SECOND EXTRAORDINARY SESSION
SENATE BILL NO. 3
89TH GENERAL ASSEMBLY
Read 1st time September 8, 1997, and 1,000 copies ordered printed.
TERRY L. SPIELER, Secretary.
S1878.02I
AN ACT
To amend chapter 393, RSMo, by adding thereto nineteen new sections to authorize the creation of certain nonprofit sewer corporations and enhance economic development.
Section A. Chapter 393, RSMo, is amended by adding thereto nineteen new sections, to be known as sections 393.825, 393.827, 393.829, 393.831, 393.833, 393.835, 393.837, 393.839, 393.841, 393.843, 393.845, 393.847, 393.849, 393.851, 393.853, 393.855, 393.857, 393.861 and 393.863, to read as follows:
393.825. 1. Nonprofit, membership corporations may be organized under sections 393.825 to 393.863 only for the purpose of supplying waste water disposal and treatment services within the state of Missouri. Corporations which become subject to sections 393.825 to 393.863 in the manner herein provided are herein referred to as "nonprofit sewer companies". Five or more persons may organize a nonprofit sewer company pursuant to sections 393.825 to 393.863.
2. The articles of incorporation of a nonprofit sewer company shall recite in the caption that they are executed pursuant to sections 393.825 to 393.863, shall be signed and acknowledged in duplicate by at least five of the incorporators and shall state:
(1) The name of the company;
(2) The address of its principal office;
(3) The names and addresses of the incorporators;
(4) The number of years the company is to continue, which may be any number including perpetuity;
(5) The names and addresses of the persons who shall constitute its first board of directors;
(6) Whether the company chooses to operate under the provisions of chapter 347, RSMo, or chapter 355, RSMo; and
(7) Any provisions not inconsistent with sections 393.825 to 393.863 deemed necessary or advisable for the conduct of its business and affair. Such articles of incorporation shall be submitted to the secretary of state for filing.
393.827. Any corporation organized under the laws of this state for the purpose, among others, waste water disposal, or waste water treatment may be converted into a nonprofit sewer company and become subject to sections 393.825 to 393.863 with the same effect as if originally organized under sections 393.825 to 393.863 by complying with the following requirements:
(1) The proposition for the conversion of such corporation into a nonprofit sewer company and proposed articles of conversion to give effect thereto shall be first approved by the board of trustees or the board of directors, as the case may be, of such corporation. The proposed articles of conversion shall recite in the caption that they are executed pursuant to sections 393.825 to 393.863 and shall state:
(a) The name of the corporation prior to its conversion into a nonprofit sewer company;
(b) The address of the principal office of such corporation;
(c) The date of the filing of the articles of incorporation of such corporation in the office of the secretary of state;
(d) The statute or statutes under which such corporation was organized;
(e) The name assumed by such corporation;
(f) A statement that such corporation elects to become a nonprofit, membership corporation subject to sections 393.825 to 393.863;
(g) The manner and basis of converting either memberships in or shares of stock of such corporation into memberships therein after completion of the conversion; and
(h) Any provisions not inconsistent with sections 393.825 to 393.863 deemed necessary or advisable for the conduct of the business and affairs of such corporation.
(2) The proposition for the conversion of such corporation into a nonprofit sewer company and the proposed articles of conversion approved by the board of trustees or board of directors, as the case may be, of such corporation shall then be submitted to a vote of the members or stockholders, as the case may be, of such corporation at any duly held annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed conversion. The proposition for the conversion of such corporation into a nonprofit sewer company and the proposed articles of conversion, with such amendments thereto as the members or stockholders of such corporation shall choose to make, shall be deemed to be approved upon the affirmative vote of not less than a majority of the members of such corporation, or, if such corporation is a stock corporation, upon the affirmative vote of the holders of not less than a majority of the capital stock of such corporation.
(3) Upon such approval by the members or stockholders of such corporation, articles of conversion in the form approved by such members or stockholders shall be executed and acknowledged in duplicate on behalf of such corporation by its president or vice president and its corporate seal shall be affixed thereto and attested by its secretary. The president or vice president executing such articles of conversion on behalf of such corporation shall also make and annex to each copy thereof an affidavit stating that the provisions of sections 393.825 to 393.863 with respect to the approval of its trustees or directors and its members or stockholders, of the proposition for the conversion of such corporation into a nonprofit sewer company and such articles of conversion were duly complied with. Such articles of conversion and affidavit shall be submitted to the secretary of state for filing as provided in sections 393.825 to 393.863. The term "articles of incorporation" as used in sections 393.825 to 393.863 shall be deemed to include the articles of conversion of a converted corporation.
