The Vermont Statutes Online

Title 30: Public Service

Chapter 081: Electric Cooperatives

• § 3001. Definitions

  As used in this chapter, unless the context otherwise requires, the following words shall have the following meanings:

  (1) “Cable television” means cable television system as defined in chapter 13 of this title.

  (2) “Community development” means the economic and social development of communities through commercial and industrial development, creating job opportunities and training for rural residents, and providing better housing, health, educational, recreational, and other rural community facilities.

  (3) “Cooperative” means a corporation organized under this chapter or that becomes subject to this chapter in the manner provided for in this chapter.

  (4) “Energy” includes electrical, propane, natural gas, fossil fuels, and other forms of energy.

  (5) “Interactive media” means communications media that is regularly used to transmit information in two directions.

  (6) “Internet” means collectively the computer and telecommunications facilities, including equipment and operating software, that comprise the interconnected network of networks that employ the transmission control protocol/internet protocol, or any predecessor or successor protocols to such protocol, to communicate information of any kind, whether by wire or wireless means.

  (7) “Internet access” means service connecting customers to the internet.

  (8) “Person” means a natural person, firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof, or a body politic or other entity.

  (9) “Telecommunications” means one or more of the following as defined in chapter 88 of this title:

  (A) basic telecommunications service;

  (B) private network;

  (C) public switched network;

  (D) telecommunications service;

  (E) telecommunications service provider. (Amended 1999, No. 143 (Adj. Sess.), § 1; 2023, No. 85 (Adj. Sess.), § 413, eff. July 1, 2024.)

• § 3001a. Purpose

  Cooperatives may be organized under this chapter for the purpose of creating or supplying energy, cable television, telecommunications, interactive media, and internet access and facilitating and extending the use thereof, and in addition, any other lawful business not inconsistent with this chapter that utilizes the electric distribution facilities of the cooperative. (Added 1999, No. 143 (Adj. Sess.), § 2.)

• § 3002. Powers

  A cooperative shall have power:

  (1) To sue and be sued in its corporate name.

  (2) To have perpetual existence.

  (3) To adopt a corporate seal and alter the same.

  (4) To generate, manufacture, purchase, acquire, accumulate, and transmit electric energy; and to distribute, sell, supply, and dispose of energy, cable television, telecommunications, interactive media, and internet access to its members, to governmental agencies and political subdivisions; provided, however, that in the generation of electric energy by water power, a cooperative shall comply with the provisions of 10 V.S.A. §§ 1081–1099, relating to the construction and maintenance of dams and, provided further, that a cooperative doing any activity governed by this title shall be regulated for that activity.

  (5) To assist persons to whom electric energy is or will be supplied by the cooperative in wiring their premises and in acquiring and installing, in compliance with all applicable codes, electrical and plumbing appliances, equipment, fixtures, and apparatus by the financing thereof or otherwise, and in connection therewith to wire or cause to be wired, such premises and to purchase, acquire, lease as lessor or lessee, sell, distribute, install, and repair such electric and plumbing appliances, equipment, fixtures, and apparatus with the intention that members of the cooperative make the most efficient use of energy.

  (6) To work cooperatively with governmental entities or private sector institutions, or a combination of both, for purposes of economic or community development, to benefit cooperative members in their communities.

  (7) To construct, purchase, lease as lessee or lessor, or otherwise acquire, and to equip, maintain, and operate; and to sell, assign, convey, mortgage, pledge, or otherwise dispose of or encumber electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, lands, buildings, structures, dams, plants, equipment, and any other real or personal property tangible or intangible, which shall be deemed necessary, convenient, or appropriate to accomplish the purpose for which the cooperative is organized. However, in the generation of electric energy by water power, a cooperative shall comply with the provisions of 10 V.S.A. §§ 1081-1099, relating to the construction and maintenance of dams.

  (8) To purchase, lease as lessee, or otherwise acquire and to use and exercise and to sell, assign, convey, mortgage, pledge, or otherwise dispose of or encumber, franchises, rights, privileges, licenses, and easements.

  (9) To borrow money and otherwise contract indebtedness and to issue notes, bonds, and other evidences of indebtedness; and to secure the payment thereof by mortgage, pledge, or deed of trust of, or other encumbrance upon, any or all of its then owned or after-acquired real or personal property, assets, franchises, revenues, or income.

  (10) To construct, maintain, and operate electric transmission and distribution lines along, upon, under, and across publicly owned land and public thoroughfares, including all roads, highways, streets, alleys, bridges, and causeways in the manner provided by chapters 71, 73, and 75 of this title.

