LBD11729-01-1
A. 8082 2
OR ARRANGEMENT ENTERED INTO IN CONNECTION WITH THE ISSUANCE OF STORM
RECOVERY BONDS UNDER THIS ARTICLE.
2. "ASSIGNEE" MEANS ANY INDIVIDUAL, CORPORATION, LIMITED LIABILITY
COMPANY, PARTNERSHIP OR LIMITED PARTNERSHIP, TRUST OR OTHER LEGALLY
RECOGNIZED ENTITY TO WHICH AN INTEREST IN STORM RECOVERY PROPERTY IS
CREATED, RECOGNIZED, ASSIGNED, SOLD OR TRANSFERRED, OTHER THAN AS SECU-
RITY, INCLUDING ANY ASSIGNEE OF SUCH PROPERTY.
3. "CONSUMER" MEANS ANY INDIVIDUAL, GOVERNMENTAL BODY, TRUST, BUSINESS
ENTITY, NONPROFIT ORGANIZATION OR OTHER LEGALLY RECOGNIZED ENTITY THAT
TAKES ELECTRIC DELIVERY SERVICE WITHIN THE SERVICE AREA BY MEANS OF
ELECTRIC TRANSMISSION OR DISTRIBUTION FACILITIES, WHETHER THOSE ELECTRIC
TRANSMISSION OR DISTRIBUTION FACILITIES ARE OWNED BY AN ELECTRIC CORPO-
RATION OR OTHER ENTITY.
4. "FINANCING COSTS" MEANS: (A) INTEREST AND ACQUISITION, DEFEASANCE,
OR REDEMPTION PREMIUMS THAT ARE PAYABLE ON STORM RECOVERY BONDS;
(B) ANY PAYMENT REQUIRED UNDER AN ANCILLARY AGREEMENT AND ANY AMOUNT
REQUIRED TO FUND OR REPLENISH RESERVE OR OTHER ACCOUNTS ESTABLISHED
UNDER THE TERMS OF ANY INDENTURE, ANCILLARY AGREEMENT, OR OTHER FINANC-
ING DOCUMENTS PERTAINING TO STORM RECOVERY BONDS;
(C) ANY OTHER COST RELATED TO ISSUING, SUPPORTING, REPAYING, AND
SERVICING STORM RECOVERY BONDS, INCLUDING BUT NOT LIMITED TO SERVICING
FEES, ACCOUNTING AND AUDITING FEES, TRUSTEE FEES, LEGAL FEES, CONSULTING
FEES, ADMINISTRATIVE FEES, PLACEMENT AND UNDERWRITING FEES, CAPITALIZED
INTEREST, RATING AGENCY FEES, STOCK EXCHANGE LISTING AND COMPLIANCE
FEES, AND FILING FEES, INCLUDING COSTS RELATED TO OBTAINING A FINANCING
ORDER; OR
(D) ANY FEDERAL, STATE OR LOCAL TAXES, PAYMENTS IN LIEU OF TAXES,
FRANCHISE FEES OR LICENSE FEES IMPOSED ON STORM RECOVERY CHARGE REVEN-
UES.
5. "FINANCING ORDER" MEANS AN ORDER OF THE COMMISSION WHICH AUTHOR-
IZES:
(A) THE ISSUANCE OF STORM RECOVERY BONDS;
(B) THE IMPOSITION, COLLECTION, AND PERIODIC ADJUSTMENTS OF STORM
RECOVERY CHARGES;
(C) THE CREATION OR RECOGNITION OF STORM RECOVERY PROPERTY; AND/OR
(D) THE SALE, ASSIGNMENT, OR TRANSFER OF STORM RECOVERY PROPERTY TO AN
ASSIGNEE.
6. "FINANCING PARTY" MEANS ANY HOLDER OF STORM RECOVERY BONDS AND ANY
TRUSTEE, COLLATERAL AGENT, OR OTHER PERSON ACTING FOR THE BENEFIT OF
HOLDERS OF STORM RECOVERY BONDS.
7. "FINANCING STATEMENT" SHALL HAVE THE SAME MEANING AS THAT PROVIDED
IN PARAGRAPH (39) OF SUBSECTION (A) OF SECTION 9-102 THE UNIFORM COMMER-
CIAL CODE. ALL FINANCING STATEMENTS UNDER THIS ARTICLE SHALL BE FILED
IN ACCORDANCE WITH SECTION 9-501 OF THE UNIFORM COMMERCIAL CODE.
8. "LIEN CREDITOR" SHALL HAVE THE SAME MEANING AS THAT PROVIDED IN
PARAGRAPH (52) OF SUBSECTION (A) OF SECTION 9-102 OF THE UNIFORM COMMER-
CIAL CODE.
9. "SECURED PARTY" MEANS A FINANCING PARTY IN FAVOR OF WHICH AN ELEC-
TRIC CORPORATION OR ITS SUCCESSORS OR ASSIGNEES CREATES A SECURITY
INTEREST IN ALL OR ANY PORTION OF ITS INTEREST IN OR RIGHT TO STORM
RECOVERY PROPERTY. A SECURED PARTY MAY BE GRANTED A SECURITY INTEREST
IN STORM RECOVERY PROPERTY UNDER THIS ARTICLE AND A SECURITY INTEREST IN
OTHER COLLATERAL SUBJECT TO THE UNIFORM COMMERCIAL CODE IN A SINGLE
SECURITY AGREEMENT.
10. "SECURITY INTEREST" MEANS A PLEDGE, HYPOTHECATION, OR OTHER ENCUM-
BRANCE OF OR OTHER RIGHT OVER ANY PORTION OF STORM RECOVERY PROPERTY
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CREATED BY CONTRACT TO SECURE THE PAYMENT OR PERFORMANCE OF AN OBLI-
GATION.
11. "SERVICE AREA" MEANS THE GEOGRAPHICAL AREA WITHIN WHICH AN ELEC-
TRIC CORPORATION PROVIDES ELECTRIC DISTRIBUTION SERVICES AS OF THE DATE
OF A FINANCING ORDER.
12. "STORM" MEANS, INDIVIDUALLY OR COLLECTIVELY, A NAMED TROPICAL
STORM OR HURRICANE, A TORNADO, ICE OR SNOW STORM, FLOOD, AN EARTHQUAKE,
OR OTHER SIGNIFICANT WEATHER OR NATURAL DISASTER.
13. "STORM RECOVERY ACTIVITY" MEANS ANY ACTIVITY OR ACTIVITIES BY OR
ON BEHALF OF AN ELECTRIC CORPORATION IN CONNECTION WITH THE RESTORATION
OF SERVICE AND INFRASTRUCTURE ASSOCIATED WITH ELECTRIC POWER OUTAGES
AFFECTING CONSUMERS OF AN ELECTRIC CORPORATION AS THE RESULT OF A STORM
OR STORMS, INCLUDING BUT NOT LIMITED TO MOBILIZATION, STAGING, AND
CONSTRUCTION, RECONSTRUCTION, REPLACEMENT, OR REPAIR OF ELECTRIC GENER-
ATION, TRANSMISSION, OR DISTRIBUTION FACILITIES.
14. "STORM RECOVERY BONDS" MEANS BONDS, DEBENTURES, NOTES, CERTIF-
ICATES OF PARTICIPATION, CERTIFICATES OF OWNERSHIP, OR OTHER EVIDENCES
OF INDEBTEDNESS OR OWNERSHIP THAT ARE ISSUED PURSUANT TO AN INDENTURE,
CONTRACT, OR OTHER AGREEMENT OF AN ELECTRIC CORPORATION OR AN ASSIGNEE
PURSUANT TO A FINANCING ORDER, THE PROCEEDS OF WHICH ARE USED DIRECTLY
OR INDIRECTLY TO PROVIDE, RECOVER, FINANCE, OR REFINANCE COMMISSION-AP-
PROVED STORM RECOVERY COSTS, FINANCING COSTS, AND COSTS TO REPLENISH OR
FUND A STORM RECOVERY RESERVE TO SUCH LEVEL AS THE COMMISSION MAY
AUTHORIZE IN A FINANCING ORDER, AND WHICH ARE SECURED BY OR PAYABLE FROM
STORM RECOVERY PROPERTY. IF CERTIFICATES OF PARTICIPATION OR OWNERSHIP
ARE ISSUED, REFERENCES IN THIS ARTICLE TO PRINCIPAL, INTEREST, OR PREMI-
UM SHALL BE CONSTRUED TO REFER TO COMPARABLE AMOUNTS UNDER THOSE CERTIF-
ICATES. STORM RECOVERY BONDS SHALL BE NONRECOURSE TO THE CREDIT OR ANY
ASSETS OF THE ELECTRIC CORPORATION OTHER THAN THE STORM RECOVERY PROPER-
TY AS SPECIFIED IN THE FINANCING ORDER AND ANY RIGHTS UNDER ANY ANCIL-
LARY AGREEMENT. STORM RECOVERY BONDS SHALL BE LEGAL INVESTMENTS FOR ALL
GOVERNMENTAL UNITS, FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, FIDUCI-
ARIES, AND OTHER PERSONS THAT REQUIRE STATUTORY AUTHORITY REGARDING
LEGAL INVESTMENT.
15. "STORM RECOVERY CHARGE" MEANS THE AMOUNTS AUTHORIZED BY THE
COMMISSION TO RECOVER, FINANCE, OR REFINANCE STORM RECOVERY COSTS AND
FINANCING COSTS. IF PROVIDED FOR IN A FINANCING ORDER, SUCH AMOUNTS
SHALL BE IMPOSED ON CONSUMER BILLS AND COLLECTED BY AN ELECTRIC CORPO-
RATION OR ITS SUCCESSORS OR ASSIGNEES, OR A COLLECTION AGENT, IN FULL
THROUGH A CHARGE PAID BY EXISTING AND FUTURE CONSUMERS RECEIVING TRANS-
MISSION OR DISTRIBUTION SERVICE, OR BOTH, FROM THE ELECTRIC CORPORATION
OR ITS SUCCESSORS OR ASSIGNEES UNDER RATE SCHEDULES OR SPECIAL CONTRACTS
APPROVED BY THE COMMISSION. THE STORM RECOVERY CHARGE SHALL BE NON-BY-
PASSABLE AND IMPOSED ON ALL CONSUMERS IN THE SERVICE AREA AND COLLECTED
BY THE ELECTRIC CORPORATION OR ANY SUCCESSOR, ITS AGENT, SUBCONTRACTOR,
ASSIGNEE, COLLECTION AGENT OR ANY OTHER ENTITY DESIGNATED UNDER THE
FINANCING ORDER.
