RURAL ELECTRIC AND RURAL TELEPHONE COOPERATIVE CORPORATIONS

KRS tit. XXIV, ch. 279

in effect

KRS 279.010 Definitions

279.010. Definitions As used in this chapter, unless the context requires otherwise: (1) "Acquire" means to construct, purchase, obtain by lease, devise, gift, or by eminent domain, or to obtain by any other lawful means; (2) "Board" means the board of directors of a corporation formed under this chapter; (3) "Business entity" means a domestic and foreign limited liability company, corporation, general partnership, limited partnership, business or statutory trust, and not-for-profit unincorporated association; (4) "Corporation" means a profit or nonprofit corporation formed under the laws of any state or a foreign country; (5) "Farm Credit Act" means Section 12 of the Federal Farm Credit Act of 1935 and the amendments thereto; (6) "Federal agency" means and includes the United States, the President of the United States, and all federal authorities, instrumentalities and agencies in the ordinary sense; (7) "Improve" means to construct, reconstruct, extend, enlarge, alter, better, or repair; (8) "Member" means and includes each person signing the articles of incorporation of a corporation formed under this chapter, each person later admitted to membership according to law or according to the articles of incorporation or bylaws of the corporation, and each common stockholder in a corporation organized under this chapter that has capital stock; (9) "Name of record with the Secretary of State" means any real, fictitious, reserved, registered, or assumed name of a business entity; (10) "Obligations" means and includes negotiable bonds, notes, debentures, interim certificates or receipts and all other evidences of indebtedness either issued or the payment thereof assumed by a corporation organized under this chapter; (11) "Real name" shall have the meaning set forth in KRS 365.015; and (12) "System" means and includes any plant, works, facilities, and properties, and all parts thereof and appurtenances thereto, used or useful in the generation, production, transmission, or distribution of electric energy. Effective: July 15, 2010 History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 131, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 137, sec. 131, effective June 26, 2007. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-2. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, "The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section." Legislative Research Commission Note (6/26/2007). 2007 Ky. Acts ch. 137, sec. 131, subsection (11) cited "Section 164 of this Act." It is apparent from context that the section referred to should have been Section 163 of the Act, KRS 365.015. The Reviser of Statutes has made this change under the authority of KRS 7.136.

KRS 279.020 Who may incorporate

279.020. Who may incorporate Any three (3) or more individuals, partnerships, associations, or private corporations, a majority of whom are citizens of Kentucky, may by executing, filing, and recording articles of incorporation as provided in KRS 279.030 and 279.040 organize to conduct a nonprofit cooperative corporation for the: (1) Primary purpose of generating, purchasing, selling, transmitting, or distributing electric energy to any individual or entity, and providing any good or service related to generating, purchasing, selling, transmitting, or distributing electric energy to any individual or entity; and (2) If the cooperative desires, for the secondary purpose of engaging in any other lawful business or activity, provided that any nonregulated business or activity is conducted through an affiliate except for any business or activity which does not involve the sale of a product that is conducted pursuant to a contract with a federal military installation or a contract for administrative services which does not involve the sale of a product requested by a local, state, or federal government. Effective: July 12, 2006 History: Amended 2006 Ky. Acts ch. 114, sec. 1, effective July 12, 2006. -- Amended 1974 Ky. Acts ch. 38, sec. 1, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-3.

KRS 279.030 Articles of incorporation -- What to contain

279.030. Articles of incorporation -- What to contain (1) The articles of incorporation shall set forth: (a) The name of the corporation that satisfies the requirements of KRS 14A.3- 010; (b) The purpose for which it is formed; (c) The place, including the county, where its principal office will be located; (d) A reasonable description of the territory in which its operations are to be conducted; (e) The number of directors; (f) The names and post office addresses of the directors who are to manage the affairs of the corporation for the first year of its existence, or until the first meeting called to elect directors, or until the successors of the first directors are elected and have qualified; (g) The period limited for the duration of the corporation, or that the corporation is to be perpetual; (h) If the corporation is organized without capital stock, the terms upon which members may be admitted and the terms upon which their membership shall terminate; (i) If the corporation is organized with capital stock, the amount of the stock, the number of shares into which it is divided and the par value; and (j) If the capital stock is divided into common and preferred stock, as it may be, the number of shares to which preference is granted and the number of shares to which no preference is granted, and the nature and definite extent of the preference and privileges granted to each. (2) The articles of incorporation may contain any other lawful provision that the incorporators choose to insert for the purpose of regulating the business and affairs of the corporation, for the purpose of creating, defining, limiting or regulating the rights, powers and duties of the corporation and its board of directors and members, and the exercise of any such powers, or for the purpose of creating or defining the rights and privileges of the members of the corporation among themselves, including separation of members into classes or districts and providing for representation of each class or district on the board of directors. Effective: January 1, 2011 History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 132, effective July 15, 2010; and amended ch. 151, sec. 80, effective January 1, 2011. -- Amended 2007 Ky. Acts ch. 137, sec. 132, effective June 26, 2007. -- Amended 1974 Ky. Acts ch. 38, sec. 2, effective June 21, 1974. -- Amended 1972 Ky. Acts ch. 11, sec. 1, effective June 16, 1972. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-4. Legislative Research Commission Note (1/1/2011). This section was amended by 2010 Ky. Acts ch. 151, and repealed and reenacted by 2010 Ky. Acts ch. 51. Pursuant to Section 184 of Acts ch. 51, it was the intent of the General Assembly that the repeal and reenactment not serve to void the amendment, and these Acts do not appear to be in conflict, therefore, they have been codified together. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, "The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section."

KRS 279.040 Filing and approval of articles -- When corporation may begin business

279.040. Filing and approval of articles -- When corporation may begin business (1) The incorporators shall execute triplicate originals of the articles of incorporation that satisfy the requirements of KRS 14A.2-010 to 14A.2-150, and each incorporator shall acknowledge each triplicate original before an officer authorized to take acknowledgments of deeds. They shall then file the triplicate originals, together with the certificate of acknowledgment, in the office of the Secretary of State. If the Secretary of State finds the articles to be legal and valid, he shall immediately indorse his approval on each of the triplicate originals, retain, record and file one (1) triplicate original in his office, and deliver the other two (2) triplicate originals, with his approval indorsed thereon, to the incorporators. The incorporators shall then file one (1) approved triplicate original in the office of the county clerk of the county in which the principal office of the corporation is to be located. (2) As soon as the Secretary of State has filed the articles of incorporation, the proposed corporation shall be a body politic and corporate and may transact business in its corporate name. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 81, effective January 1, 2011. -- Amended 1974 Ky. Acts ch. 38, sec. 3, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-5.

KRS 279.050 Amendments to articles

279.050. Amendments to articles The articles of incorporation may be amended as provided in this section at any regular or special meeting of the members of the corporation duly called upon notice of the specific purpose. The amendment shall first be approved by two-thirds (2/3) of the directors and then adopted by a vote representing not less than a majority of the votes entitled to be cast by the members present in person, or by proxy (if permitted by the bylaws) and voting at such meeting. The president of the corporation shall make triplicate originals of the amendments so adopted, each satisfying the requirements of KRS 14A.2-010 to 14A.2- 150 and the secretary of the corporation shall attest each triplicate original. Each triplicate original shall be acknowledged by the president and the secretary before an officer authorized to take acknowledgments of deeds, and the president shall then cause them to be filed, approved and recorded in the same manner as is provided by KRS 279.040 for original articles of incorporation, and the amendments shall take effect upon filing by the Secretary of State. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 82, effective January 1, 2011. -- Amended 1974 Ky. Acts ch. 38, sec. 4, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-10.

KRS 279.060 Repealed, 2011

279.060. Repealed, 2011 Catchline at repeal: Use of "Rural Electric Cooperative" in name limited. History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 133, effective July 15, 2010; and repealed ch. 151, sec. 151, effective January 1, 2011. -- Amended 2007 Ky. Acts ch. 137, sec. 133, effective June 26, 2007. -- Amended 1974 Ky. Acts ch. 38, sec. 5, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883j-6, 883j-9.

KRS 279.070 Bylaws -- Adoption and contents

279.070. Bylaws -- Adoption and contents (1) The incorporators of each corporation organized under this chapter shall adopt for its management bylaws not inconsistent with the powers granted by this chapter. The written consent of a majority of the incorporators, evidenced by their signatures to the bylaws adopted, shall be necessary to the adoption of bylaws. The bylaws may be amended by a majority vote of the board of directors. (2) The bylaws may provide for any or all of the following matters: (a) The time, place and manner of calling and conducting meetings of the members. (b) The number of members constituting a quorum. (c) The right of members to vote by proxy or by mail, or both, and the conditions, manner, form and effect of such votes. (d) The number of directors constituting a quorum. (e) The qualifications, compensation, powers, duties and term of office of directors and officers, the time of their election and the manner of giving notice thereof. (f) An executive committee and the allotment to that committee of any or all of the functions and powers of the board of directors, subject to the general direction and control of the board. (g) The amount of entrance, organization and membership fees, if any, the manner of collecting them and the purposes for which they may be used. (h) The qualifications of members of the corporation and the conditions precedent to membership; the time and manner of permitting members to withdraw; the manner of assignment or transfer of the interest of a member; the conditions upon which and the time when membership of any member shall cease; the suspension of the rights of a member when he ceases to be eligible to membership in the corporation; the manner and effect of the expulsion of a member; the manner of determining the value of a member's interest and provision for its purchase by the corporation upon the death or withdrawal of a member or upon his expulsion or forfeiture of membership or, at the option of the corporation, the purchase of the member's interest at a price fixed by appraisal by the board. The bylaws may provide that in case of the forced withdrawal or expulsion of a member the board shall equitably appraise his property interest in the corporation and shall at its option fix the amount thereof in money or other property, which shall be paid to him within one (1) year after his expulsion or withdrawal. (i) Penalties for violation of the bylaws. (j) Any other matter relating to the operation or management of the corporation and not inconsistent with law or with the articles of incorporation. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-11.

