S T A T E   O F   N E W   Y O R K
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                                  7953--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 23, 2017
                                ___________
 
 Introduced  by M. of A. BRINDISI, MAGEE, BUTLER, BLANKENBUSH, B. MILLER,
   PALMESANO, CROUCH -- read once and referred to the Committee on Energy
   -- recommitted to the Committee on Energy in accordance with  Assembly
   Rule  3,  sec.  2  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee

 AN ACT to amend the rural  electric  cooperative  law,  in  relation  to
   refunds of capital contributions, allocations and retirements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.   Section 17 of  the  rural  electric  cooperative  law  is
 amended by adding a new subdivision (f) to read as follows:
   (F)  EVERY  COOPERATIVE  SHALL KEEP, AT THE OFFICE OF THE COOPERATIVE,
 CORRECT AND COMPLETE BOOKS AND RECORDS OF ACCOUNT  AND  MINUTES  OF  THE
 PROCEEDINGS  OF ITS MEMBERS, BOARD AND EXECUTIVE COMMITTEES, IF ANY, AND
 SHALL KEEP AT SUCH OFFICE A LIST OR  RECORD  CONTAINING  THE  NAMES  AND
 ADDRESSES  OF ALL MEMBERS, THE CLASS OR CLASSES OF MEMBERSHIP AND AMOUNT
 OF PATRONAGE CAPITAL ALLOCATED AND UNRETIRED TO EACH MEMBER, AS WELL  AS
 THE  AMOUNT  OF  ANY  PATRONAGE CAPITAL ALLOCATED TO NONMEMBERS, AND THE
 DATES WHEN THEY RESPECTIVELY WERE ALLOCATED SUCH PATRONAGE CAPITAL.  ANY
 OF THE FOREGOING BOOKS, MINUTES AND RECORDS MAY BE IN WRITTEN FORM OR IN
 ANY  OTHER  FORM  CAPABLE  OF BEING CONVERTED INTO WRITTEN FORM WITHIN A
 REASONABLE TIME.
   § 2. The rural electric cooperative law is amended by adding  two  new
 sections 19-a and 19-b to read as follows:
   §  19-A. CONFLICT OF INTEREST POLICY. (A) EXCEPT AS PROVIDED IN SUBDI-
 VISION (D) OF THIS SECTION, THE BOARD OF EVERY  RURAL  ELECTRIC  COOPER-
 ATIVE  SHALL  ADOPT,  AND  OVERSEE THE IMPLEMENTATION OF, AND COMPLIANCE
 WITH, A CONFLICT OF INTEREST POLICY TO ENSURE THAT ITS DIRECTORS,  OFFI-
 CERS  AND  EMPLOYEES  ACT  IN THE COOPERATIVE'S BEST INTEREST AND COMPLY
 WITH APPLICABLE LEGAL REQUIREMENTS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10932-10-8
              

 A. 7953--A                          2
 
   (B) THE CONFLICT OF INTEREST POLICY SHALL INCLUDE, AT A  MINIMUM,  THE
 FOLLOWING PROVISIONS:
   (1)  A  DEFINITION  OF THE CIRCUMSTANCES THAT CONSTITUTE A CONFLICT OF
 INTEREST;
   (2) PROCEDURES FOR DISCLOSING  A  CONFLICT  OF  INTEREST  OR  POSSIBLE
 CONFLICT  OF  INTEREST  TO THE BOARD OR TO A COMMITTEE OF THE BOARD, AND
 PROCEDURE FOR THE BOARD OR COMMITTEE TO  DETERMINE  WHETHER  A  CONFLICT
 EXISTS;
   (3) A REQUIREMENT THAT THE PERSON WITH THE CONFLICT OF INTEREST NOT BE
 PRESENT AT OR PARTICIPATE IN THE BOARD OR COMMITTEE DELIBERATION OR VOTE
 ON  A MATTER GIVING RISE TO SUCH CONFLICT, PROVIDED THAT NOTHING IN THIS
 SECTION SHALL PROHIBIT THE BOARD OR A COMMITTEE FROM REQUESTING THAT THE
 PERSON WITH THE CONFLICT OF INTEREST PRESENT INFORMATION  AS  BACKGROUND
 OR  ANSWER  QUESTIONS  AT  A  COMMITTEE  OR  BOARD  MEETING PRIOR TO THE
 COMMENCEMENT OF DELIBERATION OR VOTING RELATING THERETO;
   (4) A PROHIBITION AGAINST ANY ATTEMPT BY THE PERSON WITH THE  CONFLICT
 TO  INFLUENCE IMPROPERLY THE DELIBERATION OR VOTING ON THE MATTER GIVING
 RISE TO SUCH CONFLICT; AND
   (5) A REQUIREMENT THAT THE EXISTENCE AND RESOLUTION OF THE CONFLICT BE
 DOCUMENTED IN THE COOPERATIVE'S RECORDS, INCLUDING IN THE MINUTES OF ANY
 MEETING AT WHICH THE CONFLICT WAS DISCUSSED OR VOTED UPON.
