Source: https://www.law.cornell.edu/uscode/text/16/831n%E2%80%934
Timestamp: 2018-06-19 14:46:51
Document Index: 38462860

Matched Legal Cases: ['§ 831', '§\u202f831', '§\u202f15', '§\u202f1', '§\u202f1', '§\u202f2', '§\u202f4', '§\u202f2', '§\u202f35', '§\u202f1', '§\u202f1', 'art 1300', 'art 1301', 'art 1302', 'art 1303', 'art 1304', 'art 1305', 'ART 1305', 'art 1306', 'art 1307', 'art 1308', 'art 1309', 'art 1310', 'art 1311', 'art 1314', 'art 1315']

16 U.S. Code § 831n–4 - Bonds for financing power program | US Law | LII / Legal Information Institute
§ 831n–4.
Bonds for financing power program
The Corporation is authorized to issue and sell bonds, notes, and other evidences of indebtedness (hereinafter collectively referred to as “bonds”) in an amount not exceeding $30,000,000,000 outstanding at any one time to assist in financing its power program and to refund such bonds. The Corporation may, in performing functions authorized by this chapter, use the proceeds of such bonds for the construction, acquisition, enlargement, improvement, or replacement of any plant or other facility used or to be used for the generation or transmission of electric power (including the portion of any multiple-purpose structure used or to be used for power generation); as may be required in connection with the lease, lease-purchase, or any contract for the power output of any such plant or other facility; and for other purposes incidental thereto. Unless 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: Provided, however, That such additional area shall not in any event increase by more than 2½ per centum (or two thousand square miles, whichever is the lesser) the area for which the Corporation and its distributors were the primary source of power supply on July 1, 1957: And provided further, That no part of such additional area may be in a State not now served by the Corporation or its distributors or in a municipality receiving electric service from another source on or after July 1, 1957, and no more than five hundred square miles of such additional area may be in any one State now served by the Corporation or its distributors.
The principal of and interest on said bonds shall be payable solely from the Corporation’s net power proceeds as hereinafter defined. Net power proceeds are defined for purposes of this section as the remainder of the Corporation’s gross power revenues after deducting the costs of operating, maintaining, and administering its power properties (including costs applicable to that portion of its multiple-purpose properties allocated to power) and payments to States and counties in lieu of taxes but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds of the sale or other disposition of any power facility or interest therein, and shall include reserve or other funds created from such sources. Notwithstanding the provisions of section 831y of this title or any other provision of law, the Corporation may pledge and use its net power proceeds for payment of the principal of and interest on said bonds, for purchase or redemption thereof, and for other purposes incidental thereto, including creation of reserve funds and other funds which may be similarly pledged and used, to such extent and in such manner as it may deem necessary or desirable. The Corporation is authorized to enter into binding covenants with the holders of said bonds—and with the trustee, if any—under any indenture, resolution, or other agreement entered into in connection with the issuance thereof (any such agreement being hereinafter referred to as a “bond contract”) with respect to the establishment of reserve funds and other funds, adequacy of charges for supply of power, application and use of net power proceeds, stipulations concerning the subsequent issuance of bonds or the execution of leases or lease-purchase agreements relating to power properties, and such other matters, not inconsistent with this chapter, as the Corporation may deem necessary or desirable to enhance the marketability of said bonds. The issuance and sale of bonds by the Corporation and the expenditure of bond proceeds for the purposes specified herein, including the addition of generating units to existing power-producing projects and the construction of additional power-producing projects, shall not be subject to the requirements or limitations of any other law.