16. "STORM RECOVERY COSTS" MEANS, IF REQUESTED BY AN ELECTRIC CORPO-
RATION AND APPROVED BY THE COMMISSION, COSTS INCURRED OR TO BE INCURRED
BY AN ELECTRIC CORPORATION IN UNDERTAKING A STORM RECOVERY ACTIVITY.
SUCH COSTS SHALL INCLUDE THE ELECTRIC CORPORATION'S COST OF CAPITAL FROM
THE DATE OF THE APPLICABLE STORM TO THE DATE THE STORM RECOVERY BONDS
ARE ISSUED CALCULATED USING THE ELECTRIC CORPORATION'S WEIGHTED AVERAGE
COST OF CAPITAL AS DEFINED IN ITS MOST RECENT BASE RATE CASE PROCEEDING
BEFORE THE COMMISSION NET OF ALL APPLICABLE INCOME TAX SAVINGS RELATED
TO THE INTEREST COMPONENT. SUCH COSTS MAY BE NET OF APPLICABLE INSUR-
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ANCE PROCEEDS, TAX BENEFITS, AND ANY OTHER AMOUNTS INTENDED TO REIMBURSE
THE ELECTRIC CORPORATION FOR STORM RECOVERY ACTIVITIES SUCH AS GOVERN-
MENTAL GRANTS OR AID OF ANY KIND AND MAY INCLUDE ADJUSTMENTS FOR NORMAL
CAPITAL REPLACEMENT AND OPERATING COSTS, OR OTHER POTENTIAL OFFSETTING
ADJUSTMENTS. STORM RECOVERY COSTS MAY INCLUDE THE COSTS TO FUND AND
FINANCE ANY STORM RECOVERY RESERVES AND COSTS OF REPURCHASING EQUITY OR
RETIRING ANY EXISTING INDEBTEDNESS RELATING TO STORM RECOVERY ACTIV-
ITIES.
17. "STORM RECOVERY PROPERTY" MEANS THE PROPERTY RIGHTS AND INTERESTS
CREATED PURSUANT TO THIS ARTICLE, INCLUDING, BUT NOT LIMITED TO, ANY AND
ALL RIGHT, TITLE AND INTEREST:
(A) IN AND TO STORM RECOVERY CHARGES ESTABLISHED PURSUANT TO A FINANC-
ING ORDER, AS ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH SUCH FINANC-
ING ORDER;
(B) IN AND TO ALL REVENUES, COLLECTIONS, CLAIMS, PAYMENTS, MONEY, OR
PROCEEDS OF OR ARISING FROM THE STORM RECOVERY CHARGES OR CONSTITUTING
STORM RECOVERY CHARGES THAT ARE THE SUBJECT OF A FINANCING ORDER,
REGARDLESS OF WHETHER SUCH REVENUES, COLLECTIONS, CLAIMS, PAYMENTS,
MONEY OR PROCEEDS ARE IMPOSED, BILLED, RECEIVED, COLLECTED OR MAINTAINED
TOGETHER WITH OR COMMINGLED WITH OTHER REVENUES, COLLECTIONS, CLAIMS,
PAYMENTS, MONEY OR PROCEEDS; AND
(C) IN AND TO ALL RIGHTS TO OBTAIN PERIODIC ADJUSTMENTS TO THE STORM
RECOVERY CHARGES PURSUANT TO THE TERMS OF THE FINANCING ORDER. STORM
RECOVERY PROPERTY SHALL CONSTITUTE A VESTED, PRESENTLY EXISTING PROPERTY
RIGHT.
18. "STORM RECOVERY RESERVE" MEANS AN ELECTRIC CORPORATION'S STORM
RESERVE OR SUCH OTHER SIMILAR RESERVE ESTABLISHED PURSUANT TO ORDER OR
RULE OF THE COMMISSION.
§ 302. FINANCING ORDERS. 1. NO ELECTRIC CORPORATION OR ITS AFFILIATE
OR OTHER ASSIGNEE SHALL ISSUE ANY STORM RECOVERY BONDS UNLESS IT HAS
BEEN SPECIFICALLY AUTHORIZED TO DO SO BY A FINANCING ORDER ISSUED PURSU-
ANT TO THIS SECTION. AN ELECTRIC CORPORATION MAY PETITION THE COMMISSION
FOR A FINANCING ORDER GRANTING SUCH AUTHORITY. SUCH PETITION SHALL BE
MADE UNDER OATH AND SHALL BE SIGNED AND FILED ON BEHALF OF THE ELECTRIC
CORPORATION OR ITS AFFILIATE OR OTHER ASSIGNEE BY THE PRESIDENT OR BY A
VICE PRESIDENT, TREASURER, OR OTHER EXECUTIVE OFFICER HAVING KNOWLEDGE
OF THE MATTERS SET FORTH THEREIN AND SHALL BE SUBMITTED IN SUCH FORM AS
THE COMMISSION SHALL PRESCRIBE.
2. EACH PETITION FILED UNDER THIS SECTION SHALL INCLUDE ALL OF THE
FOLLOWING: (A) A DESCRIPTION OF THE STORM RECOVERY ACTIVITIES THAT THE
ELECTRIC CORPORATION HAS UNDERTAKEN OR PROPOSES TO UNDERTAKE AND THE
REASONS FOR UNDERTAKING THE ACTIVITIES.
(B) THE STORM RECOVERY COSTS AND AN ESTIMATE OF THE COSTS OF ANY STORM
RECOVERY ACTIVITIES THAT ARE BEING UNDERTAKEN BUT NOT COMPLETED.
(C) THE LEVEL OF THE STORM RECOVERY RESERVE THAT THE ELECTRIC CORPO-
RATION PROPOSES TO ESTABLISH OR REPLENISH AND HAS DETERMINED WOULD BE
APPROPRIATE TO RECOVERY THROUGH STORM RECOVERY BONDS AND IS SEEKING TO
SO RECOVER AND THE LEVEL THAT THE ELECTRIC CORPORATION IS FUNDING OR
WILL SEEK TO FUND THROUGH OTHER MEANS, TOGETHER WITH A DESCRIPTION OF
THE FACTORS AND CALCULATIONS USED IN DETERMINING SUCH AMOUNTS AND METH-
ODS OF RECOVERY.
(D) AN INDICATION OF WHETHER THE ELECTRIC CORPORATION PROPOSES TO
FINANCE ALL OR A PORTION OF THE STORM RECOVERY COSTS USING STORM RECOV-
ERY BONDS. IF THE ELECTRIC CORPORATION PROPOSES TO FINANCE A PORTION OF
SUCH COSTS, THE ELECTRIC CORPORATION MUST IDENTIFY THE SPECIFIC PORTION
IN THE PETITION. AN ELECTION NOT TO FINANCE A PORTION OF THE STORM
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RECOVERY COSTS USING STORM RECOVERY BONDS BY AN ELECTRIC CORPORATION
SHALL NOT BE DEEMED TO WAIVE ITS RIGHT TO RECOVER SUCH COSTS PURSUANT TO
A SEPARATE PROCEEDING WITH THE COMMISSION.
(E) AN ESTIMATE OF THE FINANCING COSTS RELATED TO THE STORM RECOVERY
BONDS.
(F) AN ESTIMATE OF THE STORM RECOVERY CHARGES NECESSARY TO RECOVER THE
STORM RECOVERY COSTS AND FINANCING COSTS AND THE PERIOD FOR RECOVERY OF
SUCH COSTS.
(G) A COMPARISON BETWEEN THE NET PRESENT VALUE OF THE COSTS TO CONSUM-
ERS THAT ARE ESTIMATED TO RESULT FROM THE ISSUANCE OF STORM RECOVERY
BONDS AND THE RESULT FROM THE APPLICATION OF THE TRADITIONAL METHOD OF
FINANCING AND RECOVERING STORM RECOVERY COSTS FROM CONSUMERS. THE
COMPARISON SHOULD DEMONSTRATE THAT THE ISSUANCE OF STORM RECOVERY BONDS
AND THE IMPOSITION OF STORM RECOVERY CHARGES ARE EXPECTED TO PROVIDE
QUANTIFIABLE BENEFITS TO CONSUMERS.
3. THE COMMISSION MAY GRANT A PETITION UNDER SUBDIVISION ONE OF THIS
SECTION IN WHOLE OR IN PART BY ISSUING A FINANCING ORDER, WITH SUCH
MODIFICATIONS THERETO AND UPON SUCH TERMS AND CONDITIONS AS THE COMMIS-
SION PRESCRIBES AND THAT ARE CONSISTENT WITH THIS ARTICLE. IF THE
COMMISSION ISSUES A FINANCING ORDER APPROVING THE ISSUE OF STORM RECOV-
ERY BONDS UNDER THIS ARTICLE, THE COMMISSION SHALL CONSIDER WHETHER (A)
THE PROPOSED ISSUANCE OF STORM RECOVERY BONDS AND THE IMPOSITION AND
COLLECTION OF A STORM RECOVERY CHARGE ARE EXPECTED TO PROVIDE QUANTIFI-
ABLE BENEFITS TO CONSUMERS AS COMPARED TO THE COSTS THAT WOULD HAVE BEEN
INCURRED ABSENT THE ISSUANCE OF STORM RECOVERY BONDS AND (B) THE
PROPOSED STRUCTURING, EXPECTED PRICING, AND FINANCING COSTS OF THE STORM
RECOVERY BONDS ARE REASONABLY EXPECTED TO RESULT IN THE LOWEST STORM
RECOVERY CHARGES CONSISTENT WITH MARKET CONDITIONS AT THE TIME THE STORM
RECOVERY BONDS ARE PRICED AND THE TERMS OF THE FINANCING ORDER OR WOULD
AVOID OR MITIGATE RATE IMPACTS TO CONSUMERS AS COMPARED WITH TRADITIONAL
METHODS OF FINANCING OR RECOVERING STORM RECOVERY COSTS. THE COMMISSION
MAY DETERMINE WHAT DEGREE OF FLEXIBILITY TO AFFORD TO THE ELECTRIC
CORPORATION OR ASSIGNEES IN ESTABLISHING THE TERMS AND CONDITIONS OF THE
STORM RECOVERY BONDS, INCLUDING BUT NOT LIMITED TO REPAYMENT SCHEDULES,
INTEREST RATES, AND OTHER FINANCING COSTS. A COPY OF ANY FINANCING
ORDER ISSUED UNDER THIS ARTICLE DULY CERTIFIED BY A COMMISSIONER OR
OTHER PERSON AUTHORIZED TO ACT ON BEHALF OF THE COMMISSION SHALL BE
SUFFICIENT EVIDENCE FOR ALL PURPOSES OF WHOLE AND COMPLETE COMPLIANCE BY
THE ELECTRIC CORPORATION WITH ALL PROCEDURAL AND OTHER MATTERS REQUIRED
PRECEDENT TO THE ISSUANCE OF THE ORDER.
