Public Utility Holding Company Act Amendments of 1981

Public Utility Holding Company Act Amendments of 1981 - Amends the Public Utility Holding Company Act of 1935 to exempt from the prohibition on the issuance or sale of securities and the alteration of stockholder rights by registered companies: (1) certain security transactions by a subsidiary of a registered holding company if the subsidiary is a public-utility company, such a transactions's purpose is to finance the subsidiary's business or the business of another subsidiary in the same holding-company system, and such a transaction is expressly authorized by the State in which the subsidiary is doing business; (2) certain security transactions by a registered holding company or its subsidiary pursuant to a declaration effective under such Act; and (3) certain transactions involving the securities of a subsidiary by a registered holding company which is not a public-utility company if the value of the securities involved does not exceed a specified amount.

Authorizes the Securities and Exchange Commission (SEC) to establish requirements with respect to the consolidated security structure of a registered holding company system to prevent an unsound financial practice.

Authorizes the SEC to exempt certain security transactions upon application by a registered holding company or its subsidiary if such transactions are not detrimental to the public interest or to investors or consumers.

Makes declarations with respect to security transactions filed by registered companies pursuant to the Public Utility Holding Company Act of 1935 effective on the twentieth day after filing, absent SEC disapproval or SEC approval subject to terms and conditions in the form of a preliminary order. Sets forth the procedures for final approval or disapproval of a declaration. Permits the filing of amendments to a declaration.

Authorizes the SEC to permit a declaration to become effective earlier than the dates specified under this Act. Requires the SEC to permit a declaration to become effective unless the acts which are the subject of the declaration are not in compliance with State laws or involve an unsound financial practice. (Currently there are several conditions precedent to permitting a declaration to become effective.)

Requires prior SEC approval of acquisitions by a registered holding company or its subsidiary of public-utility company securities or utility assets. Eliminates prior SEC approval of acquisition of other types of business interests by a registered holding company or its subsidiary.

Requires that the SEC permit a registered holding company to retain an interest in any non public-utility related business unless such interest is detrimental to the protection of investors or consumers. (Currently the SEC may permit such a business interest if it is reasonably incidental or economically necessary to the operations of one or more integrated public-utility systems.)

Requires that the SEC permit a registered holding company to retain any combination in existence on May 1, 1981, of gas utility systems and electric utility systems unless such a combination of systems does not comply with certain location and size requirements under this Act.

Permits registered holding companies or their subsidiaries to borrow from other companies in the same holding-company system and to enter into certain transactions with other companies if such transactions are expressly authorized by the States in which the companies or their subsidiaries are doing business. Authorizes the sale of utility assets used by a public-utility company subsidiary if expressly authorized by a State commission with jurisdiction over such subsidiary.

Prohibits the SEC from considering earnings attributable to contracts with non-associate companies in determining the permissible cost to be charged an associated company by any subsidiary of a registered holding company.

Permits subsidiaries of registered holding companies to perform any sales or service contracts and certain construction contracts if the contracts are in the public interest and consistent with the interests of investors and consumers.