Missouri Statute | Act | Code |Incorporation And Regulation Of Certain Utilities And Carriers| US Code - US Statute

This chapter may be cited as "The Rural Electric Cooperative
Law". (RSMo 1939 § 5386)

In this chapter, unless the context otherwise requires,

(1) "Member" means each incorporator of a cooperative and each person
admitted to and retaining membership therein, and shall include a husband
and wife admitted to joint membership;

(2) "Person" includes any natural person, firm, association, corporation,
business trust, partnership, federal agency, state or political
subdivision or agency thereof, or any body politic; and

(3) "Rural area" shall be deemed to mean any area of the United States
not included within the boundaries of any city, town or village having a
population in excess of fifteen hundred inhabitants, and such term shall
be deemed to include both the farm and nonfarm population thereof. (RSMo
1939 § 5415)

(1961) In action by rural electric cooperative on contract for sale of
electric power, members of cooperative held disqualified as jurors. Ozark
Border Electric Cooperative v. Stacy (A.), 348 S.W.2d 586.

Cooperative, nonprofit, membership corporations may be organized
under this chapter for the purpose of supplying electric energy and
promoting and extending the use thereof in rural areas. Corporations
organized under this chapter and corporations which become subject to
this chapter in the manner herein provided are herein referred to as
"cooperatives". (RSMo 1939 § 5387)

Five or more persons may organize a cooperative in the manner
herein provided. (RSMo 1939 § 5391)

1. The articles of incorporation of a cooperative shall recite
in the caption that they are executed pursuant to this chapter, shall be
signed and acknowledged in duplicate by at least five of the
incorporators and shall state:

(1) The name of the cooperative;

(2) The address of its principal office;

(3) The names and addresses of the incorporators;

(4) The number of years the cooperative is to continue, which may be any
number including perpetuity;

(5) The names and addresses of the persons who shall constitute its first
board of directors; and

(6) Any provisions not inconsistent with this chapter deemed necessary or
advisable for the conduct of its business and affairs.

2. Such articles of incorporation shall be submitted to the secretary of
state for filing as provided in this chapter. (RSMo 1939 § 5392, A.L.
1983 H.B. 137)

The name of each cooperative shall include the words "electric"
and "cooperative". The name of a cooperative shall distinguish it from
the name of any other corporation organized under the laws of, or
authorized to transact business in, this state. The words "electric" and
"cooperative" shall not both be used in the name of any corporation
organized under the laws of, or authorized to transact business in, this
state, except a cooperative or a corporation transacting business in this
state pursuant to the provisions of this chapter. (RSMo 1939 § 5390)

1. Any corporation organized under the laws of this state for
the purpose, among others, of supplying electric energy in rural areas
may be converted into a cooperative and become subject to this chapter
with the same effect as if originally organized under this chapter by
complying with the following requirements:

(1) The proposition for the conversion of such corporation into a
cooperative and proposed articles of conversion to give effect thereto
shall be first approved by the board of trustees or the board of
directors, as the case may be, of such corporation. The proposed articles
of conversion shall recite in the caption that they are executed pursuant
to this chapter and shall state

(a) The name of the corporation prior to its conversion into a
cooperative;

(b) The address of the principal office of such corporation;

(c) The date of the filing of the articles of incorporation of such
corporation in the office of the secretary of state;

(d) The statute or statutes under which such corporation was organized;

(e) The name assumed by such corporation;

(f) A statement that such corporation elects to become a cooperative,
nonprofit, membership corporation subject to this chapter;

(g) The manner and basis of converting either memberships in or shares of
stock of such corporation into memberships therein after completion of
the conversion; and

(h) Any provisions not inconsistent with this chapter deemed necessary or
advisable for the conduct of the business and affairs of such corporation.

(2) The proposition for the conversion of such corporation into a
cooperative and the proposed articles of conversion approved by the board
of trustees or board of directors, as the case may be, of such
corporation shall then be submitted to a vote of the members or
stockholders, as the case may be, of such corporation at any duly held
annual or special meeting thereof the notice of which shall set forth
full particulars concerning the proposed conversion. The proposition for
the conversion of such corporation into a cooperative and the proposed
articles of conversion, with such amendments thereto as the members or
stockholders of such corporation shall choose to make, shall be deemed to
be approved upon the affirmative vote of not less than a majority of the
members of such corporation, or, if such corporation is a stock
corporation upon the affirmative vote of the holders of not less than a
majority of the capital stock of such corporation.

(3) Upon such approval by the members or stockholders of such
corporation, articles of conversion in the form approved by such members
or stockholders shall be executed and acknowledged in duplicate on behalf
of such corporation by its president or vice president and its corporate
seal shall be affixed thereto and attested by its secretary. The
president or vice president executing such articles of conversion on
behalf of such corporation shall also make and annex to each copy thereof
an affidavit stating that the provisions of this section with respect to
the approval of its trustees or directors and its members or
stockholders, of the proposition for the conversion of such corporation
into a cooperative and such articles of conversion were duly complied
with. Such articles of conversion and affidavit shall be submitted to the
secretary of state for filing as provided in this chapter.