   (C) THE CONFLICT OF INTEREST POLICY SHALL REQUIRE THAT  PRIOR  TO  THE
 INITIAL ELECTION OF ANY DIRECTOR, AND ANNUALLY THEREAFTER, SUCH DIRECTOR
 SHALL COMPLETE, SIGN AND SUBMIT TO THE SECRETARY OF THE COOPERATIVE OR A
 DESIGNATED  COMPLIANCE  OFFICER  A WRITTEN STATEMENT IDENTIFYING, TO THE
 BEST OF THE DIRECTOR'S KNOWLEDGE, ANY ENTITY OF WHICH SUCH  DIRECTOR  IS
 AN  OFFICER, DIRECTOR, TRUSTEE, MEMBER, OWNER (EITHER AS A SOLE PROPRIE-
 TOR OR A PARTNER), OR EMPLOYEE AND WITH  WHICH  THE  COOPERATIVE  HAS  A
 RELATIONSHIP,  AND ANY TRANSACTION IN WHICH THE COOPERATIVE IS A PARTIC-
 IPANT AND IN WHICH THE DIRECTOR MIGHT HAVE A CONFLICTING INTEREST.   THE
 POLICY  SHALL  REQUIRE THAT EACH DIRECTOR ANNUALLY RESUBMIT SUCH WRITTEN
 STATEMENT. THE SECRETARY OF THE COOPERATIVE OR THE DESIGNATED COMPLIANCE
 OFFICER SHALL PROVIDE A COPY OF ALL  THE  COMPLETED  STATEMENTS  TO  THE
 PRESIDENT OF THE BOARD.
   (D)  A  RURAL  ELECTRIC  COOPERATIVE  THAT HAS ADOPTED AND POSSESSES A
 CONFLICT OF INTEREST POLICY PURSUANT TO FEDERAL,  STATE  OR  LOCAL  LAWS
 THAT  IS SUBSTANTIALLY CONSISTENT WITH THE PROVISIONS OF SUBDIVISION (B)
 OF THIS SECTION SHALL BE DEEMED IN COMPLIANCE WITH  PROVISIONS  OF  THIS
 SECTION.
   (E)  NOTHING  IN  THIS SECTION SHALL BE INTERPRETED TO REQUIRE A RURAL
 ELECTRIC COOPERATIVE TO ADOPT ANY SPECIFIC CONFLICT OF  INTEREST  POLICY
 NOT  OTHERWISE  REQUIRED BY THIS SECTION OR ANY OTHER LAW OR RULE, OR TO
 SUPERSEDE OR LIMIT ANY REQUIREMENT OR DUTY GOVERNING CONFLICTS OF INTER-
 EST REQUIRED BY ANY OTHER LAW OR RULE.
