I 
108TH CONGRESS 
1ST SESSION H. R. 1370
To provide for expansion of electricity transmission networks in order to 
support competitive electricity markets, to ensure reliability of electric 
service, to modernize regulation and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 19, 2003
Mr. WYNN (for himself and Mr. BURR) introduced the following bill; which 
was referred to the Committee on Energy and Commerce, and in addition 
to the Committee on Ways and Means, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To provide for expansion of electricity transmission networks 
in order to support competitive electricity markets, to 
ensure reliability of electric service, to modernize regula-
tion and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Interstate Transmission Act’’. 
(b) TABLE OF CONTENTS.—The table of contents is 
as follows:
Sec. 1. Short title and table of contents. 
Sec. 2. Findings. 
Sec. 3. Sustainable transmission networks rulemaking. 
Sec. 4. Electric reliability standards. 
Sec. 5. Disposition of property. 
Sec. 6. Promotion of voluntary development of regional transmission organiza-
tions, independent transmission providers, and similar organi-
zations. 
Sec. 7. State and Federal authority to site transmission facilities. 
Sec. 8. PUHCA exemption for RTOs. 
Sec. 9. Independent transmission companies.
SEC. 2. FINDINGS. 
Congress finds as follows: 
(1) Transmission networks are the backbone of 
competitive power markets and increased interstate 
commerce in electricity. 
(2) Wholesale electric competition, already in 
effect across the nation, and retail electric competi-
tion, adopted by nearly half of the States, depend on 
adequate transmission networks to benefit electric 
consumers. 
(3) The expansion, enhancement, and improve-
ment of transmission facilities are necessary to 
maintain and improve reliability of electric service. 
(4) To support competitive power markets and 
to maintain and improve reliability of electric serv-
failure of one or more of such components may ad-
versely affect the ability of the operators of other 
components within the system to maintain reliable 
operation of the facilities within their control. 
‘‘(6) The term ‘transmission organization’ 
means a regional transmission organization, inde-
pendent system operator, independent transmission 
provider, or other transmission organization finally 
approved by the Commission for the operation of 
transmission facilities. 
‘‘(7) The term ‘regional entity’ means an entity 
having enforcement authority pursuant to subsection 
(e)(4). 
‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The 
Commission shall have jurisdiction, within the United 
States, over the ERO certified by the Commission under 
subsection (c), any regional entities, and all users, owners 
and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for pur-
poses of approving reliability standards established under 
this section and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system 
shall comply with reliability standards that take effect 
under this section.
‘‘(2) The Commission shall issue a final rule to imple-
ment the requirements of this section not later than 180 
days after the date of enactment of this section. 
‘‘(c) CERTIFICATION.—Following the issuance of a 
Commission rule under subsection (b)(2), any person may 
submit an application to the Commission for certification 
as the Electric Reliability Organization (ERO). The Com-
mission may certify one such ERO if the Commission de-
termines that such ERO—
‘‘(1) has the ability to develop and enforce, sub-
ject to subsection (e)(2), reliability standards that 
provide for an adequate level of reliability of the 
bulk-power system; 
‘‘(2) has established rules that—
‘‘(A) assure its independence of the users 
and owners and operators of the bulk-power 
system, while assuring fair stakeholder rep-
resentation in the selection of its directors and 
balanced decisionmaking in any ERO com-
mittee or subordinate organizational structure; 
‘‘(B) allocate equitably reasonable dues, 
fees, and other charges among end users for all 
activities under this section; 
‘‘(C) provide fair and impartial procedures 
for enforcement of reliability standards through
the imposition of penalties in accordance with 
subsection (e) (including limitations on activi-
ties, functions, or operations, or other appro-
priate sanctions); 
‘‘(D) provide for reasonable notice and op-
portunity for public comment, due process, 
openness, and balance of interests in developing 
reliability standards and otherwise exercising its 
duties; and 
‘‘(E) provide for taking, after certification, 
appropriate steps to gain recognition in Canada 
and Mexico. 
‘‘(d) RELIABILITY STANDARDS.—(1) The Electric 
Reliability Organization shall file each reliability standard 
or modification to a reliability standard that it proposes 
to be made effective under this section with the Commis-
sion. 