2. The term "articles of incorporation" as used in this chapter shall be
deemed to include the articles of conversion of a converted corporation.
(RSMo 1939 § 5402)

1. A cooperative shall have power:

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

(2) To have succession by its corporate name for the period stated in its
articles of incorporation or, if no period is stated in its articles of
incorporation, to have such succession perpetually;

(3) To adopt a corporate seal and alter the same at pleasure;

(4) Except as provided in section 386.800, RSMo, to generate,
manufacture, purchase, acquire, accumulate and transmit electric energy,
and to distribute, sell, supply, and dispose of electric energy in rural
areas to its members, to governmental agencies and political
subdivisions, and to other persons not in excess of ten percent of the
number of its members; provided, however, that where a cooperative has
been transmitting, distributing, selling, supplying or disposing of
electric energy in a rural area which, by reason of increase in its
population, its inclusion in a city, town or village, or by reason of any
other circumstance ceases to be a rural area, such cooperative shall have
the power to continue to transmit, distribute, sell, supply or dispose of
electric energy therein until such time as the municipality, or the
holder of a franchise to furnish electric energy in such municipality,
may purchase the physical property of such cooperative located within the
boundaries of the municipality, pursuant to law, or until such time as
the municipality may grant a franchise in the manner provided by law to a
privately owned public utility to distribute electric power within the
municipality and such privately owned public utility shall purchase the
physical property of such cooperative located within the boundaries of
the municipality. In case any of the parties to such purchase, as herein
provided, cannot agree upon the fair and reasonable price to be paid for
the physical property of such cooperative within the municipality, or if
either party refuses to negotiate for the sale of such property upon the
request of the other, the fair and reasonable value of such property for
such purchase shall be fixed by the public service commission upon
application of any one or more of the interested parties;

(5) To make loans to persons to whom electric energy is or will be
supplied by the cooperative for the purpose of, and otherwise to assist
such persons in, wiring their premises and installing therein electric
and plumbing fixtures, appliances, apparatus and equipment of any and all
kinds and character, and in connection therewith, to purchase, acquire,
lease, sell, distribute, install and repair such electric and plumbing
fixtures, appliances, apparatus and equipment, and to accept or otherwise
acquire, and to sell, assign, transfer, endorse, pledge, hypothecate and
otherwise dispose of notes, bonds and other evidences of indebtedness and
any and all types of security therefor;

(6) To make loans to persons to whom electric energy is or will be
supplied by the cooperative for the purpose of, and otherwise to assist
such persons in, constructing, maintaining and operating electric
refrigeration plants;

(7) To construct, purchase, take, receive, lease as lessee, or otherwise
acquire, and to own, hold, use, equip, maintain, and operate, and to
sell, assign, transfer, convey, exchange, lease as lessor, mortgage,
pledge, or otherwise dispose of or encumber, electric transmission and
distribution lines or systems, electric generating plants, electric
refrigeration plants, lands, buildings, structures, dams, plants and
equipment, and any and all kinds and classes of real or personal property
whatsoever, which shall be deemed necessary, convenient or appropriate to
accomplish the purpose for which the cooperative is organized;

(8) To purchase or otherwise acquire, and to own, hold, use and exercise
and to sell, assign, transfer, convey, mortgage, pledge, hypothecate, or
otherwise dispose of or encumber, franchises, rights, privileges,
licenses, rights-of-way and easements;

(9) To borrow money and otherwise contract indebtedness, and to issue
notes, bonds, and other evidences of indebtedness therefor, and to secure
the payment thereof by mortgage, pledge, deed of trust, or any 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 all public
thoroughfares, including without limitation, all roads, highways,
streets, alleys, bridges and causeways, and upon, under and across all
publicly owned lands, subject, however, to the requirements in respect of
the use of such thoroughfares and lands that are imposed by the
respective authorities having jurisdiction thereof upon corporations
constructing or operating electric transmission and distribution lines or
systems;

(11) To exercise the power of eminent domain in the manner provided by
the laws of this state for the exercise of that power by corporations
constructing or operating electric transmission and distribution lines or
systems;

(12) To conduct its business and exercise any or all of its powers within
or without this state;

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

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

2. In addition to all other powers granted in this section, rural
electric cooperatives shall have the power to supply electric energy at
retail after August 28, 1989, in cities, towns and villages having a
population in excess of fifteen hundred inhabitants under the following
conditions:

(1) The cooperative was the predominant supplier of retail electric
energy within the city, town or village at the time any official United
States Census Bureau "decennial census report" declares the population of
such city, town or village to be in excess of fifteen hundred inhabitants;

(2) The city, town or village has granted to the cooperative a franchise
to supply electric energy within the city, town or village.

3. In addition, the cooperative shall provide, concurrent with its
application to the city, town or village for its initial franchise,
written notice of its franchise application to all other providers of
electric energy at retail operating within such city, town or village.

4. The provisions of subsections 2 and 3 of this section shall in no way
affect or diminish the rights and duties of any city, town or village to
grant franchises to electric suppliers in the manner provided by law or
of any electrical corporation authorized by law to provide electric
service at retail within such city, town or village.

5. Notwithstanding the provisions of subsection 2 of this section, after
a public hearing upon a complaint, the public service commission may
order that service be provided by another supplier if it finds that
service from another supplier of electricity is in the public interest
for a reason other than rate differential. Nothing in this section shall
be construed as conferring upon the public service commission
jurisdiction over the rates, financing, accounting or management of any
electric cooperative. (RSMo 1939 § 5388, A.L. 1943 p. 491, A.L. 1949 p.
238, A.L. 1983 H.B. 137, A.L. 1989 H.B. 813, A.L. 1991 S.B. 221)

Effective 7-11-91

CROSS REFERENCES: Condemnation proceedings, Chap. 523, RSMo Power lines
on state highways, location and removal, RSMo 227.240

(1966) Cooperative's refusal of offer of amount fixed by public service
commission does not terminate its power to supply electricity to annexed
areas. Missouri Public Service Comm. v. Platte-Clay Elec. Coop. (Mo.),
407 S.W.2d 883.

