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U.S. Code as of:
01/19/04
Section 79b. Definitions; application of chapter
(a) Definitions
When used in this chapter, unless the context otherwise requires
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(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.
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