  (11) To become a member of one or more other cooperatives formed under this chapter or under the laws of another state or the District of Columbia, to own all or part-ownership interest in a domestic or foreign corporation, and to hold all or part-ownership in a partnership, joint venture, or other entity, provided that such stock or other ownership interest shall be limited to entities with business purposes or operations that are consistent with the purposes set out in section 3001a of this title for which a cooperative may be organized and that will provide products or services to members of the cooperative.

  (12) To conduct its business and exercise its powers within or outside this State.

  (13) To adopt, amend, and repeal bylaws.

  (14) To do and perform any other acts and things and to have and exercise any other powers that may be necessary or appropriate to accomplish the purpose for which the cooperative is organized.

  (15) For purposes of providing electric power, to condemn property within the State, or easements or other limited rights, in the manner provided for public service corporations by sections 111–124 of this title, when it is necessary in order that it may render adequate electric service. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; amended 1999, No. 143 (Adj. Sess.), § 3; 2023, No. 85 (Adj. Sess.), § 414, eff. July 1, 2024.)

• § 3002a. Obligations treated as expenses

  The obligations of any cooperative under any contract authorized under section 3002 of this title shall not be deemed to constitute an indebtedness or a lending of credit of the cooperative, but shall be treated as expenses of operating an electric plant. (Added 1989, No. 112, § 3b, eff. June 22, 1989.)

• § 3003. Name

  The name of a cooperative governed by this chapter shall include the words “energy” or a word designating any specific form of energy such as “electric,” “propane,” or “natural gas” and “cooperative” and the abbreviation “inc.” unless, in an affidavit made by its president or vice president and filed with the Secretary of State, or in an affidavit made by a person signing articles of incorporation, consolidation, merger, or conversion, which relate to the cooperative and filed, together with the articles, with the Secretary of State, it shall appear that the cooperative desires to do business in another state and is or would be precluded by reason of the inclusion of the words in its name. The name of a cooperative shall be distinct from the name of any other cooperative or corporation organized under the laws of, or authorized to do business in, this State. (Amended 1999, No. 143 (Adj. Sess.), § 4; 2023, No. 85 (Adj. Sess.), § 415, eff. July 1, 2024.)

• § 3004. Organization; members

  Five or more natural persons, a majority of whom are residents of this State, or two or more cooperatives, may organize a cooperative in the manner provided in this chapter. (Amended 2023, No. 85 (Adj. Sess.), § 416, eff. July 1, 2024.)

• § 3005. Articles of incorporation, contents

  Articles of incorporation of a cooperative shall recite that they are executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; (3) the names and addresses of the incorporators; and (4) the names and addresses of its directors; and may contain provisions not inconsistent with this chapter deemed necessary or advisable for the conduct of its business and not repugnant to the constitution or laws of this State. Such articles shall be signed by each incorporator and acknowledged by at least two of the incorporators, or on their behalf, if they are cooperatives. The purposes of the cooperative shall be set forth in the articles of incorporation, but it is not necessary to set forth its corporate powers. (Amended 1999, No. 143 (Adj. Sess.), § 5.)

• § 3006. Bylaws

  The board of directors shall adopt bylaws of a cooperative to be adopted following an incorporation, conversion, merger, or consolidation. Thereafter the members shall adopt, amend, or repeal the bylaws pursuant to the provisions thereof but in no case by the vote of less than a majority of those members voting thereon at a meeting of the members. The bylaws shall set forth the rights and duties of members and directors and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this chapter or with its articles of incorporation. (Amended 1959, No. 165; 1999, No. 143 (Adj. Sess.), § 6.)

• § 3007. Members, qualifications

  Each incorporator of a cooperative shall be a member thereof, but no other person may become a member thereof unless such other person uses electric energy or other services, goods, or products furnished by the cooperative when they are made available through its electric distribution facilities, or a person may become a member by purchasing and paying the cooperative for renewable energy certificates or other environmental attributes associated with the generation of electricity. A member of a cooperative who ceases to use electric energy shall cease to be a member if he or she does not use electric energy supplied by the cooperative within six months after it is made available, or if electric energy is not made available by the cooperative within two years after he or she becomes a member or some lesser period as the bylaws of the cooperative may provide. Two or more owners or occupants of property served by a cooperative may hold a joint membership in a cooperative. Membership in a cooperative shall not be transferable, except as provided by the bylaws. The bylaws may prescribe additional qualifications and limitations in respect to membership. (Amended 1999, No. 143 (Adj. Sess.), § 7; amended 2005, No. 61, § 14.)

• § 3008. Meetings

  An annual meeting of the members of a cooperative shall be held at such time and place as shall be provided in the bylaws. Special meetings of the members may be called by the president, by the board of directors, by three directors, or by not less than 10 percent of the members. All meetings of members shall be called at and held in some convenient public place in this State. (Amended 1999, No. 143 (Adj. Sess.), § 8.)