4. PROCEEDINGS ON A PETITION SUBMITTED PURSUANT TO THIS SECTION BEGIN
WITH THE PETITION FOR A FINANCING ORDER FILED BY AN ELECTRIC CORPORATION
WITH THE COMMISSION FOR REVIEW AND APPROVAL WITHIN ONE HUNDRED THIRTY-
FIVE DAYS OF THE FILING OF THE PETITION AND SHALL BE DISPOSED OF IN
ACCORDANCE WITH THE REQUIREMENTS OF THIS ARTICLE AND THE RULES OF THE
COMMISSION. A PARTY TO SUCH PROCEEDING MAY PETITION THE COMMISSION FOR
REHEARING OF THIS FINANCING ORDER WITHIN FIVE DAYS AFTER THE DATE OF ITS
ISSUANCE.
5. A FINANCING ORDER ISSUED BY THE COMMISSION TO AN ELECTRIC CORPO-
RATION SHALL:
(A) SPECIFY THE AMOUNT OF STORM RECOVERY COSTS INCLUDING ANY LEVEL OF
STORM RECOVERY RESERVES, TAKING INTO CONSIDERATION, TO THE EXTENT THE
COMMISSION DEEMS APPROPRIATE, ANY OTHER METHODS USED TO RECOVER THESE
COSTS AND ANY OFFSETS OR CREDITS TO THOSE COSTS, AND PROVIDE WITH
RESPECT TO THE AMOUNT OF FINANCING COSTS WHICH MAY BE RECOVERED THROUGH
STORM RECOVERY CHARGES;
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(B) PROVIDE THAT THE PROPOSED ISSUANCE OF STORM RECOVERY BONDS AND THE
IMPOSITION AND COLLECTION OF STORM RECOVERY CHARGES ARE EXPECTED TO
PROVIDE QUANTIFIABLE BENEFITS TO CONSUMERS AS COMPARED TO THE COSTS THAT
WOULD HAVE BEEN INCURRED ABSENT THE ISSUANCE OF THE STORM RECOVERY
BONDS;
(C) PROVIDE THAT THE STRUCTURING AND PRICING OF THE STORM RECOVERY
BONDS ARE EXPECTED TO RESULT IN THE LOWEST STORM RECOVERY CHARGES
CONSISTENT WITH MARKET CONDITIONS AT THE TIME THE STORM RECOVERY BONDS
ARE PRICED AND THE TERMS SET FORTH IN SUCH FINANCING ORDER;
(D) SPECIFY AND CREATE THE STORM RECOVERY PROPERTY OF AN ELECTRIC
CORPORATION OR ITS SUCCESSORS OR ASSIGNEES THAT MAY BE USED TO PAY OR
SECURE STORM RECOVERY BONDS AND FINANCING COSTS;
(E) PROVIDE THAT SUCH STORM RECOVERY PROPERTY MAY BE: (I) SOLD,
ASSIGNED, OR TRANSFERRED BY THE ELECTRIC CORPORATION TO (A) A SUBSIDIARY
WHICH IS WHOLLY OWNED, DIRECTLY OR INDIRECTLY, BY THE ELECTRIC CORPO-
RATION AND WHICH WILL BE THE ISSUER OF THE STORM RECOVERY BONDS OR (B)
ANOTHER ASSIGNEE WHICH WILL BE THE ISSUER OF THE STORM RECOVERY BONDS;
OR
(II) CREATED OR RECOGNIZED AS PROPERTY OF AN ASSIGNEE WHICH WILL BE
THE ISSUER OF THE STORM RECOVERY BONDS;
(F) PROVIDE THAT THE STORM RECOVERY CHARGES SHALL BE SUFFICIENT AT ALL
TIMES TO PAY THE PRINCIPAL OF AND INTEREST ON THE STORM RECOVERY BONDS
AS THE SAME SHALL BECOME DUE AND PAYABLE AND ALL OTHER FINANCING COSTS
AND ESTABLISH A TRUE-UP MECHANISM REQUIRING THAT THE STORM RECOVERY
CHARGES BE REVIEWED AND ADJUSTED AT LEAST ANNUALLY TO CORRECT ANY OVER-
COLLECTION OR UNDERCOLLECTION DURING THE PERIOD SINCE THE ISSUANCE OR
PRECEDING ADJUSTMENT AND TO ENSURE THE PROJECTED RECOVERY OF AMOUNTS
SUFFICIENT TO PROVIDE TIMELY PAYMENT OF ALL PRINCIPAL, INTEREST AND
OTHER FINANCING COSTS. EACH ADJUSTMENT TO THE STORM RECOVERY CHARGE, IN
AMOUNTS AS CALCULATED BY OR ON BEHALF OF THE OWNER OF STORM RECOVERY
PROPERTY, SHALL AUTOMATICALLY BECOME EFFECTIVE SIXTY DAYS FOLLOWING THE
DATE ON WHICH THE PERIODIC ADJUSTMENT IS FILED WITH THE COMMISSION
UNLESS THE COMMISSION APPROVES AN EARLIER EFFECTIVE DATE REQUESTED BY
THE ISSUER OF STORM RECOVERY BONDS;
(G) PROVIDE AND PLEDGE THAT AFTER THE EARLIER OF THE TRANSFER OF STORM
RECOVERY PROPERTY TO AN ASSIGNEE OR THE ISSUANCE OF STORM RECOVERY BONDS
AUTHORIZED THEREBY, A FINANCING ORDER IS IRREVOCABLE UNTIL THE INDEFEAS-
IBLE PAYMENT IN FULL OF THE STORM RECOVERY BONDS AND THE FINANCING COSTS
AND, PROVIDED THAT, EXCEPT AS PROVIDED IN SUBDIVISION EIGHT OF THIS
SECTION OR TO IMPLEMENT ANY TRUE-UP MECHANISM ADOPTED BY THE COMMISSION
AS DESCRIBED IN PARAGRAPH (F) OF THIS SUBDIVISION, THE COMMISSION MAY
NOT AMEND, MODIFY, OR TERMINATE THE FINANCING ORDER BY ANY SUBSEQUENT
ACTION OR REDUCE, IMPAIR, POSTPONE, TERMINATE, OR OTHERWISE ADJUST STORM
RECOVERY CHARGES APPROVED IN THE FINANCING ORDER, PROVIDED NOTHING SHALL
PRECLUDE LIMITATION OR ALTERATION IF AND WHEN FULL COMPENSATION, INCLUD-
ING FULL COST RECOVERY, IS MADE FOR THE FULL PROTECTION OF THE STORM
RECOVERY CHARGES COLLECTED PURSUANT TO A FINANCING ORDER AND THE FULL
PROTECTION OF THE HOLDERS OF STORM RECOVERY BONDS AND ANY ASSIGNEE OR
FINANCING PARTY;
(H) SPECIFY HOW AMOUNTS COLLECTED FROM CONSUMERS SHALL BE ALLOCATED
BETWEEN STORM RECOVERY CHARGES AND OTHER CHARGES;
(I) PROVIDE THAT A FINANCING ORDER REMAINS IN EFFECT UNTIL THE STORM
RECOVERY BONDS ISSUED PURSUANT TO THE ORDER HAVE BEEN INDEFEASIBLY PAID
IN FULL AND THE FINANCING COSTS OF SUCH BONDS HAVE BEEN RECOVERED IN
FULL;
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(J) PROVIDE THAT A FINANCING ORDER SHALL REMAIN IN EFFECT AND UNABATED
NOTWITHSTANDING THE REORGANIZATION, BANKRUPTCY, OR OTHER INSOLVENCY
PROCEEDINGS, OR MERGER OR SALE, OF THE APPLICABLE ELECTRIC CORPORATION
OR ITS SUCCESSORS OR ASSIGNEES; AND
(K) AUTHORIZE AND REQUIRE THE ELECTRIC CORPORATION, TO THE EXTENT THAT
ANY INTEREST IN STORM RECOVERY PROPERTY IS SOLD OR ASSIGNED, SHALL
CONTRACT WITH THE ASSIGNEE OR ANY FINANCING PARTY TO CONTINUE TO OPERATE
ITS SYSTEM TO PROVIDE SERVICE TO ITS CONSUMERS, COLLECT AMOUNTS IN
RESPECT OF THE STORM RECOVERY CHARGES FOR THE BENEFIT AND ACCOUNT OF
SUCH ASSIGNEE OR FINANCING PARTY, AND ACCOUNT FOR AND REMIT SUCH AMOUNTS
TO OR FOR THE ACCOUNT OF SUCH ASSIGNEE OR FINANCING PARTY, INCLUDING
PURSUANT TO A SEQUESTRATION ORDER AUTHORIZED BY SUBDIVISION SIX OF
SECTION THREE HUNDRED THREE OR SUBDIVISION SEVEN OF SECTION THREE
HUNDRED FIVE OF THIS ARTICLE.
6. IN EACH FINANCING ORDER ISSUED TO OR ON BEHALF OF AN ELECTRIC
CORPORATION, THE COMMISSION SHALL:
(A) PRESCRIBE ANY LIMITATIONS ON POTENTIAL ASSIGNEES OF STORM RECOVERY
PROPERTY;
(B) AUTHORIZE AN ASSIGNEE WHICH IS A SUBSIDIARY OF AN ELECTRIC CORPO-
RATION AND WHICH ISSUES STORM RECOVERY BONDS OR ANOTHER ASSIGNEE WHICH
ISSUES STORM RECOVERY BONDS TO PROVIDE AND ESTABLISH IN ITS ORGANIZA-
TIONAL DOCUMENTS, PARTNERSHIP AGREEMENT, OR OPERATING AGREEMENT, AS
APPLICABLE, THAT IN ORDER FOR A PERSON TO FILE A VOLUNTARY BANKRUPTCY
PETITION ON BEHALF OF SUCH ASSIGNEE, THE PRIOR UNANIMOUS CONSENT OF THE
DIRECTORS, PARTNERS, OR MANAGERS, AS APPLICABLE, SHALL BE REQUIRED. IF
SO AUTHORIZED IN A FINANCING ORDER, ANY SUCH PROVISION SET FORTH IN THE
ORGANIZATIONAL DOCUMENTS, PARTNERSHIP AGREEMENT, OR OPERATING AGREEMENT
OF SUCH AN ASSIGNEE SHALL CONSTITUTE A LEGAL, VALID, AND BINDING AGREE-
MENT OF THE SHAREHOLDERS, PARTNERS, OR MEMBERS, AS APPLICABLE, OF SUCH
ASSIGNEE AND SHALL BE ENFORCEABLE AGAINST SUCH SHAREHOLDERS, PARTNERS,
OR MEMBERS; AND
(C) PROVIDE THAT THE CREATION OF THE STORM RECOVERY PROPERTY PURSUANT
TO PARAGRAPH (D) OF SUBDIVISION FIVE OF THIS SECTION SHALL BE CONDI-
TIONED UPON, AND SHALL BE SIMULTANEOUS WITH EITHER: (I) THE SALE,
ASSIGNMENT, OR OTHER TRANSFER OF THE STORM RECOVERY PROPERTY TO AN
ASSIGNEE; OR (II) THE ISSUANCE OF THE STORM RECOVERY BONDS AND THE SECU-
RITY INTEREST CREATED IN THE STORM RECOVERY PROPERTY TO SECURE STORM
RECOVERY BONDS.
