Omnibus Bill Restructures TVA Board, Requires TVA to File Under SEC
November 23 , 2004
On November 20, 2004, Congress passed an “omnibus” appropriations bill (H.R. 4818) for fiscal year 2005 that affects TVA in several ways. Before they become law, the provisions in the omnibus bill affecting TVA would need to be included in a final bill signed by the president.
TVA Board Governance
The legislation creates a nine -member, part-time Board to replace the existing three-member, full-time Board. At least seven of the nine members must be legal residents of the TVA service area. As with the current TVA Board, future Board members will be appointed by the president and confirmed by the Senate, but will serve five-year terms rather than the current nine-year term.
The Board’s role will continue to be, among other things, to develop longrange plans for TVA, approve annual budgets and a compensation plan for TVA, and have general responsibility for TVA policies. The Board will also create an audit committee consisting of members of the Board, which will receive and review reports of TVA’s external auditors and Inspector General. Congress also reaffirmed the Board’s authority to set electric rates charged by TVA. These provisions will go into effect on May 18, 2005, or when at least three new members have been appointed, confirmed and taken office in accordance with the provisions of this legislation, whichever date is the later.
The legislation also creates the position of Chief Executive Officer for TVA. The CEO will be appointed by the Board and will be responsible for supervising day-to-day activities of TVA.
TVA To File Financial Reports With SEC
The legislation also amends the Securities Exchange Act of 1934 to provide that beginning with its annual report for fiscal year 2006, TVA must file annual reports (10Ks), quarterly reports (10Qs) and current reports (8Ks) with the Securities & Exchange Commission. Under the legislation, TVA will be deemed an issuer for some of the audit-related provisions of section 10A of the 1934 Act, but not for the provisions of section 10A that are inconsistent with TVA’s structure under the TVA Act of 1933. The legislation does not require TVA to register securities under either the Securities Act of 1933 or the Securities Exchange Act of 1934. The legislation also provides that TVA securities are “government securities” under the 1934 Act and that nothing in the amendment interferes with or affects the Board’s authority to carry out its statutory functions.
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