• § 3009. Notice of meeting

  Except as otherwise provided in this chapter, written or printed notice stating the time and place of each meeting of the members, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each member, either personally or by mail, not less than 10 nor more than 25 days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the U.S. mail with postage prepaid addressed to the member at his or her address as it appears on the records of the cooperative.

• § 3010. Members necessary for quorum

  Unless the bylaws prescribe the presence of a greater percentage or greater number of members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than 1,000 members, shall be 10 percent of all members, and of a cooperative having more than 1,000 members, shall be 100 members. For the purpose of determining the presence of a quorum under this section, all members shall be counted who are either present in person or who vote on business transacted at the meeting in a manner allowed under section 3011 of this title. If less than a quorum is present at a meeting, a majority of those present in person may adjourn the meeting from time to time without further notice but no business may validly be enacted at any meeting without the presence of a quorum. (Amended 1999, No. 143 (Adj. Sess.), § 9.)

• § 3011. Voting

  Each member shall be entitled to one vote on each matter submitted to a vote at a meeting of the members. Voting shall be in person, but if the bylaws so provide, may also be by proxy, by mail, telephonically, or electronically. If the bylaws provide for voting by proxy, by mail, telephonically, or electronically, they shall also prescribe the conditions under which such voting shall be permitted. No person shall vote as proxy for more than three members at any meeting. If the bylaws of a cooperative provide for voting by proxy, by mail, telephonically, or electronically, such vote shall have full force and effect as if voted in person by a member at a meeting of the members in accordance with the provisions of the bylaws and as specifically referred to under this title and chapter. (Amended 1975, No. 107; 1999, No. 143 (Adj. Sess.), § 10.)

• § 3012. Notice; waiver

  A person entitled to notice of a meeting may waive the notice in writing either before or after the meeting. If the person shall attend the meeting, attendance shall constitute a waiver of notice of the meeting, unless the person participates solely to object to the transaction of any business because the meeting has not been legally called or convened. (Amended 2023, No. 85 (Adj. Sess.), § 417, eff. July 1, 2024.)

• § 3013. Directors, qualifications

  The business of a cooperative shall be managed by a board of not less than five directors, each of whom shall be a member of the cooperative or of another cooperative that is a member thereof, shall not be an employee of the cooperative, and shall reside in this State. The bylaws shall prescribe the number of directors, their qualifications, other than those prescribed in this chapter, the manner of holding meetings of the board of directors and of electing successors to directors who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of directors from office and for the election of their successors. Directors as such may not receive any salary for their services, but by resolution of the board of directors a fixed sum and expenses of attendance may be allowed for attendance at each meeting of the board of directors, or a committee thereof, or other customary activities necessary to carry out the duties of a director. The board of directors may exercise all of the powers of a cooperative not conferred upon the members by this chapter or its articles of incorporation or bylaws. (Amended 1999, No. 143 (Adj. Sess.), § 11.)

• § 3014. Election and term of office

  (a) The bylaws of a cooperative shall determine the method of election and term of office of the directors.

  (b) Existing bylaws shall govern until duly amended. Those cooperatives that have in the past in compliance with their bylaws elected their directors to serve for staggered terms of three or four years may continue the practice. (Amended 1975, No. 108, § 1, eff. April 30, 1975; 1999, No. 143 (Adj. Sess.), § 12.)

• § 3015. Repealed. 1975, No. 108, § 2, eff. April 30, 1975.

• § 3016. Districts

  The bylaws may provide for the division of the territory served or to be served by a cooperative into two or more districts for any purpose, without limitation, the nomination and election of trustees and the election and functioning of district delegates. In such case the bylaws shall prescribe the boundaries of the districts, the manner of establishing and changing such boundaries, and the manner in which such districts shall function. (Amended 1999, No. 143 (Adj. Sess.), § 13.)

• § 3017. Officers, duties

  The officers of a cooperative shall consist of a president, vice president, secretary, and treasurer, who shall be elected annually by and from the board of directors. When a person holding office ceases to be a director, he or she shall cease to hold such office. The offices of secretary and treasurer may be held by the same person. A vacancy in the office of secretary may be filled by the board of directors, and the person so elected shall serve until his or her successor is elected. When a cooperative neglects for six months to appoint and have a clerk, it shall forfeit $50.00 to the person injured to be recovered in an action on this statute. The secretary shall record all votes and proceedings of the members and directors or executive committee thereof. He or she shall have the custody of the corporate seal and of the corporate records and shall keep such records within this State. He or she shall keep a book containing a record of the names of the members, the date of their membership and of others served by the cooperative, and of the places of residence of each, which book shall always be open to the inspection of members. He or she shall procure and file in the office of the clerk of the town where the principal office is located and also keep on file in his or her own office certified copies of all papers required by law or by this chapter to be filed with the Secretary of State. The board of directors may also elect or appoint such other officers, agents, or employees as it deems necessary or advisable and shall prescribe their powers and duties. An officer may be removed from office and his or her successor elected in the manner prescribed by the bylaws. (Amended 1999, No. 143 (Adj. Sess.), § 14.)