KRS 279.080 Board of directors and officers

279.080. Board of directors and officers (1) Each corporation formed under this chapter shall have a board of directors of not less than five (5) members, which shall be the governing body of the corporation. Unless otherwise provided in the articles of incorporation, directors need not be members of the corporation. The directors, other than those named in the articles of incorporation, shall be elected annually or as provided for in the bylaws, but no director shall be elected for a longer term than four (4) years. The directors shall be elected in a manner to insure secrecy and anonymity of ballots cast, provided the result of such election is determined by ballot vote. The directors shall receive such compensation and reimbursement of expenses as the bylaws provide. When a vacancy on the board of directors occurs other than by expiration of a term, the remaining members of the board, by a majority vote, shall fill the vacancy for the remainder of the term by appointment, unless the bylaws otherwise provide. (2) Subject to the provisions of the articles of incorporation and the bylaws, the board of directors may adopt rules and regulations governing the procedure of the board and the operations of the corporation, and shall manage and conduct the business and affairs of the corporation. (3) The officers of a corporation shall consist of a president, a secretary, and a treasurer, each of whom shall be elected by the board of directors at such time and in such manner as may be prescribed by the bylaws. Such other officers and assistant officers and agents as may be deemed necessary may be elected or appointed by the board of directors or chosen in such other manner as may be prescribed by the bylaws. Any two (2) or more offices may be held by the same person, except that the offices of the president and secretary may not be held by the same person. All officers and agents of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided in the bylaws, or as may be determined by resolution of the board of directors not inconsistent with the bylaws. (4) Every officer, employee, or agent handling funds, securities, or negotiable instruments of or for any corporation created under this chapter shall be required to execute an adequate bond for the faithful performance of his duties in an amount and with security approved by the board. Effective: June 24, 2003 History: Amended 2003 Ky. Acts ch. 130, sec. 1, effective June 24, 2003. -- Amended 1982 Ky. Acts ch. 140, sec. 1, effective July 15, 1982. -- Amended 1974 Ky. Acts ch. 38, sec. 6, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883j-12, 883j-13, 883j-14.

KRS 279.090 Requirements for membership in corporation -- Rights and liabilities of members

279.090. Requirements for membership in corporation -- Rights and liabilities of members (1) No person may become or remain a member of any corporation formed under this chapter with capital stock except a farmer, a person engaged in the production of agricultural products or livestock, a cooperative association as defined in the Farm Credit Act, or a corporation organized under this chapter. (2) No person other than the original incorporators may become or remain a member of any corporation formed under this chapter without capital stock unless, in addition to complying with all membership requirements in the articles of incorporation and bylaws of the corporation, such person uses electric energy supplied by the corporation or by a corporation that is a member of the corporation in question, or such person is a corporation formed under this chapter or is a corporation furnishing electric energy or is a cooperative association as defined in the Farm Credit Act. (3) Any corporation formed under this chapter without capital stock may provide in its articles of incorporation that, in addition to the requirements for membership set forth in subsection (2) of this section, no person other than the original incorporators may become or remain a member unless that person is a farmer or is a cooperative association within the meaning of the Farm Credit Act, or that a stated percentage of its members must be and remain farmers or cooperative associations within the meaning of the Farm Credit Act. (4) Any corporation formed under this chapter may become a member of any other corporation formed under this chapter and may fully avail itself of the facilities and services of that corporation. (5) Each member of a corporation organized under this chapter with or without capital stock shall have only one (1) vote, and memberships shall not be transferable. (6) Neither the incorporators nor any member of any corporation formed under this chapter shall be personally responsible for any debt, obligation or liability of the corporation, except for promissory notes given for the purchase of common stock in the corporation or except as the incorporator or member may become personally liable by reason of his or her own acts or conduct. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 133, sec. 47, effective July 15, 2010. -- Amended 1974 Ky. Acts ch. 38, sec. 7, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883l-4, 883j-8, 883j- 15, 883j-16.

KRS 279.095 Nonprofit operation

279.095. Nonprofit operation A rural electric cooperative shall be operated on a nonprofit basis for the mutual benefit of its members and patrons. The bylaws of a cooperative or its contracts with members and patrons shall contain such provisions relative to the disposition of revenue and receipts as may be necessary and appropriate to establish and maintain its nonprofit and cooperative character. In the case of a cooperative authorized to issue shares of stock, such bylaws or contracts shall provide that no moneys shall be paid or credits given on the basis of patronage except after the declaration or payment of dividends on the outstanding shares of stock in accordance with the articles of incorporation of the cooperative, and such bylaws or contracts shall otherwise be consistent with the cooperative's obligations in respect of such shares of stock. Effective: June 16, 1972 History: Created 1972 Ky. Acts ch. 11, sec. 2, effective June 16, 1972.

KRS 279.100 Common and preferred stock -- Ownership and transfer

279.100. Common and preferred stock -- Ownership and transfer (1) Only a member of a corporation organized under this chapter may own its common stock, and neither the common stock in any such corporation nor any interest therein shall be transferable or assignable, either by act of the parties or by operation of law, to any person who is not eligible to be a member of the corporation. (2) No corporation formed under this chapter shall issue common stock to a member until it has been fully paid for, but the promissory notes of a member may be accepted by the corporation as full or partial payment. The corporation shall hold the stock as security for the payment of the note, but such retention as security shall not affect the member's right to vote. (3) No person, other than a corporation formed under this chapter, shall at any one time own more than five percent (5%) of the outstanding common stock of any corporation formed under this chapter. (4) Any such corporation may at any time, as specified in its bylaws, except when the debts of the corporation exceed fifty percent (50%) of its assets, buy in or purchase its common stock at the book value thereof, as conclusively determined by its board of directors, and pay for it in cash within one (1) year thereafter. (5) Preferred stock may be owned by and transferred to any person, and may be made redeemable and retirable by the corporation on such terms and conditions as are provided for in the articles of incorporation and printed on the face of each certificate. Ownership of preferred stock shall not confer on the holder any right to vote. Effective: July 15, 1986 History: Amended 1986 Ky. Acts ch. 111, sec. 1, effective July 15, 1986. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-8.

KRS 279.110 General powers of rural electric cooperative corporations

279.110. General powers of rural electric cooperative corporations Any corporation created under this chapter may: (1) Acquire and hold any property necessary or incidental to the proper conduct of its business, including preferred stock and common stock or other corporations whether formed under this chapter or not, and the stock of any federal agency, and may pay for any such property in cash, property or on credit, or both, and secure and procure payment of all or any part of the purchase price thereof on such terms and conditions as its board of directors determines; (2) Acquire, own, operate, maintain and improve one (1) or more systems; (3) Pledge all or part of its revenue or mortgage or encumber all or any part of its property for the purpose of securing the payment of the principal and interest of any of its obligations; (4) Have and exercise the right of eminent domain in the manner provided in the Eminent Domain Act of Kentucky; (5) Construct, own, lease, operate, and control any facilities across, along, or under any street or public highway, and over any lands belonging to this state or to any county, city, or political subdivision of this state, but shall restore any such street or highway to its former condition as nearly as possible and shall not use it in such a manner as to impair unnecessarily its usefulness; (6) Accept gifts and grants of money or property from this state, any county, city, or political subdivision of this state, any federal agency, or any other person, and accept voluntary and uncompensated services; (7) Make any contract necessary or convenient for the full exercise of the powers granted by this chapter, or for any other corporate purpose, subject to any limitations imposed by this chapter; (8) Sell, lease, or dispose of all or any part of its property, subject to the provisions of KRS 279.140; (9) Contract debts, borrow money without limitation as to the amount of corporate indebtedness or liability, and issue or assume obligations; (10) Fix and collect reasonable rates and charges for services, subject to the provisions of KRS Chapter 278; (11) Assist its members in wiring their premises for the use of electric energy and in purchasing electrical equipment, appliances, and supplies, and in financing such activities; (12) (a) Establish affiliates to engage in nonregulated businesses or activities as provided for in KRS 279.020. (b) A cooperative formed under this chapter shall annually report to its member- owners the nature of the nonregulated business or activity, its financial status and future expectations, as well as any other information deemed appropriate by its board of directors. The cooperative shall file with the Public Service Commission a balance sheet and income statement for each nonregulated business or activity, if the cooperative has established a separate affiliate to engage in nonregulated business or activity. (c) If the cooperative's nonregulated activities are conducted within the cooperative pursuant to a contract with a federal military installation or a local, state, or federal government as provided for in KRS 279.020, a balance sheet and statement of revenues and expenses for each nonregulated business or activity shall be filed with the Public Service Commission. (d) The information to be filed with the Public Service Commission shall be filed simultaneously with the Public Service Commission annual report. The cooperative may request confidentiality for any information it provides as required in this subsection that it deems proprietary or competitive; and (13) Do anything not specifically set forth in this section that is reasonably deemed necessary, proper, or convenient for the accomplishment of the purposes of the corporation and is not prohibited by law. Effective: July 12, 2006 History: Amended 2006 Ky. Acts ch. 114, sec. 2, effective July 12, 2006. -- Amended 1976 Ky. Acts ch. 140, sec. 114, effective June 19, 1976. -- Amended 1972 Ky. Acts ch. 11, sec. 3, effective June 16, 1972. -- Amended 1962 Ky. Acts ch. 68, sec. 1. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-7, 883j-8.

