16 U.S.C. § 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 under 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 under 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). The Corporation must 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 must be in such forms and denominations, must 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 in it, must bear such rates of interest not exceeding 3½ per centum per annum, must be subject to such terms and conditions, must 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 must 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 must be fully and unconditionally guaranteed both as to interest and principal by the United States, and such guaranty must be expressed on the face of it, and such bonds must be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which must be under the authority or control of the United States or any officer or officers of it. if the Corporation should not pay upon demand when due, the principal of, or interest on, such bonds, the Secretary of the Treasury must pay to the holder the amount of it, 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 must 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 must be treated as public-debt transactions of the United States. With the approval of the Secretary of the Treasury, the Corporation must have power to purchase such bonds in the open market at any time and at any price. None of the proceeds of the bonds must 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 must have been submitted to and approved by the Federal Power Commission. When any such proposed contract must have been submitted to the the Commission, the matter must be given precedence and must be in every way expedited and the Commission’s determination of the matter must be final. The authority of the Corporation to issue bonds under this section must 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 before 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 before the expiration of such period, under the authority of section 831k–1 of this title .