860-037-0520 Application by a Wastewater Utility for Authority to Issue Wastewater Stocks, Bonds, Notes, or Other Securities (1) This rule applies to wastewater utilities seeking authority under ORS 757.495, 757.405 to 757.435 inclusive, 757.445, and 757.450. Every applicant shall set forth in this application to the Commission, in the manner and form and in the order indicated, the following information: (a) The applicant’s exact name and the address of its principal business office; (b) The state in which incorporated, the date of incorporation, and the other states in which authorized to transact wastewater utility business; (c) The name and address of the person authorized, on behalf of applicant, to receive notices and communications in respect to the application; (d) The names, titles, and addresses of the principal officers of the applicant; (e) A description of the general character of the business done and to be done, and a designation of the territories served. A map showing the territories served is desirable; (f) A statement, as of the date of the balance sheet submitted with the application, showing for each class and series of capital stock: brief description; amount authorized (face value and number of shares); amount outstanding (exclusive of any amount held in the treasury); held amount as reacquired securities; amount pledged by applicant; amount owned by affiliated interests; and amount held in any fund; (g) A statement, as of the date of the balance sheet submitted with the application, showing for each class and series of long-term debt or notes: brief description (amount, interest rate, and maturity); amount authorized; amount outstanding (exclusive of any amount held in the treasury); amount held as reacquired securities; amount pledged by applicant; amount held by affiliated interests; and amount in sinking and other funds; (h) A full description of the securities proposed to be issued, showing: kind and nature of securities or liabilities; amount (face value and number of shares); interest or dividend rate, if any; date of issue and date of maturity; and voting privileges, if any; (i) A reasonably detailed and precise description of the proposed transaction, including a statement of the reasons why it is desired to consummate the transaction and the anticipated effect thereof. If the transaction is part of a general program, describe the program and its relation to the proposed transaction. Such description shall include, but is not limited to, the following: (A) A description of the proposed method of issuing and selling the securities; (B) A statement of whether such securities are to be issued pro rata to existing holders of the applicant’s securities or issued pursuant to any preemptive right or in connection with any liquidation or reorganization; (C) A statement showing why it is in applicant’s interest to issue securities in the manner proposed and the reason(s) why it selected the proposed method of sale; and (D) A statement that exemption from the competitive bidding requirements of any federal or other state regulatory body has or has not been requested or obtained, and a copy of the action taken thereon when available. (j) The name and address of any person receiving or entitled to a fee for service (other than attorneys, accountants, and similar technical services) in connection with the negotiation or consummation of the issuance or sale of securities, or for services in securing underwriters, sellers, or purchasers of securities, other than fees included in any competitive bid; the amount of each such fee, and facts showing the necessity for the services and that the fee does not exceed the customary fee for such services in arm’s-length transactions and is reasonable in the light of the cost of rendering the service and any other relevant factors; (k) A statement showing both in total amount and per unit the price to the public, underwriting commissions, and net proceeds to the applicant. Supply also the information (estimated if necessary) required in section (4) of this rule. If the securities are to be issued directly for property, then a full description of the property to be acquired, its location, its original cost (if known) by accounts, with the identification of the person from whom the property is to be acquired, must be furnished. If original cost is not known, an estimate of original cost based, to the extent possible, upon records or data of the seller and applicant or their predecessors must be furnished, with a full explanation of how such estimate has been made, and a description and statement of the present custody of all existing pertinent data and records. A statement showing the cost of all additions and betterments and retirements, from the date of the original cost, should also be furnished; (l) The purposes for which the securities are to be issued. Specific information will be submitted with each filing for the issuance of bonds, stocks, or securities: (A) For construction, completion, extension, or improvement of wastewater facilities, include a description of such facilities and the cost thereof; (B) For reimbursement of the applicant’s treasury for expenditures against securities that have not been issued, include a statement giving a general description of such expenditures, the amounts and accounts charged, the associated credits, if any, and the periods during which the expenditures were made; (C) For refunding or discharging of wastewater obligations, include a description of the obligations to be refunded or discharged. The description shall provide the character, principal amounts discount or premium applicable thereto, date of issue and date of maturity, purposes to which the proceeds were applied and all other material facts concerning such obligations; and (D) For improvement or maintenance of wastewater service include a description of the type of expenditure and the estimated cost in reasonable detail. (m) A statement as to whether or not any application, registration statement, etc., with respect to the transaction or any part thereof, is required to be filed with any federal or other state regulatory body; (n) The facts relied upon by the applicant to show that the issue: (A) Is for some lawful object within the corporate purposes of the applicant; (B) Is compatible with the public interest; (C) Is necessary or appropriate for or consistent with the proper performance by the applicant of service as a wastewater utility; (D) Does not impair its ability to perform that service; (E) Is reasonably necessary or appropriate for such purposes; and (F) If filed under ORS 757.495, is fair and reasonable and not contrary to the public interest. (o) A