16 U.S.C. § 831n-3 : US Code - Section 831N-3: Use of funds; limitation of issuance

Search 16 U.S.C. § 831n-3 : US Code - Section 831N-3: Use of funds; limitation of issuance

With the approval of the Secretary of the Treasury the
Corporation is authorized, after the date of enactment of this
section, to issue bonds not to exceed in the aggregate $61,500,000.
Such bonds may be sold by the Corporation to obtain funds which may
be used for the following purposes only:
(1) Not to exceed $46,000,000 may be used for the purchase of
electric utility properties of the Tennessee Electric Power Company
and Southern Tennessee Power Company, as contemplated in the
contract between the Corporation and the Commonwealth and Southern
Corporation and others, dated as of May 12, 1939.
(2) Not to exceed $6,500,000 may be used for the purchase and
rehabilitation of electric utility properties of the Alabama Power
Company and Mississippi Power Company in the following named
counties in northern Alabama and northern Mississippi: The counties
of Jackson, Madison, Limestone, Lauderdale, Colbert, Lawrence,
Morgan, Marshall, De Kalb, Cherokee, Cullman, Winston, Franklin,
Marion, and Lamar in northern Alabama, and the counties of Calhoun,
Chickasaw, Monroe, Clay, Lowndes, Oktibbeha, Choctaw, Webster,
Noxubee, Winston, Neshoba, and Kemper in northern Mississippi.
(3) Not to exceed $3,500,000 may be used for rebuilding,
replacing, and repairing electric utility properties purchased by
the Corporation in accordance with the foregoing provisions of this
section.
(4) Not to exceed $3,500,000 may be used for constructing
electric transmission lines, substations, and other electrical
facilities necessary to connect the electric utility properties
purchased by the Corporation in accordance with the foregoing
provisions of this section with the electric power system of the
Corporation.
(5) Not to exceed $2,000,000 may be used for making loans under
section 831k-1 of this title to States, counties, municipalities,
and nonprofit organizations to enable them to purchase any electric
utility properties referred to in the contract between the
Corporation and the Commonwealth and Southern Corporation and
others, dated as of May 12, 1939, or any electric utility
properties of the Alabama Power Company or Mississippi Power
Company in any of the counties in northern Alabama or northern
Mississippi named in paragraph (2) of this section.
The Corporation shall file with the President and with the
Congress in December of each year a financial statement and
complete report as to the expenditure of funds derived from the
sale of bonds under this section covering the period not covered by
any such previous statement or report. Such bonds shall be in such
forms and denominations, shall mature within such periods not more
than fifty years from the date of their issue, may be redeemable at
the option of the Corporation before maturity in such manner as may
be stipulated therein, shall bear such rates of interest not
exceeding 3 1/2 per centum per annum, shall be subject to such
terms and conditions, shall be issued in such manner and amount,
and sold at such prices, as may be prescribed by the Corporation
with the approval of the Secretary of the Treasury: Provided, That
such bonds shall not be sold at such prices or on such terms as to
afford an investment yield to the holders in excess of 3 1/2 per
centum per annum. Such bonds shall be fully and unconditionally
guaranteed both as to interest and principal by the United States,
and such guaranty shall be expressed on the face thereof, and such
bonds shall be lawful investments, and may be accepted as security,
for all fiduciary, trust, and public funds, the investment or
deposit of which shall be under the authority or control of the
United States or any officer or officers thereof. In the event that
the Corporation should not pay upon demand when due, the principal
of, or interest on, such bonds, the Secretary of the Treasury shall
pay to the holder the amount thereof, which is authorized to be
appropriated out of any moneys in the Treasury not otherwise
appropriated, and thereupon to the extent of the amount so paid the
Secretary of the Treasury shall succeed to all the rights of the
holders of such bonds. The Secretary of the Treasury, in his
discretion, is authorized to purchase any bonds issued hereunder,
and for such purpose the Secretary of the Treasury is authorized to
use as a public-debt transaction the proceeds from the sale of any
securities hereafter issued under chapter 31 of title 31, and the
purposes for which securities may be issued under such chapter are
extended to include any purchases of the Corporation's bonds
hereunder. The Secretary of the Treasury may, at any time, sell any
of the bonds of the Corporation acquired by him under this section.
All redemptions, purchases, and sales by the Secretary of the
Treasury of the bonds of the Corporation shall be treated as public-
debt transactions of the United States. With the approval of the
Secretary of the Treasury, the Corporation shall have power to
purchase such bonds in the open market at any time and at any
price. None of the proceeds of the bonds shall be used for the
performance of any proposed contract negotiated by the Corporation
under the authority of section 831k-1 of this title until the
proposed contract shall have been submitted to and approved by the
Federal Power Commission. When any such proposed contract shall
have been submitted to the said Commission, the matter shall be
given precedence and shall be in every way expedited and the
Commission's determination of the matter shall be final. The
authority of the Corporation to issue bonds under this section
shall expire January 1, 1941, except that if at the time such
authority expires the amount of bonds issued by the Corporation
under this section is less than $61,500,000, the Corporation may,
subject to the foregoing provisions of this section, issue, after
the expiration of such period, bonds in an amount not in excess of
the amount by which the bonds so issued prior to the expiration of
such period is less than $61,500,000, for refunding purposes, or,
subject to the provisions of paragraph (5) of this section
(limiting the purposes for which loans under section 831k-1 of this
title of funds derived from bonds proceeds may be made) to provide
funds found necessary in the performance of any contract entered
into by the Corporation prior to the expiration of such period,
under the authority of section 831k-1 of this title.