New Jersey Administrative Code › Title 14 - PUBLIC UTILITIES › Chapter 1 - RULES OF PRACTICE › Subchapter 5 - PETITIONS › Section 14:1-5.9 - Petitions for authority to issue stocks, bonds, notes, other evidence of indebtedness, or to execute mortgages

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Petitions for
				authority to issue any stocks, bonds, notes, or other evidence of indebtedness,
				payable in more than one year from the date thereof, and to execute mortgages
				shall conform to the provisions at
				N.J.A.C.
				14:1-4, 5.1, 5.2, 5.3, and 5.4, to the extent
				applicable, and shall in the body thereof, or in the attached exhibits, provide
				the following information:
1. A statement of
				the amount and terms of the proposed issue including the nature of the security
				therefor, if any; the purposes for which the proceeds are to be used; and the
				nature of all rights and limitations applicable to the security;
2. Where one of the purposes is the
				acquisition of property, a general description of the property, the name of the
				transferor, and a copy of the contract, if any, for such acquisition. In the
				case of property to be acquired for right-of-way purposes, a general
				description of the proposed route and a map or plot plan will be
				sufficient;
3. Where one of the
				purposes is the construction, completion, extension or improvement of
				facilities, a general description of the work proposed to be done, and an
				estimate of the cost thereof in reasonable detail. Where one of the purposes is
				the improvement or maintenance of service, there shall be included a
				description of the existing service as well as of the improvements, or
				betterments proposed;
4. Where one
				of the purposes is the refunding of securities, a description of the securities
				and obligations to be refunded, including the kind, amount, date of issue and
				date of maturity, together with the terms of refunding and all other material
				facts affecting the same must be set out;
5. Where one of the purposes is the issuance
				of capital stock based upon the investment of earnings in plant which might
				have been distributed in dividends, a complete and reasonably detailed
				enumeration of petitioner's property, priced at original cost, or estimated if
				not known. The petitioner shall produce evidence at the hearing in support of
				such enumeration and pricing;
6.
				Where one of the purposes is to reimburse the treasury for expenditures not
				previously capitalized by the issuance of securities, the petitioner shall also
				show the exact period and amount for which reimbursement is desired;
				comparative financial statements that shall include, at a minimum, balance
				sheets and utility plant by accounts as at the beginning and end of the period,
				as well as changes in the period, and, in the case of utility plant, additions
				and retirements shall be stated separately for each year; a statement
				indicating the source and application of funds during the period; a statement
				indicating the manner in which the petitioner proposes to use the proceeds from
				the security issue; and the necessity and reasonableness of the proposed
				transaction;
7. Where one of the
				purposes is for the issuance of common capital stock in connection with the
				organization of a new corporation to operate as a public utility, the petition
				must contain the following:
i. A copy of the
				certificate of incorporation;
ii.
				The names and addresses of the elected or proposed officers, directors and
				stockholders of the company and the number of shares of capital stock to be
				held by each;
iii. The required
				number of stockholders and directors and the state in which they reside
				pursuant to the statute under which the corporation will be
				organized;
iv. A corporate
				resolution or proposed resolution of the directors of the utility authorizing
				the issuance of the stock;
v. A
				copy of a pro forma balance sheet of the new corporation and copy of a pro
				forma income statement of estimated operating results anticipated for the first
				two years of its proposed operations, unless a different period is specified by
				the Board;
vi. The name of the
				municipality and the street and number therein;
(1) In which the principal office in this
				State is to be located, and the name of the agent in and in charge of such
				principal office upon whom process against the corporation may be
				served;
(2) In which the principal
				business office is to be located; and
(3) At which the records, books, accounts,
				documents and other writings referred to in
				48:3-7.8 are to be kept and the
				name, place of residence within this State, and place of business of the agent
				who shall have custody of said corporate records and upon whom process for the
				production of the same before the Board may be served. The books of account
				must be kept in conformity with the appropriate Uniform System of Accounts
				prescribed by the Board. Books and records must be kept within this State
				unless authority to do otherwise is obtained from the Board;
vii. A detailed list of
				organization expenditures;
viii. A
				copy of a pro forma balance sheet giving effect to the issuance of the proposed
				securities;
ix. A copy of a pro
				forma income statement giving effect to the issuance of the proposed
				securities; and
x. The effective
				rate of interest or of the cost of money to the petitioner and the
				reasonableness thereof, if authority is requested to issue stocks, bonds, notes
				or other evidence of indebtedness by means of private placement and not at a
				public offering, and the financial sources that the petitioner has contacted in
				this connection. The petitioner shall submit information as to the computation
				of the effective rate of interest or of the cost of money as distinguished from
				the nominal rates which may be indicated;
8. Where one of the purposes is the issuance
				of bonds to be secured by an existing mortgage, a statement showing the amount
				and use made of the proceeds of the bonds, if any, already issued under such
				mortgage;
9. Information relating
				to the current financial condition of the petitioner setting forth:
i. As to each class of capital stock of the
				petitioner, the amount authorized and the amount issued and
				outstanding;
ii. As to each class
				of preferred stock of the petitioner, a summary statement of the terms of
				preference thereof;
iii. As to each
				issue or series of long-term indebtedness of the petitioner, the principal
				amount authorized to be issued, date of issue, date of maturity, rate of
				interest and principal amount outstanding; and as to each such issue secured by
				a mortgage upon any property of the petitioner, the date of said mortgage, name
				of trustee, principal amount authorized to be secured, and a brief description
				of the mortgaged property;
iv.
				Other indebtedness of all kinds, giving same by classes and describing
				security, if any;
v. The amount of
				interest charged to income during previous fiscal year upon each kind of
				indebtedness and rate thereof; and, if different rates were charged, the amount
				charged at each rate;
vi. The
				amount of dividends paid upon each class of stock during the previous calendar
				year and rate thereof; and
vii. A
				detailed income statement for the previous calendar year and balance sheet
				showing conditions at the close of that year;
10. A statement whether any franchise or
				right is proposed to be capitalized directly or indirectly. In case it is
				proposed to capitalize any franchise as authorized by
				48:3-5, a copy of such franchise
				and a statement, together with an affidavit showing the amount actually paid
				for said franchise shall be attached to the petition;
11. Where any contract, agreement or
				arrangement, verbal or written, has been made to sell the securities proposed
				to be issued, a description of such contract, agreement or arrangement and, if
				in writing, a copy thereof;
12. If
				no contract, agreement or arrangement has been made for the sale or other
				disposition of the securities proposed to be issued, the proposed method of
				sale or other disposition must be set forth together with an affidavit of a
				competent person showing the amount which can probably be realized from the
				sale and disposition thereof, and the reasons for the opinion of the
				affiant;
13. Petitions filed under
				this rule shall contain a certified copy of the resolution of the Board of
				Directors or other authority authorizing the proposed issuance of securities
				and shall be verified. The verification shall include a statement that it is
				the intention of the petitioner in good faith to use the proceeds of the
				securities proposed to be issued for the purposes set forth in the petition;
				and
14. Information which under
				this rule is required to be set forth in a petition or any exhibit attached
				thereto and which is contained in any report, document, pleading or other
				instrument previously filed with the Board pursuant to any requirement of any
				statute or any rule of the Board, may be incorporated in such petition or
				exhibit by reference to the official filing thereof with the Board provided
				that said information is still correct in all respects.