[Watchdogs] HB 3820, The Bennie and Bud Texas Electric Co-op Institutionalized Corruption Act
Clyde Doyal
clydedoyal at sbcglobal.net
Mon Apr 6 16:08:01 CDT 2009
Well folks, let's face it. When it comes down to what is in the best
interest of members of co ops vs what is in the best interests of co op
management and those feeding off the money trough, it doesn't take a rocket
scientist to know who is going to win that battle. Clyde Doyal
From: watchdogs-bounces at pec4u.org [mailto:watchdogs-bounces at pec4u.org] On
Behalf Of Milton Hawkins
Sent: Monday, April 06, 2009 3:20 PM
To: 'richardviktorin'; 'Carlos Higgins'; 'Watchdogs'
Cc: Kathy Scanlon; 'Patrick Cox'; Pete Slover; Charles Tesar
Subject: Re: [Watchdogs] HB 3820, The Bennie and Bud Texas Electric Co-op
Institutionalized Corruption Act
Friends,
I've just come from the Board meeting today. I write in haste, and with
some anger, so you should compare my report with others coming later.
Concerning these two bills, Pete Slover, governance counsel, presented the
staff recommendation, which amounted to opposing the Rose/Fraser Bill and
supporting the TEC/Swinford Bill, rather than one of the two other options
he presented, which were to support the R/F Bill, or take a neutral
position, appearing as a resource.
According to Pete, the staff found that though PEC has gone further than the
requirements of the R/F Bill in some respects concerning open meetings/open
records, the R/F Bill does not require the statement of a purpose for
information sought, and that failure, according to staff, opened the door
for abuse. (Why I, an owner of the cooperative, should have to state a
purpose to receive public information escapes me.) This lack of a "proper
purpose requirement" was seen as a major shortcoming of the R/F Bill.
Second, the use of the PUC in the R/F Bill, as an appeal mechanism, rather
than the AG's Office, used for the same purpose in the Swinford bill, was
seen as a distinct negative.
Third, the "bracketing" of PEC by stating membership ranges, resulting in
PEC's not being able freely to enter the generation business, for example,
and in PEC's having to go to single-member districts, for another, was
presented as another major staff concern. (Given its history, some of which
has only recently been revealed, doesn't PEC deserve to be singled out for
attention!)
It was soon clear that the Board majority favored the TEC/Swinford Bill and
opposed the Fraser/Rose Bill. Seeing this, Patrick Cox tried to prevent the
Board's aligning itself with the cooperatives that are clearly hostile to
open meeting/open records and the rest of our reforms. He suggested that
the Board instruct Juan to register as a "resource witness," rather than as
one opposed to or in support of a particular bill. Patrick's motion to that
effect received no second, and thus died. Then Kathy Scanlon moved the
staff recommendation, which by now was the clear favorite, and it passed,
with only Cox opposed, I believe.
Thus our Board has put us squarely on the side of those who would limit
information and participation. It's disgusting, at least to this
member/owner. The majority of the Board members say that they will maintain
current procedures and practices, even though the Swinford Bill doesn't
require them, but who knows what another Board might do, or this Board might
do--and could do--tomorrow? The Swinford Bill allows Boards to severely
limit member access. (Read it for yourself below, in Carlos Higgins's
posting.)
If my facts are incorrect, I'm sure someone from PEC will post a correction.
But what I saw today makes it more necessary than ever that the reforms we
enjoy be protected by legislation, and extended to others in sister
cooperatives.
Many of our Board members never really wanted reform anyway. I recall Val
Smith's saying (I paraphrase), "They're going to ram it down our throat
anyway, so we might as well accept it." Today they showed their true colors.
It wasn't pretty. Patrick Cox tried, as did Charlie Tesar, but the old
guard members, together with their converts, were too strong.
Milton Hawkins mhawkins at tstar.net 830-868-9075
-----Original Message-----
From: richardviktorin [mailto:richardviktorin at sbcglobal.net]
Sent: Monday, April 06, 2009 11:11 AM
To: 'Carlos Higgins'; 'Watchdogs'; mhawkins at tstar.net
Subject: HB 3820, The Bennie and Bud Texas Electric Co-op Institutionalized
Corruption Act
I haven't read HB 3820..but if it is as bad as Carlos describes, it
should be given a street name, say the Bennie and Bud Texas Electric
Co-op Institutionalized Corruption Act.
