SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Public Utility Holding Company Act 
of 1996''.

   TITLE I--REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

SEC. 101. PURPOSE.

    (a) The Public Utility Holding Company Act of 1935 was intended to 
facilitate the work of State and Federal regulators by placing certain 
constraints on the activities of holding company systems. Developments 
since 1935, including changes in other regulation and in the industry 
itself, have called into question the continued relevance of the model 
of regulation established by the statute.
    (b) There is, however, a continuing need for limited Federal 
regulation in this area to ensure the rate protection of utility 
consumers. The Public Utility Holding Company Act of 1996 is intended 
to eliminate unnecessary regulation, yet still provide for consumer 
protection by providing for State commission access to books and 
records of all companies in a holding company system, and for Federal 
audit authority and oversight of affiliate transactions, to the extent 
that such activities affect rates, while, at the same time, affording 
companies the flexibility required to compete in today's energy 
markets.

SEC. 102. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935, as amended, is 
hereby repealed, effective one year from the date of enactment of this 
Act.

 TITLE II--ENACTMENT OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1996

SEC. 201. PURPOSE.

    Limited Federal regulation is necessary to supplement the work of 
State commissions for the continued rate protection of electric and gas 
utility consumers. This Act is intended to address these concerns by 
providing for Federal and State access to books and records of all 
companies in a holding company system and for federal oversight of 
affiliate transactions, to the extent that such activities affect 
rates.

SEC. 202. DEFINITIONS.

    (a) When used in this title:
            (1) ``Person'' means an individual or company.
            (2) ``Company'' means a corporation, joint stock company, 
        partnership, association, business trust, organized group of 
        persons, whether incorporated or not, or a receiver or 
        receivers, trustee or trustees of any of the foregoing.
            (3) ``Electric utility company'' means any company that 
        owns or operates facilities used for the generation, 
transmission, or distribution of electric energy for sale.
            (4) ``Gas utility company'' means any company that owns or 
        operates facilities used for distribution at retail (other than 
        the distribution only in enclosed portable containers) of 
        natural or manufactured gas for heat, light or power.
            (5) ``Public utility company'' means an electric utility 
        company or gas utility company but does not mean a qualifying 
        facility as defined in the Public Utility Regulatory Policies 
        Act of 1992, or an exempt wholesale generator or a foreign 
        utility company defined by the Energy Policy Act of 1992.
            (6) ``Holding company'' means (A) any company that directly 
        or indirectly owns, controls, or holds with power to vote, 10 
        percent or more of the outstanding voting securities of a 
        public utility company or of a holding company of any public 
        utility company; and (B) any person, determined by the 
        Commission, after notice and opportunity for hearing, to 
        exercise directly or indirectly (either alone or pursuant to an 
arrangement or understanding with one or more persons) such a 
controlling influence over the management or policies of any public 
utility or holding company as to make it necessary or appropriate for 
the protection of consumers with respect to rates that such person be 
subject to the obligations, duties, and liabilities imposed in this 
title upon holding companies.
            (7) ``Subsidiary company'' of a holding company means (A) 
        any company 10 percent 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; 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 for the protection of 
        consumers with respect to rates that such person be subject to 
        the obligations, duties, and liabilities imposed in this title 
        upon subsidiary companies of holding companies.
            (8) ``Holding company system'' means a holding company 
        together with its subsidiary companies.
            (9) ``Associate company'' of a company means any company in 
        the same holding company system with such company.
            (10) ``Affiliate'' of a company means any company 5 percent 
        or more of whose outstanding voting securities are owned, 
        controlled, or held with power to vote, directly or indirectly, 
        by such company.
            (11) ``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.
            (12) ``Commission'' means the Federal Energy Regulatory 
        Commission.
            (13) ``State Commission'' means any commission, board, 
        agency, or officer, by whatever name designated, of a State, 
        municipality, or other political subdivision of a State that 
        under the law of such State has jurisdiction to regulate public 
        utility companies.
    (b) No provision in this Act shall apply to, or be deemed to 
include: (1) the United States, (2) a State or any political 
subdivision of a State, (3) any foreign governmental authority not 
operating in the United States, (4) any agency, authority, or 
instrumentality of any of the foregoing, or (5) any officer, agent, or 
employee of any of the foregoing acting as such in the course of his 
official duty.

SEC. 203. EXEMPTIONS.

    (a) The provisions of this Act shall not apply to any person 
previously exempted, by rule or order, from regulation under the Public 
Utility Holding Company Act of 1935 and such person shall continue to 
be exempted from the provisions of this Act: Provided, That the 
Commission may institute proceedings to terminate such exemption if the 
termination of such exemption would be necessary for regulating the 
rates of a public utility company and necessary for the protection of 
consumers.
    (b) The Commission, by rules and regulations, or by order upon 
application, may conditionally or unconditionally exempt any person or 
transaction, or any class or classes of persons or transactions, from 
any provision or provisions of this title or of any rule or regulation 
thereunder, if the Commission finds that regulation of such person or 
transaction is not relevant to the rates of a public utility company; 
in considering whether to grant such an exemption, the Commission shall 
consult with the affected State commissions.

