819
. Bonds and debentures of gas, electric, or gas and electric
companies meeting the requirements of subdivision (a); bonds and
debentures of telephone companies meeting the requirements of
subdivision (b); and bonds and debentures of water companies meeting
the requirements of subdivision (c).
(a) Bonds or debentures of a gas, electric, or gas and electric
company shall be of an issue that originally amounted to not less
than one million dollars ($1,000,000) and, if bonds, be secured by a
mortgage on substantially all of its physical property, and, if
debentures, shall be issued by a company substantially all of whose
physical property is free of mortgage and must carry a covenant to be
secured equally with any mortgage indebtedness, except a purchase
money mortgage, subsequently issued, and both bonds and debentures
shall be issued by a public utility corporation that meets all of the
following conditions:
(1) Derives more than 50 percent of its gross operating revenue
from the business of supplying electricity, artificial gas, or
natural gas or all or any of them, and at least 80 percent of its
gross operating revenue from all or any of the public utility
businesses enumerated in this section.
(2) Shall have had a gross operating revenue of not less than
seven million five hundred thousand dollars ($7,500,000) for its most
recent fiscal year.
(3) Has a funded debt not exceeding two-thirds of the value of its
physical property as shown by the books of the corporation or by a
statement of a certified public accountant issued within one year,
which statement may be based upon the books of the corporation, less
the amount of any reserves for depreciation, retirement, or
amortization of that physical property. Physical property of a
corporation shall include the physical property of a subsidiary
corporation if the corporation owns not less than 90 percent of the
outstanding voting shares of the subsidiary corporation.
(4) Shall have had earnings including earnings of subsidiaries
mentioned in paragraph (3), available for interest payments, before
deduction of state and federal taxes imposed on or measured by income
or profits, during four of the five most recent fiscal years and
during the most recent fiscal year equal to at least twice the
existing annual interest charges on the corporation's total funded
debt during those respective fiscal years.
(b) Bonds or debentures of telephone companies shall be of an
issue originally amounting to at least one million dollars
($1,000,000) and, if bonds, be secured by a mortgage on substantially
all of the physical property of the company, and if debentures shall
be issued by a company substantially all of whose physical property
is free of mortgage and shall carry a covenant to be secured equally
with any mortgage indebtedness, except a purchase money mortgage,
subsequently issued, and both bonds and debentures shall be issued by
a company that meets all of the following conditions:
(1) During its last fiscal year had gross revenues of at least
seven million five hundred thousand dollars ($7,500,000), more than
50 percent of which was derived from owned properties used in
furnishing telephone and other communication services and at least 80
percent of its gross revenues from all or any of the public utility
businesses enumerated in this section.
(2) Whose funded debt does not exceed two-thirds of the value of
its physical property as shown by the books of the corporation or by
a statement of a certified public accountant issued within one year,
which statement may be based upon the books of the corporation, less
the amount of any reserves shown on the statement for depreciation,
retirement or amortization of such physical property. Physical
property of a corporation shall include the physical property of a
subsidiary corporation if the corporation owns not less than 90
percent of the outstanding voting shares of the subsidiary
corporation.
(3) Which for four of the five most recent fiscal years and for
the last fiscal year had earnings including earnings of subsidiaries
mentioned in paragraph (2) available for the payment of interest
charges, before deduction of state and federal taxes imposed on or
measured by income or profits, at least equal to twice the interest
charges on the company's total funded debt during such respective
fiscal years.
(c) Water company bonds or debentures shall be of an issue
originally amounting to at least one million dollars ($1,000,000) and
if bonds, be secured by a first mortgage on the company's property,
and if debentures, shall be issued by a company substantially all of
whose property is free of mortgage and shall carry a covenant to be
secured equally with any mortgage indebtedness, except a purchase
money mortgage, subsequently issued, and both bonds and debentures
shall be issued by a company that meets all of the following
conditions:
(1) Is the supplier of substantially all water for domestic use in
a community or communities having a population of not less than
25,000.
(2) Whose funded debt does not exceed two-thirds of the value of
its physical property as shown by the published statement of the
company for its next preceding fiscal period, less the amount of any
reserves shown for depreciation, retirement or amortization of such
physical property. Physical property of a corporation shall include
the physical property of a subsidiary corporation if the corporation
owns not less than 90 percent of the outstanding voting shares of the
subsidiary corporation.
(3) Which for four out of the five most recent fiscal years and
for the most recent fiscal year shall have had earnings including
those of subsidiaries mentioned in paragraph (2) available for the
payment of interest charges, before deduction of state and federal
taxes imposed on or measured by income or profits, of at least one
and one-half times the interest charges on the company's total funded
debt during the respective fiscal years.