§ 108 - Issue of bonds or other securities
§ 108. Issue of bonds or other securities
(a) A domestic corporation subject to the jurisdiction of the public service board shall not mortgage nor pledge any of its corporate property nor issue any stocks, bonds, notes or other evidences of indebtedness without the consent of the public service board given on petition and after opportunity for hearing of the corporation or its incorporators and a finding of the board that the proposed action will be consistent with the general good of the state. Notice of the hearing shall be given as the board directs.
(1) The corporation may issue evidences of indebtedness payable within one year from the date of issue without such consent provided such borrowing is necessary as an emergency to restore service immediately after damage by disaster or provided its total evidences of indebtedness so payable within one year from the date of issue do not exceed 20 percent of its total assets. If such evidences of indebtedness would cause its total evidences of indebtedness so payable within one year to exceed 20 percent of its total assets, then it shall give the board notice in writing of its intention so to do at least 10 days before the date of the proposed issue and an itemization in such detailed form as the board may prescribe. If the board determines after considering the notice and the said corporation's report to the board that further inquiry is warranted, it shall order such corporation not to issue such evidences of indebtedness under this subdivision without the consent of the board given after opportunity for hearing, provided, however, that if the board does not make such an order within 10 days from the time it receives such notice under this subdivision then such corporation may issue such evidences of indebtedness without the consent of the public service board and the board upon request shall so notify such corporation in writing; provided, however, that the failure of the board to so notify such corporation shall not affect the right of such corporation to issue the evidences of indebtedness described in its notice.
(2) Nothing in this section shall restrict the right of a common carrier by motor vehicle to issue evidences of indebtedness payable within one year from the date of issue without prior notice to or consent by the board.
(b) The provisions of this section shall not apply to a public utility which meets each and all of the following four conditions:
(1) is incorporated in some state other than Vermont, and
(2) is conducting an interstate and intrastate telephone business which is subject to regulation by the Federal Communications Commission in some respects, and
(3) is conducting telephone operations in four or more states, and
(4) has less than 10 percent of its total investment in property used or useful in rendering service located within this state to the extent that such public utility may issue stock, bonds, notes, debentures or other evidences of indebtedness not directly or indirectly constituting or creating a lien on any property used or useful in rendering service which is located within this state.
(c)(1) A municipality shall not issue bonds or notes or pledge its net revenues under chapter 53 of Title 24, respecting the ownership or operation of a gas or electric utility, unless the public service board first finds, upon petition of the municipality and after notice and an opportunity for hearing, that the proposed action will be consistent with the general good of the state.
(2) If the public service board does not issue its ruling within 90 days of the filing of the petition, as may be extended by consent of the municipality, the issuance of the proposed bonds or notes or pledge of net revenues shall be deemed to be consistent with the general good of the state.
(3) If the public service board issues a ruling in accordance with subdivision (1) of this subsection, or does not rule within the period specified in subdivision (2) of this subsection, a municipality must subsequently obtain voter approval in accordance with chapter 53 of Title 24.
(d) Notwithstanding the provisions of subsection (c) of this section, a municipality may:
(1) issue bonds or notes or pledge its net revenues payable within three years from the date of issue without such consent, provided such borrowing is necessary in an emergency to restore service immediately after damage by disaster, or
(2) issue bonds or notes or pledge its net revenues payable within one year of the date of issuance without the consent otherwise required by this subdivision, provided its total bonds, notes or evidences of indebtedness so payable within one year do not exceed 20 percent of its total assets. (Amended 1959, No. 329 (Adj. Sess.), § 39(b), eff. March 1, 1961; 1961, No. 183, § 2; 1971, No. 66, eff. April 15, 1971; 1989, No. 111, § 12, eff. June 22, 1989; 1993, No. 21, § 7, eff. May 12, 1993; 1995, No. 99 (Adj. Sess.), § 6.)