Assembly Bill A4904

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4904

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            February 6, 2009
                               ___________

Introduced by M. of A. JEFFRIES -- read once and referred to the Commit-
  tee on Corporations, Authorities and Commissions

AN ACT to amend the public service law, in relation to transfer of fran-
  chises or stocks

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 70 of the public service law, as amended by chapter
297 of the laws of 1989, is amended to read as follows:
  S 70. Transfer of franchises or stocks. 1. No gas corporation or elec-
tric corporation shall transfer or lease its franchise, works or  system
or  any  part  of such franchise, works or system to any other person or
corporation or contract for the operation of its works and system, with-
out the written consent of the commission.  Notwithstanding the  forego-
ing,  any  transfer  or lease with an original cost of (a) less than one
hundred thousand dollars proposed  by  a  gas  or  electric  corporation
having annual gross revenues in excess of two hundred million dollars or
(b) less than twenty-five thousand dollars proposed by a gas or electric
corporation  having  annual  gross  revenues  of  less  than two hundred
million dollars shall be  effective  without  the  commission's  written
consent  within  ninety days after such corporation notifies the commis-
sion that it plans to complete the  transfer  or  lease  and  submits  a
description  of  the  transfer  or lease[,]; provided, however, that the
commission may determine within such ninety days after such notification
and submission that the public interest requires its review and  written
consent.
  2. The permission and approval of the commission, to the exercise of a
franchise under section sixty-eight of this [chapter] ARTICLE, or to the
assignment,  transfer  or  lease of a franchise under this section shall
not be construed to revive or validate any lapsed or  invalid  franchise
or to enlarge or add to the powers and privileges contained in the grant
of any franchise or to waive any forfeiture.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00248-01-9
              

A. 4904                             2

  3. No [such] GAS CORPORATION OR ELECTRIC corporation shall directly or
indirectly  acquire the stock or bonds of any other corporation incorpo-
rated for, or engaged in, the same or a similar business, in this  state
or  any  other state, or proposing to operate or operating under a fran-
chise  from the same or any other municipality, neither shall any street
railroad corporation acquire the stock or bonds of any  electric  corpo-
ration, unless authorized so to do by the commission.
  4.  Save  where  stock shall be transferred or held for the purpose of
collateral security only with the consent of the commission empowered by
this  chapter  to  give  such  consent,  no  stock  corporation  of  any
description,  domestic  or  foreign, COMPANY, INCLUDING, BUT NOT LIMITED
TO, A LIMITED LIABILITY COMPANY, ASSOCIATION, INCLUDING  A  JOINT  STOCK
ASSOCIATION,  PARTNERSHIP, INCLUDING A LIMITED LIABILITY PARTNERSHIP, OR
PERSON, other than a gas corporation or electric corporation  or  street
railroad corporation, shall purchase or acquire, take or hold, more than
ten per centum of the voting capital stock issued by any gas corporation
or  electric corporation organized or existing under or by virtue of the
laws of this state, except that a corporation  now  lawfully  holding  a
majority  of the voting capital stock of any gas corporation or electric
corporation may with the consent of the commission acquire and hold  the
remainder  of  the voting capital stock of such gas corporation or elec-
tric corporation or any portion thereof. Provided, that with the consent
of such commission and upon and subject to such terms and conditions  as
such commission may fix and impose, any such stock corporation, COMPANY,
ASSOCIATION,  PARTNERSHIP OR PERSON may acquire, take and hold more than
ten per centum of the voting capital stock of  any  gas  corporation  or
electric  corporation,  organized  or existing under or by virtue of the
laws of this state.
  5. No consent shall be given by the commission to the  acquisition  of
any  stock  in  accordance  with  this section unless it shall have been
shown that such acquisition is in the public  interest.  Nothing  herein
contained shall be construed to prevent the holding of any stock hereto-
fore  lawfully  acquired, nor to prevent, upon the surrender or exchange
of such stock pursuant to a reorganization plan, the purchase,  acquisi-
tion,  taking  or  holding of a proportionate amount of stock of any new
corporation organized to take over, at foreclosure or  other  sale,  the
property  of  any  corporation  whose stock has been thus surrendered or
exchanged; but the proportion of the voting capital  stock  of  the  new
corporation  held by a stock corporation, COMPANY, ASSOCIATION, PARTNER-
SHIP OR PERSON and acquired by it by any such surrender or  exchange  of
stock shall not without the consent of the commission exceed the propor-
tion of the voting capital stock held by it in the former corporation.
  6.  Every  contract, assignment, transfer or agreement for transfer of
any stock by or through any person or corporation  to  any  corporation,
COMPANY,   ASSOCIATION,  PARTNERSHIP  OR  PERSON  in  violation  of  any
provision of this chapter shall be void and of no effect,  and  no  such
transfer  or  assignment  shall  be  made upon the books of any such gas
corporation, or electric corporation, or shall be recognized  as  effec-
tive for any purpose.
  7.  No  consent,  permission or approval otherwise required under this
section shall be necessary for the sale of the franchise, works, system,
stocks or bonds by a gas or electric corporation to a  duly  constituted
authority of the state.
  S  2.  Section 83 of the public service law, as amended by chapter 787
of the laws of 1930, is amended to read as follows:

