CHAPTER 597
ELECTRIC COOPERATIVE ACT

      Sec. 33-218. Definitions. "Cooperative" means any corporation organized under this chapter or which becomes subject to this chapter in the manner hereinafter provided, and "person" means any natural person, firm, association, limited liability company, corporation, municipal corporation, municipal utility, business trust or partnership.

      (1949 Rev., S. 5327; P.A. 73-644, S. 1; P.A. 95-79, S. 122, 189.)

      History: P.A. 73-644 included municipal corporations and municipal utilities in definition of "person"; P.A. 95-79 redefined "cooperative" to include a limited liability company, effective May 31, 1995.

      Sec. 33-219. Purposes. Exceptions. Utilization of cogeneration technology and renewable energy resources. (a) Cooperative, nonprofit, membership corporations may be organized under this chapter for the purpose of supplying electric energy and promoting and extending the use thereof to persons (1) in rural areas or in any portion thereof occupied by such persons and not receiving central station service, and (2) elsewhere except that the supplying of electric energy to franchise areas being supplied on October 1, 1971, with electric energy, or to areas supplied on said date by municipal utilities, shall be permitted only with the consent of the holder of the franchise or the municipal utility.

      (b) Notwithstanding the provisions of subsection (a) of this section, cooperative, nonprofit, membership corporations may be organized under this chapter for the purpose of generating electric energy by means of cogeneration technology, renewable energy resources or both and supplying it to any member or supplying it to, purchasing it from or exchanging it with a public service company, electric supplier, as defined in section 16-1, municipal aggregator, as defined in said section, municipal utility or municipal electric energy cooperative, in accordance with an agreement with the company, electric supplier, electric aggregator, municipal utility or cooperative. No membership corporation under this subsection may exercise those powers contained in subsection (i) or (j) of section 33-221 unless the prior approval of the Department of Public Utility Control is obtained, after opportunity for hearing in accordance with title 16 and chapter 54. Any cooperative organized on or after July 1, 1998, pursuant to this subsection shall collect from its members the competitive transition assessment levied pursuant to section 16-245g and the systems benefits charge levied pursuant to section 16-245l in such manner and at such rate as the Department of Public Utility Control prescribes, provided the department shall order the collection of said assessment and said charge in a manner and rate equal to that to which the members of the cooperative would have been subject had the cooperative not been organized.

      (1949 Rev., S. 5328; 1971, P.A. 422; P.A. 73-644, S. 2; P.A. 81-439, S. 8, 14; P.A. 98-28, S. 66, 117.)

      History: 1971 act added Subdiv. (2) allowing organization of electric energy supply corporations in other than rural areas; P.A. 73-644 deleted "in this state" following the word "elsewhere" in Subdiv. (2); P.A. 81-439 added Subsec. (b), exempting a cooperative, generating electricity by means of cogeneration technology or renewable energy resources, from restrictions in Subsec. (a) and requiring department approval for some powers under section 33-221; P.A. 98-28 amended Subsec. (b) by adding electric suppliers and aggregators, by deleting reference to the Public Utility Regulatory Policies Act and by adding provision regarding collection of the competitive transition assessment and systems benefits charge, effective July 1, 1998.

      Sec. 33-220. Name. The name of a cooperative shall include the words "Electric" and "Cooperative", and the abbreviation "Inc.", unless, in an affidavit made by its president or vice president and filed with the Secretary of the State, or in an affidavit made by a person signing articles of incorporation which relate to such cooperative and filed, together with any such articles, with the Secretary of the State, it appears that the cooperative desires to do business in another state and is or would be precluded therefrom by reason of the inclusion of such words or either thereof 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. Only a cooperative or corporation doing business in this state pursuant to this chapter shall use both the words "Electric" and "Cooperative" in its name.

      (1949 Rev., S. 5330.)