Whose money is behind this stinker anyway? Segueing back to the Bill's
provisions regarding the Attorney General and the public interest, why
wait, the public interest is being sold right in front of our eyes. The
gall, in the aftermath of the PEC scandal, that someone would even put
up something like HB 3820, is amazing. What next, the Bernie Madoff
Relief Act?
Richard Viktorin
Audits in the Public Interest
-----Original Message-----
From: watchdogs-bounces at pec4u.org [mailto:watchdogs-bounces at pec4u.org]
On Behalf Of Carlos Higgins
Sent: Sunday, April 05, 2009 11:31 PM
To: Watchdogs; mhawkins at tstar.net
Subject: [Watchdogs] Legislation affecting the PEC
PEC Members:
If you read through the information posted recently regarding SB 921, a
Bill that would give electric co-op members some protection, here's some
more information you need to know. House Bill 1390 is identical to
Senate Bill 921. Another Bill, House Bill 3820, is similar, but offers
considerably less protection to co-op members.
Both HB1390 and HB 3820 are scheduled to be heard on Tuesday by the
House State Affairs Committee. That meeting will be in room 140 of the
Reagan Building (on 15th Street, immediately to the NW of the Capitol)
beginning at 2 pm or upon adjournment of the House Session. HB 3820 is
included below, so you can compare it with SB921/HB1390.
In this newer Bill, HB 3820, you will note that you, as a member of the
co-op, will be entitled to much less information than under the other
Bills. You are also entitled to attend not the entire meeting of your
Board, but only for the duration of the period specified in the meeting
notice for member comments. Non-members are not entitled to attend.
If you want to complain about something going on at your co-op, you are
limited to certain issues. If you are not satisfied with the response
to your complaint, you can then complain to the Attorney General. The
AG can then respond to you, if the AG decides it is in the public
interest to respond.
If you want to view this committee meeting, click on
http://www.capitol.state.tx.us/
Then, click on "House" video broadcasts under Legislative Activity.
Look for the State Affairs Committee broadcast and click on that.
Regards
Carlos Higgins
_______________________________________________
State Affairs Rep. Burt Solomons
2:00 PM or upon final adjourn./recess
Tuesday, April 07, 2009
JHR 140
HB 1390
<http://www.capitol.state.tx.us/BillLookup/History.aspx?LegSess=81R&Bill
=HB1390> Rose
Relating to access by the members of electric cooperatives to meetings
of the boards of directors and certain information of the electric
cooperatives.
HB 3820 Swinford
Relating to the governance and disclosure requirements of electric
cooperative corporations and the review of complaints of electric
cooperative corporation members by the Office of the Attorney General.
You should take time
________________________________________________
By: Swinford H.B. No. 3820
A BILL TO BE ENTITLED
AN ACT
relating to the governance and disclosure requirements of electric
cooperative corporations and the review of complaints of electric
cooperative corporation members by the Office of the Attorney General.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 161.072, Utilities Code, is amended by adding
Subsections (c) through (h) to read as follows:
(c) Notwithstanding Section 161.070, if the bylaws provide for voting
by proxy:
(1) a director who is standing for reelection to the board may not
serve on a committee established under the bylaws for the purpose of
casting, or being authorized to cast, the proxy vote of a member in a
director election; and
(2) a member's proxy vote may be cast by a committee described by
Subdivision (1) in a director election only if:
(A) a proxy form is sent by regular mail to each member of record not
later than the 30th day before the date of the meeting at which proxy
votes are counted;
(B) the proxy form lists:
(i) the names of all qualified candidates and, if the cooperative
nominates or elects directors by district, the district the member seeks
to represent, or
(ii) the slate of candidates nominated at the district meeting, if
applicable;
(C) the proxy form designates each candidate who is an incumbent
director;
(D) an exact copy of the proxy form is posted on the cooperative's
Internet website, if the cooperative maintains a website;
(E) the proxy form includes information describing the process by which
proxy votes are authorized and cast, including:
(i) the name of each member of the committee established under the
bylaws for the purpose of casting proxy votes in a director election;
(ii) the process prescribed in the bylaws for selecting members to
serve on the committee; and
(iii) the districts represented by each committee member, if
applicable; and
(F) the proxy form contains the following statements, in bold type:
(i) "If you grant the committee your proxy, you are giving the
committee full authority to vote your proxy for the candidates you
selected, or, if you did not select any candidates, to vote your proxy
for candidates the committee selects";
(ii) "You may rescind your proxy at any time before votes are cast at
the meeting to elect directors"; and
(iii) "State law prohibits any person from using incentives or other
enticements to encourage you to provide your proxy in any board
election."