‘‘(2) The Commission may approve by rule or order 
a proposed reliability standard or modification to a reli-
ability standard if it determines that the standard is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest. The Commission shall give due 
weight to the technical expertise of the Electric Reliability 
Organization with respect to the content of a proposed 
standard or modification to a reliability standard and to
the technical expertise of a regional entity organized on 
an Interconnection-wide basis with respect to a reliability 
standard to be applicable within that Interconnection, but 
shall not defer with respect to the effect of a standard 
on competition. A proposed standard or modification shall 
take effect upon approval by the Commission. 
‘‘(3) The Electric Reliability Organization shall 
rebuttably presume that a proposal from a regional entity 
organized on an Interconnection-wide basis for a reliability 
standard or modification to a reliability standard to be ap-
plicable on an Interconnection-wide basis is just, reason-
able, and not unduly discriminatory or preferential, and 
in the public interest. 
‘‘(4) The Commission shall remand to the Electric 
Reliability Organization for further consideration a pro-
posed reliability standard or a modification to a reliability 
standard that the Commission disapproves in whole or in 
part. 
‘‘(5) The Commission, upon its own motion or upon 
complaint, may order the Electric Reliability Organization 
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that ad-
dresses a specific matter if the Commission considers such 
a new or modified reliability standard appropriate to carry 
out this section.
‘‘(6) The final rule adopted under subsection (b)(2) 
shall include fair processes for the identification and time-
ly resolution of any conflict between a reliability standard 
and any function, rule, order, tariff, rate schedule, or 
agreement accepted, approved, or ordered by the Commis-
sion applicable to a transmission organization. Such trans-
mission organization shall continue to comply with such 
function, rule, order, tariff, rate schedule or agreement ac-
cepted, approved, or ordered by the Commission until—
‘‘(A) the Commission finds a conflict exists 
between a reliability standard and any such 
provision; 
‘‘(B) the Commission orders a change to 
such provision pursuant to section 206 of this 
part; and 
‘‘(C) the ordered change becomes effective 
under this part. 
If the Commission determines that a reliability standard 
needs to be changed as a result of such a conflict, it shall 
order the ERO to develop and file with the Commission 
a modified reliability standard under paragraph (4) or (5) 
of this subsection. 
‘‘(e) ENFORCEMENT.—(1) The ERO may impose, 
subject to paragraph (2), a penalty on a user or owner 
or operator of the bulk-power system for a violation of a
reliability standard approved by the Commission under 
subsection (d) if the ERO, after notice and an opportunity 
for a hearing—
‘‘(A) finds that the user or owner or operator 
has violated a reliability standard approved by the 
Commission under subsection (d); and 
‘‘(B) files notice and the record of the pro-
ceeding with the Commission. 
‘‘(2) A penalty imposed under paragraph (1) may 
take effect not earlier than the 31st day after the electric 
reliability organization files with the Commission notice of 
the penalty and the record of proceedings. Such penalty 
shall be subject to review by the Commission, on its own 
motion or upon application by the user, owner or operator 
that is the subject of the penalty filed within 30 days after 
the date such notice is filed with the Commission. Applica-
tion to the Commission for review, or the initiation of re-
view by the Commission on its own motion, shall not oper-
ate as a stay of such penalty unless the Commission other-
wise orders upon its own motion or upon application by 
the user, owner or operator that is the subject of such 
penalty. In any proceeding to review a penalty imposed 
under paragraph (1), the Commission, after notice and op-
portunity for hearing (which hearing may consist solely 
of the record before the electric reliability organization and
opportunity for the presentation of supporting reasons to 
affirm, modify, or set aside the penalty), shall by order 
affirm, set aside, reinstate, or modify the penalty, and, 
if appropriate, remand to the electric reliability organiza-
tion for further proceedings. The Commission shall imple-
ment expedited procedures for such hearings. 
‘‘(3) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard 
and may impose a penalty against a user or owner or oper-
ator of the bulk-power system, if the Commission finds, 
after notice and opportunity for a hearing, that the user 
or owner or operator of the bulk-power system has en-
gaged or is about to engage in any acts or practices that 
constitute or will constitute a violation of a reliability 
standard. 
