Corporations and Associations - Electric Cooperatives - Nonescheat Capital Credits
Summary
SB561 creates a new category of “nonescheat capital credits” for electric cooperatives. These are amounts owed to former members in retirement of patronage capital that have remained unclaimed for at least five years. The bill provides that this money is not treated as abandoned property under Maryland’s unclaimed property law, and it adds a new section to the Corporations and Associations Article defining the term and setting out how the funds may be used.
Under the bill, an electric cooperative may use nonescheat capital credits only for limited purposes: to assist members in accordance with the cooperative’s statutory powers, or to make donations to nonprofit charitable organizations approved by the board of directors. The bill also makes clear that a cooperative still must refund these credits if a past member later applies for them. The act takes effect October 1, 2025.
Impact
The bill amends Commercial Law § 17-304 to exclude nonescheat capital credits from the general abandoned property rules and adds Corporations and Associations § 5-650.1 to define and regulate those credits. As a result, certain unclaimed patronage capital held by electric cooperatives will no longer be turned over or treated as abandoned under the state’s unclaimed property framework, so long as the statutory conditions are met. The measure affects electric cooperatives, past members entitled to capital credits, and nonprofit charities that may receive approved donations from these funds.
Sentiment
The bill appears to have been broadly supported and noncontroversial. The recorded votes were unanimous in both chambers, with no recorded opposition. The lack of committee transcript material also suggests the measure moved as a relatively technical or administrative change rather than a contested policy debate.
Contention
The main policy issue is how unclaimed capital credits should be treated: whether they should remain subject to abandoned property law or be retained by the cooperative for member assistance and charitable donations. Supporters likely viewed the bill as giving cooperatives flexibility to use dormant funds for cooperative purposes, while preserving the right of former members to claim their money later. Any concern would center on whether exempting these funds from escheat reduces state oversight or changes the handling of money owed to former members, but no recorded opposition appears in the available history.