7. AFTER THE ISSUANCE OF A FINANCING ORDER, AND WITHIN SUCH TIME AND
SUBJECT TO ANY OTHER LIMITATIONS SET FORTH IN THE FINANCING ORDER, THE
ELECTRIC CORPORATION RETAINS DISCRETION REGARDING WHETHER TO SELL,
ASSIGN, OR OTHERWISE TRANSFER STORM RECOVERY PROPERTY OR TO CAUSE THE
STORM RECOVERY BONDS TO BE ISSUED, INCLUDING THE RIGHT TO DEFER OR POST-
PONE SUCH SALE, ASSIGNMENT, TRANSFER, OR ISSUANCE.
8. AT THE REQUEST OF AN ELECTRIC CORPORATION, THE COMMISSION MAY
COMMENCE A PROCEEDING AND ISSUE A SUBSEQUENT FINANCING ORDER THAT
PROVIDES FOR THE REFINANCING, RETIRING, OR REFUNDING OF STORM RECOVERY
BONDS ISSUED BY AN AFFILIATE OF THE ELECTRICAL CORPORATION PURSUANT TO
THE ORIGINAL FINANCING ORDER IF THE COMMISSION FINDS THAT THE SUBSEQUENT
FINANCING ORDER SATISFIES ALL OF THE CRITERIA SPECIFIED IN SUBDIVISION
THREE OF THIS SECTION OR THAT PROVIDES FOR AN ACCOUNTING, REFUNDING, OR
CREDITING TO CONSUMERS OF THE PROCEEDS OF ANY TRUE-UP MECHANISM ADOPTED
BY THE COMMISSION IN ACCORDANCE WITH PARAGRAPH (F) OF SUBDIVISION FIVE
OF THIS SECTION. EFFECTIVE ON RETIREMENT OF THE REFUNDED STORM RECOVERY
BONDS AND THE ISSUANCE OF NEW STORM RECOVERY BONDS, THE COMMISSION MAY
A. 8082 8
ADJUST THE RELATED STORM RECOVERY CHARGES ACCORDINGLY OR ESTABLISH
SUBSTITUTE STORM RECOVERY CHARGES.
9. (A) THE COMMISSION SHALL NOT, IN EXERCISING ITS POWERS AND CARRYING
OUT ITS DUTIES REGARDING ANY MATTER WITHIN ITS AUTHORITY PURSUANT TO
THIS ARTICLE, CONSIDER THE STORM RECOVERY BONDS ISSUED PURSUANT TO A
FINANCING ORDER TO BE THE DEBT OF THE ELECTRIC CORPORATION OTHER THAN
FOR FEDERAL INCOME TAX PURPOSES, CONSIDER THE STORM RECOVERY CHARGES
PAID UNDER THE FINANCING ORDER TO BE THE REVENUE OF THE ELECTRIC CORPO-
RATION FOR ANY PURPOSE, OR CONSIDER THE STORM RECOVERY COSTS OR FINANC-
ING COSTS SPECIFIED IN THE FINANCING ORDER TO BE THE COSTS OF THE ELEC-
TRIC CORPORATION, NOR MAY THE COMMISSION DETERMINE ANY ACTION TAKEN BY
AN ELECTRIC CORPORATION WHICH IS NOT CONSISTENT WITH THE FINANCING ORDER
TO BE UNJUST OR UNREASONABLE.
(B) THE COMMISSION MAY NOT ORDER OR OTHERWISE DIRECTLY OR INDIRECTLY
REQUIRE AN ELECTRIC CORPORATION TO USE STORM RECOVERY BONDS TO FINANCE
ANY PROJECT, ADDITION, PLANT, FACILITY, EXTENSION, CAPITAL IMPROVEMENT,
EQUIPMENT, OR ANY OTHER EXPENDITURE. AFTER THE ISSUANCE OF A FINANCING
ORDER, THE ELECTRIC CORPORATION RETAINS SOLE DISCRETION WHETHER TO CAUSE
THE STORM RECOVERY BONDS TO BE ISSUED, INCLUDING THE RIGHT TO DEFER OR
POSTPONE SUCH SALE, ASSIGNMENT, TRANSFER OR ISSUANCE. NOTHING SHALL
PREVENT THE ELECTRIC CORPORATION FROM ABANDONING THE ISSUANCE OF STORM
RECOVERY BONDS UNDER THE FINANCING ORDER BY FILING WITH THE COMMISSION A
STATEMENT OF ABANDONMENT AND THE REASONS THEREFOR. THE COMMISSION SHALL
NOT REFUSE TO ALLOW AN ELECTRIC CORPORATION TO RECOVER STORM RECOVERY
COSTS IN AN OTHERWISE PERMISSIBLE FASHION OR REFUSE OR CONDITION AUTHOR-
IZATION OR APPROVAL OF THE ISSUANCE AND SALE BY AN ELECTRIC CORPORATION
OF SECURITIES OR THE ASSUMPTION BY THE ELECTRIC CORPORATION OF LIABIL-
ITIES OR OBLIGATIONS, SOLELY BECAUSE OF THE POTENTIAL AVAILABILITY OF
STORM RECOVERY BOND FINANCING.
10. ALL FINANCING ORDERS ISSUED BY THE COMMISSION SHALL BE OPERATIVE
AND IN FULL FORCE AND EFFECT ON THE DATE OF THE ISSUANCE OF SUCH ORDER.
11. NOTWITHSTANDING ANY OTHER LAW TO THE CONTRARY, ANY ACTION, SUIT OR
PROCEEDING TO WHICH THE COMMISSION OR THE STORM RECOVERY BOND ISSUER MAY
BE A PARTY, IN WHICH ANY QUESTION ARISES AS TO THE VALIDITY OF THIS
ARTICLE OR ANY FINANCING ORDER, SHALL BE PREFERRED OVER ALL OTHER CIVIL
CAUSES IN ALL COURTS OF THE STATE, EXCEPT ELECTION MATTERS, AND SHALL BE
HEARD AND DETERMINED IN PREFERENCE TO ALL OTHER CIVIL BUSINESS PENDING
THEREIN, EXCEPT ELECTION MATTERS, IRRESPECTIVE OF POSITION ON THE CALEN-
DAR. SUCH PREFERENCE SHALL ALSO BE GRANTED UPON PETITION OF COUNSEL TO
THE COMMISSION IN ANY ACTION OR PROCEEDING QUESTIONING THE VALIDITY OF
ANY FINANCING ORDER OR OTHER DECISION MADE BY THE COMMISSION UNDER THIS
ARTICLE IN WHICH SUCH COUNSEL MAY BE ALLOWED TO INTERVENE. NOTWITH-
STANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE VALIDITY OF ANY
FINANCING ORDER OR OTHER DECISION MAY ONLY BE CHALLENGED BY AN AGGRIEVED
PARTY PURSUANT TO AN ACTION, SUIT OR PROCEEDING FILED WITHIN THIRTY DAYS
AFTER SUCH FINANCING ORDER BECOMES FINAL; PROVIDED, HOWEVER, THAT ANY
SUCH ACTION, SUIT OR PROCEEDING AND ALL SUPPORTING PAPERS SHALL BE
COMMENCED DIRECTLY IN THE SUPREME COURT, APPELLATE DIVISION, THIRD JUDI-
CIAL DEPARTMENT.
§ 303. STORM RECOVERY PROPERTY. 1. ALL STORM RECOVERY PROPERTY SPECI-
FIED IN A FINANCING ORDER SHALL CONSTITUTE AN EXISTING, PRESENT PROPERTY
RIGHT. SUCH PROPERTY SHALL EXIST WHETHER OR NOT THE REVENUES OR PROCEEDS
ARISING FROM THE PROPERTY HAVE BEEN BILLED, HAVE ACCRUED, OR HAVE BEEN
COLLECTED.
2. STORM RECOVERY PROPERTY SPECIFIED IN A FINANCING ORDER SHALL
CONTINUE TO EXIST UNTIL THE STORM RECOVERY BONDS ISSUED PURSUANT TO SUCH
A. 8082 9
ORDER ARE PAID IN FULL AND ALL FINANCING COSTS OF THE BONDS HAVE BEEN
RECOVERED IN FULL.
3. ALL OR ANY PORTION OF STORM RECOVERY PROPERTY SPECIFIED IN A
FINANCING ORDER ISSUED TO AN ELECTRIC CORPORATION MAY BE SOLD, ASSIGNED,
OR TRANSFERRED TO A SUCCESSOR OR AN ASSIGNEE, INCLUDING AN AFFILIATE OR
AFFILIATES OF THE ELECTRIC CORPORATION OR ANY OTHER ASSIGNEE CREATED FOR
THE LIMITED PURPOSE OF ACQUIRING, OWNING, OR ADMINISTERING STORM RECOV-
ERY PROPERTY OR ISSUING STORM RECOVERY BONDS UNDER THE FINANCING ORDER.
ALL OR ANY PORTION OF STORM RECOVERY PROPERTY MAY BE ENCUMBERED BY A
SECURITY INTEREST TO SECURE STORM RECOVERY BONDS ISSUED PURSUANT TO THE
ORDER AND OTHER FINANCING COSTS. EACH SUCH SALE, ASSIGNMENT, TRANSFER,
OR SECURITY INTEREST GRANTED BY AN ELECTRIC CORPORATION OR AFFILIATE OF
AN ELECTRIC CORPORATION OR ASSIGNEE SHALL BE CONSIDERED TO BE A TRANS-
ACTION IN THE ORDINARY COURSE OF BUSINESS.
