[Congressional Record Volume 147, Number 59 (Thursday, May 3, 2001)]
[Senate]
[Pages S4254-S4256]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FRIST (for himself and Mr. Thompson):
  S. 821. A bill to amend the Tennessee Valley Authority Act of 1933 to 
modify provisions relating to the Board of Directors of the Tennessee 
Valley Authority, and for other purposes; to the Committee on Energy 
and Natural Resources.
  Mr. FRIST. Mr. President, today I introduce the ``TVA Modernization 
Act of 2001'' along with Senator Thompson. This bill would expand and 
restructure TVA's Board of Directors to make it reflect the board 
structure of most large corporations.
  TVA is now a multi-billion dollar per year corporation. However, it 
continues to function under a Depression-era administrative structure. 
By expanding the board and restructuring it more like a corporation's 
board, TVA will be in a better position to meet the future challenges 
facing TVA and the energy industry as a whole.
  Specifically, this legislation would create a nine-member, part-time 
board made up of experts in corporate management and strategic decision 
making. Each member would be required to be a legal resident of the TVA 
service area, and each member would receive an annual stipend. The 
board would appoint a CEO who would be responsible

[[Page S4255]]

for daily management decisions. Currently, the board is comprised of 
three full-time members, although one position is currently vacant, and 
the Chairman acts as the CEO.
  This legislation provides the organizational structure necessary for 
TVA's future. With proper leadership and sound management practices, 
TVA can continue to improve and more efficiently provide its valuable 
services.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 821

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CHANGE IN COMPOSITION, OPERATION, AND DUTIES OF 
                   THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY 
                   AUTHORITY.

       (a) In General.--The Tennessee Valley Authority Act of 1933 
     (16 U.S.C. 831 et seq.) is amended by striking section 2 and 
     inserting the following:

     ``SEC. 2. MEMBERSHIP, OPERATION, AND DUTIES OF THE BOARD OF 
                   DIRECTORS.