• § 3018. Amendment of articles

  A cooperative may amend its articles of incorporation by complying with the following requirements: The proposed amendment shall be presented to a meeting of the members, the notice of which shall set forth or have attached to it the proposed amendment. If the proposed amendment, with changes, is approved by the affirmative vote of not less than two-thirds of those members voting the meeting, a certificate of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its seal shall be affixed to it and attested by its secretary. The certificate of amendment shall recite that it is executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; and (3) the amendment to its articles of incorporation. The president or vice president executing the certificate of amendment shall make and attach to it an affidavit stating that the provisions of this section in respect of the amendment set forth in the articles were duly complied with. (Amended 1999, No. 143 (Adj. Sess.), § 15; 2023, No. 85 (Adj. Sess.), § 418, eff. July 1, 2024.)

• § 3019. Location of office

  Upon authorization of its board of trustees or its members, a cooperative may change the location of its principal office by filing in the office of the Secretary of State a certificate reciting such change of principal office, executed and acknowledged by its president or vice president under its seal attested by its clerk.

• § 3020. Consolidation

  Two or more cooperatives licensed in this State under this law, each of which is designated a “consolidating cooperative,” may consolidate into a new cooperative, designated the “new cooperative,” by complying with the following requirements:

  (1) The proposition for the consolidation of the consolidating cooperatives into the new cooperative and proposed articles of consolidation to effect the same shall be submitted to a meeting of the members of each consolidating cooperative, the notice of which shall have been attached to a copy of the proposed articles of consolidation.

  (2) If the proposed consolidation and the proposed articles of consolidation, with amendments, are approved by the affirmative vote of not less than two-thirds of the members of each consolidating cooperative voting at each meeting, articles of consolidation in the form approved shall be executed and acknowledged on behalf of each consolidating cooperative by its president or vice president and its seal shall be affixed and attested by its secretary. The articles of consolidation shall recite that they are executed pursuant to this chapter and shall state: (A) the name of each consolidating cooperative and the address of its principal office; (B) the name of the new cooperative and the address of its principal office; (C) a statement that each consolidating cooperative agrees to the consolidation; (D) the names and addresses of the directors of the new cooperative; and (E) the terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner in which members of the consolidating cooperative may or shall become members of the new cooperative; and may contain provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the new cooperative. The president or vice president of each consolidating cooperative executing articles of consolidation shall make and attach an affidavit stating that the provisions of this section in respect of such articles were duly complied with by the cooperative. (Amended 1999, No. 143 (Adj. Sess.), § 16; 2023, No. 85 (Adj. Sess.), § 419, eff. July 1, 2024.)

• § 3021. Merger; requirements

  One or more cooperatives, each of which is designated a “merging cooperative,” may merge into another cooperative, designated the “surviving cooperative,” by complying with the following requirements:

  (1) The proposition for the merger of the merging cooperatives into the surviving cooperative and proposed articles of merger to give effect to shall be submitted to a meeting of the members of each merging cooperative and of the surviving cooperative, the notice of which shall have attached to it a copy of the proposed articles of merger.

  (2) If the proposed merger and the proposed articles of merger, with amendments, are approved by the affirmative vote of not less than two-thirds of those members of each cooperative voting at each meeting, articles of merger in the form approved shall be executed and acknowledged on behalf of each cooperative by its president or vice president and its seal shall be affixed to it and attested by its secretary. The articles of merger shall recite that they are executed pursuant to this chapter and shall state: (A) the name of each merging cooperative and the address of its principal office; (B) the name of the surviving cooperative and the address of its principal office; (C) a statement that each merging cooperative and the surviving cooperative agree to the merger; (D) the names and addresses of the directors of the surviving cooperative; and (E) the terms and conditions of the merger and the mode of carrying the same into effect, including the manner in which members of the merging cooperatives may become members of the surviving cooperative. The articles may contain provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the surviving cooperative. The president or vice president of each cooperative executing articles of merger shall make and attach to an affidavit stating that the provisions of this section in respect to the articles were duly complied with by the cooperative. (Amended 1999, No. 143 (Adj. Sess.), § 17; 2023, No. 85 (Adj. Sess.), § 420, eff. July 1, 2024.)

• § 3022. Effect

  In the case of a consolidation, the separate existence of the consolidating cooperatives shall cease and the articles of consolidation shall be deemed to be the articles of incorporation of the new cooperative. In the case of a merger, the separate existence of the merging cooperatives shall cease and the articles of incorporation of the surviving cooperative shall be deemed to be amended to the extent that changes are provided for in the articles of the merger. (Amended 2023, No. 85 (Adj. Sess.), § 421, eff. July 1, 2024.)