4. THE DESCRIPTION OF STORM RECOVERY PROPERTY BEING SOLD, ASSIGNED, OR
TRANSFERRED TO AN ASSIGNEE IN ANY SALE AGREEMENT, PURCHASE AGREEMENT, OR
OTHER TRANSFER AGREEMENT OR CREATED AND RECOGNIZED AS PROPERTY OF AN
ASSIGNEE IN ACCORDANCE WITH SUBDIVISION NINE OF THIS SECTION, BEING
ENCUMBERED TO A SECURED PARTY IN ANY SECURITY AGREEMENT, PLEDGE AGREE-
MENT, OR OTHER SECURITY DOCUMENT, OR INDICATED IN ANY FINANCING STATE-
MENT IS ONLY SUFFICIENT IF SUCH DESCRIPTION OR INDICATION REFERS TO THE
SPECIFIC FINANCING ORDER THAT CREATED THE STORM RECOVERY PROPERTY AND
STATES THAT SUCH AGREEMENT OR FINANCING STATEMENT COVERS ALL OR PART OF
SUCH STORM RECOVERY PROPERTY DESCRIBED IN SUCH FINANCING ORDER. A
DESCRIPTION OF STORM RECOVERY PROPERTY IN A FINANCING STATEMENT SHALL BE
SUFFICIENT IF IT REFERS TO THE FINANCING ORDER CREATING THE STORM RECOV-
ERY PROPERTY. THIS SUBDIVISION SHALL APPLY TO ALL PURPORTED SALES,
ASSIGNMENTS, OR TRANSFERS OF, AND ALL PURPORTED LIENS OR SECURITY INTER-
ESTS IN, STORM RECOVERY PROPERTY, REGARDLESS OF WHETHER THE RELATED SALE
AGREEMENT, PURCHASE AGREEMENT, OTHER TRANSFER AGREEMENT, SECURITY AGREE-
MENT, PLEDGE AGREEMENT, OR OTHER SECURITY DOCUMENT WAS ENTERED INTO, OR
ANY FINANCING STATEMENT WAS FILED, BEFORE OR AFTER THE EFFECTIVE DATE OF
THIS ARTICLE.
5. EVERY ELECTRIC BILL ISSUED BY AN ELECTRIC CORPORATION THAT HAS
OBTAINED A FINANCING ORDER AND CAUSED STORM RECOVERY BONDS TO BE ISSUED
SHALL COMPLY WITH THE PROVISIONS OF THIS SUBDIVISION; PROVIDED, HOWEVER,
THAT THE FAILURE OF AN ELECTRIC CORPORATION TO COMPLY WITH THIS SUBDIVI-
SION SHALL NOT INVALIDATE, IMPAIR, OR AFFECT ANY FINANCING ORDER, STORM
RECOVERY PROPERTY, STORM RECOVERY CHARGE, OR STORM RECOVERY BONDS.
EVERY SUCH BILL SHALL:
(A) EXPLICITLY REFLECT THAT A PORTION OF THE CHARGES ON SUCH BILL
REPRESENTS STORM RECOVERY CHARGES APPROVED IN A FINANCING ORDER ISSUED
TO THE ELECTRIC CORPORATION AND, IF THE STORM RECOVERY PROPERTY HAS BEEN
TRANSFERRED TO, OR CREATED AT, AN ASSIGNEE, MUST INCLUDE A STATEMENT TO
THE EFFECT THAT THE ASSIGNEE IS THE OWNER OF THE RIGHTS TO STORM RECOV-
ERY CHARGES AND THAT THE ELECTRIC CORPORATION OR OTHER ENTITY, IF APPLI-
CABLE, IS ACTING AS A COLLECTION AGENT OR SERVICER FOR THAT ASSIGNEE.
THE TARIFF APPLICABLE TO CONSUMERS MUST INDICATE THE STORM RECOVERY
CHARGE AND THE OWNERSHIP OF THE CHARGE.
(B) INCLUDE THE STORM RECOVERY CHARGE ON EACH CONSUMER'S BILL AS A
SEPARATE LINE ITEM AND INCLUDE EITHER THE RATE OR THE AMOUNT OF THE
CHARGE ON EACH BILL.
6. IF AN ELECTRIC CORPORATION DEFAULTS ON ANY REQUIRED PAYMENT OF
CHARGES ARISING FROM STORM RECOVERY PROPERTY SPECIFIED IN A FINANCING
ORDER, THE SUPREME COURT, ALBANY COUNTY, UPON PETITION BY AN INTERESTED
PARTY, AND WITHOUT LIMITING ANY OTHER REMEDIES AVAILABLE TO THE APPLYING
A. 8082 10
PARTY, SHALL ORDER THE SEQUESTRATION AND PAYMENT OF THE REVENUES ARISING
FROM THE STORM RECOVERY PROPERTY TO THE FINANCING PARTIES OR THEIR
REPRESENTATIVES. ANY SUCH ORDER SHALL REMAIN IN FULL FORCE AND EFFECT
NOTWITHSTANDING ANY REORGANIZATION, BANKRUPTCY, OR OTHER INSOLVENCY
PROCEEDINGS WITH RESPECT TO THE ELECTRIC CORPORATION OR ITS SUCCESSORS
OR ASSIGNEES.
7. THE INTEREST OF AN ASSIGNEE OR SECURED PARTY IN STORM RECOVERY
PROPERTY SPECIFIED IN A FINANCING ORDER SHALL NOT BE SUBJECT TO SETOFF,
COUNTERCLAIM, SURCHARGE, OR DEFENSE BY THE ELECTRIC CORPORATION OR ANY
OTHER PERSON, OR IN CONNECTION WITH THE REORGANIZATION, BANKRUPTCY, OR
OTHER INSOLVENCY OF THE ELECTRIC CORPORATION OR ANY OTHER ENTITY.
8. ANY SUCCESSOR TO AN ELECTRIC CORPORATION, WHETHER PURSUANT TO ANY
REORGANIZATION, BANKRUPTCY, OR OTHER INSOLVENCY PROCEEDING OR WHETHER
PURSUANT TO ANY MERGER OR ACQUISITION, SALE, OR OTHER BUSINESS COMBINA-
TION, OR TRANSFER BY OPERATION OF LAW, AS A RESULT OF ELECTRIC CORPO-
RATION RESTRUCTURING OR OTHERWISE, SHALL PERFORM AND SATISFY ALL OBLI-
GATIONS OF, AND HAVE THE SAME RIGHTS UNDER A FINANCING ORDER AS THE
ELECTRIC CORPORATION UNDER THE FINANCING ORDER IN THE SAME MANNER AND TO
THE SAME EXTENT AS THE ELECTRIC CORPORATION, INCLUDING COLLECTION AND
PAYMENT OF ANY REVENUES AND PROCEEDS OF THE STORM RECOVERY PROPERTY TO
ANY PERSON ENTITLED THERETO.
9. UPON PETITION BY THE ELECTRIC CORPORATION, STORM RECOVERY PROPERTY
MAY BE IMMEDIATELY CREATED BY OPERATION OF LAW ON THE LATTER OF THE
ISSUANCE OF A FINANCING ORDER, OR THE ISSUANCE OF THE STORM RECOVERY
BONDS BY AN ASSIGNEE. STORM RECOVERY PROPERTY CREATED IN ACCORDANCE
WITH THIS SUBDIVISION SHALL, UPON CREATION, BELONG TO THE ASSIGNEE AND
SUCH ASSIGNEE WILL HAVE THE SAME RIGHTS TO AND BENEFITS ARISING FROM THE
STORM RECOVERY PROPERTY AS IT WOULD HAVE IF IT ACQUIRED SUCH STORM
RECOVERY PROPERTY AS A RESULT OF A PURCHASE, ACQUISITION OR OTHER TRANS-
FER FROM THE ELECTRICAL CORPORATION.
§ 304. SALE, ASSIGNMENT, OR TRANSFER OF STORM RECOVERY PROPERTY. 1.
THE SALE, ASSIGNMENT, OR OTHER TRANSFER OF STORM RECOVERY PROPERTY BY AN
ELECTRIC CORPORATION TO AN ASSIGNEE THAT THE PARTIES HAVE IN THE GOVERN-
ING CONTRACT EXPRESSLY STATED TO BE A SALE OR OTHER ABSOLUTE TRANSFER
SHALL CONSTITUTE AN ABSOLUTE TRANSFER AND TRUE SALE OF, AND NOT A SECU-
RITY INTEREST IN, THE TRANSFEROR'S RIGHT, TITLE, AND INTEREST IN, TO,
AND UNDER SUCH STORM RECOVERY PROPERTY, OTHER THAN FOR FEDERAL AND STATE
INCOME TAX PURPOSES. THE PARTIES' CHARACTERIZATION OF SUCH TRANSACTION
AS A SALE OF AN INTEREST IN STORM RECOVERY PROPERTY SHALL BE CONCLUSIVE
THAT THE TRANSACTION IS A TRUE SALE AND THAT OWNERSHIP HAS PASSED TO THE
PARTY CHARACTERIZED AS THE PURCHASER, REGARDLESS OF WHETHER THE PURCHAS-
ER HAS POSSESSION OF ANY DOCUMENTS EVIDENCING OR PERTAINING TO THE
INTEREST. AFTER ANY SUCH TRANSACTION, THE STORM RECOVERY PROPERTY SHALL
NOT BE SUBJECT TO ANY CLAIMS OF THE TRANSFEROR OR THE TRANSFEROR'S CRED-
ITORS, OTHER THAN CREDITORS HOLDING A PRIOR SECURITY INTEREST IN THE
STORM RECOVERY PROPERTY PERFECTED UNDER SECTION THREE HUNDRED SEVEN OF
THIS ARTICLE.
2. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE CHARAC-
TERIZATION OF ANY SALE, ASSIGNMENT, OR OTHER TRANSFER AS A TRUE SALE OR
OTHER ABSOLUTE TRANSFER PURSUANT TO SUBDIVISION ONE OF THIS SECTION AND
THE CORRESPONDING CHARACTERIZATION OF THE ASSIGNEE'S PROPERTY INTEREST
SHALL BE DETERMINATIVE AND CONCLUSIVE IRRESPECTIVE OF, AND NOT AFFECTED
OR IMPAIRED BY, THE EXISTENCE OF ANY OR ALL OF THE FOLLOWING CIRCUM-
STANCES:
(A) COMMINGLING OF AMOUNTS ARISING WITH RESPECT TO THE STORM RECOVERY
PROPERTY WITH OTHER AMOUNTS;
A. 8082 11
(B) THE RETENTION BY THE TRANSFEROR OF A PARTIAL OR RESIDUAL INTEREST,
INCLUDING AN EQUITY INTEREST OR ENTITLEMENT TO ANY SURPLUS, IN THE STORM
RECOVERY PROPERTY, WHETHER DIRECT OR INDIRECT, OR WHETHER SUBORDINATE OR
OTHERWISE;
(C) ANY RECOURSE THAT THE ASSIGNEE MAY HAVE AGAINST THE TRANSFEROR,
EXCEPT THAT ANY SUCH RECOURSE SHALL NOT BE CREATED, CONTINGENT UPON, OR
OTHERWISE OCCURRING OR RESULTING FROM THE INABILITY OR FAILURE OF ONE OR
MORE OF THE TRANSFEROR'S CONSUMERS TO TIMELY PAY ALL OR A PORTION OF THE
STORM RECOVERY CHARGE;
(D) ANY INDEMNIFICATIONS, OBLIGATIONS, OR REPURCHASE RIGHTS MADE OR
PROVIDED BY THE TRANSFEROR, EXCEPT THAT SUCH INDEMNITY OR REPURCHASE
RIGHTS SHALL NOT BE BASED SOLELY UPON THE INABILITY OR FAILURE OF A
TRANSFEROR'S CONSUMERS TO TIMELY PAY ALL OR A PORTION OF THE STORM
RECOVERY CHARGE;
(E) THE TRANSFEROR ACTING AS THE COLLECTOR OF THE STORM RECOVERY
CHARGES OR THE EXISTENCE OF ANY CONTRACT DESCRIBED IN PARAGRAPH (K) OF
SUBDIVISION FIVE OF SECTION THREE HUNDRED TWO OF THIS ARTICLE;
(F) THE CONTRARY OR OTHER TREATMENT OF THE SALE, ASSIGNMENT, OR OTHER
TRANSFER FOR TAX, FINANCIAL REPORTING, OR OTHER PURPOSES;
(G) THE GRANTING OR PROVIDING TO HOLDERS OF THE STORM RECOVERY BONDS
OF A PREFERRED RIGHT TO THE STORM RECOVERY PROPERTY OR CREDIT ENHANCE-
MENT BY THE ELECTRIC CORPORATION OR ITS AFFILIATES WITH RESPECT TO THE
STORM RECOVERY BONDS; OR
(H) THE STATUS OF THE ASSIGNEE AS A DIRECT OR INDIRECT WHOLLY OWNED
SUBSIDIARY OR OTHER AFFILIATE OF THE ELECTRIC CORPORATION. THE SEPARATE
JURIDICAL PERSONALITY OF ANY ASSIGNEE OF STORM RECOVERY PROPERTY WHICH
IS A SUBSIDIARY OR AFFILIATE OF THE ELECTRIC CORPORATION SHALL NOT BE
DISREGARDED DUE TO THE FACT THAT THE ASSIGNEE AND THE ELECTRIC CORPO-
RATION SHARE ANY ONE OR MORE INCIDENTS OF CONTROL, INCLUDING COMMON
MANAGERS, OFFICERS, DIRECTORS, MEMBERS, ACCOUNTING OR ADMINISTRATIVE
SYSTEMS, CONSOLIDATED TAX RETURNS, OR OFFICE SPACE, THAT THE ASSIGNEE
MAY BE A DISREGARDED ENTITY FOR TAX PURPOSES, THAT THE ELECTRIC CORPO-
RATION CAUSED THE FORMATION OF THE ASSIGNEE, THAT A CONTRACT BY THE
ELECTRIC CORPORATION AND THE ASSIGNEE DESCRIBED IN PARAGRAPH (K) OF
SUBDIVISION FIVE OF SECTION THREE HUNDRED TWO OF THIS ARTICLE EXISTS,
THAT THE ASSIGNEE HAS NO OTHER BUSINESS OTHER THAN PERTAINING TO THE
STORM RECOVERY PROPERTY, THAT THE CAPITALIZATION OF THE ASSIGNEE IS
LIMITED TO AMOUNTS REQUIRED FOR COMPLIANCE WITH CERTAIN APPLICABLE
FEDERAL INCOME TAX LAWS AND REVENUE PROCEDURES, OR THAT OTHER FACTORS
USED IN APPLYING A SINGLE BUSINESS ENTERPRISE TEST TO JURIDICAL PERSONS
ARE PRESENT.
3. ANY RIGHT THAT AN ELECTRIC CORPORATION HAS IN THE STORM RECOVERY
PROPERTY PRIOR TO ITS SALE, ASSIGNMENT, OR TRANSFER SHALL BE IN THE FORM
OF A CONTRACTUAL RIGHT OR CHOSE IN ACTION NOTWITHSTANDING ANY CONTRARY
TREATMENT THEREOF FOR ACCOUNTING OR TAX PURPOSES. THE OWNERSHIP OF AN
INTEREST IN STORM RECOVERY PROPERTY IS VOLUNTARILY TRANSFERRED BY A
CONTRACT BETWEEN THE OWNER AND THE ASSIGNEE THAT PURPORTS TO TRANSFER
THE OWNERSHIP OF THAT INTEREST. UNLESS OTHERWISE PROVIDED, THE TRANSFER
OF OWNERSHIP BETWEEN THE PARTIES SHALL BE EFFECTIVE AS SOON AS THERE IS
WRITTEN AGREEMENT ON THE INTEREST, THE PURCHASE PRICE IS FIXED, AND THE
FINANCING ORDER HAS BEEN ISSUED. SUCH TRANSFER SHALL BE PERFECTED AND
TAKE EFFECT AGAINST ALL THIRD PARTIES INCLUDING, BUT NOT LIMITED TO,
SUBSEQUENT LIEN CREDITORS WHEN THE TRANSFER HAS BECOME EFFECTIVE BETWEEN
THE PARTIES AND WHEN A FINANCING STATEMENT GIVING NOTICE OF THE SALE,
ASSIGNMENT, OR TRANSFER IS FILED IN ACCORDANCE WITH SUBDIVISION FOUR OF
THIS SECTION. DELIVERY OF SUCH AN INTEREST IN STORM RECOVERY PROPERTY
A. 8082 12
SHALL TAKE PLACE BY OPERATION OF LAW UPON THE FILING OF THE FINANCING
STATEMENT.
4. FINANCING STATEMENTS REQUIRED TO BE FILED UNDER THIS SECTION SHALL
BE FILED, INDEXED, MAINTAINED, AND CONTINUED IN THE SAME MANNER AND IN
THE SAME SYSTEM OF RECORDS MAINTAINED FOR THE FILING OF FINANCING STATE-
MENTS UNDER ARTICLE NINE OF THE UNIFORM COMMERCIAL CODE. THE FILING OF
SUCH FINANCING STATEMENT SHALL BE THE ONLY METHOD OF PERFECTING A SALE,
ASSIGNMENT, OR TRANSFER OF STORM RECOVERY PROPERTY. THE SALE, ASSIGN-
MENT, OR TRANSFER OF AN INTEREST IN STORM RECOVERY PROPERTY PERFECTED BY
FILING A FINANCING STATEMENT SHALL BE EFFECTIVE AGAINST ANY CONSUMERS
OWING PAYMENT OF THE STORM RECOVERY CHARGES, CREDITORS OF THE TRANSFE-
ROR, SUBSEQUENT TRANSFEREES, AND ALL OTHER THIRD PERSONS NOTWITHSTANDING
THE ABSENCE OF ACTUAL KNOWLEDGE OF OR NOTICE TO SUCH CONSUMERS OF SUCH
SALE, ASSIGNMENT, OR TRANSFER.
5. THE PRIORITY OF THE CONFLICTING OWNERSHIP INTERESTS OF ASSIGNEES IN
THE SAME INTEREST OR RIGHTS IN ANY STORM RECOVERY PROPERTY SHALL BE
DETERMINED AS FOLLOWS:
(A) CONFLICTING PERFECTED INTERESTS OR RIGHTS OF ASSIGNEES RANK
ACCORDING TO PRIORITY IN TIME OF PERFECTION.
(B) A PERFECTED INTEREST OR RIGHT OF AN ASSIGNEE HAS PRIORITY OVER A
CONFLICTING UNPERFECTED INTEREST OR RIGHT OF AN ASSIGNEE.
(C) A PERFECTED INTEREST OR RIGHT OF AN ASSIGNEE HAS PRIORITY OVER A
PERSON WHO BECOMES A LIEN CREDITOR AFTER THE PERFECTION OF SUCH
ASSIGNEE'S INTEREST OR RIGHT.
6. THE PRIORITY OF A SALE, ASSIGNMENT, OR TRANSFER PERFECTED UNDER
THIS SECTION SHALL NOT BE IMPAIRED BY ANY LATER MODIFICATION OF THE
FINANCING ORDER OR STORM RECOVERY PROPERTY OR BY THE COMMINGLING OF
FUNDS ARISING FROM STORM RECOVERY PROPERTY WITH OTHER FUNDS. ANY OTHER
SECURITY INTEREST THAT MAY APPLY TO SUCH FUNDS, OTHER THAN A SECURITY
INTEREST PERFECTED UNDER SECTION THREE HUNDRED FIVE OF THIS ARTICLE,
SHALL BE TERMINATED WHEN THOSE FUNDS ARE TRANSFERRED TO A SEGREGATED
ACCOUNT FOR THE ASSIGNEE OR A FINANCING PARTY. IF STORM RECOVERY PROP-
ERTY HAS BEEN TRANSFERRED TO AN ASSIGNEE OR FINANCING PARTY, ANY
PROCEEDS OF SUCH PROPERTY SHALL BE HELD FOR AND DELIVERED TO THE ASSIG-
NEE OR FINANCING PARTY BY ANY COLLECTOR UNDER ANY CONTRACT DESCRIBED IN
PARAGRAPH (K) OF SUBDIVISION FIVE OF SECTION THREE HUNDRED TWO OF THIS
ARTICLE AS A MANDATARY AND FIDUCIARY.
§ 305. SECURITY INTERESTS. 1. THE PROVISIONS OF ARTICLE NINE OF THE
UNIFORM COMMERCIAL CODE RELATING TO SECURED TRANSACTIONS SHALL NOT APPLY
TO STORM RECOVERY PROPERTY OR ANY RIGHT, TITLE, OR INTEREST OF A CORPO-
RATION OR ASSIGNEE THEREIN, WHETHER BEFORE OR AFTER THE ISSUANCE OF A
FINANCING ORDER, EXCEPT AS PROVIDED IN SUBDIVISION ONE OF SECTION THREE
HUNDRED SIX OF THIS ARTICLE. IN ADDITION, SUCH RIGHT, TITLE, OR INTER-
EST PERTAINING TO A FINANCING ORDER, INCLUDING BUT NOT LIMITED TO, THE
ASSOCIATED STORM RECOVERY PROPERTY, AND ANY REVENUES, COLLECTIONS,
CLAIMS, RIGHTS TO PAYMENT, PAYMENTS, MONEY, OR PROCEEDS OF OR ARISING
FROM STORM RECOVERY CHARGES PURSUANT TO SUCH ORDER, SHALL NOT BE DEEMED
PROCEEDS OF ANY RIGHT OR INTEREST OTHER THAN OF THE FINANCING ORDER AND
THE STORM RECOVERY PROPERTY ARISING FROM THE FINANCING ORDER. ALL
REVENUES AND COLLECTIONS RESULTING FROM STORM RECOVERY PROPERTY SHALL
CONSTITUTE PROCEEDS ONLY OF THE STORM RECOVERY PROPERTY ARISING FROM THE
FINANCING ORDER.
