N.Y. PBS Law § 101 — New York Code / Act PBS / Article 5 / Section 101
Authority to issue stock, bonds and other forms of indebtedness
Status: in_force

§ 101. Authority to issue stock, bonds and other forms of\nindebtedness.  A telegraph or telephone corporation may, when authorized\nby the commission, issue stock, bonds, notes or other evidences of\nindebtedness payable at periods of more than twelve months after the\ndate thereof, or a receiver of such a corporation, if duly authorized by\nlaw, may issue receiver's certificates, when necessary for the\nacquisition of property, the construction, completion, extension or\nimprovement of its facilities or the improvement or maintenance of its\nservice within the state, or for the discharge or lawful refunding of\nits obligations, or reimbursement of moneys actually expended from the\nincome from any source, within five years next prior to the filing of\nthe application therefor, or for any of such purposes, provided,\nhowever, that no authority shall be granted authorizing such issue for\nreimbursement of moneys expended from income for betterments or\nreplacements unless the applicant shall have kept its accounts and\nvouchers of such expenditures in such manner as to enable the commission\nto ascertain the amount of moneys so expended and the purposes for which\nsuch expenditures were made. Stock may be issued to stockholders as a\nstock dividend provided that there shall have been secured from the\ncommission authority for such issuance and for a transfer of surplus to\ncapital in an amount equal to the par or stated value of the stock so\nauthorized and that the applicant has certified in the application for\nauthority that a sum equal to the amount to be so transferred was\nexpended for the purposes enumerated in this section. Stock may be\nissued to an employee or director of a telegraph or telephone\ncorporation under a stock option plan pursuant to which such corporation\ngrants options to its employees or directors to purchase shares of\nstock, such options to be exercisable for a stated period of time to\npurchase shares of stock at the market value of the stock at the time of\nissuance of the option, provided that there shall have been secured from\nthe commission authority for such issuance and that the applicant has\ncertified in the application for authority that the proceeds from the\nexercise of the stock options are needed for one of the purposes\nenumerated in this section. The issue of stocks, bonds or other\nevidences of indebtedness, within the meaning of this section, shall\ninclude the sale by any such corporation of any such securities\npreviously issued in compliance with the provisions of this section and\nsubsequently reacquired by such corporation, provided, however, for good\ncause shown the commission may exempt from the restriction hereof\nstocks, bonds or other evidences of indebtedness. The application for\nauthority shall state the amount of any such issue and the purposes to\nwhich it or its proceeds are to be applied and shall certify that the\nmoney, property or labor procured or to be procured or paid for by such\nissue or its proceeds has been or is reasonably required for the\npurposes specified in the application for authority, and that such\npurposes are in no part reasonably chargeable to operating expenses or\nto income except in the case of bonds, notes or other evidences of\nindebtedness as may be specifically identified in the application for\nauthority. For the proceeds from a federal loan, a telegraph or\ntelephone corporation shall provide notice to the public service\ncommission of receipt of such issue but shall not be required to file an\napplication for authority. For the purpose of enabling the commission to\ndetermine whether it should authorize such issuance, the commission\nshall have the power to make such inquiry or investigation, hold such\nhearings and examine such witnesses, books, papers, documents or\ncontracts as it may determine of importance in enabling it to reach a\ndetermination. Except in instances where a telegraph or telephone\ncorporation has notified the commission it is engaged in securing a\nfederal loan for the expansion of broadband services, no such\ncorporation shall, without the consent of the commission, apply any such\nissue or its proceeds to any purpose not specified in the application\nfor authority. Such telegraph corporation or telephone corporation may\nissue notes for proper corporate purposes and not in violation of any\nprovision of this chapter or of any other act, payable at periods of not\nmore than twelve months without the consent of the commission; but no\nsuch note shall, in whole or in part, directly or indirectly, be\nrefunded by any issue of stock or bonds, or by any evidences of\nindebtedness running for more than twelve months, without the consent of\nthe commission. No telegraph corporation or telephone corporation shall\nbe required, however, to apply to the commission for authority to issue\nstocks, bonds, notes or other evidence of indebtedness except for the\nacquisition of property, the construction, completion, extension or\nimprovement of its facilities, or the improvement or maintenance of its\nservice within the state, or the discharge or refunding of obligations,\nor reimbursement of moneys actually expended for such purposes. The\ncommission shall have power to require every such corporation to file\nwith the commission after the issuance of stocks, bonds, notes or other\nevidences of indebtedness issued with or without the approval of the\ncommission as provided in this section, a notice of such transaction in\nsuch form as the commission may prescribe. The commission shall have no\npower to authorize the capitalization of any franchise or right to be a\ncorporation, nor to authorize the capitalization of any franchise or the\nright to own, operate or enjoy any franchise whatsoever in excess of the\namount (exclusive of any tax or annual charge) actually paid to the\nstate or any political subdivision thereof, as the consideration of the\ngrant of such franchise or right, nor to authorize the issuance of any\nstocks or other securities for any purposes other than those enumerated\nin this section. Nor shall the corporate stock of the corporation formed\nby the merger or consolidation of two or more other corporations exceed\nthe sum of the capital stock of the corporations so consolidated, at the\npar value thereof, or such sum and any additional sum actually paid in\ncash; nor shall any contract for consolidation or lease be capitalized\nin the stock of any corporation whatever; nor shall any corporation\nhereafter issue any bonds against or as a lien upon any contract for\nconsolidation or merger. Notwithstanding the foregoing provisions of\nthis section, any application for approval under this section shall be\ndeemed granted by the commission forty-five days after such application\nis filed for approval, unless the commission, or its designee,\ndetermines and informs the applicant in writing within such forty-five\nday period that the public interest requires the commission's review and\nits written order.\n