CHAPTER 81 HOUSE BILL No. 2018* An Act concerning electricity; providing for the organization of cooperative corporations
to generate electricity from renewable resources and technologies and to transmit and
sell such electricity at wholesale; authorizing issuance of bonds for certain purposes.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. Sections 1 through 30, and amendments thereto, may be
cited as the renewable energy electric generation cooperative act.

      Sec.  2. As used in the renewable energy electric generation coop-
erative act:

      (a) ``Cooperative'' means any corporation organized under the renew-
able energy electric generation cooperative act or which becomes subject
to the renewable energy electric generation cooperative act in the manner
hereinafter provided.

      (b) ``Person'' means any natural person, firm, association, corporation,
limited liability company, business trust or partnership.

      (c) ``Renewable attributes'' has the meaning provided in K.S.A. 66-
1,184a, and amendments thereto.

      (d) ``Renewable resources or technologies'' means wind, solar, ther-
mal, photovoltaic, biomass, hydropower, geothermal, waste incineration
and landfill gas resources or technologies.

      Sec.  3. Five or more persons may organize a cooperative, nonprofit,
membership corporation under the provisions of the renewable energy
electric generation cooperative act for the purposes of conducting or pro-
moting any lawful business under the general corporation laws of the
state, generating electricity from renewable resources and technologies
and transmitting and selling such electricity at wholesale.

      Sec.  4. (a) In addition to the powers conferred on all corporations
under article 61 of chapter 17 of the Kansas Statutes Annotated, a co-
operative organized under the renewable energy electric generation co-
operative act shall have power to:

      (1) Sue and be sued in its corporate name;

      (2) have perpetual existence;

      (3) adopt a corporate seal and alter the same;

      (4) generate, either as the cooperative or as individual members of
the cooperative, electricity from renewable resources or technologies and
transmit and sell such electricity at wholesale;

      (5) sell renewable attributes of the cooperative or of members of the
cooperative;

      (6) construct, purchase, lease, equip, maintain and operate, and to
sell, assign, convey, lease, mortgage, pledge or encumber electric trans-
mission lines or systems, electric generating plants, and lands, buildings,
structures, easements and rights-of-way and equipment, and any other
real or personal property, tangible or intangible, necessary to accomplish
the purpose for which the cooperative may be organized hereunder;

      (7) purchase, lease as lessee or otherwise acquire, and use, and ex-
ercise and to sell, assign, convey, mortgage, pledge or otherwise dispose
of or encumber, franchises, rights, privileges, licenses and easements;

      (8) borrow money and otherwise contract indebtedness, and to issue
notes, bonds and other evidences of indebtedness, and to secure the pay-
ment thereof by mortgage, pledge, or deed of trust of, or any other en-
cumbrance upon, any or all of its then-owned or after-acquired real or
personal property, assets, franchises, revenues or income;

      (9) construct, maintain and operate electric transmission lines along,
upon, under and across publicly owned lands and public thoroughfares,
roads, highways, streets, alleys, bridges and causeways in conformity with
the laws of the state of Kansas;

      (10) become an incorporator, promoter, manager, member, stock-
holder or owner of other corporations or cooperatives, and conduct its
business and exercise its powers within this state and to participate with
other persons in any corporation, limited liability company, cooperative,
partnership, limited partnership, joint venture or other association of any
kind, or in any transaction, undertaking or arrangement which the par-
ticipating person would have power to conduct by itself, whether or not
such participation involves sharing or delegation of control with or to
others;

      (11) adopt, amend and repeal bylaws; and

      (12) do and perform any other acts and things, and to have and ex-
ercise any other powers which may be necessary, to accomplish the pur-
pose for which the cooperative is organized.

