I
106TH CONGRESS
1ST SESSION
H. R. 3130
To amend the Tennessee Valley Authority Act of 1933, to ensure that the
Tennessee Valley Authority does not place the United States Treasury
at risk for its financial instability, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 21, 1999
Mr. BAKER introduced the following bill; which was referred to the Committee
on Transportation and Infrastructure, and in addition to the Committee
on Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend the Tennessee Valley Authority Act of 1933, to
ensure that the Tennessee Valley Authority does not
place the United States Treasury at risk for its financial
instability, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND DEFINITION.
(a) SHORT TITLE.—This Act may be cited as the
‘‘TVA Financial Integrity Act of 1999’’.
(b) DEFINITION.—As used in this Act, the term
‘‘TVA’’ means the Tennessee Valley Authority.
SEC. 2. TVA FINANCIAL INTEGRITY AND ACCOUNTABILITY.
Section 15d of the Tennessee Valley Authority Act
of 1933 (16 U.S.C. 831n–4), is hereby amended to read
as follows:
‘‘SEC. 15d. BONDS FOR FINANCING POWER PROGRAM.
‘‘(a) AUTHORIZATION; AMOUNT, USE OF PROCEEDS;
RESTRICTION ON CONTRACTS FOR SALE OR DELIVERY OF
POWER; EXCHANGE POWER ARRANGEMENTS; PAYMENT
OF PRINCIPAL AND INTEREST; BOND CONTRACTS.—The
Corporation is authorized to issue and sell bonds, notes,
and other evidences of indebtedness (hereinafter collec-
tively referred to as ‘bonds’) in an amount not exceeding
$27,000,000,000 outstanding as of January 1, 2001, to
assist in financing its power program and to refund such
bonds. Such authorization shall be reduced in annual in-
crements of $1,000,000,000, such that TVA shall be au-
thorized to issue and sell bonds, in an amount up to and
not exceeding $17,000,000,000 on and after January 1,
2011. The Corporation shall certify to the Committee on
Transportation and Infrastructure of the United States
House of Representatives by January 1 of each year that
the Corporation’s cumulative indebtedness is less than the
bond authorization designated herein. The Corporation
shall clearly provide on the face of such bonds the fol-
lowing disclaimer:
‘‘ ‘The United States General Accounting Office
has 
determined 
that 
the 
Tennessee 
Valley
Authority’s level of indebtedness may impair its fi-
nancial flexibility in the future, that the United
States Congress has expressly disclaimed any ex-
press or implied support for such indebtedness, and
that the sole means for payment of principal and in-
terest thereon comes only from the Tennessee Valley
Authority’s Power Program.’
The Corporation shall be prohibited from marketing or
representing to the public that such bonds are backed, di-
rectly or indirectly, expressly or implicitly, by the United
States. Proceeds realized by the Corporation from
issuance of such bonds and from power operations and the
expenditure of such proceeds shall not be subject to appor-
tionment under the provisions of subchapter II of chapter
15 of title 31. The Corporation may, in performing func-
tions authorized by this Act, use the proceeds of such
bonds for the operation and maintenance of any plant or
other facility used or to be used for the generation or
transmission of electric power; as may be required in con-
nection with the lease, lease-purchase, or any contract for
the power output of any such plant or other facility. Un-
less otherwise specifically authorized by Act of Congress
the Corporation shall make no contracts for the sale or
delivery of power which would have the effect of making
the Corporation or its distributors, directly or indirectly,
a source of power supply outside the area for which the
Corporation or its distributors were the primary source of
power supply on July 1, 1957, and such additional area
extending not more than five miles around the periphery
of such area as may be necessary to care for the growth
of the Corporation and its distributors within said area.
‘‘(b) BONDS NOT OBLIGATIONS OF OR GUARANTEED
BY UNITED STATES; APPORTIONMENT OF PROCEEDS.—
Bonds issued by the Corporation hereunder shall not be
obligations of, nor shall payment of the principal thereof
or interest thereon be guaranteed by, the United States.
Proceeds realized by the Corporation from issuance of
such bonds and from power operations and the expendi-
ture of such proceeds shall not be subject to apportion-
ment under the provisions of subchapter II of chapter 15
of title 31. Securities issued by the Tennessee Valley Au-
thority under authority of section 15d of this Act are sole-
ly and exclusively obligations of the Tennessee Valley Au-
thority. The holder of a security issued by the Tennessee
Valley Authority shall have recourse only to the Tennessee
Valley Authority directly and shall otherwise have no re-
course, directly or indirectly, to the United States. No
funds of the United States shall be appropriated, ex-
pended, applied, or otherwise used in any way to facilitate,
directly or indirectly, the reissuance, refinancing, or pay-
ment of interest or principal arising under or relating to
securities or obligations of the Tennessee Valley Authority.