A. 4904                             3

  S 83. Transfer of franchises, property or stocks.  1. No steam  corpo-
ration  shall  transfer  or  lease its franchise, works or system or any
part of such franchise, works or system to any other  person  or  corpo-
ration  or  contract  for the operation of its works and system, without
the written consent of the commission.
  2.  The permission and approval of the commission to the exercise of a
franchise under section eighty-one of this [chapter] ARTICLE, or to  the
assignment,  transfer  or  lease of a franchise under this section shall
not be construed to revive or validate any lapsed or  invalid  franchise
or to enlarge or add to the powers and privileges contained in the grant
of any franchise or to waive any forfeiture.
  3.  No  [such]  STEAM corporation shall directly or indirectly acquire
the stock or bonds of any other corporation incorporated for, or engaged
in, the same or a similar business, or proposing to operate or operating
under a franchise from  the  same  or  any  other  municipality,  unless
authorized so to do by the commission.
  4.  Save  where  stock shall be transferred or held for the purpose of
collateral security only with the consent of the  commission,  no  stock
corporation of any description, domestic or foreign, COMPANY, INCLUDING,
BUT  NOT LIMITED TO, A LIMITED LIABILITY COMPANY, ASSOCIATION, INCLUDING
A JOINT STOCK ASSOCIATION, PARTNERSHIP, INCLUDING  A  LIMITED  LIABILITY
PARTNERSHIP,  OR  PERSON, other than a steam corporation, a street rail-
road corporation, a gas corporation, an electric corporation, or  a  gas
and  electric corporation, shall purchase or acquire, take or hold, more
than ten per centum of the voting capital  stock  issued  by  any  steam
corporation organized or existing under or by virtue of the laws of this
state,  except that a corporation now lawfully holding a majority of the
voting capital stock of any steam corporation may with  the  consent  of
the  commission  acquire  and  hold  the remainder of the voting capital
stock of such steam corporation or any portion thereof.
  5. No consent shall be given by the commission to the  acquisition  of
any  stock  in  accordance  with  this section unless it shall have been
shown that such acquisition is in the public  interest.  Nothing  herein
contained shall be construed to prevent the holding of any stock hereto-
fore  lawfully  acquired, nor to prevent, upon the surrender or exchange
of such stock pursuant to a reorganization plan, the purchase,  acquisi-
tion,  taking  or  holding of a proportionate amount of stock of any new
corporation organized to take over, at foreclosure or  other  sale,  the
property  of  any  corporation  whose stock has been thus surrendered or
exchanged; but the proportion of the voting capital  stock  of  the  new
corporation  held by a stock corporation, COMPANY, ASSOCIATION, PARTNER-
SHIP OR PERSON and acquired by it by any such surrender or  exchange  of
stock shall not without the consent of the commission exceed the propor-
tion of the voting capital stock held by it in the former corporation.
  6.  Every  contract, assignment, transfer or agreement for transfer of
any stock by or through any person or corporation  to  any  corporation,
COMPANY,  ASSOCIATION,  PARTNERSHIP  OR  PERSON,  in  violation  of  any
provision of this chapter, shall be void and of no effect, and  no  such
transfer  or  assignment shall be made upon the books of any such steam-
heating corporation,  or  shall  be  recognized  as  effective  for  any
purpose.
  S  3.  Section 89-h of the public service law, as added by chapter 715
of the laws of 1931, is amended to read as follows:
  S 89-h. Transfer of franchises or stocks.   1. No  water-works  corpo-
ration  shall  transfer  or  lease its franchise, works or system or any
part of such franchise, works or system to any other  person  or  corpo-