1. A cooperative may amend its articles of incorporation by
complying with the following requirements:

(1) The proposed amendment shall be first approved by the board of
directors and shall then be submitted to a vote of the members at any
annual or special meeting thereof, the notice of which shall set forth
the proposed amendment. The proposed amendment, with such changes as the
members shall choose to make therein, shall be deemed to be approved on
the affirmative vote of not less than two-thirds of those members voting
thereon at such meeting; and

(2) (a) Upon such approval by the members, articles of amendment shall be
executed and acknowledged in duplicate on behalf of the cooperative by
its president or vice president and its corporate seal shall be affixed
thereto and attested by its secretary. The articles of amendment shall
recite in the caption that they are executed pursuant to this chapter and
shall state:

a. The name of the cooperative;

b. The address of its principal office;

c. The date of the filing of its articles of incorporation in the office
of the secretary of state; and

d. The amendment to its articles of incorporation.

(b) The president or vice president executing such articles of amendment
shall also make and annex to each copy thereof an affidavit stating that
the provisions of this section were duly complied with.

(c) Such articles of amendment and affidavit shall be submitted to the
secretary of state for filing as provided in this chapter.

2. A cooperative may upon authorization of a majority of the members at
any regular or special meeting change the location of its principal
office by filing a certificate of change of principal office, executed
and acknowledged in duplicate by its president or vice president under
its seal attested by its secretary, in the office of the secretary of
state and also by filing such certificate of change in each county office
in which its articles of incorporation or any prior certificate of change
of principal office of such cooperative has been filed. Such cooperative
shall also, within thirty days after the filing of such certificate of
change of principal office in any county office, file therein certified
copies of its articles of incorporation and all amendments thereto, if
the same are not already on file therein. (RSMo 1939 § 5398)

1. Articles of incorporation, amendment, consolidation, merger,
conversion, or dissolution, as the case may be, when executed and
acknowledged in duplicate and accompanied by such affidavits as may be
required by applicable provisions of this chapter, shall be presented to
the secretary of state for filing in the records of his office.

2. If the secretary of state shall find that the articles presented
conform to the requirements of this chapter, he shall, upon the payment
of the fees as in this chapter provided, file one copy of the articles so
presented in the records of his office and upon such filing the
incorporation, amendment, consolidation, merger, conversion, or
dissolution provided for therein shall be in effect. The secretary of
state immediately upon the filing in his office of any articles pursuant
to this chapter shall transmit a certified copy thereof, with the
certified copy of the certificate of incorporation, amendment,
consolidation, merger, conversion or dissolution, as the case may be,
attached, to the recorder of deeds of the county in which the principal
office of each cooperative or corporation affected by such incorporation,
amendment, consolidation, merger, conversion, or dissolution shall be
located.

3. The recorder of deeds of any county, upon receipt of any such
certified copy, shall file, record and index the same in the records of
his office, but the failure of the secretary of state or of a recorder of
deeds of a county to comply with the provisions of this section shall not
invalidate such articles.

4. The provisions of this section shall also apply to certificates of
election to dissolve and affidavits of compliance executed pursuant to
subdivision (2) of subsection 3 of section 394.240. (RSMo 1939 § 5404)

The original bylaws of a cooperative may be adopted by its board
of directors or stockholders. Thereafter bylaws shall be adopted, amended
or repealed by its 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.
(RSMo 1939 § 5393)

1. No person shall become a member of a cooperative unless such
person shall agree to use electric energy furnished by the cooperative
when such electric energy shall be available through its facilities. The
bylaws of a cooperative may provide that any person, including an
incorporator, shall cease to be a member thereof if he or she shall fail
or refuse to use electric energy made available by the cooperative or if
electric energy shall not be made available to such person by the
cooperative within a specified time after such person shall have become a
member thereof. Membership in the cooperative shall not be transferable,
except as provided in the bylaws. The bylaws may prescribe additional
qualifications and limitations in respect of membership.

2. An annual meeting of the members shall be held at such time as shall
be provided in the bylaws.

3. Special meetings of the members may be called by the board of
directors, by any three directors, by not less than ten percent of the
members, or by the president.

4. Meetings of members shall be held at such place as may be provided in
the bylaws. In the absence of any such provisions, all meetings shall be
held in the city or town in which the principal office of the cooperative
is located.

5. Except as herein otherwise provided, written or printed notice stating
the time and place of each meeting of 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 nor more than twenty-five days before the date of the meeting.

6. Two percent of the first two thousand members and one percent of the
remaining members, present in person shall constitute a quorum for the
transaction of business at all meetings of the members, unless the bylaws
prescribe the presence of a greater percentage of the members for a
quorum. 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.

