§ 79b. — Definitions; application of chapter.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC79b]
TITLE 15--COMMERCE AND TRADE
CHAPTER 2C--PUBLIC UTILITY HOLDING COMPANIES
Sec. 79b. Definitions; application of chapter
(a) Definitions
When used in this chapter, unless the context otherwise requires--
(1) ``Person'' means an individual or company.
(2) ``Company'' means a corporation, a partnership, an
association, a joint-stock company, a business trust, or an
organized group of persons, whether incorporated or not; or any
receiver, trustee, or other liquidating agent of any of the
foregoing in his capacity as such.
(3) ``Electric utility company'' means any company which owns or
operates facilities used for the generation, transmission, or
distribution of electric energy for sale, other than sale to tenants
or employees of the company operating such facilities for their own
use and not for resale. The Commission, upon application, shall by
order declare a company operating any such facilities not to be an
electric utility company if the Commission finds that (A) such
company is primarily engaged in one or more businesses other than
the business of an electric utility company, and by reason of the
small amount of electric energy sold by such company it is not
necessary in the public interest or for the protection of investors
or consumers that such company be considered an electric utility
company for the purposes of this chapter, or (B) such company is one
operating within a single State, and substantially all of its
outstanding securities are owned directly or indirectly by another
company to which such operating company sells or furnishes electric
energy which it generates; such other company uses and does not
resell such electric energy, is engaged primarily in manufacturing
(other than the manufacturing of electric energy or gas) and is not
controlled by any other company; and by reason of the small amount
of electric energy sold or furnished by such operating company to
other persons it is not necessary in the public interest or for the
protection of investors or consumers that it be considered an
electric utility company for the purposes of this chapter. The
filing of an application hereunder in good faith shall exempt such
company (and the owner of the facilities operated by such company)
from the application of this paragraph until the Commission has
acted upon such application. As a condition to the entry of any such
order, and as a part thereof, the Commission may require application
to be made periodically for a renewal of such order, and may require
the filing of such periodic or special reports regarding the
business of the company as the Commission may find necessary or
appropriate to insure that such company continues to be entitled to
such exemption during the period for which such order is effective.
The Commission, upon its own motion or upon application, shall
revoke such order whenever it finds that the conditions specified in
clause (A) or (B) of this paragraph are not satisfied in the case of
such company. Any action of the Commission under the preceding
sentence shall be by order. Application under this paragraph may be
made by the company in respect of which the order is to be issued or
by the owner of the facilities operated by such company. Any order
issued under this paragraph shall apply equally to such company and
such owner. The Commission may by rules or regulations conditionally
or unconditionally provide that any specified class or classes of
companies which it determines to satisfy the conditions specified in
clause (A) or (B) of this paragraph, and the owners of the
facilities operated by such companies, shall not be deemed electric
utility companies within the meaning of this paragraph.
(4) ``Gas utility company'' means any company which owns or
operates facilities used for the distribution at retail (other than
distribution only in enclosed portable containers, or distribution
to tenants or employees of the company operating such facilities for
their own use and not for resale) of natural or manufactured gas for
heat, light, or power. The Commission, upon application, shall by
order declare a company operating any such facilities not to be a
gas utility company if the Commission finds that (A) such company is
primarily engaged in one or more businesses other than the business
of a gas utility company, and (B) by reason of the small amount of
natural or manufactured gas distributed at retail by such company it
is not necessary in the public interest or for the protection of
investors or consumers that such company be considered a gas utility
company for the purposes of this chapter. The filing of an
application hereunder in good faith shall exempt such company (and
the owner of the facilities operated by such company) from the
application of this paragraph until the Commission has acted upon
such application. As a condition to the entry of any such order, and
as a part thereof, the Commission may require application to be made
periodically for a renewal of such order, and may require the filing
of such periodic or special reports regarding the business of the
company as the Commission may find necessary or appropriate to
insure that such company continues to be entitled to such exemption
during the period for which such order is effective. The Commission,
upon its own motion or upon application, shall revoke such order
whenever it finds that the conditions specified in clauses (A) and
(B) of this paragraph are not satisfied in the case of such company.