      (b) No cooperative organized under the renewable energy electric
generation cooperative act nor any member of such cooperative shall:

      (1) Enter into any contract for parallel generation services pursuant
to K.S.A. 66-1,184, and amendments thereto, with regard to power gen-
erated by such cooperative or member from renewable resources;

      (2) sell electricity at retail or have a certificated territory in this state;

      (3) transfer or distribute electricity to any other member of the co-
operative; or

      (4) resell electricity provided to the cooperative or member by the
cooperative's or member's provider of last resort.

      Sec.  5. The name of an electric generation cooperative organized
under the renewable energy electric generation cooperative act shall in-
clude the words ``renewable,'' ``generation'' and ``cooperative'' and the
abbreviation ``Inc.''. The name of an electric generation cooperative shall
be distinct from the name of any other cooperative or corporation organ-
ized under the laws of, or authorized to do business in, this state. Only a
cooperative doing business in this state pursuant to the renewable energy
electric generation cooperative act shall use all of the following words in
its name: ``Renewable,'' ``generation'' and ``cooperative.''

      Sec.  6. (a) The articles of incorporation of a cooperative organized
under the renewable energy electric generation cooperative act shall re-
cite that they are executed pursuant to the renewable energy electric
generation cooperative act and shall state:

      (1) The name of the cooperative;

      (2) the address of its principal office;

      (3) the names and addresses of the incorporators;

      (4) the names and addresses of its directors; and

      (5) the purposes for which it is organized.

      (b) The articles of incorporation of a cooperative organized under the
renewable energy electric generation cooperative act may contain any
provisions, not inconsistent with the renewable energy electric generation
cooperative act, which are deemed necessary or advisable for the conduct
of the business of the cooperative.

      (c) The articles of incorporation shall be signed by each incorporator.

      Sec.  7. The board of directors shall adopt the first bylaws of a co-
operative to be adopted following an incorporation, conversion, merger
or consolidation. Thereafter the members shall adopt, amend or repeal
the bylaws by the affirmative vote of a majority of those members voting
thereon at a meeting of the members. The bylaws shall set forth the rights
and duties of members and directors and may contain other provisions
for the regulation and management of the affairs of the cooperative not
inconsistent with the renewable energy electric generation cooperative
act or with the cooperative's articles of incorporation.

      Sec.  8. Each incorporator of a cooperative shall be a member
thereof. No person shall become a member of the cooperative unless such
person operates generation facilities which use renewable resources and
have a capacity of at least 100 kilowatts and agrees to generate electricity
using such facilities and: (a) Transmit and sell at wholesale through the
cooperative any such electricity in excess of that used by the person; (b)
sell through the cooperative renewable attributes; or (c) both. Any mem-
ber of a cooperative who so agrees shall cease to be a member of the
cooperative if such member does not comply with the terms of the agree-
ment within two years after such person becomes a member, or such
lesser period as the bylaws of the cooperative may provide. A husband
and wife may hold a joint membership in a cooperative. Membership in
a cooperative shall not be transferable, except as provided in the bylaws.
The bylaws may prescribe additional qualifications and limitations in re-
spect of membership.

      Sec.  9. (a) An annual meeting of the members of a cooperative shall
be held at such time and place as shall be provided in the bylaws of the
cooperative.

      (b) Special meetings of the members may be called by the president,
by the board of directors, by any three directors or by not less than 10%
of the members.

      (c) Except as otherwise provided in the renewable energy electric
generation cooperative act, written or printed notice stating the time and
place of each meeting of the members and, in the case of a special meet-
ing, the purpose or purposes for which the meeting is called, shall be
given to each member, either personally or by mail, not less than 10 days
nor more than 35 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 the member's
address as it appears on the records of the cooperative.

      (d) 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 shall be 5%
of all members, who must be present in person. If less than a quorum is
present at any meeting, a majority of those present in person may adjourn
the meeting without further notice.

      (e) Each member shall be entitled to one vote on each matter sub-
mitted to a vote at a meeting of the members. Voting shall be in person
but, if the bylaws so provide, may also be by proxy or by mail, or both. If
the bylaws provide for voting by proxy or by mail, they shall also prescribe
the conditions under which voting shall be permitted. No person shall
vote as proxy more than three members at any meeting of the members.

