UTILITIES CODE
CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS
SUBCHAPTER A. GENERAL PROVISIONS
§ 162.001. SHORT TITLE. This chapter may be cited as
the Telephone Cooperative Act.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.002. PURPOSE. A cooperative, nonprofit
corporation may be organized under this chapter to furnish
communication service to the widest practicable number of users of
that service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.003. DEFINITIONS. In this chapter:
(1) "Board" means the board of directors of a
telephone cooperative.
(2) "Communication service" means:
(A) the transmission or reception of
information, signals, or messages by any means, including by wire,
radio, cellular radio, microwave, or fiber optics; and
(B) the provision of lines, facilities, and
systems used in the transmission or reception described by
Paragraph (A).
(3) "Member" means:
(A) an incorporator of a telephone cooperative;
or
(B) a person admitted to membership in a
telephone cooperative as provided by Section 162.065.
(4) "Patron" means a member who is eligible to receive
patronage dividends or to earn capital credits as a result of
purchasing certain services from a telephone cooperative as
provided by Section 162.066.
(5) "Telephone cooperative" means a corporation that
is organized under this chapter or that becomes subject to this
chapter as provided by this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.004. CERTAIN CORPORATE NAMES PROHIBITED. A
corporation organized under the laws of this state or authorized to
do business in this state may not use the words "telephone
cooperative" in the corporation's name unless the corporation is
organized under this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.005. EFFECT OF RECORDING CERTAIN MORTGAGES
EXECUTED BY TELEPHONE COOPERATIVES. (a) An instrument executed
by a telephone cooperative or a foreign corporation doing business
in this state under this chapter that affects real and personal
property and that is recorded in the real property records of any
county in which the property is located or is to be located has the
same effect as if the instrument were also recorded as provided by
law in the proper office in that county as a mortgage of personal
property.
(b) All after-acquired property of a telephone cooperative
or foreign corporation doing business in this state under this
chapter described by or referred to as being pledged in an
instrument to which Subsection (a) applies becomes subject to the
lien described by the instrument immediately when the cooperative
or corporation acquires the property, without regard to whether the
property existed at the time the instrument was executed. The
execution of the instrument constitutes notice and otherwise has
the same effect with respect to after-acquired property to which
this subsection applies as it has under the laws relating to
recordation with respect to property that is owned by the
cooperative or foreign corporation at the time the instrument is
executed and that is described in the instrument as being pledged by
the instrument.
(c) After a lien on personal property under an instrument to
which Subsection (a) applies is recorded, the lien continues in
existence and of record for the period specified in the instrument
without:
(1) the refiling of the instrument; or
(2) the filing of any renewal certificate, affidavit,
or other supplemental information required by a law relating to the
renewal, maintenance, or extension of a lien on personal property.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.006. CONSTRUCTION STANDARDS. A telephone
cooperative that constructs communication lines or facilities must
at a minimum comply with the standards of the National Electrical
Safety Code in effect at the time of construction.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER B. CREATION AND OPERATION OF TELEPHONE COOPERATIVES
§ 162.051. INCORPORATORS. (a) Three or more
individuals may act as incorporators of a telephone cooperative by
executing articles of incorporation as provided by this chapter.
(b) An incorporator must:
(1) be at least 21 years of age; and
(2) reside in this state.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.052. DURATION OF CORPORATION. A telephone
cooperative may be created as a perpetual corporation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.053. NAME OF TELEPHONE COOPERATIVE. The name of a
telephone cooperative must:
(1) include the words "telephone" and "cooperative"
and the abbreviation "Inc."; and
(2) be distinct from the name of any other corporation
organized under the laws of or authorized to do business in this
state.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.054. ARTICLES OF INCORPORATION. (a) The
articles of incorporation of a telephone cooperative must:
(1) state that the articles are executed under this
chapter;
(2) be signed by each incorporator and acknowledged by
at least two incorporators; and
(3) state:
(A) the name of the cooperative;
(B) the purpose for which the cooperative is
formed;
(C) the name and address of each incorporator;
(D) the number of directors;
(E) the address of the cooperative's principal
office and the name and address of its agent on whom process may be
served;
(F) the duration of the cooperative;
(G) the terms under which a person is admitted to
membership and retains membership in the cooperative, unless the
articles expressly state that the determination of membership
matters is reserved to the directors by the bylaws; and
(H) any provisions that the incorporators
include for the regulation of the business and the conduct of the
affairs of the cooperative.
