CHAPTER 13. RURAL ELECTRIC MEMBERSHIP CORPORATION ACT
IC 8-1-13
Chapter 13. Rural Electric Membership Corporation Act
IC 8-1-13-1
Short title
Sec. 1. This chapter may be known and referred to as the "ruralelectric membership corporation act".
(Formerly: Acts 1935, c.175, s.1.) As amended by P.L.59-1984,SEC.65.
IC 8-1-13-2
Incorporation; purpose
Sec. 2. Any number of natural persons not less than eleven (11)may, by executing, filing and recording articles of incorporation ashereinafter provided, form a corporation not organized for pecuniaryprofit for the purpose of promoting and encouraging the fullestpossible use of electric energy in the state by making electric energyavailable to inhabitants of rural areas of the state at the lowest costconsistent with sound economy and prudent management of thebusiness of such corporations and/or by rendering other services toits members.
(Formerly: Acts 1935, c.175, s.2; Acts 1937, c.258, s.1.)
IC 8-1-13-3
Definitions
Sec. 3. The following terms whenever used or referred to in thischapter have the following meanings, unless a different meaningclearly appears from the context:
(a) "Corporation" means a corporation formed under this chapter.
(b) "Municipality" means any county, city, or town of this state.
(c) "Person" or "inhabitant" means natural persons, firms,associations, corporations, limited liability companies, businesstrusts, partnerships, and bodies politic.
(d) "Energy" means all electric energy no matter how generatedor produced.
(e) "System" means any plant, works, system, facilities, orproperties, together with all parts thereof and appurtenances thereto,used or useful in the furnishing of services.
(f) "Obligations" means negotiable bonds, interim certificates orreceipts, notes, debentures, and all other evidences of indebtedness,either issued or the payment thereof assumed by the corporation.
(g) "Law" means any law of this state.
(h) "Federal agency" means the United States of America, thePresident of the United States of America, the federal emergencyadministrator of public works and any other authority, agency, orinstrumentality of the United States of America, heretofore orhereafter created.
(i) "Acquire" means construction, obtaining by purchase, lease,devise, or gift, the exercise of the right of eminent domain in themanner provided by law for the exercise thereof, or other mode of
acquisition.
(j) "Improve" means to construct, reconstruct, improve, extend,enlarge, alter, better, or repair.
(k) "Board" means board of directors of a corporation formedunder this chapter.
(l) "Member" means each person signing the articles ofincorporation of a corporation and each person admitted tomembership therein pursuant to law or the corporation's bylaws.
(m) "Service" or "services" means the furnishing of energy orother utility services incidental to development, operation, ormaintenance of utility infrastructure and the rendering of relatedengineering, financial, accounting, economic development, orcommunity development services, or educational services and relatedmaterials or equipment assisting in the establishment andmaintenance of better communication between corporations and theirmembers, or any of the same.
(n) As used in this chapter, the word "territory" when modified bythe phrase "already being served with energy by any public ormunicipally owned utility" shall not be construed to include territoryserved by an electric distribution line or lines:
(1) acquired prior to March 1, 1980, from a public ormunicipally owned utility by a corporation formed or admittedto do business in this state under this chapter; or
(2) acquired on or after March 1, 1980, from a public ormunicipally owned utility by such a corporation;
if the Indiana utility regulatory commission, after public hearing,finds that public convenience and necessity would be best served by,and authorizes, such acquisition, and if the electric distribution lineor lines, together with all other facilities proposed to be purchased,have a reproduction cost new, less depreciation, of not more thanthree hundred thousand dollars ($300,000) and are not located inwhole or in part in any city or town having a population in excess ofone thousand five hundred (1,500); however, the dollar andpopulation limitations do not apply if the acquisition is agreed to inall respects by all affected electricity suppliers and is approved bythe commission.
(o) As used in this chapter, "commission" refers to the Indianautility regulatory commission.
(Formerly: Acts 1935, c.175, s.3; Acts 1937, c.258, s.2; Acts 1945,c.155, s.1; Acts 1951, c.162, s.1; Acts 1953, c.23, s.1; Acts 1969,c.116, s.1.) As amended by Acts 1980, P.L.69, SEC.3; P.L.121-1987,SEC.1; P.L.8-1993, SEC.123; P.L.95-1993, SEC.1; P.L.1-1994,SEC.33; P.L.109-1995, SEC.1; P.L.81-1998, SEC.1; P.L.198-1999,SEC.1.
IC 8-1-13-4
Articles of incorporation
Sec. 4. (a) The articles of incorporation shall be entitled andendorsed either "Articles of Incorporation of _______ Rural ElectricMembership Corporation" or Articles of Incorporation of
_____________ Rural Electric Cooperative, Inc." (the blank spacebeing filled in with the distinguishing part of the name of thecorporation) and shall state the following:
(1) The name of the corporation, which name shall be such asto distinguish it from any other corporation.
(2) A reasonable description of the territory in which itsoperations are to be conducted, and which shall not include anyincorporated city or town having a population in excess offifteen hundred (1500) inhabitants at the time such articles arefirst approved by the commission, or any territory, whetherwithin or without any incorporated city or town, already beingserved with energy by any public or municipally owned utility.
(3) The location of its principal offices and the post officeaddress thereof.
(4) The maximum number of directors, not less than three (3).
(5) The names and post office addresses of the directors, notless than three (3), who are to manage the affairs of thecorporation for the first year of its existence, or until theirsuccessors are chosen.
(6) The period, if any, limited for the duration of thecorporation. If the duration of the corporation is to be perpetual,this fact should be stated.
(7) The terms and conditions upon which members of thecorporation shall be admitted.
(b) The articles of incorporation of a corporation may also containany provision not contrary to law which the incorporators maychoose to insert for the regulation of its business and for the conductof the affairs of the corporation; and any provisions creating,defining, limiting, or regulating the powers of the corporation, itsdirectors and members.
