[Congressional Record Volume 140, Number 97 (Friday, July 22, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LEAHY (for himself and Mr. Jeffords):
  S. 2311. A bill to exempt a foreign holding company from the 
application of the provisions of the Public Utility Holding Company Act 
of 1935; to the Committee on Banking, Housing, and Urban Affairs.


    public utility holding company act of 1935 exception act of 1994

  Mr. LEAHY. Mr. President, today I am introducing legislation to 
clarify a technical ambiguity in the Public Utility Holding Company Act 
of 1935 [PUHCA]. I am pleased that Senator Jeffords is joining me today 
as an original cosponsor. For the last 7 years, Vermont Gas Systems, 
Inc. [Vermont Gas], the only natural gas utility in Vermont, has 
traveled on an odyssey to resolve this technicality. Let me explain.
  In late 1986, Gaz Metropolitain, Inc. [Gaz Metropolitain], one of the 
largest distributors of natural gas in Canada, acquired Northern New 
England Gas Corp. and its subsidiary Vermont Gas. Vermont Gas is the 
sole source of natural gas in Vermont, which is an environmentally 
sound and competitively priced energy source for many Vermonters. Gaz 
Metropolitain's acquisition has greatly benefited Vermont Gas and its 
customers--the people of Vermont--for 2 reasons.
  First, the acquisition has given Vermont Gas a reliable source of 
natural gas. Vermont is not served by any U.S.-based natural gas 
company and depends on its natural gas from the Canadian natural gas 
pipeline. Through its affiliation with Gaz Metropolitain, Vermont Gas 
has increased its bargaining position to acquire competitively priced 
natural gas. In 1991, for example Vermont Gas negotiated a ground-
breaking 15-year supply contract with Western Gas Marketing Ltd. of 
Canada. For the first time, Vermont Gas was able to negotiate a partial 
requirements contract, leaving Vermont Gas free to pursue other 
suppliers on a competitive basis.
  Second, the acquisition has given Vermont Gas, a small company, 
extensive financial, managerial, and technical expertise. With the help 
of Gaz Metropolitain's affiliates, Vermont Gas has successfully 
renegotiated its existing debt at favorable rates. The substantial 
savings from this refinancing has kept Vermont Gas customer rates low 
and has strengthen its financial base. Experts from Gaz Metropolitain 
also have provided Vermont Gas with invaluable advice on insurance 
management, regulatory guidance and internal audit procedures.
  Despite the benefits of Gaz Metropolitain's indirect ownership of 
Vermont Gas, this acquisition has yet to receive regulatory approval. 
Under the PUHCA, the Securities and Exchange Commission [SEC] must 
approve acquisitions of public utilities based in the United States. In 
1987, Gaz Metropolitain applied to the SEC for PUHCA approval to 
indirectly own Vermont Gas. This application, however, was put on hold 
until the SEC determined if an acquisition by a foreign company like 
Gaz Metropolitain may be approved under the PUHCA. The PUHCA, first 
enacted in 1935, fails to adequately address public utility holding 
companies located outside the United States that are adjacent to U.S. 
utilities.

  To aid the SEC in its review process, I introduced legislation in 
1989, which was almost identical to today's bill, that would clarify 
the PUHCA to explicitly permit Gaz Metropolitain to indirectly own 
Vermont Gas. The Senate passed that legislation as section 501 of the 
Securities Acts Amendments of 1989, H.R. 1396. Section 501, however, 
was dropped in the House-Senate conference committee on H.R. 1396 
because some conferees felt the legislation was premature since the SEC 
had not finished reviewing Gaz Metropolitain's PUHCA application.
  For various reasons, Gaz Metropolitain's PUHCA application is still 
pending before the SEC. I understand that the SEC's Division of 
Investment Management [Division] recently filed a brief with the 
commission recommending against approval of Gaz Metropolitain's 
acquisition of Vermont Gas. While the Division acknowledges the 
benefits of the acquisition, it has interpreted PUHCA to not permit 
foreign ownership of a U.S. public utility. The Division went on to say 
that ``[l]egislation may * * * provide a satisfactory response in this 
matter.''
  The Division's recommendation against approving Gaz Metropolitain's 
acquisition of Vermont Gas and its call for legislation has prompted me 
to introduce this bill. This legislation would clarify the PUHCA to 
allow Gaz Metropolitain to indirectly own Vermont Gas. It provides an 
exemption to Gaz Metropolitain from the registration requirements of 
the PUHCA. This exemption is limited solely to Gaz Metropolitain and 
would not exempt any other public utility holding company from the 
PUHCA.
  The highest Government official and the chief public utility 
regulators from the State of Vermont strongly support this legislation. 
I have received letters testifying to the benefits from Gaz 
Metropolitain's indirect ownership of Vermont Gas and the need for this 
legislation from the Honorable Howard Dean, Governor of Vermont; 
Richard H. Cowart, the chairman of the Vermont Public Service Board; 
and Richard P. Sedano, the commissioner of the Vermont department of 
public service.
  This bill ensures that Vermont Gas and the people of Vermont will 
continue to reap the many benefits of Vermont Gas' affiliation with Gaz 
Metropolitain.
  Mr. President, I ask unanimous consent that the text of the bill and 
additional material be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2311