      Sec.  10. 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.

      Sec.  11. (a) The business of a cooperative shall be managed by a
board of not less than five directors, each of whom shall be a member of
the cooperative. The bylaws shall prescribe the number of directors, their
qualifications, other than those prescribed in the renewable energy elec-
tric generation cooperative act, the manner of holding meetings of the
board of directors and of electing successors to directors who resign, die
or are otherwise incapable of acting as a director. The bylaws may also
provide for the removal of directors from office and for the election of
their successors. Directors shall not receive any salary for their services
as directors and, except in emergencies, shall not be employed by the
cooperative in any capacity involving compensation without the approval
of the members. The bylaws may provide that a fixed fee and expenses
of attendance may be allowed to each director for attendance at each
meeting of the board of directors and for other functions duly authorized
for and on behalf of the cooperative.

      (b) The directors of a cooperative named in any articles of incorpo-
ration, consolidation, merger or 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 directors to hold office until the next
annual meeting of the members, except as otherwise provided in the
renewable energy electric generation cooperative act. Each director shall
hold office for the term for which elected and until a successor is elected
and qualifies.

      (c) Instead of electing all the directors annually, the bylaws may pro-
vide for half of the directors, or a number as near thereto as possible, to
be elected to serve until the next annual meeting of the members and
that the remaining directors shall be elected to serve until the second
succeeding annual meeting. Thereafter, as directors' terms expire, the
members shall elect successor directors to serve until the second suc-
ceeding annual meeting after their election.

      (d) Instead of electing the directors in the manner provided in sub-
section (b) or (c), the bylaws may provide that the members shall be
elected at such annual meetings to serve for terms of three years, except
that the terms of the first directors elected pursuant to this subsection
may be fixed in such bylaws for a number of years not exceeding three
and, upon the expiration thereof, all members thereafter to be elected
for terms of three years.

      (e) A majority of the board of directors shall constitute a quorum.

      (f) If a husband and wife hold a joint membership in a cooperative,
either one, but not both, may be elected a director.

      Sec.  12. The officers of a cooperative shall consist of a president,
vice-president, secretary and treasurer. The offices shall be elected an-
nually by and from the board of directors. When a person holding any
such office ceases to be a director, the person shall cease to hold such
office. The office of secretary and the office of treasurer may be held by
the same person. The board of directors may also elect or appoint such
other officers, agents or employees as the board deems necessary or ad-
visable and the board shall prescribe the powers and duties of such offi-
cers, agents or employees. Any officer may be removed from office and
a successor elected in the manner prescribed in the bylaws.

      Sec.  13. A cooperative may amend its articles of incorporation in any
manner not inconsistent with the renewable energy electric generation
cooperative act by complying with the following requirements: The pro-
posed amendment shall be presented to a meeting of the members, the
notice of which shall set forth or have attached the proposed amendment.
If the proposed amendment, with any changes, is approved by the affir-
mative vote of not less than 2/3 of those members voting at such meeting,
articles of amendment shall be executed on behalf of the cooperative by
its president or vice-president and attested by its secretary. The articles
of amendment shall recite that they are executed pursuant to the renew-
able energy electric generation cooperative act 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. The president or vice-
president executing such articles of amendment shall make and annex
thereto an affidavit stating that the amendment was submitted and
adopted in compliance with the provisions of this section.

      Sec.  14. A cooperative, upon authorization of its board of directors
or its members, may change the location of its principal office to any
place within the state of Kansas by filing, in the office of the secretary of
state, a certificate which recites such change of principal office and which
is executed by the cooperative's president or vice-president and attested
by the cooperative's secretary.