(b) The articles of incorporation do not need to state any
of the corporate powers enumerated in this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.055. FILING AND RECORDING OF ARTICLES OF
INCORPORATION. (a) The secretary of state shall receive articles
of incorporation of a telephone cooperative if the incorporators of
the cooperative:
(1) apply for filing the articles;
(2) furnish satisfactory evidence of compliance with
this chapter to the secretary of state; and
(3) pay a fee of $25.
(b) The secretary of state shall:
(1) file the articles of incorporation in the
secretary's office;
(2) record the articles at length in a book to be kept
for that purpose;
(3) retain the original articles of incorporation on
file in the secretary's office; and
(4) issue a certificate showing the recording of the
articles of incorporation and the telephone cooperative's
authority to do business under the articles.
(c) A copy of the articles of incorporation or of the record
of the articles, certified under the state seal, is evidence of the
creation of the telephone cooperative.
(d) The existence of the telephone cooperative dates from
the filing of the articles in the office of the secretary of state.
The certificate of the secretary of state is evidence of that
filing.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.056. REVIVAL OF ARTICLES OF
INCORPORATION. (a) If the articles of incorporation of a
telephone cooperative expire by limitation, the cooperative, with
the consent of a majority of its members, may revive the articles by
filing:
(1) new articles of incorporation under this chapter;
and
(2) a certified copy of the expired original articles.
(b) A telephone cooperative that revives its articles of
incorporation has all the privileges, immunities, and rights of
property exercised and held by the cooperative at the time the
original articles expired.
(c) New articles of incorporation filed under this section
must recite the privileges, immunities, and rights of property
exercised and held by the cooperative at the time the original
articles expired.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.057. ORGANIZATIONAL MEETING. (a) After the
certificate of incorporation is issued, the incorporators of a
telephone cooperative shall meet to adopt bylaws, elect officers,
and transact other business that properly comes before the meeting.
(b) A majority of the incorporators shall call the
organizational meeting.
(c) The incorporators calling the organizational meeting
shall give at least three days' notice of the meeting by mail to
each incorporator. The notice must state the time and place of the
meeting. The notice may be waived in writing.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.058. PERFECTING DEFECTIVELY ORGANIZED
CORPORATIONS. (a) A telephone cooperative that files defective
articles of incorporation or fails to take an action necessary to
perfect its corporate organization may:
(1) file corrected articles of incorporation or amend
the original articles; and
(2) take any action necessary to correct the defect.
(b) An action taken under this section is valid and binding
on any person concerned.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.059. NONPROFIT OPERATION. (a) A telephone
cooperative shall be operated on a nonprofit basis for the mutual
benefit of its members and patrons.
(b) A cooperative's bylaws and its contracts with members
and patrons must contain appropriate provisions relating to the
disposition of revenues and receipts to establish and maintain the
cooperative's nonprofit and cooperative character.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.060. MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE
COOPERATIVE. A member is not liable for a debt of a telephone
cooperative, and the member's property is not subject to execution
for that debt.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.061. LICENSE FEE. Not later than July 1 of each
year, each telephone cooperative doing business in this state shall
pay to the secretary of state a fee of $10.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.062. EXEMPTION FROM EXCISE TAXES. A telephone
cooperative doing business in this state is exempt from all excise
taxes but is exempt from the franchise tax imposed by Chapter 171,
Tax Code, only if the cooperative is exempted by that chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.063. EXEMPTION FROM APPLICATION OF SECURITIES
ACT. The Securities Act (Article 581-1 et seq., Vernon's Texas
Civil Statutes) does not apply to:
(1) a note, bond, or other evidence of indebtedness
issued by a telephone cooperative doing business in this state to
the United States;
(2) an instrument executed to secure a debt of a
telephone cooperative to the United States; or
(3) the issuance of a membership certificate by a
telephone cooperative or a foreign corporation doing business in
this state under this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.064. BYLAWS. (a) The board shall adopt the
initial bylaws of a telephone cooperative to be adopted following:
(1) an incorporation;
(2) a consolidation; or
(3) an amendment by an existing cooperative,
corporation, or association of its articles of incorporation as
provided by Section 162.082.
(b) After the initial bylaws are adopted, the members may
adopt, amend, or repeal the bylaws by the affirmative vote of a
majority of those members voting on the question at a meeting of the
members.