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PUBLIC UTILITY HOLDING COMPANY EXEMPTION.

       (a) In General.--The provisions of the Public Utility 
     Holding Company Act of 1935 (15 U.S.C. 79a et seq.) shall not 
     apply to a foreign holding company that has a gas utility 
     subsidiary company in a foreign country contiguous to the 
     United States and the State of Vermont, solely as a result of 
     the acquisition, directly or indirectly, by the holding 
     company of all the voting securities of a gas utility company 
     that--
       (1) is organized and operating under the laws of Vermont; 
     and
       (2) has its service territory contiguous to the gas utility 
     operations of the holding company.
       (b) Applicability to Affiliates.--The exemption under 
     subsection (a) also applies to a person or company that--
       (1) is an affiliate (as defined in section 2(a)(11)(A) of 
     the Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79b(a)(11)(A)) of the holding company described in subsection 
     (a); and
       (2) is not an affiliate of any other public utility company 
     organized and operating in the United States.
       (c) Inapplicability to Other Acquisitions.--The exemption 
     granted by subsection (a) shall not apply to the acquisition 
     or retention by any holding company of voting securities of a 
     public utility company organized or operating within the 
     United States except as provided in subsection (a).
                                  ____

                                                 State of Vermont,


                                       Office of the Governor,

                                     Montpelier, VT, May 31, 1994.
     Re: Proposed Legislation Approving the Indirect Acquisition 
       of Vermont Gas Systems, Inc. (``Vermont Gas'') by Gaz 
       Metropolitain & Company, Limited Partnership (``Gaz 
       Metropolitain''), and Exempting Gaz Metropolitain and Its 
       Affiliates from Regulation under the Public Utility Holding 
       Company Act of 1935 (the ``Act'')

     Hon. Patrick J. Leahy,
     U.S. Senate,
     Washington, DC.
       Dear Pat: I write in support of legislation that would 
     approve Vermont Gas acquisition by Gaz Metropolitain and 
     exempt Gaz Metropolitain and its affiliates from regulation 
     under the Act. You recently received letters from Richard H. 
     Cowart, Chairman of the Vermont Public Service Board, and 
     Richard Sedano, Commissioner of the Vermont Department of 
     Public Service, explaining in more detail the Board's and 
     Department's support for the legislation.
       I have always viewed natural gas to be an environmentally 
     sound and competitively priced energy source, one that is 
     very important to Vermont's economic recovery. As you 
     probably know, Vermont Gas is dependent upon a single 
     pipeline located in Canada for delivery of its natural gas 
     supply.
       For that reason, the State of Vermont has viewed 
     acquisition of Vermont Gas by Quebec's largest natural-gas 
     distribution company to be valuable. As Chairman Cowart's and 
     Commissioner Sedano's letters point out, we are confident 
     that our Public Service Board and Department of Public 
     Service can regulate Vermont Gas to ensure that its 
     acquisition by Gaz Metropolitain will not disadvantage 
     Vermont customers.
       In short, the State of Vermont continues to believe that 
     the acquisition will be a positive component of Vermont's 
     strategy to promote economic growth through trade with Quebec 
     and Canada.
           Sincerely,
                                                Howard Dean, M.D.,
                                                         Governor.