2. EXCEPT TO THE EXTENT PROVIDED IN THIS ARTICLE WITH RESPECT TO
FILINGS OF FINANCING STATEMENTS OR CONTROL OF DEPOSIT ACCOUNTS OR
INVESTMENT PROPERTY AS ORIGINAL COLLATERAL, THE CREATION, ATTACHMENT,
GRANTING, PERFECTION, AND PRIORITY OF SECURITY INTERESTS IN STORM RECOV-
A. 8082 13
ERY PROPERTY TO SECURE STORM RECOVERY BONDS SHALL BE GOVERNED SOLELY BY
THIS ARTICLE AND NOT BY THE UNIFORM COMMERCIAL CODE.
3. (A) A SECURITY INTEREST IN STORM RECOVERY PROPERTY IS VALID AND
ENFORCEABLE AGAINST THE ELECTRIC CORPORATION AND ITS SUCCESSOR OR AN
ASSIGNEE AND THIRD PARTIES AND ATTACHES TO STORM RECOVERY PROPERTY ONLY
AFTER ALL OF THE FOLLOWING CONDITIONS ARE MET:
(I) THE ISSUANCE OF A FINANCING ORDER;
(II) THE EXECUTION AND DELIVERY OF A SECURITY AGREEMENT WITH A FINANC-
ING PARTY IN CONNECTION WITH THE ISSUANCE OF STORM RECOVERY BONDS; AND
(III) THE RECEIPT OF VALUE FOR THE STORM RECOVERY BONDS.
(B) A SECURITY INTEREST ATTACHES TO STORM RECOVERY PROPERTY WITHOUT
PHYSICAL DELIVERY OF COLLATERAL OR OTHER ACT WHEN ALL OF THE FOREGOING
CONDITIONS HAVE BEEN MET, UNLESS THE SECURITY AGREEMENT EXPRESSLY POST-
PONES THE TIME OF ATTACHMENT.
4. A SECURITY INTEREST IN STORM RECOVERY PROPERTY IS PERFECTED ONLY IF
IT HAS ATTACHED AND A FINANCING STATEMENT INDICATING THE STORM RECOVERY
PROPERTY COLLATERAL COVERED THEREBY HAS BEEN FILED. A FINANCING STATE-
MENT MUST BE FILED TO PERFECT ALL SECURITY INTERESTS AND LIENS IN STORM
RECOVERY PROPERTY UNDER THIS ARTICLE. A SECURITY INTEREST IN STORM
RECOVERY PROPERTY IS PERFECTED WHEN IT HAS ATTACHED AND WHEN THE APPLI-
CABLE FINANCING STATEMENT HAS BEEN FILED. THE INTEREST OF A SECURED
PARTY IS NOT PERFECTED UNLESS A FINANCING STATEMENT SUFFICIENT UNDER
THIS ARTICLE AND OTHERWISE IN ACCORDANCE WITH THE UNIFORM COMMERCIAL
CODE IS FILED, AND AFTER PERFECTION THE SECURED PARTY'S INTEREST CONTIN-
UES IN THE STORM RECOVERY PROPERTY AND ALL PROCEEDS OF SUCH STORM RECOV-
ERY PROPERTY, WHETHER OR NOT BILLED, ACCRUED, OR COLLECTED, AND WHETHER
OR NOT DEPOSITED INTO A DEPOSIT ACCOUNT AND HOWEVER EVIDENCED. A SECU-
RITY INTEREST IN PROCEEDS OF STORM RECOVERY PROPERTY IS A PERFECTED
SECURITY INTEREST IF THE SECURITY INTEREST IN THE STORM RECOVERY PROPER-
TY WAS PERFECTED UNDER THIS ARTICLE. FINANCING STATEMENTS REQUIRED TO
BE FILED PURSUANT TO THIS ARTICLE SHALL BE FILED, INDEXED, MAINTAINED,
AND CONTINUED IN THE SAME MANNER AND IN THE SAME SYSTEM OF RECORDS MAIN-
TAINED FOR THE FILING OF FINANCING STATEMENTS UNDER THE UNIFORM COMMER-
CIAL CODE, EXCEPT THAT THE REQUIREMENT AS TO CONTINUATION STATEMENTS
DOES NOT APPLY. THE FILING OF SUCH A FINANCING STATEMENT SHALL BE THE
ONLY METHOD OF PERFECTING A LIEN OR SECURITY INTEREST ON STORM RECOVERY
PROPERTY. THE FINANCING STATEMENT SHALL BE FILED AS IF THE DEBTOR NAMED
THEREIN WERE LOCATED IN THIS STATE.
5. THE PRIORITY OF THE CONFLICTING SECURITY INTERESTS OF SECURED
PARTIES IN THE SAME INTEREST OR RIGHTS IN ANY STORM RECOVERY PROPERTY IS
DETERMINED AS FOLLOWS:
(A) CONFLICTING PERFECTED SECURITY INTERESTS OF SECURED PARTIES RANK
ACCORDING TO PRIORITY IN TIME OF PERFECTION;
(B) A PERFECTED SECURITY INTEREST OF A SECURED PARTY HAS PRIORITY OVER
A CONFLICTING UNPERFECTED SECURITY INTEREST OF A SECURED PARTY; AND
(C) A PERFECTED SECURITY INTEREST OF A SECURED PARTY HAS PRIORITY OVER
A PERSON WHO BECOMES A LIEN CREDITOR AFTER THE PERFECTION OF SUCH
SECURED PARTY'S SECURITY INTEREST.
6. A PERFECTED SECURITY INTEREST IN STORM RECOVERY PROPERTY AND ALL
PROCEEDS OF SUCH STORM RECOVERY PROPERTY, WHETHER OR NOT BILLED,
ACCRUED, OR COLLECTED, AND WHETHER OR NOT DEPOSITED INTO A DEPOSIT
ACCOUNT AND HOWEVER EVIDENCED, SHALL HAVE PRIORITY OVER A CONFLICTING
LIEN OR PRIVILEGE OF ANY NATURE IN THE SAME COLLATERAL PROPERTY, EXCEPT
A SECURITY INTEREST IS SUBORDINATE TO THE RIGHTS OF A PERSON THAT
BECOMES A LIEN CREDITOR BEFORE THE PERFECTION OF SUCH SECURITY INTEREST.
A SECURITY INTEREST IN STORM RECOVERY PROPERTY WHICH QUALIFIES FOR
A. 8082 14
PRIORITY OVER A CONFLICTING SECURITY INTEREST, LIEN, OR PRIVILEGE ALSO
HAS PRIORITY OVER THE CONFLICTING SECURITY INTEREST, LIEN, OR PRIVILEGE
IN PROCEEDS OF THE STORM RECOVERY PROPERTY. THE RELATIVE PRIORITY OF A
PERFECTED SECURITY INTEREST OF A SECURED PARTY IS NOT ADVERSELY AFFECTED
BY ANY LIEN, PRIVILEGE, OR SECURITY INTEREST IN A DEPOSIT ACCOUNT OF THE
ELECTRIC CORPORATION THAT IS A COLLECTOR AS DESCRIBED IN PARAGRAPH (K)
OF SUBDIVISION FIVE OF SECTION THREE HUNDRED TWO OF THIS ARTICLE AND
INTO WHICH THE REVENUES ARE DEPOSITED. THE PRIORITY OF A SECURITY INTER-
EST PERFECTED UNDER THIS SECTION SHALL NOT BE DEFEATED OR IMPAIRED BY
ANY LATER MODIFICATION OF THE FINANCING ORDER OR STORM RECOVERY PROPERTY
OR BY THE COMMINGLING OF FUNDS ARISING FROM STORM RECOVERY PROPERTY WITH
OTHER FUNDS. ANY OTHER SECURITY INTEREST THAT MAY APPLY TO THOSE FUNDS
SHALL BE TERMINATED AS TO ALL FUNDS TRANSFERRED TO A SEGREGATED ACCOUNT
FOR THE BENEFIT OF AN ASSIGNEE OR A FINANCING PARTY OR TO AN ASSIGNEE OR
FINANCING PARTY DIRECTLY. THE PERFECTION BY CONTROL, THE EFFECT OF
PERFECTION BY CONTROL, AND THE PRIORITY OF A SECURITY INTEREST GRANTED
BY THE ISSUER OF AND SECURING STORM RECOVERY BONDS HELD BY A SECURED
PARTY HAVING CONTROL OF A SEGREGATED DEPOSIT ACCOUNT OR SECURITIES
ACCOUNT AS ORIGINAL COLLATERAL INTO WHICH REVENUES, COLLECTIONS, OR
PROCEEDS OF STORM RECOVERY PROPERTY ARE DEPOSITED OR CREDITED SHALL BE
GOVERNED BY SECTION 1-301 OF UNIFORM COMMERCIAL CODE.
7. IF A DEFAULT OCCURS UNDER THE TERMS OF ANY STORM RECOVERY BOND, THE
SECURED PARTY MAY FORECLOSE ON OR OTHERWISE ENFORCE THE SECURITY INTER-
EST IN ANY STORM RECOVERY PROPERTY AS IF IT WAS A SECURED PARTY UNDER
THE UNIFORM COMMERCIAL CODE. A SECURED PARTY HOLDING A SECURITY INTEREST
IN STORM RECOVERY PROPERTY SHALL BE ENTITLED TO EXERCISE ALL OF THE SAME
RIGHTS AND REMEDIES AVAILABLE TO A SECURED PARTY UNDER THE UNIFORM
COMMERCIAL CODE, TO THE SAME EXTENT AS IF THOSE RIGHTS AND REMEDIES WERE
SET FORTH IN THIS ARTICLE. THE COURT MAY ORDER THAT AMOUNTS ARISING
FROM STORM RECOVERY PROPERTY BE TRANSFERRED TO A SEPARATE ACCOUNT OF THE
SECURED PARTY FOR THE FINANCING PARTIES' BENEFIT, TO WHICH THEIR SECURI-
TY INTEREST SHALL APPLY. ON PETITION BY OR ON BEHALF OF A SECURED
PARTY, THE COURT SHALL ORDER THE SEQUESTRATION AND PAYMENT TO THE
FINANCING PARTIES OF REVENUES ARISING FROM THE STORM RECOVERY PROPERTY.