      Sec. 33-221. Powers. A cooperative shall have power, subject to the limitations of section 33-219: (a) To sue and be sued in its corporate name; (b) to have perpetual existence; (c) to adopt a corporate seal and alter the same; (d) to generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and to distribute, sell, supply and dispose of electric energy to its members, and to other persons not in excess of ten per cent of the number of its members pursuant to applicable federal law and regulations adopted thereunder, provided the furnishing by a cooperative of electric cold storage or processing plant service shall not be deemed to be distributing, selling, supplying or disposing of electric energy; (e) to assist persons to whom electric energy is or will be supplied by the cooperative in wiring their premises and in acquiring and installing electrical appliances, equipment, fixtures, apparatus and energy conservation and renewable energy systems and equipment, 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 appliances, equipment, fixtures, apparatus and energy conservation and renewable energy systems and equipment; (f) to assist persons to whom electric energy is or will be supplied by the cooperative in constructing, equipping, maintaining and operating electric cold storage or processing plants, by the financing thereof or otherwise; (g) to construct, purchase, lease as lessee, or otherwise acquire, and to equip, maintain and operate, and to sell, assign, convey, lease as lessor, mortgage, pledge or otherwise dispose of or encumber, electric transmission and distribution lines or systems, electric generating plants, electric cold storage or processing plants, lands, buildings, structures, dams, plants and equipment, and any other real property or tangible or intangible personal property which shall be deemed necessary, convenient or appropriate to accomplish the purpose stated in section 33-219; (h) 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 any other encumbrance upon, any or all of its then owned or after-acquired real or personal property, assets, franchises, revenues or income; (i) to construct, maintain and operate electric transmission and distribution lines along, upon, under and across publicly owned lands and public thoroughfares, including, without limitation, all roads, highways, streets, alleys, bridges and causeways, subject to the provisions of all laws regulating the use of highways by electric companies, provided no standards in excess of standards provided in the National Electric Safety Code shall be required; (j) to exercise the power of eminent domain in the manner provided by the general statutes for the exercise of such power by other corporations constructing or operating electric transmission and distribution lines or systems; (k) to petition the Department of Public Utility Control to issue an order under section 16-243c; (l) to conduct its business and exercise its powers within or without this state; (m) to adopt, amend and repeal bylaws; and (n) to do and perform any other acts and things, and to have and exercise any other powers, which may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized.

      (1949 Rev., S. 5329; P.A. 81-439, S. 9, 14; P.A. 98-28, S. 67, 117.)

      History: P.A. 81-439 authorized cooperatives to assist persons in acquiring and installing energy conservation and renewable energy systems and equipment, inserted new Subdiv. (k), authorizing cooperatives to petition department for an order under Sec. 16-243c and relettered former Subdivs. (k) to (m) accordingly; P.A. 98-28 amended Subdiv. (d) by adding "pursuant to applicable federal law and regulations adopted thereunder" and deleted references to plumbing, effective July 1, 1998.

      Sec. 33-222. Incorporators. Five or more natural persons who are residents of Connecticut may organize a cooperative in the manner hereinafter provided.

      (1949 Rev., S. 5331.)

      Sec. 33-223. Articles of incorporation. 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 trustees; and may contain any provisions not inconsistent with this chapter deemed necessary or advisable for the conduct of its business. Such articles shall be signed by each incorporator and acknowledged by at least two of the incorporators. It shall not be necessary to recite in the articles of incorporation of a cooperative the purpose for which it is organized or any of its corporate powers.

      (1949 Rev., S. 5332.)

      Sec. 33-224. Bylaws. The board of trustees shall adopt the first bylaws of a cooperative to be adopted following incorporation. Thereafter the members shall adopt, amend or repeal the bylaws by the affirmative vote of 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 trustees 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.

      (1949 Rev., S. 5333.)

      Sec. 33-225. Members. Each incorporator of a cooperative shall be a member thereof, but no other person may become a member thereof unless such other person agrees to use electric energy or other services furnished by the cooperative when they are made available through its facilities. Any member of a cooperative who agrees to use electric energy shall cease to be a member if he does not use electric energy supplied by the cooperative within six months after it has been made available to him or if electric energy is not made available to him by the cooperative within two years after he becomes a member, or within such lesser period as the bylaws of the cooperative may provide. A husband and wife may hold a joint membership in a cooperative. Membership in a cooperative shall not be transferable, except as provided in the bylaws. The bylaws may prescribe additional qualifications and limitations in respect of membership.