(c) The bylaws may contain any provision for the regulation
and management of the affairs of the telephone cooperative that is
consistent with the articles of incorporation.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.065. MEMBERSHIP. (a) Each incorporator of a
telephone cooperative is a member of the cooperative. A person
other than an incorporator may become a member of a telephone
cooperative only if the person agrees to use communication service
furnished by the cooperative when that service is made available
through the cooperative's facilities. The bylaws may prescribe
additional qualifications and limitations with respect to
membership.
(b) Membership in a telephone cooperative is evidenced by a
certificate of membership. A membership certificate must contain
the provisions, consistent with this chapter and the articles of
incorporation, that are prescribed by the cooperative's bylaws. A
certificate may be transferred only as provided by the bylaws.
(c) A telephone cooperative may become a member of another
telephone cooperative and may fully use the facilities and services
of that cooperative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.066. PATRONS. (a) A member is a patron of a
telephone cooperative if the member purchases local
telecommunications service or toll telecommunications service or
pays end user access charges in the ordinary course of business of
the cooperative.
(b) The use of interexchange access, payment of
interexchange access fees or settlements, or purchase of equipment
does not qualify a member or other person as a patron.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.067. MEETINGS OF MEMBERS. (a) A telephone
cooperative shall hold an annual meeting of members at the time and
place provided by the bylaws. Failure to hold the annual meeting at
the designated time does not result in forfeiture or dissolution of
the cooperative.
(b) A special meeting of the members may be called by:
(1) the president;
(2) the board;
(3) any three directors; or
(4) the lesser of:
(A) 200 members; or
(B) 10 percent of all the members.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.068. NOTICE OF MEMBERS' MEETING. (a) Except as
otherwise provided by this chapter, written notice of each meeting
of the members shall be given to each member, either personally or
by mail, not earlier than the 25th day or later than the 10th day
before the date of the meeting.
(b) The notice must state the time and place of the meeting
and, in the case of a special meeting, each purpose for which the
meeting is called.
(c) A notice that is mailed is considered to have been given
when the notice is deposited in the United States mail with postage
prepaid addressed to the member at the member's address as it
appears on the records of the telephone cooperative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.069. WAIVER OF NOTICE. A person entitled to
notice of a meeting may waive notice in writing either before or
after the meeting. If a person entitled to notice of a meeting
attends the meeting, the person's attendance constitutes a waiver
of notice of the meeting, unless the person participates in the
meeting solely to object to the transaction of business because the
meeting is not legally called or convened.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.070. MEMBERS' MEETING: QUORUM AND
VOTING. (a) Unless the bylaws prescribe a greater percentage or
number of members for a quorum, a quorum at a meeting of the members
of a telephone cooperative is the personal presence of:
(1) 10 percent of all members, if the cooperative has
500 or fewer members; or
(2) the greater of 50 members or two percent of all
members, if the cooperative has more than 500 members.
(b) If fewer than a quorum are present at a meeting, a
majority of the members present in person may adjourn the meeting
from time to time without further notice.
(c) Each member present at a meeting of the members is
entitled to one vote on each matter submitted to a vote at the
meeting. Voting must be in person unless the bylaws provide for
voting by mail.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.071. BOARD OF DIRECTORS. (a) A board of at least
five directors shall manage the business of a telephone
cooperative. Each director must be a member of the cooperative.
The bylaws must prescribe the number of directors and their
qualifications other than those prescribed by this chapter.
(b) The board may exercise any power of a telephone
cooperative not conferred on the members by this chapter or by the
cooperative's articles of incorporation or bylaws.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.072. ELECTION OF DIRECTORS; TERMS. (a) The
incorporators of a telephone cooperative named in the articles of
incorporation shall serve as directors and hold office until the
first annual meeting of the members and until their successors are
elected and qualify.
(b) At each annual meeting or, in the case of failure to hold
the annual meeting as specified in the bylaws, at a special meeting
called for that purpose, the members shall elect directors to hold
office until the next annual members' meeting, except as otherwise
provided by this chapter. Except as provided by Subsection (e),
each director holds office for the term for which the person is
elected and until the person's successor is elected and qualifies.