7. Each member shall be entitled to one vote on each matter submitted to
a vote at a meeting. 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 proxy or mail voting shall be exercised. In any event, no
person shall vote as proxy for more than two members at any meeting of
the members. (RSMo 1939 § 5394, A.L. 1945 p. 694, A.L. 1971 H.B. 344,
A.L. 1999 H.B. 915)

Notwithstanding any other provision of this chapter, the bylaws
may provide that the territory in which a cooperative supplies electric
energy to its members may be divided into two or more voting districts
for the purpose of properly distributing its directors over the area in
which its members reside. In such case the bylaws shall prescribe the
manner in which such voting districts shall function in the election of
directors at annual meetings. (RSMo 1939 § 5396)

1. The business and affairs 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. The bylaws shall prescribe the number of directors,
their qualifications, other than those provided for in this chapter, the
manner of holding meetings of the board of directors and of the election
of 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. Without
approval of the members, directors shall not receive any salaries for
their services as directors. The bylaws may, however, provide that a
fixed fee and expenses of attendance, if any, may be allowed to each
director for attendance at each meeting of the board of directors.

2. The directors of a cooperative named in any articles of incorporation,
consolidation, merger or conversion, as the case may be, shall hold
office until the next following annual meeting of the members or until
their successors shall have been elected and qualified.

3. The bylaws shall provide that the directors shall be divided into
three classes, each class to be as nearly equal in number as possible,
with the term of office of the directors of the first class to expire at
the next succeeding annual meeting and the term of the second class to
expire at the second succeeding annual meeting, and the term of the third
class to expire at the third succeeding annual meeting. At each annual
meeting after such classification a number of directors equal to the
number of the class whose term expires at the time of such meeting shall
be elected to hold office until the third succeeding annual meeting.

4. A majority of the board of directors shall constitute a quorum.

5. If a husband and wife hold a joint membership in a cooperative, either
one, but not both, may be elected a director.

6. The board of directors may exercise all of the powers of a cooperative
except such as are conferred upon the members by this chapter, or its
articles of incorporation or bylaws. (RSMo 1939 § 5395)

(1965) This section construed to authorize payment of salaries to
directors when approved by the members. Triplett v. Grundy Electric
Cooperative, Inc. (A.), 389 S.W.2d 401.

The officers of a cooperative shall consist of a president, vice
president, secretary and treasurer, who shall be elected annually. No
person shall continue to hold the offices of president or vice president
after he shall have ceased to be a director. The offices of secretary and
of treasurer may be held by the same person and need not be a member of
the board of directors. The board of directors may also elect or appoint
such other officers, agents, or employees as it shall deem necessary or
advisable and shall prescribe the powers and duties thereof. Any officer
may be removed from office and his successor elected in the manner
prescribed in the bylaws. (RSMo 1939 § 5397)

1. Every cooperative constructing, maintaining and operating its
electric transmission or distribution lines shall construct, maintain and
operate such lines in conformity with the rules and regulations relating
to the manner and methods of construction, maintenance and operation and
as to safety of the public and as to induction or electrical interference
with other lines now or hereafter from time to time prescribed by the
public service commission for the construction, maintenance and operation
of electric transmission or distribution lines or system. The
jurisdiction, supervision, powers and duties of the public service
commission shall extend to every such cooperative so far as concerns the
construction, maintenance and operation of the physical equipment of such
cooperative to the extent of providing for the safety of the public and
the elimination or lessening of induction or electrical interference,
including the power to minimize retail distribution electric line
duplication for the sole purpose of providing for the safety of employees
and the general public in those cases when, upon complaint, the
commission finds that a proposed retail distribution electric line cannot
be constructed in compliance with commission safety rules. The
jurisdiction of the public service commission shall be extended only to
the extent provided in this section, and nothing herein contained shall
be construed as otherwise conferring upon such commission jurisdiction
over the service, rates, financing, accounting or management of any such
cooperative.

2. Applications, notices, hearings, findings and orders, and all other
proceedings before the commission, in pursuance of the powers and duties
herein conferred upon such commission, and review thereof, shall be the
same as now or hereafter provided by law for other similar proceedings
before the commission and review thereof.

3. The commission may retain jurisdiction of any such cause for the
purpose of making such supplemental orders in such cause as may be
necessary in furtherance of the purposes of this section, or for the
purpose of modifying or amending the terms of, or revoking any permit
granted under, the provisions of this section for failure to comply with
such rules, regulations, findings and orders made by the commission under
authority of this section. (RSMo 1939 § 5389, A.L. 1979 H.B. 186)

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

(1) To defray expenses of the cooperative and of the operation and
maintenance of its facilities 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 maturing more than one year after the date of the incurrence
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; and

(6) To provide a fund for education in cooperation and for the
dissemination 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 as patronage refunds prorated in
accordance with the patronage of the cooperative by the respective
members paid for during such fiscal year.

2. 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. (RSMo 1939 § 5405)

1. A cooperative may not sell, lease or otherwise dispose of,
except by mortgage, or deeds of trust, all or any substantial portion of
its property unless such sale, lease, or other disposition is authorized
at a duly held meeting of the members thereof by the affirmative vote of
not less than two-thirds of all of the members of the cooperative, and
unless the notice of such proposed sale, lease or other disposition shall
have been contained in the notice of the meeting.

2. Notwithstanding any other provisions of law, the board of directors of
a cooperative, without authorization by the members thereof, shall have
full power and authority to authorize the execution and delivery of a
mortgage or mortgages or a deed or deeds of trust upon, 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 directors shall determine, to secure any indebtedness of the
cooperative to the United States of America or any instrumentality or
agency thereof, or to any bank or other financial institution or
organization. (RSMo 1939 § 5406, A.L. 1971 H.B. 126)

Any mortgage, deed of trust, or other instrument executed by a
cooperative or foreign corporation transacting business in this state
pursuant to this chapter, which, by its terms, creates a lien upon real
and personal property then owned or after-acquired, and which is recorded
as a mortgage of* real property in any county 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 or
filed in the proper office in such county as a mortgage of personal
property. Recordation of any such mortgage, deed of trust or other
instrument shall cause the lien thereof to attach to all after-acquired
property of the mortgagor of the nature therein described as being
mortgaged or pledged thereby immediately upon the acquisition thereof by
the mortgagor, and such liens shall be superior to all claims of
creditors of the mortgagor and purchasers of such property and to all
other liens, except liens of prior record, affecting such property. (RSMo
1939 § 5408)

*Word "or" appears in original rolls.

