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 14 members appointed by the President by and with 
        the advice and consent of the Senate.
            ``(2) Composition.--The Board shall be composed of 14 
        members, of whom--
                    ``(A) 2 members shall be residents of Alabama;
                    ``(B) 2 members shall be residents of Georgia;
                    ``(C) 2 members shall be residents of Kentucky;
                    ``(D) 2 members shall be residents of Mississippi;
                    ``(E) 2 members shall be residents of North 
                Carolina;
                    ``(F) 2 members shall be residents of Tennessee; 
                and
                    ``(G) 2 members shall be residents of Virginia.
    ``(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 not be an employee of the Corporation;
                    ``(C) 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
                    ``(D) shall profess a belief in the feasibility and 
                wisdom of this Act.
            ``(2) Party affiliation.--Not more than 8 of the 14 members 
        of the Board may be affiliated with a single political party.
    ``(c) Terms.--
            ``(1) In general.--A member of the Board shall serve a term 
        of 4 years except that in first making appointments after the 
        date of enactment of this paragraph, the President shall 
        appoint--
                    ``(A) 5 members to a term of 2 years;
                    ``(B) 6 members to a term of 3 years; and
                    ``(C) 3 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.
    ``(d) Quorum.--
            ``(1) In general.--Eight 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 8 members in office.
    ``(e) Compensation.--
            ``(1) In general.--A member of the Board shall be entitled 
        to receive--
                    ``(A) a stipend of $30,000 per year; 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) 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.
    ``(f) Chief Executive Officer.--
            ``(1) Appointment.--The President, by and with the advice 
        and consent of the Senate, 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 proven 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) Term.--
                    ``(A) In general.--The chief executive officer 
                shall serve for a term of 4 years.
                    ``(B) Reappointment.--The chief executive officer 
                may be reappointed for additional terms.
            ``(4) Compensation.--
                    ``(A) In general.--The chief executive officer 
                shall be entitled to receive--
                            ``(i) compensation at a rate that does not 
                        exceed the annual rate of pay prescribed under 
                        Level III of the Executive Schedule under 
                        section 5315 of title 5, United States Code; 
                        and
                            ``(ii) reimbursement from the Corporation 
                        for travel expenses, including per diem in lieu 
                        of subsistence, while away from home or regular 
                        place of business of the chief executive 
                        officer in the performance of the duties of the 
                        chief executive officer.''.
    (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
            (2) may not be reappointed.

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act take effect, and the additional 
members of the Board of the Tennessee Valley Authority and Chief 
Executive Officer shall be appointed so as to commence their terms on, 
the date that is 90 days after the date of enactment of this Act.
Amends the Tennessee Valley Authority Act of 1933 to: (1) expand from 3 to 14 the membership of the Board of Directors; (2) grant permanent membership to the States of Alabama, Georgia, Kentucky, Mississippi; North Carolina, Tennessee, and Virginia; (3) set Board member compensation at a stipend of $30,000 per year, plus travel expenses; and (4) provide for a Chief Executive Officer appointed by the President, with the advice and consent of the Senate.
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.