Section 82. Approval of issues of stock, bonds and other forms of indebtedness

A steam corporation organized or  existing,  or  hereafter
  incorporated,  under  or by virtue of the laws of the state of New York,
  may issue stock, bonds, notes or other evidences of indebtedness payable
  at periods of more than twelve months  after  the  date  thereof,  or  a
  receiver  of  such  a  corporation, if duly authorized by law, may issue
  receiver's certificates, when necessary for the acquisition of property,
  the construction, completion, extension or improvement of its  plant  or
  distributing  system,  or  for  the  improvement  or  maintenance of its
  service or for the discharge or lawful refunding of its  obligations  or
  for  the  reimbursement  of moneys actually expended from income or from
  any other moneys in the treasury  of  the  corporation  not  secured  or
  obtained  from  the  issue  of stock, bonds, notes or other evidences of
  indebtedness of such corporation, within ten years  next  prior  to  the
  filing   of   an  application  with  the  commission  for  the  required
  authorization, for any of the aforesaid purposes except  maintenance  of
  service  and except replacements in cases where the applicant shall have
  kept its accounts and vouchers of such expenditure in such manner as  to
  enable  the commission to ascertain the amount of moneys so expended and
  the purposes for which such  expenditure  was  made;  provided  and  not
  otherwise  that  there  shall  have  been secured from the commission an
  order authorizing such issue, and the amount thereof,  and  stating  the
  purposes  to  which the issue or proceeds thereof are to be applied, and
  that, in the opinion of the commission, the money, property or labor  to
  be  procured  or  paid  for  by the issue of such stock, bonds, notes or
  other evidences of indebtedness is or has been reasonably  required  for
  the  purposes  specified  in  the  order,  and  that except as otherwise
  permitted in the order in the case of bonds, notes and  other  evidences
  of  indebtedness,  such  purposes are not in whole or in part reasonably
  chargeable to operating expenses or to income. Stock may  be  issued  to
  stockholders  as  a  stock  dividend provided that there shall have been
  secured from the commission  an  order  authorizing  such  issue  and  a
  transfer  of  surplus to capital in an amount equal to the par or stated
  value of the stock so authorized and stating that a  sum  equal  to  the
  amount  to be so transferred was expended for the purposes enumerated in
  this section. Stock may be issued to an employee or director of a  steam
  corporation under a stock option plan pursuant to which such corporation
  grants  options  to  its  employees  or  directors to purchase shares of
  stock, such options to be exercisable for a stated  period  of  time  to
  purchase shares of stock at the market value of the stock at the time of
  issuance of the option, provided that there shall have been secured from
  the  commission  an  order  authorizing such issue and that the proceeds
  from the exercise of the  stock  options  are  needed  for  one  of  the
  purposes enumerated in this section. The issue of stocks, bonds or other
  evidences  of  indebtedness,  within  the meaning of this section, shall
  include the  sale  by  any  such  corporation  of  any  such  securities
  previously  issued in compliance with the provisions of this section and
  subsequently reacquired by such corporation, provided, however, for good
  cause shown the  commission  may  exempt  from  the  restriction  hereof
  stocks,  bonds  or  other  evidences of indebtedness. For the purpose of
  enabling it to determine whether it should  issue  such  an  order,  the
  commission  shall make such inquiry or investigation, hold such hearings
  and examine such witnesses, books, papers, documents or contracts as  it
  may  deem  of  importance  in enabling it to reach a determination. Such
  corporation shall not without the consent of the commission  apply  said
  issue  or  any  proceeds  thereof  to  any purpose not specified in such
  order. Such steam corporation may  issue  notes,  for  proper  corporate
  purposes  and  not in violation of any provision of this or of any other

  act, payable at periods of not more  than  twelve  months  without  such
  consent;  but  no  such  notes  shall,  in whole or in part, directly or
  indirectly be refunded by  any  issue  of  stock  or  bonds  or  by  any
  evidences  of  indebtedness  running for more than twelve months without
  the consent of the commission.   The  commission  shall  have  power  to
  require  every  such  corporation  to file with the commission after the
  issuance of stocks, bonds, notes  or  other  evidences  of  indebtedness
  issued  with  or  without  the  approval  of  the  commission  as herein
  provided, a notice of such transaction in such form  as  the  commission
  may  prescribe.  Provided,  however,  that  the commission shall have no
  power  to  authorize  the  capitalization  of  any  franchise  to  be  a
  corporation  nor to authorize the capitalization of any franchise or the
  right to own, operate or enjoy any franchise whatsoever in excess of the
  amount, exclusive of any tax or annual  charge,  actually  paid  to  the
  state  or  to any political subdivision thereof as the consideration for
  the grant of such franchise or right, nor to authorize the  issuance  of
  any  stocks  or  other  securities  for  any  purposes  other than those
  enumerated in this section. Nor shall the capital stock of a corporation
  formed by the merger or consolidation of two or more corporations exceed
  the sum of the capital stock of the corporations,  so  consolidated,  at
  the  par  value thereof, or such sum or any additional sum actually paid
  in  cash;  nor  shall  any  contract  for  consolidation  or  lease   be
  capitalized  in  the  stock  of  any corporation whatever; nor shall any
  corporation hereafter issue any bonds against or  as  a  lien  upon  any
  contract for consolidation or merger.