‘‘(4) The Commission shall establish regulations au-
thorizing the ERO to enter into an agreement to delegate 
authority to a regional entity for the purpose of proposing 
reliability standards to the ERO and enforcing reliability 
standards under paragraph (1) if—
‘‘(A) the regional entity is governed by—
‘‘(i) an independent board; 
‘‘(ii) a balanced stakeholder board; or 
‘‘(iii) a combination independent and bal-
anced stakeholder board;
‘‘(B) the regional entity otherwise satisfies the 
provisions of subsection (c)(1) and (2); and 
‘‘(C) the agreement promotes effective and effi-
cient administration of bulk-power system reliability. 
The Commission may modify such delegation. The ERO 
and the Commission shall rebuttably presume that a pro-
posal for delegation to a regional entity organized on an 
Interconnection-wide basis promotes effective and efficient 
administration of bulk-power system reliability and should 
be approved. Such regulation may provide that the Com-
mission may assign the ERO’s authority to enforce reli-
ability standards under paragraph (1) directly to a re-
gional entity consistent with the requirements of this para-
graph. 
‘‘(5) The Commission may take such action as is nec-
essary or appropriate against the ERO or a regional entity 
to ensure compliance with a reliability standard or any 
Commission order affecting the ERO or a regional entity. 
‘‘(6) Any penalty imposed under this section shall 
bear a reasonable relation to the seriousness of the viola-
tion and shall take into consideration the efforts of such 
user, owner, or operator to remedy the violation in a time-
ly manner. 
‘‘(f) CHANGES IN ELECTRICITY RELIABILITY ORGA-
NIZATION RULES.—The Electric Reliability Organization
shall file with the Commission for approval any proposed 
rule or proposed rule change, accompanied by an expla-
nation of its basis and purpose. The Commission, upon 
its own motion or complaint, may propose a change to the 
rules of the Electric Reliability Organization. A proposed 
rule or proposed rule change shall take effect upon a find-
ing by the Commission, after notice and opportunity for 
comment, that the change is just, reasonable, not unduly 
discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c). 
‘‘(g) RELIABILITY REPORTS.—The Electric Reli-
ability Organization shall conduct periodic assessments of 
the reliability and adequacy of the bulk-power system in 
North America. 
‘‘(h) COORDINATION WITH CANADA AND MEXICO.— 
The President is urged to negotiate international agree-
ments with the governments of Canada and Mexico to pro-
vide for effective compliance with reliability standards and 
the effectiveness of the Electric Reliability Organization 
in the United States and Canada or Mexico. 
‘‘(i) SAVINGS PROVISIONS.—(1) The Electric Reli-
ability Organization shall have authority to develop and 
enforce compliance with reliability standards for only the 
bulk-power system.
‘‘(2) This section does not authorize the Electric Reli-
ability Organization or the Commission to order the con-
struction of additional generation or transmission capacity 
or to set and enforce compliance with standards for ade-
quacy or safety of electric facilities or services. 
‘‘(3) Nothing in this section shall be construed to pre-
empt any authority of any State to take action to ensure 
the safety, adequacy, and reliability of electric service 
within that State, as long as such action is not incon-
sistent with any reliability standard, except that the State 
of New York may establish rules that result in greater 
reliability within that State, as long as such action does 
not result in lesser reliability outside the State than that 
provided by the reliability standards. 
‘‘(4) Within 90 days of the application of the Electric 
Reliability Organization or other affected party, and after 
notice and opportunity for comment, the Commission shall 
issue a final order determining whether a State action is 
inconsistent with a reliability standard, taking into consid-
eration any recommendation of the Electric Reliability Or-
ganization. 
‘‘(5) The Commission, after consultation with the 
Electric Reliability Organization and the State taking ac-
tion, may stay the effectiveness of any State action, pend-
ing the Commission’s issuance of a final order.
