KRS § 278.300 — KY Code / Title XXIV / Chapter 278 / Section 278.300
278.300 Issuance or assumption of securities by utilities
Status: in_force

278.300 Issuance or assumption of securities by utilities.

(1) No utility shall issue any securities or evidences of indebtedness, or assume any

obligation or liability in respect to the securities or evidences of indebtedness of any

other person until it has been authorized so to do by order of the commission.

(2) Application for authority to issue or assume securities or evidences of indebtedness

shall be made in such form as the commission prescribes. Every such application

shall be made under oath, and shall be signed and filed on behalf of the utility by its

president, or by a vice president, auditor, comptroller, or other executive officer

having knowledge of the matters set forth and duly designated by the utility. Every

such application shall be placed at the head of the docket of the commission and

disposed of promptly within sixty (60) days after it is filed with the commission,

unless it is necessary for good cause to continue the application for longer time than

sixty (60) days, in which case the order making the continuance shall state fully the

facts that make it necessary.

(3) The commission shall not approve any issue or assumption unless, after

investigation of the purposes and uses of the proposed issue and the proceeds

thereof, or of the proposed assumption of obligation or liability, the commission

finds that the issue or assumption is for some lawful object within the corporate

purposes of the utility, is necessary or appropriate for or consistent with the proper

performance by the utility of its service to the public and will not impair its ability

to perform that service, and is reasonably necessary and appropriate for such

purpose.

(4) The commission may grant or deny the application in whole or in part, or may grant

it with such modifications and upon such terms and conditions as the commission

deems necessary or appropriate. The order of the commission shall specify that the

securities or evidences of indebtedness, or the proceeds thereof, shall be used only

for the lawful purposes specified in the application, and both the application of the

utility and the order of the commission shall state in general terms the purpose of

the issuance or assumption.

(5) A copy of any order made and entered by the commission under this section, duly

certified by the executive director of the commission, shall be sufficient evidence

for all purposes of full and complete compliance by the utility with all procedural

and other matters required precedent to the entry of the order.

(6) Securities and evidences of indebtedness issued and obligations and liabilities

assumed by a utility, for which, under the provisions of this section, the

authorization of the commission is required, shall comply with the terms and

conditions of the order of authorization entered prior to the issue or assumption, and

where the order has been fully complied with the validity of the issue or assumption

shall not be affected by a failure to comply with any provision of this section or rule

of the commission relating to procedure or other matters preceding the entry of the

order of authorization or order supplemental thereto.

(7) The commission may require periodical or special reports from the utility issuing

any security or evidence of indebtedness. The report shall show, in such detail as the

commission requires, the disposition made of such securities or evidences of

indebtedness, and the application of the proceeds thereof.

(8) This section does not apply to notes issued by a utility, for proper purposes and not

in violation of law, that are payable at periods of not more than two (2) years from

the date thereof, or to like notes, payable at a period of not more than two (2) years

from date thereof, that are issued to pay or refund in whole or in part any such

notes, or to renewals of such notes from time to time, not exceeding in the aggregate

six (6) years from the date of the issue of the original notes so renewed or refunded.

(9) Nothing in this section implies any guarantee of securities or evidences of

indebtedness by the state, or any obligation on the part of the state with respect

thereto, and nothing in this section limits the power of any court having jurisdiction

to authorize or cause receiver's certificates or debentures to be issued according to

the rules and practice obtaining in receivership proceedings in courts of equity.

(10) This section does not apply in any instance where the issuance of securities or

evidences of indebtedness is subject to the supervision or control of the federal

government or any agency thereof, but the commission may appear as a party to any

proceeding filed or pending before any federal agency if the issuance of the

securities or evidences of indebtedness will materially affect any utility over which

the commission has jurisdiction.

(11) This section also does not apply to the issuance of securities or evidence of

indebtedness by a utility principally engaged in transportation of gas by pipeline in

interstate commerce and subject to the supervision, control or jurisdiction of the

federal government or any agency, board or commission thereof.