   § 19-B. WHISTLEBLOWER POLICY. (A) EXCEPT AS  PROVIDED  IN  SUBDIVISION
 (C) OF THIS SECTION, THE BOARD OF EVERY RURAL ELECTRIC COOPERATIVE SHALL
 ADOPT,  AND OVERSEE THE IMPLEMENTATION OF, AND COMPLIANCE WITH, A WHIST-
 LEBLOWER POLICY TO PROTECT FROM RETALIATION PERSONS WHO REPORT SUSPECTED
 IMPROPER CONDUCT. SUCH POLICY SHALL PROVIDE THAT NO DIRECTOR, OFFICER OR
 EMPLOYEE OF A RURAL ELECTRIC COOPERATIVE WHO IN GOOD FAITH  REPORTS  ANY
 ACTION  OR  SUSPECTED  ACTION TAKEN BY OR WITHIN THE COOPERATIVE THAT IS
 ILLEGAL, FRAUDULENT OR IN VIOLATION OF ANY ADOPTED POLICY  OR  BYLAW  OF
 THE COOPERATIVE SHALL SUFFER INTIMIDATION, HARASSMENT, DISCRIMINATION OR
 OTHER  RETALIATION  OR,  IN  THE  CASE  OF EMPLOYEES, ADVERSE EMPLOYMENT
 CONSEQUENCE.
   (B) THE WHISTLEBLOWER POLICY SHALL INCLUDE THE FOLLOWING PROVISIONS:

 A. 7953--A                          3
 
   (1) PROCEDURES FOR THE REPORTING OF VIOLATIONS OR SUSPECTED VIOLATIONS
 OF LAWS OR COOPERATIVE POLICIES  OR  BYLAWS,  INCLUDING  PROCEDURES  FOR
 PRESERVING THE CONFIDENTIALITY OF REPORTED INFORMATION;
   (2) A REQUIREMENT THAT AN EMPLOYEE, OFFICER OR DIRECTOR OF THE COOPER-
 ATIVE BE DESIGNATED TO ADMINISTER THE WHISTLEBLOWER POLICY AND TO REPORT
 TO THE BOARD OR AN AUTHORIZED COMMITTEE THEREOF;
   (3) A REQUIREMENT THAT THE PERSON WHO IS THE SUBJECT OF A WHISTLEBLOW-
 ER  COMPLAINT NOT BE PRESENT AT OR PARTICIPATE IN BOARD DELIBERATIONS OR
 VOTE ON THE MATTER RELATING TO SUCH COMPLAINT, PROVIDED THAT NOTHING  IN
 THIS  PARAGRAPH SHALL PROHIBIT THE BOARD FROM REQUESTING THAT THE PERSON
 WHO IS SUBJECT TO THE COMPLAINT PRESENT  INFORMATION  AS  BACKGROUND  OR
 ANSWER  QUESTIONS AT A BOARD MEETING PRIOR TO THE COMMENCEMENT OF DELIB-
 ERATIONS OR VOTING RELATING THERETO; AND
   (4) A REQUIREMENT THAT A COPY OF THE  POLICY  BE  DISTRIBUTED  TO  ALL
 DIRECTORS,  OFFICERS  AND  EMPLOYEES.  FOR PURPOSES OF THIS SUBDIVISION,
 POSTING THE POLICY ON THE COOPERATIVE'S WEBSITE OR AT THE  COOPERATIVE'S
 OFFICES  IN A CONSPICUOUS LOCATION ACCESSIBLE TO EMPLOYEES ARE AMONG THE
 METHODS A COOPERATIVE MAY USE TO SATISFY THE DISTRIBUTION REQUIREMENT.
   (C) A RURAL ELECTRIC COOPERATIVE THAT  HAS  ADOPTED  AND  POSSESSES  A
 WHISTLEBLOWER  POLICY  PURSUANT  TO FEDERAL, STATE OR LOCAL LAWS THAT IS
 SUBSTANTIALLY CONSISTENT WITH THE PROVISIONS OF SUBDIVISION (B) OF  THIS
 SECTION SHALL BE DEEMED IN COMPLIANCE WITH PROVISIONS OF THIS SECTION.