1. Any corporation organized on a nonprofit or a cooperative
basis for the purpose of supplying electric energy in rural areas and
owning and operating electric transmission or distribution lines in a
state adjacent to this state shall be permitted to extend its lines into
and to transact business in this state without complying with any statute
of this state pertaining to the qualification of foreign corporations for
the transaction of business in this state. Any such foreign corporation,
as a prerequisite to the extension of its lines into and the transaction
of business in this state, shall, by an instrument executed and
acknowledged in its behalf by its president or vice president under its
corporate seal attested by its secretary, designate the secretary of
state its agent to accept service of process in its behalf.

2. In the event any process shall be served upon the secretary of state,
he shall forthwith forward the same by registered mail to such
corporation at the address thereof specified in such instrument.

3. Any such corporation may sue and be sued in the courts of this state
to the same extent that a cooperative may sue or be sued in such courts.

4. Any such foreign corporation may secure its notes, bonds or other
evidences of indebtedness by mortgage, pledge, deed of trust or other
encumbrance upon any or all of its then owned or after-acquired real or
personal property, assets, or franchises, located or to be located in
this state, and also upon the revenues and income thereof. (RSMo 1939 §
5411)

Any two or more cooperatives, each of which is herein designated
a "consolidating cooperative", may consolidate into a new cooperative,
herein 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 give effect thereto shall be first approved by the board
of directors of each consolidating cooperative. The proposed articles of
consolidation shall recite in the caption that they are executed pursuant
to this chapter and shall state:

(a) The name of each consolidating cooperative, the address of its
principal office, and the date of the filing of its articles of
incorporation in the office of the secretary of state;

(b) The name of the new cooperative and the address of its principal
office;

(c) The names and addresses of the persons who shall constitute the first
board of directors of the new cooperative;

(d) The terms and conditions of the consolidation and the mode of
carrying the same into effect, including the manner and basis of
converting memberships in each consolidating cooperative into memberships
in the new cooperative and the issuance of certificates of membership in
respect of such converted membership; and

(e) Any provisions not inconsistent with this chapter deemed necessary or
advisable for the conduct of the business and affairs of the new
cooperative;

(2) The proposition for the consolidation of the consolidating
cooperatives into the new cooperative and the proposed articles of
consolidation approved by the board of directors of each consolidating
cooperative shall then be submitted to a vote of the members thereof at
any annual or special meeting thereof, the notice of which shall set
forth full particulars concerning the proposed consolidation. The
proposed consolidation and the proposed articles of consolidation shall
be deemed to be approved upon the affirmative vote of a majority of the
members of each cooperative present at the meeting and voting on the
issue; and

(3) (a) Upon such approval by the members of the respective consolidating
cooperatives, articles of consolidation in the form approved shall be
executed and acknowledged in duplicate on behalf of each consolidating
cooperative by its president or vice president and its seal shall be
affixed thereto and attested by its secretary;

(b) The president or vice president of each consolidating cooperative
executing such articles of consolidation shall also make and annex
thereto an affidavit stating that the provisions of this section were
duly complied with by such cooperative;

(c) Such articles of consolidation and affidavits shall be submitted to
the secretary of state for filing as provided in this chapter. (RSMo 1939
§ 5399, A.L. 1991 S.B. 221)

Effective 7-11-91

Any one or more cooperatives, each of which is herein designated
a "merging cooperative", may merge into another cooperative, herein
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
thereto shall be first approved by the board of directors of each merging
cooperative and by the board of directors of the surviving cooperative.
The proposed articles of merger shall recite in the caption that they are
executed pursuant to this chapter and shall state:

(a) The name of each merging cooperative, the address of its principal
office, and the date of the filing of its articles of incorporation in
the office of the secretary of state;

(b) The name of the surviving cooperative and the address of its
principal office;

(c) A statement that the merging cooperatives elect to be merged into the
surviving cooperative;

(d) The terms and conditions of the merger and the mode of carrying the
same into effect, including the manner and basis of converting the
memberships in the merging cooperative or cooperatives into memberships
in the surviving cooperative and the issuance of certificates of
memberships in respect of such converted memberships; and

(e) Any provisions not inconsistent with this chapter deemed necessary or
advisable for the conduct of the business and affairs of the surviving
cooperative;

(2) The proposition for the merger of the merging cooperatives into the
surviving cooperative and the proposed articles of merger approved by the
board of directors of the respective cooperatives, parties to the
proposed merger, shall then be submitted to a vote of the members of each
such cooperative at any annual or special meeting thereof, the notice of
which shall set forth full particulars concerning the proposed merger.
The proposed merger and the proposed articles of merger shall be deemed
to be approved upon the affirmative vote of a majority of the members of
each cooperative present at the meeting and voting on the issue; and