• § 3023. Transfer of rights and liabilities

  All the rights, privileges, immunities, and franchises and all property, real and personal, including applications for membership, all debts due on whatever account, and all other choses in action, of each of the consolidating or merger cooperatives shall be deemed to be transferred to and vested in the new or surviving cooperative respectively, without further act or deed.

• § 3024. Responsibilities for liabilities transferred

  The new or surviving cooperative shall be responsible and liable for all the liabilities and obligations of each of the consolidating or merging cooperatives and a claim existing or action or proceeding pending by or against a consolidating or merging cooperative may be prosecuted as if the consolidation or merger had not taken place, but the new or surviving cooperative may be substituted in its place.

• § 3025. Creditors’ rights not impaired by merger

  Neither the rights of creditors nor liens upon the property of such cooperatives shall be impaired by such consolidation or merger.

• § 3026. Private corporation; change

  A corporation organized under the laws of this State and supplying or authorized to supply energy may be converted into a cooperative by complying with the following requirements and shall become subject to this chapter with the same effect as if originally organized under this chapter:

  (1) The proposition for the conversion of a corporation into a cooperative and proposed articles of conversion to give effect to shall be submitted to a meeting of the members or stockholders of a corporation, the notice of which shall have attached a copy of the proposed articles of conversion.

  (2) If the proposition for the conversion of a corporation into a cooperative and the proposed articles of conversion, with amendments, are approved by the affirmative vote of not less than two-thirds of those members of such corporation voting at the meeting, or, if such corporation is a stock corporation, by the affirmative vote of the holders of not less than two-thirds of the shares of the capital stock of the corporation represented at the meeting and voting articles of conversion in the form approved shall be executed and acknowledged on behalf of the corporation by its president or vice president and its seal shall be affixed to it and attested by its secretary.

  (3) The articles of conversion shall recite that they are executed pursuant to this chapter and shall state: (A) the name of the corporation and the address of its principal office prior to its conversion into a cooperative; (B) the statute or statutes under which it was organized; (C) a statement that the corporation elects to become a cooperative subject to this chapter; (D) its name as a cooperative; (E) the address of the principal office of the cooperative; (F) the names and addresses of the directors of the cooperative; and (G) the manner in which members or stockholders of the corporation may become members of the cooperative; and may contain any provisions not inconsistent with law or this chapter deemed necessary or advisable for the conduct of the business of the cooperative. The president or vice president executing articles of conversion shall make and attach to an affidavit stating that the provisions of this section were duly complied with in respect of such articles. The articles of conversion shall be deemed to be the articles of incorporation of the cooperative. (Amended 1999, No. 143 (Adj. Sess.), § 18; 2023, No. 85 (Adj. Sess.), § 422, eff. July 1, 2024.)

• § 3027. Dissolution—Cooperative not commencing business

  A cooperative that has not commenced business may be dissolved by delivering to the Secretary of State a certificate of dissolution, which shall be executed and acknowledged on behalf of the cooperative by a majority of the incorporators and that shall state:

  (1) the name of the cooperative;

  (2) the address of its principal office;

  (3) that the cooperative has not commenced business;

  (4) that any sums received by the cooperative, less any part thereof disbursed for expenses of the cooperative, have been returned or paid to those entitled to them;

  (5) that no debt of the cooperative is unpaid; and

  (6) that a majority of the incorporators elect that the cooperative be dissolved. (Amended 2023, No. 85 (Adj. Sess.), § 423, eff. July 1, 2024.)

