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As Passed by the House
123rd General Assembly
Regular Session
1999-2000 | Sub. H. B. No. 452 |
REPRESENTATIVES GOODMAN-MEAD-TIBERI-TRAKAS-GARDNER-R.MILLER-
VESPER-CAREY-DePIERO-OLMAN-HARTNETT-JOLIVETTE-WILLAMOWSKI-
HOOPS-NETZLEY-CORBIN-KRUPINSKI-THOMAS-HOUSEHOLDER-LOGAN-
METELSKY-TAYLOR-HOLLISTER-FLANNERY-BEATTY-D.MILLER-
CALLENDER-GERBERRY-JERSE-HARTLEY-SCHULER-COUGHLIN-JACOBSON-
PETERSON-JORDAN-LUEBBERS-MAIER-HAINES-SCHURING-AMSTUTZ-ALLEN-
BUEHRER-CLANCY-BRITTON-KREBS-MOTTLEY-HARRIS-BUCHY-AUSTRIA-CATES-
BRADING-WILSON-ASLANIDES-OGG-BOYD-DAMSCHRODER-CALVERT-PATTON-
A.CORE-FORD-ROBERTS-PERRY-JONES-EVANS-REDFERN-TERWILLEGER-
SMITH-MYERS-BENDER-WOMERBENJAMIN-KILBANE-VANVYVEN-VERICH-
JAMES-SYKES-SCHUCK-METZGER-PRINGLE-SULZER-SULLIVAN-STAPLETON-
GOODING-BARNES-ROMAN-SUTTON-SALERNO-BARRETT
A BILL
To enact section 4905.403 of the Revised Code to require a report
by the Public Utilities Commission on whether acceptance of a
hostile control bid for an Ohio
natural gas utility or its
holding company will promote the public convenience and result in the
provision of adequate utility
service at a reasonable rate and to declare an emergency.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 4905.403 of the Revised Code be enacted
to read as follows:
Sec. 4905.403. (A) AS USED IN THIS SECTION:
(1) "CONTROL BID" MEANS THE PURCHASE OF, OR OFFER TO PURCHASE,
FROM A RESIDENT OF THIS STATE, BY TENDER OFFER, INVITATION FOR
TENDERS, OR OTHERWISE, ANY EQUITY SECURITY OF A NATURAL GAS
COMPANY IN THIS STATE THAT IS A PUBLIC UTILITY UNDER SECTION
4905.02 of the Revised Code OR ANY EQUITY SECURITY OF A HOLDING
COMPANY CONTROLLING SUCH A COMPANY, IF, AFTER THAT PURCHASE, THE OFFEROR WOULD
BE DIRECTLY OR INDIRECTLY THE BENEFICIAL OWNER OF MORE THAN TEN PER CENT OF
ANY CLASS OF THE ISSUED AND OUTSTANDING EQUITY SECURITIES OF THE
SUBJECT NATURAL GAS COMPANY OR SUBJECT HOLDING COMPANY. "CONTROL
BID" EXCLUDES ANY OF THE FOLLOWING:
(a) A BID MADE BY A DEALER FOR THE DEALER'S OWN ACCOUNT IN THE
ORDINARY COURSE OF THE BUSINESS OF BUYING AND SELLING SECURITIES;
(b) AN OFFER TO ACQUIRE ANY EQUITY SECURITY SOLELY IN EXCHANGE
FOR ANY OTHER SECURITY, OR THE ACQUISITION OF ANY EQUITY SECURITY PURSUANT TO
AN OFFER, FOR THE SOLE ACCOUNT OF THE
OFFEROR, IN GOOD FAITH AND NOT FOR THE PURPOSE OF AVOIDING THE
PROVISIONS OF THIS SECTION, AND NOT INVOLVING ANY PUBLIC OFFERING
OF THE OTHER SECURITY WITHIN THE MEANING OF SECTION 4 OF
TITLE I
OF THE "SECURITIES
ACT OF 1933," 48
STAT. 77, 15
U.S.C.A.
77d(2), AS AMENDED;
(c) PURSUANT TO A MERGER, CONSOLIDATION, COMBINATION,
MAJORITY
SHARE ACQUISITION, OR OTHER TRANSACTION, THE ACQUISITION OF ANY EQUITY
SECURITY OF A NATURAL GAS COMPANY IN THIS
STATE THAT IS A PUBLIC UTILITY UNDER SECTION 4905.02 of the Revised Code OR ANY EQUITY
SECURITY OF A HOLDING COMPANY CONTROLLING SUCH A COMPANY, IF, PRIOR TO THE
DATE UPON WHICH THE
OFFEROR BECOMES THE OWNER OF MORE THAN TEN PER CENT OF ANY CLASS OF
THE ISSUED AND OUTSTANDING EQUITY SECURITIES OF THE SUBJECT
NATURAL GAS COMPANY OR HOLDING COMPANY, THE DIRECTORS OF THE
SUBJECT NATURAL GAS COMPANY OR SUBJECT HOLDING COMPANY HAD
APPROVED THE ACQUISITION.
(2) "DEALER" HAS THE SAME MEANING AS IN SECTION 1707.01 of the Revised Code.
(3) "EQUITY SECURITY" MEANS ANY SHARE OR SIMILAR SECURITY, OR ANY
SECURITY CONVERTIBLE INTO ANY SUCH SECURITY, OR CARRYING ANY WARRANT OR
RIGHT TO SUBSCRIBE TO OR PURCHASE ANY SUCH SECURITY, OR ANY SUCH
WARRANT OR RIGHT, OR ANY OTHER SECURITY THAT, FOR THE PROTECTION
OF SECURITY HOLDERS, IS DEEMED AN EQUITY SECURITY BY THE PUBLIC
UTILITIES COMMISSION.