      Sec.  15. (a) Any two or more cooperatives organized under the re-
newable energy electric generation cooperative act may merge into a sin-
gle cooperative, which may be any one of the constituent cooperatives,
or may consolidate into a new cooperative formed by the consolidation,
by complying with the following requirements:

      (1) The proposition for the merger or consolidation of the coopera-
tives and proposed articles of merger or consolidation shall be submitted
to a meeting of the members of each merging or consolidating coopera-
tive, the notice of which shall have attached a copy of the proposed articles
of merger or consolidation; and

      (2) if the proposed merger or consolidation and the proposed articles
of merger or consolidation, with any amendments, are approved by the
affirmative vote of not less than 2/3 of the members of each merging or
consolidating cooperative voting at each such meeting, the articles of
merger or consolidation in the form approved shall be executed on behalf
of each merging or consolidating cooperative by its president or vice-
president and attested by its secretary.

      (b) Voting on the proposed articles of merger or consolidation shall
be in accordance with subsection (e) of section 9, and amendments
thereto.

      (c) The articles of merger or consolidation shall recite that they are
executed pursuant to the renewable energy electric generation coopera-
tive act and shall state:

      (1) The name of each merging or consolidating cooperative and the
address of its principal office;

      (2) the name of the surviving or new cooperative and the address of
its principal office;

      (3) a statement that each merging or consolidating cooperative agrees
to the merger or consolidation;

      (4) the names and addresses of the directors of the surviving or new
cooperative; and

      (5) the terms and conditions of the merger or consolidation and the
mode of carrying the same into effect, including the manner in which the
members of the merging or consolidating cooperatives may or shall be-
come members of the surviving or new cooperative.

      Such articles may contain any provisions, not inconsistent with the re-
newable energy electric generation cooperative act, which are deemed
necessary or advisable for the conduct of the business of the surviving or
new cooperative.

      (d) The president or vice-president of each merging or consolidating
cooperative executing the articles of merger or consolidation shall make
and annex thereto an affidavit stating that such articles were submitted
and approved in compliance with the provisions of this section.

      Sec.  16. (a) In the case of a consolidation, the existence of the con-
solidating cooperatives shall cease and the articles of consolidation shall
be deemed to be the articles of incorporation of the new cooperative. In
case of a merger, the separate existence of the merging cooperatives shall
cease and the articles of incorporation of the surviving cooperatives shall
be amended to the extent, if any, that changes therein are necessary in
the articles of merger.

      (b) All the rights, privileges, immunities and franchises and all prop-
erty, real and personal, including applications for membership, all debts
due on whatever account and all other choses in action, of each consoli-
dating or merging cooperative shall be deemed to be transferred to and
vested in the new or surviving cooperative without further act or deed.

      (c) The new or surviving cooperative shall be responsible and liable
for all liabilities and obligations of each consolidating or merging coop-
erative and any claim existing or action or proceeding pending by or
against any of the consolidating or merging cooperatives may be prose-
cuted as if the consolidation or merger had not taken place, but the new
or surviving cooperative may be substituted in its place.

      (d) Neither the rights of creditors nor any liens upon the property of
any such cooperative shall be impaired by such consolidation or merger.

      Sec.  17. (a) A cooperative which has not commenced business may
be dissolved by delivering to the secretary of state articles of dissolution
which shall be executed on behalf of the cooperative by a majority of the
incorporators and which shall state:

      (1) The name of the cooperative;

      (2) the address of its principal office;

      (3) that the cooperative has not commenced business;

      (4) that any sums received by the cooperative, less any part thereof
disbursed for expenses of the cooperative, have been returned or paid to
those entitled thereto;

      (5) that no debt of the cooperative is unpaid; and

      (6) that a majority of the incorporators elect that the cooperative be
dissolved.