(3) (a) Upon such approval by the members of the respective cooperatives,
parties to the proposed merger, articles of merger in the form approved
shall be executed and acknowledged in duplicate on behalf of each such
cooperative by its president or vice president and its seal shall be
affixed thereto and attested by its secretary;

(b) The president or vice president of each cooperative executing such
articles of merger shall also make and annex thereto an affidavit stating
that the provisions of this section were duly complied with by such
cooperative;

(c) Such articles of merger and affidavits shall be submitted to the
secretary of state for filing as provided in this chapter. (RSMo 1939 §
5400, A.L. 1991 S.B. 221)

Effective 7-11-91

The effect of consolidation or merger shall be as follows:

(1) The several cooperatives, parties to the consolidation or merger,
shall be a single cooperative, which in the case of a consolidation,
shall be the new cooperative provided for in the articles of
consolidation, and, in the case of a merger, shall be that cooperative
designated in the articles of merger as the surviving cooperative, and
the separate existence of all cooperatives, parties to the consolidation
or merger, except the new or surviving cooperative, shall cease;

(2) Such new or surviving cooperative shall have all the rights,
privileges, immunities, and powers and shall be subject to all the duties
and liabilities of a cooperative organized under the provisions of this
chapter, and shall possess all the rights, privileges, immunities, and
franchises, as well of a public as of a private nature, and all property,
real and personal, applications for membership, all debts due on whatever
account, and all other choses in action, of each of the consolidating or
merging cooperatives, and furthermore all and every interest of, or
belonging or due to, each of the cooperatives so consolidated or merged,
shall be taken and deemed to be transferred to and vested in such new or
surviving cooperative without further act or deed; and the title to any
real estate, or any interest therein, under the laws of this state vested
in any such cooperatives shall not revert or be in any way impaired by
reason of such consolidation or merger;

(3) Such new or surviving cooperative shall thenceforth be responsible
and liable for all of the liabilities and obligations of each of the
cooperatives so consolidated or merged, and any claim existing, or action
or proceeding pending, by or against any of such cooperatives may be
prosecuted as if such consolidation or merger had not taken place, but
such new or surviving cooperative may be substituted in its place;

(4) Neither the rights of creditors nor any liens upon the property of
any of such cooperatives shall be impaired by such consolidation or
merger; and

(5) In the case of a consolidation, the articles of consolidation shall
be deemed to be the articles of incorporation of the new cooperative; and
in the case of a merger, the articles of incorporation of the surviving
cooperatives shall be deemed to be amended to the extent, if any, that
changes therein are provided for in the articles of merger. (RSMo 1939 §
5401)

1. A cooperative which has not commenced business may dissolve
voluntarily by delivering to the secretary of state articles of
dissolution, executed and acknowledged in duplicate on behalf of the
cooperative by a majority of the incorporators, which shall state:

(1) The name of the cooperative;

(2) The address of its principal office;

(3) The date of its incorporation;

(4) That the cooperative has not commenced business;

(5) That the amount, if any, actually paid in on account of membership
fees, less any part thereof disbursed for necessary expenses, has been
returned to those entitled thereto and that all easements shall have been
released to the grantors;

(6) That no debt of the cooperative remains unpaid; and

(7) That a majority of the incorporators elect that the cooperative be
dissolved.

2. Such articles of dissolution shall be submitted to the secretary of
state for filing as provided in this chapter.

3. A cooperative which has commenced business may dissolve voluntarily
and wind up its affairs in the following manner:

(1) The board of directors shall first recommend that the cooperative be
dissolved voluntarily and thereafter the proposition that the cooperative
be dissolved shall be submitted to the members of the cooperative at any
annual or special meeting the notice of which shall set forth such
proposition. The proposed voluntary dissolution shall be deemed to be
approved upon the affirmative vote of not less than a majority of the
members;

(2) Upon such approval, a certificate of election to dissolve, herein
designated the "certificate", shall be executed and acknowledged in
duplicate on behalf of the cooperative by its president or vice
president, and its corporate seal shall be affixed thereto and attested
by its secretary. The certificate shall state:

(a) The name of the cooperative;

(b) The address of its principal office;

(c) The names and addresses of its directors; and

(d) The total number of members of the cooperative and the number of
members who voted for and against the voluntary dissolution of the
cooperative. The president or vice president executing the certificate
shall also make and annex thereto an affidavit stating that the
provisions of subsection 3 were duly complied with. Such certificate and
affidavit shall be submitted to the secretary of state for filing as
provided in this chapter;

(3) Upon the filing of the certificate and affidavit by the secretary of
state, the cooperative shall cease to carry on its business except
insofar as may be necessary for the winding up thereof, but its corporate
existence shall continue until articles of dissolution have been filed by
the secretary of state;

(4) After the filing of the certificate and affidavit by the secretary of
state the board of directors shall immediately cause notice of the
winding up proceedings to be mailed to each known creditor and claimant
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;

(5) The board of directors shall become trustees and have full power to
wind up and settle the affairs of the cooperative and shall proceed to
collect the debts owing to the cooperative, convey and dispose of its
property and assets, pay, satisfy, and discharge its debts, obligations,
and liabilities, and do all other things required to liquidate its
business and affairs, and after paying or adequately providing for the
payment of all its debts, obligations and liabilities, shall distribute
the remainder of its property and assets among its members in proportion
to the aggregate patronage of each such member during the seven years
next preceding the date of such filing of the certificate, or, if the
cooperative shall not have been in existence for such period, during the
period of its existence; and