(c) Instead of electing all the directors annually, the
bylaws may provide that the directors, other than those named in the
articles of incorporation to serve until the first annual meeting
of the members, are elected by the members for a term of two years or
three years. The terms must be set so that:
(1) one-half of the directors, as nearly as possible,
are elected annually, if a two-year term is provided; or
(2) one-third of the directors, as nearly as possible,
are elected annually, if a three-year term is provided.
(d) After the implementation of two-year or three-year
terms for directors, as directors' terms expire, the members shall
elect their successors to serve until the second or third
succeeding annual meeting after their election, as appropriate.
(e) The bylaws must prescribe the manner of electing a
successor to a director who resigns, dies, or otherwise becomes
incapable of acting. The bylaws may provide for the removal of a
director from office and for the election of the director's
successor.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.073. COMPENSATION OF DIRECTORS. (a) A director
may not receive a salary for services as a director. Except in an
emergency, a director may not receive a salary for services in a
capacity other than director without the approval of the members.
(b) The bylaws may:
(1) prescribe a fixed fee for attendance at each board
meeting, committee meeting, industry-related conference approved
by the board, or training program; and
(2) provide for reimbursement of actual expenses of
attendance or a reasonable per diem.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.074. INSURANCE FOR DIRECTORS. A telephone
cooperative may provide liability, accident, life, and health
insurance coverage for a director who chooses to have that
coverage.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.075. BOARD MEETINGS; QUORUM. (a) The bylaws
shall prescribe the manner of holding board meetings.
(b) A majority of the directors is a quorum.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.076. DISTRICTS. (a) The bylaws may provide for
the territory served or to be served by a telephone cooperative to
be divided into two or more districts for any purpose, including the
nomination and election of directors and the election and
functioning of district delegates.
(b) The bylaws must prescribe:
(1) the boundaries of each district or the manner of
establishing a district's boundaries;
(2) the manner of changing a district's boundaries;
and
(3) the manner in which each district functions.
(c) District delegates may nominate and elect directors. A
district delegate must be a member.
(d) A member may not vote by proxy or by mail at a district
meeting.
(e) A district delegate may not vote by proxy or by mail at
any meeting.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.077. OFFICERS, AGENTS, AND EMPLOYEES. (a) The
board of a telephone cooperative shall annually elect from the
board's membership a president, a vice president, a secretary, and
a treasurer.
(b) An officer who ceases to be a director ceases to hold
office.
(c) The same person may hold the offices of secretary and of
treasurer.
(d) The board may also elect or appoint other officers,
agents, or employees as the board considers appropriate and shall
prescribe the powers and duties of those persons.
(e) An officer may be removed from office and a successor
elected in the manner prescribed by the bylaws.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.078. EXECUTIVE COMMITTEE. (a) The bylaws of a
telephone cooperative may authorize the board to elect an executive
committee from the board's membership.
(b) The board may delegate to the executive committee the
management of the current and ordinary business of the cooperative
and other duties as prescribed by the bylaws.
(c) The designation of an executive committee and the
delegation of authority to the committee does not relieve the board
or any director of a responsibility imposed on the board or the
director by this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.079. INDEMNIFICATION. Article 2.22A, Texas
Non-Profit Corporation Act (Article 1396-2.22A, Vernon's Texas
Civil Statutes), applies to a telephone cooperative in the same
manner as if the cooperative were formed under the Texas Non-Profit
Corporation Act.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.080. CHANGE OF LOCATION OF PRINCIPAL
OFFICE. (a) A telephone cooperative may, with the authorization
of the board or the members, change the location of its principal
office by filing a certificate reciting the change of principal
office with the secretary of state.
(b) The cooperative's president or vice president must
execute and acknowledge the certificate under the cooperative's
seal as attested by the secretary.
