each officer, agent, or employee it elects or appoints.

A proposed consolidation and proposed articles of consolidation that effect the consolidation shall be submitted for consideration at an annual or special meeting of the members of each consolidating cooperative.

A copy of the proposed articles of consolidation shall be attached to the notice of the meeting.

The proposed consolidation, proposed articles of consolidation, and any amendments to the proposed articles of consolidation shall be approved by the affirmative vote of not less than two-thirds of the members of each consolidating cooperative voting on the matter.

Articles of consolidation in the form approved shall be signed and acknowledged for each cooperative by its chairman or vice-chairman and attested by its secretary; and

The seal of each cooperative shall be affixed to the articles.

The articles of consolidation shall contain:

The articles of consolidation may contain any provision that:

A proposed merger and proposed articles of merger that effect the merger shall be submitted for consideration at an annual or special meeting of the members of each merging cooperative and of the successor.

A copy of the proposed articles of merger shall be attached to the notice of the meeting.

The proposed merger, proposed articles of merger, and any amendments to the proposed articles of merger shall be approved by the affirmative vote of not less than two-thirds of the members of each merging cooperative and of the successor voting on the matter.

Articles of merger in the form approved shall be signed and acknowledged for each cooperative by its chairman or vice-chairman and attested by its secretary; and

The seal of each cooperative shall be affixed to the articles.

The articles of merger shall contain:

The articles of merger may contain any provision that:

In a consolidation, the articles of consolidation shall be deemed to be the articles of incorporation of the successor.

In a merger, the articles of incorporation of the successor shall be deemed to be amended to the extent that changes to the articles of incorporation are provided for in the articles of merger.

The successor is liable for all the debts, obligations, and liabilities of each consolidating or merging cooperative.

An existing claim, action, or proceeding pending by or against a consolidating or merging cooperative may be prosecuted to judgment as if the consolidation or merger had not taken place, or, on motion of the successor or any party, the successor may be substituted as a party and a judgment against the consolidating or merging cooperative constitutes a lien on the property of the successor.

A proposed conversion and proposed articles of conversion that effect the conversion shall be submitted for consideration at an annual or special meeting of the members or stockholders of the corporation.

A copy of the proposed articles of conversion shall be attached to the notice of the meeting.

The proposed conversion, proposed articles of conversion, and any amendments to the proposed articles of conversion shall be approved:

Articles of conversion in the form approved shall be signed and acknowledged for the corporation by its chairman or vice-chairman and attested by its secretary; and

The seal of the corporation shall be affixed to the articles.

The articles of conversion shall contain:

The articles of conversion may contain any provision that:

The name of the cooperative and the address of its principal office; and

A statement that:

Except as provided in paragraph (2) of this subsection, a proposed dissolution shall be approved by the affirmative vote of not less than two–thirds of the members voting on the matter at an annual or special meeting of the members.

A proposed dissolution of a member–regulated cooperative shall be approved by the affirmative vote of a majority of the members voting at a meeting at which at least 15% of the members vote.

On approval of the proposed dissolution by the members of the cooperative as provided in subsection (b) of this section:

The certificate shall state:

The chairman or vice-chairman who signs the certificate for the cooperative shall make and attach to the certificate an affidavit stating that the statements made in the certificate are true.

The certificate and affidavit shall be filed for record with the Department.

The board of directors immediately shall cause notice of the dissolution proceedings to be:

The board shall collect money owing to the cooperative, liquidate its assets, discharge its debts, obligations, and liabilities, and do all other acts required to wind up the business and affairs of the cooperative.

After winding up the business and affairs of the cooperative as provided in subsection (d) of this section, the board of directors shall authorize the execution of articles of dissolution.

The articles of dissolution shall be signed and acknowledged for the cooperative by its chairman or vice-chairman and attested by its secretary, and the seal of the cooperative shall be affixed to the articles.