Bonds issued by the Corporation under this section shall be negotiable instruments unless otherwise specified 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 entitled to such relative priorities of claim on the Corporation’s net power proceeds with respect to principal and interest payments, and shall be subject to such other terms and conditions, as the Corporation may determine: Provided, 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 interest 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 Secretary of the Treasury except as to the time of issuance and the maximum rates of interest to be borne by the bonds: Provided further, That if the Secretary of the Treasury does not approve a proposed issue of bonds hereunder within seven working days following the date on which he is advised of the proposed sale, the Corporation may issue to the Secretary interim obligations in the amount of the proposed issue, which the Secretary is directed to purchase. In case the Corporation determines that a proposed issue of bonds hereunder cannot be sold on reasonable terms, it may issue to the Secretary interim obligations which the Secretary is authorized to purchase. Notwithstanding the foregoing provisions of this subsection, obligations issued by the Corporation to the Secretary shall not exceed $150,000,000 outstanding at any one time, shall mature on or before one year from date of issue, and shall bear interest equal to the average rate (rounded to the nearest one-eighth of a percent) on outstanding marketable obligations of the United States with maturities from dates of issue of one year or less as of the close of the month preceding the issuance of the obligations of the Corporation. If agreement is not reached within eight months concerning the issuance of any bonds which the Secretary has failed to approve, the Corporation may nevertheless proceed to sell such bonds on any date thereafter without approval by the Secretary in amount sufficient to retire the interim obligations issued to the Treasury and such interim obligations shall be retired from the proceeds of such bonds. For the purpose of any purchase of the Corporation’s obligations the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under chapter 31 of title 31 are extended to include any purchases of the Corporation’s obligations hereunder. The Corporation may sell its bonds by negotiation or on the basis of competitive bids, subject to the right, if reserved, to reject all bids; may designate trustees, registrars, and paying agents in connection with said bonds and the issuance thereof; may arrange for audits of its accounts and for reports concerning its financial condition and operations by certified public accounting firms (which audits and reports shall be in addition to those required by sections 9105 and 9106 of title 31,[1] may, subject to any covenants contained in any bond contract, invest the proceeds of any bonds and other funds under its control which derive from or pertain to its power program in any securities approved for investment of national bank funds and deposit said proceeds and other funds, subject to withdrawal by check or otherwise, in any Federal Reserve Bank or bank having membership in the Federal Reserve System; and may perform such other acts not prohibited by law as it deems necessary or desirable to accomplish the purposes of this section. Bonds issued by the Corporation hereunder shall contain a recital that they are issued pursuant to this section, and such recital shall be conclusive evidence of the regularity of the issuance and sale of such bonds and of their validity. The annual report of the Board filed pursuant to section 831h of this title shall contain a detailed statement of the operation of the provisions of this section during the year.
From net power proceeds in excess of those required to meet the Corporation’s obligations under the provisions of any bond or bond contract, the Corporation shall, beginning with fiscal year 1961, 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 Corporation’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 repayment sum shall be applied to reduction of said appropriation investment until a total of $1,000,000,000 of said appropriation investment shall have been repaid. The said appropriation investment shall consist, in any fiscal year, of that part of the Corporation’s total investment assigned to power as of the beginning of the fiscal year (including both completed plant and construction in progress) which has been provided from appropriations or by transfers of property from other Government agencies without reimbursement by the Corporation, less repayments of such appropriation investment made under title II of the Government Corporations Appropriation Act, 1948, this chapter, or other applicable legislation. The payment as a return on the appropriation investment 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. Payments due hereunder may be deferred for not more than two years when, in the judgment of the Board of Directors of the Corporation, such payments cannot feasibly be made because of inadequacy of funds occasioned by drought, poor business conditions, emergency replacements, or other factors beyond the control of the Corporation.
The Corporation shall charge rates for power which will produce gross revenues sufficient to provide funds for operation, maintenance, and administration of its power system; payments to States and counties in lieu of taxes; debt service on outstanding bonds, including provision and maintenance of reserve funds and other funds established in connection therewith; payments to the Treasury as a return on the appropriation investment pursuant to subsection (e) hereof; payment to the Treasury of the repayment sums specified in subsection (e) hereof; and such additional margin as the Board may consider desirable for investment in power system assets, retirement of outstanding bonds in advance of maturity, additional reduction of appropriation investment, and other purposes connected with the Corporation’s power business, having due regard for the primary objectives of the chapter, including the objective that power shall be sold at rates as low as are feasible. In order to protect the investment of holders of the Corporation’s securities and the appropriation investment as defined in subsection (e) hereof, the Corporation, during each successive five-year period beginning 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 reduction (directly or through payments into reserve or sinking funds) of its capital obligations, including bonds and the appropriation investment, or to reinvestment in power assets, at least to the extent of the combined amount of the aggregate of the depreciation accruals 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. As of October 1, 1975, the five-year periods described herein shall be computed as beginning on October 1 of that year and of each fifth year thereafter.