(4) "OFFEROR" MEANS A PERSON THAT MAKES, OR IN ANY WAY
PARTICIPATES OR AIDS IN MAKING, A CONTROL BID. "OFFEROR" INCLUDES
PERSONS ACTING JOINTLY OR IN CONCERT IN EXERCISING, OR THAT INTEND TO EXERCISE
JOINTLY
OR IN CONCERT, ANY VOTING RIGHTS ATTACHED TO THE SECURITIES FOR
WHICH THE CONTROL BID IS MADE, BUT EXCLUDES A SUBJECT NATURAL GAS
COMPANY IN THIS STATE THAT IS A PUBLIC UTILITY UNDER SECTION
4905.02 of the Revised Code OR A SUBJECT HOLDING COMPANY
CONTROLLING SUCH A COMPANY WHEN MAKING A CONTROL BID FOR ITS OWN
SECURITIES.
(B) NO OFFEROR SHALL MAKE A CONTROL BID FOR A NATURAL GAS COMPANY
IN THIS STATE THAT IS A PUBLIC
UTILITY UNDER SECTION 4905.02 of the Revised Code, OR A HOLDING COMPANY CONTROLLING SUCH A
COMPANY, WITHOUT
THE OFFEROR FILING THE CONTROL BID WITH THE PUBLIC
UTILITIES COMMISSION, IN SUCH FORM AND PURSUANT TO SUCH PROCEDURES
AS THE COMMISSION PRESCRIBES. NOT LATER THAN THREE DAYS AFTER THE
DATE OF THE FILING, THE COMMISSION SHALL FIX A TIME FOR A HEARING
AND SHALL NOTIFY THE OFFEROR AND THE SUBJECT NATURAL GAS COMPANY
OR SUBJECT HOLDING COMPANY. THE EXCLUSIVE PURPOSE OF THE HEARING SHALL BE
TO DETERMINE WHETHER ACCEPTANCE OF THE CONTROL BID WILL PROMOTE PUBLIC
CONVENIENCE IN THIS STATE AND
RESULT IN THE PROVISION OF ADEQUATE NATURAL GAS SERVICE IN THIS
STATE BY THE NATURAL GAS COMPANY AT A REASONABLE RATE, RENTAL,
TOLL, OR CHARGE. NOT LATER THAN TWENTY DAYS AFTER THE DATE OF THE
FILING OR NOT LATER THAN SUCH LATER DATE AS IS AGREED TO BY BOTH
THE OFFEROR AND THE SUBJECT NATURAL GAS COMPANY OR SUBJECT HOLDING
COMPANY, THE COMMISSION SHALL ISSUE A REPORT OF ITS FINDINGS AND
MAKE THE REPORT AVAILABLE TO THE GENERAL PUBLIC.
(C) WITH RESPECT TO A CONTROL BID TO
WHICH DIVISION (B) OF THIS SECTION APPLIES, THE FILING REQUIRED BY
THAT DIVISION SHALL BE MADE AT THE TIME OF MAKING THE CONTROL BID IN THE
CASE OF A CONTROL BID INITIATED ON OR AFTER THE EFFECTIVE DATE OF THIS
SECTION, AND SHALL BE MADE
NOT LATER THAN FIVE DAYS AFTER THE EFFECTIVE DATE OF THIS SECTION
IN THE CASE OF A PENDING CONTROL BID INITIATED PRIOR TO THE
EFFECTIVE DATE OF THIS SECTION.
(D) THE COMMISSION SHALL ADOPT RULES TO CARRY OUT THIS SECTION,
INCLUDING RULES IDENTIFYING ANY ADDITIONAL SECURITIES THAT IT DEEMS
EQUITY SECURITIES UNDER DIVISION (A)(3) OF THIS SECTION AND
RULES PRESCRIBING THE FORM AND PROCEDURES PERTAINING TO A FILING UNDER
DIVISION (B) OF THIS SECTION.
(E) THE AUTHORITY CONFERRED BY THIS SECTION IS IN ADDITION TO ANY
AUTHORITY OF THE COMMISSION UNDER THIS CHAPTER WITH RESPECT TO A NATURAL GAS
COMPANY THAT IS A PUBLIC UTILITY UNDER SECTION 4905.02 of the Revised Code OR A HOLDING
COMPANY CONTROLLING SUCH A COMPANY.
(F) THIS SECTION DOES NOT APPLY TO ACQUISITIONS THAT, PRIOR TO
JULY 15, 1999, HAD RECEIVED THE APPROVAL OF THE BOARD OF DIRECTORS OF
THE SUBJECT NATURAL GAS COMPANY OR SUBJECT HOLDING COMPANY, OR THE APPROVAL OF
A MAJORITY OF THAT COMPANY'S SHAREHOLDERS.
Section 2. This act is hereby declared to be an emergency measure necessary
for the immediate preservation of the public peace, health, and safety. The
reason for such necessity is to establish at the earliest possible time a
regulatory mechanism that ensures that the Public Utilities Commission
undertakes a timely review of a pending hostile control bid that could affect
the adequacy and price of natural gas service provided to millions of Ohio
consumers and, ultimately, could affect economic growth and development within
the state; and that provides the public and the marketplace with necessary
information to use in evaluating the actual merits of that bid. Therefore,
this act shall go into immediate effect.
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