‘‘(j) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition 
of at least two-thirds of the States within a region that 
have more than one-half of their electric load served within 
the region. A regional advisory body shall be composed or 
of one member from each participating State in the region, 
appointed by the Governor of each State, and may include 
representatives of agencies, States, and provinces outside 
the United States. A regional advisory body may provide 
advice to the Electric Reliability Organization, a regional 
entity, or the Commission regarding the governance of an 
existing or proposed regional entity within the same re-
gion, whether a standard proposed to apply within the re-
gion is just, reasonable, not unduly discriminatory or pref-
erential, and in the public interest, whether fees proposed 
to be assessed within the region are just, reasonable, not 
unduly discriminatory or preferential, and in the public 
interest and any other responsibilities requested by the 
Commission. The Commission may give deference to the 
advice of any such regional advisory body if that body is 
organized on an Interconnection-wide basis. 
‘‘(k) APPLICATION TO ALASKA AND HAWAII.—The 
provisions of this section do not apply to Alaska or Ha-
waii.’’.
SEC. 5. DISPOSITION OF PROPERTY. 
Section 203 of the Federal Power Act (16 U.S.C. 
824b) is repealed. 
SEC. 6. PROMOTION OF VOLUNTARY DEVELOPMENT OF RE-
GIONAL 
TRANSMISSION 
ORGANIZATIONS, 
INDEPENDENT TRANSMISSION PROVIDERS, 
AND SIMILAR ORGANIZATIONS. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end thereof the fol-
lowing new section: 
‘‘SEC. 217. PROMOTION OF VOLUNTARY DEVELOPMENT OF 
REGIONAL TRANSMISSION ORGANIZATIONS, 
INDEPENDENT TRANSMISSION PROVIDERS, 
AND SIMILAR ORGANIZATIONS. 
‘‘(a) IN GENERAL.—The Commission may approve 
and may encourage the formation of regional transmission 
organizations, independent transmission providers, and 
similar organizations (referred to in this section as ‘trans-
mission organizations’) for the purpose of enhancing the 
transmission of electric energy in interstate commerce. 
Among options for the formation of a transmission organi-
zation, the Commission shall prefer those in which—
‘‘(1) participation in the organization by trans-
mitting utilities is voluntary;
‘‘(2) the form, structure, and operating entity 
of the organization are approved of by participating 
transmitting utilities; and 
‘‘(3) market incentives exist to promote invest-
ment for expansion of transmission facilities and for 
the introduction of new transmission technologies 
within the territory of the organization. 
‘‘(b) CONDITIONS.—No order issued under this Act 
shall be conditioned upon or require a transmitting utility 
to transfer operational control of jurisdictional facilities 
to an independent system operator or other transmission 
organization. 
‘‘(c) COMPLAINT.—In addition to any other rights or 
remedies it may have under this Act, any entity serving 
electric load that is denied services by a transmission orga-
nization that the transmission organization makes avail-
able to other load serving entities shall be entitled to file 
a complaint with the Commission concerning the denial 
of such services. If the Commission shall find, after an 
evidentiary hearing on the record, that the denial of serv-
ices complained of was unjust, unreasonable, unduly dis-
criminatory or preferential, or contrary to the public inter-
est, the Commission may order the provision of such serv-
ices at rates and on terms and conditions that shall be 
in accordance with section 215 of this Act.’’.
SEC. 7. STATE AND FEDERAL AUTHORITY TO SITE TRANS-
MISSION FACILITIES. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end thereof the fol-
lowing new section: 
‘‘SEC. 218. STATE AND FEDERAL AUTHORITY TO SITE 
TRANSMISSION FACILITIES. 
‘‘(a) In order to ensure the availability of adequate 
capacity to provide for reliable, economic transmission of 
electric energy in interstate commerce, upon enactment of 
this section, and after notice and opportunity for com-
ment, the Commission shall publish a report, which it shall 
revise each year thereafter, describing areas where addi-
tional facilities are necessary to increase electric trans-
mission capacity. The report shall include information 
from the regional transmission organization planning 
processes explaining the feasibility of providing additional 
transmission capacity through existing transmission rights 
of way, and shall assess efforts to promote adequate and 
economically efficient transmission of electricity through 
the introduction of new transmission technologies, and to 
encourage investment in new and existing transmission fa-
cilities. The Commission shall rely upon information pro-
vided by regional transmission organizations developed in 
conjunction with States through regional transmission or-
ganization planning processes, information provided by
has not received all permits and approvals required to con-
struct the facilities, the Commission may, after consid-
ering the feasibility of upgrading existing facilities to in-
crease electric transmission capacity, upon its own motion 
or upon request, and after notice and opportunity for 
hearing, issue a certificate of public convenience and ne-
cessity to construct a proposed transmission facility if it 
finds the facilities to be authorized by the certificate are 
or will be required by public convenience and necessity. 