(6) (a) When all debts, liabilities and obligations of the cooperative
have been paid and discharged or adequate provision shall have been made
therefor, and all of the remaining property and assets of the cooperative
shall have been distributed to the members pursuant to the provisions of
this section, the board of trustees shall authorize the execution of
articles of dissolution which shall thereupon be executed and
acknowledged on behalf of the cooperative by its president or vice
president, and its corporate seal shall be affixed thereto and attested
by its secretary. Such articles of dissolution shall recite in the
caption that they are executed pursuant to this chapter and shall state:

a. The name of the cooperative;

b. The address of the principal office of the cooperative;

c. That the cooperative has heretofore delivered to the secretary of
state a certificate of election to dissolve and the date on which the
certificate was filed by the secretary of state in the records of his
office;

d. That all debts, obligations and liabilities of the cooperative have
been paid and discharged or that adequate provision has been made
therefor;

e. That all the remaining property and assets of the cooperative have
been distributed among the members in accordance with the provisions of
this section; and

f. That there are no actions or suits pending against the cooperative.

(b) The president or vice president executing the articles of dissolution
shall also make and annex thereto an affidavit stating that the
provisions of this subsection were duly complied with;

(c) Such articles of dissolution and affidavit accompanied by proof of
the publication required in this subsection, shall be submitted to the
secretary of state for filing as provided in this chapter. (RSMo 1939 §
5403)

1. There shall be charged and collected for:

(1) Filing articles of incorporation, ten dollars;

(2) Filing articles of amendment, one dollar;

(3) Filing articles of consolidation or merger, ten dollars;

(4) Filing articles of conversion, ten dollars;

(5) Filing certificate of election to dissolve, one dollar;

(6) Filing articles of dissolution, two dollars; and

(7) Filing certificate of change of principal office, two dollars.

2. All fees shall be made payable to and collected by the state director
of revenue. (RSMo 1939 § 5412, A.L. 1947 V. I p. 232)

Each cooperative and each foreign corporation transacting
business in this state pursuant to this chapter shall pay annually, on or
before the first day of July, to the state director of revenue, a fee of
ten dollars. (RSMo 1939 § 5413, A.L. 1947 V. I p. 232)

The private property of the members of a cooperative shall be
exempt from execution for the debts of the cooperative and no member
shall be liable or responsible for any debts of the cooperative. (RSMo
1939 § 5407)

The provisions of the securities law of Missouri shall not apply
to any note, bond or other evidence of indebtedness issued by any
cooperative or foreign corporation transacting business in this state
pursuant to this chapter to the United States of America or any agency or
instrumentality thereof, or to any mortgage or deed of trust executed to
secure the same. The provisions of said securities law shall not apply to
the issuance of membership certificates by any cooperative or any such
foreign corporation. (RSMo 1939 § 5414)

No person who is 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, director or member of such cooperative.
(RSMo 1939 § 5410)

1. Whenever any notice is required to be given under the
provisions of this chapter or under the provisions of the articles of
incorporation or bylaws of a cooperative, waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before
or after the time fixed for the giving of such notice, shall be deemed
equivalent to such notice.

2. If a person or persons entitled to notice of a meeting shall attend
such meeting, such attendance shall constitute a waiver of notice of the
meeting, except in case the attendance is for the express purpose of
objecting to the transaction of any business because the meeting shall
not have been lawfully called or convened. (RSMo 1939 § 5409)

This chapter shall be construed liberally. The enumeration of
any object, purpose, power, manner, method or thing shall not be deemed
to exclude like or similar objects, purposes, powers, manners, methods or
things. (RSMo 1939 § 5416)

1. Competition to provide retail electric service, as between
rural electric cooperatives, electrical corporations and municipally
owned utilities may be displaced by written territorial agreements, but
only to the extent hereinafter provided for in this section.

2. Such territorial agreements shall specifically designate the
boundaries of the electric service area of each electric service supplier
subject to the agreement, any and all powers granted to a rural electric
cooperative by a municipality, pursuant to the agreement, to operate
within the corporate boundaries of that municipality, notwithstanding the
provisions of section 394.020 and of section 394.080 to the contrary, and
any and all powers granted to a municipally owned utility, pursuant to
the agreement, to operate in areas beyond the corporate municipal
boundaries of its municipality. Where the parties cannot agree, they may,
by mutual consent of all parties involved, petition the public service
commission to designate the boundaries of the electric service areas to
be served by each party and such designations by the commission shall be
binding on all such parties. Petitions shall be made pursuant to the
rules and regulations of the commission governing applications for
certificates of public convenience and necessity and the commission shall
be required to hold evidentiary hearings on all petitions so received.
The commission shall base its final determination upon a finding that the
commission's designation of electric service areas is in the public
interest.

3. The provisions of sections 386.310, RSMo, and 393.106, RSMo, and
sections 394.160 and 394.315 to the contrary notwithstanding, before
becoming effective, all territorial agreements entered into under the
provisions of this section, including any subsequent amendments to such
agreements, or the transfer or assignment of the agreement or any rights
or obligations of any party to an agreement, shall receive the approval
of the public service commission by report and order. Applications for
commission approval shall be made and notice of such filing shall be
given to other electrical suppliers pursuant to the rules and regulations
of the commission governing applications for certificates of public
convenience and necessity. Unless otherwise ordered by the commission for
good cause shown, the commission shall rule on such applications not
later than one hundred twenty days after the application is properly
filed with the secretary of the commission.

