[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3130 Introduced in House (IH)]







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 jurisdiction 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 Representatives 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 collectively 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 increments of $1,000,000,000, 
such that TVA shall be authorized 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 following disclaimer:
            ```The United States General Accounting Office has 
        determined that the Tennessee Valley Authority's level of 
        indebtedness may impair its financial flexibility in the 
        future, that the United States Congress has expressly 
        disclaimed any express or implied support for such 
        indebtedness, and that the sole means for payment of principal 
        and interest 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, directly 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 apportionment 
under the provisions of subchapter II of chapter 15 of title 31. The 
Corporation may, in performing functions 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 connection with 
the lease, lease-purchase, or any contract for the power output of any 
such plant or other facility. 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.
    ``(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 expenditure of such proceeds shall not be subject to 
apportionment under the provisions of subchapter II of chapter 15 of 
title 31. Securities issued by the Tennessee Valley Authority under 
authority of section 15d of this Act are solely and exclusively 
obligations of the Tennessee Valley Authority. 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 
recourse, directly or indirectly, to the United States. No funds of the 
United States shall be appropriated, expended, applied, or otherwise 
used in any way to facilitate, directly or indirectly, the reissuance, 
refinancing, or payment 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 protections to bonds issued by 
the Tennessee Valley Authority or owners of bonds issued by the 
Tennessee Valley Authority.
    ``(d) Sale; Terms and Conditions; Method; Limitation on Amount; 
Statement in Annual Report.--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. 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 excess of those required to meet the 
Corporation's obligations 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 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 such 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 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 Act, 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.
    ``(f) Rates for Sale of Power; Application of Net Proceeds.--The 
Corporation shall petition the Federal 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 provision 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 margin as the Board may 
consider desirable for investment in power system asset maintenance, 
retirement of outstanding bonds in advance of maturity, additional 
reduction of appropriation investment, and other purposes connected 
directly with the Corporation's power business. In order to protect the 
investment of holders of the Corporation's securities and the 
appropriation investment, 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, 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. 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-Purchase Agreements.--Power 
generating and related facilities 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 section, 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 Commission Act (15 
        U.S. C. 45), to the extent that the section 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 agency or 
        instrumentality of the United States or is otherwise 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 distributor, 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 January 1, 1998;
            ``(2) the distributor is purchasing firm power from the 
        Corporation in an amount that is equal to not more than 50 
        percent of the total retail sales of the distributor; and
            ``(3) the customer elects to continue such purchases.
    ``(c) The Corporation shall not offer long-term, firm power to a 
new customer at rates or under terms and conditions that the Federal 
Energy Regulatory Commission determines are more favorable than those 
offered to any distributor for comparable power supply, unless the 
distributor that is purchasing comparable power agrees to the sale to 
the new customer at those rates or under those terms and conditions.''.

SEC. 5. FOREIGN OPERATIONS; PROTECTIONS.

    Section 15d of the Tennessee Valley Authority Act of 1933 (16 
U.S.C. 831n-4) is amended by adding the following new subsection after 
subsection (f), as added by section 2 of this Act:
    ``(g) Notwithstanding the provisions of subsection (e), the 
Corporation may charge no rate nor recover any amount reflecting or 
facilitating, directly or indirectly, recovery from power customers of 
any costs or expenses incurred by or for the Corporation in the conduct 
of any activities or operations outside the United States.''.

SEC. 6. TVA ACCOUNTABILITY.

    (a) Application of Federal Power Act.--Section 4 of the Tennessee 
Valley Authority Act of 1933 (16 U.S.C. 831c) is amended by adding the 
following new subsection (m) after subsection (l):
    ``(m) Except as provided in subsection (n) of this section 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 CONTRACTING 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 subsection, 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 Corporation may provide 
        equipment or a service described 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 governmental 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 construction 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 private entity that is 
                independent of the Corporation.
                    ``(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 Corporation.''.

SEC. 8. LIMITATIONS ON NEW GENERATION AND TAX EQUIVALENCY.

    (a) Restrictions.--Notwithstanding Sections 4, 5, 9a or any other 
provision of the Tennessee Valley Authority Act of 1933 (16 U.S.C. 
831), TVA shall not acquire, construct, own, lease, maintain or 
operate, directly or indirectly, 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 completely 
        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 authority 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 affirmatively 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 financed 
        thereby, and shall not otherwise be payable from the proceeds 
        of TVA's power program, generally.
            (5) TVA yields to the taxing authority of the local, county 
        and state governments where such generation resource is located 
        and with regard to such facility makes property and other non-
        income tax payments on the same basis as are otherwise 
        applicable 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 capital 
        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 jurisdiction 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 respecting 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 follows:
    ``In order to render financial assistance to those States and local 
governments in which the power operations 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 taxation equivalence between the Corporation and private 
industry, 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 
Proceeds' as used in this section means the total gross proceeds 
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 exempted 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 compensate 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 Corporation 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 regulated 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 
opportunity for judicial review. Such differential shall be multiplied 
by the total authorized indebtedness of the Corporation 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 following 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 Conservation Act (16 
        U.S.C. 2001 and following).
            ``(6) The Federal fraud statute (18 U.S.C. 1001).
            ``(7) The Racketeer Influenced and Corrupt Organizations 
        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 Response, 
        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 provision of this 
Act, to the extent the Corporation makes any contract that has the 
direct or indirect effect of making it a source of power supply--
            ``(1) the Corporation's eminent domain authority provided 
        for in this Act shall not be exercised to construct any new or 
        expanded facilities or to otherwise acquire franchises or 
        facilities of any other person or entity or government for the 
        purpose of satisfying 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 applicable 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 amendment made by this 
Act--
            (1) subjects any Tennessee Valley Authority distributor to 
        regulation by the Federal Energy Regulatory Commission;
            (2) abrogates or affects any law in effect on the date of 
        enactment of this Act that applies to a Tennessee Valley 
        Authority distributor;
            (3) shall be construed or implemented to give bonds issued 
        by Tennessee Valley Authority any special 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.
                                 <all>