State of Illinois
91st General Assembly
Legislation

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91_SB0411

 
                                               LRB9102271JSpc

 1        AN ACT to amend the  Public  Utilities  Act  by  changing
 2    Section 6-102.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.   The  Public  Utilities  Act  is  amended  by
 6    changing Section 6-102 as follows:

 7        (220 ILCS 5/6-102) (from Ch. 111 2/3, par. 6-102)
 8        Sec.  6-102. Authorization of issues of stock, bonds, and
 9    notes.
10        (a)  Subject to the provisions of this  Act  and  of  the
11    order  of  the  Commission  issued as provided in this Act, a
12    public utility may issue stocks and stock  certificates,  and
13    bonds,  notes  and other evidences of indebtedness payable at
14    periods of more than 12 months after the date thereof for any
15    lawful purpose. However, such public utility shall first have
16    secured from the Commission an order authorizing  such  issue
17    and stating the amount thereof and the purpose or purposes to
18    which  the  issue  or the proceeds thereof are to be applied,
19    and that  in  the  opinion  of  the  Commission,  the  money,
20    property or labor to be procured or paid for by such issue is
21    reasonably  required for the purpose or purposes specified in
22    the order.
23        (b)  The provisions of this subsection  (b)  shall  apply
24    only  to  (1)  any issuances of stock in a cumulative amount,
25    exclusive of any issuances referred to in item (3), that  are
26    10%  or  more in a calendar year or 20% or more in a 24-month
27    period of the total common stockholders'  equity  or  of  the
28    total  amount of preferred stock outstanding, as the case may
29    be, of the public utility, and (2) to any issuances of bonds,
30    notes or other evidences  of  indebtedness  in  a  cumulative
31    principal  amount,  exclusive of any issuances referred to in
 
                            -2-                LRB9102271JSpc
 1    item (3), that are 10% or more in a calendar year or  20%  or
 2    more  in  a 24-month period of the aggregate principal amount
 3    of bonds, notes and other evidences of  indebtedness  of  the
 4    public  utility  outstanding,  all  as  of  the  date  of the
 5    issuance, but shall not apply to (3) any issuances  of  stock
 6    or  of bonds, notes or other evidences of indebtedness 90% or
 7    more of the proceeds of which are to be used  by  the  public
 8    utility  for  purposes of refunding, redeeming or refinancing
 9    outstanding issues of stock, bonds, notes or other  evidences
10    of  indebtedness.  To  enable it to determine whether it will
11    issue the order required by subsection (a) of  this  Section,
12    the   Commission  may  hold  a  hearing  and  may  make  such
13    additional  inquiry  or  investigation,  and   examine   such
14    witnesses,  books,  papers, accounts, documents and contracts
15    and require the filing  of  such  data  as  it  may  deem  of
16    assistance.  The  public  utility  may  be  required  by  the
17    Commission  to  disclose  every  interest of the directors of
18    such public utility in any transaction  under  investigation.
19    The  Commission  shall  have  power  to  investigate all such
20    transactions and to inquire into the good faith  thereof,  to
21    examine  books,  papers, accounts, documents and contracts of
22    public utilities, construction or other companies or of firms
23    or individuals with whom the public utility  shall  have  had
24    financial  transactions,  for  the  purpose of enabling it to
25    verify any statements furnished,  and  to  examine  into  the
26    actual  value of property acquired by or services rendered to
27    such  public  utility.  Before   issuing   its   order,   the
28    Commission,  when  it  is deemed necessary by the Commission,
29    shall make an adequate physical valuation of all property  of
30    the public utility, but a valuation already made under proper
31    public  supervision  may  be  adopted,  either in whole or in
32    part, at the discretion of the  Commission;  and  shall  also
33    examine  all  previously authorized or outstanding securities
34    of the public utility, and fixed charges attached thereto.  A
 
                            -3-                LRB9102271JSpc
 1    statement  of  the  results of such physical valuation, and a
 2    statement of the character  of  all  outstanding  securities,
 3    together with the conditions under which they are held, shall
 4    be  included  in  the  order. The Commission may require that
 5    such information or such part thereof as  it  thinks  proper,
 6    shall appear upon the stock, stock certificate, bond, note or
 7    other  evidence  of indebtedness authorized by its order. The
 8    Commission may by its order grant permission for the issue of
 9    such stock certificates, or bonds, notes or  other  evidences
10    of  indebtedness  in  the  amount applied for, or in a lesser
11    amount, or not at all, and may attach to the exercise of  its
12    permission  such  condition  or  conditions  as  it  may deem
13    reasonable and  necessary.  Nothing  in  this  Section  shall
14    prevent  a  public  utility  from seeking, nor the Commission
15    from  approving,  a  shelf  registration  plan  for   issuing
16    securities  over  a  reasonable  period  in  accordance  with
17    regulations  established  by the United States Securities and
18    Exchange Commission.  Any securities issued  pursuant  to  an
19    approved shelf registration plan need not be further approved
20    by  the Commission so long as they are in compliance with the
21    approved shelf registration plan. The Commission  shall  have
22    the  power  to  refuse  its approval of applications to issue
23    securities, in whole or in part,  upon  a  finding  that  the
24    issue   of  such  securities  would  be  contrary  to  public
25    interest. The Commission may also require the public  utility
26    to compile for the information of its shareholders such facts
27    in  regard to its financial transactions, in such form as the
28    Commission may direct.
29        No public utility  shall,  without  the  consent  of  the
30    Commission,   apply   the   issue   of  any  stock  or  stock
31    certificates,  or   bond,   note   or   other   evidence   of
32    indebtedness,  which  was  issued pursuant to an order of the
33    Commission entered pursuant to this subsection  (b),  or  any
34    part  thereof,  or  any  proceeds thereof, to any purpose not
 