(Formerly: Acts 1935, c.175, s.4; Acts 1937, c.258, s.3; Acts 1939,c.105, s.2; Acts 1953, c.48, s.1.) As amended by P.L.23-1988,SEC.46.
IC 8-1-13-5
Articles of incorporation; action by commission
Sec. 5. (a) The natural persons executing the articles ofincorporation shall be residents of the territory in which theoperations of the corporation are to be conducted who are desirousof using electric energy to be furnished by the corporation. Thearticles of incorporation shall be executed in as many copies as thereare counties, any part or parts of which are included in the territoryin which the operations of the corporation are to be conducted andshall be acknowledged by the subscribers before an officerauthorized by the laws of this state to take acknowledgments ofdeeds. When so acknowledged the articles of incorporation shall besubmitted to the commission together with a petition executed by one(1) or more of the natural persons executing the said articles ofincorporation praying the commission to grant a certificate of publicconvenience and necessity for the organization and operations of the
proposed corporation. Upon the filing of such articles and petitionwith the commission, said commission shall set the said petition forpublic hearing and shall give notice of the time and place of suchhearing by publication one (1) time in at least one (1) newspaperprinted and published in each of the counties in which the saidcorporation proposes to carry on its operations, which publicationshall be had at least ten (10) days prior to the date set for suchhearing, the cost of such publications to be paid by the petitioners atthe time of filing said petition. Any interested person may appear atsuch hearing either in person or by attorney and oppose the prayer ofsaid petition. The commission, after hearing the evidence introducedat said hearing, shall enter a finding either that the convenience andnecessity of the public proposed to be served in the territory in whichthe operations of the corporation are to be conducted will or will notbe served by the organizations and operations of the proposedcorporation. If such finding be in the affirmative, the commissionshall enter an order approving the organization of such corporationand the proposed articles of incorporation and shall attach a copy ofsaid order to each copy of the said articles of incorporation. If thesaid finding be in the negative, the commission shall enter an orderdenying the approval of the said articles of incorporation.
(b) If the commission approve the said articles of incorporation asherein above provided, the same shall be filed together with theattached copy of the order of the commission in the office of thesecretary of state who shall forthwith endorse his approval thereonand file one (1) of said copies in his office and deliver all othercopies thereof with his approval endorsed thereon to theincorporators who shall thereupon file one (1) of the said approvedcopies of said articles in the office of the county recorder in eachcounty in which a portion of the territory proposed to be served bythe corporation is located. As soon as the provisions of this sectionhave been complied with, the proposed corporation described in thearticles so filed, under its designated name, shall be and constitute abody corporate.
(Formerly: Acts 1935, c.175, s.5.) As amended by P.L.23-1988,SEC.47.
IC 8-1-13-6
Board of directors
Sec. 6. (a) Each corporation formed under this chapter shall havea board of directors that constitutes the governing body of thecorporation. The directors must be members, or if the corporation'sbylaws so provide, a member's officers, directors, or partners, or theowner of a member that is a sole proprietorship may be directors ofthe corporation. Directors other than those named in the corporation'sarticles of incorporation shall be elected by the members entitled tovote for the directors. Unless the bylaws of the corporation provideotherwise, the directors shall be elected annually. The bylaws mayprovide that:
(1) the directors may hold office for any stated period not
exceeding three (3) years;
(2) the directors be elected so that the terms of only part of thedirectors expire at any one time; and
(3) only enough directors to succeed those whose terms areabout to expire are elected in any year.
(b) The bylaws may provide that the territory where the membersof the corporation reside be apportioned into districts and prescribethe procedure by which the members residing in any one (1) districtmay nominate a director.
(c) The bylaws may specify a fair remuneration for the timeactually spent by its officers, directors, and members of its executivecommittee in the performance of their duties and provide that theremuneration be paid to the officers, directors, and members of theexecutive committee. The officers, directors, and members of theexecutive committee are entitled to reimbursement for expensesincurred in the performance of their duties whether or not the bylawsprovide that they be remunerated for their time spent in theperformance of those duties. The board shall annually designate andelect those officers it considers necessary.
(Formerly: Acts 1935, c.175, s.6; Acts 1939, c.105, s.1.) As amendedby P.L.109-1989, SEC.1; P.L.198-1999, SEC.2.
IC 8-1-13-7
Board of directors; powers and duties
Sec. 7. The board shall have power to do all things necessary orconvenient in conducting the business of the corporation, includingbut not limited to:
(a) The power to make, alter, amend or repeal by-laws for theregulation and management of the affairs of the corporation notinconsistent with law or with the articles of incorporation.
(b) To appoint agents and employees and to fix theircompensation and the compensation of the officers of thecorporation.
(c) To execute instruments.
(d) To delegate to one (1) or more of the directors or to the agentsand employees of a corporation such powers and duties as it maydeem proper.
(e) To make its own rules and regulations as to its procedure.
(Formerly: Acts 1935, c.175, s.7; Acts 1937, c.258, s.4.)
IC 8-1-13-8
Membership certificates; meetings of members
Sec. 8. (a) A corporation may issue to its members certificates ofmembership and each member shall be entitled to only one (1) voteat any regular or special meeting of the corporation.
(b) Meetings of members may be held at such place as may beprovided in the by-laws. An annual meeting of the members shall beheld at such time as may be provided by the by-laws. Specialmeetings may be called by the president, by the board of directors,by a petition signed by not less than one-twentieth (1/20) of all the
members or by such other officers or persons as may be provided inthe articles of incorporation or the by-laws.
(c) Written or printed notice stating the place, day and hour of themeeting of members, and, in the case of a special meeting, thepurpose or purposes for which the meeting is called, shall bedelivered not less than ten (10) nor more than thirty (30) days beforethe date of the meeting, either personally or by mail, by or at thedirection of the president or the secretary, or the officers or personscalling the meeting, to each member of record entitled to vote at suchmeeting. If mailed, such notice shall be deemed to be delivered whendeposited in the United States mails in a sealed envelope addressedto the member at his address as it appears on the records of thecorporation, with postage thereon prepaid. Notice of meetings ofmembers may be waived in writing.