KRS 279.120 Persons with whom corporation may do business -- Conditions for acquisition of new base load generating facility

279.120. Persons with whom corporation may do business -- Conditions for acquisition of new base load generating facility (1) Except as provided in subsections (2), (3), and (4) of this section, corporations formed under this chapter shall supply electric energy, furnish services, and sell personal property, except that transferred in part payment for other personal property, to their members only. (2) Except as provided in subsections (3), (4), and (5) of this section and in KRS 279.125, any corporation formed under this chapter may supply electric energy, furnish services and sell property, to the extent of not more than forty-nine percent (49%) of its total business, to nonmembers of the corporation, including any federal agency, any state, and any county, city or political subdivision. (3) A corporation formed under this chapter may sell and lease back any part or all of its property free of the restrictions contained in subsections (1) and (2) of this section, or any other section of the Kentucky Revised Statutes except that such sale shall be subject to KRS 279.140. (4) A corporation formed under this chapter on or before December 31, 2005, may supply electric energy to a nonmember of the corporation free of the restrictions contained in subsections (1) and (2) of this section only if: (a) The hourly amount of electric energy supplied is produced by a generator owned or leased by the corporation; and (b) The hourly amount of electric energy supplied was previously used by a member of the corporation, which is also a corporation formed under this chapter on or before December 31, 2005, to provide electric service to a retail customer with an annual hourly peak electric energy requirement of more than two hundred (200) megawatts. (5) A sale of electric energy authorized by subsection (4) of this section shall be considered member business for purposes of subsection (2) of this section. (6) A corporation formed under this chapter that is supplying electric energy to a nonmember of the corporation under subsections (4) and (5) of this section may acquire a new base load generating facility for its system by purchase, lease, or construction only if, at the time the corporation enters into a binding commitment for the acquisition of the new base load generating facility, the number of megawatts the corporation is supplying to nonmembers of the corporation is forty- nine percent (49%) or less of the total number of megawatts that the corporation is supplying to all persons. Effective: July 12, 2006 History: Amended 2006 Ky. Acts ch. 4, sec. 1, effective July 12, 2006. -- Amended 2004 Ky. Acts ch. 12, sec. 1, effective July 13, 2004. -- Amended 1984 Ky. Acts ch. 27, sec. 1, effective February 23, 1984. -- Amended 1974 Ky. Acts ch. 38, sec. 9, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883j-8, 883j-16.

KRS 279.125 Transmission, distribution or sale of energy to municipally owned electric utility -- Exceptions

279.125. Transmission, distribution or sale of energy to municipally owned electric utility -- Exceptions Notwithstanding the provisions of any other section of the Kentucky Revised Statutes, unless specific authorization is granted by the Public Service Commission, no corporation formed under this chapter shall transmit, distribute or furnish electric energy for resale, either directly or indirectly, to any electric utility now or hereafter owned or controlled, in whole or in part, by any municipality or municipalities, or instrumentalities thereof, incorporated on June 21, 1974, except to any such electric utility to which such corporation's electric facilities are physically connected on June 21, 1974; and provided, further, that no provision herein shall prevent a corporation organized under this chapter from interconnecting for exchanges of energy with any such municipal utility which, on June 21, 1974, owns and operates electric generating facilities adequate to supply the electric requirements of the municipality. The required authorization as used in this section shall not be construed to extend the jurisdiction of the Public Service Commission over municipally owned electric systems. Effective: July 13, 2004 History: Amended 2004 Ky. Acts ch. 12, sec. 2, effective July 13, 2004. -- Created 1974 Ky. Acts ch. 38, sec. 10, effective June 21, 1974.

KRS 279.130 Obligations, how issued, secured, purchased or redeemed

279.130. Obligations, how issued, secured, purchased or redeemed Any corporation formed under this chapter may issue its obligations and pledge its future revenues for the payment thereof. The obligations may be in the form of bonds, notes, debentures, interim certificates or other evidences of indebtedness. The obligations shall be authorized by the board of directors by a resolution which shall fix the dates of issuance and maturity, the rate and time of payment of interest, and denominations, the form (either coupon or registered), the registration privileges, the manner of execution, the place and medium of payment, and the terms of redemption. Any limitation as to interest or term of maturity otherwise provided by law shall not be applicable to obligations issued by a corporation organized under this chapter. Effective: June 16, 1972 History: Amended 1972 Ky. Acts ch. 11, sec. 4, effective June 16, 1972. -- Amended 1949 (1st Extra. Sess.) Ky. Acts ch. 9, sec. 1, effective March 30, 1949. -- Amended 1942 Ky. Acts ch. 7, secs. 1 and 2. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883j-17, 883j-18, 883j-19.

KRS 279.140 Power of board of directors to encumber or dispose of property

279.140. Power of board of directors to encumber or dispose of property (1) Except as provided in KRS 279.090, 279.120 and 279.130, and in subsection (2) of this section, no corporation formed under this chapter may sell, lease or otherwise dispose of any of its property unless the board of directors is authorized so to do by a majority vote of the total membership. Due notice shall be given to all members of the proposed sale, lease or other disposition of such property. The board of directors, without authorization by the members, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust upon, or the pledging or encumbering of any or all of, the property, assets, rights, privileges, licenses, franchises, and permits of such a corporation, whether acquired or to be acquired, and wherever situated, as well as the revenues and income therefrom, upon such terms and conditions as the board of directors shall determine, to secure any obligation of such corporation, any provision of the articles of incorporation or bylaws of such corporation to the contrary notwithstanding. (2) The board may sell any of the following property without authority from the members: (a) Property that is not necessary in operating and maintaining the system, but sales of such property shall not in any one year exceed ten percent (10%) in value of all the property of the corporation other than merchandise and property acquired for resale; (b) Services and electric energy; (c) Property acquired for resale; and (d) Merchandise. Effective: June 16, 1972 History: Amended 1972 Ky. Acts ch. 11, sec. 5, effective June 16, 1972. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-23.

KRS 279.150 Other electric companies required to sell electric energy to cooperatives

279.150. Other electric companies required to sell electric energy to cooperatives No person engaged in the business of producing, selling or distributing electric energy for public use in this state shall refuse to furnish electric energy to any corporation organized under this chapter, if the corporation is able and willing to pay the same rates for such energy as are paid by other consumers in the same territory using a comparable amount of energy. This section does not forbid a discrimination based on the load factor or diversity factor. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-24.

KRS 279.160 Repealed, 1972

279.160. Repealed, 1972 Catchline at repeal: Rates, charges and prices, how to be fixed -- Disposition of surplus revenue. History: Repealed 1972 Ky. Acts ch. 11, sec. 6, effective June 16, 1972. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-20.

KRS 279.170 Consolidation of cooperatives

279.170. Consolidation of cooperatives (1) Any two (2) or more corporations created under this chapter may enter into an agreement for their consolidation. The agreement shall set forth the terms and conditions of the consolidation, the name of the proposed consolidated corporation, the number of its directors, which shall be not less than five (5), the time of the annual meetings of the consolidated corporation and the names of the directors who are to serve until the first annual meeting. If the agreement is approved by a majority vote of those members voting at each corporation, with the votes cast as authorized by KRS 279.070, the directors named in the agreement shall subscribe and acknowledge articles in triplicate originals conforming substantially to the original articles of incorporation, and entitled and indorsed "Articles of Consolidation of ....." (2) The articles of consolidation shall state: (a) The names of the corporations being consolidated. (b) The name of the consolidated corporation. (c) Such other items as are required or permitted to be set forth in the original articles of incorporation. (3) The articles of consolidation shall be filed, recorded and approved in the same manner, and shall take effect upon approval, as is provided in KRS 279.040 for original articles of incorporation. (4) The articles of consolidation may be amended in the same manner as articles of incorporation may be amended under KRS 279.050. Effective: July 15, 1998 History: Amended 1998 Ky. Acts ch. 165, sec. 1, effective July 15, 1998. -- Amended 1974 Ky. Acts ch. 38, sec. 8, effective June 21, 1974. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-21.