393.829. A nonprofit sewer company shall have power:
(1) To sue and be sued, in its corporate name;
(2) To have succession by its corporate name for the period stated in its articles of incorporation or, if no period is stated in its articles of incorporation, to have such succession perpetually;
(3) To adopt a corporate seal and alter the same at pleasure;
(4) To provide waste water disposal and waste water treatment services to its members, to governmental agencies and political subdivisions;
(5) To make loans to persons to whom waste water disposal or waste water treatment is or will be supplied by the company for the purpose of, and otherwise to assist such persons in, installing therein plumbing fixtures, appliances, apparatus and equipment of any and all kinds and character, and in connection therewith, to purchase, acquire, lease, sell, distribute, install and repair such plumbing fixtures, appliances, apparatus and equipment, and to accept or otherwise acquire, and to sell, assign, transfer, endorse, pledge, hypothecate and otherwise dispose of notes, bonds and other evidences of indebtedness and any and all types of security therefor;
(6) To make loans to persons to whom waste water disposal or waste water treatment is or will be supplied by the company for the purpose of, and otherwise to assist such persons in, constructing, maintaining and operating commercial or industrial plants or facilities;
(7) To construct, purchase, take, receive, lease as lessee, or otherwise acquire, and to own, hold, use, equip, maintain, and operate, and to sell, assign, transfer, convey, exchange, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, waste water provision or collection or treatment systems, plants, lands, buildings, structures, dams, and equipment, and any and all kinds and classes of real or personal property whatsoever, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the company is organized;
(8) To purchase or otherwise acquire, and to own, hold, use and exercise and to sell, assign, transfer, convey, mortgage, pledge, hypothecate, or otherwise dispose of or encumber, franchises, rights, privileges, licenses, rights-of-way and easements;
(9) To borrow money and otherwise contract indebtedness, and to issue notes, bonds, and other evidences of indebtedness therefor, and to secure the payment thereof by mortgage, pledge, deed of trust, or any other encumbrance upon any or all of its then-owned or after-acquired real or personal property, assets, franchises, revenues or income;
(10) To construct, maintain and operate waste water distribution and collection and treatment plants and lines along, upon, under and across all public thoroughfares, including without limitation, all roads, highways, streets, alleys, bridges and causeways, and upon, under and across all publicly owned lands;
(11) To exercise the power of eminent domain in the manner provided by the laws of this state for the exercise of that power by corporations constructing or operating electric transmission and distribution lines or systems;
(12) To conduct its business and exercise any or all of its powers within or without this state;
(13) To adopt, amend and repeal bylaws; and
(14) To do and perform any and all other acts and things, and to have and exercise any and all other powers which may be necessary, convenient or appropriate to accomplish the purpose for which the company is organized.
393.831. A company may amend its articles of incorporation by complying with the following requirements:
(1) The proposed amendment shall be first approved by the board of directors and shall then be submitted to a vote of the members at any annual or special meeting thereof, the notice of which shall set forth the proposed amendment. The proposed amendment, with such changes as the members shall choose to make therein, shall be deemed to be approved on the affirmative vote of not less than two-thirds of those members voting thereon at such meeting; and
(2) (a) Upon such approval by the members, articles of amendment shall be executed and acknowledged in duplicate on behalf of the company by its president or vice president and its corporate seal shall be affixed thereto and attested by its secretary. The articles of amendment shall recite in the caption that they are executed pursuant to sections 393.825 to 393.863 and shall state:
a. The name of the company;
b. The address of its principal office;
c. The date of the filing of its articles of incorporation in the office of the secretary of state; and
d. The amendment to its articles of incorporation;
(b) The president or vice president executing such articles of amendment shall also make and annex to each copy thereof an affidavit stating that the provisions of sections 393.825 to 393.863 were duly complied with;
(c) Such articles of amendment and affidavit shall be submitted to the secretary of state for filing.
393.833. A company may, upon authorization of a majority of the members at any regular or special meeting, change the location of its principal office by filing a certificate of change of principal office, executed and acknowledged in duplicate by its president or vice president under its seal attested by its secretary, in the office of the secretary of state. Such company shall also, within thirty days after the filing of such certificate of change of principal office, file certified copies of its articles of incorporation and all amendments thereto, if the same are not already on file.