      (1949 Rev., S. 5334.)

      Sec. 33-226. Meetings of members. (a) An annual meeting of the members of a cooperative shall be held at such time and place as is provided in the bylaws.

      (b) Special meetings of the members shall be called by the president, by the board of trustees, by any three trustees or by not less than ten per cent of the members.

      (c) 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 ten days nor more than twenty-five days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage prepaid addressed to the member at his address as it appears on the records of the cooperative.

      (d) Unless the bylaws prescribe the presence of a greater percentage or number of the members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than one thousand members shall be five per cent of all members, present in person, and of a cooperative having more than one thousand members shall be fifty members, present in person. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice.

      (e) 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 or by mail or both. If the bylaws provide for voting by proxy or by mail, 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 of the members.

      (1949 Rev., S. 5335.)

      Sec. 33-227. Waiver of notice. Any person entitled to notice of a meeting may waive such notice in writing either before or after such meeting. If any such person attends such meeting, such attendance shall constitute a waiver of notice of such meeting, unless such person participates therein solely to object to the transaction of any business because the meeting has not been legally called or convened.

      (1949 Rev., S. 5336.)

      Sec. 33-228. Board of trustees. (a) The business of a cooperative shall be managed by a board of not less than five trustees, each of whom shall be a member of the cooperative. The bylaws shall prescribe the number of trustees, their qualifications, other than those prescribed in this chapter, and the manner of holding meetings of the board of trustees and of electing successors to trustees who resign, die or otherwise are incapable of acting. The bylaws may also provide for the removal of trustees from office and for the election of their successors. Trustees shall not receive any salaries for their services as trustees and, except in emergencies, shall not be employed by the cooperative in any capacity involving compensation without the approval of the members. The bylaws may provide that a fixed fee and expenses of attendance may be allowed to each trustee for attendance at each meeting of the board of trustees.

      (b) The trustees of a cooperative named in any articles of incorporation shall hold office until the next annual meeting of the members and until their successors are elected and have qualified. At each annual meeting or, in case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members shall elect trustees to hold office until the next annual meeting of the members, except as otherwise provided in this chapter. Each trustee shall hold office for the term for which he is elected and until his successor is elected and has qualified.

      (c) Instead of electing all the trustees annually, the bylaws may provide that half of them, or a number as near thereto as possible, shall be elected to serve until the next annual meeting of the members and that the remaining trustees shall be elected to serve until the second succeeding annual meeting. Thereafter, as trustees' terms expire, the members shall elect their successors to serve until the second succeeding annual meeting after their election.

      (d) A majority of the board of trustees shall constitute a quorum.

      (e) If a husband and wife hold a joint membership in a cooperative, either one, but not both, may be elected a trustee.

      (f) The board of trustees may exercise all of the powers of a cooperative not conferred upon the members by this chapter or its articles of incorporation or bylaws.

      (1949 Rev., S. 5337.)

      Sec. 33-229. Officers. 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 trustees. When a person holding any such office ceases to be a trustee he shall cease to hold such office. The offices of secretary and of treasurer may be held by the same person. The board of trustees may also elect or appoint such other officers, agents or employees as it deems necessary or advisable and shall prescribe their powers and duties. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws.

      (1949 Rev., S. 5338.)

      Sec. 33-230. Amendment of articles of incorporation. 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 thereto the proposed amendment. If the proposed amendment, with any changes, is approved by the affirmative vote of not less than two-thirds of those members voting thereon at such meeting, articles of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of amendment 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; and (3) the amendment to its articles of incorporation. The president or vice president executing such articles of amendment shall make and annex thereto an affidavit stating that the provisions of this section in respect of the amendment set forth in such articles were complied with.

      (1949 Rev., S. 5339.)

      Sec. 33-231. Change of location of principal office. A cooperative may, upon authorization of its board of trustees or its members, change the location of its principal office by filing a certificate reciting such change of principal office, executed and acknowledged by its president or vice president under its seal attested by its secretary, in the office of the Secretary of the State.

