16 U.S.C. § 831n–1: Bonds to carry out…

Summary

The Corporation may issue bonds, with the approval of the Secretary of the Treasury, up to $50,000,000 outstanding at any one time to get money for carrying out section 831k–1. The bonds can have many forms and sizes, can mature in up to 50 years, may be callable by the Corporation, and must pay no more than 3.5% interest per year. The Corporation, with Treasury approval, sets the exact terms, amounts, and prices, but the yield to investors cannot exceed 3.5%. The United States fully guarantees both principal and interest, and that guarantee must appear on the bond. The bonds are allowed as investments and as security for U.S.‑controlled trust or public funds. If the Corporation fails to pay, the Secretary of the Treasury will pay the holder and then take the holder’s rights. The Secretary may buy, sell, or redeem these bonds as public‑debt transactions and may use public‑debt proceeds to buy them. The Corporation may also buy its bonds with Treasury approval. No bonds to fund a proposed contract under section 831k–1 may be issued until the Federal Power Commission approves that contract, and the Commission must decide quickly and finally. The authority to issue these bonds ends five years after the law’s amendment, but bonds needed to carry out contracts made before that end date may still be issued later.

Title 16, §831n–1

Conservation, Source: USLM XML via OLRC

With the approval of the Secretary of the Treasury, the Corporation is authorized to issue bonds not to exceed in the aggregate $50,000,000 outstanding at any one time, which bonds may be sold by the Corporation to obtain funds to carry out the provisions of section 831k–1 of this title. 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 3½ 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 3½ 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. No bonds shall be issued hereunder to provide funds or bonds necessary 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 hereunder shall expire at the end of five years from the date when this section as amended herein becomes law, except that such bonds may be issued at any time after the expiration of said period to provide bonds or funds necessary for the performance of any contract entered into by the Corporation, prior to the expiration of said period, under the authority of section 831k–1 of this title.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date when this section as amended herein becomes law, referred to in text, probably means August 31, 1935. Codification “Chapter 31 of title 31” and “such chapter” substituted in text for “the Second Liberty Bond Act, as amended” and “such Act, as amended,”, 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.

Statutory Notes and Related Subsidiaries

Transfer of Functions

The Federal Power Commission was terminated, and its functions, personnel, property, funds, etc., were transferred to the Secretary of Energy (except for certain functions which were transferred to the Federal Energy Regulatory Commission) by section 7151(b), 7171(a), 7172(a), 7291, and 7293 of Title 42, The Public Health and Welfare.

§831n–1 Bonds to Carry Out Provisions of Section 831k–1; Amount, Terms, and Conditions