393.835. (1) Articles of incorporation, amendment, consolidation, merger, conversion, or dissolution, as the case may be, when executed and acknowledged in duplicate and accompanied by such affidavits as may be required by applicable provisions of sections 393.825 to 393.863, shall be presented to the secretary of state for filing in the records of his office.
(2) If the secretary of state shall find that the articles presented conform to the requirements of sections 393.825 to 393.863, he shall file one copy of the articles so presented in the records of his office and upon such filing the incorporation, amendment, consolidation, merger, conversion, or dissolution provided for therein shall be in effect.
393.837. The provisions of the securities law of Missouri shall not apply to any note, bond or other evidence of indebtedness issued by any nonprofit sewer company transacting business in this state pursuant to sections 393.825 to 393.863 to the United States of America or to any agency or instrumentality thereof, or to any mortgage or deed of trust executed to secure the same. The provisions of such securities law of Missouri shall not apply to the issuance of membership certificates by any nonprofit sewer company.
393.839. 1. No person shall become a member of a nonprofit sewer company unless such person shall agree to use services furnished by the company when such shall be available through its facilities. The bylaws of a company may provide that any person, including an incorporator, shall cease to be a member thereof if such person shall fail or refuse to use services made available by the company or if services shall not be made available to such person by the company within a specified time after such person shall have become a member thereof. Membership in the company shall not be transferable, except as provided in the bylaws. The bylaws may prescribe additional qualifications and limitations in respect of membership.
2. An annual meeting of the members shall be held at such time as shall be provided in the bylaws.
3. Special meetings of the members may be called by the board of directors, by any three directors, by not less than ten percent of the members or by the president.
4. Meetings of members shall be held at such place as may be provided in the bylaws. In the absence of any such provisions, all meetings shall be held in the city or town in which the principal office of the company is located.
5. Except as otherwise provided in sections 393.825 to 393.863, written or printed notice stating the time and place of each meeting of 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 nor more than twenty-five days before the date of the meeting.
6. Two percent of the members, present in person or by mail or proxy shall constitute a quorum for the transaction of business at all meetings of the members, unless the bylaws prescribe the presence of a greater percentage of the members for a quorum. 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.
7. Each member shall be entitled to one vote on each matter submitted to a vote at a meeting. 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 proxy or mail voting shall be exercised.
393.841. Notwithstanding any other provision of law, the bylaws may provide that the territory in which a company supplies waste water services may be divided into two or more voting districts for the purpose of properly distributing its directors over the area in which its members reside. In such case the bylaws shall prescribe the manner in which such voting districts shall function in the election of directors at annual meetings.
393.843. 1. The business and affairs of a company shall be managed by a board of not less than five directors, each of whom shall be a member of the company. The bylaws shall prescribe the number of directors, their qualifications, other than those provided for in sections 393.825 to 393.863, the manner of holding meetings of the board of directors and of the election of successors to directors who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of directors from office and for the election of their successors. Without approval of the members, directors shall not receive any salaries for their services as directors. The bylaws may, however, provide that a fixed fee and expenses of attendance, if any, may be allowed to each director for attendance at each meeting of the board of directors.
2. The directors of a company named in any articles of incorporation, consolidation, merger or conversion, as the case may be, shall hold office until the next following annual meeting of the members or until their successors shall have been elected and qualified.
3. The bylaws shall provide that the directors shall be divided into three classes, each class to be as nearly equal in number as possible, with the term of office of the directors of the first class to expire at the next succeeding annual meeting and the term of the second class to expire at the second succeeding annual meeting, and the term of the third class to expire at the third succeeding annual meeting. At each annual meeting after such classification a number of directors equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the third succeeding annual meeting.
4. A majority of the board of directors shall constitute a quorum.
5. The board of directors may exercise all of the powers of a company except such as are conferred upon the members by sections 393.825 to 393.863, or its articles of incorporation or bylaws. Nothing in sections 393.825 to 393.863 shall be deemed to prohibit a nonprofit sewer company from contracting with any other person or entity for any services needed by the nonprofit sewer company including, but not limited to, management or operations services.