      (b) A cooperative which has commenced business may be dissolved
in the following manner:

      (1) The members at any meeting shall approve, by the affirmative
vote of not less than 2/3 of those members voting on such proposal at such
meeting, a proposal that the cooperative be dissolved. Upon such ap-
proval, a certificate of election to dissolve shall be executed on behalf of
the cooperative by its president or vice-president and attested by its sec-
retary. Such certificate shall state: (A) The name of the cooperative; (B)
the address of its principal office; and (C) that the members of the co-
operative have duly voted that the cooperative be dissolved. Such certif-
icate shall be submitted to the secretary of state for filing, together with
an affidavit, made by the cooperative's president or vice-president exe-
cuting the certificate, stating that the statements in the certificate are
true.

      (2) Upon the filing of the certificate and affidavit by the secretary of
state, the cooperative shall cease to carry on its business except to the
extent necessary for the winding up thereof, but its corporate existence
shall continue until articles of dissolution have been filed by the secretary
of state. The board of directors shall immediately cause notice of the
dissolution proceedings to be mailed to each known creditor of and claim-
ant against the cooperative and to be published once a week for two
successive weeks in a newspaper of general circulation in the county
where the principal office of the cooperative is located. The board of
directors shall wind up and settle the affairs of the cooperative, collect
sums owing to it, liquidate its property and assets, pay and discharge its
debts, obligations and liabilities, and do all other things required to wind
up its business, and after paying or discharging or adequately providing
for the payment or discharge of all its debts, obligations and liabilities,
shall distribute any remaining sums among its members and former mem-
bers in proportion to the patronage of the respective members or former
members during the seven years next preceding the date of the filing of
the certificate by the secretary of state or, if the cooperative has not been
in existence for such period, then during the period of its existence prior
to such filing. The board of directors shall thereupon authorize the exe-
cution of articles of dissolution, which shall be executed on behalf of the
cooperative by its president or vice-president, and attested by its secre-
tary.

      (3) The articles of dissolution shall recite that they are executed pur-
suant to the renewable energy electric generation cooperative act and
shall state:

      (A) The name of the cooperative;

      (B) the address of its principal office;

      (C) the date on which the certificate of election to dissolve was filed
by the secretary of state;

      (D) that there are no actions or suits pending against the cooperative;

      (E) that all debts, obligations and liabilities of the cooperative have
been paid and discharged or that adequate provision has been made
therefor; and

      (F) that the preceding provisions of this subsection have been duly
complied with.

      The president or vice-president executing the articles of dissolution
shall make and annex thereto an affidavit stating that the statements made
therein are true.

      Sec.  18. Articles of incorporation, amendment, consolidation,
merger, conversion or dissolution, when executed and accompanied by
such affidavits as required by applicable provisions of the renewable en-
ergy electric generation cooperative act, shall be presented to the secre-
tary of state for filing in the records of the secretary's office. If the sec-
retary of state finds that the articles presented conform to the
requirements of the renewable energy electric generation cooperative act,
the secretary, upon the payment of the fees provided by the renewable
energy electric generation cooperative act, shall file such articles in the
records of the secretary's office. Upon such filing the incorporation,
amendment, consolidation, merger, conversion or dissolution shall be in
effect. The provisions of this section shall also apply to certificates of
election to dissolve and affidavits executed in connection with such cer-
tificates of election to dissolve pursuant to subsection (b) of section 17,
and amendments thereto.

      Sec.  19. (a) Except as otherwise determined by a vote of the mem-
bers of the cooperative, revenues of a cooperative for any fiscal year in
excess of the following shall be distributed by the cooperative to its mem-
bers in accordance with the bylaws of the cooperative:

      (1) Amounts necessary to defray the expenses of operation and main-
tenance of facilities of the cooperative during such fiscal year;

      (2) amounts necessary to pay interest and principal obligations of the
cooperative coming due in such fiscal year;

      (3) amounts necessary to finance, or to provide a reserve for the fi-
nancing of, the construction or acquisition by the cooperative of additional
facilities to the extent determined by the board of directors;

      (4) amounts necessary to provide a reasonable reserve for working
capital;

      (5) amounts necessary to provide a reserve for the payment of in-
debtedness of the cooperative in an amount not less than the total of the
interest and principal payments in respect thereof required to be made
during the next following fiscal year.