4. The commission shall hold evidentiary hearings to determine whether
such territorial agreements should be approved or disapproved. The
commission may approve the application if it shall after hearing
determine that approval of the territorial agreement in total is not
detrimental to the public interest. Review of commission decisions under
this section shall be governed by the provisions of sections 386.500 to
386.550, RSMo.

5. Commission approval of any territorial agreement entered into under
the provisions of this section shall in no way affect or diminish the
rights and duties of any supplier not a party to the agreement or of any
electrical corporation authorized by law to provide service within the
boundaries designated in such territorial agreement. In the event any
electrical corporation which is not a party to the territorial agreement
and which is subject to the jurisdiction, control and regulation of the
commission under chapters 386, RSMo, and 393, RSMo, has heretofore sought
or hereafter seeks authorization from the commission to render electric
service or construct, operate and maintain electric facilities within the
boundaries designated in any such territorial agreement, the commission,
in making its determination regarding such requested authority, shall
give no consideration or weight to the existence of any such territorial
agreement and any actual rendition of retail electric service by any of
the parties to such territorial agreement will not preclude the
commission from granting the requested authority.

6. The commission shall have jurisdiction to entertain and hear
complaints involving any commission-approved territorial agreement. Such
complaints shall be brought and prosecuted in the same manner as other
complaints before the commission. After hearing, if the commission
determines that the territorial agreement is not in the public interest,
it shall have the authority to suspend or revoke the territorial
agreement. If the commission determines that the territorial agreement is
still in the public interest, such territorial agreement shall remain in
full force and effect. Except as provided in this section, nothing in
this section shall be construed as otherwise conferring upon the
commission jurisdiction over the service, rates, financing, accounting,
or management of any rural electric cooperative or municipally owned
utility, or to amend, modify, or otherwise limit the rights of electrical
suppliers to provide service as otherwise provided by law.

7. Notwithstanding the provisions of section 386.410, RSMo, the
commission shall by rule set a schedule of fees based upon its costs in
reviewing proposed territorial agreements for approval or disapproval.
Responsibility for payment of the fees shall be that of the parties to
the proceeding as ordered by the commission in each case. The fees shall
be paid to the director of revenue who shall remit such payments to the
state treasurer. The state treasurer shall credit such payments to the
public service commission fund, or its successor fund, as established in
section 33.571, RSMo. Nothing in this section shall be construed as
otherwise conferring upon the commission jurisdiction over the service,
rates, financing, accounting or management of any rural electric
cooperative or municipally owned utility and except as provided in this
section nothing shall affect the rights, privileges or duties of rural
electric cooperatives, electrical corporations or municipally owned
utilities. (L. 1988 S.B. 689, A.L. 1989 H.B. 813)

CROSS REFERENCE: Antitrust laws not applicable to territorial agreements,
RSMo 416.041

1. As used in this section, the following terms mean:

(1) "Permanent service", electrical service provided through facilities
which have been permanently installed on a structure and which are
designed to provide electric service for the structure's anticipated
needs for the indefinite future, as contrasted with facilities installed
temporarily to provide electrical service during construction. Service
provided temporarily shall be at the risk of the electrical supplier and
shall not be determinative of the rights of the provider or recipient of
permanent service;

(2) "Structure" or "structures", an agricultural, residential,
commercial, industrial or other building or a mechanical installation,
machinery or apparatus at which retail electric energy is being delivered
through a metering device which is located on or adjacent to the
structure and connected to the lines of an electrical supplier. Such
terms shall include any contiguous or adjacent additions to or expansions
of a particular structure. Nothing in this section shall be construed to
confer any right on a rural electric cooperative to serve new structures
on a particular tract of land because it was serving an existing
structure on that tract.

2. Once a rural electric cooperative, or its predecessor in interest,
lawfully commences supplying retail electric energy to a structure
through permanent service facilities, it shall have the right to continue
serving such structure, and other suppliers of electrical energy shall
not have the right to provide service to the structure except as might be
otherwise permitted in the context of municipal annexation, pursuant to
section 386.800, RSMo, and section 394.080, or pursuant to a territorial
agreement approved under section 394.312. The public service commission,
upon application made by an affected party, may order a change of
suppliers on the basis that it is in the public interest for a reason
other than a rate differential, and the commission is hereby given
jurisdiction over rural electric cooperatives to accomplish the purpose
of this section. The commission's jurisdiction under this section is
limited to public interest determinations and excludes questions as to
the lawfulness of the provision of service, such questions being reserved
to courts of competent jurisdiction. Except as provided herein, nothing
in this section shall be construed as otherwise conferring upon the
commission jurisdiction over the service, rates, financing, accounting or
management of any such cooperative, and except as provided in this
section, nothing contained herein shall affect the rights, privileges or
duties of existing cooperatives pursuant to this chapter. Nothing in this
section shall be construed to make lawful any provision of service which
was unlawful prior to July 11, 1991. Nothing in this section shall be
construed to make unlawful the continued lawful provision of service to
any structure which may have had a different supplier in the past, if
such a change in supplier was lawful at the time it occurred. However,
those customers who had canceled service with their previous supplier or
had requested cancellation by May 1, 1991, shall be eligible to change
suppliers as per previous procedures. No customer shall be allowed to
change electric suppliers by disconnecting service between May 1, 1991,
and July 11, 1991. (L. 1982 H.B. 1646 § 2, A.L. 1986 H.B. 1486, A.L. 1991
S.B. 221)

Effective 7-11-91

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