KRS 279.180 Dissolution

279.180. Dissolution (1) Any corporation formed under this chapter may be dissolved by filing articles of dissolution, which shall be entitled and indorsed "Articles of Dissolution of ...." and shall state: (a) The name of the corporation and, if it is a consolidated corporation, the names of the original corporations; (b) The date of filing of the articles of incorporation and, if the corporation is a consolidated corporation, the dates on which the articles of incorporation of the original corporations were filed; (c) That the corporation elects to dissolve; and (d) The name and post office address of each of its directors, and the name, title and post office address of each of its officers. (2) The articles of dissolution shall be subscribed and acknowledged in the same manner as original articles of incorporation, by the president or a vice president and the secretary or an assistant secretary, who shall make and attach an affidavit stating that they have been authorized to execute and file the articles by a majority vote of all of the members. (3) Articles of dissolution shall be filed, recorded and approved in the same manner, and shall take effect upon approval, as is provided in KRS 279.040 for articles of incorporation. (4) The corporation filing articles of dissolution shall continue in existence for the purpose of paying, satisfying and discharging any existing liabilities or obligations and collecting or liquidating its assets, and doing all other acts required to adjust and wind up its business and affairs and may sue and be sued, contract and be contracted with in its corporate name. Any assets remaining after the liabilities and obligations of the corporation have been satisfied or discharged shall be ratably distributed to the members of the corporation. Effective: July 15, 1986 History: Amended 1986 Ky. Acts ch. 44, sec. 1, effective July 15, 1986. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-22.

KRS 279.190 Fees for articles and amendments -- No recording taxes

279.190. Fees for articles and amendments -- No recording taxes (1) For acting upon, filing and recording articles of incorporation, articles of consolidation, articles of dissolution, or amendments to articles of incorporation or consolidation, the corporation shall pay to the Secretary of State a sum not to exceed two dollars ($2) for which the Secretary of State shall give his receipt. (2) For filing and recording articles of incorporation, articles of consolidation, articles of dissolution, or amendments to articles of incorporation or consolidation, the corporation shall pay to the county clerk a sum not to exceed three dollars ($3), for which the county clerk shall give his receipt. (3) No fee shall be paid or received for affixing the state seal to any of the documents mentioned in this section or to any copy thereof. (4) The recordation of the documents mentioned in this section shall be exempt from all recording taxes. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-30.

KRS 279.200 Taxes

279.200. Taxes Corporations formed under this chapter shall be exempt from all profit taxes, gross and net taxes, sales taxes, occupation taxes, privilege taxes, income taxes, taxes on electric current consumed and from all excise taxes whatsoever, any statute now existing or hereafter passed to the contrary notwithstanding. In lieu of all other state, county, city and district taxes, except ad valorem and franchise taxes, corporations formed under this chapter shall pay to the State Treasurer an annual tax of ten dollars ($10). History: Amended 1944 Ky. Acts ch. 173, sec. 19. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-28.

KRS 279.210 Jurisdiction of Public Service Commission -- Application of other laws

279.210. Jurisdiction of Public Service Commission -- Application of other laws (1) Every corporation formed under KRS 279.010 to 279.220 shall be subject to the general supervision of the Public Service Commission, and shall be subject to all the provisions of KRS 278.010 to 278.450 inclusive, and KRS 278.990. (2) The provisions of the general corporation laws of this state and all rights and powers thereunder shall apply to corporations organized under KRS 279.010 to 279.220, except where such provisions are in conflict with or inconsistent with the express provisions of KRS 279.010 to 279.220. Effective: June 15, 1950 History: Amended 1950 Ky. Acts ch. 129, sec. 1, effective June 15, 1950. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 883j- 25, 883j-27.

KRS 279.220 Foreign cooperatives may extend lines into this state -- Conditions -- Limitation

279.220. Foreign cooperatives may extend lines into this state -- Conditions -- Limitation (1) Any rural electric cooperative corporation organized under a law of any state contiguous to this state, which law is substantially similar to the law under which such corporations may be organized in this state, may extend its operations into this state for a distance not exceeding three (3) miles from the boundary between that state and this state, and such extension shall not be considered doing business in this state within the meaning of the statutes regulating or taxing foreign corporations doing business in this state. Such corporation shall be entitled to the same exemptions granted to, and shall pay the same tax required of, domestic corporations under KRS 279.200. (2) The operations of such corporation within this state shall be subject to the supervision of the Public Service Commission, and the commission may take the necessary action to require the corporation to furnish adequate service at reasonable rates. If the corporation fails to comply with the regulations and requirements of the commission it shall forfeit the privilege granted by this section. (3) The privilege granted by this section shall be effective for a period of five (5) years from June 12, 1940, at which date it shall expire, unless the contiguous state grants a similar privilege to rural electric cooperative corporations incorporated in this state, in which case it shall continue so long as the contiguous state continues to grant the same privilege. (4) A rural electric cooperative corporation organized under a law of any state other than Kentucky not satisfying the exemptions set forth in subsections (1), (2) and (3) of this section is subject to KRS 14A.9-010. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 83, effective January 1, 2011. -- Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 3952a-1, 3952a-2, 3952a-3.

KRS 279.310 Definitions for KRS 279.320 to 279.600

279.310. Definitions for KRS 279.320 to 279.600 As used in KRS 279.320 to 279.600, unless the context requires otherwise: (1) "Cooperative" means any corporation organized under KRS 279.320 to 279.600 or which becomes subject to those sections in the manner provided therein; (2) "Person" means any natural person, firm, association, corporation, business trust, or partnership; (3) As used in this chapter, the term "telephone service" shall include in its meaning communications services of all kinds allowed to any other telephone utility, authorized by regulatory agency and with some unregulated, that being the transmission of voice, data, sounds, signals, pictures, writing, or signs of all kinds, by use of wire, radio, light, electromagnetic impulse, broadband (wideband) spectrum, or any other transmission mode and facility used in rendition of such services; but shall not include in their meaning message telegram service, or radio broadcasting services or facilities within the meaning of Section 153(O) of the Federal Communications Act of 1934, as amended; (4) "Acquire" means to construct, purchase, obtain by lease, devise, gift, or eminent domain, or to obtain by any other lawful means; (5) "Board" means the board of trustees of a corporation formed under KRS 279.320 to 279.600; (6) "Federal agency" means and includes the United States, the President of the United States, and all federal authorities, instrumentalities, and agencies in the ordinary sense; (7) "Improve" means to construct, reconstruct, extend, enlarge, alter, better, or repair; (8) "Member" means and includes each person signing the articles of incorporation of a corporation formed under KRS 279.320 to 279.600, each person later admitted to membership according to law or according to the articles of incorporation or bylaws of the corporation, and each common stockholder in a corporation, having capital stock, organized under KRS 279.320 to 279.600; (9) "Obligations" means and includes negotiable bonds, notes, debentures, interim certificates or receipts, and all other evidences of indebtedness either issued or the payment thereof assumed by a corporation organized under KRS 279.320 to 279.600; (10) "System" means and includes any plant, works, facilities, and properties, and all parts thereof and appurtenances thereto, used or useful in the operation and maintenance of telephone communication service; (11) "Rural area" shall be deemed to mean any area of this state not included within the boundaries of any incorporated or unincorporated city or of a consolidated local government, having a population in excess of fifteen hundred (1,500) inhabitants; (12) "Telephone company" means any natural person, firm, association, corporation, or partnership owning, leasing, or operating any line, facility, or system used in the furnishing of telephone service within this state; (13) "Business entity" means a domestic and foreign limited liability company, corporation, general partnership, limited partnership, business or statutory trust, and not-for-profit unincorporated association; (14) "Corporation" means a profit or nonprofit corporation formed under the laws of any state or a foreign country; (15) "Name of record with the Secretary of State" means any real, fictitious, reserved, registered, or assumed name of a business entity; and (16) "Real name" shall have the meaning set forth in KRS 365.015. Effective: July 15, 2010 History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 134, effective July 15, 2010. -- Amended 2007 Ky. Acts ch. 137, sec. 134, effective June 26, 2007. -- Amended 2002 Ky. Acts ch. 346, sec. 224, effective July 15, 2002. -- Amended 1980 Ky. Acts ch. 175, sec. 1, effective July 15, 1980. -- Created 1950 Ky. Acts ch. 147, sec. 1, effective March 25, 1950. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, "The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section." Legislative Research Commission Note (6/26/2007). 2007 Ky. Acts ch. 137, sec. 134, subsection (16) cited "Section 164 of this Act." It is apparent from context that the section referred to should have been Section 163 of the Act, KRS 365.015. The Reviser of Statutes has made this change under the authority of KRS 7.136.

KRS 279.320 Who may incorporate -- Purposes of incorporation

279.320. Who may incorporate -- Purposes of incorporation Any five (5) or more natural persons, a majority of whom are citizens of Kentucky, may, by executing, filing and recording articles of incorporation as provided in KRS 279.330 and 279.350, form a nonprofit cooperative corporation to promote and encourage the fullest possible use of telephone service in this state by making facilities for such service available to persons in rural areas of the state at the lowest cost consistent with sound business methods and prudent management. Effective: March 25, 1950. History: Created 1950 Ky. Acts ch. 147, sec. 2, effective March 25, 1950.

KRS 279.330 Articles of incorporation

279.330. Articles of incorporation (1) The articles of incorporation of a corporation formed under KRS 279.310 to 279.600 shall be entitled "Articles of Incorporation of .... Corporation" and the title may include the word "Cooperative." The articles shall satisfy the requirements of KRS 14A.2-010 to 14A.2-150, recite that they are executed pursuant to KRS 279.310 to 279.600 and shall state: (a) The name of the corporation. (b) The address of its principal office. (c) The names and addresses of the incorporators. (d) The names and addresses of its trustees. (e) A general description of the territory in which it proposes to operate. (2) If a cooperative desires to issue nonvoting shares of stock, its articles of incorporation, in addition to the provisions of subsection (1) of this section, shall state: (a) The total number of such shares of stock which may be issued and the par value of each share; (b) The fixed or maximum rate of dividends on the par value of such shares of stock, in either case not exceeding four percent (4%) per annum, and whether dividends shall be cumulative or noncumulative; (c) Whether such shares of stock may be issued to members only or to members and nonmembers; (d) The maximum number of such shares of stock which may be owned by any person; (e) The terms and conditions on which such shares of stock may be transferred, redeemed or retired. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 84, effective January 1, 2011. -- Amended 1972 Ky. Acts ch. 136, sec. 1, effective June 16, 1973. -- Created 1950 Ky. Acts ch. 147, sec. 3, effective March 25, 1950.