(c) The secretary of state shall charge and collect a fee of
$5 for filing a certificate of change of principal office.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.081. DIRECTOR, OFFICER, OR MEMBER ACTING AS
NOTARY. A person who is an officer, director, or member of a
telephone cooperative and who is authorized to take acknowledgments
under state law is not disqualified because of the person's
association with the cooperative from taking an acknowledgment of
an instrument executed in favor of the cooperative or to which the
cooperative is a party.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.082. APPLICABILITY TO CORPORATIONS ORGANIZED
UNDER OTHER LAW. A cooperative or nonprofit corporation or
association organized under any other law of this state for the
purpose of furnishing communication service may, by a majority vote
of the members present in person at a meeting called for that
purpose, amend its articles of incorporation to comply with this
chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER C. POWERS OF TELEPHONE COOPERATIVE
§ 162.121. GENERAL POWERS. A telephone cooperative
may:
(1) sue and be sued in its corporate name;
(2) adopt and alter a corporate seal and use the seal
or a facsimile of the seal as required by law;
(3) construct, acquire, lease, improve, install,
equip, maintain, and operate, and, subject to Sections 162.125 and
162.126, dispose of, lease, or encumber, communication lines,
facilities or systems, lands, structures, plants and equipment,
exchanges, and other property, considered appropriate to
accomplish the purpose for which the cooperative is organized;
(4) issue membership certificates as provided by this
chapter;
(5) borrow money and otherwise contract indebtedness,
issue or guarantee notes, bonds, and other evidences of
indebtedness, and secure the payment of indebtedness by pledge or
other encumbrance on any or all of its property or revenue;
(6) conduct its business and exercise its powers
inside or outside this state;
(7) adopt, amend, and repeal bylaws;
(8) make any contracts appropriate for the full
exercise of the powers granted by this chapter; and
(9) perform any other acts and exercise any other
power that may be appropriate to accomplish the purpose for which
the cooperative is organized.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.122. POWERS RELATING TO PROVISION OF COMMUNICATION
SERVICE. (a) A telephone cooperative may:
(1) furnish and improve communication service to its
members, to governmental agencies and political subdivisions, to
any number of subscribers of other communication systems through
interconnection of facilities, and to any number of users through
pay stations;
(2) connect and interconnect its communication lines,
facilities, or systems with other communication lines, facilities,
or systems;
(3) make its facilities available to persons
furnishing communication service inside or outside this state; and
(4) construct, maintain, and operate a communication
line along, on, under, or across publicly owned land or a public
thoroughfare, subject to the same restrictions and obligations that
apply to an electric transmission cooperative under Subchapter C,
Chapter 181.
(b) A telephone cooperative that acquires communication
facilities may continue to furnish service to a person who is
already receiving service from those facilities without requiring
the person to become a member, but the person may become a member on
the terms prescribed by the bylaws.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.123. CONNECTION AND INTERCONNECTION OF
FACILITIES. A telephone cooperative doing business in this state
may require a person furnishing communication service to the public
in this state to interconnect that person's lines, facilities, or
systems with, or otherwise make available those lines, facilities,
or systems to, the cooperative's communication lines, facilities,
or systems to provide a continuous line of communication for the
cooperative's subscribers.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.124. EMINENT DOMAIN. A telephone cooperative may
exercise the power of eminent domain in the manner provided by state
law for the exercise of that power by other corporations
constructing or operating communication lines, facilities, or
systems.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.125. ENCUMBRANCE AND DISPOSITION OF PROPERTY
WITHOUT MEMBERS' AUTHORIZATION. (a) The board of a telephone
cooperative may, without authorization of the members, authorize
the execution and delivery of a mortgage or deed of trust of or the
encumbering of any property of the cooperative, including property
to be acquired and the revenues from property of the cooperative, to
secure any indebtedness of the cooperative to the United States or
any lending institution licensed by the United States or a state.
(b) A mortgage or deed of trust described by Subsection (a)
is exempt from a tax for recording the instrument.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.126. ENCUMBRANCE, LEASE, AND DISPOSITION OF
PROPERTY WITH MEMBERS' AUTHORIZATION. (a) Except as provided by
Section 162.125, a telephone cooperative may not dispose of, lease,
or encumber all or a major portion of its property unless the
disposition, lease, or encumbrance is authorized by the affirmative
vote of at least two-thirds of all the members of the cooperative.
(b) The board may, on the authorization of two-thirds of all
the members of the cooperative at a members' meeting, dispose of or
lease all or a major portion of its property to:
(1) another telephone cooperative;
(2) a foreign corporation doing business in this state
under this chapter; or
(3) the holder of a note, bond, or other evidence of
indebtedness issued to the United States or to a lending
institution licensed by the United States or a state.
(c) The notice of a meeting at which a disposition or lease
under Subsection (b) is to be considered must state the proposed
action.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION
§ 162.151. AMENDMENT OF ARTICLES OF INCORPORATION. A
telephone cooperative may amend its articles of incorporation in
accordance with this subchapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.152. PRESENTATION AND APPROVAL OF PROPOSED
AMENDMENT. (a) A proposed amendment to the articles of
incorporation must be presented to a meeting of the members. The
notice of the meeting must state the proposed amendment or must have
the proposed amendment attached to it.
