S7912 CONGRESSIONAL RECORD — SENATE June 7, 1995

fact, the other day I cited him, when I

was on a national program of State legislators and they asked, in terms of a

model of a State to deregulate, what

might it be. And I suggested the work

of BOB KERREY of Nebraska when he

was Governor. I observed his work in

deregulating telecommunications in

that State, and I certainly look forward to his insights.

We have worked on a bipartisan basis

on this bill. In fact, all the Democrats

on the Commerce Committee voted for

the bill. Senator HOLLINGS did a good

job. I visited with and delivered a copy

of the original draft bill to each of the

Democrats on the Commerce Committee.

Two Republicans on the committee

voted against the bill. Eight Republicans on the committee voted for it.

This is a bipartisan bill. All the Democrats on the committee voted for it. I

think that is a very important point.

THE PUBLIC UTILITY HOLDING COMPANY ACT

PROVISIONS

Mr. D’AMATO. Mr. President, today I

rise to speak about certain provisions

in S. 652, the Telecommunications

Competition and Deregulation Act of

1995.

This bill contains provisions that

would significantly alter the Public

Utility Holding Company Act of 1935

(PUHCA). The PUHCA was originally

enacted 60 years ago to simplify the

utility holding company structure and

ensure that consumers were protected

from unfair rate increases. At that

time, there were many industry abuses

involving the pyramidal corporate

structures of holding companies which

greatly increased the speculative nature of securities issuances, led to market manipulation, and inflated the capital structure. The abuses in the industry made it nearly impossible for the

States to adequately protect utility

ratepayers.

The PUHCA limited the types of

businesses that holding companies

could acquire to utility related services. As reported out of the Commerce

Committee, Sections 102 and 206 of the

‘‘Telecommunications Competition and

Deregulation Act’’ would permit diversification of registered holding companies into the telecommunications business—without SEC approval or any

other conditions. Allowing holding

companies to diversify away from their

traditional core utility operations is a

departure from the basis principles underlying the 1935 Act.

Mr. President, my primary concern

with these sections of the ‘‘Telecommunications Competition and Deregulation Act’’ is that losses resulting

from the subsidiaries telecommunications activities could be passed on to

public utility customers in the form of

higher utility rates.

I would like to commend Senator

PRESSLER and Senator LOTT for including my provision—which addresses

these concerns—in the manager’s

amendment. My provision puts in place

the proper consumer safeguards to protect electric utility ratepayers and

stockholders from bearing the costs of

diversification by registered holding

companies into telecommunications

activities.

It requires the Federal Communications Commission, the Federal Energy

Regulatory Commission, and the State

regulators to monitor the activities

and practices of both the subsidiaries

and the parent holding companies that

engage in telecommunications activities in order to ensure that utility consumers pay only what they get.

For example, my provision would ensure that telecommunications-related

activities are conducted in a separate

subsidiary of the holding company. It

would also provide the States with the

appropriate regulatory, investigatory,

and enforcement authority to protect

utility consumers. To this effect, it

would require the States to approve

any rate increases by those utility

companies that have a telecommunications subsidiary. As a result, the

States can examine the proposed rate

increase to make sure it is justified

and that utility customers are not subsidizing the holding company’s telecommunications-related costs.

The Banking Committee has consulted the SEC as well as industry and

consumer representatives in crafting

this provision to make sure appropriate safeguards will allow the holding

companies to diversify without negative consequences to utility customers.

We have struck a reasonable balance.

As a conferee on the Telecommunications Competition and Deregulation

Act of 1995, I will be in a position to

make certain that this balance is preserved.

At the same time, I would add that

the Banking Committee intends to examine the continuing need for the

PUHCA once the Securities and Exchange Commission releases its report

and recommendations on repeal or reform of the Act.

I would like to thank Senator PRESSLER, Senator LOTT, Senator BUMPERS,

Senator SARBANES, and their staffs for

their cooperation on this issue.

MESSAGES FROM THE PRESIDENT

fMessages from the President of the

United States were communicated to

the Senate by Mr. Thomas, one of his

secretaries.

EXECUTIVE MESSAGES REFERRED

fAs in executive session the Presiding

Officer laid before the Senate messages

from the President of the United

States submitting sundry nominations

which were referred to the Committee

on Finance.

(The nominations received today are

printed at the end of the Senate proceedings.)

PETITIONS AND MEMORIALS

The following petitions and memorials were laid before the Senate and

were referred or ordered to lie on the

table as indicated:

POM–146. A petition from a citizen of the

State of Indiana relative to taxes; to the

Committee on the Judiciary.

POM–147. A resolution adopted by the

Board of Representatives, Otsego County,

New York relative to local government resources; to the Committee on the Judiciary.

POM–148. A resolution adopted by the

Council of the City of Alexandria, Virginia

relative to the flag; to the Committee on the

Judiciary.

POM–149. A concurrent resolution adopted

by the Legislature of the State of Arizona; to

the Committee on the Judiciary.

‘‘SENATE CONCURRENT RESOLUTION 1018

‘‘Whereas, the people of the State of Arizona believe that state legislatures should be

provided with a method of offering amendments to the Constitution of the United

States: Therefore be it

‘‘Resolved by the Senate of the State of Arizona, the House of Representatives concurring:

‘‘1. That the Congress of the United States

propose to the people of the United States an

amendment to the Constitution of the United States to amend the Constitution of the

United States as follows:

‘‘ARTICLE V—AMENDMENT OF THE

CONSTITUTION

‘‘The Congress, whenever two thirds of

both Houses shall deem it necessary, shall

propose Amendments to this Constitution,

or, on the Application of the Legislatures of

two thirds of the several States, shall call a

Convention for proposing Amendments,

which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of

three fourths of the several States, or by

Conventions in three fourths thereof, as the

one or the other Mode of Ratification may be

proposed by the Congress; Provided that no

Amendment which may be made prior to the

Year One thousand eight hundred and eight

shall in any Manner affect the first and

fourth Clauses in the Ninth Section of the

first Article; and that no States, without its

Consent, shall be deprived of its equal Suffrage in the Senate.

‘‘Whenever three-fourths of the legislatures of the States deem it necessary, they

shall propose amendments to this Constitution. These proposed amendments are valid

for all intents and purposes two years after

these amendments are submitted to Congress

unless both Houses of Congress by a twothirds vote disapprove the proposed amendments within two years after their submission.

‘‘2. That the Secretary of State of the

State of Arizona transmit copies of this Concurrent Resolution to the President of the

United States, the President of the United

States Senate, the Speaker of the United

States House of Representatives, the President of the Senate and the Speaker of the

House of Representatives of each state’s legislature of the United States of America, and

the Arizona Congressional Delegation.’’

POM–150. A concurrent resolution adopted

by the Legislature of the State of Arizona; to

the Committee on the Judiciary.

‘‘SENATE CONCURRENT RESOLUTION 1006

‘‘Be it resolved by the Senate of the State

of Arizona, the House of Representatives

concurring:

‘‘1. The following Declaration of Sovereignty is adopted:

‘‘Section I:

‘‘A. We, the legislature of the State of Arizona, hereby reaffirm the sovereignty of the

states and of the people.