(d) Unless otherwise provided in the articles of incorporation,one-fiftieth (1/50) of all the members of the corporation present inperson at any meeting of members, of which meeting notice shallhave been given as provided in the foregoing subdivision (c) of thissection, shall constitute a quorum for the transaction of business atsuch meeting.
(e) Except as otherwise specifically provided in this chapter, amajority vote of those members who are voting at any regularmeeting, or at any special meeting of the members called for thatpurpose, shall be necessary for the taking of any action, adoption ofany resolution, or the election of any directors, or otherwise, as thecase may be. Provided, that if more than two (2) persons are runningfor election as a director from the same district then the personreceiving the most votes shall be elected.
(Formerly: Acts 1935, c.175, s.8; Acts 1937, c.258, s.5.) As amendedby Acts 1977, P.L.102, SEC.1.
IC 8-1-13-9
Conditions of membership; restrictions to providing services
Sec. 9. (a) The corporate purpose of each corporation formedunder this chapter shall be to render services to or for the benefit ofits members and no person shall become or remain a member of anylocal district corporation, defined in section 23 of this chapter, unlesssuch person shall use energy supplied by such corporation and shallhave complied with the terms and conditions in respect tomembership contained in the bylaws of such corporation.
(b) Notwithstanding IC 8-1-2.7, a corporation or any subsidiaryor affiliate thereof may not begin water service in any area unlessboth of the following apply:
(1) The corporation has filed a petition with the commissionseeking authority to begin water service.
(2) The commission has found after a hearing that publicconvenience and necessity require the proposed service.
In connection with the petition, the commission may adoptconditions and restrictions on the area and consumers to be servedthat the commission finds consistent with the public interest. The
commission may revoke, modify, or amend a finding of publicconvenience and necessity upon a showing of good cause after ahearing.
(Formerly: Acts 1935, c.175, s.9; Acts 1937, c.258, s.6.) As amendedby P.L.59-1984, SEC.66; P.L.109-1995, SEC.2; P.L.81-1998, SEC.2.
IC 8-1-13-10
Powers of corporation
Sec. 10. Each corporation formed under this chapter is herebyvested with all powers necessary or requisite for the accomplishmentof its corporate purpose and capable of being delegated by thegeneral assembly of the state of Indiana, and no enumeration ofparticular powers hereby granted shall be construed to impair anygeneral grant of power contained in this section, nor to limit any suchgrant to a power or powers of the same class or classes as those soenumerated.
(Formerly: Acts 1935, c.175, s.10.) As amended by P.L.59-1984,SEC.67.
IC 8-1-13-11
Enumerated powers of corporation
Sec. 11. A corporation created under this chapter may do any andall acts or things necessary or convenient for carrying out the purposefor which it was formed, including the following powers:
(1) To sue and be sued.
(2) To have a seal and alter the same at pleasure.
(3) To acquire, hold and dispose of property, real and personal,tangible and intangible, or any interest in the property and topay in cash or on credit, and to secure and procure payment ofall or any part of the purchase price on the terms and conditionsas the board shall determine.
(4) To acquire, own, exchange, operate, maintain, and improvea system or systems.
(5) To pledge all or any part of its revenues or mortgage orotherwise encumber all or any part of its property for thepurpose of securing the payment of the principal of and intereston any of its obligations.
(6) To construct, operate, and maintain works across or alongany street or public highway, or over any lands which are nowor may be the property of this state or any political subdivisionthereof, after obtaining the necessary franchise or permittherefor. Before any works are constructed across or along ahighway in the state highway system, the corporation shallobtain the permit of the Indiana department of transportation todo so, and the location and setting of the works shall beapproved by and subject to the supervision of the Indianadepartment of transportation. Before any works are constructedon or across lands belonging to the state, the corporation shallfirst obtain the permit of the department of the state havingcharge of the lands to do so, and the location and setting of the
works shall be approved by and subject to the supervision of thedepartment. The works shall be erected and maintained so asnot to interfere with the use and maintenance of the streets,highways, and lands, and no pole or appliance shall be locatedso as to interfere with the ingress or egress from any premiseson the street or highway. Nothing in this section shall deprivethe body having charge of the street or highway to require therelocation of any pole or appliance which may affect the properuse of the street or highway for public travel, for drainage or forthe repair, construction, or reconstruction of the street orhighway. The corporation shall restore the street, highway, orlands to its former condition or state as near as may be and shallnot use the same in a manner to impair unnecessarily itsusefulness or to injure the property of others.
(7) To accept gifts or grants of property, real or personal, fromany person, municipality, or federal agency and to acceptvoluntary and uncompensated services.
(8) To make any and all contracts necessary or convenient forthe full exercise of the powers in this chapter granted,including, without limiting the generality of the foregoing,contracts with any person, federal agency, or municipality forthe purchase of energy needed by the corporation to supply itsmembers; for the management and conduct of the business ofthe corporation; for the fixing of the rates, fees, or charges forservice rendered or to be rendered by the corporation subject,however, to the approval of the commission as to all the rates,fees, or charges for energy in the same manner and to the sameextent as is provided by law for the regulation of the rates, fees,or charges of public utilities.
(9) To sell, lease, mortgage, or otherwise encumber or disposeof all or any part of its property as provided in this chapter.
(10) To contract debts, borrow money, and to issue or assumethe payment of obligations.
(11) To levy and collect reasonable fees, rents, tolls, and othercharges for service rendered, subject to the approval of thecommission.
(12) To perform any and all of the foregoing acts and to do anyand all of the foregoing things under, through or by means of itsown officers, agents, and employees, or by contracts with anyperson, federal agency, or municipality.
(13) To exercise the right of eminent domain in the mannerprovided by law.