      (b) Nothing herein contained shall be construed to prohibit the pay-
ment by a cooperative of all or any part of its indebtedness prior to the
date when the same shall become due.

      Sec.  20. (a) The board of directors 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 and income therefrom, all upon such
terms and conditions as the board of directors shall determine, to secure
any indebtedness of the cooperative.

      (b) A cooperative may not otherwise sell, mortgage, lease or other-
wise 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 a majority of all the
members of the cooperative.

      Sec.  21. No member of a cooperative shall be liable or responsible
for any debts of the cooperative and the property of the members shall
not be subject to execution therefor.

      Sec.  22. Any mortgage, deed or trust or other instrument executed
by a cooperative doing business in this state pursuant to the renewable
energy electric generation cooperative act, 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-ac-
quired property of such cooperative described or referred to as being
mortgaged or pledged in any such mortgage, deed of trust or other in-
strument, shall become subject to the lien thereof immediately upon the
acquisition of such property by such cooperative, whether or not such
property was in existence at the time of the execution of such mortgage,
deed or 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 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, after recordation
thereof, shall 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 per-
sonal property.

      Sec.  23. No action or suit affecting an easement or lease may be
brought against a cooperative doing business in this state pursuant to the
renewable energy electric generation cooperative act, or against any
agent, servant or employee thereof, by reason of the maintenance of elec-
tric transmission lines on any real property after the expiration of a period
of two years of continuous maintenance of such lines without the consent
of the person or persons legally entitled to object to such maintenance.

      Sec.  24. No person who is authorized to take acknowledgments un-
der the laws of this state shall be disqualified from taking acknowledg-
ments of instruments executed in favor of a cooperative or to which it is
a party, by reason of being an officer, director or member of such coop-
erative.

      Sec.  25. (a) Cooperatives doing business in this state pursuant to the
renewable energy electric generation cooperative act shall be subject to
the jurisdiction and control of the state corporation commission of this
state in those provisions of chapter 66 of the Kansas Statutes Annotated
applicable to electric utilities.

      (b) No merger or consolidation of any cooperative organized under
the provisions of the renewable energy electric generation cooperative
act shall become effective until approved by the state corporation com-
mission.

      Sec.  26. The provisions of the Kansas securities act shall not apply
to any note, bond or other evidence of indebtedness issued by any co-
operative doing business in this state pursuant to the renewable energy
electric generation cooperative act 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 such
securities act shall not apply to the issuance of membership certificates
by any cooperative.

      Sec.  27. (a) Every cooperative organized under the renewable energy
electric generation cooperative act shall make an annual report in writing
to the secretary of state, showing the financial condition of the cooperative
at the close of business on the last day of its tax period next preceding
the date of filing, but if any such cooperative's tax period is other than
the calendar year, it shall give notice thereof to the secretary of state prior
to December 31 of the year it commences such tax period. The report
shall be filed on or before the 15th day of the fourth month following the
close of the tax year of the electric cooperative. An extension for filing
the annual report may be granted upon the filing of a written application
with the secretary of state prior to the due date of the report, except that
no such extension may be granted for a period of more than 90 days. The
report shall be made on a form provided by the secretary of state, con-
taining the following information:

      (1) The name of the cooperative;

      (2) the location of the principal office of the cooperative;

      (3) the names and addresses of the president, secretary, treasurer and
directors of the cooperative;

      (4) the number of members of the cooperative;

      (5) a balance sheet showing the financial condition of the cooperative
at the close of business on the last day of its tax period next preceding
the date of filing; and

      (6) the change or changes, if any, in the particulars made since the
last annual report.