KRS 279.340 Name

279.340. Name (1) The name of a cooperative shall satisfy the requirements of KRS 14A.3-010 unless, in an affidavit made by its president or vice president, and filed with the Secretary of State, or in an affidavit made by a person signing articles of incorporation, consolidation, merger or conversion, which relate to such cooperative, and filed, together with any such articles, with the Secretary of State, it shall appear that the cooperative desires to do business in another state and is or would be precluded therefrom by reason of the inclusion of such words or either thereof in its name. (2) This section shall not apply to any corporation which becomes subject to KRS 279.310 to 279.600 by complying with the provisions of KRS 279.470, which does business in this state pursuant to KRS 279.570 and which elects to retain a corporate name which does not comply with this section. Effective: January 1, 2011 History: Repealed and reenacted 2010 Ky. Acts ch. 51, sec. 135, effective July 15, 2010; and repealed, reenacted, and amended ch. 151, sec. 85, effective January 1, 2011. -- Amended 2007 Ky. Acts ch. 137, sec. 135, effective June 26, 2007. -- Amended 1972 Ky. Acts ch. 136, sec. 2, effective June 16, 1972. -- Amended 1964 Ky. Acts ch. 14, sec. 1. -- Created 1950 Ky. Acts ch. 147, sec. 4, effective March 25, 1950. Legislative Research Commission Note (1/1/2011). This section was repealed, reenacted, and amended by 2010 Ky. Acts ch. 151, and repealed and reenacted by 2010 Ky. Acts ch. 51. Pursuant to Section 184 of Acts ch. 51, it was the intent of the General Assembly that the repeal and reenactment not serve to void the amendment, and these Acts do not appear to be in conflict, therefore, they have been codified together. Legislative Research Commission Note (7/15/2010). 2010 Ky. Acts ch. 51, sec. 183, provides, "The specific textual provisions of Sections 1 to 178 of this Act which reflect amendments made to those sections by 2007 Ky. Acts ch. 137 shall be deemed effective as of June 26, 2007, and those provisions are hereby made expressly retroactive to that date, with the remainder of the text of those sections being unaffected by the provisions of this section."

KRS 279.350 Filing and approval of articles -- When corporation may begin business

279.350. Filing and approval of articles -- When corporation may begin business (1) The incorporators shall execute four (4) copies of the articles of incorporation that satisfy KRS 14A.2-010 to 14A.2-150, and each incorporator shall acknowledge each copy before an officer authorized to take acknowledgments of deeds. They shall then deliver for filing the four (4) copies, together with the certificate of acknowledgment, to the Secretary of State for filing. (2) As soon as the Secretary of State has filed the articles of incorporation, the corporation shall be a body politic and corporate and may transact business in its corporate name. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 86, effective January 1, 2011. -- Created 1950 Ky. Acts ch. 147, sec. 5, effective March 25, 1950.

KRS 279.360 General powers of rural telephone cooperative corporations

279.360. General powers of rural telephone cooperative corporations Each corporation organized under the provisions of KRS 279.310 to 279.600 shall have power: (1) To furnish, improve and expand telephone service in rural areas to its members, to governmental agencies and political subdivisions, and to other persons not in excess of ten percent (10%) of the number of its members, provided, however, that, without regard to said ten percent (10%) limitation, telephone service may be made available by a cooperative through interconnection of facilities to any number of subscribers of other telephone systems, and through pay stations to any number of users; and provided, further, that a cooperative which acquires existing telephone facilities in rural areas may continue service to persons, not in excess of forty percent (40%) of the number of its members, who are already receiving service from such facilities, without requiring such persons to become members, but such persons may become members upon such terms as may be prescribed in the bylaws; and provided, further, that no cooperative shall (a) construct or operate any line, facility or system in any rural area being furnished telephone service by any telephone company or other cooperative unless the Public Service Commission shall determine, after hearing on reasonable notice to all interested parties, that any such telephone company or other cooperative is unwilling or unable to furnish reasonably adequate telephone service in such area, or (b) furnish any telephone service in any area proposed to be served by any telephone company, which may be found to be ready, willing and able to serve, within such period of time as may, after hearing, be determined to be reasonable by the Public Service Commission; (2) To construct, purchase, lease as lessee, or otherwise acquire, and to improve, expand, install, equip, maintain, and operate, and to sell, assign, convey, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, telephone lines, facilities or systems, lands, buildings, structures, plants and equipment, exchanges, and any other real or personal property, tangible or intangible, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized; provided, that no cooperative shall construct, purchase, lease as lessee, take, receive, or otherwise acquire, improve, expand, install, equip, maintain, or operate any telephone lines, facilities or system, lands, buildings, structures, plants and equipment, exchanges, or any other real or personal property, tangible or intangible, within the boundaries of any incorporated or unincorporated city, town, village, or borough within this state having a population in excess of one thousand five hundred (1,500) inhabitants, unless said procedures or any of them are determined by the administrator of the rural electrification administration to be necessary in order to furnish or improve telephone service in rural areas, and unless said determination by the administrator of the rural electrification administration, after proper hearing on reasonable notice to all interested parties, be approved by the Public Service Commission of the Commonwealth of Kentucky. In case of such a determination by the administrator of the rural electrification administration as aforesaid with approval by the Kentucky Public Service Commission, nothing contained in this section or elsewhere provided in KRS 279.310 to 279.600 shall deprive any corporation organized under KRS 279.310 to 279.600 or foreign corporation doing business in this state pursuant to KRS 279.310 to 279.600, of the power to improve, expand, construct, acquire and operate telephone lines, facilities, or systems without regard to their geographical location; (3) To connect and interconnect its telephone lines, facilities or systems with other telephone lines, facilities or systems; (4) To make its facilities available to persons furnishing telephone service within or without this state; (5) To purchase, lease as lessee, or otherwise acquire, and to use, and exercise and to sell, assign, convey, mortgage, pledge or otherwise dispose of or encumber, franchises, rights, privileges, licenses and easements; (6) To issue membership certificates and nonvoting shares of stock as hereinafter provided; (7) To borrow money and otherwise contract indebtedness, and to issue or guarantee notes, bonds, and other evidences of indebtedness, and to secure the payment thereof by mortgage, pledge, or deed of trust of, or any other encumbrance upon, any or all of its then owned or after-acquired real or personal property, assets, franchises, or revenues; (8) To construct, maintain and operate telephone lines along, upon, under and across publicly owned lands and public thoroughfares, including, without limitation, all roads, highways, streets, alleys, bridges and causeways; (9) To exercise the power of eminent domain in the manner provided by the laws of this state for the exercise of such power by other corporations constructing or operating telephone lines, facilities or systems; (10) To become a member of other cooperatives or corporations or to own stock therein; (11) To conduct its business and exercise its powers within or without this state; (12) To adopt, amend and repeal bylaws; (13) To make any and all contracts necessary, convenient or appropriate for the full exercise of the powers herein granted; (14) To exercise all other powers authorized by KRS Chapter 271B; and (15) To do and perform any other lawful acts and things, and to have and exercise any other powers which may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized. Effective: July 1, 1972 History: Amended 1972 Ky. Acts ch. 274, sec. 156, effective July 1, 1972. -- Created 1950 Ky. Acts ch. 147, sec. 6, effective March 25, 1950.

KRS 279.370 Bylaws -- Adoption and contents

279.370. Bylaws -- Adoption and contents (1) The incorporators of each corporation organized under KRS 279.310 to 279.600 shall adopt for its management bylaws not inconsistent with the powers granted by KRS 279.310 to 279.600. The written consent of a majority of the incorporators, evidenced by their signatures to the bylaws adopted, shall be necessary to the adoption of bylaws. The bylaws may be amended by a majority vote of the board of trustees. (2) The bylaws may provide for any or all of the following matters: (a) The time, place and manner of calling and conducting meetings of the members. (b) The number of members constituting a quorum. (c) The right of members to vote by mail, and the conditions, manner, form and effect of such votes. (d) The number of trustees constituting a quorum. (e) The qualifications, compensation, powers, duties and terms of office of trustees and officers, the time of their election and the manner of giving notice thereof. (f) An executive committee and the allotment to that committee of any or all of the functions and powers of the board of trustees, subject to the general direction and control of the board. (g) The amount of entrance, organization and membership fees, if any, the manner of collecting them and the purposes for which they may be used. (h) The qualifications of members of the corporation and the conditions precedent to membership; the time and manner of permitting members to withdraw; the manner of assignment or transfer of the interest of a member; the conditions upon which and the time when membership of any member shall cease; the suspension of the rights of a member when he ceases to be eligible to membership in the corporation; the manner and effect of the expulsion of a member; the manner of determining the value of a member's interest and provision for its purchase by the corporation upon the death or withdrawal of a member or upon his expulsion or forfeiture of membership, or, at the option of the corporation, the purchase of the member's interest at a price fixed by appraisal by the board. The bylaws may provide that in case of the forced withdrawal or expulsion of a member the board shall equitably appraise his property interest in the corporation and shall at its option fix the amount thereof in money or other property, which shall be paid to him within one (1) year after his expulsion or withdrawal. (i) Penalties for violation of the bylaws. (j) Any other matter relating to the operation or management of the corporation and not inconsistent with law or with the articles of incorporation. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 7, effective March 25, 1950.