(14) To recover, after a period of two (2) years, any unclaimedstocks, dividends, capital credits, patronage refunds, utilitydeposits, membership fees, account balances, or book equitiesfor which the owner cannot be found and are the result ofdistributable savings of the corporation returned to the memberson a pro rata basis pursuant to section 17 of this chapter.
(Formerly: Acts 1935, c.175, s.11; Acts 1937, c.258, s.7.) Asamended by Acts 1977, P.L.102, SEC.2; Acts 1980, P.L.74, SEC.35;
Acts 1981, P.L.106, SEC.1; P.L.23-1988, SEC.48; P.L.18-1990,SEC.27.
IC 8-1-13-12
Sale, encumbrance, or other disposition of property
Sec. 12. (a) No corporation may sell, lease, or otherwise disposeof all, or substantially all, the property of the corporation unless (1)the same shall be authorized by a resolution duly adopted at ameeting of its members duly called and held as provided in section8 of this chapter, which resolution shall have received the affirmativevote of at least a majority of all its members and unless (2) the sameshall be approved by the commission.
(b) The board of directors of a corporation shall have full powerand authority, without authorization by the members thereof, toauthorize the execution and delivery of a mortgage, or mortgages, ora deed or deeds of trust of, or the pledging or encumbering of, any ofor all the property, assets, rights, privileges, licenses, franchises andpermits of the corporation, whether acquired or to be acquired andwherever situated, as well as the revenues therefrom, for the purposeof financing the construction or maintenance of the corporations'distribution or transmission system or systems, and for general plantas defined in the uniform system of accounts prescribed by thecommission, all upon such terms and conditions as the board ofdirectors shall determine, to secure any indebtedness of thecorporation to any federal agency or to any financial institution,which action of the board of directors shall not be subject to theapproval of the commission if the corporation has a mortgage withany federal agency.
(Formerly: Acts 1935, c.175, s.12; Acts 1937, c.258, s.8; Acts 1953,c.47, s.1; Acts 1969, c.117, s.1; Acts 1971, P.L.83, SEC.1.) Asamended by Acts 1977, P.L.102, SEC.3; P.L.23-1988, SEC.49.
IC 8-1-13-13
Obligations in anticipation of revenue; authority to issue
Sec. 13. (a) Subject to the approval of the commission, acorporation formed under this chapter may, from time to time, issueits obligations in anticipation of its revenues for any corporatepurpose.
(b) Those obligations may be authorized by resolution of theboard and may bear a date, mature at a time not exceeding forty (40)years from their respective dates, bear interest at a rate, be indenominations, be in a form, either coupon or registered, carryregistration privileges, be executed in a manner, be payable in amedium of payment, at a place, and be subject to terms ofredemption as provided in the resolution. The obligations may besold in a manner and upon terms as determined by the board.
(c) Notwithstanding any other law, any obligations and theinterest coupon pertaining to the obligation, if any, issued under thischapter, possess all of the qualities of negotiable instruments.However, approval of the commission is not required when a
corporation has a mortgage with any federal agency.
(Formerly: Acts 1935, c.175, s.13; Acts 1969, c.117, s.2; Acts 1971,P.L.83, SEC.2.) As amended by Acts 1977, P.L.102, SEC.4;P.L.23-1988, SEC.50; P.L.109-1989, SEC.2.
IC 8-1-13-14
Obligations; covenants or agreements
Sec. 14. In connection with the issuance of any obligations, acorporation may make such covenants or agreements and do any andall such acts and things as may be necessary or convenient ordesirable in order to secure its obligations or which, in the absolutediscretion of the board tend to make the obligations more marketable,notwithstanding that such covenants, agreements, acts and thingsmay constitute a limitation on the exercise of the powers hereingranted.
(Formerly: Acts 1935, c.175, s.14.)
IC 8-1-13-15
Purchase; own obligations
Sec. 15. A corporation may, out of any funds available for thatpurpose, purchase any obligations issued by it at a price determinedby resolution of the board together with accrued interest on theobligations. All obligations purchased in that manner shall becancelled.
(Formerly: Acts 1935, c.175, s.15.) As amended by P.L.109-1989,SEC.3.
IC 8-1-13-16
Consolidation or merger; mutual benefit corporations
Sec. 16. (a) Any corporation created under the provisions of thischapter may enter into an agreement for the consolidation or mergerof such a corporation with:
(1) any other corporation organized under this chapter; or
(2) any mutual benefit corporation that was organized before1964 under Acts 1935, c. 157, that engages in the generation,transmission, or distribution of electric energy.
(b) An agreement under subsection (a) must set forth the termsand conditions of the consolidation or merger, the name of theproposed consolidated or merged corporation, the number of itsdirectors, not less than five (5), the time of the annual election andthe names of the persons, not less than five (5), to be directors uponcompleting the consolidation or merger. The agreement must specifythe terms the directors will serve. A corporation organized under thischapter shall duly call and hold a meeting of its members, asprovided in section 8 of this chapter, at which the proposal of suchconsolidation or merger shall be presented. A mutual benefitcorporation must approve the merger in accordance withIC 23-17-19-3. With respect to such a merger, the agreement mayprovide that the surviving corporation may have one (1) or moremembers that are incorporated under the laws of a state other than
Indiana. If at each such meeting, the aforesaid agreement is approvedby a resolution duly adopted and receiving the affirmative vote of atleast a majority of all the members of the respective corporationvoting at the meeting, the directors named in the agreement shallsubscribe and acknowledge articles conforming substantially to theoriginal articles of incorporation, except that it shall be entitled andendorsed "Articles of consolidation (merger) of _______" (the blankspace being filled in with the names of the corporations beingconsolidated or merged) and shall state:
(1) The names of the corporations being consolidated ormerged.
(2) The name of the consolidated or merged corporation.
(3) The other items required or permitted to be stated in originalarticles of incorporation.