                            -4-                LRB9102271JSpc
 1    specified  in  the  Commission's  order  or  to  any  purpose
 2    specified in the Commission's order in excess of  the  amount
 3    authorized  for such purpose; or issue or dispose of the same
 4    on any terms less favorable  than  those  specified  in  such
 5    order,  or  a modification thereof. The Commission shall have
 6    the power to require public  utilities  to  account  for  the
 7    disposition  of the proceeds of all sales of stocks and stock
 8    certificates,  and  bonds,  notes  and  other  evidences   of
 9    indebtedness,  which  were issued pursuant to an order of the
10    Commission entered pursuant to this subsection (b),  in  such
11    form  and  detail  as it may deem advisable, and to establish
12    such rules and regulations as  it  may  deem  reasonable  and
13    necessary  to insure the disposition of such proceeds for the
14    purpose or purposes specified in its order.
15        (c)  A  public  utility  may  issue  notes,  for   proper
16    purposes,  and  not in violation of any provision of this Act
17    or any other Act, payable at periods  of  not  more  than  12
18    months  after  the  date of issuance of the same, without the
19    consent of the Commission; but no such note shall,  in  whole
20    or  in  part,  be renewed or be refunded from the proceeds of
21    any other such note or evidence of indebtedness from time  to
22    time  without  the consent of the Commission for an aggregate
23    period of longer than 2 years.
24        (d)  Any issuance of stock or of bonds,  notes  or  other
25    evidences  of  indebtedness,  other  than  issuances of notes
26    pursuant to subsection (c) of  this  Section,  which  is  not
27    subject to subsection (b) of this Section, shall be regulated
28    by  the Commission as follows:  the public utility shall file
29    with the Commission, at least 15 days before the date of  the
30    issuance,  an  informational statement setting forth the type
31    and amount of the issue and the purpose or purposes to  which
32    the  issue  or the proceeds thereof are to be applied.  Prior
33    to the date of the issuance specified in the public utility's
34    filing, the Commission, if it finds that the issuance is  not
 
                            -5-                LRB9102271JSpc
 1    subject  to  subsection  (b)  of  this Section, shall issue a
 2    written order in conformance  with  subsection  (a)  of  this
 3    Section  authorizing the issuance.  Notwithstanding any other
 4    provisions of this  Act,  the  Commission  may  delegate  its
 5    authority  to enter the order required by this subsection (d)
 6    to a hearing examiner.
 7        (e)  The Commission shall have no power to authorize  the
 8    capitalization  of  the  right  to  be  a  corporation, or to
 9    authorize the capitalization of any  franchise,  license,  or
10    permit  whatsoever  or the right to own, operate or enjoy any
11    such franchise, license, or permit, in excess of  the  amount
12    (exclusive  of any tax or annual charge) actually paid to the
13    State  or  to  a  political  subdivision   thereof   as   the
14    consideration  for  the  grant  of  such  franchise, license,
15    permit or right; nor shall any contract for consolidation  or
16    lease  be capitalized, nor shall any public utility hereafter
17    issue any bonds, notes or  other  evidences  of  indebtedness
18    against  or as a lien, upon any contract for consolidation or
19    merger.
20        (f)  The provisions of this Section shall  not  apply  to
21    public utilities which are not corporations duly incorporated
22    under  the  laws  of  this  State to the extent that any such
23    public  utility  may  issue  stock,  bonds,  notes  or  other
24    evidences  of  indebtedness  not   directly   or   indirectly
25    constituting  or  creating  a  lien or charge on, or right to
26    profits from,  any  property  used  or  useful  in  rendering
27    service  within  this  State.  Nothing  in this Section or in
28    Section 6-104 of this Act shall be  construed  to  require  a
29    common   carrier  by  railroad  subject  to  Part  I  of  the
30    Interstate Commerce Act, being part of an  Act  of  the  49th
31    Congress  of  the  United States entitled "An Act to Regulate
32    Commerce",  as  amended,  to  secure  from   the   Commission
33    authority  to  issue  or  execute  or deliver any conditional
34    sales contract or similar contract or instrument reserving or
 
                            -6-                LRB9102271JSpc
 1    retaining title in the seller for all or part of the purchase
 2    price of equipment or property used or to be used for  or  in
 3    connection with the transportation of persons or property.
 4    (Source: P.A. 90-561, eff. 12-16-97.)

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