   (D)  NOTHING IN THIS SECTION SHALL BE INTERPRETED TO RELIEVE ANY RURAL
 ELECTRIC COOPERATIVE FROM ANY ADDITIONAL  REQUIREMENTS  IN  RELATION  TO
 INTERNAL  COMPLIANCE, RETALIATION, OR DOCUMENT RETENTION REQUIRED BY ANY
 OTHER LAW OR RULE.
   § 3. Section 60 of the rural electric cooperative law  is  amended  to
 read as follows:
   § 60.  [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 directors;
   (d) To provide a reasonable reserve for working capital as  determined
 by the board of directors;
   (e)  To provide a reserve for the payment of indebtedness of the coop-
 erative in an amount not less than the total of the interest and princi-
 pal payment in respect thereof required  to  be  made  during  the  next
 following fiscal year; and
   (f) To provide a fund for education in cooperation and for the dissem-
 ination  of  information concerning the effective use of electric energy
 and other services 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  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, however, that 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 distribu-
 tive  shares  equals  the  membership fee required by the by-laws of the

 A. 7953--A                          4

 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 paid
 into  the  fund provided for in this subdivision.  The cooperative shall
 make such additional provision, in the by-laws or otherwise, relative to
 the disposition of the revenues of the cooperative, as may be  necessary
 and  appropriate  to  establish and maintain the non-profit character of
 the cooperative. 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 shall become due.] PATRONAGE CAPITAL
 CONTRIBUTIONS, ALLOCATIONS, AND RETIREMENTS.    (A)  EACH  COOPERATIVE'S
 BY-LAWS  SHALL, UNLESS OTHERWISE DETERMINED BY AGREEMENT OF THE MEMBERS,
 PROVIDE FOR PATRONAGE CAPITAL ALLOCATIONS AND RETIREMENTS IN THE  MANNER
 PROVIDED  BY THIS SECTION. AGREEMENT BY THE MEMBERS FOR PURPOSES OF THIS
 SECTION SHALL MEAN MEMBER APPROVAL OF BY-LAW PROVISIONS OR BY A MAJORITY
 VOTE OF THE MEMBERS VOTING AT A DULY  CALLED  MEETING.  ANY  MATTER  SET
 FORTH  IN THIS SECTION WHICH IS SUBJECT TO DETERMINATION OF THE BOARD OF
 DIRECTORS SHALL BE DETERMINED IN THE EXERCISE OF SUCH  BOARD  OF  DIREC-
 TOR'S BUSINESS JUDGMENT.
   (B) PATRONAGE CAPITAL SHALL BE DETERMINED BY A COOPERATIVE ON AN ANNU-
 AL BASIS AND SHALL BE THE EXCESS, IF ANY, OF AMOUNTS RECEIVED OR RECEIV-
 ABLE  BY  SUCH COOPERATIVE FROM FURNISHING ELECTRICITY OVER SUCH COOPER-
 ATIVE'S  OPERATING  COSTS  AND  EXPENSES  PROPERLY  CHARGEABLE   AGAINST
 FURNISHING  ELECTRICITY,  AS  DETERMINED USING SUCH ACCOUNTING METHOD OR
 METHODS AS AGREED UPON BY THE MEMBERS.   COSTS AND  EXPENSES  CHARGEABLE
 AGAINST FURNISHING ELECTRICITY SHALL INCLUDE:
   (1) EXPENSES OF THE OPERATION AND MAINTENANCE OF ITS FACILITIES DURING
 SUCH FISCAL YEAR;
   (2)  INTEREST OBLIGATIONS OF THE COOPERATIVE COMING DUE IN SUCH FISCAL
 YEAR;
   (3) DEPRECIATION AND OTHER EXPENSES 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 DIREC-
 TORS;
   (4)  EXPENSES  TO  PROVIDE A REASONABLE RESERVE FOR WORKING CAPITAL AS
 DETERMINED BY THE BOARD OF DIRECTORS;
   (5) EXPENSES TO PROVIDE A RESERVE FOR THE PAYMENT OF  INDEBTEDNESS  OF
 THE COOPERATIVE MATURING MORE THAN ONE YEAR AFTER THE DATE OF THE INCUR-
 RENCE  OF  SUCH INDEBTEDNESS 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)  EXPENSES  TO  PROVIDE A FUND FOR EDUCATION IN COOPERATION AND FOR
 THE DISSEMINATION OF INFORMATION CONCERNING THE EFFECTIVE USE  OF  ELEC-
 TRIC ENERGY AND OTHER SERVICES MADE AVAILABLE BY THE COOPERATIVE; AND
   (7)  ALL  OTHER  COSTS  AND  EXPENSES FROM AND DIRECTLY RELATED TO THE
 FURNISHING OF ELECTRIC ENERGY TO THE PATRONS.