      (b) The annual report shall be signed by the president, vice-president
or secretary of the cooperative, sworn to before an officer duly authorized
to administer oaths, and forwarded to the secretary of state. At the time
of filing such annual report, the cooperative shall pay an annual franchise
tax of $20.

      Sec.  28. A cooperative organized under the renewable energy elec-
tric generation cooperative act shall pay the costs of use of distribution
and transmission systems by the cooperative to transmit electricity, the
costs of a generation interconnect study to the extent required by the
standard provisions for agreements for interconnection and the costs of
transmission system improvements, other upgrades and metering nec-
essary for system operation. The cooperative shall negotiate with the own-
ers of distribution and transmission systems for the purpose of determin-
ing such costs.

      Sec.  29. If a member of a cooperative organized under the renewable
energy electric generation cooperative act is located within the certifi-
cated territory of a retail electric supplier, such supplier may charge such
member of the cooperative a monthly fee which reflects the cost of pro-
viding standby electric service, distribution system repair and mainte-
nance and other reasonable costs of being the provider of last resort.

      Sec.  30. Any agreement between a cooperative organized under the
renewable energy electric generation cooperative act and the owner of
distribution or transmission lines directly interconnecting with generation
facilities of members of such cooperative for use of such lines by the
cooperative shall require that all safety, system reliability and other ap-
propriate issues shall have been satisfactorily resolved by the parties prior
to the cooperative's first delivery of electricity.

      Sec.  31. (a) As used in this section:

      (1) ``Appurtenances'' means all substations, towers, poles and other
structures and equipment necessary for the bulk transfer of electricity.

      (2) ``Electric transmission line'' means any line or extension of a line
which is at least five miles long and which is used for the bulk transfer of
electricity.

      (b) The Kansas development finance authority is hereby authorized
to issue revenue bonds in amounts sufficient to pay the following de-
scribed costs of construction, upgrading and acquisition, including any
required interest on the bonds during such construction, upgrading and
acquisition, plus all amounts required for the costs of bond issuance and
any required reserves on the bonds: (1) Construction or upgrading of
electric transmission lines and appurtenances to be used for the transfer
of 69 kilovolts or more of electricity; (2) acquisition of the right-of-way
on which transmission lines and appurtenances to be used for the transfer
of 69 kilovolts or more of electricity are to be constructed; and (3) up-
grading of electric transmission lines and appurtenances to be used for
the transfer of 69 kilovolts or more of electricity. The bonds, and interest
thereon, issued pursuant to this section shall be payable from revenues
derived from use of the transmission lines.

      (c) The provisions of subsection (a) of K.S.A. 74-8905, and amend-
ments thereto, shall not prohibit the issuance of bonds by the Kansas
development finance authority for the purposes of this section and any
such issuance of bonds is exempt from the provisions of subsection (a) of
K.S.A. 74-8905, and amendments thereto, which would operate to pre-
clude such issuance.

      (d) Revenue bonds, including refunding revenue bonds, issued here-
under shall not constitute an indebtedness of the state of Kansas, nor
shall they constitute indebtedness within the meaning of any constitu-
tional or statutory provision limiting the incurring of indebtedness.

      (e) Revenue bonds, including refunding revenue bonds, issued here-
under and the income derived therefrom are and shall be exempt from
all state, county and municipal taxation in the state of Kansas, except
Kansas estate taxes.

      Sec.  32. On or before September 1, 2003, the state corporation com-
mission shall establish standard provisions, including applicable fees, for
agreements providing for interconnection between the facilities of an
electric public utility, as defined by K.S.A. 66-101a, and amendments
thereto, and a generator which generates electricity from renewable re-
sources or technologies, as defined by section 2, and amendments thereto.

      Sec.  33. If any provisions of this act or its application to any person
or circumstances is held invalid, the invalidity does not affect other pro-
visions or applications of the act that can be given effect without the
invalid provisions or application. To this end the provisions of this act are
severable.

  Sec.  34. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 16, 2003.
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