‘‘(c) BONDS NO SPECIAL STATUS.—No law shall be
construed or implemented to give special status or protec-
tions to bonds issued by the Tennessee Valley Authority
or owners of bonds issued by the Tennessee Valley Author-
ity.
‘‘(d) SALE; TERMS AND CONDITIONS; METHOD; LIM-
ITATION
ON AMOUNT; STATEMENT
IN ANNUAL RE-
PORT.—Bonds issued by the Corporation under this sec-
tion shall be negotiable instruments unless otherwise spec-
ified therein, shall be in such forms and denominations,
shall be sold at such times and in such amounts, shall
mature at such time or times not more than fifty years
from their respective dates, shall be sold at such prices,
shall bear such rates of interest, may be redeemable before
maturity at the option of the Corporation in such manner
and at such times and redemption premiums, may be enti-
tled to such relative priorities of claim on the Corpora-
tion’s net power proceeds with respect to principal and in-
terest payments, and shall be subject to such other terms
and conditions, as the Corporation may determine; pro-
vided, that at least fifteen days before selling each issue
of bonds hereunder (exclusive of any commitment shorter
than one year) the Corporation shall advise the Secretary
of the Treasury as to the amount, proposed date of sale,
maturities, terms and conditions and expected rates of in-
terest of the proposed issue in the fullest detail possible
and, if the Secretary shall so request, shall consult with
him or his designee thereon, but the sale and issuance of
such bonds shall not be subject to approval by the Sec-
retary of the Treasury. The annual report of the Board
filed pursuant to section 831h of this Act shall contain
a detailed statement of the operation of the provisions of
this section during the year.
‘‘(e) PAYMENT OF EXCESS POWER PROCEEDS INTO
TREASURY; DEFERRAL.—From net power proceeds in ex-
cess of those required to meet the Corporation’s obliga-
tions under the provisions of any bond or bond contract,
or as Congress may or otherwise direct, the Corporation
shall make payments into the Treasury as miscellaneous
receipts on or before September 30, of each fiscal year
as a return on the appropriation investment in the Cor-
poration’s power facilities, plus a repayment sum of not
less than $10,000,000 for each of the first five fiscal
years, $15,000,000 for each of the next five fiscal years,
and $20,000,000 for each fiscal year thereafter, which re-
payment sum shall be applied to reduction of said appro-
priation investment until such appropriation investment
shall have been repaid. The said appropriation investment
shall consist, in any fiscal year, of that part of the Cor-
poration’s total investment assigned to power as of the be-
ginning of the fiscal year which has been provided from
appropriations or by transfers of property from other Gov-
ernment agencies without reimbursement by the Corpora-
tion, less repayments of such appropriation investment
made under title II of the Government Corporations Ap-
propriation Act, 1948, this Act, or other applicable legisla-
tion. The payment as a return on the appropriation invest-
ment in each fiscal year shall be equal to the computed
average interest rate payable by the Treasury upon its
total marketable public obligations as of the beginning of
said fiscal year applied to said appropriation investment.
‘‘(f) RATES FOR SALE OF POWER; APPLICATION OF
NET PROCEEDS.—The Corporation shall petition the Fed-
eral Energy Regulatory Commission for authority to
charge rates for power which will produce gross revenues
sufficient to provide funds for operation, maintenance, and
administration of its power system; payments in lieu of
taxes; debt service on outstanding bonds, including provi-
sion and maintenance of reserve funds and other funds
established in connection therewith; payments to the
Treasury as a return on the appropriation investment;
payment to the Treasury of the repayment sums specified
in subsection (e) of this section; and such additional mar-
gin as the Board may consider desirable for investment
in power system asset maintenance, retirement of out-
standing bonds in advance of maturity, additional reduc-
tion of appropriation investment, and other purposes con-
nected directly with the Corporation’s power business. In
order to protect the investment of holders of the Corpora-
tion’s securities and the appropriation investment, the
Corporation, during each successive five-year period begin-
ning with the five-year period which commences on July
1 of the first full fiscal year after the effective date of
this section, shall apply net power proceeds either in re-
duction (directly or through payments into reserve or sink-
ing funds) of its capital obligations, including bonds and
the appropriation investment, at least to the extent of the
combined amount of the aggregate of the depreciation ac-
cruals and other charges representing the amortization of
capital expenditures applicable to its power properties plus
the net proceeds realized from any disposition of power
facilities in said period. The five-year periods described
herein shall be computed as beginning on January 1, 2000
and each fifth year thereafter.