(d) Subsection (c) may not be construed as limiting the right of an
individual member to collect or cast the proxy vote of another member in
a director election, if allowed by the bylaws.
(e) 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.
(f) 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.
(g) If the bylaws of a cooperative allow a committee of members to
nominate qualified members as candidates in a director election, the
bylaws must also:
(1) allow nominations to be made through one or more written petitions
by members;
(2) specify the number of printed names and dated signatures a petition
nominating a candidate must contain;
(3) specify the time period within which the names and dated
signatures may be collected; and
(4) specify the deadline by which a petition nominating a candidate
must be submitted to the cooperative.
(h) A petition submitted under Subsection (g) must provide on the
petition the name and address of the member seeking nomination and, if
the cooperative nominates or elects directors by district, the district
the member seeks to represent.
SECTION 2. Section 161.075, Utilities Code, is amended by amending
Subsection (a) and adding Subsections (d) through (g) to read as
follows:
(a) The board shall hold a regular or special board meeting at the
place and time specified in [on] the notice prescribed by Subsection (d)
and the bylaws.
(d) 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 posting the notice in a prominent place convenient to
members at the cooperative's main office and each district office, and
on the cooperative's Internet website, if the cooperative maintains a
website. The board shall provide on request a copy of the notice to a
member of the cooperative.
(e) In the event of an emergency or urgent matter, notice may be given
in the manner prescribed by Subsection (d) less than three days before a
regular or special board meeting is convened.
(f) An action taken by the board at a meeting for which notice was
provided less than three days before a regular or special board meeting
is convened must be ratified by the board at the next board meeting.
(g) A member of the electric cooperative is entitled to attend a
regular or special board meeting for the duration of the period
specified in the meeting notice for member comments and to have a
reasonable opportunity to comment on any matter on the meeting agenda or
related to cooperative business. Only a member of the electric
cooperative is entitled to attend a regular or special board meeting for
the duration of the period specified in the meeting notice for member
comments.
SECTION 3. Subchapter B, Chapter 161, Utilities Code, is amended by
adding Sections 161.080 and 161.081 to read as follows:
Sec. 161.080. ANNUAL FINANCIAL AUDIT. (a) The board annually, at the
electric cooperative's expense, shall have an independent financial
audit made of the cooperative's books and records.
(b) The audit must be performed by a qualified, independent,
professional entity.
(c) The board shall make the results of the audit available to any
member of the cooperative upon request.
Sec. 161.081. MEMBER'S RIGHT OF ACCESS TO INFORMATION. (a) A member of
an electric cooperative may, at any reasonable time and on written
request that states a proper purpose, inspect and copy the books and
records of the cooperative relevant to that purpose.
(b) The cooperative may charge the member for the cost of providing the
information.
(c) An electric cooperative may not limit or deny a member's request
to inspect its books and records unless the member:
(1) does not meet the requirements of Subsection (a);
(2) seeks information the release of which would unduly infringe on or
invade the privacy of a person;
(3) seeks information related to a trade secret;
(4) seeks personnel information the disclosure of which would violate
the law or constitute a clearly unwarranted invasion of personal
privacy;
(5) seeks information related to:
(A) pending or reasonably anticipated litigation;
(B) real estate transactions for projects that have not been formally
announced or for which contracts have not been formally awarded;
(C) the cooperative's competitive activity, including commercial
information and utility-related matters, that would, if disclosed, give
advantage to competitors or prospective competitors; or
(D) the security of the electrical system; or
(6) seeks information that is confidential, privileged, or proprietary.
SECTION 4. Subchapter C, Chapter 161, Utilities Code, is amended by
adding Section 161.126 to read as follows:
Sec. 161.126. NOTIFICATION OF INVESTMENT IN CERTAIN BUSINESS ENTITIES.