(c) Articles of consolidation or merger under this section or acertified copy or copies thereof shall be filed in the office of thesecretary of state and thereupon the proposed consolidated or mergedcorporation, under its designated name, shall be and constitute abody corporate with all the powers of a corporation as originallyformed hereunder. In the case of a merger of a corporation organizedunder this chapter and a mutual benefit corporation, IC 23-17-19-5applies.
(Formerly: Acts 1935, c.175, s.16; Acts 1937, c.258, s.9.) Asamended by Acts 1977, P.L.102, SEC.5; P.L.83-1997, SEC.1.
IC 8-1-13-17
Services, facilities, and charges; sinking fund; REA borrowers
Sec. 17. (a) A corporation shall furnish reasonably adequateservices and facilities. The charge made by any corporation for anyservice rendered or to be rendered, either directly or in connectiontherewith, shall be nondiscriminatory, reasonable, and just, and everydiscriminatory, unjust, or unreasonable charge for the service isprohibited.
(b) A reasonable and just charge for service within the meaningof this section are charges that produce sufficient revenue:
(1) to pay all legal and other necessary expense incident to theoperation of its system, to include maintenance cost, operatingcharges, upkeep, depreciation and amortization, repairs, andinterest charges on bonds or other obligations;
(2) to provide a sinking fund for the liquidation of bonds orother evidences of indebtedness;
(3) to provide adequate funds to be used as working capital, aswell as funds for making extensions and replacements (to theextent not provided for through depreciation);
(4) to meet reasonable financial agreements entered into by thecorporation in the process of securing capital; and
(5) for the payment of any taxes that may be assessed againstthe corporation or its property.
(c) The purpose of this section is to ensure that the chargesproduce an income sufficient to maintain the corporation property in
a sound physical and financial condition to render adequate andefficient service. Any rate too low to meet the requirements of thissection is unlawful.
(d) Revenues and receipts not needed for the purposes of thissection shall be returned to the members on an equitable basis, eitherin cash or in abatement of current charges for energy, as the boardmay decide.
(e) As used in subsections (g) and (h), "financial assistance"means:
(1) a loan or loan guarantee; or
(2) a lien accommodation provided to secure a loan made byanother lender;
that is made by the Rural Electrification Administration of the UnitedStates Department of Agriculture (REA).
(f) As used in subsections (g) and (h), "REA borrower" means acorporation created under this chapter that is the recipient offinancial assistance.
(g) In determining rates under this section, once the commissiondetermines that property of an REA borrower is reasonably necessaryfor the provision of electric service and has been placed in service,the commission shall approve rates to be charged by the REAborrower sufficient to enable the REA borrower to:
(1) satisfy its reasonable expenses and obligations; and
(2) repay the full amount of any financial assistance and theinterest thereon.
(h) So long as there remains any unpaid portion of any financialassistance associated with the property of an REA borrowerdetermined under subsection (g) to be reasonably necessary andplaced in service, the rates of the REA borrower shall be set at alevel sufficient to repay the financial assistance, regardless of anychange in the regulatory status of the property, including, withoutlimitation, the full or partial retirement of the property or any otherchange in the status of the property as reasonably necessary or usedand useful.
(i) Subsections (g) and (h) do not apply to a corporation that is notcreated under this chapter, whether or not the rates of the corporationare set by the commission under this section.
(Formerly: Acts 1935, c.175, s.17.) As amended by P.L.121-1987,SEC.2; P.L.109-1989, SEC.4; P.L.74-1991, SEC.2; P.L.1-1992,SEC.31.
IC 8-1-13-18
Rates and charges; jurisdiction and powers of commission
Sec. 18. A corporation is subject to the jurisdiction of thecommission for the purpose of fixing rates to be charged to membersof the corporation for energy, and for the purpose of service areaassignments under IC 8-1-2.3.
(Formerly: Acts 1935, c.175, s.18; Acts 1937, c.258, s.10; Acts 1939,c.105, s.3; Acts 1951, c.162, s.2.) As amended by Acts 1980, P.L.69,SEC.4; P.L.121-1987, SEC.3; P.L.23-1988, SEC.51.
IC 8-1-13-18.5
Withdrawal from jurisdiction of commission
Sec. 18.5. (a) Except as provided in subsection (i), a corporationorganized under this chapter or a corporation organized underIC 23-17 whose membership includes one (1) or more corporationsorganized under this chapter may withdraw from the jurisdiction ofthe commission. A corporation organized under this chapter thatwithdraws from the jurisdiction of the commission must comply withall provisions of this chapter that do not directly concern thecommission and must continue to pay the public utility fee requiredunder IC 8-1-6. A member of a corporation that has withdrawn fromthe commission's jurisdiction shall have reasonable access to themeetings and the minutes of the meetings of the corporation's boardof directors, except for executive sessions that concern personnelmatters and confidential or proprietary matters that may:
(1) invade the privacy of a member or an employee of thecorporation; or
(2) impair the corporation's bargaining, legal, or competitiveposition;
if the matter is disclosed to the member.
(b) A corporation that proposes to withdraw under this chapterfrom the jurisdiction of the commission must first obtain theapproval of the members.
(c) The board of a corporation that proposes to withdraw underthis chapter from the jurisdiction of the commission must conduct areferendum of the members of the corporation to determine whetherthe members approve of the removal of the corporation from thejurisdiction of the commission.
(d) A board must send written notice of the board's intent toconduct a referendum to the commission before the board mayconduct the referendum.
(e) A referendum may be conducted at an annual or specialmeeting of the members held under section 8 of this chapter if aquorum is present.
(f) Written notice of a meeting at which a referendum is to beconducted must be sent to every member not less than thirty (30)days before the date of the meeting. The notice must contain thefollowing information:
(1) The place, date, and hour of the meeting.
(2) The fact that a referendum will be conducted at the meetingto determine whether the members approve of the removal ofthe corporation from the jurisdiction of the commission.
