Section 11-50-411 Disposition of net profits of district; "net income" defined; distribution of less than net income for fiscal year; availability for payment in future fiscal years.
Section 11-50-411
Disposition of net profits of district; "net income" defined; distribution of less than net income for fiscal year; availability for payment in future fiscal years.
All the net income of the gas transmission system or systems, for each fiscal year, of a gas district incorporated under this article shall, unless otherwise provided in the certificate of incorporation of such district, be divided, within a reasonable time after the close of each fiscal year, among its member municipalities in proportion to the amount of gas sold to or within each such municipality.
All the net income of each gas distribution system, for each fiscal year, of any such district shall, unless otherwise provided in its certificate of incorporation, be distributed and paid, within a reasonable time after the close of each fiscal year, to the municipality or municipalities within which such distribution system is located.
The term "net income" as used in the preceding two paragraphs of this section shall mean, with respect to the system or systems and for the fiscal year in question, the net income thereof computed in accordance with generally accepted accounting principles plus depreciation and amortization less the sum of the following:
(1) All sums required during such fiscal year for the payment of principal and interest on its bonds and all sums required to be paid during such fiscal year into special funds or otherwise obligated by the terms of the mortgages, indentures of trust, security agreements or bond resolutions under and pursuant to which its bonds were issued (other than such as constituted operating expenses and were taken into consideration in the determination of "net income computed in accordance with generally accepted accounting principles"),
(2) All sums expended during such fiscal year for capital additions and improvements to such system or systems or for retirement of debt not previously funded and paid with internally generated funds from operations, not including, however, (i) any sums expended for either of such purposes out of any special funds referred to above, nor (ii) if and to the extent that the certificate of incorporation of such district expressly so provides, any sums expended for either of such purposes out of any other moneys or funds (provided, that the board of directors of such district by duly adopted resolution determines, at any time or times prior to any distribution of "net income" for the fiscal year in question, that such district has, from retained earnings, current year's earnings or otherwise, current assets sufficient to enable it to disregard, in the computation of such "net income," any such sums so expended for capital additions and improvements),
(3) An amount which, when added to the amount (if any) held in reserve at the end of such fiscal year for future expenses of operating such system or systems, will equal 50 percent of the estimated expenses of operating such system or systems for the then current fiscal year (not including, as an expense of operating any such system or systems, the cost of any purchased gas), and
(4) An amount which, when added to the amount (if any) held in reserve at the end of such fiscal year for future capital additions and improvements to such system or systems, will equal a reasonable reserve (the minimum amount of which may be specified in the certificate of incorporation of such district but which, subject to any such specification, shall be determined by the board of directors of such district) for future capital additions and improvements to such system or systems.
If any gas district incorporated under the provisions of this article provides, in its certificate of incorporation, for the disposition of the net income of all its gas transmission and distribution systems in the same manner, it may, for purposes of such disposition, compute net income for all its gas transmission and distribution systems as a unit rather than separately; and, in any such case, such certificate of incorporation may provide for and authorize the distribution and payment, in the discretion of the board of directors of any such gas district, of an amount less than the net income of all such systems for any fiscal year, in which event (A) that portion of such net income for any such fiscal year not so distributed and paid shall be available for distribution and payment in future fiscal years as and to the extent provided in such certificate of incorporation, and (B) such certificate of incorporation may also specify that such provision and authorization shall operate both prospectively and retrospectively, so as to ratify and confirm (i) any prior distributions and payments of amounts less the net income of all such systems for any prior fiscal year, and (ii) the availability (for distribution and payment in future fiscal years) of any portion thereof not so distributed and paid. (Acts 1951, No. 762, p. 1319, §15; Acts 1983, No. 83-613, p. 950; Acts 1989, No. 89-705, p. 1410, §1.)