§ 108. Issue of bonds or other securities

(a) A domestic corporation subject to the jurisdiction of the Public Utility Commission 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 Utility Commission given on petition and after opportunity for hearing of the corporation or its incorporators and a finding of the Commission that the proposed action will be consistent with the general good of the State. Notice of the hearing shall be given as the Commission 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 Commission 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 Commission may prescribe. If the Commission determines after considering the notice and the said corporation’s report to the Commission 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 Commission given after opportunity for hearing; provided, however, that if the Commission 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 Utility Commission, and the Commission upon request shall so notify such corporation in writing; provided, however, that the failure of the Commission 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 Commission.

(b) The provisions of this section shall not apply to the Vermont Public Power Supply Authority or to a public utility that meets each and all of the following four conditions:

(1) is incorporated in some state other than Vermont;

(2) is conducting an interstate and intrastate telephone business that is subject to regulation by the Federal Communications Commission in some respects;

(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 that is located within this State.

(c)(1) A municipality shall not issue bonds or notes or pledge its net revenues under 24 Vt. Stat. Ann. chapter 53, respecting the ownership or operation of a gas or electric utility, unless the Public Utility Commission 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 Utility Commission 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 Utility Commission 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 also have obtained voter approval in accordance with 24 Vt. Stat. Ann. chapter 53, if required, prior to issuing bonds or notes or pledging its net revenues.

(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;

(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; or

(3) issue bonds or notes without the consent otherwise required by this subdivision, provided:

(A) the amount of the issuance plus the amount of any bond or note issuances during the previous 12 calendar months does not exceed 20 percent of the municipality’s total assets; and

(B) after the proposed issuance, the total amount of the municipality’s outstanding bonds, notes, or evidences of indebtedness would not exceed 50 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; 2019, No. 81, § 2.)