KRS 279.380 Board of trustees -- Officers

279.380. Board of trustees -- Officers (1) The business of a cooperative shall be managed by a board of not less than five (5) trustees, each of whom shall be a member of the cooperative, or of another cooperative which is a member thereof. The bylaws shall prescribe the number of trustees, their qualifications, other than those prescribed in this section, the manner of holding meetings of the board of trustees and of electing successors to trustees who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of trustees from office and for the election of their successors. Trustees shall not receive any salaries for their services as trustees and, except in emergencies, shall not receive any salaries for their services in any other capacity without the approval of the members. The bylaws may, however, prescribe a fixed fee for attendance at each meeting of the board of trustees and may provide for reimbursement of actual expenses of attendance. (2) The trustees of a cooperative named in any articles of incorporation, consolidation, merger, conversion or combined consolidation and conversion shall hold office until the next annual meeting of the members and until their successors are elected and qualify. At each annual meeting or, in 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 trustees to hold office until the next annual meeting of the members, except as otherwise provided in KRS 279.310 to 279.600. The trustees so elected shall be elected in a manner to insure secrecy and anonymity of ballots cast provided the result of such election is determined by ballot vote. Each trustee shall hold office for the term for which he is elected and until his successor is elected and qualifies. (3) Instead of electing all the trustees annually, the bylaws may provide that one-third (1/3) of them, or a number as near thereto as possible, shall be elected annually for a term of three (3) years. (4) A majority of the board of trustees shall constitute a quorum. (5) The board of trustees may exercise all of the powers of a cooperative not conferred upon the members by KRS 279.310 to 279.600, or its articles of incorporation or bylaws. (6) The officers of a cooperative shall consist of a president, vice president, secretary and treasurer, who shall be elected annually by and from the board of trustees. When a person holding any such office ceases to be a trustee he shall cease to hold such office. The office of secretary and of treasurer may be held by the same person. The board of trustees may also elect or appoint such other officers, agents, or employees as it deems necessary or advisable and shall prescribe their powers and duties. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws. Effective: July 15, 1982 History: Amended 1982 Ky. Acts ch. 140, sec. 2, effective July 15, 1982. -- Amended 1964 Ky. Acts ch. 14, sec. 2. -- Created 1950 Ky. Acts ch. 147, sec. 8, effective March 25, 1950.

KRS 279.390 Members and shareholders -- Requirements for membership

279.390. Members and shareholders -- Requirements for membership (1) Each incorporator of a cooperative shall be a member thereof but no other person may become a member thereof unless such other person agrees to use telephone service furnished by the cooperative when it is made available through its facilities. Membership in a cooperative shall be evidenced by a certificate of membership which shall not be transferable, except as provided in the bylaws. The bylaws may prescribe additional qualifications and limitations in respect of membership, provided that ownership of shares of stock, if any are authorized, shall not be a condition of membership in the cooperative. (2) In case the issuance of shares of stock is provided for in the articles of incorporation, ownership thereof shall be evidenced by share certificates. No share of stock shall be issued except for cash, or for property at its fair value, in an amount equal to the par value of such share of stock. (3) Membership and share certificates shall contain such provisions, consistent with KRS 279.310 to 279.600 and the articles of incorporation of the cooperative, as shall be prescribed by its bylaws. (4) No member or shareholder shall be liable or responsible for any debts of the cooperative and the property of the members and shareholders shall not be subject to execution therefor except as the member or shareholder may become personally liable by reason of his or her own acts or conduct. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 133, sec. 48, effective July 15, 2010. -- Created 1950 Ky. Acts ch. 147, sec. 9, effective March 25, 1950.

KRS 279.400 Meeting of members -- Waiver of notice

279.400. Meeting of members -- Waiver of notice (1) An annual meeting of the members of a cooperative shall be held at such time and place as shall be provided in the bylaws. (2) Special meetings of the members may be called by the president, by the board of trustees, by any three (3) trustees, or by not less than two hundred (200) members or ten percent (10%) of all members, whichever shall be the lesser. (3) Except as otherwise provided in KRS 279.310 to 279.600, written or printed notice stating the time and place of each meeting of the members and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each member, either personally or by mail not less than ten (10) days nor more than twenty-five (25) days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage prepaid addressed to the member at his address as it appears on the records of the cooperative. (4) Unless the bylaws prescribe the presence of a greater percentage or number of the members for a quorum, a quorum for the transaction of business at all meetings of the members of a cooperative having not more than five hundred (500) members, shall be ten percentum (10%) of all members, present in person, and of a cooperative having more than five hundred (500) members, shall be fifty (50) members or one percentum (1%) of all members, whichever is greater, present in person. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice. (5) Each member shall be entitled to one (1) vote on each matter submitted to a vote at a meeting of the members. Voting shall be in person, but, if the bylaws so provide, may also be by mail. (6) Any person entitled to notice of a meeting may waive such notice in writing either before or after such meeting. If any such person shall attend such meeting, such attendance shall constitute a waiver of notice of such meeting, unless such person participates therein solely to object to the transaction of any business because the meeting has not been legally called or convened. Effective: June 16, 1972 History: Amended 1972 Ky. Acts ch. 32, sec. 1, effective June 16, 1972. -- Created 1950 Ky. Acts ch. 147, sec. 10, effective March 25, 1950.

KRS 279.410 Amendment of articles of incorporation

279.410. Amendment of articles of incorporation (1) A cooperative may amend its articles of incorporation by complying with the following requirements, provided, however, that a change of location of principal office may be effected in the manner set forth in KRS 279.420. The proposed amendment shall be presented to a meeting of the members, the notice of which shall set forth or have attached thereto the proposed amendment. If the proposed amendment, with any changes, is approved by the affirmative vote of not less than two-thirds (2/3) of those members voting thereon at such meeting, articles of amendment shall be executed and acknowledged on behalf of the cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of amendment shall recite that they are executed pursuant to this section and shall state: (a) The name of the cooperative; (b) The address of its principal office; and (c) The amendment to its articles of incorporation. (2) The president or vice president executing such articles of amendment shall make and annex thereto an affidavit stating that the provisions of this section in respect of the amendment set forth in such articles were duly complied with. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 11, effective March 25, 1950.

KRS 279.420 Change of location of principal offices

279.420. Change of location of principal offices A cooperative may, upon authorization of its board of trustees or its members, change the location of its principal office by filing a statement of change in accordance with KRS 14A.5-010. Effective: January 1, 2011 History: Amended 2010 Ky. Acts ch. 151, sec. 87, effective January 1, 2011. -- Created 1950 Ky. Acts ch. 147, sec. 12, effective March 25, 1950.

KRS 279.430 Common and preferred stock -- Ownership and transfer

279.430. Common and preferred stock -- Ownership and transfer (1) Only a member of a corporation organized under KRS 279.310 to 279.600 may own its common stock, and neither the common stock in any such corporation or any interest therein shall be transferable or assignable, except as security for a loan from the federal government, either by act of the parties or by operation of law, to any person who is not eligible to be a member of the corporation. (2) No corporation formed under KRS 279.310 to 279.600 shall issue common stock to a member until it has been fully paid for, but the promissory notes of a member may be accepted by the corporation as full or partial payment. The corporation shall hold the stock as security for the payment of the note, but such retention as security shall not affect the member's right to vote. (3) No person, other than a corporation formed under KRS 279.310 to 279.600, shall at any one (1) time own more than five percent (5%) of the outstanding common stock of any corporation formed under KRS 279.310 to 279.600. (4) No corporation formed under KRS 279.310 to 279.600 shall pay dividends on either its common stock or its preferred stock in an amount greater than four percent (4%) per annum on each class of stock. (5) Any such corporation may at any time, as specified in its bylaws, except when the debts of the corporation exceed fifty percent (50%) of its assets, buy in or purchase its common stock at the book value thereof, as conclusively determined by its board of directors, and pay for it in cash within one (1) year thereafter. (6) Preferred stock may be owned by and transferred to any person, and may be made redeemable and retirable by the corporation on such terms and conditions as are provided for in the articles of incorporation and printed on the face of each certificate. Ownership of preferred stock shall not confer on the holder any right to vote. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 13, effective March 25, 1950.

