Section 1 - Interest or Dividends on Capital Prohibited
The Cooperative shall at-all-times be operated on a cooperative non-profit basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.
Section 2 - Patronage Capital in Connection with Furnishing Electric Energy
In the furnishing of electric energy, the Cooperative’s operations shall be so conducted that all patrons will, through their patronage, furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis, patronage will be assigned annually to full year members based on the total revenue from the member minus the cost of power. For members in the large power class, individual power costs will be calculated. For all other classes, the average cost of electricity per kWh for the year will be used. The Cooperative is obligated to pay by credits to a capital account for each patron these amounts. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each patron, which records shall be available for inspection by members during business hours. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.
(a) Capital credits assigned to RushShelby Energy by Hoosier energy shall be considered an investment in an associated organization by the Cooperative and will not be allocated to the membership in the form of patronage.
(b) Profits returned to RushShelby Energy from subsidiary organizations or investment returns from associated organizations will not be included in the calculations of patronage.
Notwithstanding any other provision of these bylaws, the Board of Directors, at its discretion, shall have the power at any time upon the death of any patron, if the legal representatives of the patron’s estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the Board of Directors, acting under policies of general application, and the legal representatives of such patron’s estate shall agree upon; provided, however, that the financial condition of the Cooperative will not be impaired thereby. Bankruptcy, receivership, dissolution, or merger of a member shall not be interpreted as “death of any patron”.
Any patronage returned or utilized in any way before the end of a twenty-year period from the date of assignment shall be discounted. The board of directors shall establish a discount rate per annum for this purpose. All patronage returned after a twenty-year period shall be on a full dollar basis.
Patronage in the account of any member terminating their membership with an unpaid balance shall be applied, on a discounted basis, toward the unpaid balance. Such member and their account shall forfeit all rights to any patronage that would remain in the account.
In the event of dissolution or liquidation of the Cooperative, after all outstanding indebtedness of the Cooperative shall have been paid, outstanding capital credits shall be retired without priority on a pro-rata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the Board of Directors shall determine that the financial condition of the Cooperative will not be impaired thereby, the capital then credited to patrons’ accounts may be retired in full or in part. Such retirements of capital shall be made in order of priority according to the year the capital was furnished and credited, the capital first received by the Cooperative being first retired.
Capital credited to the account of each patron shall be assignable only on the books of the Cooperative pursuant to written instructions from the assignor and only to successors in interest or successors in occupancy in all or part of such patron’s premises served by the Cooperative unless the Board of Directors, acting under policies of general application, shall determine otherwise.
Any capital credit record on file which the Cooperative retires by the general retirement process and is mailed to the member at the last known address on file:
(a) any uncollected funds after 90 days are deemed as an unclaimed patronage refund and will remain at this status for three years.
(b) patron name with available unclaimed funds will be published on the Cooperative’s website and/or monthly newsletter.
(c) on the fourth year the amount will be transferred to abandoned. After funds are transferred to abandoned, a claim can be made by the member.
A 1099 will be issued to any patronage refund over $600 at the end of each year per IRS Guidelines.
The patrons of the Cooperative, by dealing with the Cooperative, acknowledge that the terms and provisions of the Articles of Incorporation and bylaws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and each patron are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. The provisions of this Article of the bylaws shall be called to the attention of each patron of the Cooperative by posting in a conspicuous place in the Cooperative’s office.