brief statement of all rights to be a corporation, franchises, permits, and contracts for consolidation, merger, or lease included as assets of the applicant or any predecessor thereof; the amounts actually paid as consideration therefore, respectively; and the facts relied upon to show the issuance of the securities for which approval is requested will not result in the capitalization of the right to be a corporation or of any franchise, permit, or contract for consolidation, merger, or lease in excess of the amount (exclusive of any tax or annual charge) actually paid as the consideration for such right, franchise, permit, or contract; and (p) If filed under ORS 757.490 or 757.495: (A) Provide a statement describing the relationship between the wastewater utility and the affiliated interest as defined in ORS 757.015 or 757.490: (i) Set forth the amount, kind, and ratio to total voting securities held, if applicable; (ii) List all officers and directors of the affiliated interest who are also officers and/or directors of the applicant; and (iii) State the pecuniary interest of any officer or director in compliance with ORS 757.490(1). (B) State the reasons, in detail, relied upon by the wastewater utility for entering into the proposed transaction and the benefits, if any, the customers receiving wastewater service and the general public will derive from the transaction. (2) Required Exhibits. The following exhibits shall be filed as part of the application: (a) EXHIBIT A. A copy of the applicant’s charter or articles of incorporation with amendments to date; (b) EXHIBIT B. A copy of the bylaws with amendments to date; (c) EXHIBIT C. A copy of each resolution of directors authorizing the issue in respect to which the application is made and, if approval of stockholders has been obtained, copies of the stockholder resolutions should also be furnished; (d) EXHIBIT D. A copy of the mortgage, indenture, or other agreement under which it is proposed to issue the securities, and a copy of any mortgage, indenture, or other agreement securing other funded obligations of the applicant; (e) EXHIBIT E. Copies of balance sheets showing booked amounts, adjustments to record the proposed transaction and pro forma, with supporting fixed capital or plant schedules in conformity with the form in the annual report which applicant is required to file with the Commission; (f) EXHIBIT F. A statement of all known contingent liabilities, except minor items such as damage claims and similar items involving relatively small amounts, as of the date of the application; (g) EXHIBIT G. Copies of comparative income statements showing recorded results of operations, adjustments to record the proposed transaction and pro forma in conformity with the form in the annual report which applicant is required to file with the Commission; (h) EXHIBIT H. A copy of an analysis of surplus for the period covered by the income statements referred to in Exhibit G; (i) EXHIBIT I. A copy of the registration statement proper, if any, and financial exhibits made a part thereof, filed with the Securities and Exchange Commission; (j) EXHIBIT J. A copy of the proposed and of the published invitation of proposals for the purchase of underwriting of the securities to be issued; of each proposal received; and of each contract, underwriting, and other arrangement entered into for the sale or marketing of the securities. When a contract or underwriting is not in final form so as to permit filing, a preliminary draft or a summary identifying parties thereto and setting forth the principal terms thereof, may be filed pending filing of the conformed copy in the form executed by final amendment to the application; (k) EXHIBIT K. Copies of the stock certificates, notes, or other evidences of indebtedness proposed to be issued; (l) An application for a wastewater utility to loan its funds to an affiliated interest, shall also include the following: (A) EXHIBIT L. Copies of all proposed or existing contracts or agreements entered into by the parties to the transaction; (B) EXHIBIT M. The amount of money the applicant desires to loan to the affiliated interest, terms of said loan, rate of interest, method of repayment, security given, if any, and if said loan is to be an open account or evidenced by a promissory note; and (C) EXHIBIT N. The use to which funds derived from this loan are to be put by the affiliated interest. (m) An application for a wastewater utility to give credit on its books or otherwise by: (A) Advancing cash through an open or loan account, shall also include the following: (i) EXHIBIT L. Copies of all proposed or existing contracts or agreements entered into by the parties to the transaction; (ii) EXHIBIT M. The amount of money the applicant proposes to receive, the rate of interest it will pay, and the date and method of repayment; and (iii) EXHIBIT N. A definite statement of purpose for which the advance will be used. (B) Payments by the affiliated interest of amounts owed, shall also include the following: (i) EXHIBIT L. Copies of all proposed or existing contracts or agreements entered into by the parties to the transaction; and (ii) EXHIBIT M. The amount of money the affiliated interest proposes to pay on the wastewater utility’s behalf, with a description of the obligation, how the funds will be used, and how incurred. (C) Credits or open accounts a wastewater utility proposes to give to an affiliated interest, shall also include the following: (i) EXHIBIT L. Copies of all proposed or existing contracts or agreements entered into by the parties to the transaction; and (ii) EXHIBIT M. The amount and a description of each item for which the wastewater utility proposes to give credit through its loan or open account. (3) The following form of application may be filed by all wastewater utilities with annual revenues of less than $100,000 seeking authority to issue promissory notes maturing more than one year after date of issue or renewal and unsecured notes on motor vehicles in the principal amount of less than $10,000. In the instances when this provision is proper, the requirements of sections (1) and (2) of this rule do not apply. The Commission may require compliance with sections (1) and (2) of this rule if the Commission deems it necessary in a particular case. [Form not included. See ED. NOTE.] [ED. NOTE: Forms referenced are available from the agency.] Statutory/Other Authority: ORS 183, 756 & 757 Statutes/Other Implemented: ORS 756.040, 756.105, 757.005, 757.061, 757.405 - 757.450 & 757.495 History: PUC 5-2004, f. & cert. ef. 1-29-04 PUC 6-2000, f. 4-18-00, cert. ef. 4-20-00 PUC 9-1999(Temp), f. 10-22-99, cert. ef. 10-23-99 thru 4-19-00