(b) A proposed amendment, with any changes, may be approved
only on the affirmative vote of at least two-thirds of the members
voting on the question at the meeting.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.153. ARTICLES OF AMENDMENT. (a) The president
or vice president, on behalf of the telephone cooperative, shall
execute and acknowledge the approved articles of amendment. The
cooperative's seal must be affixed to the articles of amendment and
attested by its secretary.
(b) The articles of amendment must state:
(1) that the articles of amendment are executed under
this chapter;
(2) the name of the telephone cooperative;
(3) the address of the cooperative's principal office;
and
(4) the amendment to the articles of incorporation.
(c) The president or vice president executing the articles
of amendment shall make and attach to the articles an affidavit
stating that the cooperative complied with this subchapter with
respect to the amendment set forth in the articles.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.154. FILING OF ARTICLES OF
AMENDMENT. (a) Articles of amendment shall be filed with the
secretary of state in the same manner as the original articles of
incorporation.
(b) The secretary of state shall charge and collect a fee of
$25 for filing articles of amendment.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER E. CONSOLIDATION OR MERGER OF TELEPHONE COOPERATIVES
§ 162.201. CONSOLIDATION. (a) Two or more telephone
cooperatives may enter into an agreement to consolidate the
cooperatives. The agreement must state:
(1) the terms of the consolidation;
(2) the name of the proposed consolidated cooperative;
(3) the number of directors of the proposed
consolidated cooperative;
(4) the time of the annual meeting and election; and
(5) the names of at least five persons to be directors
until the first annual meeting.
(b) A consolidation agreement may be approved only on the
votes of a majority of the members of each telephone cooperative at
a regular meeting or at a special meeting of its members called for
that purpose.
(c) Telephone cooperatives may not consolidate for the
purpose of duplicating the facilities of another communication
company where the other communication company is giving or is
willing to give reasonably adequate communication service.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.202. ARTICLES OF CONSOLIDATION. (a) The
articles of consolidation must:
(1) conform substantially to original articles of
incorporation of a telephone cooperative; and
(2) be executed, acknowledged, filed, and recorded in
the same manner as original articles of incorporation.
(b) The directors named in the consolidation agreement
shall as incorporators sign and acknowledge the articles of
consolidation.
(c) The secretary of state shall charge and collect a fee of
$50 for filing articles of consolidation.
(d) When the secretary of state accepts the articles of
consolidation for filing and recording and issues a certificate of
consolidation, the proposed consolidated telephone cooperative
described in the articles under its designated name exists as a body
corporate, with all the powers of a telephone cooperative
originally organized under this chapter.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.203. MERGER. (a) One or more telephone
cooperatives may merge into another cooperative as provided by this
section and Section 162.204.
(b) The proposition for the merger and proposed articles of
merger must be submitted at a meeting of the members of each merging
cooperative and the surviving cooperative. A copy of the proposed
articles of merger must be attached to the notice of each meeting.
(c) A proposed merger and proposed articles of merger, with
any amendments, may be approved only on the affirmative vote of at
least two-thirds of the members of each cooperative voting on the
proposed merger and articles.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.204. ARTICLES OF MERGER. (a) The president or
vice president of each telephone cooperative, on behalf of the
telephone cooperative, shall execute and acknowledge the approved
articles of merger. The cooperative's seal must be affixed to the
articles of merger and attested by its secretary.
(b) The articles of merger must state:
(1) that they are executed under this chapter;
(2) the name of each merging cooperative and the
address of its principal office;
(3) the name of the surviving cooperative and the
address of its principal office;
(4) that each merging cooperative and the surviving
cooperative agree to the merger;
(5) the name and address of each director of the
surviving cooperative;
(6) the terms of the merger and the manner in which the
merger will be carried out, including the manner in which members of
the merging cooperatives become or may become members of the
surviving cooperative;
(7) the duration of the surviving cooperative; and
(8) the purpose for which the surviving cooperative is
formed.
(c) The articles of merger may contain any provision
consistent with this chapter considered appropriate for the conduct
of the business of the surviving cooperative. The president or vice
president of each cooperative executing the articles of merger
shall make and attach to the articles an affidavit stating that the
cooperative complied with this subchapter with respect to the
articles.