‘‘(g) POWER PROPERTY; LEASE AND LEASE-PUR-
CHASE AGREEMENTS.—Power generating and related fa-
cilities operated by the Corporation under lease and lease-
purchase agreements shall constitute power property held
by the Corporation within the meaning of this Act.’’.
SEC. 3. APPLICABILITY OF THE ANTITRUST LAWS.
The Tennessee Valley Authority Act of 1933 (16 U.
S. C. 831 et seq.) is amended by inserting after section
16 the following new section:
‘‘SEC. 17. APPLICABILITY OF THE ANTITRUST LAWS.
‘‘(a) DEFINITION OF ANTITRUST LAWS.—In this sec-
tion, the term ‘antitrust laws’ means—
‘‘(1) an antitrust law (within the meaning of
section (1) of the Clayton Act (15 U.S.C. 12));
‘‘(2) the Act of June 19, 1936 (commonly
known as the ‘Robinson Patman Act’) (49 Stat.
1526, chapter 323; 15 U.S.C. 13 et seq.); and
‘‘(3) section 5 of the Federal Trade Commis-
sion Act (15 U.S. C. 45), to the extent that the sec-
tion relates to unfair methods of competition.
‘‘(b) APPLICABILITY.—Nothing in this Act modifies,
impairs, or supersedes the antitrust laws.
‘‘(c) ANTITRUST LAWS.—
‘‘(1) TVA DEEMED A PERSON.—The Tennessee
Valley Authority shall be deemed to be a person, and
not government, for purposes of the antitrust laws.
‘‘(2) 
APPLICABILITY.—Notwithstanding 
any
other provision of law, the antitrust laws (including
the availability of any remedy for a violation of an
antitrust law) shall apply to the Tennessee Valley
Authority notwithstanding any determination that
the Tennessee Valley Authority is a corporate agen-
cy or instrumentality of the United States or is oth-
erwise engaged in governmental functions.’’.
SEC. 4. TVA POWER SALES.
Section 10 of the Tennessee Valley Authority Act of
1933 (16 U.S.C. 831(i)) is amended by inserting ‘‘(a)’’
after ‘‘10.’’ and by adding the following new subsections
at the end thereof:
‘‘(b) The Corporation shall make no contract that has
the effect, directly or indirectly, of making it a source of
power supply to a retail customer that will consume the
power within an area assigned by state law to a dis-
tributor, unless—
‘‘(1) the customer (or predecessor in interest to
the customer) was purchasing electric power directly
from the Corporation as a retail customer as of Jan-
uary 1, 1998;
‘‘(2) the distributor is purchasing firm power
from the Corporation in an amount that is equal to
SEC. 6. TVA ACCOUNTABILITY.
(a) APPLICATION OF FEDERAL POWER ACT.—Sec-
tion 4 of the Tennessee Valley Authority Act of 1933 (16
U.S.C. 831c) is amended by adding the following new sub-
section (m) after subsection (l):
‘‘(m) Except as provided in subsection (n) of this sec-
tion hereof, notwithstanding any other provision of law,
the Corporation shall be considered a ‘corporation’ under
part I of the Federal Power Act and as both a ‘public
utility’ and an ‘electric utility’ under parts II and III of
the Federal Power Act.’’.
SEC. 7. PROVISION OF CONSTRUCTION EQUIPMENT CON-
TRACTING AND ENGINEERING SERVICES.
Section 4 of the Tennessee Valley Authority Act of
1933 of 1933 (16 U.S.C. 831c) is amended by adding at
the end the following:
‘‘(n) PROVISION
OF CONSTRUCTION EQUIPMENT,
CONTRACTING, AND ENGINEERING SERVICES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this Act, except as provided in this sub-
section, the Corporation shall not have power to—
‘‘(A) rent or sell construction equipment;
‘‘(B) provide a construction equipment
maintenance or repair service;
‘‘(C) perform contract construction work;
or
‘‘(D) provide a construction engineering
service to any private or public entity.
‘‘(2) ELECTRICAL
CONTRACTORS.—The Cor-
poration may provide equipment or a service de-
scribed in paragraph (1) to a private contractor that
is engaged in electrical utility work on an electrical
utility project of the Corporation.