(3) The fact that no proxies will be permitted to determinewhether the members approve of the removal of the corporationfrom the jurisdiction of the commission.
(g) A board shall distribute secret ballots to the members presentat the meeting. The ballots must be in a form substantially equivalentto the following:
___ YES. I want the corporation to withdraw from thejurisdiction of the commission. ___ NO. I want the corporation to remain under the jurisdictionof the commission.
Only those members present in person at the meeting may vote. Eachmember is entitled to one (1) vote on the question of thecorporation's withdrawal from jurisdiction of the commission. If amajority of the members present vote in favor of withdrawing fromthe jurisdiction of the commission, the withdrawal is effective thirty(30) days after the date of the vote. If less than a majority of themembers vote in favor of withdrawing the corporation fromjurisdiction of the commission, the corporation is prohibited fromconducting another referendum concerning withdrawal for eighteen(18) months following the date of the meeting at which the vote wastaken. Parties aggrieved by the conduct of the referendum must filean action in the circuit or superior court with jurisdiction in thecounty where the corporation has the corporation's principal officeto allege noncompliance with this section not more than thirty (30)days after the date of the vote.
(h) If a corporation withdraws from jurisdiction of thecommission, the corporation's secretary shall not more than five (5)days after the date of the vote send a verified certification of the voteto the commission affirming that all the requirements of this sectionwere met and include all of the following:
(1) The total membership of the corporation.
(2) The total number of members voting in the referendum.
(3) The actual vote, for and against withdrawal.
(i) If a corporation withdraws from the jurisdiction of thecommission, the commission shall continue to exercise jurisdictionover the corporation only as to the following:
(1) Electric service area assignments under IC 8-1-2.3.
(2) Certificates of public convenience and necessity, certificatesof territorial authority, and indeterminate permits underIC 8-1-2, IC 8-1-8.5, or IC 8-1-8.7.
(3) Water utility disputes under IC 8-1-2-86.5.
(j) Whenever two (2) or more corporations organized under thischapter consolidate or merge under section 16 of this chapter, andone (1) but not all of the corporations has withdrawn from thejurisdiction of the commission under this section, the consolidated ormerged corporation is under the jurisdiction of the commission untilthe consolidated or merged corporation withdraws from jurisdictionof the commission under this section, unless the agreement forconsolidation or merger approved under section 16 of this chapterincludes the withdrawal from the jurisdiction of the commissionunder this section.
(k) A board of a corporation that has withdrawn from thejurisdiction of the commission under this section must conduct areferendum of the corporation's members to determine whether thecorporation should return to the jurisdiction of the commission uponreceipt of:
(1) a petition for a referendum signed by not less than fifteenpercent (15%) of the corporation's members; or (2) a resolution ordering a referendum adopted by a majorityvote of the board of directors of the corporation.
Upon receipt of the petition or adoption of the resolution by theboard, the board shall inform the commission of the petition orresolution and shall thereafter conduct a referendum at the nextannual meeting of the corporation held under section 8 of thischapter, or if the next annual meeting is more than ninety (90) daysafter the date the petition was received or resolution for referendumwas adopted by the board, then at a special meeting called by theboard and held not more than ninety (90) days after receipt of thepetition or adoption of the resolution. The process provided insubsections (d), (e), (f), (g), and (h) shall be followed whenconducting a referendum under this subsection, except the form ofthe ballots must be as follows:
___ YES. I want the corporation to return to the jurisdiction ofthe commission.
___ NO. I want the corporation to remain outside thejurisdiction of the commission.
If a corporation returns to the jurisdiction of the commission, thecommission shall resume all the jurisdiction it would have if thecorporation had not withdrawn, effective thirty (30) days followingthe date the referendum was conducted. If less than a majority of themembers voting at the referendum vote in favor of returning to thejurisdiction of the commission, a referendum on the questionpresented at the referendum may not be conducted for eighteen (18)months following the date of the vote.
As added by P.L.109-1995, SEC.3. Amended by P.L.42-2005, SEC.1.
IC 8-1-13-19
Repealed
(Repealed by Acts 1980, P.L.69, SEC.5.)
IC 8-1-13-20
Repealed
(Repealed by Acts 1980, P.L.69, SEC.5.)
IC 8-1-13-21
Dissolution of corporation
Sec. 21. Any corporation created under this chapter may bedissolved by filing in the office of the secretary of state articles ofdissolution which shall be entitled and indorsed "Articles ofdissolution of ____________" (the blank space being filled in withthe name of the corporation) and shall state:
(a) Name of the corporation and, if such corporation is acorporation resulting from a consolidation as provided in thischapter, the names of the original corporations.
(b) The date of filing of the articles of incorporation in theoffice of secretary of state and, if such corporation is acorporation resulting from a consolidation as provided in thischapter, the dates on which the articles of incorporation of the
original corporations were filed in the office of secretary ofstate.
(c) That the corporation elects to dissolve.
(d) The name and post office address of each of its directors,and the name, title, and post office address of each of itsofficers.
Such articles shall be subscribed and acknowledged in the samemanner as original articles of incorporation by the president or vicepresident and the secretary or an assistant secretary, who shall makeand annex an affidavit stating that they have been authorized toexecute and file such articles by a resolution duly adopted by themembers of each corporation at meetings thereof duly called andheld as provided in section 8 of this chapter. Articles of dissolutionand/or a certified copy or copies thereof shall be filed in the sameplaces as original articles of incorporation and thereupon thecorporation shall be deemed to be dissolved. Such corporation shallcontinue for the purpose of paying, satisfying, and discharging anyexisting liabilities or obligations and collecting or liquidating itsassets, and doing all other acts required to adjust and wind up itsbusiness and affairs, and may sue and be sued, in its corporate name.Any assets remaining after all liabilities or obligations of thecorporation have been satisfied or discharged shall pass to andbecome the property of the state.