(d) The original and a copy of the articles of merger shall
be delivered to the secretary of state. If the secretary of state
finds that the articles conform to law, the secretary of state, on
payment of a fee of $50, shall:
(1) file and record the articles of merger;
(2) issue a certificate of merger; and
(3) attach to the certificate of merger the copy of the
articles of merger and deliver the certificate and attached copy to
the surviving cooperative or its representative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.205. EFFECT OF CONSOLIDATION OR MERGER. (a) In a
consolidation the existence of each telephone cooperative ceases
and the articles of consolidation are considered to be the articles
of incorporation of the new cooperative. In a merger the separate
existence of each merging telephone cooperative ceases and the
articles of incorporation of the surviving cooperative are
considered to be amended to the extent, if any, that amendment is
provided for in the articles of merger.
(b) All the rights, privileges, immunities, property, and
applications for membership of each of the consolidating or merging
cooperatives are transferred to and vested in the new or surviving
cooperative, except that this chapter does not relieve a
cooperative of the obligation to comply with the applicable
provisions of Title 2.
(c) The new or surviving cooperative is liable for all the
liabilities and obligations of the consolidating or merging
cooperatives. A claim existing or action or proceeding pending by
or against a consolidating or merging cooperative may be prosecuted
as if the consolidation or merger had not taken place, and the new
or surviving cooperative may be substituted in the place of the
consolidating or merging cooperative. The consolidation or merger
does not impair the rights of creditors of or liens on the property
of a consolidating or merging cooperative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER F. CONVERSION OF CORPORATION INTO TELEPHONE COOPERATIVE
§ 162.251. CONVERSION OF CORPORATION INTO TELEPHONE
COOPERATIVE. (a) A corporation organized under the laws of this
state that furnishes or is authorized to furnish communication
service may be converted into a telephone cooperative in accordance
with this subchapter. On conversion, the corporation is subject to
this chapter as if it had been originally organized under this
chapter.
(b) The proposition for the conversion and proposed
articles of conversion must be submitted at a meeting of the members
or stockholders of the corporation or, in the case of a corporation
that does not have members or stockholders, at a meeting of the
incorporators of the corporation. A copy of the proposed articles
of conversion must be attached to the notice of the meeting.
(c) A proposed conversion and proposed articles of
conversion, with any amendments, may be approved only on the
affirmative vote of:
(1) at least two-thirds of the members of the
corporation voting on the proposed conversion and articles;
(2) the holders of at least two-thirds of the shares of
the capital stock of the corporation represented at the meeting and
voting on the proposition and articles, if the corporation is a
stock corporation; or
(3) at least two-thirds of the corporation's
incorporators, if the corporation does not have members or
outstanding shares of capital stock.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.252. ARTICLES OF CONVERSION. (a) The president
or vice president, on behalf of the corporation, shall execute and
acknowledge the approved articles of conversion. The corporation's
seal must be affixed to the articles and attested by its secretary.
(b) The articles of conversion must state:
(1) that they are executed under this chapter;
(2) the name of the corporation and the address of its
principal office before its conversion into a telephone
cooperative;
(3) the law under which the corporation was organized;
(4) that the corporation elects to become a
cooperative, nonprofit corporation subject to this chapter;
(5) the corporation's name as a cooperative;
(6) the address of the principal office of the
cooperative;
(7) the name and address of each director of the
cooperative;
(8) the manner in which a member, stockholder, or
incorporator of the corporation becomes or may become a member of
the cooperative;
(9) the duration of the cooperative; and
(10) the purpose for which the cooperative is formed.
(c) The articles of conversion may contain any provision
consistent with this chapter considered appropriate for the conduct
of the business of the cooperative. The president or vice president
executing the articles of conversion shall make and attach to the
articles an affidavit stating that the corporation complied with
this section with respect to the articles. The articles of
conversion are considered to be the articles of incorporation of
the cooperative.
(d) The original and a copy of the articles of conversion
shall be delivered to the secretary of state. If the secretary of
state finds that the articles conform to law, the secretary of
state, on payment of a fee of $50, shall:
(1) file and record the articles of conversion;
(2) issue a certificate of conversion; and
(3) attach to the certificate of conversion the copy
of the articles of conversion and deliver the certificate and
attached copy to the cooperative or its representative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.253. CONSOLIDATION AND CONVERSION OF CORPORATIONS
INTO TELEPHONE COOPERATIVE. (a) Two or more corporations
organized under the laws of this state that furnish or are
authorized to furnish communication service may, if otherwise
permitted to consolidate under state law, consolidate and convert
into a telephone cooperative in accordance with this subchapter.