• § 3028. Dissolution of cooperatives

  A cooperative that has commenced business may be dissolved in the following manner: The members at a meeting shall approve, by the affirmative vote of not less than two-thirds of the members voting a meeting, a proposal that the cooperative be dissolved. Upon approval, a certificate of election to dissolve, designated the “certificate,” executed under oath and acknowledged on behalf of the cooperative by its president or vice president under its seal, attested by its secretary, and stating (1) the name of the cooperative; (2) the address of its principal office; and (3) that the members of the cooperative have duly voted that the cooperative be dissolved, shall be filed with the Secretary of State. Upon filing of a certificate by the Secretary of State, the cooperative shall cease to carry on its business except to the extent necessary for the winding up but its corporate existence shall continue until a certificate of dissolution has been filed by the Secretary of State. The board of directors shall immediately cause notice of the dissolution proceedings to be mailed to each known creditor of and claimant against the cooperative and to be published once a week for two successive weeks in a newspaper of general circulation in the county in which the principal office of the cooperative is located. The board of directors shall wind up and settle the affairs of the cooperative; collect sums owing to it; liquidate its property and assets; pay and discharge its debts, obligations, and liabilities; and do all other things required to wind up its business. After paying or discharging or adequately providing for the payment or discharge of all its debts, obligations, and liabilities, the board shall distribute any remaining sums among its members and former members in proportion to the patronage of the respective members or former members during the seven years next preceding the date of the filing of the certificate by the Secretary of State, or if the cooperative has not been in existence for such period, then during the period of its existence prior to the filing. The board of directors shall authorize the execution of a certificate of dissolution, which shall be executed and acknowledged on behalf of the cooperative by its president or vice president, and its seal shall be affixed to it and attested by its secretary. The certificate of dissolution shall recite that it is executed pursuant to this chapter and shall state: (1) the name of the cooperative; (2) the address of its principal office; (3) the date on which the certificate of election to dissolve was filed by the Secretary of State; (4) that there are no actions or suits pending against the cooperative; (5) that all debts, obligations, and liabilities of the cooperative have been paid and discharged or that adequate provision has been made; and (6) that the provisions of this chapter relative to dissolution have been duly complied with. The president or vice president executing the certificate of dissolution shall make and attach to an affidavit stating that the statements made in it are true. (Amended 1999, No. 143 (Adj. Sess.), § 19; 2023, No. 85 (Adj. Sess.), § 424, eff. July 1, 2024.)

• § 3029. Papers filed

  Articles of incorporation, amendment, consolidation, merger, conversion, or dissolution, when executed and acknowledged and accompanied by affidavits as may be required by applicable provisions of this chapter, shall be filed with the Secretary of State. If the Secretary of State finds that the articles presented conform to the requirements of this chapter, the Secretary shall, upon the payment of the fees as in this chapter provided, record the articles and upon the recording the incorporation, amendment, consolidation, merger, conversion, or dissolution provided for shall be in effect. The provisions of this section shall also apply to certificates of election to dissolve pursuant to section 3028 of this chapter. (Amended 2023, No. 85 (Adj. Sess.), § 425, eff. July 1, 2024.)

• § 3030. Revenues; use of

  Revenues of a cooperative for a fiscal year in excess of the amount thereof necessary:

  (1) To defray the expenses of the operation and maintenance of the facilities of the cooperative during such fiscal year.

  (2) To pay interest and principal obligations of the cooperative coming due in such fiscal year.

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

  (4) To provide a reasonable reserve for working capital.

  (5) To provide a reserve for the payment of indebtedness of the cooperative in an amount not less than the total of the interest and principal payments in respect thereof required to be made during the next following fiscal year.

  (6) To provide a fund, designated as the “cooperative education fund,” for education in cooperation and for the dissemination of information concerning the effective use of energy and other services, goods, or products made available by the cooperative, shall, unless otherwise determined by a vote of the members, be distributed by the cooperative to its members and to other persons to whom the cooperative supplies energy or other services, goods, or products made available through its electric distribution facilities, as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members and other persons, paid for during such fiscal year; provided, however, a distribution shall not be made to a person until that person becomes a member of the cooperative. If that person does not become a member of the cooperative within one year after the amount of that person’s distributive share or accumulated distributive shares equals the membership fee required by the bylaws of the cooperative, or, if no membership fee is required, within two years after the declaration of the patronage refund, that person shall cease to be entitled to a share or shares, which shall, in such case, be paid into the cooperative education fund. The cooperative shall make such additional provision, in the bylaws or otherwise, relative to the disposition of the revenues of the cooperative as may be necessary and appropriate to establish and maintain the nonprofit character of the cooperative. Nothing contained in this section shall be construed to prohibit the payment by a cooperative of all or any part of its indebtedness prior to the date when the same shall become due. (Amended 1999, No. 143 (Adj. Sess.), § 20; 2023, No. 85 (Adj. Sess.), § 426, eff. July 1, 2024.)

• § 3031. Mortgage and investment

  (a) The board of directors of a cooperative shall have full power and authority, without authorization by the members, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises, and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income, all upon such terms and conditions as the board of directors shall determine, to secure indebtedness of the cooperative in the ordinary course of the cooperative’s electric business.

  (b) The board of directors of a cooperative shall have full power and authority, with the approval of two-thirds of the members of the cooperative voting on such authorization, to authorize the execution and delivery of a mortgage or mortgages or a deed of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises, and permits of the cooperative, whether acquired or to be acquired, and wherever situated, as well as the revenues and income, upon terms and conditions as the board of directors shall determine, to secure indebtedness of the cooperative for purposes authorized by statute other than operation of the cooperative’s electric business.

  (c) No more than 50 percent of the member equity of an electric cooperative subject to the provisions of this chapter may be used to invest in all business activities authorized by statute, other than electric business activities. Each individual investment by the electric cooperative in a business activity authorized by statute, other than electric, exceeding three percent of the members’ equity, may be made only with approval of two-thirds of the members voting on such proposal.