‘‘(d) The Commission shall have the power to attach 
to the issuance of such certificate and to the exercise of 
the rights granted thereunder such reasonable terms and 
conditions related to the construction of such facility as 
the public convenience and necessity may require. 
‘‘(e) The Commission shall require that construction 
on the proposed transmission facility commence within 18 
months after the Commision grants an issuance of certifi-
cate. If construction does not commence within the allowed 
time, the certificate reverts back to the Commission. The 
owner of the proposed transmission facility may apply for 
up to two six-month extensions. 
‘‘(f) The Commission shall issue its final decision in 
the certificate proceeding within 18 months after the filing 
of a request for a certificate or the initiation of pro-
ceedings on its own motion.
‘‘(g) When any holder of a certificate of public con-
venience and necessity for electric transmission facilities 
issued by the Commission pursuant to subsection (c) can-
not acquire by contract, or is unable to agree with the 
owner of the property to the compensation to be paid for 
the necessary rights-of-way to construct, operate and 
maintain such transmission facility, it may acquire the 
same by the exercise of the right of eminent domain in 
the district court of the United States for the district in 
which such property may be located, or in the State 
courts.’’. 
SEC. 8. PUBLIC UTILITY HOLDING COMPANY ACT EXEMP-
TION FOR RTOS. 
The Public Utility Holding Company Act (15 U.S.C. 
79 et seq.) is amended—
(1) by redesignating section 36 as section 37; 
and 
(2) by inserting after section 35 the following: 
‘‘SEC. 36. SAVINGS CLAUSE. 
‘‘(a) IN GENERAL.—This Act shall not apply to a 
multistate independent transmission company or to any 
action to form, modify, finance, sell, purchase, operate, or 
otherwise affect such an organization. 
‘‘(b) DEFINITIONS.—For purposes of subsection (a):
‘‘(1) The term ‘multistate independent trans-
mission’ means any person which owns or operates 
facilities in more than one State used for the trans-
mission of electric energy in interstate commerce 
and which—
‘‘(A) is not engaged in the generation or 
sale of electric energy; or 
‘‘(B) the Federal Energy Regulatory Com-
mission determines is not a market participant 
(within the meaning of the Commission’s rules 
applicable to regional transmission organiza-
tions). 
‘‘(2) The term ‘transmission of electric energy 
in interstate commerce’ shall have the meaning given 
such term in section 201 of the Federal Power 
Act.’’. 
SEC. 9. INDEPENDENT TRANSMISSION COMPANIES. 
(a) IN GENERAL.—Section 1033 of the Internal Rev-
enue Code of 1986 (relating to involuntary conversions) 
is amended by redesignating subsection (k) as subsection 
(l) and by inserting after subsection (j) the following new 
subsection: 
‘‘(k) SALES OR DISPOSITIONS TO IMPLEMENT FED-
ERAL ENERGY REGULATORY COMMISSION
OR STATE 
ELECTRIC RESTRUCTURING POLICY.—
‘‘(1) IN GENERAL.—For purposes of this sub-
title, if a taxpayer elects the application of this sub-
section to a qualifying electric transmission trans-
action—
‘‘(A) such transaction shall be treated as 
an involuntary conversion to which this section 
applies, and 
‘‘(B) exempt utility property shall be treat-
ed as property which is similar or related in 
service or use to the property disposed of in 
such transaction. 
‘‘(2) EXTENSION OF REPLACEMENT PERIOD.—
In the case of any involuntary conversion described 
in paragraph (1), subsection (a)(2)(B) shall be ap-
plied by substituting ‘4 years’ for ‘2 years’ in clause 
(i) thereof. 
‘‘(3) QUALIFYING
ELECTRIC
TRANSMISSION 
TRANSACTION.—For purposes of this subsection, the 
term ‘qualifying electric transmission transaction’ 
means any sale or other disposition before January 
1, 2009, of—
‘‘(A) property used in the trade or business 
of providing electric transmission services, or 
‘‘(B) any stock or partnership interest in a 
corporation or partnership, as the case may be,
whose principal trade or business consists of 
providing electric transmission services, 
but only if such sale or disposition is to an inde-
pendent transmission company. 