(May 18, 1933, ch. 32, § 15d, as added Pub. L. 86–137, § 1, Aug. 6, 1959, 73 Stat. 280; amended Pub. L. 86–157, Aug. 14, 1959, 73 Stat. 338; Pub. L. 89–537, Aug. 12, 1966, 80 Stat. 346; Pub. L. 91–446, Oct. 14, 1970, 84 Stat. 915; Pub. L. 94–139, § 1, Nov. 28, 1975, 89 Stat. 750; Pub. L. 94–273, §§ 2(30), 35(a), Apr. 21, 1976, 90 Stat. 376, 380; Pub. L. 96–97, Oct. 31, 1979, 93 Stat. 730.)
[1]  So in original. The comma probably should be “);”.
The effective date of this Act, referred to in subsec. (a), and “the effective date of this section”, referred to in subsec. (f), probably means the effective date of Pub. L. 86–137, which was approved Aug. 6, 1959.
Title II of the Government Corporations Appropriation Act, 1948, referred to in subsec. (e), means title II of act July 30, 1947, ch. 358, 61 Stat. 576, which was not classified to the Code.
In subsecs. (b) and (c), “subchapter II of chapter 15 of title 31”, “chapter 31 of title 31”, and “sections 9105 and 9106 of title 31” substituted for “Revised Statutes 3679, as amended (31 U.S.C. 665)”, “the Second Liberty Bond Act, as amended”, and “sections 105 and 106 of the Act of December 6, 1945 (59 Stat. 599; 31 U.S.C. 850–851)”, respectively, on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance.
1979—Subsec. (a). Pub. L. 96–97 substituted “$30,000,000,000” for “$15,000,000,000”.
1976—Subsec. (e). Pub. L. 94–273, § 2(30), substituted “September” for “June”.
Subsec. (f). Pub. L. 94–273, § 35(a), inserted provision relating to computation of five-year periods as of Oct. 1, 1975.
1975—Subsec. (a). Pub. L. 94–139, § 1(a), substituted “$15,000,000,000” for “$5,000,000,000”.
Subsec. (e). Pub. L. 94–139, § 1(b), struck out “December 31 and” before “June 30”.
1970—Subsec. (a). Pub. L. 91–446 substituted “$5,000,000,000” for “$1,750,000,000”.
1966—Subsec. (a). Pub. L. 89–537 increased the limitation on the amount of revenue bonds the TVA may issue and sell from $750,000,000 to $1,750,000,000.
1959—Subsec. (a). Pub. L. 86–157 struck out proviso relating to the transmission of the power construction program to the Congress by the President with the budget estimates, and the provision for withholding initiation of construction of new power producing projects until the construction program of the Corporation has been before Congress in session for ninety calendar days.
18 CFR Part 1300 - STANDARDS OF CONDUCT FOR EMPLOYEES OF TENNESSEE VALLEY AUTHORITY
18 CFR Part 1301 - PROCEDURES
18 CFR Part 1302 - NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF TVA - EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964
18 CFR Part 1303 - PROPERTY MANAGEMENT
18 CFR Part 1304 - APPROVAL OF CONSTRUCTION IN THE TENNESSEE RIVER SYSTEM AND REGULATION OF STRUCTURES AND OTHER ALTERATIONS
18 CFR Part 1305 - PART 1305 [RESERVED]
18 CFR Part 1306 - RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES
18 CFR Part 1307 - NONDISCRIMINATION WITH RESPECT TO HANDICAP
18 CFR Part 1308 - CONTRACT DISPUTES
18 CFR Part 1309 - NONDISCRIMINATION WITH RESPECT TO AGE
18 CFR Part 1310 - ADMINISTRATIVE COST RECOVERY
18 CFR Part 1311 - INTERGOVERNMENTAL REVIEW OF TENNESSEE VALLEY AUTHORITY FEDERAL FINANCIAL ASSISTANCE AND DIRECT FEDERAL DEVELOPMENT PROGRAMS AND ACTIVITIES
18 CFR Part 1314 - BOOK-ENTRY PROCEDURES FOR TVA POWER SECURITIES ISSUED THROUGH THE FEDERAL RESERVE BANKS
18 CFR Part 1315 - NEW RESTRICTIONS ON LOBBYING