TITLE 61

PUBLIC UTILITY REGULATION

CHAPTER 16

UTILITY COST REDUCTION BONDS

61-1608.  Transfers in interest. (1) A transfer of cost reduction property by a public utility to an assignee, or by an assignee to another assignee, that the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a cost reduction order, shall be treated as an absolute transfer of all of the transferor’s right, title and interest, as in a true sale, and not as a pledge or other financing, of the cost reduction property, in each case notwithstanding any contrary treatment for federal or state income and franchise taxes, accounting or other purposes.

(2)  A transfer of cost reduction property shall be deemed perfected as against third persons and shall vest title in the transferee when both of the following have taken place:

(a)  The commission has issued the cost reduction order authorizing the cost reduction rate included in the cost reduction property; and

(b)  A written assignment of the cost reduction property has been executed and delivered to the transferee.

(3)  As between bona fide assignees of the same right for value without notice, the assignee first filing a financing statement in accordance with chapter 9, naming the assignor of the cost reduction property as debtor and identifying the cost reduction property has priority. Any description of cost reduction property shall be sufficient if it refers to the cost reduction order creating the cost reduction property. A copy of the financing statement shall be filed by the assignee with the commission, and the commission may require the assignor or the assignee to make other filings with respect to the transfer in accordance with procedures it may establish, but these filings shall not affect the perfection of the transfer.

(4)  The interest of an assignee or pledgee in cost reduction property and in the revenues and collections arising from such property are not subject to set-off, counterclaim, surcharge or defense by the public utility or any other person or in connection with the bankruptcy of the public utility or any other person.

History:

[61-1608, added 2005, ch. 372, sec. 1, p. 1193.]