Any action of the Commission under the preceding sentence shall be
by order. Application under this paragraph may be made by the
company in respect of which the order is to be issued or by the
owner of the facilities operated by such company. Any order issued
under this paragraph shall apply equally to such company and such
owner. The Commission may by rules or regulations conditionally or
unconditionally provide that any specified class or classes of
companies which it determines to satisfy the conditions specified in
clauses (A) and (B) of this paragraph, and the owners of the
facilities operated by such companies, shall not be deemed gas
utility companies within the meaning of this paragraph.
(5) ``Public-utility company'' means an electric utility company
or a gas utility company.
(6) ``Commission'' means the Securities and Exchange Commission.
(7) ``Holding company'' means--
(A) any company which directly or indirectly owns, controls,
or holds with power to vote, 10 per centum or more of the
outstanding voting securities of a public-utility company or of
a company which is a holding company by virtue of this clause or
clause (B) of this paragraph, unless the Commission, as
hereinafter provided, by order declares such company not to be a
holding company; and
(B) any person which the Commission determines, after notice
and opportunity for hearing, directly or indirectly to exercise
(either alone or pursuant to an arrangement or understanding
with one or more other persons) such a controlling influence
over the management or policies of any public-utility or holding
company as to make it necessary or appropriate in the public
interest or for the protection of investors or consumers that
such person be subject to the obligations, duties, and
liabilities imposed in this chapter upon holding companies.
The Commission, upon application, shall by order declare that a
company is not a holding company under clause (A) of this paragraph
if the Commission finds that the applicant (i) does not, either
alone or pursuant to an arrangement or understanding with one or
more other persons, directly or indirectly control a public-utility
or holding company either through one or more intermediary persons
or by any means or device whatsoever, (ii) is not an intermediary
company through which such control is exercised, and (iii) does not,
directly or indirectly, exercise (either alone or pursuant to an
arrangement or understanding with one or more other persons) such a
controlling influence over the management or policies of any public-
utility or holding company as to make it necessary or appropriate in
the public interest or for the protection of investors or consumers
that the applicant be subject to the obligations, duties, and
liabilities imposed in this chapter upon holding companies. The
filing of an application hereunder in good faith by a company other
than a registered holding company shall exempt the applicant from
any obligation, duty, or liability imposed in this chapter upon the
applicant as a holding company, until the Commission has acted upon
such application. Within a reasonable time after the receipt of any
application hereunder, the Commission shall enter an order granting,
or, after notice and opportunity for hearing, denying or otherwise
disposing of, such application. As a condition to the entry of any
order granting such application and as a part of any such order, the
Commission may require the applicant to apply periodically for a
renewal of such order and to do or refrain from doing such acts or
things, in respect of exercise of voting rights, control over
proxies, designation of officers and directors, existence of
interlocking officers, directors and other relationships, and
submission of periodic or special reports regarding affiliations or
intercorporate relationships of the applicant, as the Commission may
find necessary or appropriate to ensure that in the case of the
applicant the conditions specified in clauses (i), (ii), and (iii)
of this paragraph are satisfied during the period for which such
order is effective. The Commission, upon its own motion or upon
application of the company affected, shall revoke the order
declaring such company not to be a holding company whenever in its
judgment any condition specified in clauses (i), (ii), or (iii) of
this paragraph is not satisfied in the case of such company, or
modify the terms of such order whenever in its judgment such
modification is necessary to ensure that in the case of such company
the conditions specified in clauses (i), (ii), and (iii) of this
paragraph are satisfied during the period for which such order is
effective. Any action of the Commission under the preceding sentence
shall be by order.
