Sec. 20.07.04.02. Applications for Authority to Issue Stocks, Bonds, Notes and Other Evidences of Indebtedness

A. Application. Except for an application to issue rate stabilization bonds under Regulation .11 of this chapter, an application made to the Commission by a public service company for authority under Public Utilities Article, §6-102, Annotated Code of Maryland, to issue any stock, bonds, notes, or other evidences of indebtedness shall include:

(1) The amount and terms of the proposed issue, the purposes for which the proceeds are to be used, and the nature of the security, if any.

(2) If the purpose is the acquisition of property, a general description of the property, from whom it is to be acquired, and the terms of the contract for the acquisition, if any has been made. Names of the owners of property to be acquired for rights of way need not be set out, but a general description of the proposed route will be sufficient.

Agency Note: The description of property should include the number, dimensions, type, and location of each class of items mentioned in the petition. For example, the item of "land" should state the area and the location of the property; expenditures for "building construction" should state dimensions of buildings, so that cubical contents may be ascertained, and also give the type of construction, including foundations; a description of plant, machinery, equipment, etc., should be given, including the number and size of each unit, its type, and similar information.

It should also be stated whether the amount proposed to be expended on each item covers the entire cost thereof or whether a portion of the cost has been submitted in a prior statement to the Commission, or may be included in some future statement of expenditure, for which security may be proposed to be issued, and authority asked.

(3) If the purpose is for the construction, completion, extension, or improvement of facilities, the existing facilities shall be set forth as well as those proposed.

(4) If the purpose is the improvement or maintenance of service, the existing service shall be set forth as well as any improvements or betterments proposed.

(5) If the purpose is the refunding of obligations, the obligations shall be described fully, showing character, amount, date of issue, date of maturity, and all other material facts concerning them.

(6) The financial condition of the applicant.

(7) If the application is for the issue of bonds to be secured by an existing mortgage, the amount of the bonds, if any, already issued under the mortgage, and the amount and application made of the proceeds of them.

(8) If the proceeds are to be used for construction, completion, extension, or improvement purposes, the affidavit of a competent person shall be annexed, showing the estimated cost in reasonable detail.

(9) In applications for the issue of stock, the application shall state that no franchise or right is capitalized, directly or indirectly, except as authorized by the Public Utilities Article, Annotated Code of Maryland. If it is proposed to capitalize any franchise or right as therein authorized, there shall be filed with the application a verified copy of the franchise, and an affidavit of the proper officer of the State, county, or municipality granting it, showing the amount that has been actually paid for the franchise or right.

(10) If any contract, agreement, or arrangement, verbal or written, has been made to sell the stock, bonds, notes, or other evidence of indebtedness proposed to be issued, the contract, agreement, or arrangement shall be described in full, and a copy of it shall be attached to the application.

(11) If no contract, agreement, or arrangement has been made for the sale or other disposal of the stock, bonds, notes, or other evidence of indebtedness proposed to be issued, there shall be attached to the application an affidavit of a competent person showing the amount that can probably be realized from the sale or disposition of them and the reasons for the opinion of the affiant.

(12) There shall be attached to the application an affidavit made by at least three of the directors of the applicant, showing that it is the intention of the applicant in good faith to use the proceeds of the stock, bonds, notes, or other evidence of indebtedness proposed to be issued, for the purposes set forth in the petition.

B. Notice. Within 2 weeks of the filing of an application, and for the next succeeding week, the public service company shall give notice of the filing of an application under §A of this regulation with the Commission by publishing an advertisement in a newspaper of general circulation in each county in the distribution territory served by the company.

C. Final Order. An order of the Commission granting an application, or any part of it, shall:

(1) Prescribe the purpose for which the proceeds of the security or obligation authorized shall be used;

(2) Direct the applicant to report to the Commission under oath the sale or other disposition of the securities or obligations authorized, the terms and conditions of them, and the amount realized from them;

(3) Require the applicant to make a report when funds have been fully expended showing in detail the use and application by it of the money so realized; and

(4) Contain such other provisions as the Commission may deem necessary or appropriate in each case.