(Formerly: Acts 1935, c.175, s.19; Acts 1937, c.258, s.11.) Asamended by P.L.59-1984, SEC.68.
IC 8-1-13-22
Articles of incorporation; amendment; change of name; change ofterritory
Sec. 22. (a) A corporation created under this chapter may amendits articles of incorporation to change its corporate name, to increaseor reduce the number of its directors or change any other provisionstherein; however, no corporation shall amend its articles ofincorporation to embody therein any purpose, power, or provisionwhich would not be authorized if its original articles ofincorporation, including such additional or changed purpose, power,or provision were offered for filing at the time articles under thissection are offered. Such amendment may be accomplished by filingarticles of amendment in the office of the secretary of state whichshall be entitled and endorsed "Articles of amendment of____________" (the blank space being filled in with the name of thecorporation) and state:
(1) The name of the corporation, and if it has been changed, thename under which it was originally incorporated.
(2) The date of filing the articles of incorporation in each publicoffice where filed.
(3) Whether the territory served or to be served by thecorporation is to be changed and, if so, whether it is to beincreased or decreased.
(4) The purposes, powers, or provisions, if any, to be amended
or eliminated and the purposes, powers, or provisions, if any, tobe added or substituted.
(b) Such articles shall be subscribed in the name of thecorporation by the president or a vice president, and by the secretaryor the assistant secretary, who shall make and annex an affidavitstating that they have been authorized to execute and file sucharticles by a resolution duly adopted at a meeting of the corporationduly called and held as provided in section 8 of this chapter, or uponwaiver of notice signed by all the members of the corporation. If byany such amendment to articles of incorporation, the territoryproposed to be served by the corporation is to be increased ordecreased, the articles of amendment, together with a petitionexecuted by the secretary or assistant secretary of the corporation andpraying for the permission of the commission shall be submitted tosuch commission. Thereupon, the commission shall set said petitionfor public hearing and shall give notice of the time and place thereofone (1) time in at least one (1) newspaper published in each of thecounties in which lies any of the territory proposed to be added oromitted by such amendment, which publication shall be at least ten(10) days before such hearing; the cost of such publication shall bepaid by the petitioner when filing such petition.
(c) Any interested person may appear, personally or by attorney,at such hearing and aid or oppose the prayer of the petition. Aftersuch hearing, the commission shall grant or deny the petition andmake its order accordingly.
(d) No amendment increasing or decreasing the territory to beserved by such corporation shall be filed in the office of the secretaryof state unless there be attached thereto a certified copy of an orderfrom the commission consenting to such increase or decrease. Sucharticles shall be filed in the office of the secretary of state andthereupon the amendment shall be deemed to have been effected.
(Formerly: Acts 1935, c.175, s.20; Acts 1937, c.258, s.12; Acts 1939,c.105, s.4.) As amended by Acts 1977, P.L.102, SEC.6; P.L.23-1988,SEC.52.
IC 8-1-13-23
Classification of corporations; general district corporation andlocal district corporation distinguished
Sec. 23. Any corporation to be formed under this chapter shall beeither a general district corporation or a local district corporation.
(a) A general district corporation is a corporation formed underthis chapter for the purpose of furnishing services to local districtcorporations. A general district corporation may be formed to dobusiness in all, or a stated number of the counties of this state. Nosuch corporation shall have the authority or right to do business witha local district corporation in any county already named as a part ofthe territory of another general district corporation unless, prior to itsincorporation, consent for it to transact business in that county shallhave been given by the existing general district corporation orcorporations then authorized to furnish services to the local district
corporations in that county. However, nothing in this chapter shall beconstrued to allow such a newly formed general district corporationto engage in the business to acquire, own, operate, maintain, andimprove a system or systems. A general district corporation may beorganized by:
(1) a group consisting of one-third (1/3) of the heads of farmfamilies in all the counties included;
(2) the directors of an association of agricultural producers, themembers of which reside in nine-tenths (9/10) of the countiesnamed within the said corporation's territorial limits;
(3) the directors of the county or regional stockholdercorporations within the state having as stockholders or membersmore than seventy-five thousand (75,000) producers ofagricultural products within the state of Indiana; or
(4) the board of directors of another general district corporationorganized under this chapter.
(b) A local district corporation is a corporation formed under thischapter for the purpose of furnishing services to its members. A localdistrict corporation shall not be permitted to exercise any of thepowers granted under this chapter until at least one-half (1/2) of theheads of farm families residing in the territory described in itsproposed articles of incorporation shall have agreed in writing tobecome members of the corporation and made a minimum paymentfor such membership as in said articles provided.
(Formerly: Acts 1935, c.175, s.21; Acts 1937, c.258, s.13.) Asamended by Acts 1980, P.L.70, SEC.1.
IC 8-1-13-24
Commission decisions or orders; appeal
Sec. 24. Any person or legal entity adversely affected by any finaldecision, ruling, or order of the commission made pursuant to thischapter may appeal that decision, ruling, or order under the sameappeal procedures as in IC 8-1-3.
(Formerly: Acts 1935, c.175, s.22.) As amended by Acts 1977,P.L.102, SEC.7; P.L.23-1988, SEC.53.
IC 8-1-13-25
Construction of chapter
Sec. 25. This chapter is to be liberally construed, and theenumeration of any object, purpose, power, manner, method, or thingshall not be deemed to exclude like or similar objects, purposes,powers, manners, methods, or things.
(Formerly: Acts 1935, c.175, s.23.) As amended by P.L.59-1984,SEC.69.