 Mr. JEFFORDS. Mr. President, today Senator Leahy and I 
introduce legislation that will go a long way toward providing Vermont 
homes and businesses with a reliable source of natural gas for years to 
come. This measure will allow Gaz Metropolitain, a Canadian-based firm, 
to purchase Vermont Gas Systems, a Vermont gas company. Such action is 
strongly supported by the Governor of Vermont, the Vermont Public 
Service Board and the Commissioner of the Vermont Department of Public 
Service.
  In 1987, Gaz Metropolitain acquired Northern New England Gas and its 
subsidiary, Vermont Gas Systems. Regulatory action regarding approval 
of the purchase was delayed for a number of years for a variety of 
reasons. While recognizing the benefits of the acquisition of Vermont 
Gas by Gaz Metropolitain, the Security and Exchange Commission's 
Division of Investment Management recently recommended that the 
application for approval of full acquisition be denied. The Division 
argued that the Public Utility Holding Company Act of 1935 [PUHCA] does 
not allow foreign ownership of a domestic utility.
  This legislation would clarify that nothing in PUHCA precludes the 
Quebec utility, Gaz Metropolitain, or its affiliates, from fully owning 
the Northern New England Gas Corp. and its subsidiary, Vermont Gas 
Systems, Inc. The measure does not allow an exemption for any other 
holding company owning a public utility, but solely provides the 
exemption for Gaz Metropolitain and its affiliates.
  Mr. President, this step will bring substantial benefits to Vermont. 
Gaz Metropolitain is one of the largest distributors of natural gas in 
Canada. Vermont Gas Systems supplies natural gas to communities 
throughout Northern Vermont, along the Canadian border. Vermont Gas 
Systems, a small utility, is completely dependent on gas from Canada to 
supply its customers. For this reason, the ownership of Vermont Gas 
Systems by Gaz Metropolitain has allowed Vermont gas customers to save 
money and provided these customers energy security.
  Codifying the merger will allow Vermonters to continue to enjoy the 
economic clout of a larger utility, and maintain a strong bargaining 
position with Canadian suppliers of Vermont's sole source of natural 
gas. Gaz Metropolitain has negotiated competitively priced, reliable 
gas contracts. Integration of the two firms will result in more 
effective insurance and risk management, and allow for a safe, steady 
supply of natural gas. In addition, the State of Vermont will exercise 
full oversight of Vermont Gas Systems' supply contracts, rates and 
physical expansion consistent with the interests of Vermont consumers.

  When Congress authorized PUCHA, it intended to promote integration of 
gas companies. As we move to a global economy, with passage of 
international trade agreements such as the United States/Canada Free-
Trade Agreement and NAFTA, we should begin to think in terms of 
movement of commerce without borders. Vermont's close proximity to 
Quebec allows it to maintain a strong trade relationship. This is true 
in a number of areas, including energy. Here is an opportunity to prove 
we are serious about free trade, by allowing the integration of two gas 
companies that are largely interdependent.
  Mr. President, gas is an important component of Vermont's energy mix. 
Gas is a clean fuel, and vital to Vermont's economy. This simple 
legislation will allow for a reliable, reasonably priced supply of 
natural gas to Vermont for years to come. I hope my colleagues will 
work with us and support this important legislation.
                                 ______

      By Mr. DASCHLE:
  S. 2312. A bill to maintain the ability of United States agriculture 
to remain viable and competitive in domestic and international markets, 
to meet the food and fiber needs of United States and international 
consumers, and for other purposes; to the Committee on Agriculture, 
Nutrition, and Forestry.


                Agriculture Competitiveness Legislation

 Mr. DASCHLE. Mr. President, as my colleagues from farm States 
are painfully aware, agriculture is going through a major 
transformation. The market in which agriculture must compete is not 
longer a largely domestic one, but an international one.
  The global market is characterized by fierce competition and, 
unfortunately, inconsistent rules.
  The final Uruguay round agreement concluded under the auspices of the 
General Agreement on Tariffs and Trade seeks to bring some fairness to 
the rules in global agricultural trade. Considering the fact that 
agriculture has never before been subject to multilateral disciplines 
of this nature, this is a significant and important step. It wasn't 
easy getting to this point.
  If the Uruguay round agreement is approved by Congress, I have no 
doubt that the United States will live up to its obligations under the 
agreement. Historically, that has been the pattern. We have sought in 
good faith to uphold the validity of international agreements, which 
can only be valid if all countries comply. Most of us agree that it is 
better to have such agreements than not.
  I am equally convinced that our major trading partners who will be 
members of the new World Trade Organization will seek to do the same.
  What I am more concerned about is the ways in which they will seek to 
legitimately circumvent the restrictions of the Uruguay round 
agreement.
  Under this agreement, agricultural export subsidies must be reduced 
21 percent by volume and 36 percent in terms of budget outlays by the 
end of 6 years. These reductions must be made from the 1986-90 base 
period. Export subsidies specifically do not include, however, spending 
on such non-trade distorting measures as export promotion, foreign 
market development, food assistance programs, and programs for 
developing alternative uses of agricultural commodities.
  Mr. President, we are kidding ourselves if we think that our trading 
partners will not simply transfer the savings from cuts in export 
subsidies to these other so-called green box categories.
  Our farmers can compete against any in the world. They should not, 
however, be forced to compete unarmed against foreign governments. The 
ink on this agreement is not even dry, and already we hear reports of 
the European Union devising schemes to circumvent it. If we do not 
recognize the almost-inevitable approach that our trading partners will 
take with respect to the agricultural provisions of the Uruguay round 
agreement, farmers in those countries will have an unfair advantage 
over our farmers.