393.845. The officers of a nonprofit sewer company shall consist of a president, vice president, secretary and treasurer, who shall be elected annually. No person shall continue to hold the offices of president or vice president after he shall have ceased to be a director. The offices of secretary and of treasurer may be held by the same person and need not be a member of the board of directors. The board of directors may also elect or appoint such other officers, agents, or employees as it shall deem necessary or advisable and shall prescribe the powers and duties thereof. Any officer may be removed from office and his successor elected in the manner prescribed in the bylaws.
393.847. 1. Every nonprofit sewer company constructing, maintaining and operating its waste water lines and treatment facilities shall construct, maintain and operate such lines and facilities in conformity with the rules and regulations relating to the manner and methods of construction, maintenance and operation and as to safety of the public with other lines and facilities now or hereafter from time to time prescribed by the department of natural resources for the construction, maintenance and operation of such lines or systems. The jurisdiction, supervision, powers and duties of the department of natural resources shall extend to every such nonprofit sewer company so far as it concerns the construction, maintenance and operation of the physical equipment of such company to the extent of providing for the safety of employees and the general public.
2. The public service commission shall not have jurisdiction over the construction, maintenance or operation of the waste water facilities, service, rates, financing, accounting or management of any nonprofit sewer company.
393.849. Revenues of a nonprofit sewer company for any fiscal year in excess of the amount thereof necessary:
(1) To defray expenses of the company and of the operation and maintenance of its facilities during such fiscal year;
(2) To pay interest and principal obligations of the company coming due in such fiscal year;
(3) To finance, or to provide a reserve for the financing of, the construction or acquisition by the company of additional facilities to the extent determined by the board of directors;
(4) To provide a reasonable reserve for working capital;
(5) To provide a reserve for the payment of indebtedness of the company maturing more than one year after the date of the incurrence of such indebtedness 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; and
(6) To provide a fund for education in the effective use of services made available by the company;
shall, unless otherwise determined by a vote of the members, be distributed by the company to its members as patronage refunds prorated in accordance with the patronage of the company by the respective members paid for during such fiscal year.
393.851. Nothing herein contained shall be construed to prohibit the payment by a company of all or any part of its indebtedness prior to the date when the same shall become due.
393.853. 1. A nonprofit sewer company which has not commenced business may dissolve voluntarily by delivering to the secretary of state articles of dissolution, executed and acknowledged in duplicate on behalf of the company by a majority of the incorporators, which shall state:
(1) The name of the nonprofit sewer company;
(2) The address of its principal office;
(3) The date of its incorporation;
(4) That the company has not commenced business;
(5) That the amount, if any, actually paid in on account of membership fees, less any part thereof disbursed for necessary expenses, has been returned to those entitled thereto and that all easements shall have been released to the grantors;
(6) That no debt of the company remains unpaid; and
(7) That a majority of the incorporators elect that the company be dissolved.
2. Such articles of dissolution shall be submitted to the secretary of state for filing.
393.855. A nonprofit sewer company which has commenced business may dissolve voluntarily and wind up its affairs in the following manner:
(1) The board of directors shall first recommend that the company be dissolved voluntarily and thereafter the proposition that the company be dissolved shall be submitted to the members of the company at any annual or special meeting, the notice of which shall set forth such proposition. The proposed voluntary dissolution shall be deemed to be approved upon the affirmative vote of not less than a majority of the members;
(2) Upon such approval, a certificate of election to dissolve, herein designated the "certificate", shall be executed and acknowledged in duplicate on behalf of the company by its president or vice president, and its corporate seal shall be affixed thereto and attested by its secretary. The certificate shall state:
(a) The name of the nonprofit sewer company;
(b) The address of its principal office;
(c) The names and addresses of its directors; and
(d) The total number of members of the company and the number of members who voted for and against the voluntary dissolution of the company.