IC 8-1-13-26
Foreign corporation; admittance to do business within state;finding of convenience and necessity
Sec. 26. Any foreign corporation organized as a nonprofitcorporation for the purpose of making electric energy available to the
inhabitants of rural areas may be admitted to do business within thisstate and shall have the same powers, restrictions, and liabilities asa corporation organized under this chapter. Whenever such foreigncorporation desires to be admitted to operate in this state, it shall filewith the commission a petition in as many original counterparts asthere are counties in Indiana, in which it requests permission to makeelectric energy available, plus five (5). Said petition shall describethe territory in Indiana in which its operations are to be conductedand pray the said commission to grant to it a certificate of publicconvenience and necessity for such operations. To each such originalpetition, there shall be attached a copy of the articles of incorporationof said corporation, with all amendments thereto, duly authenticatedby the proper officer of the state wherein it is incorporated. Saidpetition shall be acted upon by the commission in accordance withthe provisions of section 18 of this chapter. The commission shallenter a finding that the convenience and necessity of the publicproposed to be served in the Indiana territory in which the operationsof the corporation are proposed to be conducted either will or willnot be served by such operations. If said finding be in the negative,said commission shall enter an order denying the petition. If suchfinding be in the affirmative, said commission shall enter an ordergranting a certificate of public convenience and necessity for theproposed operations of said corporation in Indiana and shall attacha copy of said order, duly certified by the secretary of saidcommission, to each of the originals of said petition, filed asaforesaid, except two (2) and deliver the same to the petitioner. Thecorporation shall then present to the secretary of state all such sets ofauthenticated copy of articles, original petition, and order of thecommission, together with such application for admission to dobusiness in this state, if any, as the secretary of state may require andtender to the said secretary of state six dollars and fifty cents ($6.50)to cover his fees for filing, certificate, and seal. If the secretary ofstate shall approve the same, he shall endorse his approval upon eachof the aforesaid sets of documents, file one (1) thereof in his office,return the remaining ones to the corporation, and issue to thecorporation his certificate of admission to do business in this state.Thereupon, and before the corporation shall do any business in thisstate, it shall file in the office of the recorder of each county inIndiana in which it is to make electric energy available, one (1) ofsaid sets of documents bearing the approval of the secretary of stateendorsed thereon.
(Formerly: Acts 1935, c.175, s.26; Acts 1939, c.106, s.2.) Asamended by P.L.59-1984, SEC.70; P.L.23-1988, SEC.54.
IC 8-1-13-27
Liability of members and directors
Sec. 27. (a) No member of any corporation shall be liable orresponsible for its debts or liabilities.
(b) A director of a distribution cooperative corporation or adirector of a power supplier whose members are corporations as
defined in this chapter is not personally liable while acting in goodfaith for the acts or omissions of the distribution cooperativecorporation or the power supplier.
(Formerly: Acts 1935, c.175, s.27; Acts 1939, c.106, s.3.) Asamended by P.L.59-1984, SEC.71; P.L.121-1987, SEC.4.
IC 8-1-13-28
Rules; customer relations; adoption; complaints; procedures
Sec. 28. (a) The commission shall adopt rules to govern therelations between corporations and any or all classes of theircustomers. Those rules shall cover the following subjects:
(1) Extension of service.
(2) Extension of credit.
(3) Deposits, including interest.
(4) Billing procedures.
(5) Termination of service.
(6) Complaints.
(7) Information and notice to customers of their rights under therules.
(b) The commission may investigate and enter orders oncomplaints filed by individual customers arising under this section.The commission may establish an appeals division to act on its ownbehalf regarding individual customer complaints. The decision of thedivision is binding on all parties to the complaint. The commissionshall review decisions of the appeals division upon timely request byan affected party.
(c) This section does not invalidate any rule adopted by thecommission before September 1, 1987, to govern the relationsbetween corporations and their customers if the rule is consistentwith this section.
As added by P.L.121-1987, SEC.5.
IC 8-1-13-29
Rates, tolls, and charges; schedules; filing; approval
Sec. 29. (a) Every corporation shall file with the commission,within a time fixed by the commission, schedules showing all rates,tolls, and charges that it has established and that are enforced at thetime for any service performed by it within the state, or for anyservice in connection with the rates, tolls, and charges.
(b) The schedules of rates, tolls, and charges shall be open forpublic inspection.
(c) Every corporation shall file, with and as a part of the schedule,all rules that in any manner affect the rates charged or to be chargedfor any service.
(d) It is unlawful for a corporation to charge any amount for anyservice that varies from the schedules approved by the commission.
As added by P.L.121-1987, SEC.6.
IC 8-1-13-30
Changes in schedules of rates, tolls, and charges; requests for
increases; approval; factors considered; required procedures
Sec. 30. (a) No change shall be made in any schedule, includingschedules of joint rates, except upon thirty (30) days notice to thecommission, and approval by the commission, and all changes shallbe plainly indicated upon existing schedules or by filing newschedules in place of existing schedules thirty (30) days before thetime the same are to take effect. The commission may prescribe ashorter time within which a change may be made. A corporation maynot file a request for a general increase in its basic rates and chargeswithin fifteen (15) months after the filing date of its most recentrequest for a general increase in its basic rates and charges, exceptthat the commission may order a more timely increase if:
(1) the requested increase relates to a different type of utilityservice;
(2) the commission finds that the corporation's financialintegrity or service reliability is threatened; or
(3) the increase is based on:
(A) a rate structure previously approved by the commission;or
(B) orders of federal courts or federal regulatory agencieshaving jurisdiction over the corporation.
The phrase "general increase in basic rates and charges" does notinclude changes in rates related solely to the cost of fuel orpurchased electricity or adjustments in accordance with trackingprovisions approved by the commission.
(b) No schedule of rates, tolls, and charges of a corporation whichincludes or authorizes any changes in charges based upon costs iseffective without the approval of the commission. Before thecommission approves any changes in the schedule of rates, tolls, andcharges of a corporation that generates and sells electricity, basedupon the cost of fuel to generate electricity or upon the cost of fuelincluded in the cost of purchased electricity, the utility consumercounselor shall examine the books and records of the publicgenerating corporation to determine the cost of fuel upon which theproposed charges are based. In addition, before a fuel cost chargebecomes effective, the comm