The name of the cooperative and the address of its principal office;

The date on which the certificate of election to dissolve was accepted for record by the Department;

That there are no actions pending against the cooperative;

That all debts, obligations, and liabilities of the cooperative have been discharged, or that adequate provision has been made for their discharge;

That the articles are executed in accordance with this subtitle; and

That the provisions of this section have been complied with.

To operate as a member–regulated cooperative, a cooperative shall:

The Commission shall expedite the review of a waiver requested under paragraph (1)(i) of this subsection.

May be called by a cooperative’s board of directors; or

Shall be called within 100 days after receipt by the board of directors of a petition signed by at least 1,000 cooperative members.

A cooperative’s board of directors shall hold a meeting with the cooperative’s members on whether to operate as a member–regulated cooperative.

A cooperative’s board of directors shall hold at least two open forums to allow the cooperative’s members to discuss or make inquiries concerning operating as a member–regulated cooperative.

Forums shall be held:

A cooperative’s members shall have:

If a cooperative’s board of directors mails information to its members regarding operating as a member–regulated cooperative that is in addition to the information provided in the notice, the cooperative’s board of directors shall include in the mailing any materials provided in opposition to operating as a member–regulated cooperative if the materials are accompanied by a petition signed by at least 100 of the cooperative’s members.

A cooperative shall pay for mailing the materials in an amount equal to the cost of mailing the cooperative’s notice under subsection (c) of this section.

If the cost of mailing the materials is greater than the cost of mailing the cooperative’s notice, the difference shall be paid:

A cooperative’s board of directors shall select an independent auditor to control and supervise the procedures for voting.

Each of a cooperative’s members is entitled to one vote on whether to operate as a member–regulated cooperative, regardless of the method used to cast a vote.

A cooperative’s member may vote at the meeting under subsection (a) of this section by:

If a cooperative uses written ballots under paragraph (3) of this subsection, the written ballots shall be:

Adopt bylaws for the member–regulated cooperative; and

Amend the cooperative’s articles of incorporation to reflect the cooperative’s conversion to being a member–regulated cooperative.

Authorize the member–regulated cooperative to provide broadband Internet service;

Establish a plan for making broadband Internet service available to members in a manner that maximizes deployment with available financial resources;

Include an allocation method in accordance with § 5–607(c) of this subtitle to ensure that electric customers do not subsidize the cost of broadband Internet service; and

Except as provided in § 5–637(a)(2) of this subtitle, be consistent with this subtitle.

Except as provided in paragraph (2) of this subsection, this subtitle applies to the provision of broadband Internet service by a member–regulated cooperative.

A member–regulated cooperative may not, for the sole purpose of providing broadband Internet service, exercise the power of condemnation under § 5–607(a)(16) of this subtitle.

§ 5–103;

§ 5–201;

§ 5–202;

§ 5–303;

§ 5–304;

§ 5–306;

§ 7–103;

§ 7–104;

§ 7–203;

§ 7–207;

Title 7, Subtitle 2, Part II;

§ 7–302;

Title 7, Subtitle 5, Part I and Part II;

Title 7, Subtitle 7; and

§ 13–101.

Rate schedules, tariffs, and terms and conditions of service;

Financial and statistical information regarding:

Data and information concerning load management, energy conservation, and other similar programs;

Information concerning ongoing consumer education programs; and

Information concerning the member–regulated cooperative’s performance, including income statements, balance sheets, and reliability data.

Notice of the proposed rates;

The opportunity to comment on the proposed rates; and

The opportunity to observe the portion of the meeting in which the board of directors votes on the proposed rates.

The procedures adopted under subsection (a) of this section shall provide for a formal and an informal complaint process.

A formal complaint proceeding shall include, at a minimum:

A member–regulated cooperative may not require a member to use the formal or informal complaint process.

If a member uses the formal or informal complaint process, the member may:

To low–income members;

To a member in cold weather; and

To a member in hot weather.