The president or vice president executing the certificate shall also make and annex thereto an affidavit stating that the provisions of this subdivision and subdivision (1) of this section were duly complied with. Such certificate and affidavit shall be submitted to the secretary of state for filing;
(3) Upon the filing of the certificate and affidavit by the secretary of state, the company shall cease to carry on its business except insofar as may be necessary for the winding up thereof, but its corporate existence shall continue until articles of dissolution have been filed by the secretary of state;
(4) After the filing of the certificate and affidavit by the secretary of state the board of directors shall immediately cause notice of the winding up proceedings to be mailed to each known creditor and claimant and to be published once a week for two successive weeks in a newspaper of general circulation in the county in which the principal office of the company is located;
(5) The board of directors shall become trustees and have full power to wind up and settle the affairs of the company and shall proceed to collect the debts owing to the company, convey and dispose of its property and assets, pay, satisfy, and discharge its debts, obligations, and liabilities, and do all other things required to liquidate its business and affairs, and after paying or adequately providing for the payment of all its debts, obligations and liabilities, shall distribute the remainder of its property and assets among its members in proportion to the aggregate patronage of each such member during the seven years next preceding the date of such filing of the certificate, or, if the company shall not have been in existence for such period, during the period of its existence; and
(6) (a) When all debts, liabilities and obligations of the company have been paid and discharged or adequate provision shall have been made therefor, and all of the remaining property and assets of the company shall have been distributed to the members pursuant to the provisions of sections 393.825 to 393.863, the board of directors shall authorize the execution of articles of dissolution which shall thereupon be executed and acknowledged on behalf of the company by its president or vice president, and its corporate seal shall be affixed thereto and attested by its secretary. Such articles of dissolution shall recite in the caption that they are executed pursuant to sections 393.825 to 393.863 and shall state:
a. The name of the nonprofit sewer company;
b. The address of the principal office of the company;
c. That the company has heretofore delivered to the secretary of state a certificate of election to dissolve and the date on which the certificate was filed by the secretary of state in the records of his office;
d. That all debts, obligations and liabilities of the company have been paid and discharged or that adequate provision has been made therefor;
e. That all the remaining property and assets of the company have been distributed among the members in accordance with the provisions of sections 393.825 to 393.863; and
f. That there are no actions or suits pending against the company;
(b) The president or vice president executing the articles of dissolution shall also make and annex thereto an affidavit stating that the provisions of this section were duly complied with;
(c) Such articles of dissolution and affidavit, accompanied by proof of the publication required in this section, shall be submitted to the secretary of state for filing.
393.857. Sections 393.825 to 393.863 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. To the extent that sections 393.825 to 393.863 does not speak to an issue, the provisions applicable to mutual benefit not for profit corporations or limited liability companies, as the nonprofit sewer company may elect in its articles of incorporation, which are not inconsistent with the provisions of sections 393.825 to 393.863 shall apply to nonprofit sewer companies.
393.861. The private property of the members of a nonprofit sewer company shall be exempt from execution for the debts of the company and no member shall be liable or responsible for any debts of the company.
393.863. 1. Any entity authorized by law to engage in the business of offering waste water disposal or treatment services may apply to the department of natural resources to be designated as the sole regional or watershed supplier of such services.
2. The application to be designated as a regional or watershed supplier shall be on a form as developed by the department and shall at a minimum provide the following information:
(1) The region or watershed for which the applicant intends to provide service defined on a meets and bounds basis;
(2) The documents such as contracts, articles of incorporation, limited liability company forms or municipal ordinances which define the applicant's existence, ownership and management;
(3) Information as to the applicant's financial assets including balance sheet income statements for the previous five years or, if less than five years, income statements for the applicant's entire history;
(4) A description of the facilities owned or operated by the applicant;
(5) A business plan describing how and why the proposed region or watershed was selected and the applicant's plans for providing collection and treatment services in the requested area;
(6) A commitment by the applicant to provide area coverage for the entire area covered by the application and the applicant's plan for how to provide such services;
(7) A description of the services to be provided by the applicant to the region or watershed and the prices to be charged by the applicant;
(8) A description of the standards that the applicant will require of other entities that will wish to connect with the applicant's collection and treatment systems.
3. Once a regional or watershed provider of waste water collection and treatment is approved by the department, no other person or entity may construct or operate collection or treatment facilities within the designated region or watershed except pursuant to the approved regional or watershed plan.
4. The department of natural resources shall give preference to regional or watershed providers in all of its licensing, permitting, and administration of loan and grant funds functions.
5. In evaluating among competing applicants to be a regional or watershed provider, the department shall give preference to those providers most likely to provide a stable, long-term solution without regard to the type of entity the applicant may be. Joint applications from existing providers of waste water collection and treatment services within the region or watershed shall be given preference.
6. Pricing of services by regional or watershed providers shall be set by such provider in the same manner the provider sets all other rates and charges and shall be on a nondiscriminatory basis with each user bearing its fair share of the costs of providing service to that user. Private sewer companies shall charge such rates as are approved pursuant to applicable law.