   (C) "PATRON", AS REFERRED TO IN SUBDIVISIONS (B) THROUGH (H)  OF  THIS
 SECTION,  SHALL  BE  DEFINED AS (1) A MEMBER AND (2) A NONMEMBER TO WHOM
 THE COOPERATIVE FURNISHES ELECTRIC ENERGY OR OTHER SERVICES ON A  PATRO-
 NAGE BASIS PURSUANT TO BYLAWS OR AS AGREED UPON BY THE MEMBERS.
   (D) ON AN ANNUAL BASIS, PATRONAGE CAPITAL DETERMINED UNDER SUBDIVISION
 (B)  OF  THIS SECTION SHALL BE ALLOCATED ON THE BOOKS OF THE COOPERATIVE
 TO EACH PATRON HAVING FURNISHED SUCH CAPITAL AND SHALL BE BASED UPON AND
 IN PROPORTION TO:
   (1) THE REVENUE FROM EACH PATRON OR GROUP OF SIMILAR  PATRONS  TO  THE
 COOPERATIVE'S TOTAL REVENUE;

 A. 7953--A                          5

   (2) THE CONTRIBUTION OF EACH PATRON OR GROUP OF SIMILAR PATRONS TO THE
 COOPERATIVE'S OVERALL PATRONAGE CAPITAL;
   (3) THE KILOWATT-HOUR USAGE OF EACH PATRON OR GROUP OF SIMILAR PATRONS
 TO THE TOTAL KILOWATT-HOUR USAGE OF ALL PATRONS;
   (4) ANY OTHER METHOD WHICH IS AGREED UPON BY THE MEMBERS; OR
   (5) ANY COMBINATION OF PARAGRAPHS  ONE, TWO, THREE AND/OR FOUR OF THIS
 SUBDIVISION AS AGREED UPON BY THE MEMBERS.
   (E)  "RETIREMENT"  IN  REFERENCE  TO  PATRONAGE CAPITAL SHALL MEAN THE
 REDEMPTION AND PAYMENT IN CASH OR OTHER PROPERTY, AS PROVIDED BY  SUBDI-
 VISION  (F)  OF  THIS  SECTION,  OF PATRONAGE CAPITAL TO THE COOPERATIVE
 PATRONS OR FORMER PATRONS TO WHOM IT HAS PREVIOUSLY BEEN ALLOCATED.  THE
 ALLOCATION OF PATRONAGE CAPITAL TO A PATRON'S PATRONAGE CAPITAL  ACCOUNT
 SHALL  IN NO EVENT CREATE A VESTED RIGHT TO THE RETIREMENT OF THE AMOUNT
 SO ALLOCATED.   THE BOARD OF DIRECTORS OF  A  COOPERATIVE  MAY,  IN  ITS
 DISCRETION, RETIRE PATRONAGE CAPITAL ALLOCATED ON THE BOOKS OF THE COOP-
 ERATIVE  WHEN  IT  DETERMINES  SUCH  RETIREMENT IS CONSISTENT WITH SOUND
 BUSINESS AND MANAGEMENT PRACTICES AND THE LONG-TERM FINANCIAL  STABILITY
 OF THE COOPERATIVE.  PATRONAGE CAPITAL SHALL BE RETIRED ACCORDING TO THE
 METHOD  CHOSEN  BY  THE  MEMBERS  AND AT THE TIME THE BOARD OF DIRECTORS
 SHALL DETERMINE AS A MATTER OF ITS DISCRETION. HOWEVER, PATRONAGE  CAPI-
 TAL  MAY  BE  RETIRED  IN ADVANCE OF THE DATE WHEN IT WOULD OTHERWISE BE
 RETIRED UNDER THE PREVIOUS SENTENCE IN SUCH CIRCUMSTANCES AND UPON  SUCH
