Membership Bylaws - Article VII
Non-Profit Organization
SECTION 7.1
Interest or Dividends on Capital Prohibited.
The Cooperative
shall at all times be operated on a Cooperative non-profit basis for the mutual
benefit of its patrons.No interest or dividends shall be paid or payable by the
Cooperative on any capital furnished by its patrons.
SECTION 7.2
Patronage Capital in Connection with Furnishing Electric Energy.
In the furnishing
of electric energy the Cooperative's operations shall be so conducted that all patrons,
members and non-members alike, will through their patronage furnish capital for
the Cooperative. In order to induce patronage and to assure that the Cooperative
will operate on a non-profit basis the Cooperative is obligated to account on a
patronage basis to all its patrons, members and non-members alike, for all amounts
received and receivable from the furnishing ofelectric energy. All such amounts
in excess of operating costs and expenses at the moment of receipt
by the Cooperative are received with the understanding that they are furnishedby
the patrons, members and non-members alike, as capital.The Cooperative is obligated
to pay by credits to a capital account for each patron all such amounts in excess
of operating costs and expenses.The books and records of the Cooperative shall be
set up and kept that at the end of the fiscal year the amount of capital, if any,
so furnished by each patron is clearly reflected and credited in an appropriate
record to the capital account of each patron, and the Cooperative shall within a
reasonable time after the close of the fiscal year notify each patron of the amount
of capital so credited to his account.All such amounts credited to the capital account
of any patron shall have the same status as thought they had been paid to the patron
in case in pursuance of a legal obligation to do so and the patron had then furnished
the Cooperative corresponding amounts for capital.
All other amounts received by the Cooperative from
its operation in excess of costs and expenses shall, insofar as permitted by law
be:
(a) used to offset any losses incurred
during the current or any prior fiscal year, and
(b) to the extent not needed for
that purpose, allocated to its patrons on a patronage basis an any amount so allocated
shall be included as a part of the capital credited to the accounts of patrons,
as herein provided.
In the event of dissolution or liquidation of the
Cooperative, after all outstanding indebtedness of the Cooperative shall have been
paid, outstanding capital credits shall be retired without priority on a pro rata
basis before any payments are made on account of property rights of members.If,
at any time prior to dissolution or liquidation, the Board of Directors shall determine
that the financial conditions of the Cooperative will not be impaired thereby, the
capital credited to patrons' accounts may be retired in full or in part.After September
18,1980, the Board of Directors shall determine the method, basis, priority and
order of retirement, if any, for all amounts heretofore and hereafter furnished
as capital. Provided (further), however, that the Board of Directors
shall have the power to adopt rules providing for the separate retirement of a portion
(the power supply portion) of capital credited to the accounts of patrons which
corresponds to capital credited to the account of the Cooperative by an organization
furnishing electric service to the Cooperative.Such rules shall:
(a) establish a method of determining
the power supply portion of capital credited to each patron for each applicable
fiscal year,
(b) provide for separate identification
on the Cooperatives books of the power supply portion of capital credited to the
Cooperative's patrons,
(c) provide for appropriate notification
to patrons with respect to the power supply portion of capital credited to their
accounts, and
(d) preclude a general retirement
of the power supply portion of capital credited to patrons for any fiscal year prior
to the general retirement of 'other capital' credited to patrons for the same year
or of any capital credited to patrons for any prior fiscal year.
Capital credited to the account of each patron
shall be assignable only on the books of the Cooperative pursuant to written instruction
from the assignor an only to successors in interest or successors in occupancy in
all or part of such patron's premises served by the Cooperative unless the Board
of Directors, acting under policies of general application, shall determine otherwise.In
the event that a non-member patron shall elect to become a member of the Cooperative
the capital credited to the account of such non-member patron may be applied by
the Cooperative toward the payment of a membership fee on behalf of such non-member
patron.
Notwithstanding any other provision of these bylaws,
the Board of Directors, at its discretion, shall have the power at any time upon
the death of any patron, if the legal representatives of his estate shall request
in writing that the capital credited to any such patron be retired prior to the
time such capital would otherwise be retired under the provisions of these bylaws,
to retire capital creditedto any such patron immediately upon such terms and conditions
as the Board of Directors, acting under policies of general application, and the
legal representatives of such patron's estate shall agree upon; provided, however,
that the financial condition of the Cooperative will not be impaired thereby.
The patrons of the Cooperative, by dealing with
the Cooperative, acknowledge that the terms and provisions of the articles of incorporation
and bylaws shall constitute and be a contract between the Cooperative and each patron,
and both the Cooperative and the patrons are bound by such contract, as fully as
though each patron had individually signed a separate instrument containing such
terms and provisions. The provisions of this article of the bylaws shall be called
to the attention of each patron of the Cooperative by posting in a conspicuous place
in the Cooperative's office.