A. 4904                             4

ration  or  contract  for the operation of its works and system, without
the written consent of the commission.
  2.  The  permission  and approval of the commission to the assignment,
transfer or lease of  a  franchise  under  this  section  shall  not  be
construed  to  revive  or validate any lapsed or invalid franchise or to
enlarge or add to the powers and privileges contained in  the  grant  of
any franchise or to waive any forfeiture.
  3.  No  [such]  WATER-WORKS  corporation  shall directly or indirectly
acquire the stock or bonds of any other corporation incorporated for, or
engaged in, the same or a similar business, or proposing to  operate  or
operating  under  a  franchise  from the same or any other municipality,
unless authorized so to do by the commission.
  4. Save where stock shall be transferred or held for  the  purpose  of
collateral security only with the consent of the commission empowered by
this  chapter  to  give  such  consent,  no  stock  corporation  of  any
description, domestic or foreign, COMPANY, INCLUDING,  BUT  NOT  LIMITED
TO,  A  LIMITED  LIABILITY COMPANY, ASSOCIATION, INCLUDING A JOINT STOCK
ASSOCIATION, PARTNERSHIP, INCLUDING A LIMITED LIABILITY PARTNERSHIP,  OR
PERSON, other than a water-works corporation, shall purchase or acquire,
take  or  hold,  more  than  ten  per centum of the voting capital stock
issued by any water-works corporation organized or existing under or  by
virtue of the laws of this state, except that a corporation now lawfully
holding a majority of the voting capital stock of any water-works corpo-
ration  may  with  the  consent  of  the commission acquire and hold the
remainder of the voting capital stock of such water-works corporation or
any portion thereof.  Provided, that with the consent of such commission
and upon and subject to such terms and conditions as such commission may
fix and impose, any such stock corporation, COMPANY, ASSOCIATION,  PART-
NERSHIP OR PERSON may acquire, take and hold more than ten per centum of
the  voting  capital  stock of any water-works corporation, organized or
existing under or by virtue of the laws of this state.
  [2.] 5. No consent shall be given by the commission to the acquisition
of any stock in accordance with this section unless it shall  have  been
shown that such acquisition is in the public interest. Nothing contained
in  this  section shall be construed to prevent the holding of any stock
heretofore lawfully acquired, nor to  prevent,  upon  the  surrender  or
exchange  of such stock pursuant to a reorganization plan, the purchase,
acquisition, taking or holding of a proportionate amount of stock of any
new corporation organized to take over, at foreclosure  or  other  sale,
the property of any corporation whose stock has been thus surrendered or
exchanged;  but  the  proportion  of the voting capital stock of the new
corporation held by a stock corporation, COMPANY, ASSOCIATION,  PARTNER-
SHIP  OR  PERSON and acquired by it by any such surrender or exchange of
stock shall not without the consent of the commission exceed the propor-
tion of the voting capital stock held by it in the former corporation.
  6. Every contract, assignment, transfer or agreement for  transfer  of
any  stock  by  or through any person or corporation to any corporation,
COMPANY,  ASSOCIATION,  PARTNERSHIP  OR  PERSON,  in  violation  of  any
provision  of  this  chapter shall be void and of no effect, and no such
transfer or assignment shall be made upon the books of any  such  water-
works corporation, or shall be recognized as effective for any purpose.
  S  4. Section 100 of the public service law, as amended by chapter 446
of the laws of 1998, is amended to read as follows:
  S 100. Transfer and ownership of stock. 1. No telegraph corporation or
telephone corporation, domestic or foreign, shall hereafter purchase  or
acquire,  take  or  hold  any part of the capital stock of any telegraph

A. 4904                             5

corporation or telephone corporation organized  or  existing  under  the
laws of this state unless authorized so to do by the commission.
  2.  Save  where  stock shall be transferred or held for the purpose of
collateral security, no stock corporation, domestic or foreign, COMPANY,
INCLUDING, BUT NOT LIMITED TO, A LIMITED LIABILITY COMPANY, ASSOCIATION,
INCLUDING A JOINT STOCK ASSOCIATION, PARTNERSHIP,  INCLUDING  A  LIMITED
LIABILITY  PARTNERSHIP, OR PERSON, other than a telegraph corporation or
telephone corporation, shall, without the  consent  of  the  commission,
purchase or acquire, take or hold more than ten per centum of the voting
capital  stock  issued  by any telegraph corporation or telephone corpo-
ration organized or existing under or by virtue  of  the  laws  of  this
state.  Any  corporation  now  lawfully holding a majority of the voting
capital stock of any telegraph corporation or telephone corporation may,
without the consent of the commission, acquire and hold the remainder of
the voting capital stock of  such  telegraph  corporation  or  telephone
corporation, or any portion thereof.
  3.  No  consent shall be given by the commission to the acquisition of
any stock in accordance with this section  unless  it  shall  have  been
shown  that such acquisition is in the public interest; provided, howev-
er, that any such consent shall be deemed to be granted by  the  commis-
sion  ninety  days  after such corporation applies to the commission for
its consent, unless the commission,  or  its  designee,  determines  and
informs  the applicant in writing within such ninety day period that the
public  interest  requires  the  commission's  review  and  its  written
consent.    Nothing  herein  contained shall be construed to prevent the
holding of any stock heretofore lawfully acquired, nor to prevent,  upon
the  surrender  or  exchange  of such stock pursuant to a reorganization
plan, the purchase, acquisition, taking or holding  of  a  proportionate
amount  of stock of any new corporation organized to take over, at fore-
closure or other sale the property of any corporation  whose  stock  has
been  thus  surrendered  or  exchanged; but the proportion of the voting
capital stock of the new corporation held by a stock corporation, COMPA-
NY, ASSOCIATION, PARTNERSHIP OR PERSON and acquired by it  by  any  such
surrender  or  exchange  of  stock  shall not without the consent of the
commission exceed the proportion of the voting capital stock held by  it
in the former corporation.
  4.  Every  contract, assignment, transfer or agreement for transfer of
any stock by or through any person or corporation  to  any  corporation,
COMPANY,  ASSOCIATION,  PARTNERSHIP  OR  PERSON,  in  violation  of  any
provision of this chapter shall be void and of no effect,  and  no  such
transfer  or  assignment  shall be made upon the books of any such tele-
graph corporation or telephone corporation, or shall  be  recognized  as
effective for any purpose.
  S 5. This act shall take effect immediately.