On consolidation and conversion, the new cooperative is subject to
this chapter as if it had been originally organized under this
chapter.
(b) The proposition for the consolidation and conversion
and the proposed articles of consolidation and conversion, with any
amendments, must be approved by each corporation in accordance
with:
(1) the law under which it was organized; and
(2) Sections 162.251 and 162.252.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.254. ARTICLES OF CONSOLIDATION AND
CONVERSION. (a) The approved articles of consolidation and
conversion:
(1) shall be executed, acknowledged, and sealed as
prescribed by Section 162.252 and by the law under which the
consolidating and converting corporations were organized;
(2) must:
(A) state that they are executed under this
chapter and the law under which the corporations were organized and
that each consolidating corporation elects that the new corporation
be a cooperative; and
(B) contain all other information required by the
law under which the corporations were organized; and
(3) may contain any provision consistent with this
chapter considered appropriate for the conduct of the business of
the cooperative.
(b) The president or vice president executing the articles
of consolidation and conversion shall make and attach to the
articles an affidavit stating that the corporations complied with
this section and Section 162.253 and with the applicable provisions
of the law under which the consolidating corporations were
organized with respect to the articles. The articles of
consolidation and conversion are considered to be the articles of
incorporation of the cooperative and shall be filed in accordance
with the provisions both of this chapter and of the law under which
the consolidating corporations were organized.
(c) The original and a copy of the articles of consolidation
and conversion shall be delivered to the secretary of state. If the
secretary of state finds that the articles conform to law, the
secretary of state, on payment of a fee of $50, shall:
(1) file and record the articles of consolidation and
conversion;
(2) issue a certificate of consolidation and
conversion; and
(3) attach to the certificate the copy of the articles
and deliver the certificate and attached copy to the cooperative or
its representative.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
SUBCHAPTER G. DISSOLUTION
§ 162.301. DISSOLUTION. (a) A telephone cooperative
may be dissolved by a two-thirds vote of all the members of the
cooperative. The vote must be taken at a regular meeting or at a
special meeting of its members called for that purpose. Votes must
be cast in person.
(b) A certificate of dissolution must be:
(1) signed by the president or vice president and
attested by the secretary, certifying to the dissolution and
stating that the officers have been authorized by a vote of the
members under Subsection (a) to execute and file the certificate;
and
(2) executed, acknowledged, filed, and recorded in the
same manner as original articles of incorporation of a telephone
cooperative.
(c) The cooperative is dissolved when the secretary of state
accepts the certificate of dissolution for filing and recording and
issues a certificate of dissolution.
(d) The secretary of state shall charge and collect:
(1) a fee of $5 for filing a certificate of election to
dissolve; and
(2) a fee of $5 for filing articles of dissolution.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.302. EXISTENCE FOLLOWING DISSOLUTION. (a) A
dissolved telephone cooperative continues to exist to:
(1) satisfy existing liabilities or obligations;
(2) collect or liquidate its assets; and
(3) take any other action required to adjust and wind
up its business and affairs.
(b) A dissolved telephone cooperative may sue and be sued in
its corporate name.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.303. DISTRIBUTION OF NET ASSETS ON
DISSOLUTION. Assets of a dissolved telephone cooperative that
remain after all liabilities or obligations of the cooperative have
been satisfied shall be distributed as follows:
(1) first, to patrons for the pro rata return of
amounts standing to their credit because of their patronage; and
(2) second, to members for the pro rata repayment of
membership fees.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
§ 162.304. DISSOLUTION OF DEFECTIVELY INCORPORATED
TELEPHONE COOPERATIVE. (a) A telephone cooperative that purports
to have been incorporated or reincorporated under this chapter but
that has not complied with a requirement for legal corporate
existence may file a certificate of dissolution in the same manner
as a validly incorporated telephone cooperative.
(b) The certificate of dissolution may be authorized by a
majority of the incorporators or directors at a meeting called by an
incorporator and held at the principal office of the cooperative
named in the articles of incorporation.
(c) The incorporator calling the meeting must give at least
ten days' notice of the meeting by mail to the last known post
office address of each incorporator or director.
Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.