      (1949 Rev., S. 5340.)

      Sec. 33-232. Dissolution. (a) A cooperative which has not commenced business may be dissolved by delivering to the Secretary of the State articles of dissolution, which shall be executed and acknowledged on behalf of the cooperative by a majority of the incorporators and which 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 thereto; (5) that no debt of the cooperative is unpaid; and (6) that a majority of the incorporators elect that the cooperative be dissolved.

      (b) A cooperative which has commenced business may be dissolved in the following manner: The members at any meeting shall approve, by the affirmative vote of not less than two-thirds of those members voting thereon at such meeting, a proposal that the cooperative be dissolved. Upon such approval, a certificate of election to dissolve, hereinafter designated the "certificate", executed 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 voted that the cooperative be dissolved, shall, together with an affidavit made by its president or vice president executing the certificate, stating that the statements in the certificate are true, be submitted to the Secretary of the State for filing. Upon the filing of the certificate and affidavit with the Secretary of the State, the cooperative shall cease to carry on its business except to the extent necessary for the winding up thereof, but its corporate existence shall continue until articles of dissolution have been filed with the Secretary of the State. The board of trustees 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 trustees 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, and, after paying or discharging or adequately providing for the payment or discharge of all of its debts, obligations and liabilities, 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 with the Secretary of the State or, if the cooperative has not been in existence for such period, then during the period of its existence prior to such filing. The board of trustees shall thereupon authorize the execution of articles 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 thereto and attested by its secretary. The articles of dissolution 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 date on which the certificate of election to dissolve was filed with the Secretary of the 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 therefor; and (6) that the preceding provisions of this subsection have been complied with. The president or vice president executing the articles of dissolution shall make and annex thereto an affidavit stating that the statements made therein are true.

      (1949 Rev., S. 5341.)

      Sec. 33-233. Filing of articles. Articles of incorporation, amendment or dissolution, when executed and acknowledged and accompanied by such affidavits as may be required by applicable provisions of this chapter, shall be presented to the Secretary of the State for filing in the records of his office. If the Secretary of the State finds that the articles presented conform to the requirements of this chapter, he shall, upon the payment of the fees as provided in section 33-234, file such articles in the records of his office and upon such filing the incorporation, amendment or dissolution provided for therein shall be in effect. The provisions of this section shall also apply to certificates of election to dissolve and affidavits executed in connection therewith pursuant to subsection (b) of section 33-232.

      (1949 Rev., S. 5342.)

      Sec. 33-234. Fees. The Secretary of the State shall charge and collect the fees set forth in section 33-617, for the filing of articles or certificates provided for in this chapter.

      (1949 Rev., S. 5348; May Sp. Sess. P.A. 92-6, S. 91, 117; P.A. 96-271, S. 169, 254.)

      History: May Sp. Sess. P.A. 92-6 deleted all existing language and established that the fees charged and collected by the secretary of the state shall be those set forth in Sec. 33-304; P.A. 96-271 replaced reference to Sec. 33-304 with Sec. 33-617, effective January 1, 1997.

      Sec. 33-235. Refunds to members. Revenues of a cooperative for any fiscal year in excess of the amount thereof necessary (a) to defray the expenses of the operation and maintenance of the facilities of the cooperative during such fiscal year, (b) to pay interest and principal obligations of the cooperative coming due in such fiscal year, (c) 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 trustees, (d) to provide a reasonable reserve for working capital and (e) 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, 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 electric energy or other services, as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members and such other persons, paid for during such fiscal year; provided such distribution shall not be made to any such other person until he has become a member of the cooperative. If such other person does not become a member of the cooperative within one year after the amount of his distributive share or accumulated distributive shares equal the membership fee required by the bylaws of the cooperative or, if no membership fee is required, within two years after the declaration of any such patronage refund, he shall cease to be entitled to such share or shares, which shall, in such case, be disposed of as determined by a vote of the members. Nothing herein contained 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 becomes due.

      (1949 Rev., S. 5343.)