Except as provided under paragraph (2) of this subsection, a member–regulated cooperative may not prohibit a telecommunications or cable service provider from accessing a pole, duct, conduit, right–of–way, or similar facility owned or controlled, in whole or in part, by the member–regulated cooperative.

A member–regulated cooperative may deny access to a facility specified under paragraph (1) of this subsection:

Subject to paragraph (2) of this subsection, a member–regulated cooperative shall charge a reasonable rate for access to a facility specified under subsection (b)(1) of this section.

A member–regulated cooperative may not charge a rate for access to a facility specified under subsection (b)(1) of this section that is more than the rates charged for access by a local exchange carrier, electric company, water company, or other utility operating in the member–regulated cooperative’s service area.

A member–regulated cooperative shall hold an election to revert to a cooperative on:

A member–regulated cooperative may hold an election to revert to a cooperative only once every 12 months.

A vote to revert to a cooperative shall be held in accordance with § 5–635 of this subtitle.

Within 5 days after an affirmative vote to revert to a cooperative, the member–regulated cooperative shall file a declaration with the Commission stating that it has reverted to a cooperative.

The Commission shall have jurisdiction over a member–regulated cooperative that has elected to revert to a cooperative on issuance of an order by the Commission.

The Commission shall issue the order under paragraph (1) of this subsection within 180 days after the filing of a declaration under subsection (b)(2) of this section.

To pay the expenses of operating and maintaining the facilities of the cooperative during the fiscal year;

To pay interest and principal obligations of the cooperative that are due in the fiscal year;

To the extent determined by the board of directors, to finance or provide a reserve for the financing of the construction or acquisition by the cooperative of additional facilities;

To provide a reasonable reserve for working capital;

To provide a reserve for the payment of the indebtedness of the cooperative in an amount not less than the total interest and principal payments that are due during the next fiscal year;

To provide for education about cooperatives; and

To provide for the dissemination of information about the effective use of electricity and services made available by the cooperative.

Unless otherwise determined by a vote of the members of the cooperative, for each fiscal year, the revenues of a cooperative in excess of the amount necessary to provide for the items described in subsection (a) of this section shall be allocated by the cooperative, in the form of patronage credits, to:

For each fiscal year, the patronage credits shall be allocated to a member or other person in proportion to the patronage of the member or other person during the fiscal year.

Due to any past member of a cooperative in retirement of capital allocated on a patronage basis to the account of the past member for amounts received and receivable by the cooperative in excess of operating costs and expenses from the date of the cooperative’s incorporation in the State;

For which at least 5 years have passed since the credits were retired; and

That has not been claimed by the past member.

Assist members of the cooperative in accordance with the powers granted to the cooperative under § 5–607 of this subtitle; or

Make donations to nonprofit, charitable organizations approved by the cooperative’s board of directors.

Without authorization by the members and on the conditions the board of directors determines, the board of directors of a cooperative may authorize the execution and delivery of a mortgage or deed of trust of, or the pledging or encumbering of, any or all of the assets of the cooperative, whether acquired or to be acquired, and wherever located, and the revenues and income from the assets, to secure any indebtedness of the cooperative to:

A loan described in paragraph (1) of this subsection is not subject to § 4–106(b) of the Real Property Article.

A cooperative may not sell, lease, or otherwise dispose of all or a substantial portion of its assets unless:

Notwithstanding any other provision of law, on the authorization of a majority of the members of the cooperative present at a meeting of the members, the board of directors may sell, lease, or otherwise dispose of all or a substantial portion of its assets to:

Except as provided in paragraph (3) of this subsection, a cooperative shall give notice to each owner of property subject to an electric easement at least 60 days before the cooperative:

The cooperative shall give the notice required under this subsection by:

The cooperative shall give the notice required under this section at the next following annual member meeting of the cooperative after the notice has been given under paragraph (2) of this subsection.

The notice shall contain: