SEC. 106. REPEAL.
Section 505 of Public Law 102–377 is hereby re-
pealed.
SEC. 107. EFFECTIVE DATE.
Except as otherwise specifically provided in this title,
the provisions of this title and the amendments made by
this title shall take effect on the date of enactment of this
Act.
TITLE II—PRIVATIZATION OF
PMA AND TVA ASSETS
SEC. 201. SALE OF FEDERAL HYDROELECTRIC GENERA-
TION AND TRANSMISSION FACILITIES.
(a) SALE OF PMA AND TVA FACILITIES.—
(1) PMA FACILITIES.—The Secretary of En-
ergy is authorized and directed to sell the hydro-
electric power generation facilities used to generate
the electric power marketed by the Federal Power
Marketing Administrations, together with all con-
tracts, marketing agreements, and any and all other
rights, interests, and obligations held or owed by the
Federal Power Marketing Administrations and all
electric power transmission facilities owned by the
United States and operated by a Federal Power
Marketing Administrations.
(2) TVA FACILITIES.—The Tennessee Valley
Authority is authorized and directed to sell the hy-
droelectric power generation facilities owned and op-
erated by the Authority.
(b) WATER STORAGE RIGHTS.—Each sale under this
Act shall be subject to all existing water storage rights
in reservoirs used in connection with such power genera-
tion facilities which rights have been acquired by local in-
terests pursuant to the Water Supply Act of 1958 (Public
Law 85–500; 43 U.S.C. 390b) and sections 1, 2, and 3
of Public Law 88–140 (43 U.S.C. 390c through 390e) for
water supply or other purposes and all such rights shall
survive such sale. All obligations of the United States
under contracts with such local interests for the use of
such storage shall be assumed by any purchaser so that
such local interests may continue to operate and utilize
their storage in accordance with their existing contracts
with the United States without entering into an additional
contract with the United States or the purchaser, notwith-
standing any provision of law or contract to the contrary.
(c) COMPETITIVE BIDDING.—The Secretary and the
Authority shall restrict the sale of any Federal Power
Marketing Administration or Tennessee Valley Authority
asset to only domestic entities or United States citizens
who reside principally within the United States. In order
to assure that the facilities are transferred in a manner
that provides a reasonable payment to the United States,
sales under this section shall be made through a competi-
tive bidding process open to all bidders determined by the
Secretary (or the Authority in the case of facilities sold
by the Authority) to be financially qualified and who have
the experience and resources necessary to manage the
transferred assets. No facility or group of facilities may
be sold for an amount less than the minimum bid estab-
lished and published by the Secretary (or the Authority
in the case of facilities sold by the Authority). The mini-
mum bid for any facility sold by the Secretary shall be
equal to the net present value of the outstanding debt re-
payable to the United States and attributable to the facil-
ity or group of facilities concerned.
(d) COOPERATION OF OTHER AGENCIES.—The heads
of other affected Federal departments and agencies shall
assist the Secretary and the Authority in implementing
the sales authorized by this section. Upon receiving a writ-
ten request from the Secretary or the Authority, the head
of any such department or agency having administrative
jurisdiction over any facility to be sold under this section
shall transfer (at such time as may be specified by the
Secretary or the Authority in such request) such facility
to the Secretary or the Authority for purposes of effectuat-
ing such sale.
(e) FINANCIAL AND BID MANAGEMENT ADVISOR.—
(1) 
RETENTION
OF
ADVISOR.—Within 
months after the date of enactment of this Act, the
Secretary (or the Authority in the case of facilities
sold by the Authority) shall retain an experienced
private sector firm to serve as financial, bid manage-
ment, and technical advisor (hereinafter referred to
in this Act as the ‘‘advisor’’) to the Secretary (or the
Authority) with respect to such sales. The advisor
shall not have any substantial financial interest in
the existing assets, their operation or the ultimate
purchasers.
(2) NOTICE.—Within 6 months after the date
of enactment of this Act, the Secretary and the Au-
thority shall each publish a notice in the Federal
Register soliciting all parties which have an oper-
ational or ownership interest in facilities to be sold
under this Act to provide evidence of such interest
within 90 days of the published notice.
(3) ADVISOR’S REPORT.—Within 6 months of
being retained by the Secretary or the Authority and
based on information provided by the Secretary or
the Authority and the information obtained in para-
graph (2), the advisor shall provide to the Secretary
(or the Authority in the case of facilities sold by the
Authority) a report containing each of the following:
(A) A plan for the competitive sale of all
facilities and other assets and interests referred
to in subsection (a).
(B) An estimate of the net present value of
the income expected to be derived over the next
50 years from each facility or group of facilities
to be sold under this section.
(C) An estimate of the net present value of
the expenses expected to be incurred over the
next 50 years in connection with each facility or
group of facilities to be sold under this section.
(D) A comparison between the net of sub-
paragraphs (B) and (C) and the net present
value of the outstanding debt which the Federal
government attributes to the asset being sold.