(8) ``Subsidiary company'' of a specified holding company
means--
(A) any company 10 per centum or more of the outstanding
voting securities of which are directly or indirectly owned,
controlled, or held with power to vote, by such holding company
(or by a company that is a subsidiary company of such holding
company by virtue of this clause or clause (B) of this
paragraph), unless the Commission, as hereinafter provided, by
order declares such company not to be a subsidiary company of
such holding company; and
(B) any person the management or policies of which the
Commission, after notice and opportunity for hearing, determines
to be subject to a controlling influence, directly or
indirectly, by such holding company (either alone or pursuant to
an arrangement or understanding with one or more other persons)
so as to make it necessary or appropriate in the public interest
or for the protection of investors or consumers that such person
be subject to the obligations, duties, and liabilities imposed
in this chapter upon subsidiary companies of holding companies.
The Commission, upon application, shall by order declare that a
company is not a subsidiary company of a specified holding company
under clause (A) of this paragraph if the Commission finds that (i)
the applicant is not controlled, directly or indirectly, by such
holding company (either alone or pursuant to an arrangement or
understanding with one or more other persons) either through one or
more intermediary persons or by any means or device whatsoever, (ii)
the applicant is not an intermediary company through which such
control of another company is exercised, and (iii) the management or
policies of the applicant are not subject to a controlling
influence, directly or indirectly, by such holding company (either
alone or pursuant to an arrangement or understanding with one or
more other persons) so as to make it necessary or appropriate in the
public interest or for the protection of investors or consumers that
the applicant be subject to the obligations, duties, and liabilities
imposed in this chapter upon subsidiary companies of holding
companies. The filing of an application hereunder in good faith
shall exempt the applicant from any obligation, duty, or liability
imposed in this chapter upon the applicant as a subsidiary company
of such specified holding company until the Commission has acted
upon such application. Within a reasonable time after the receipt of
any application hereunder, the Commission shall enter an order
granting, or, after notice and opportunity for hearing, denying or
otherwise disposing of, such application. As a condition to the
entry of, and as a part of, any order granting such application, the
Commission may require the applicant to apply periodically for a
renewal of such order and to file such periodic or special reports
regarding the affiliations or intercorporate relationships of the
applicant as the Commission may find necessary or appropriate to
enable it to determine whether in the case of the applicant the
conditions specified in clauses (i), (ii), and (iii) of this
paragraph are satisfied during the period for which such order is
effective. The Commission, upon its own motion or upon application,
shall revoke the order declaring such company not to be a subsidiary
company whenever in its judgment any condition specified in clauses
(i), (ii), or (iii) of this paragraph is not satisfied in the case
of such company, or modify the terms of such order whenever in its
judgment such modification is necessary to ensure that in the case
of such company the conditions specified in clauses (i), (ii), and
(iii) of this paragraph are satisfied during the period for which
such order is effective. Any action of the Commission under the
preceding sentence shall be by order. Any application under this
paragraph may be made by the holding company or the company in
respect of which the order is to be entered, but as used in this
paragraph the term ``applicant'' means only the company in respect
of which the order is to be entered.
(9) ``Holding-company system'' means any holding company,
together with all its subsidiary companies, and all mutual service
companies (as defined in paragraph (13) of this subsection) of which
such holding company or any subsidiary company thereof is a member
company (as defined in paragraph (14) of this subsection).
(10) ``Associate company'' of a company means any company in the
same holding-company system with such company.
(11) ``Affiliate'' of a specified company means--
(A) any person that directly or indirectly owns, controls,
or holds with power to vote, 5 per centum or more of the
outstanding voting securities of such specified company;
(B) any company 5 per centum or more of whose outstanding
voting securities are owned, controlled, or held with power to
vote, directly or indirectly, by such specified company;
(C) any individual who is an officer or director of such
specified company, or of any company which is an affiliate
thereof under clause (A) of this paragraph; and
(D) any person or class of persons that the Commission
determines, after appropriate notice and opportunity for
hearing, to stand in such relation to such specified company
that there is liable to be such an absence of arm's-length
bargaining in transactions between them as to make it necessary
or appropriate in the public interest or for the protection of
investors or consumers that such person be subject to the
obligations, duties, and liabilities imposed in this chapter
upon affiliates of a company.