  That is why I am introducing today a measure that would address this 
concern. It is a proposal that I hope will be included in the 
legislation to implement the Uruguay round agreement.
  This proposal, which was initiated by Representative Jill Long in the 
House of Representatives, would ensure that the net savings from 
agriculture cuts under the Uruguay round agreement are retained for use 
in the nontrade distorting areas mentioned above, areas of government 
spending that are permissible under the agreement.
  Members of this body who care about agriculture know that, once these 
funds are cut from the agricultural portion of the budget, they will be 
nearly impossible to restore. The measure will ensure that these funds 
can be used for such programs as the Emergency Food Assistance Program 
[TEFAP], General Sales Manager [GSM] export credit guarantees, and 
Public Law 480. Moreover, they could be used to development of such 
alternative uses of agricultural commodities as making biodiesel fuel 
from oilseeds.
  In addition, the proposal continues support for export subsidies to 
the extent permitted under the Uruguay round agreement, providing that 
these programs should be funded to the maximum extent allowable under 
the agreement. Any excess would be directed to nontrade distorting 
programs.
  I encourage my colleagues to consider this measure carefully and 
support a fair global trading environment for our agricultural 
producers.
  Mr. President, I ask that a copy of the bill be placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2312

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That, in 
     order to maintain the ability of United States agriculture to 
     remain viable and competitive in domestic and international 
     markets, the Secretary of Agriculture, consistent with the 
     obligations of the United States to limit agricultural export 
     subsidies as set forth in the Uruguay Round Agreement and 
     notwithstanding any other provision of law, shall--
       (1) make available and aggressively utilize in each fiscal 
     year the funds and commodities of the Commodity Credit 
     Corporation in the maximum amounts allowed under the 
     Agreement for the export enhancement program, the dairy 
     export incentive program, the cottonseed oil assistance 
     program, and the sunflowerseed oil assistance program; and
       (2) make available additional funds and commodities in each 
     fiscal year in an amount equal to the total of the reductions 
     below the amounts made available in fiscal year 1994 for the 
     programs described in paragraph (1) that are made as a 
     condition of compliance with the budgetary outlay or volume 
     restrictions on agricultural export subsidies under the 
     Agreement, in addition to any funds or commodities that may 
     be authorized, appropriated, or otherwise made available, for 
     authorized export promotion, foreign market development, 
     export credit guarantee, and international food assistance 
     programs, for commodity purchases under the Emergency Food 
     Assistance Program, and to promote the development, 
     processing, commercialization, and marketing of products 
     resulting from alternative uses of agricultural commodities, 
     including vegetable oil.
                                 ______

      By Mr. NICKLES (for himself and Mr. Boren):
  S.J. Res. 213. A joint resolution to provide for the payment of fair 
and equitable consideration in satisfaction of the claims of certain 
Kaw Indians; to the Committee on Indian Affairs.