      Sec. 33-236. Disposition of property. (a) The board of trustees of a cooperative shall have full power and authority, without authorization by the members thereof, 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 therefrom, all upon such terms and conditions as the board of trustees determines, to secure any indebtedness of the cooperative to the United States of America or any agency or instrumentality thereof.

      (b) A cooperative may not otherwise sell, mortgage, lease or otherwise dispose of or encumber all or a substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized by the affirmative vote of not less than a majority of all the members of the cooperative.

      (1949 Rev., S. 5344.)

      Sec. 33-237. Nonliability of members for debts of cooperative. No member shall be liable or responsible for any debts of the cooperative and the property of the members shall not be subject to execution therefor.

      (1949 Rev., S. 5345.)

      Sec. 33-238. Recordation of mortgages; effect thereof. Any mortgage, deed of trust or other instrument executed by a cooperative doing business in this state pursuant to this chapter, which affects real and personal property and which is recorded in the real property records in any 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 described or referred to as being mortgaged or pledged in any 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, 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 any such mortgage, deed of trust or other instrument shall constitute notice and otherwise have the same effect with respect to such after-acquired property as it has under the laws relating to recordation, with respect to property owned by such cooperative at the time of the execution of such mortgage, deed of trust or other instrument and therein described or referred to as being mortgaged or pledged thereby. The lien upon personal property of any such mortgage, deed of trust or other instrument shall, after recordation thereof, continue in existence and of record for the period of time specified therein without the refiling thereof or the filing of any renewal certificate, affidavit or other supplemental information required by the laws relating to the renewal, maintenance or extension of liens upon personal property.

      (1949 Rev., S. 5346.)

      Sec. 33-239. Trustees, officers or members may take acknowledgments. No person authorized to take acknowledgments under the laws of this state shall 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, trustee or member of such cooperative.

      (1949 Rev., S. 5347.)

      Sec. 33-240. License fee. Exemption from excise and income taxes. Each cooperative doing business in this state pursuant to this chapter shall pay annually, on or before July first, to the Secretary of the State, a fee of twenty-five dollars, but shall be exempt from all other excise and income taxes.

      (1949 Rev., S. 5349; May Sp. Sess. P.A. 92-6, S. 92, 117.)

      History: May Sp. Sess. P.A. 92-6 raised fee from ten to twenty-five dollars.

      The legislature has wide discretion in the classification of property for taxation and in granting exemptions. 142 C. 483.

      Sec. 33-240a. Liability for taxation, when. Notwithstanding section 33-240, an electric cooperative organized under this chapter, one or more cooperators of which is a public service company, municipality, municipal utility or municipal electric energy cooperative, shall be subject to the tax imposed under chapter 212.

      (P.A. 73-644, S. 3; P.A. 81-439, S. 10, 14.)

      History: P.A. 81-439 subjected cooperatives to tax under chapter 212 if any cooperator is a public service company or municipal electric energy cooperative.

      Sec. 33-241. Exemption from jurisdiction of Department of Public Utility Control. Cooperatives doing business in this state pursuant to this chapter shall be exempt from the jurisdiction and control of the Department of Public Utility Control of this state, except as to the construction and maintenance of electric transmission and distribution lines, provided no standards in excess of standards prescribed in the National Electric Safety Code shall be required by said department.

      (1949 Rev., S. 5350; P.A. 75-486, S. 61, 69; P.A. 77-614, S. 162, 610; P.A. 80-482, S. 231, 348.)

      History: P.A. 75-486 replaced public utilities commission with public utilities control authority, effective December 1, 1975; P.A. 77-614 replaced public utilities control authority with division of public utility control within the department of business regulation, effective January 1, 1979; P.A. 80-482 created independent department of public utility control and abolished department of business regulation.

      Sec. 33-242. Securities act exemption. The provisions of chapter 651 shall not apply to any note, bond or other evidence of indebtedness issued by any cooperative doing business in this state pursuant to this chapter, to the United States of America or any agency or instrumentality thereof, or to any mortgage, deed of trust or other instrument executed to secure the same. The provisions of said chapter shall not apply to the issuance of membership certificates by any cooperative.

      (1949 Rev., S. 5351.)