SEC. 204. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) Every holding company and subsidiary company thereof shall 
maintain, and make available to the Commission, such books, records, 
accounts, and other documents as the Commission deems relevant to costs 
incurred by a public utility company that is an associate company 
of such holding company and necessary or appropriate for the protection 
of consumers with respect to rates.
    (b) Every affiliate of a holding company or of any subsidiary 
company thereof shall maintain, and make available to the Commission, 
such books, records, accounts, and other documents with respect to any 
transaction with another affiliate, as the Commission deems relevant to 
costs incurred by a public utility company that is an associate company 
of such holding company and necessary or appropriate for the protection 
of consumers with respect to rates.
    (c) The Commission may examine the books and records of any company 
in a holding company system, or any affiliate thereof, as the 
Commission deems relevant to costs incurred by a public utility company 
within such holding company system and necessary or appropriate for the 
protection of consumers with respect to rates.
    (d) No member, officer, or employee of the Commission shall divulge 
any fact or information that may come to his knowledge during the 
course of examination of books, accounts, or other information as 
hereinbefore provided, except insofar as he may be directed by the 
Commission or by a court.

SEC. 205. STATE ACCESS TO BOOKS AND RECORDS.

    (a) Upon the written request of a State commission having 
jurisdiction to regulate a public utility company in a holding company 
system, and subject to such terms and conditions as may be necessary 
and appropriate to safeguard against unwarranted disclosure to the 
public of any trade secrets or sensitive commercial information, a 
holding company or its associate company or affiliate thereof, wherever 
located, shall produce for inspection such books and records as have 
been identified in reasonable detail in a proceeding before the State 
commission, are relevant to costs incurred by such public utility 
company and are necessary for the effective discharge of the State 
commission's responsibilities with respect to such proceeding.
    (b) Nothing in this section shall preempt applicable State law 
concerning the provision of records and other information, or in any 
way limit a State's rights to obtain books and records and other 
information under Federal law, contract, or otherwise.

SEC. 206. AFFILIATE TRANSACTIONS.

    Nothing in this Act shall preclude the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to determine whether a public utility company may recover in rates 
any costs of an activity performed by an associate company, or any 
costs of goods or services acquired by such public utility company from 
an associate company.

SEC. 207. EFFECT ON OTHER REGULATION.

    Nothing in this Act shall preclude a State commission from 
exercising its jurisdiction under otherwise applicable law to protect 
utility consumers.

SEC. 208. ENFORCEMENT.

    The Commission shall have the same powers as set forth in Sections 
306 through 317 of the Federal Power Act (16 U.S.C. 825d-825p) to 
enforce the provisions of this Act.

SEC. 209. SAVINGS PROVISION.

    Nothing in this Act prohibits a person from engaging in activities 
in which it is legally engaged or authorized to engage on the effective 
date of the Public Utility Holding Company Act of 1996, provided that 
it continues to comply with the terms of any authorization, whether by 
rule or by order.

SEC. 210. IMPLEMENTATION.

    The Commission shall promulgate regulations necessary or 
appropriate to implement this Act not later than one year after the 
date of the enactment of this title.

SEC. 211. RESOURCES.

    All books and records that relate primarily to the function hereby 
vested in the Commission shall be transferred from the Securities and 
Exchange Commission to the Commission. It is the sense of the Congress 
that, subject to the approval of the Director of the Office of 
Management and Budget and the Chairman of the Securities and Exchange 
Commission all personnel of the Office of Public Utility Regulation of 
the Securities and Exchange Commission as of the date of enactment of 
this title should be transferred to the Commission.

SEC. 212. EFFECTIVE DATE.

    This Act shall take effect one year after the date of enactment.

SEC. 213. SEVERABILITY.

    If any provision of this Act, or the application of such provision 
to any person or circumstance, shall be held invalid, the remainder of 
the Act, and the application of such provision to persons or 
circumstances other than those as to which it is held invalid, shall 
not be affected thereby.

            TITLE III--CONFORMING CHANGES TO OTHER STATUTES

SEC. 301. FEDERAL POWER ACT.

    Section 318 of the Federal Power Act (16 U.S.C. 285g) if hereby 
repealed.
TABLE OF CONTENTS: 
     Title I:  Repeal of the Public Utility Holding Company Act of 
          1935 
     Title II:  Enactment of the Public Utility Holding Company 
          Act of 1996 
     Title III:  Conforming Changes to Other Statutes 
Public Utility Holding Company Act of 1996 - 
Title I:  Repeal of the Public Utility Holding Act of 1935
 - Repeals the Public Utility Holding Company Act of 1935 (PUHCA). 
Title II:  Enactment of the Public Utility Holding Company Act of 1996
 - Declares that this Act does not apply to persons previously exempted from regulations under the PUHCA.  Authorizes the Federal Energy Regulatory Commission (FERC) to institute proceedings to terminate any such exemption if termination would be necessary for regulating the rates of a public utility company and for protecting consumers. 
Empowers FERC to exempt any person or transaction from this title if it finds that regulation of such person or transaction is irrelevant to the rates of a public utility company. 
Prescribes procedural guidelines for both FERC and State access to holding company records (including subsidiaries and affiliates). 
Retains the jurisdiction of FERC and State commissions to determine whether a public utility company may recover in rates any costs of affiliate transactions.  Grants FERC certain Federal Power Act enforcement powers. 
Transfers from the Securities and Exchange Commission (SEC) to FERC all resources that relate primarily to the functions vested in FERC by this Act. 
Expresses the sense of the Congress that all personnel of the Office of Public Utility Regulation of the SEC should be transferred to FERC. 
Title III:  Conforming Changes to Other Statutes
 - Amends the Federal Power Act to repeal its conflict of jurisdiction guidelines.
Public Utility Holding Company Act of 1996