KRS 279.440 Consolidation

279.440. Consolidation (1) Any two (2) or more cooperatives (each of which is hereinafter designated a "consolidating cooperative"), may consolidate into a new cooperative (hereinafter designated the "new cooperative"), by complying with the following requirements of this section. (2) The proposition for the consolidation of the consolidating cooperative into the new cooperative and proposed articles of consolidation to give effect thereto shall be submitted to a meeting of the members of each consolidating cooperative, the notice of which shall have attached thereto a copy of the proposed articles of consolidation. (3) If the proposed consolidation and the proposed articles of consolidation with any amendments are approved by the affirmative vote of not less than two-thirds (2/3) of those members of each consolidating cooperative voting thereon at each such meeting, articles of consolidation in the form approved shall be executed and acknowledged on behalf of each consolidating cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of consolidation shall recite that they are executed pursuant to this section and shall state: (a) The name of each consolidating cooperative and the address of its principal office; (b) The name of the new cooperative and the address of its principal office; (c) A statement that each consolidating cooperative agrees to the consolidation; (d) The names and addresses of the trustees of the new cooperative; and (e) The terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner in which members and shareholders, if any, of the consolidating cooperative may or shall become members and shareholders, respectively, of the new cooperative; and may contain any provisions not inconsistent with KRS 279.310 to 279.600 deemed necessary or advisable for the conduct of the business of the new cooperative. (4) The president or vice president of each consolidating cooperative executing such articles of consolidation shall make and annex thereto an affidavit stating that the provisions of this section in respect of such articles were duly complied with by such cooperative. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 14, effective March 25, 1950.

KRS 279.450 Merger

279.450. Merger (1) Any one (1) or more cooperatives (each of which is hereinafter designated a "merging cooperative") may merge into another cooperative (hereinafter designated the "surviving cooperative"), by complying with the following requirements of this section. (2) The proposition for the merger of the merging cooperatives into the surviving cooperative and proposed articles of merger to give effect thereto shall be submitted to a meeting of the members of each merging cooperative and of the surviving cooperative, the notice of which shall have attached thereto a copy of the proposed articles of merger. (3) If the proposed merger and the proposed articles of merger, with any amendments, are approved by the affirmative vote of not less than two-thirds (2/3) of those members of each cooperative voting thereon at each such meeting, articles of merger in the form approved shall be executed and acknowledged on behalf of each such cooperative by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of merger shall recite that they are executed pursuant to this section and shall state: (a) The name of each merging cooperative and the address of its principal office; (b) The name of the surviving cooperative and the address of its principal office; (c) A statement that each merging cooperative and the surviving cooperative agree to the merger; (d) The names and addresses of the trustees of the surviving cooperative; and (e) The terms and conditions of the merger and the mode of carrying the same into effect, including the manner in which members, if any, of the merging cooperative may or shall become members and shareholders, respectively, of the surviving cooperative, and may contain any provisions not inconsistent with KRS 279.310 to 279.600 deemed necessary or advisable for the conduct of the business of the surviving cooperative. (4) The president or vice president of each cooperative executing such articles of merger shall make and annex thereto an affidavit stating that the provisions of this section in respect of such articles were duly complied with by such cooperative. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 15, effective March 25, 1950.

KRS 279.460 Effect of consolidation or merger

279.460. Effect of consolidation or merger (1) In the case of a consolidation the existence of the consolidating cooperatives shall cease and the articles of consolidation shall be deemed to be the articles of incorporation of the new cooperative; and in the case of a merger the separate existence of the merging cooperative shall cease and the articles of incorporation of the surviving cooperative shall be deemed to be amended to the extent, if any, that changes therein are provided for in the articles of merger. (2) All the rights, privileges, immunities and franchises and all property, real and personal, including without limitation applications for membership, all debts due on whatever account and all other choses in action, of each of the consolidating or merging cooperatives shall be deemed to be transferred to and vested in the new or surviving cooperative without further act or deed. (3) The new or surviving cooperative shall be responsible and liable for all the liabilities and obligations of each of the consolidating or merging cooperatives and any claim existing or action or proceeding pending by or against any of the consolidating or merging cooperatives may be prosecuted as if the consolidation or merger had not taken place, but the new or surviving cooperative may be substituted in its place. (4) Neither the rights of creditors nor any liens upon the property of any of such cooperatives shall be impaired by such consolidation or merger. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 16, effective March 25, 1950.

KRS 279.470 Conversion and combined consolidation and conversion of existing corporations

279.470. Conversion and combined consolidation and conversion of existing corporations (1) Any corporation organized under the laws of this state and furnishing or having the corporate power to furnish telephone service may be converted into a cooperative by complying with the following requirements and shall thereupon become subject to KRS 279.310 to 279.600 with the same effect as if originally organized under those sections: (a) The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be submitted to a meeting of the members or stockholders of such corporation, or in case of a corporation having no members or stockholders, to a meeting of the incorporators of such corporation, the notice of which shall have attached thereto a copy of the proposed articles of conversion. (b) If the proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion, with any amendments, are approved by the affirmative vote of not less than two-thirds (2/3) of those members of such corporation voting thereon at such meeting, or, if such corporation is a stock corporation, by the affirmative vote of the holders of not less than two- thirds (2/3) of those shares of the capital stock of such corporation represented at such meeting and voting thereon, or, in the case of a corporation having no members and no shares of its capital stock outstanding, by the affirmative vote of not less than two-thirds (2/3) of its incorporators, articles of conversion in the form approved shall be executed and acknowledged on behalf of such corporation by its president or vice president and its seal shall be affixed thereto and attested by its secretary. The articles of conversion shall recite that they are executed pursuant to this section and shall state: 1. The name of the corporation and the address of its principal office prior to its conversion into a cooperative; 2. The statute or statutes under which it was organized; 3. A statement that such corporation elected to become a cooperative, nonprofit corporation subject to KRS 279.310 to 279.600; 4. Its name as a cooperative; 5. The address of the principal office of the cooperative; 6. The names and addresses of the trustees of the cooperative; and 7. The manner in which members, stockholders or incorporators of such corporation may or shall become members of the cooperative; and may contain any provisions not inconsistent with KRS 279.310 to 279.600 deemed necessary or advisable for the conduct of the business of the cooperative, including provisions for the issuance of nonvoting shares of stock as provided for in KRS 279.330. If the articles of conversion shall make provision for the issuance of such shares of stock, they shall also state the manner in which members, stockholders or incorporators of such corporation may or shall become shareholders of the cooperative. The president or vice president executing such articles of conversion shall make and annex thereto an affidavit stating that the provisions of this section were duly complied with in respect of such articles. The articles of conversion shall be deemed to be the articles of incorporation of the cooperative. (2) Any two (2) or more corporations organized under the laws of this state and furnishing or having the corporate power to furnish telephone service may, if otherwise permitted to consolidate by the laws of this state, consolidate into a cooperative subject to KRS 279.310 to 279.600, with the same effect as if originally organized under those sections, by complying with the following requirements: (a) The proposition for the consolidation into a cooperative and the proposed articles of consolidation and conversion, with any amendments, shall be approved by each consolidating corporation in accordance with the statute or statutes under which it was organized and the provisions of subsection (1) of this section; (b) The articles of consolidation and conversion in the form approved shall be executed, acknowledged and sealed in the manner prescribed in subsection (1) of this section and in the statute or statutes under which the consolidating corporations were organized. The articles of consolidation and conversion shall state that they are executed pursuant to this section and such statute or statutes, that each consolidating corporation elects that the new corporation shall be a cooperative, and in addition shall contain all other information required by such statute or statutes and by paragraph (b) of subsection (1) of this section; may contain any provisions not inconsistent with KRS 279.310 to 279.600 deemed necessary or advisable for the conduct of the business of the cooperative. The president or vice president executing such articles of consolidation and conversion shall make and annex thereto an affidavit stating that the provisions of this section and of the statute or statutes under which the consolidating corporations were organized were duly complied with in respect of such articles. The articles of consolidation and conversion shall be deemed to be the articles of incorporation of the cooperative and shall be filed both in accordance with the provisions of KRS 279.310 to 279.600 and of the statute or statutes under which the consolidating corporations were organized. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 17, effective March 25, 1950.

KRS 279.480 Dissolution

279.480. Dissolution (1) Any corporation formed under KRS 279.310 to 279.600 may be dissolved by filing articles of dissolution, which shall be entitled and indorsed "Articles of Dissolution of ...." and shall state: (a) The name of the corporation and, if it is a consolidated corporation, the names of the original corporations. (b) The date of filing of the articles of incorporation and, if the corporation is a consolidated corporation, the dates on which the articles of incorporation of the original corporations were filed. (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 its officers. (2) The articles of dissolution shall be subscribed and acknowledged in the same manner as original articles of incorporation, by the president or a vice president and the secretary or an assistant secretary, who shall make and attach an affidavit stating that they have been authorized to execute and file the articles by a majority vote of all the members, and shareholders. (3) Articles of dissolution shall be filed, recorded and approved in the same manner, and shall take effect upon approval, as is provided in KRS 279.350 for articles of incorporation. (4) The corporation filing articles of dissolution shall continue in existence for the purpose of paying, satisfying and discharging any existing liabilities or obligations and collecting or liquidating its assets, and doing all other acts required to adjust and wind up its business and affairs, and may sue and be sued, contract and be contracted with in its corporate name. Any assets remaining after the liabilities and obligations of the corporation have been satisfied or discharged shall be ratably distributed to the shareholders, members and nonmember patrons of the corporation in accordance with the manner in which their respective rights may appear. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 18, effective March 25, 1950.