8. A SECURITY INTEREST CREATED UNDER THIS SECTION MAY PROVIDE FOR A
SECURITY INTEREST IN AFTER-ACQUIRED COLLATERAL. SUCH SECURITY INTEREST
SHALL NOT BE INVALID OR FRAUDULENT AGAINST CREDITORS SOLELY BECAUSE THE
GRANTOR OR THE ELECTRIC CORPORATION AS COLLECTOR OR SERVICER HAS THE
RIGHT OR ABILITY TO COMMINGLE THE COLLATERAL OR PROCEEDS, OR COLLECT,
COMPROMISE, ENFORCE, AND OTHERWISE DEAL WITH COLLATERAL.
9. ANY ACTION ARISING UNDER THE PROVISIONS OF THIS ARTICLE TO ENFORCE
A SECURITY INTEREST IN STORM RECOVERY PROPERTY, OR WHICH OTHERWISE
ASSERTS AN INTEREST IN, OR A RIGHT IN, TO OR AGAINST ANY STORM RECOVERY
PROPERTY, WHEREVER LOCATED OR DEEMED LOCATED, OR ANY SECURITY INTEREST
GOVERNED BY THIS ARTICLE, SHALL BE BROUGHT IN THE SUPREME COURT, ALBANY
COUNTY. SUCH ACTIONS SHALL BE GOVERNED BY THE APPLICABLE PROVISIONS OF
THE CIVIL PRACTICE LAW AND RULES AND OTHER LAW APPLICABLE TO EXECUTORY
PROCEEDINGS, INCLUDING PROVISIONAL REMEDIES, BUT ONLY TO THE EXTENT SUCH
LAWS ARE CONSISTENT WITH THE LANGUAGE AND PURPOSES OF THIS ARTICLE.
§ 306. CHOICE OF LAW; CONFLICTS. 1. THE LAW GOVERNING THE VALIDITY,
ENFORCEABILITY, ATTACHMENT, PERFECTION, PRIORITY, EXERCISE OF REMEDIES,
AND VENUE WITH RESPECT TO THE CREATION, RECOGNITION, SALE, ASSIGNMENT,
OR TRANSFER OF AN INTEREST OR RIGHT OR THE CREATION OF A SECURITY INTER-
EST IN ANY STORM RECOVERY PROPERTY SHALL BE EXCLUSIVELY THE LAWS OF THIS
STATE, WITHOUT APPLYING THIS STATE'S LAW ON CONFLICT OF LAWS AND
NOTWITHSTANDING ANY CONTRARY CONTRACTUAL PROVISION, EXCEPT AS PROVIDED
A. 8082 15
IN SUBDIVISION SIX OF SECTION THREE HUNDRED FIVE OF THIS ARTICLE. THE
VALIDITY, ENFORCEABILITY, ATTACHMENT, PERFECTION, PRIORITY, AND EXERCISE
OF REMEDIES WITH RESPECT TO THE CREATION, RECOGNITION, SALE, ASSIGNMENT,
OR TRANSFER OF AN INTEREST OR RIGHT OR THE CREATION OF A SECURITY INTER-
EST IN ANY STORM RECOVERY PROPERTY SHALL BE GOVERNED BY THIS ARTICLE,
AND SOLELY TO THE EXTENT NOT ADDRESSED BY THIS ARTICLE, BY THE UNIFORM
COMMERCIAL CODE AND OTHER LAWS OF THIS STATE. NOTWITHSTANDING THE
PRECEDING SENTENCE, THIS ARTICLE PROVIDES THAT THE UNIFORM COMMERCIAL
CODE APPLIES TO THE FILINGS OF FINANCING STATEMENTS REFERENCED IN THIS
ARTICLE, TO PERFECTION, THE EFFECT OF PERFECTION OR NONPERFECTION, AND
THE PRIORITY OF SECURITY INTERESTS HELD BY A SECURED PARTY HAVING
CONTROL OF DEPOSIT ACCOUNTS OR SECURITIES ACCOUNTS AS ORIGINAL COLLAT-
ERAL SECURING STORM RECOVERY BONDS, NOTWITHSTANDING THAT PROCEEDS OF
STORM RECOVERY CHARGES ARE DEPOSITED THEREIN, AND TO THE ENFORCEMENT OF
SECURITY INTERESTS IN STORM RECOVERY PROPERTY, IN EACH CASE SUBJECT TO
SUBDIVISION TWO OF THIS SECTION.
2. INSOFAR AS THE PROVISIONS OF THIS ARTICLE ARE INCONSISTENT WITH THE
PROVISIONS OF ANY OTHER LAW OR PART THEREOF REGARDING THE ATTACHMENT,
CREATION, PERFECTION, THE EFFECT OF PERFECTION, OR PRIORITY OF, AND
SALE, ASSIGNMENT, OR TRANSFER OF, OR SECURITY INTEREST IN, STORM RECOV-
ERY PROPERTY, OR THE EXERCISE OF REMEDIES WITH RESPECT THERETO, THE
PROVISIONS OF THIS ARTICLE SHALL BE CONTROLLING.
3. NOTHING IN THIS SECTION SHALL BE CONSTRUED SO AS TO CONFLICT WITH
THE PROVISIONS OF SUBDIVISION SIX OF SECTION THREE HUNDRED FIVE OF THIS
ARTICLE.
§ 307. STORM RECOVERY BONDS NOT PUBLIC DEBT. STORM RECOVERY BONDS ARE
NOT A DEBT OR A GENERAL OBLIGATION OF THE STATE OR ANY OF ITS POLITICAL
SUBDIVISIONS, AGENCIES, OR INSTRUMENTALITIES AND ARE NOT A CHARGE ON
THEIR FULL FAITH AND CREDIT. AN ISSUE OF STORM RECOVERY BONDS SHALL
NOT, DIRECTLY OR INDIRECTLY OR CONTINGENTLY, OBLIGATE THE STATE OR ANY
AGENCY, POLITICAL SUBDIVISION, OR INSTRUMENTALITY OF THE STATE TO LEVY
ANY TAX OR MAKE ANY APPROPRIATION FOR PAYMENT OF THE BONDS, OTHER THAN
FOR PAYING STORM RECOVERY CHARGES IN THEIR CAPACITY AS CONSUMERS OF
ELECTRICITY. ALL STORM RECOVERY BONDS AUTHORIZED BY A FINANCING ORDER
BY THE COMMISSION MUST CONTAIN ON THE FACE THEREOF A STATEMENT TO THE
FOLLOWING EFFECT: "NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING
POWER OF THE STATE OF NEW YORK IS PLEDGED TO THE PAYMENT OF THE PRINCI-
PAL OF, OR INTEREST ON, THIS BOND."
§ 308. STATE PLEDGE. 1. THE STATE PLEDGES TO AND AGREES WITH THE HOLD-
ERS OF STORM RECOVERY BONDS, ANY ASSIGNEE AND ALL FINANCING PARTIES THAT
THE STATE WILL NOT IN ANY WAY TAKE OR PERMIT ANY ACTION THAT LIMITS,
ALTERS OR IMPAIRS THE VALUE OF STORM RECOVERY PROPERTY OR, EXCEPT AS
REQUIRED BY A TRUE-UP MECHANISM DESCRIBED IN THE FINANCING ORDER,
REDUCE, ALTER OR IMPAIR STORM RECOVERY CHARGES THAT ARE IMPOSED,
COLLECTED AND REMITTED FOR THE BENEFIT OF THE OWNERS OF STORM RECOVERY
BONDS, ANY ASSIGNEE, AND ALL FINANCING PARTIES, UNTIL ALL PRINCIPAL,
INTEREST AND REDEMPTION PREMIUM IN RESPECT OF STORM RECOVERY BONDS, ALL
OTHER FINANCING COSTS AND ALL AMOUNTS TO BE PAID TO AN ASSIGNEE OR
FINANCING PARTY UNDER AN ANCILLARY AGREEMENT ARE PAID OR PERFORMED IN
FULL.
2. ANY PERSON THAT ISSUES STORM RECOVERY BONDS SHALL BE PERMITTED TO
INCLUDE THE PLEDGE SPECIFIED IN SUBDIVISION ONE OF THIS SECTION ON THE
FACE OF SUCH BONDS AND IN ANY ANCILLARY AGREEMENTS OR OTHER DOCUMENTA-
TION RELATED TO THE ISSUANCE AND MARKETING OF SUCH BONDS.
§ 309. ASSIGNEE NOT AN ELECTRIC CORPORATION. AN ASSIGNEE OR FINANCING
PARTY SHALL NOT BE CONSIDERED AN ELECTRIC CORPORATION AS DEFINED IN
A. 8082 16
SUBDIVISION THIRTEEN OF SECTION TWO OF THIS CHAPTER SOLELY BY VIRTUE OF
ENGAGING IN ANY OF THE TRANSACTIONS DESCRIBED IN THIS ARTICLE.
§ 310. EFFECT OF INVALIDITY. IF ANY PROVISION OF THIS ARTICLE IS HELD
INVALID OR IS INVALIDATED, SUPERSEDED, REPLACED REPEALED, OR EXPIRES FOR
ANY REASON, SUCH OCCURRENCE SHALL NOT AFFECT THE VALIDITY OF ANY ACTION
ALLOWED UNDER THIS ARTICLE TAKEN BY AN ELECTRIC CORPORATION, OR AN
ASSIGNEE, A FINANCING PARTY, A COLLECTION AGENT, OR A PARTY TO AN ANCIL-
LARY AGREEMENT. ANY SUCH ACTION SHALL REMAIN IN FULL FORCE AND EFFECT
WITH RESPECT TO ALL STORM RECOVERY BONDS ISSUED OR AUTHORIZED IN A
FINANCING ORDER ISSUED PURSUANT TO THIS ARTICLE ON OR BEFORE THE DATE
THAT SUCH PROVISION IS HELD INVALID OR IS INVALIDATED, SUPERSEDED,
REPLACED, OR REPEALED, OR EXPIRES FOR ANY REASON.
§ 311. EFFECT OF A FINANCING ORDER. SECTION SEVENTY OF THIS CHAPTER
SHALL NOT APPLY TO: 1. ANY SALE, ASSIGNMENT OR TRANSFER OF STORM RECOV-
ERY PROPERTY OR ANY EQUITY POSITION HELD BY THE ELECTRICAL CORPORATION
IN AN ASSIGNEE; OR
2. ANY OTHER TRANSACTION CONTEMPLATED BY OR APPROVED IN A FINANCING
ORDER ISSUED BY THE COMMISSION PURSUANT TO THIS ARTICLE.
§ 3. This act shall take effect immediately.