 CONDITIONS AS ARE AGREED UPON BY THE MEMBERS, INCLUDING, BUT NOT LIMITED
 TO,  UPON  A  PATRON'S  OR  FORMER  PATRON'S DEATH, THE TERMINATION OF A
 PATRON OR FORMER PATRON'S  ELECTRIC  SERVICE,  OR  A  PATRON  OR  FORMER
 PATRON'S FILING FOR BANKRUPTCY. IN THE EVENT OF SUCH EARLY RETIREMENT OF
 PATRONAGE  CAPITAL,  THE  AMOUNT  OF  PATRONAGE CAPITAL ALLOCATED TO THE
 PATRON OR FORMER PATRON ON THE COOPERATIVE'S BOOKS MAY BE DISCOUNTED FOR
 PURPOSES OF ITS RETIREMENT IN ACCORDANCE WITH SUCH METHOD AS  IS  AGREED
 UPON  BY  THE MEMBERS.  THE DIFFERENCE BETWEEN THE DISCOUNTED AMOUNT AND
 THE PATRON'S OR FORMER PATRON'S PATRONAGE CAPITAL MAY BE RETAINED BY THE
 COOPERATIVE AS PART OF ITS NET SAVINGS IN A  MANNER  DETERMINED  BY  THE
 BOARD OF DIRECTORS.
   (F)  WHEN  THE  BOARD  OF DIRECTORS OF THE COOPERATIVE HAS DETERMINED,
 PURSUANT TO SUBDIVISION (E) OF  THIS  SECTION,  THAT  PATRONAGE  CAPITAL
 SHALL  BE  RETIRED, THE RETIREMENT MAY BE ACCOMPLISHED BY A BILL CREDIT,
 BY THE MAILING OF PAYMENT OR NOTICE OF PAYMENT TO THE PATRON'S OR FORMER
 PATRON'S LAST KNOWN ADDRESS OF RECORD ON FILE WITH THE  COOPERATIVE,  OR
 BY  SUCH  OTHER  METHOD  AS THE BOARD OF DIRECTORS SHALL DETERMINE TO BE
 APPROPRIATE. NO INTEREST SHALL BE PAID OR PAYABLE BY THE COOPERATIVE  ON
 ANY PATRONAGE CAPITAL. THE AMOUNT OF PATRONAGE CAPITAL BEING RETIRED MAY
 BE REDUCED BY ANY AMOUNT OWED TO THE COOPERATIVE BY THE PATRON OR FORMER
 PATRON.
   (G)  A  COOPERATIVE  MAY  ADOPT SUCH PROCEDURES FOR THE ASSIGNMENT AND
 CONTRIBUTION OF UNCLAIMED PATRONAGE CAPITAL TO THE  COOPERATIVE  AS  ARE
 AGREED  UPON BY ITS MEMBERS.  SUCH PROCEDURES MAY INCLUDE PROVIDING THAT
 PATRONAGE CAPITAL WHICH HAS NOT BEEN  CLAIMED  BY  A  PATRON  OR  FORMER
 PATRON, AFTER REASONABLE EFFORTS TO LOCATE SAID PATRON OR FORMER PATRON,
 SHALL BE ADDED TO THE NET SAVINGS OF THE COOPERATIVE. MAILING OF A CHECK
 OR  NOTICE OF THE AVAILABILITY OF A CHECK TO THE LAST KNOWN ADDRESS OF A
 PATRON OR FORMER PATRON BY FIRST CLASS MAIL AND PUBLICATION OF THE  LIST
 OF  PATRONS  OR FORMER PATRONS HAVING UNCLAIMED PATRONAGE CAPITAL ON THE
 WEBSITE AND/OR NEWSLETTER OF THE COOPERATIVE FOR A PERIOD OF THREE YEARS
 SHALL BE DEEMED REASONABLE  EFFORT  TO  LOCATE  SAID  PATRON  OR  FORMER
 PATRON.

