CHAPTER 405

AN ACT to amend and reenact §§ 56-209, 56-224 and 56-226 of the
Code of 1950, relating to electric cooperatives so as to make
certain changes in definitions, fir the rights of members and
prescribe the manner of operation.

[H 641]

Approved April 5, 1950

Be it enacted by the General Assembly of Virginia:

1. That §§ 56-209, 56-224 and 56-226 of the Code of 1950 be
amended and reenacted, as follows:

§ 56-209. Definitions.—The following terms whenever used or
referred to in this chapter, shall have the following meanings,
unless a different meaning clearly appears from the context:

(a) “Cooperative” shall mean an electric corporation formed
under this chapter.

(b) “Municipality” shall mean any city or incorporated town
of the State.

(c) “Person” * shall mean and include natural persons, firms,
associations, cooperatives, corporations, business trusts, partner-
ships and bodies politic.

(d) “Energy” shall mean and include any and all electric
energy no matter how or where generated or produced.

(e) “Acquire” shall mean and include construct, acquire by
purchase, lease, devise, gift or the exercise of the power of eminent
domain, or other mode of acquisition.

(f) “System” shall mean and include any plant, works, system,
facilities, or properties, or any part or parts thereof, together with
all appurtenances thereto, used or useful in connection with the
generation, production, transmission or distribution of energy.

(h) “Obligation” shall mean and include bonds, interim cer-
tificates or receipts, notes, debentures, and all other evidences of
indebtedness either issued by, or the payment of which is assumed
by a cooperative.

(i) “Federal agency” shall mean and include the United States
of America, the President of the United States of America. Tennes-
see Valley Authority, the Federal Administrator of the Rural
Ilectrification Administration and any and all other authorities,
agencies and instrumentalities of the United States of America,
heretofore or hereafter created.
(j) “Improve” shall mean and include construct, reconstruct,
replace, extend, enlarge, alter, better or repair.

(k) “Board” shall mean the board of directors of a cooperative
formed under this chapter.

(1) “Member” shall mean and include each natural person
signing the certificate of incorporation of a cooperative and each
person admitted to membership therein pursuant to law or its
by-laws.

§ 56-224. Rights and liabilities of members.—A cooperative
shall issue to its members certificates of membership and each
member shall be entitled to only one vote at the meetings of the
meinbers of the cooperative. The liability of each member shall be
limited to the unpaid portion of his membership fee or subscrip-
tion to capital stock, and any unpaid bills for electric energy or
machinery or appliances purchased from the cooperative. The
equity of members of a nonstock cooperative shall be in proportion
to the revenue paid the cooperative by each member. A coopera-
tire shall be operated on a nonprofit basis for the mutual benefit
of the members. The by-laws of a cooperative or its contract with
the members shall contain such provisions relative to the disposi-
tion of revenucs and receipts as may be necessary and appropriate
to establish and maintain its nonprofit and cooperative. character.

§ 56-226. Adequate service; rates *.—A cooperative formed
hereunder shall be required to furnish reasonably adequate services
and facilities, subject to the regulations of the State Corporation
Commission, as provided in § 56-227. The charge made by any
such cooperative for any service rendered or to be rendered, either
directly or in connection therewith, shall be nondiscriminatory,
reasonable and just, and every discriminatory, unjust or unreason-
able charge for such service is prohibited and declared unlawful.
Reasonable and just charges for service within the meaning of this
section shall be such charges as shall produce sufficient revenue
to pay all legal and other necessary expense incident to the opera-
tion of the system, to include maintenance cost, operating charges,
* interest charges on bonds or other obligations, to provide for
the liquidation of bonds or other evidences of indebtedness, to pro-
vide adequate funds to be used as working capital, as well as rea-
sonable reserves and funds for making * replacements and also *
for the payment of any taxes that may be assessed against such
cooperative or its property, it being the intent and purpose hereof
that such charges shall produce an income sufficient to maintain
such cooperative property in a sound physical and financial condi-
tion to render adequate and efficient service. Any rate too low to
meet the foregoing requirements shall be unlawful. *