(12) ``Registered holding company'' means a person whose
registration is in effect under section 79e of this title.
(13) ``Mutual service company'' means a company approved as a
mutual service company under section 79m of this title.
(14) ``Member company'' means a company which is a member of an
association or group of companies mutually served by a mutual
service company.
(15) ``Director'' means any director of a corporation or any
individual who performs similar functions in respect of any company.
(16) ``Security'' means any note, draft, stock, treasury stock,
bond, debenture, certificate of interest or participation in any
profit-sharing agreement or in any oil, gas, other mineral royalty
or lease, any collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a
security, receiver's or trustee's certificate, or, in general, any
instrument commonly known as a ``security''; or any certificate of
interest or participation in, temporary or interim certificate for,
receipt for, guaranty of, assumption of liability on, or warrant or
right to subscribe to or purchase, any of the foregoing.
(17) ``Voting security'' means any security presently entitling
the owner or holder thereof to vote in the direction or management
of the affairs of a company, or any security issued under or
pursuant to any trust, agreement, or arrangement whereby a trustee
or trustees or agent or agents for the owner or holder of such
security are presently entitled to vote in the direction or
management of the affairs of a company; and a specified per centum
of the outstanding voting securities of a company means such amount
of the outstanding voting securities of such company as entitles the
holder or holders thereof to cast said specified per centum of the
aggregate votes which the holders of all the outstanding voting
securities of such company are entitled to cast in the direction or
management of the affairs of such company.
(18) ``Utility assets'' means the facilities, in place, of any
electric utility company or gas utility company for the production,
transmission, transportation, or distribution of electric energy or
natural or manufactured gas.
(19) ``Service contract'' means any contract, agreement, or
understanding whereby a person undertakes to sell or furnish, for a
charge, any managerial, financial, legal, engineering, purchasing,
marketing, auditing, statistical, advertising, publicity, tax,
research, or any other service, information, or data.
(20) ``Sales contract'' means any contract, agreement, or
understanding whereby a person undertakes to sell, lease, or
furnish, for a charge, any goods, equipment, materials, supplies,
appliances, or similar property. As used in this paragraph the term
``property'' does not include electric energy or natural or
manufactured gas.
(21) ``Construction contract'' means any contract, agreement, or
understanding for the construction, extension, improvement,
maintenance, or repair of the facilities or any part thereof of a
company for a charge.
(22) ``Buy'', ``acquire'', ``acquisition'', or ``purchase''
includes any purchase, acquisition by lease, exchange, merger,
consolidation, or other acquisition.
(23) ``Sale'' or ``sell'' includes any sale, disposition by
lease, exchange or pledge, or other disposition.
(24) ``State'' means any State of the United States or the
District of Columbia.
(25) ``United States'', when used in a geographical sense, means
the States.
(26) ``State commission'' means any commission, board, agency,
or officer, by whatever name designated, of a State, municipality,
or other political subdivision of a State which under the law of
such State has jurisdiction to regulate public-utility companies.
(27) ``State securities commission'' means any commission,
board, agency, or officer, by whatever name designated, other than a
State commission as defined in paragraph (26) of this subsection,
which under the law of a State has jurisdiction to regulate,
approve, or control the issue or sale of a security by a company.
(28) ``Interstate commerce'' means trade, commerce,
transportation, transmission, or communication among the several
States or between any State and any place outside thereof.
(29) ``Integrated public-utility system'' means--
(A) As applied to electric utility companies, a system
consisting of one or more units of generating plants and/or
transmission lines and/or distributing facilities, whose utility
assets, whether owned by one or more electric utility companies,
are physically interconnected or capable of physical
interconnection and which under normal conditions may be
economically operated as a single interconnected and coordinated
system confined in its operations to a single area or region, in
one or more States, not so large as to impair (considering the
state of the art and the area or region affected) the advantages
of localized management, efficient operation, and the
effectiveness of regulation; and
(B) As applied to gas utility companies, a system consisting
of one or more gas utility companies which are so located and
related that substantial economies may be effectuated by being
operated as a single coordinated system confined in its
operations to a single area or region, in one or more States,
not so large as to impair (considering the state of the art and
the area or region affected) the advantages of localized
management, efficient operation, and the effectiveness of
regulation: Provided, That gas utility companies deriving
natural gas from a common source of supply may be deemed to be
included in a single area or region.