‘‘(3) CUSTOMERS, DISTRIBUTORS, AND GOVERN-
MENTAL ENTITIES.—The Corporation may provide
equipment or a service described in subparagraph
(1) to—
‘‘(A) a power customer served directly by
the Corporation;
‘‘(B) a distributor of Corporation power; or
‘‘(C) a Federal, State, or local government
entity;
that is engaged in work specifically related to an
electrical utility project of the Corporation.
‘‘(4) USED CONSTRUCTION EQUIPMENT.—
‘‘(A) DEFINITION OF USED CONSTRUCTION
EQUIPMENT.—In this paragraph, the term
‘used construction equipment’ means construc-
tion equipment that has been in service for
more than 2,500 hours.
‘‘(B) DISPOSITION.—The Corporation may
dispose of used construction equipment by
means of a public auction conducted by a pri-
vate entity that is independent of the Corpora-
tion.
‘‘(C) DEBT REDUCTION.—The Corporation
shall apply all proceeds of a disposition of used
construction equipment under subparagraph
(B) to the reduction of debt of the Corpora-
tion.’’.
SEC. 8. LIMITATIONS ON NEW GENERATION AND TAX
EQUIVALENCY.
(a) RESTRICTIONS.—Notwithstanding Sections 4, 5,
9a or any other provision of the Tennessee Valley Author-
ity Act of 1933 (16 U.S.C. 831), TVA shall not acquire,
construct, own, lease, maintain or operate, directly or indi-
rectly, any new or newly expanded or refurbished major
generating resource after the date of enactment of this
Act unless and until each of the following requirements
are satisfied:
(1) The generating resource proposed is com-
pletely subscribed in advance by distributors and the
output thereof will be used only within the area for
which TVA or its distributors were the actual and
exclusive source of power supply on January 1,
2000.
(2) Contractual or other financial arrangements
have been made to ensure that distributors on whose
behalf the resource may be acquired commit to pay
the full costs of the resource.
(3) There is no reasonable basis to conclude
that the acquisition, construction, ownership, lease,
or operation will necessitate the use of TVA’s au-
thority to recover otherwise nonrecoverable costs
provided in this Act.
(4) Any bonds, bond anticipation obligations or
any other forms or evidence of indebtedness issued
in association with such acquisition, construction,
ownership or operation, expressly disclaims and af-
firmatively prohibits payment, directly or indirectly,
by the United States and expressly provides that
such obligations shall be exclusive obligations of the
TVA, payable as to both principal and interest solely
from the net proceeds of the generating resource fi-
nanced thereby, and shall not otherwise be payable
from the proceeds of TVA’s power program, gen-
erally.
(5) TVA yields to the taxing authority of the
local, county and state governments where such gen-
eration resource is located and with regard to such
facility makes property and other non-income tax
payments on the same basis as are otherwise appli-
cable to other public utilities. Such payments shall
be in addition to and shall not off-set payments
made by TVA to state and local governments in lieu
of taxes under 16 U.S.C. 831e.
(6) At least fifty one percent (51%) of the cap-
ital requirements of any such venture or project is
provided in the form of equity.
(b) WAIVER OF IMMUNITY.—The Tennessee Valley
Authority is hereby authorized to submit to the jurisdic-
tion and taxing authority of State and local governments
respecting taxation and related assessments relating to
new major generating resources, as well as State and local
laws and regulatory authority, process and sanctions re-
specting power generation and supply.
(c) TAXATION EQUIVALENCY.—The first paragraph,
and the first clause of the first sentence of the second
paragraph of section 13 of the Tennessee Valley Authority
Act of 1933 (16 U.S.C. 831l) are amended to read as fol-
lows:
‘‘In order to render financial assistance to those
States and local governments in which the power oper-
ations of the Corporation are carried on and in which the
Corporation has acquired properties previously subject to
state and local taxation, and to provide for Federal tax-
ation equivalence between the Corporation and private in-
dustry, the Board is authorized and directed to pay the
States and the counties therein, and to the United States
Treasury, the following percentages of the gross proceeds
derived from the sale of power by the Corporation for the
preceding fiscal year, together with such additional
amounts as may be payable pursuant to the provisions
hereinafter set forth, said payments to constitute a charge
against the power operations of the Corporation: To states
and counties, for the first fiscal year after the effective
date and each year thereafter, 10 percent; and to the
United States Treasury 15 percent. The term ‘Gross Pro-
ceeds’ as used in this section means the total gross pro-
ceeds derived by the Corporation from the sale of power
and associated services for the preceding fiscal year. The
payments herein authorized are in lieu of taxation, and
the Corporation, its property and income are expressly ex-
empted from taxation in any manner or form by any state,
county, municipality or any subdivision or district thereof.