       ``(a) Membership.--
       ``(1) Appointment.--The Board of Directors of the 
     Corporation (referred to in this Act as the `Board') shall be 
     composed of 9 members appointed by the President by and with 
     the advice and consent of the Senate, who shall be legal 
     residents of the service area.
       ``(2) Chairman.--The members of the Board shall select 1 of 
     the members to act as chairman of the Board.
       ``(b) Qualifications.--
       ``(1) In general.--To be eligible to be appointed as a 
     member of the Board, an individual--
       ``(A) shall be a citizen of the United States;
       ``(B) shall have widely recognized experience or applicable 
     expertise in the management of or decisionmaking for a large 
     corporate structure;
       ``(C) shall not be an employee of the Corporation;
       ``(D) shall have no substantial direct financial interest 
     in--
       ``(i) any public-utility corporation engaged in the 
     business of distributing and selling power to the public; or
       ``(ii) any business that may be adversely affected by the 
     success of the Corporation as a producer of electric power; 
     and
       ``(E) shall profess a belief in the feasibility and wisdom 
     of this Act.
       ``(2) Party affiliation.--Not more than 5 of the 9 members 
     of the Board may be affiliated with a single political party.
       ``(c) Recommendations.--In appointing members of the Board, 
     the President shall--
       ``(1) consider recommendations from such public officials 
     as--
       ``(A) the Governors of States in the service area;
       ``(B) individual citizens;
       ``(C) business, industrial, labor, electric power 
     distribution, environmental, civic, and service 
     organizations; and
       ``(D) the congressional delegations of the States in the 
     service area; and
       ``(2) seek qualified members from among persons who reflect 
     the diversity and needs of the service area of the 
     Corporation.
       ``(d) Terms.--
       ``(1) In general.--A member of the Board shall serve a term 
     of 5 years, except that in first making appointments after 
     the date of enactment of this paragraph, the President shall 
     appoint--
       ``(A) 2 members to a term of 2 years;
       ``(B) 1 member to a term of 3 years; and
       ``(C) 2 members to a term of 4 years.
       ``(2) Vacancies.--A member appointed to fill a vacancy in 
     the Board occurring before the expiration of the term for 
     which the predecessor of the member was appointed shall be 
     appointed for the remainder of that term.
       ``(3) Reappointment.--
       ``(A) In general.--A member of the Board that was appointed 
     for a full term may be reappointed for 1 additional term.
       ``(B) Appointment to fill vacancy.--For the purpose of 
     subparagraph (A), a member appointed to serve the remainder 
     of the term of a vacating member for a period of more than 2 
     years shall be considered to have been appointed for a full 
     term.
       ``(e) Quorum.--
       ``(1) In general.--Six members of the Board shall 
     constitute a quorum for the transaction of business.
       ``(2) Minimum number of members.--A vacancy in the Board 
     shall not impair the power of the Board to act, so long as 
     there are 6 members in office.
       ``(f) Compensation.--
       ``(1) In general.--A member of the Board shall be entitled 
     to receive--
       ``(A)(i) a stipend of $30,000 per year; plus
       ``(ii) compensation, not to exceed $10,000 for any year, at 
     a rate that does not exceed the daily equivalent of the 
     annual rate of basic pay prescribed under level V of the 
     Executive Schedule under section 5316 of title 5, United 
     States Code, for each day the member is engaged in the actual 
     performance of duties as a member of the Board at meetings or 
     hearings; and
       ``(B) travel expenses, including per diem in lieu of 
     subsistence, in the same manner as persons employed 
     intermittently in Government service under section 5703 of 
     title 5, United States Code.
       ``(2) Adjustments in stipends.--The amount of the stipend 
     under paragraph (1)(A)(i) shall be adjusted by the same 
     percentage, at the same time and manner, and subject to the 
     same limitations as are applicable to adjustments under 
     section 5318 of title 5, United States Code.
       ``(g) Duties.--
       ``(1) In general.--The Board shall--
       ``(A) establish the broad goals, objectives, and policies 
     of the Corporation that are appropriate to carry out this 
     Act;
       ``(B) develop long-range plans to guide the Corporation in 
     achieving the goals, objectives, and policies of the 
     Corporation and provide assistance to the chief executive 
     officer to achieve those goals, objectives, and policies, 
     including preparing the Corporation for fundamental changes 
     in the electric utilities industry;
       ``(C) ensure that those goals, objectives, and policies are 
     achieved;
       ``(D) approve an annual budget for the Corporation;
       ``(E) establish a compensation plan for employees of the 
     Corporation in accordance with subsection (i);
       ``(F) approve the salaries, benefits, and incentives for 
     managers and technical personnel that report directly to the 
     chief executive officer;
       ``(G) ensure that all activities of the Corporation are 
     carried out in compliance with applicable law;
       ``(H) create an audit committee, composed solely of Board 
     members independent of the management of the Corporation, 
     which shall--
       ``(i) recommend to the Board an external auditor;
       ``(ii) receive and review reports from the external 
     auditor; and
       ``(iii) make such recommendations to the Board as the audit 
     committee considers necessary;
       ``(I) create such other committees of Board members as the 
     Board considers to be appropriate;
       ``(J) conduct public hearings on issues that could have a 
     substantial effect on--
       ``(i) the electric ratepayers in the service area; or
       ``(ii) the economic, environmental, social, or physical 
     well-being of the people of the service area; and
       ``(K) establish the electricity rate schedule.
       ``(2) Meetings.--The Board shall meet at least 4 times each 
     year.
       ``(h) Chief Executive Officer.--
       ``(1) Appointment.--The Board shall appoint a person to 
     serve as chief executive officer of the Corporation.
       ``(2) Qualifications.--To serve as chief executive officer 
     of the Corporation, a person--
       ``(A) shall be a citizen of the United States;
       ``(B) shall have management experience in large, complex 
     organizations;
       ``(C) shall not be a current member of the Board or have 
     served as a member of the Board within 2 years before being 
     appointed chief executive officer; and
       ``(D) shall have no substantial direct financial interest 
     in--
       ``(i) any public-utility corporation engaged in the 
     business of distributing and selling power to the public; or
       ``(ii) any business that may be adversely affected by the 
     success of the Corporation as a producer of electric power; 
     and
       ``(3) Tenure.--The chief executive officer shall serve at 
     the pleasure of the Board.
       ``(i) Compensation Plan.--
       ``(1) In general.--The Board shall approve a compensation 
     plan that specifies salaries, benefits, and incentives for 
     the chief executive officer and employees of the Corporation.
       ``(2) Annual survey.--The compensation plan shall be based 
     on an annual survey of the prevailing salaries, benefits, and 
     incentives for similar work in private industry, including 
     engineering and electric utility companies, publicly owned 
     electric utilities, and Federal, State, and local 
     governments.
       ``(3) Considerations.--The compensation plan shall provide 
     that education, experience, level of responsibility, 
     geographic differences, and retention and recruitment needs 
     will be taken into account in determining salaries of 
     employees.
       ``(4) Submission to congress.--No salary shall be 
     established under a compensation plan until after the 
     compensation plan and the survey on which it is based have 
     been submitted to Congress and made available to the public 
     for a period of 30 days.
       ``(5) Positions at or below level iv.--The chief executive 
     officer shall determine the salary and benefits of employees 
     whose annual salary is not greater than the annual rate 
     payable for positions at level IV of the Executive 
     Schedule under section 5315 of title 5, United States 
     Code.
       ``(6) Positions above level iv.--On the recommendation of 
     the chief executive officer, the Board shall approve the 
     salaries of employees whose annual salaries would be in 
     excess of the annual rate payable for positions at level IV 
     of the Executive Schedule under section 5315 of title 5, 
     United States Code.''.
       (b) Current Board Members.--A member of the board of 
     directors of the Tennessee Valley Authority who was appointed 
     before the effective date of the amendment made by subsection 
     (a)--
       (1) shall continue to serve as a member until the date of 
     expiration of the member's current term; and

