Section 3
SEC. 3. Section three of the same Act is hereby amended to read as follows: "SEC. 3. The grantee shall operate according, and at all times adhere, to the 'area coverage' principle; shall be 'non-profit/ and shall during the first twenty-five years from the approval of this amendatory Act, or for as long as its obligations are not fully paid be exempt from all taxes, duties and fees of whatever kind and nature, except income tax as applicable to non-agricultural cooperatives the provisions of any existing law to the contrary notwithstanding. " 'Area-coverage', as used in this Act, means that if a person lives in the territory of an electric service cooperative system, he shall be entitled to receive electric service regardless of the place of his residence upon his becoming a member of such cooperative and regardless of the cost of the service to him, whether profitable or not, the feasibility or financial possibility of providing him service being based on the principle that the cooperative's system is designed to serve the interest of all its members collectively, and not individually: Provided, That membership in the cooperative shall not permit any preference or discrimination. " 'Non-profit' means that the cooperative shall be operated without any profit or dividend to its members, but the rates, fees, rents or other charges for electric energy and any other facilities, supplies, equipment, or services furnished by the cooperative shall be sufficient at all times: (a) to pay all operating and maintenance expenses necessary or desirable for the prudent conduct of its business and the principal of and interest on obligations issued or assumed by the cooperative in the performance of the purpose for which it was organized; and (b) for the creation of reserves. The revenues of the cooperative shall be devoted first to the payment of the operating and maintenance expenses and the principal of and interest on outstanding obligations, and thereafter to such reserves for improvement, new construction, depreciation and contingencies as the board may from time to time prescribe."