Section 101. Authority to issue stock, bonds and other forms of indebtedness

A telegraph or telephone corporation may, when authorized
  by the commission, 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 facilities or the improvement or maintenance  of  its
  service  within  the  state, or for the discharge or lawful refunding of
  its obligations, or reimbursement of moneys actually expended  from  the
  income  from  any  source, within five years next prior to the filing of
  the application  therefor,  or  for  any  of  such  purposes,  provided,
  however,  that  no authority shall be granted authorizing such issue for
  reimbursement  of  moneys  expended  from  income  for  betterments   or
  replacements  unless  the  applicant  shall  have  kept its accounts and
  vouchers of such expenditures in such manner as to enable the commission
  to ascertain the amount of moneys so expended and the purposes for which
  such expenditures were made. Stock may be issued to  stockholders  as  a
  stock  dividend  provided  that  there  shall have been secured from the
  commission authority for such issuance and for a transfer of surplus  to
  capital  in  an  amount equal to the par or stated value of the stock so
  authorized and that the applicant has certified in the  application  for
  authority  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  telegraph  or  telephone
  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 authority for such issuance and that  the  applicant  has
  certified  in  the  application for authority 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.  The  application  for
  authority  shall  state the amount of any such issue and the purposes to
  which it or its proceeds are to be applied and shall  certify  that  the
  money,  property or labor procured or to be procured or paid for by such
  issue or its proceeds  has  been  or  is  reasonably  required  for  the
  purposes  specified  in  the  application  for  authority, and that such
  purposes are in no part reasonably chargeable to operating  expenses  or
  to  income  except  in  the  case  of bonds, notes or other evidences of
  indebtedness as may be specifically identified in  the  application  for
  authority.  For  the  purpose  of  enabling  the commission to determine
  whether it should authorize such issuance, the commission shall have the
  power to make such inquiry or  investigation,  hold  such  hearings  and
  examine  such witnesses, books, papers, documents or contracts as it may
  determine of importance in enabling it to reach a determination. No such
  corporation shall, without the consent of the commission, apply any such
  issue or its proceeds to any purpose not specified  in  the  application
  for  authority.  Such telegraph corporation or telephone corporation may
  issue notes for proper corporate purposes and not in  violation  of  any
  provision of this chapter or of any other act, payable at periods of not

  more  than  twelve  months without the consent of the commission; but no
  such note 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. No telegraph corporation or telephone corporation shall
  be required, however, to apply to the commission for authority to  issue
  stocks,  bonds,  notes  or other evidence of indebtedness except for the
  acquisition of property,  the  construction,  completion,  extension  or
  improvement  of its facilities, or the improvement or maintenance of its
  service within the state, or the discharge or refunding of  obligations,
  or  reimbursement  of  moneys  actually  expended for such purposes. 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 provided in this section, a notice of such transaction in
  such form as the commission may prescribe. The commission shall have  no
  power  to authorize the capitalization of any franchise or right 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 any political subdivision thereof, as the consideration of 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 corporate stock of the corporation formed
  by the merger or consolidation of two or more other corporations  exceed
  the sum of the capital stock of the corporations so consolidated, at the
  par  value  thereof, or such sum and 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.  Notwithstanding  the foregoing provisions of
  this section, any application for approval under this section  shall  be
  deemed  granted by the commission forty-five days after such application
  is  filed  for  approval,  unless  the  commission,  or  its   designee,
  determines  and  informs the applicant in writing within such forty-five
  day period that the public interest requires the commission's review and
  its written order.