(b) Order of Commission essential to status as ``holding company'',
``subsidiary company'', or ``affiliate''
No person shall be deemed to be a holding company under clause (B)
of paragraph (7) of subsection (a) of this section, or a subsidiary
company under clause (B) of paragraph (8) of such subsection, or an
affiliate under clause (D) of paragraph (11) of such subsection, unless
the Commission, after appropriate notice and opportunity for hearing,
has issued an order declaring such person to be a holding company, a
subsidiary company, or an affiliate, or declaring a class of which such
person is a member to be affiliates. Such an order shall not become
effective for at least thirty days after the mailing of a copy thereof
to the person thereby declared to be a holding company, subsidiary
company, or affiliate; or, in the case of determination of affiliates by
classes, until at least thirty days after appropriate publication
thereof in such manner as the Commission shall determine. Whenever the
Commission, on its own motion or upon application by the person declared
to be a holding company, subsidiary company, or affiliate, finds that
the circumstances which gave rise to the issuance of any such order no
longer exist, the Commission shall by order revoke such order.
(c) Chapter inapplicable to United States, States, or their governmental
agencies
No provision in this chapter shall apply to, or be deemed to
include, the United States, a State, or any political subdivision of a
State, or any agency, authority, or instrumentality of any one or more
of the foregoing, or any corporation which is wholly owned directly or
indirectly by any one or more of the foregoing, or any officer, agent,
or employee of any of the foregoing acting as such in the course of his
official duty, unless such provision makes specific reference thereto.
(Aug. 26, 1935, ch. 687, title I, Sec. 2, 49 Stat. 804.)
Transfer of Functions
For transfer of functions of Securities and Exchange Commission,
with certain exceptions, to Chairman of such Commission, see Reorg. Plan
No. 10 of 1950, Secs. 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat.
1265, set out under section 78d of this title.
Nonapplicability of Chapter
Pub. L. 102-486, title IV, Sec. 404(c), Oct. 24, 1992, 106 Stat.
2880, provided that:
``(1) A company shall not be considered to be a gas utility company
under section 2(a)(4) of the Public Utility Holding Company Act of 1935
(15 U.S.C. 79b(a)(4)) solely because it owns or operates facilities used
for the distribution at retail of vehicular natural gas.
``(2) Notwithstanding section 11(b)(1) of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79k(b)(1)), a holding company registered
under such Act [15 U.S.C. 79 et seq.] solely by reason of the
application of section 2(a)(7)(A) or (B) of such Act with respect to
control of a gas utility company or subsidiary thereof, may acquire or
retain, in any geographic area, any interest in a company that is not a
public utility company and which, as a primary business, is involved in
the sale of vehicular natural gas or the manufacture, sale, transport,
installation, servicing, or financing of equipment related to the sale
for consumption of vehicular natural gas.
``(3) The sale or transportation of vehicular natural gas by a
company, or any subsidiary of such company, shall not be taken into
consideration in determining whether under section 3 of the Public
Utility Holding Company Act of 1935 (15 U.S.C. 79c) such company is
exempt from registration.
``(4) For purposes of this subsection, terms that are defined under
the Public Utility Holding Company Act of 1935 shall have the meaning
given such terms in such Act.
``(5) For purposes of this subsection, the term `vehicular natural
gas' means natural or manufactured gas that is ultimately used as a fuel
in a self-propelled vehicle.''
Section Referred to in Other Sections
This section is referred to in sections 77kkk, 79i, 79z-5a, 79z-5b,
79z-5c of this title; title 16 sections 824m, 839f; title 26 section
1083; title 42 section 7651o.