If an electric cooperative or an affiliate of the cooperative enters
into a transaction in which the cooperative creates or acquires an
interest in a business entity that does not generate, transmit, or
distribute electricity, the cooperative shall, not later than the 30th
day following the completion of the transaction, 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 cost and method of financing the transaction;
and
(5) a description of the anticipated effect the transaction will have
on the cooperative's electricity rates.
SECTION 5. Chapter 161, Utilities Code, is amended by adding Subchapter
G to read as follows:
SUBCHAPTER G. ATTORNEY GENERAL REVIEW
Sec. 161.301. MEMBER COMPLAINTS. (a) A member may file a written
complaint with an electric cooperative that the cooperative or an
officer or agent of the cooperative failed or refused to follow Section
161.072, 161.075, 161.080, 161.081, or 161.126.
(b) If the electric cooperative does not resolve the complaint to the
member's satisfaction before the 21st day after the date the complaint
is received by the cooperative, the member may file a written complaint
with the consumer protection division of the office of the attorney
general. The complaint must identify the name and address of the
electric cooperative, describe the problem in detail, and provide copies
of documents relevant to the complaint, including any request the member
provided to the cooperative, the written complaint the member filed with
the cooperative, and any response from the cooperative.
(c) The consumer protection division of the office of the attorney
general may review a complaint filed by a member under this subchapter
for purposes of determining if the electric cooperative or an officer or
agent of the cooperative failed or refused to follow Section 161.072,
161.075, 161.080, 161.081, or 161.126.
(d) The consumer protection division may request from the cooperative
additional information about the complaint. The division must identify
in the request the persons authorized by the division to receive,
inspect, or copy the information.
(e) The electric cooperative shall cooperate fully with the consumer
protection division and shall provide to the authorized employee of the
division information to assist in resolving the complaint within the
time specified by the division.
Sec. 161.302. USE OF INFORMATION ACQUIRED BY ATTORNEY GENERAL. (a) No
information provided in response to a request under Section 161.301,
unless otherwise ordered by a court for good cause shown, may be
produced for inspection or copying by, nor may its contents be disclosed
to, any person other than an authorized employee of the consumer
protection division without the consent of the electric cooperative that
provided the information.
(b) The consumer protection division may use the information or copies
of the information as necessary to resolve a complaint filed under this
subchapter, including presentation before any court in a suit filed
under Section 161.303. Confidential or sensitive information shall not
be presented except with approval of the court in which the action is
pending after adequate notice to the electric cooperative. If no suit
is filed under Section 161.303, any confidential or sensitive
information shall be returned to the electric cooperative upon request
after the complaint is closed.
Sec. 161.303. INJUNCTIVE RELIEF. (a) If the consumer protection
division determines that it is in the public interest, the attorney
general may file suit against an electric cooperative to prevent or
restrain by temporary restraining order, temporary injunction, or
permanent injunction a violation of Section 161.072, 161.075, 161.080,
161.081, or 161.126.
(b) A suit filed under this section must be filed not later than one
year after the date the member of the electric cooperative filed the
complaint with the consumer protection division, and may be brought in a
district court in Travis County or in a county in which any part of the
violation occurs.
(c) If the attorney general files suit against an electric cooperative
under this section and a temporary or permanent injunction is granted
against the cooperative or an officer or agent of the cooperative, the
attorney general may recover reasonable expenses, court costs,
investigative costs, and attorney's fees.
SECTION 6. (a) The change in law made to Section 161.072, Utilities
Code, as amended by this Act, applies 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 change in law made by Section 161.075, Utilities Code, as
amended by this Act, applies 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 change in law made by Section 161.081, Utilities Code, as added
by this Act, applies 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 change in law made by Section 161.126, Utilities Code, as added
by this Act, applies 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 that
date, and that law is continued in effect for that purpose.
(e) The change in law made by Subchapter G, Chapter 161, Utilities
Code, as added by this Act, applies only to a complaint filed by a
member of an electric cooperative regarding an action that occurs on or
after the effective date of this Act. An action that is completed before
the effective date of this Act is subject to the law in effect on that
date, and that law is continued in effect for that purpose.
SECTION 7. This Act takes effect September 1, 2009.
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