[[Page S4256]]

       (2) may not be reappointed.

     SEC. 2. CHANGE IN MANNER OF APPOINTMENT OF STAFF.

       Section 3 of the Tennessee Valley Authority Act of 1933 (16 
     U.S.C. 831b) is amended--
       (1) by striking the first undesignated paragraph and 
     inserting the following:
       ``(a) Appointment by the Chief Executive Officer.--The 
     chief executive officer shall appoint, with the advice and 
     consent of the Board, and without regard to the provisions of 
     the civil service laws applicable to officers and employees 
     of the United States, such managers, assistant managers, 
     officers, employees, attorneys, and agents as are necessary 
     for the transaction of the business of the Corporation.''; 
     and
       (2) by striking ``All contracts'' and inserting the 
     following:
       ``(b) Wage Rates.--All contracts''.

     SEC. 3. CONFORMING AMENDMENTS.

       (a) The Tennessee Valley Authority Act of 1933 (16 U.S.C. 
     831 et seq.) is amended--
       (1) by striking ``board of directors'' each place it 
     appears and inserting ``Board of Directors''; and
       (2) by striking ``board'' each place it appears and 
     inserting ``Board''.
       (b) Section 9 of the Tennessee Valley Authority Act of 1933 
     (16 U.S.C. 831h) is amended--
       (1) by striking ``The Comptroller General of the United 
     States shall audit'' and inserting the following:
       ``(c) Audits.--The Comptroller General of the United States 
     shall audit''; and
       (2) by striking ``The Corporation shall determine'' and 
     inserting the following:
       ``(d) Administrative Accounts and Business Documents.--The 
     Corporation shall determine''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by this Act take effect, and 7 
     additional members of the Board of the Tennessee Valley 
     Authority shall be appointed so as to commence their terms 
     on, May 18, 2002.
                                 ______