S T A T E O F N E W Y O R K
________________________________________________________________________
5863
2013-2014 Regular Sessions
I N S E N A T E
June 18, 2013
___________
Introduced by Sen. YOUNG -- (at request of the Legislative Commission on
Rural Resources) -- read twice and ordered printed, and when printed
to be committed to the Committee on Rules
AN ACT to amend the public service law, in relation to the issuance of
stocks, bonds and other forms of indebtedness for the purpose of
expanding broadband services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 101 of the public service law, as amended by chap-
ter 443 of the laws of 2000, is amended to read as follows:
S 101. Authority to issue stock, bonds and other forms of indebt-
edness. A telegraph or telephone corporation may, when authorized by
the commission, issue stock, bonds, notes or other evidences of indebt-
edness 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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11588-01-3
S. 5863 2
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 direc-
tor 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, INCLUDING PROCEEDS FROM FEDERAL
LOANS FOR THE EXPANSION FOR BROADBAND SERVICES, has been or is reason-
ably required for the purposes specified in the application for authori-
ty, and that such purposes are in no part reasonably chargeable to oper-
ating 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 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, PROVIDED THAT ANY DETERMINATION FROM AN INQUIRY, INVESTI-
GATION OR EXAMINATION OF PROCEEDS OF FEDERAL LOANS FOR THE EXPANSION OF
BROADBAND SERVICES SHALL BE PERFORMED WITHIN SIXTY CALENDAR DAYS OF
RECEIPT OF SUCH TELEPHONE AND TELEGRAPH PROVIDER'S APPLICATION FOR
AUTHORITY, OR SUCH APPLICATION SHALL BE DEEMED APPROVED. No such corpo-
ration shall, without the consent of the commission, apply any such
issue or its proceeds to any purpose not specified in the application
for authority, EXCEPT WHEN THERE HAS NOT BEEN A DETERMINATION WITHIN
SIXTY CALENDAR DAYS FROM THE COMMISSION WITH RESPECT TO PROCEEDS OF
FEDERAL LOANS FOR THE EXPANSION OF BROADBAND SERVICES. Such telegraph
corporation or telephone corporation may issue notes for proper corpo-
rate 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 actu-
ally expended for such purposes. The commission shall have power to
S. 5863 3
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 commis-
sion 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, oper-
ate 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 securi-
ties 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.
S 2. This act shall take effect immediately.