KRS 279.490 Fees for articles and amendments -- No recording taxes

279.490. Fees for articles and amendments -- No recording taxes (1) For acting upon, filing and recording articles of incorporation, articles of consolidation, articles of dissolution, or amendments to articles of incorporation or consolidation, the corporation shall pay to the Secretary of State a sum not to exceed two dollars ($2), for which the Secretary of State shall give his receipt. (2) For filing and recording articles of incorporation, articles of consolidation, articles of dissolution, or amendments to articles of incorporation or consolidation, the corporation shall pay to the county clerk a fee pursuant to KRS 64.012, for which the county clerk shall give his receipt. (3) No fee shall be paid or received for affixing the state seal to any of the documents mentioned in this section or to any copy thereof. (4) The recordation of the documents mentioned in this section shall be exempt from all recording taxes. Effective: January 1, 2007 History: Amended 2006 Ky. Acts ch. 255, sec. 22, effective January 1, 2007. -- Created 1950 Ky. Acts ch. 147, sec. 22, effective March 25, 1950.

KRS 279.500 Nonprofit operation

279.500. Nonprofit operation (1) A cooperative shall be operated on a nonprofit basis for the mutual benefit of its members and patrons. The bylaws of a cooperative or its contracts with members and patrons shall contain such provisions relative to the disposition of revenue and receipts as may be necessary and appropriate to establish and maintain its nonprofit and cooperative character. In the case of a cooperative authorized to issue shares of stock, such bylaws or contracts shall provide that no moneys shall be paid or credits given on the basis of patronage except after the declaration or payment of dividends on the outstanding shares of stock in accordance with the articles of incorporation of the cooperative, and such bylaws or contracts shall otherwise be consistent with the cooperative's obligations in respect of such shares of stock. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 19, effective March 25, 1950.

KRS 279.510 Obligations, how issued, secured, purchased or redeemed -- Power of board of trustees to encumber or dispose of property

279.510. Obligations, how issued, secured, purchased or redeemed -- Power of board of trustees to encumber or dispose of property (1) The board of trustees of a cooperative shall have full power and authority, without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed or deeds of trust of, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired or to be acquired, and wherever situated as well as the revenues therefrom, all upon such terms and conditions as the board of trustees shall determine, to secure any indebtedness of the cooperative to the United States of America or any agency or instrumentality thereof. Any such mortgage or mortgages or deed or deeds of trust shall be exempt from mortgage recordation tax. (2) A cooperative may not otherwise sell, mortgage, lease or otherwise dispose of or encumber all or a substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized by the affirmative vote of not less than two-thirds (2/3) of all the members of the cooperative; provided however, that notwithstanding any other provision of KRS 279.310 to 279.600, or any other provision of law, the board of trustees may, upon the authorization of a majority of those members of the cooperative present at a meeting of the members thereof, the notice of which shall have set forth the proposed action, sell, lease or otherwise dispose of all or a substantial portion of its property to another cooperative or a foreign corporation doing business in this state pursuant to KRS 279.310 to 279.600 or to the holder or holders of any notes, bonds or other evidences of indebtedness issued to the United States of America or any agency or instrumentality thereof. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 20, effective March 25, 1950.

KRS 279.520 Recordation of mortgages -- Effect thereof

279.520. Recordation of mortgages -- Effect thereof Any mortgage, deed of trust or other instrument executed by a cooperative or foreign corporation doing business in this state pursuant to KRS 279.310 to 279.600, which affects real and personal property and which is recorded in the real property records in any county in which such property is located or is to be located, shall have the same force and effect as if the mortgage, deed of trust or other instrument were also recorded, filed or indexed as provided by law in the proper office in such county as a mortgage of personal property. All after-acquired property of such cooperative or foreign corporation described or referred to as being mortgaged or pledged in any such mortgage, deed of trust or other instrument, shall become subject to the lien thereof immediately upon the acquisition of such property by such cooperative or foreign corporation, whether or not such property was in existence at the time of the execution of such mortgage, deed of trust or other instrument. Recordation of any such mortgage, deed of trust or other instrument shall constitute notice and otherwise have the same effect with respect to such after-acquired property as it has under the laws relating to recordation, with respect to property owned by such cooperative or foreign corporation at the time of the execution of such mortgage, deed of trust or other instrument and therein described or referred to as being mortgaged or pledged thereby. The lien upon personal property of any such mortgage, deed of trust or other instrument shall, after recordation thereof, continue in existence and of record for the period of time specified therein without the refiling thereof or the filing of any renewal certificate, affidavit or other supplemental information required by the laws relating to the renewal, maintenance or extension of liens upon personal property. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 21, effective March 25, 1950.

KRS 279.530 Taxes

279.530. Taxes Corporations formed under KRS 279.310 to 279.600 shall be exempt from all profit taxes, gross and net taxes, sales taxes, occupation taxes, privilege taxes, income taxes, taxes on telephone service and from all excise taxes whatsoever, any statute now existing or hereafter passed to the contrary notwithstanding. In lieu of all other state, county, city and district taxes, except ad valorem and franchise taxes, corporations formed under KRS 279.310 to 279.600 shall pay to the State Treasurer an annual tax of ten dollars ($10). Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 23, effective March 25, 1950.

KRS 279.540 Jurisdiction of Public Service Commission -- Application of other laws

279.540. Jurisdiction of Public Service Commission -- Application of other laws (1) Every corporation formed under KRS 279.310 to 279.600 shall be subject to the general supervision of the Public Service Commission, and shall be subject to all the provisions of KRS 278.010 to 278.450 inclusive, and KRS 278.530 and 278.990. (2) The provisions of the general corporation laws of this state and all rights and powers thereunder shall apply to corporations organized under KRS 279.310 to 279.600, except where such provisions are in conflict with or inconsistent with the express provisions of KRS 279.310 to 279.600. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 24, effective March 25, 1950.

KRS 279.550 Securities act exemption

279.550. Securities act exemption The provisions of KRS Chapter 292 shall not apply to any note, bond or other evidence of indebtedness issued by any cooperative or foreign corporation doing business in this state pursuant to KRS 279.310 to 279.600 to the United States of America or any agency or instrumentality thereof, or to any mortgage, deed of trust or other instrument executed to secure the same. The provisions of said securities act shall not apply to the issuance of membership certificates, shares of stock or any other evidence of member, shareholder or patron interest by any cooperative or any such foreign corporation. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 25, effective March 25, 1950.

KRS 279.560 Districts

279.560. Districts The bylaws may provide for the division of the territory served or to be served by a cooperative into two (2) or more districts for any purpose, including without limitation, the nomination and election of trustees and the election and functioning of district delegates. Such delegates, who shall be members, may nominate and elect trustees. The bylaws shall prescribe the boundaries of the districts, or the manner of establishing such boundaries, and the manner of changing such boundaries, and the manner in which such districts shall function. No member at any district meeting and no district delegate at any meeting shall vote by proxy or by mail. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 26, effective March 25, 1950.

KRS 279.570 Foreign corporations

279.570. Foreign corporations Any foreign nonprofit or cooperative corporation furnishing or authorized to furnish telephone service and owning or operating telephone lines or facilities in an adjacent state may construct or acquire extensions of such lines in this state and operate such extensions without complying with any statute of this state pertaining to the qualifications of foreign corporations for the doing of business in this state. Any such corporation shall, before constructing or operating such extensions, by an instrument executed and acknowledged on its behalf by its president or vice president, under its seal attested by its secretary, and filed with the Secretary of State, designate the Secretary of State its agent to accept service of process on its behalf. Thereafter, with respect to its operations in this state, such corporation shall have only the rights, powers, privileges and immunities of, and shall be subject to all of the laws of this state relating to the jurisdiction and supervision of the Public Service Commission in the same manner and to the same extent as, a cooperative organized under KRS 279.310 to 279.600. In the event any process shall be served upon the Secretary of State, he shall forthwith forward the same by certified mail, return receipt requested to such corporation at the address thereof specified in the aforesaid instrument. Effective: July 15, 1980 History: Amended 1980 Ky. Acts ch. 114, sec. 66, effective July 15, 1980. -- Amended 1974 Ky. Acts ch. 315, sec. 44. -- Created 1950 Ky. Acts ch. 147, sec. 27, effective March 25, 1950.

KRS 279.580 Construction standards -- Safety

279.580. Construction standards -- Safety Construction of telephone lines and facilities by a cooperative shall, as a minimum requirement, comply with the standards of the National Electrical Safety Code in effect at the time of such construction. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 28, effective March 25, 1950.

KRS 279.590 Easements

279.590. Easements Two (2) years' continuous, uncontested maintenance of telephone lines on any real property by a cooperative or foreign corporation doing business in this state pursuant to KRS 279.310 to 279.600 shall ripen into legal title to such easement. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 29, effective March 25, 1950.

KRS 279.600 Effect and construction of KRS 279.310 to 279.590

279.600. Effect and construction of KRS 279.310 to 279.590 KRS 279.310 to 279.590 are complete in themselves and shall be controlling. They shall be construed liberally. The enumeration of any object, purpose, power, manner, method, or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods or things. Effective: March 25, 1950 History: Created 1950 Ky. Acts ch. 147, sec. 30, effective March 25, 1950.

KRS 279.990 Penalties

279.990. Penalties Any person referred to in KRS 279.150, or any officer, agent or employee in an official capacity of such person, who knowingly or willfully violates any of the provisions of KRS 279.150 shall be fined not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) or imprisoned for not more than two (2) years, or both, and each day that the violation continues shall constitute a separate offense. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. sec. 883j-24.

Source: Kentucky Legislative Research Commission (legislature.ky.gov)URL: https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38597Fetched: 10/20/2026