§ 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
A cooperative 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; amended 2025, No. 10, § 26, eff. July 1, 2025.)
§ 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
to 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; 2025, No. 10, § 26, eff. July 1, 2025.)
§ 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 “utility”
or “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; 2025, No. 10, § 26, eff. July 1, 2025.)
§ 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 11 V.S.A. § 1656. (Amended 2023, No. 85 (Adj. Sess.), § 430, eff. July 1, 2024; 2025, No. 10, § 26, eff. July 1, 2025.)
§ 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.)