2023 New York Laws › PBS - Public Service › Article 5 - Provisions Relating to Telegraph and Telephone Lines and to Telephone and Telegraph Corporations › 101 - Authority to Issue Stock, Bonds and Other Forms of Indebtedness.

§ 101.   Authority   to   issue   stock,  bonds  and  other  forms  of
  indebtedness.  A telegraph or telephone corporation may, when authorized
  by the commission, issue stock,  bonds,  notes  or  other  evidences  of
  indebtedness  payable  at  periods  of more than twelve months after the
  date thereof, or a receiver of such a corporation, if duly authorized by
  law,  may  issue  receiver's  certificates,  when  necessary   for   the
  acquisition  of  property,  the  construction,  completion, extension or
  improvement of its facilities or the improvement or maintenance  of  its
  service  within  the  state, or for the discharge or lawful refunding of
  its obligations, or reimbursement of moneys actually expended  from  the
  income  from  any  source, within five years next prior to the filing of
  the application  therefor,  or  for  any  of  such  purposes,  provided,
  however,  that  no authority shall be granted authorizing such issue for
  reimbursement  of  moneys  expended  from  income  for  betterments   or
  replacements  unless  the  applicant  shall  have  kept its accounts and
  vouchers of such expenditures in such manner as to enable the commission
  to ascertain the amount of moneys so expended and the purposes for which
  such expenditures were made. Stock may be issued to  stockholders  as  a
  stock  dividend  provided  that  there  shall have been secured from the
  commission authority for such issuance and for a transfer of surplus  to
  capital  in  an  amount equal to the par or stated value of the stock so
  authorized and that the applicant has certified in the  application  for
  authority  that  a  sum  equal  to  the  amount to be so transferred was
  expended for the purposes enumerated  in  this  section.  Stock  may  be
  issued   to  an  employee  or  director  of  a  telegraph  or  telephone
  corporation under a stock option plan pursuant to which such corporation
  grants options to its employees  or  directors  to  purchase  shares  of
  stock,  such  options  to  be exercisable for a stated period of time to
  purchase shares of stock at the market value of the stock at the time of
  issuance of the option, provided that there shall have been secured from
  the commission authority for such issuance and that  the  applicant  has
  certified  in  the  application for authority that the proceeds from the
  exercise of the stock  options  are  needed  for  one  of  the  purposes
  enumerated  in  this  section.  The  issue  of  stocks,  bonds  or other
  evidences of indebtedness, within the meaning  of  this  section,  shall
  include  the  sale  by  any  such  corporation  of  any  such securities
  previously issued in compliance with the provisions of this section  and
  subsequently reacquired by such corporation, provided, however, for good
  cause  shown  the  commission  may  exempt  from  the restriction hereof
  stocks, bonds or other evidences of indebtedness.  The  application  for
  authority  shall  state the amount of any such issue and the purposes to
  which it or its proceeds are to be applied and shall  certify  that  the
  money,  property or labor procured or to be procured or paid for by such
  issue or its proceeds  has  been  or  is  reasonably  required  for  the
  purposes  specified  in  the  application  for  authority, and that such
  purposes are in no part reasonably chargeable to operating  expenses  or
  to  income  except  in  the  case  of bonds, notes or other evidences of
  indebtedness as may be specifically identified in  the  application  for
  authority.  For  the  proceeds  from  a  federal  loan,  a  telegraph or
  telephone  corporation  shall  provide  notice  to  the  public  service
  commission of receipt of such issue but shall not be required to file an
  application for authority. For the purpose of enabling the commission to
  determine  whether  it  should  authorize  such issuance, the commission
  shall have the power to make such inquiry or  investigation,  hold  such
  hearings  and  examine  such  witnesses,  books,  papers,  documents  or
  contracts as it may determine of importance in enabling it  to  reach  a
  determination.  Except  in  instances  where  a  telegraph  or telephone
  corporation has notified the commission it  is  engaged  in  securing  a

  federal   loan   for  the  expansion  of  broadband  services,  no  such
  corporation shall, without the consent of the commission, apply any such
  issue or its proceeds to any purpose not specified  in  the  application
  for  authority.  Such telegraph corporation or telephone corporation may
  issue notes for proper corporate purposes and not in  violation  of  any
  provision of this chapter or of any other act, payable at periods of not
  more  than  twelve  months without the consent of the commission; but no
  such note shall, in  whole  or  in  part,  directly  or  indirectly,  be
  refunded  by  any  issue  of  stock  or  bonds,  or  by any evidences of
  indebtedness running for more than twelve months, without the consent of
  the commission. No telegraph corporation or telephone corporation  shall
  be  required, however, to apply to the commission for authority to issue
  stocks, bonds, notes or other evidence of indebtedness  except  for  the
  acquisition  of  property,  the  construction,  completion, extension or
  improvement of its facilities, or the improvement or maintenance of  its
  service  within the state, or the discharge or refunding of obligations,
  or reimbursement of moneys actually  expended  for  such  purposes.  The
  commission  shall  have  power to require every such corporation to file
  with the commission after the issuance of stocks, bonds, notes or  other
  evidences  of  indebtedness  issued  with or without the approval of the
  commission as provided in this section, a notice of such transaction  in
  such  form as the commission may prescribe. The commission shall have no
  power to authorize the capitalization of any franchise or right to be  a
  corporation, nor to authorize the capitalization of any franchise or the
  right to own, operate or enjoy any franchise whatsoever in excess of the
  amount  (exclusive  of  any  tax  or annual charge) actually paid to the
  state or any political subdivision thereof, as the consideration of  the
  grant  of  such franchise or right, nor to authorize the issuance of any
  stocks or other securities for any purposes other than those  enumerated
  in this section. Nor shall the corporate stock of the corporation formed
  by  the merger or consolidation of two or more other corporations exceed
  the sum of the capital stock of the corporations so consolidated, at the
  par value thereof, or such sum and any additional sum actually  paid  in
  cash;  nor  shall any contract for consolidation or lease be capitalized
  in the stock of any corporation  whatever;  nor  shall  any  corporation
  hereafter  issue  any  bonds  against or as a lien upon any contract for
  consolidation or merger. Notwithstanding  the  foregoing  provisions  of
  this  section,  any application for approval under this section shall be
  deemed granted by the commission forty-five days after such  application
  is   filed  for  approval,  unless  the  commission,  or  its  designee,
  determines and informs the applicant in writing within  such  forty-five
  day period that the public interest requires the commission's review and
  its written order.