  (d) Business activities authorized by statute, other than electric, shall be geographically limited to any county in which the cooperative has authority to sell energy or other services furnished by the cooperative when they are made available through its electric distribution facilities, or any county in which an authorized business is presently serving. (Amended 1969, No. 192 (Adj. Sess.), eff. March 12, 1970; 1999, No. 143 (Adj. Sess.), § 21; 2023, No. 85 (Adj. Sess.), § 427, eff. July 1, 2024.)

• § 3032. Sale or lease of assets

  A cooperative may not sell, lease, or otherwise dispose of all or a substantial portion of its property unless such sale, lease, or other disposition is authorized by the affirmative vote of not less than a majority of all the members of the cooperative. Members may vote in person or in a manner authorized under section 3011 of this title. (Amended 1999, No. 143 (Adj. Sess.), § 22.)

• § 3033. Personal liability

  A member shall not be liable or responsible for debts of the cooperative and the property of the members shall not be subject to attachment or execution. (Amended 2023, No. 85 (Adj. Sess.), § 428, eff. July 1, 2024.)

• § 3034. Mortgages; filing

  A mortgage, deed of trust, or other instrument executed by a cooperative or foreign corporation doing business in this State pursuant to this chapter, which affects real and personal property and which is recorded in the town in which such property is located or is to be located, shall have the same force and effect as if the mortgage, deed of trust, or other instrument were also recorded, filed, or indexed as provided by law in the proper office in such town as a mortgage of personal property. All after-acquired property of such cooperative or foreign corporation described or referred to as being mortgaged or pledged in such mortgage, deed of trust, or other instrument, shall become subject to the lien thereof immediately upon the acquisition of such property by such cooperative or foreign corporation, whether or not such property was in existence at the time of the execution of such mortgage, deed of trust, or other instrument. Recordation of the mortgage, deed of trust, or other instrument shall constitute notice and otherwise have the same effect with respect to the after-acquired property as it has under the laws relating to recordation, with respect to property owned by the cooperative or foreign corporation at the time of the execution of the mortgage, deed of trust, or other instrument and described or referred to as being mortgaged or pledged. (Amended 2023, No. 85 (Adj. Sess.), § 429, eff. July 1, 2024.)

• § 3035. Safety standards

  As a minimum requirement for any activity authorized by this chapter, the cooperative shall adhere to all applicable federal, State, or local safety codes, regulations, or standards. (Amended 1999, No. 143 (Adj. Sess.), § 23.)

• § 3036. Acknowledgments, members authorized

  A person who is authorized to take acknowledgments under the laws of this State shall not be disqualified from taking acknowledgments of instruments executed in favor of a cooperative or to which it is a party, by reason of being an officer, director, or member of such cooperative. (Amended 1999, No. 143 (Adj. Sess.), § 24.)

• § 3037. Foreign companies; service of process

  A foreign nonprofit or cooperative corporation supplying or authorized to supply electric energy and owning or operating electric transmission or distribution lines in an adjacent state, prior to March 26, 1943, may construct or acquire extensions of lines in this State within an area no point of which is more than 25 miles from the boundary line of this State and may operate those extensions without qualifying as a foreign corporation to do business in this State. Before constructing or operating such extensions, by an instrument executed and acknowledged on its behalf by its president or vice president, under its seal attested by its clerk or secretary, and filed with the Secretary of State, a corporation shall designate the Secretary of State its agent to accept service of process on its behalf. Thereafter, the corporation shall have all the rights, powers, privileges, and immunities of a cooperative. Service of process shall be made upon the Secretary of State in accordance with the provisions of 12 V.S.A. §§ 851 and 852 and shall forward one copy of the same by registered mail to such corporation at the address of its principal office. (Amended 2023, No. 85 (Adj. Sess.), § 430, eff. July 1, 2024.)

• § 3038. Fees

  (a) There shall be paid to the Secretary of State fees for filing as follows:

  (1) Articles of incorporation, $15.00;

  (2) Articles of amendment, $10.00;

  (3) Articles of consolidation or merger, $15.00;

  (4) Articles of conversion, $10.00;

  (5) Certificate of election to dissolve, $5.00;

  (6) Articles of dissolution, $5.00; and

  (7) Certificate of change of principal office, $5.00.

  (b) Such fees shall include two certified copies of the respective instruments. (Amended 1963, No. 37, § 19.)

• §§ 3039, 3040. Repealed. 1969, No. 257 (Adj. Sess.), § 7.

• § 3041. Securities Act

  The provisions of 9 V.S.A. chapter 131 shall not apply to a note, bond, or other evidence of indebtedness issued by a cooperative or foreign corporation doing business in this State pursuant to this chapter, to the United States of America or an agency or instrumentality thereof, or to a mortgage, deed of trust, or other instrument executed to secure the same. The provisions of 9 V.S.A. chapter 131 shall not apply to the issuance of membership certificates by a cooperative or such foreign corporations.