‘‘(4) 
INDEPENDENT
TRANSMISSION
COM-
PANY.—For purposes of this subsection, the term 
‘independent transmission company’ means—
‘‘(A) a regional transmission organization 
approved by the Federal Energy Regulatory 
Commission, 
‘‘(B) a person—
‘‘(i) who the Federal Energy Regu-
latory Commission determines in its au-
thorization of the transaction under section 
203 of the Federal Power Act (16 U.S.C. 
823b) is not a market participant within 
the meaning of such Commission’s rules 
applicable to regional transmission organi-
zations, and 
‘‘(ii) whose transmission facilities to 
which the election under this subsection 
applies are under the operational control of 
a Federal Energy Regulatory Commission-
approved regional transmission organiza-
tion before the close of the period specified
in such authorization, but not later than 
the close of the period applicable under 
subsection (a)(2)(B) as extended under 
paragraph (2), or 
‘‘(C) in the case of facilities subject to the 
exclusive jurisdiction of the Public Utility Com-
mission of Texas, a person which is approved by 
that Commission as consistent with Texas State 
law regarding an independent transmission or-
ganization. 
‘‘(5) EXEMPT
UTILITY
PROPERTY.—For pur-
poses of this subsection—
‘‘(A) IN
GENERAL.—The term ‘exempt 
utility property’ means property used in the 
trade or business of—
‘‘(i) generating, transmitting, distrib-
uting, or selling electricity, or 
‘‘(ii) producing, transmitting, distrib-
uting, or selling natural gas. 
‘‘(B) NONRECOGNITION OF GAIN BY REA-
SON OF ACQUISITION OF STOCK.—Acquisition of 
control of a corporation shall be taken into ac-
count under this section with respect to a quali-
fying electric transmission transaction only if 
the principal trade or business of such corpora-
tion is a trade or business referred to in sub-
paragraph (A). 
‘‘(6) 
SPECIAL
RULE
FOR
CONSOLIDATED 
GROUPS.—In the case of a corporation which is a 
member of an affiliated group filing a consolidated 
return, such corporation shall be treated as satis-
fying the purchase requirement of subsection (a)(2) 
with respect to any qualifying electric transmission 
transaction engaged in by such corporation to the 
extent such requirement is satisfied by another 
member of such group. 
‘‘(7) ELECTION.—An election under paragraph 
(1), once made, shall be irrevocable.’’
(b) EXCEPTION FROM GAIN RECOGNITION UNDER 
SECTION 1245.—Subsection (b) of section 1245 of such 
Code is amended by adding at the end the following new 
paragraph: 
‘‘(9) DISPOSITIONS
TO
IMPLEMENT
FEDERAL 
ENERGY REGULATORY COMMISSION OR STATE ELEC-
TRIC RESTRUCTURING POLICY.—At the election of 
the taxpayer, the amount of gain which would (but 
for this paragraph) be recognized under this section 
on any qualified electric transmission transaction (as 
defined in section 1033(k)) for which an election 
under section 1033 is made shall be reduced by the
aggregate reduction in the basis of section 1245 
property held by the taxpayer or, if insufficient, by 
a member of an affiliated group which includes the 
taxpayer at any time during the taxable year in 
which such transaction occurred. The manner and 
amount of such reduction shall be determined under 
regulations prescribed by the Secretary.’’
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) of this section shall apply to trans-
actions occurring after the date of the enactment of this 
Act. 
(d) DISTRIBUTIONS OF STOCK TO IMPLEMENT FED-
ERAL ENERGY REGULATORY COMMISSION
OR STATE 
ELECTRIC RESTRUCTURING POLICY.—
(1) IN GENERAL.—Subparagraph (A) of section 
355(e)(3) of such Code (relating to special rules re-
lating to acquisitions) is amended by inserting after 
clause (iv) the following new clause: 
‘‘(v) The acquisition of stock in any 
controlled corporation in a qualifying elec-
tric transmission transaction (as defined in 
section 1033(k)).’’.
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to distributions after 
the date of the enactment of this Act.
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