The Corporation also shall pay to the United States
Treasury each fiscal year (beginning as of the first month
after the effective date) an amount sufficient to com-
pensate for the support given to the Corporation’s bonds
by virtue of its status as a Federal corporation. The
amount to be paid shall be calculated by determining the
difference between the total cost of money paid by the Cor-
poration during the preceding year for money borrowed
for investment in power program facilities and the average
cost of capital of electric utilities of comparable size regu-
lated by the Federal Energy Regulatory Commission.
Such differential shall be calculated by the Federal Energy
Regulatory Commission by June 1 of each year and shall
be transmitted to the Corporation in writing. The Federal
Energy Regulatory Commission’s determination shall be
final and binding upon the Corporation, without oppor-
tunity for judicial review. Such differential shall be multi-
plied by the total authorized indebtedness of the Corpora-
tion to determine the compensation required to be paid.
‘‘The payment to States for each fiscal year shall be
apportioned among the states in the following manner:’’.
SEC. 9. AMENDMENTS TO TENNESSEE VALLEY AUTHORITY
ACT TO PROVIDE COMPETITIVE EQUALITY.
(a) Section 4 of the Tennessee Valley Authority Act
of 1933 (16 U.S.C. 831c), is amended by adding the fol-
lowing new subsections after subsection (l):
‘‘(m) The Corporation shall be subject to the same
legal and regulatory requirements over its operations as
apply generally to electric utility companies, including but
not limited to the following laws, including amendments,
and applicable rules and regulations:
‘‘(1) The Securities Act of 1933 (7 U.S.C. 77a
and following).
‘‘(2) The Securities Exchange Act of 1934 (7
U.S.C. 78a and following)
‘‘(3) The Toxic Substances Control Act (15
U.S.C. 2601 and following).
‘‘(4) The Antiquities Act (16 U.S.C. 461 and
following).
‘‘(5) The Soil and Water Resources Conserva-
tion Act (16 U.S.C. 2001 and following).
‘‘(6) The Federal fraud statute (18 U.S.C.
1001).
‘‘(7) The Racketeer Influenced and Corrupt Or-
ganizations Act (18 U.S.C. 1961).
‘‘(8) The Federal Water Pollution Control Act
(33 U.S.C. 1251 and following).
‘‘(9) The Solid Waste Disposal Act (42 U.S.C.
6901 and following).
‘‘(10) The Comprehensive Environmental Re-
sponse, Compensation, and Liability Act (42 U.S.C.
9601 and following).
‘‘(11) The Clean Air Act (42 U.S.C. 7401 and
following).
‘‘(n) Notwithstanding the foregoing or any other pro-
vision of this Act, to the extent the Corporation makes
any contract that has the direct or indirect effect of mak-
ing it a source of power supply—
‘‘(1) the Corporation’s eminent domain author-
ity provided for in this Act shall not be exercised to
construct any new or expanded facilities or to other-
wise acquire franchises or facilities of any other per-
son or entity or government for the purpose of satis-
fying any obligations under such contract; and
‘‘(2) notwithstanding any inconsistent provision
of section 9(a) (16 U.S.C. 831c–2) or otherwise, the
Corporation shall be subject to State and Federal
regulation, civil tort and contract liability, including
punitive liability, and rate-making accounting and
rate regulation requirements that are otherwise ap-
plicable to shareholder-owned public utilities and
transmission owning utilities doing business in the
areas where Tennessee Valley Authority power is
supplied, directly or indirectly.’’.
SEC. 10. SAVINGS PROVISIONS; INCONSISTENT LAWS.
(a) SAVINGS.—Nothing in this Act or any amend-
ment made by this Act—
(1) subjects any Tennessee Valley Authority
distributor to regulation by the Federal Energy Reg-
ulatory Commission;
(2) abrogates or affects any law in effect on the
date of enactment of this Act that applies to a Ten-
nessee Valley Authority distributor;
(3) shall be construed or implemented to give
bonds issued by Tennessee Valley Authority any spe-
cial status under law; or
(4) 
shall 
modify 
the 
Tennessee 
Valley
Authority’s obligations to investors under its bonds
and associated resolutions.
(b) TVA ACT PROVISIONS.—The provisions of this
Act shall supersede the provisions of the Tennessee Valley
Authority Act of 1933 and any other provisions of law
to the extent that such provisions are inconsistent with
the provisions of this Act.
Æ