Legislation Proposed to Place TVA Under SEC Jurisdiction
September 27, 2004
The Senate Committee on Appropriations has approved the Senate Transportation, Treasury, and General Government Appropriations Act, 2005, S.2806 (Bill), which includes language that would make securities issued by the Tennessee Valley Authority subject to the provisions of the Securities Act of 1933 and TVA subject to the Securities Exchange Act of 1934. If enacted in its current form, the Bill would require TVA to register its securities and file periodic reports with the Securities and Exchange Commission (SEC). The Bill also contains language that would expressly prohibit the SEC from granting TVA exemptions from securities laws and regulations. TVA would be the only entity, governmental or private, for which the SEC could not provide such exemptions.
In addition to subjecting TVA to the SEC’s registration and reporting requirements and preventing the SEC from granting TVA exemptive relief, the Bill would have other implications for TVA and its bondholders if it is enacted. The Bill would apply to all TVA bonds issued after the Bill becomes law and may be broad enough to apply to bonds issued before the Bill becomes law.
The Bill has been approved by the Senate Committee on Appropriations but has not yet been considered by the full Senate. The comparable bill in the House of Representatives does not contain similar language with respect to TVA. In order to become law, the provision subjecting TVA to SEC jurisdiction would need to be included in any final bill that is approved by both houses of Congress and signed by the President.
If the legislation were to be enacted in its current form, for a period of time, TVA may experience loss of access to its traditional sources of funding as it comes into compliance with the 1933 and 1934 Acts.
TVA is a wholly owned federal agency and instrumentality of the United States and is completely self-financed. TVA is authorized to issue debt securities and had approximately $23.3 billion in bonds and notes outstanding as of June 30, 2004. Rating agencies currently assign a triple-A rating to TVA’s bonds. TVA is not permitted to issue equity securities.
TVA is the nation’s largest public power provider and provides power to large industries and 158 power distributors that serve approximately 8.5 million consumers in seven southeastern states.
Media Contact:
John Moulton, Knoxville, (865) 632-8048
TVA News Bureau, Knoxville, (865) 632-6000