                       kaw half breed legislation

  Mr. NICKLES. Mr. President, I rise today to offer legislation on 
behalf of myself and Senator Boren which would provide full and fair 
compensation to resolve the land claims of the half breed members of 
the Kaw Indian Tribe. The claims are the result of the illegal taking 
of lands allotted the Kaw half breeds and the failure of the Federal 
Government to protect their ownership rights. In 1992, I introduced 
similar legislation, Senate Joint Resolution 346, which was not 
considered before adjournment of the 102d Congress. The legislation was 
referred to the Senate Indian Affairs Committee.
  This history of the Kaw half breed claim began with the treaty of 
June 3, 1825, which allotted 23 reservations of 1 square mile each to 
the Kaw half breed Indians. The half breed members of the Kaw Tribe 
were the offspring of full bloods that intermarried with French fur 
traders. As a result of their intermarriages, the half breed members 
were estranged from the full blooded members of the tribe and their 
allotments were established separated from the Kaw Reservation.
  The basis of the half breed claim dates back to the non-Indian 
settlement of Kansas territory. The Kaw half breeds were defrauded by 
squatters into giving up legal title to their property. Despite the 
requests of the Federal Indian agent in charge of native Americans in 
the area, the U.S. Government did not prevent the actions of the non-
Indian settlers against the allottees. Aside from simply taking illegal 
possession of the Indian allotments, squatters shot and killed Indian-
owned livestock, burned their housing, and harvested the valuable 
timber on the property.
  Congress, recognizing the failure of the Federal Government to uphold 
its trust responsibility to the Kaw half breeds, passed legislation on 
May 26, 1860, declaring all prior contracts for lands within the Kaw 
Reserve null and void. Legal ownership via a fee title of the lands was 
returned to the original allottees or their heirs.
  However, on July 17, 1862, before the Secretary of the Interior had 
finished determining the appropriate heirs as required by the 1860 act, 
Congress repealed those provisions which vested title in the heirs of 
the original reservees. Also repealed were provisions which authorized 
the Secretary to sell the lands of the deceased original reservees who 
had died without heirs and distribute the proceeds to surviving 
original allottees.
  On August 8, 1968, Congress passed Private Law 90-318 which 
recognized the failure of the U.S. Government to protect the Kaw half 
breed allotments and provide for the compensation of the heirs. The 
compensation provided for in private law 90-318 was based on a value of 
$5 per acre for 14,720 acres resulting in a total award of $73,600. 
Unfortunately, this award did not comply with the fair and honorable 
dealing standards as required of the United States and set forth in the 
Indian Claims Commission Act of 1946.
  The Indian Claims Commission Act required the payment of fair market 
value for the land plus interest and damages. As a result, shortly 
after passage of the 1968 law, the U.S. Claims Court ruled that the 
treaty of June 3, 1825, guaranteed in article 10 the full 
indemnification for property stolen from the allottees.
  As a result, the bill I am introducing today would provide the heirs 
of the Kaw half-breed reservees or their assigns with a payment 
formulated from the estimated 1858 value of the lands and includes 
damages for the removal of timber and simple interest of 5 percent. The 
1968 award of $73,600 would be subtracted from the final award.
  The 1858 land value was estimated at $32.50 per acre by the Indian 
agent in charge at the time. Thus, the total value of the 14,720 acres 
in this legislation is set at $478,400. Estimated timber loss is 
$280,963 as determined by the 1860 Walsh-Coombs Report filed with the 
Secretary of the Interior. Total estimated value for the loss of land 
and timber is $759,363. The 5-percent interest will be calculated from 
October 1, 1855, until the payment of the claim for an estimated total 
value of approximately $6 million.

  The formula divides the award into 23 equal shares of about $260,000 
each; 23 represents the tracts of land originally owned by the Kaw half 
breeds. Each tract has a different number of identified heirs ranging 
from 2 to 127 and total about 730. The bill limits the maximum any one 
heir can receive to 10 percent the value of any one tract. Any funds in 
excess after the per capita payments have been made will be put into a 
charitable trust to be administered by a board of directors consisting 
of lineal descendants of the original reservees.
  These descendants include enrolled members of the Kaw, Osage, Otoe-
Missouria, Pottawatomie, and Ponca tribes. Also included on the board 
will be one lineal descendant who is not a tribal member and one 
employee of the Bureau of Indian Affairs as appointed by the Secretary 
of the Interior.
  Upon the establishment of the account and payment of funds by the 
Treasury Department, the Secretary is required to publish notice in the 
Federal Register that any and all claims arising out of the treaty of 
June 3, 1825, which allotted the Kaw lands, shall be extinguished. 
Extinguishing the claims will allow the State of Kansas to clear title 
on the former Kaw lands and resolve this centuries-old injustice. Today 
it remains a common practice in Kansas to institute a quiet title 
action on lands within the original Kaw Reserve to prevent problems 
from arising in the conveyance of ownership of these lands.
  Mr. President, as a member of the Senate Indian Affairs Committee I 
am hopeful that this legislation can be considered and enacted before 
Congress adjourns. This issue is important to the Kaw half breed heirs 
and is an issue which they have pursued for many years. In particular I 
would like to recognize Tom Dennison, former chairman of the Kaw Tribe, 
whose tireless effort on this issue is responsible for the legislation 
that I am presenting today.

                          ____________________