 A. 7953--A                          6
 
   (H) IN THE EVENT THAT THE COOPERATIVE SHOULD ENGAGE IN THE BUSINESS OF
 FURNISHING  GOODS  AND  SERVICES OTHER THAN ELECTRIC ENERGY, ALL AMOUNTS
 RECEIVED AND RECEIVABLE THEREFROM WHICH  ARE  IN  EXCESS  OF  COSTS  AND
 EXPENSES  PROPERLY  CHARGEABLE  AGAINST  THE FURNISHING OF SUCH GOODS OR
 SERVICES  SHALL,  INSOFAR AS PERMITTED BY LAW, BYLAWS, OR BY APPROVAL OF
 THE MEMBERS, BE PRORATED ANNUALLY ON A PATRONAGE BASIS AND ALLOCATED  TO
 EACH  MEMBER AND SHALL BE RETIRED TO SAID MEMBER ACCORDING TO THE METHOD
 CHOSEN BY THE MEMBERS AND AT THE TIME THAT THE BOARD OF DIRECTORS  SHALL
 DETERMINE  AS  A  MATTER  OF  ITS DISCRETION.   NOTHING IN THIS SECTION,
 HOWEVER, PREVENTS A COOPERATIVE FROM FURNISHING GOODS AND SERVICES OTHER
 THAN ELECTRIC ENERGY ON A NON-PATRONAGE BASIS TO  NON-MEMBERS;  THE  NET
 EARNINGS OF WHICH MAY BE RETAINED AS PART OF ITS NET SAVINGS.
   (I)  WITH RESPECT TO ANY COOPERATIVE FORMED UNDER THIS CHAPTER THAT IS
 EXEMPT FROM FEDERAL INCOME TAXATION UNDER PARAGRAPH TWELVE OF SUBSECTION
 (C) OF SECTION FIVE HUNDRED ONE OF THE INTERNAL REVENUE CODE OF NINETEEN
 EIGHTY-SIX, AS AMENDED, OR ANY CORRESPONDING PROVISION OF FUTURE FEDERAL
 TAX LAW, OR ANY COOPERATIVE  WHICH  WOULD  OTHERWISE  QUALIFY  FOR  SAID
 EXEMPTION  BUT  FOR  HAVING  LESS  THAN EIGHTY-FIVE PERCENT (OR WHATEVER
 THRESHOLD MAY BE SPECIFIED IN THE FUTURE FOR SAID PURPOSE BY THE  INTER-
 NAL  REVENUE  CODE)  OF  INCOME  FROM MEMBERS, THIS SECTION SHALL IN ALL
 EVENTS BE LIMITED TO AND INTERPRETED IN A MANNER WHICH IS COMPLIANT WITH
 THE REQUIREMENTS OF EXEMPTION UNDER SUCH INTERNAL REVENUE CODE  SECTION,
 AND ANY AGREEMENT BY THE MEMBERS OR DETERMINATION BY THE BOARD OF DIREC-
 TORS  UNDER THIS SECTION WITH RESPECT TO THE SUBJECT MATTER HEREOF SHALL
 ALSO BE LIMITED TO AND INTERPRETED IN A MANNER WHICH IS  COMPLIANT  WITH
 SUCH INTERNAL REVENUE CODE SECTION.
   §  4. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.