• § 3042. Annual reports

  Each cooperative formed under the provisions of this chapter shall prepare and submit to its annual meeting a report containing the name of the cooperative, its principal place of business, a general statement of its business operations during the fiscal year, including a statement of its assets and liabilities, the amount of its indebtedness secured by mortgage or pledge of the corporate property or part thereof, and the names of the directors, officers, and secretary. A copy of the annual report attested by the secretary shall be filed with the Secretary of State within 30 days after the annual meeting. (Amended 1999, No. 143 (Adj. Sess.), § 25.)

• § 3043. Formation of cooperatives by cooperatives

  (a) Notwithstanding any other provision of this chapter, one or more cooperatives formed under the provisions of this chapter may organize and control a cooperative having as its principal purpose the generation, manufacture, purchase, acquisition, accumulation, transmission, sale, supply, and disposal of energy, cable television, telecommunications, interactive media, and internet access. Such a cooperative shall have all of the powers of cooperatives formed under the provisions of this chapter.

  (b) Members of a cooperative organized pursuant to subsection (a) of this section shall be the cooperative or cooperatives organizing it and may include any individual, partnership, association, corporation, municipality, or cooperative engaged in the generation, transmission, or distribution of energy within or outside the State of Vermont. The bylaws of a cooperative organized pursuant to subsection (a) of this section may provide for more than one class of membership, including a class or classes with no rights or with limited rights to vote on matters requiring the vote of members under this chapter, and including a class or classes with no rights or limited rights to receive distributions of patronage refunds. (Added 1979, No. 51, § 1, eff. April 25, 1979; amended 1999, No. 143 (Adj. Sess.), § 26; 2023, No. 85 (Adj. Sess.), § 431, eff. July 1, 2024.)

• § 3044. Approval by members of cooperative

  (a) With respect to matters not subject to section 248 of this title, a cooperative established under this chapter shall obtain the approval of the voters of the cooperative before in any way:

  (1) purchasing electric capacity or energy from outside the State:

  (A) for a period exceeding five years, that represents more than three percent of its historic peak demand, unless the purchase is from a plant that produces electricity from renewable energy; or

  (B) for a period exceeding 10 years, that represents more than 10 percent of its historic peak demand, if the purchase is from a plant that produces electricity from renewable energy;

  (2) investing in an electric generation or transmission facility located outside this State; or

  (3) beginning site preparation for or construction of an electric generation facility within the State, or an electric transmission facility within the State that is designed for immediate or eventual operation at any voltage or exercising the right of eminent domain in connection with site preparation for or construction of any such transmission or generation facility, except for the replacement of existing facilities with equivalent facilities in the usual course of business.

  (b) A cooperative shall obtain the approval required by subsection (a) of this section by a vote of a majority of the voters of the cooperative voting upon the question at a duly warned annual or special meeting to be held for that purpose. Prior to the meeting, the cooperative may provide to the voters an assessment of any risks and benefits of the proposed action.

  (c) In this section, “plant” and “renewable energy” have the same meaning as in section 8002 of this title. (Added 1985, No. 48, § 4; amended 2015, No. 130 (Adj. Sess.), § 2.)

• § 3045. Conservation and load management

  (a) Cooperatives may expend their funds, including the proceeds of their notes, bonds, or other obligations, for the purposes of modifying demand for electric capacity or energy through conservation or load management by participation in such facilities, projects, and programs as the governing board of the cooperative determines will effectively accomplish such purposes. Such facilities, projects, and programs may include providing or financing facilities or programs for conservation or load management, which may be: (i) owned or operated by the cooperative or by others, (ii) leased or licensed by the cooperative to others, or financed by loans by the cooperative to others, in either case on such terms and conditions as the governing board of the cooperative may determine.

  (b) A cooperative may issue its notes, bonds, or other obligations pursuant to any statutory authority conferring such power for carrying out the purposes of this section. (Added 1989, No. 112, § 5a, eff. June 22, 1989.)

• § 3046. [Reserved.]

• § 3047. Cost allocations; subsidization prohibited

  In carrying out the purposes of this chapter, the electric revenues received from regulated activities of a cooperative shall not subsidize any nonelectric activities of the cooperative. A cooperative shall adopt cost allocation procedures to ensure that the electrical distribution revenues received from regulated activities of a cooperative do not subsidize any of the nonelectric activities and that costs attributable to any nonelectric activities are not included in the cooperative’s rates for electric service. A copy of the cost allocation procedures shall be available to the public upon request. (Added 1999, No. 143 (Adj. Sess.), § 27; amended 2019, No. 79, § 12, eff. June 20, 2019.)