(E) The options for the grouping of facili-
ties to be sold under this section. The transfer
shall be structured to transfer assets and inter-
ests by watershed or by project unless the Advi-
sor can provide satisfactory information to the
Secretary or the Authority that another alter-
native should be used. Groupings of assets shall
specifically be designed to transfer all assets in
a manner that provides reasonable payment to
the United States for all assets.
(F) A plan that takes into consideration
the use of tax exempt and government financ-
ing for purposes of maximizing the return to
the American public.
(f) PROCEEDS.—The Secretary may use up to
$6,000,000 from unobligated balances available to the De-
partment of Energy to fund any sale preparation costs
provided for in this section, and shall provide an account-
ing of all sale preparation costs and studies to the Com-
mittee on Resources and the Committee on Transportation
and Infrastructure of the House of Representatives, and
to the Committee on Energy and Natural Resources and
the Committee on Public Works and the Environment of
the Senate within 60 days after completion of the sale.
The proceeds of any sale by the Secretary of a facility
or group of facilities under this section shall be used first
to offset the costs of carrying out such sale and the re-
maining net proceeds shall be deemed to extinguish the
outstanding debt repayable to the United States and at-
tributable to such facility or group of facilities. Any por-
tion of such net proceeds which exceeds the net present
value of the outstanding debt repayable to the United
States and attributable to the facility or group of facilities
concerned shall be deposited in the Treasury of the United
States as miscellaneous receipts.
(g) TREATMENT OF SALES FOR PURPOSES OF CER-
TAIN LAWS.—The sales of assets under this Act shall not
be considered a disposal of Federal surplus property under
the following provisions of law:
(1) Section 203 of the Federal Property and
Administrative Services Act of 1949 (40 U.S.C.
484).
(2) Section 13 of the Surplus Property Act of
1944 (50 U.S.C. App. 1622).
(h) EXISTING CONTRACTS, USES, ETC.—All sales of
assets and rights under this section shall be subject to all
contracts, debt obligations to non-Federal entities, oper-
ational objectives, and other binding agreements which
apply, as of the date of such sale, to the facilities con-
cerned and to the sale of electric power from such facili-
ties. The purchaser of each such facility shall assume all
liabilities and obligations of the United States (including
the Tennessee Valley Authority) under such contracts, ob-
ligations or other agreements. Neither any Federal Power
Marketing Administration nor the Authority shall, after
the date of enactment of this Act, enter into a long-term
agreement, contract, or other long-term obligation or re-
sponsibility, except to the extent that such an obligation
will significantly enhance or maintain the value of a facil-
ity after it is transferred. The United States (including
the Tennessee Valley Authority) shall remain responsible
for concluding all lawsuits associated with the assets which
are the subject of a transfer and which are extant as of
the date of the enactment of this Act, whether in its capac-
ity of plaintiff or defendant. Any right, title, or interest
of the United States (including the Tennessee Valley Au-
thority) which exists at the conclusion of such lawsuits and
which would otherwise have been transferred, but for the
lawsuit, shall be transferred to the party in interest who
acquired the related asset from the United States (includ-
ing the Tennessee Valley Authority). The United States
shall remain responsible for any outstanding Indian trust
responsibilities, unless the transfer in question specifically
identifies the obligation being transferred.
(i) REPORT TO FERC.—Not later than June 30,
1997, the Secretary (or the Authority in the case of facili-
ties sold by the Authority) shall provide each of the follow-
ing to the Federal Energy Regulatory Commission:
(1) A description of—
(A) all the assets tangible and intangible
that comprise each power generation or trans-
mission facility or group of power generation or
transmission facilities to be sold under this sec-
tion;
(B) the existing terms of operation with
respect to such facilities; and
(C) any other interest being proposed for
transfer.
(2) The information pertaining to such facilities
required by title 18 of the Code of Federal Regula-
tions, subparts B and F, or G, as appropriate, ex-
cept exhibit E.
(3) The date when an offer for purchase of the
assets must be submitted.
(j) NOTICE OF SALE AND SOLICITATION OF BIDS.—
Not later than March 31, 1998, the Secretary (or the Au-
thority in the case of facilities sold by the Authority) shall
publish a notice in the Federal Register which includes
each of the following:
(1) A description of—
(A) all the assets tangible and intangible
that comprise each power generation facility or
group of power generation facilities to be sold
under this section;
(B) the existing terms of operation with
respect to such facilities; and
(C) any other interest being proposed for
transfer.
(2) The date, time, and conditions of the bids
that must be met to submit a successful bid for the
assets to be sold under this Act.
(3) The terms and conditions identified in the
proposed license provided from the Federal Energy
Regulatory Commission to the Secretary (or the Au-
thority in the case of facilities to be sold by the Au-
thority) under this Act.
(k) DATE OF SALE.—All sales under this section
shall be completed between July 1, 1999, and September
30, 1999.
(l) TERMINATION
OF
THE FEDERAL PMAS
AND
TVA.—Following the sale of all facilities and other assets
referred to in the first sentence of subsection (a), the Sec-
retary shall complete the business of and close out the
Federal Power Marketing Administrations and return the
unexpended balances of funds appropriated for the Admin-
istrations to the Treasury of the United States. To the
extent practical, the purchasers under this section should,
consistent with good business practices, attempt to offer
to employ those former employees of the United States
who are necessary to the continued operation of such fa-
cilities following the sale of the facilities.
SEC. 202. FEDERAL ENERGY REGULATORY COMMISSION
JURISDICTION.
(a) REGULATION
OF RATES
AND CHARGES.—All
rates and charges established for the wholesale sale of
electric power from facilities sold under section 201 shall
be subject to part 2 of the Federal Power Act. This sub-
section shall take effect upon the expiration of any con-
tract which is applicable to the sale of such electric power
on the date of the sale of the facility concerned.
(b) ORIGINAL LICENSE.—Not later than January 1,
1998, the Federal Energy Regulatory Commission shall
provide the Secretary (or the Authority in the case of fa-
cilities to be sold by the Authority) with a proposed license
for each power generation facility to be sold under section
1. Not later than September 30, 1999, the Commission
shall issue to the purchaser of each power generation facil-
ity sold under section 1 a license under part I of the Fed-
eral Power Act (16 U.S.C. 791a–823b) authorizing the
continued operation and maintenance of such facility for
a term of 10 years. Such license shall—
(1) be for the project purposes established by
the existing terms of operation and shall be consist-
ent with the proposed license provided to the Sec-
retary or the Authority;
(2) be conditioned upon the requirement that
the licensed facility continue to be operated and
maintained in accordance with the existing terms of
operation, except that the licensee may make im-
provements to the project which increase capacity
without amendment to the license so long as existing
minimum flows are not affected;
(3) be subject only to the appropriate standard
‘‘L-Form’’ license conditions, published at 54 FPC
1792–1928 (1975), except that the license may not
be reopened for any purpose for the first 10 years
of the license;
(4) not be subject to: the word ‘‘constructed’’ in
section 3(10), the 4 provisos of section 4(e); section
6 to the extent it requires the licensee’s acceptance
of those terms and conditions of the Act that this
subsection waives; section 10(e) as it concerns an-
nual charges for the use and occupancy of Federal
lands and facilities; section 10(f), section 10(j), sec-
tion 18, section 19, section 20, and section 22 of the
Federal Power Act (16 U.S.C. 796(10), 797(e), 799,
803(e), 803(f), 803(j), 811, 812, 813, and 815); and
(5) contain minimum flow restrictions no more
restrictive than those currently in effect, if any, such
minimum flow restrictions may not be altered during
the primary term of the license.
(c) ACTS APPLICABLE TO LICENSING.—The issuance
of a license pursuant to subsection (b) shall not be subject
to the provisions of the Federal Land Policy and Manage-
ment Act of 1976, section 2402 of the Energy Policy Act
of 1992, the National Environmental Policy Act of 1969,
the Endangered Species Act of 1973, the Wild and Scenic
Rivers Act, the Federal Water Pollution Control Act, the
National Historic Preservation Act, the Coastal Zone
Management Act, the Fish and Wildlife Coordination Act,
or any other Act otherwise applicable to the licensing of
the projects. Subsequent operations shall be consistent
with all applicable rules and regulations.
(d) EFFECT OF LICENSE.—A license issued under
subsection (b)—
(1) shall be deemed to meet the licensing stand-
ards of the Federal Power Act, including section
10(a) and the last sentence of section 4(e) (16
U.S.C. 797(e)); and
(2) shall constitute the sole and exclusive source
for transferred power generation facilities of author-
izations and requirements with respect to facility op-
eration.
(e) RESERVATIONS.—Any power site reservation es-
tablished by the President, the Department of the Interior,
or pursuant to section 24 of the Federal Power Act (16
U.S.C. 818), or any other law, which exists on any lands,
whether Federally or privately owned, that are included
within the final project boundaries of a transferred hydro-
electric project as approved by the Commission shall be
vacated by operation of law upon issuance of a license for
such project.
(f) RELICENSING.—All requirements of part I of the
Federal Power Act and of any other Act applicable to the
licensing of a hydroelectric project shall apply to a trans-
ferred power generation facility upon expiration of an
original license issued under this section.
(g) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘Commission’’ means the Federal
Energy Regulatory Commission.
(2) The term ‘‘existing terms of operation’’
means any applicable statutes, executive department
regulations, orders, rule curves and the like, memo-
randa of agreement, operating manuals, and con-
tractual arrangements pertaining to a transferred
power generation facility that were in effect as of
the date of enactment of this Act.
(3) The term ‘‘power generation facility’’ means
the facilities, real property interests, and other as-
sets sold or to be sold to a transferee under this Act,
including any such real property interests, facilities,