Legal Work Group
Please find attached Eric Freedman's status report on his sub group's
activities
for your information and for discussion at our meeting next week.

Barney Speckman
RTO West  KEMA Team
Portland Office Phone 503-258-0475
RTO West Offices
5933 NE Win Sivers Drive
Portland, Oregon

BMS Consulting
2130 Belford Drive
Walnut Creek, Calif. 94598
925-287-0365 (Walnut Creek Phone and Fax)

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Subject: Bylaws, Articles, Tax Status Subgroup -- Status Report
Date: Wed, 21 Jun 2000 23:07:58 -0700
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    This e-mail is intended to reach all of those who have expressed an
interest in being part of the Legal Work Group subgroup addressing the RTO
bylaws, articles and tax status.  Please let me know if my e-mail
distribution list is missing anyone who would like to participate in the
subgroup.

    I would divide the immediate tasks before us into four main
categories:

    1.  General Governance Issues (Especially RTO Membership, Board
Composition and Technical Advisory Committee Issues)

    At the Governance Workshop on June 15, we had a good discussion of
issues relating to the appropriate number and scope of membership classes,
board composition and method of selecting the members of the Technical
Advisory Committee.  Barney Speckman is in the process of scheduling a
meeting in early July for a continuation of discussion of these topics and
any other governance issues that may be of interest.

    2.  Board and Employee Conflict of Interest Provisions/Board
Member Qualifications

    One element of the RTO bylaws that will require a fair amount of
thought and discussion is the appropriate nature and extent of the trustee
and employee disqualification/conflict of interest provisions.  Another such
element is the required qualifications of the RTO board members.  John
Buechler of the New York ISO has prepared for us a good summary of the board
member qualifications that have been adopted or are under consideration by
various existing or proposed ISOs, and Barney Speckman will distribute
copies of John's summary to the group.  I would like to have a discussion of
these issues at the next meeting, with the aim of preparing and circulating
one or more straw man proposals as soon thereafter as possible.

    3.  Consideration of Jurisdiction of Incorporation/Conforming
Revisions to Bylaws

    IndeGO was proposed to be formed in Utah, in large part because
Utah's nonprofit corporation law was determined as of three years ago to
contain the most favorable provisions for trustee indemnification of any
state in which IndeGO was proposed to operate.  RTO West, the nonprofit
corporation that is serving as the vehicle for our RTO in formation, was
incorporated this spring in Washington in large part on the strength of
Washington's provisions for indemnification of nonprofit corporation
trustees.  Our subgroup needs to review the laws of the states in which RTO
West would operate, and come up with a recommendation as to whether
consideration should be given to incorporation of the RTO in any state other
than Washington.  Once a determination is made as to the appropriate state
for incorporation, the bylaws will need to be conformed to the requirements
of that state's nonprofit corporation law.  Anyone who is interested in
helping out on these fronts is most welcome.

    4.  Potential RTO Application for Tax Exemption

    The California ISO has been qualified for exemption from federal
income tax, and a determination needs to be made whether such qualification
would be appropriate for RTO West as well.  Our subgroup has been given the
task of identifying the relevant considerations to be taken into account in
making the determination whether to seek tax-exempt status.  Robb Roberts
and Sanjiv Kripalani have expressed interest in helping to undertake this
analysis.  If any of the rest of you is interested in participating, please
let me know.

    I will be out of the office for the next week-and-a-half, but will
be checking voice mail and e-mail regularly.

    I look forward to seeing you all soon.

                            Eric

Eric E. Freedman
Preston Gates & Ellis LLP
701 Fifth Avenue, Suite 5000
Seattle, WA  98104-7078
Phone:  (206) 623-7580 x 7727
Direct:  (206) 224-7327
FAX:  (206) 623-7022
E-mail:  ericf@prestongates.com

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