§ 1155. — Connie Lee privatization.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 20USC1155]
TITLE 20--EDUCATION
CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
SUBCHAPTER VIII--MISCELLANEOUS
Sec. 1155. Connie Lee privatization
(a) Status of Corporation and corporate powers; obligations not
federally guaranteed
(1) Status of the Corporation
The Corporation shall not be an agency, instrumentality, or
establishment of the United States Government, nor a Government
corporation, nor a Government controlled corporation, as such terms
are defined in section 103 of title 5. No action under section 1491
of title 28 (commonly known as the Tucker Act) shall be allowable
against the United States based on the actions of the Corporation.
(2) Corporate powers
The Corporation shall be subject to the provisions of this
section, and, to the extent not inconsistent with this section, to
the District of Columbia Business Corporation Act (or the comparable
law of another State, if applicable). The Corporation shall have the
powers conferred upon a corporation by the District of Columbia
Business Corporation Act (or such other applicable State law) as
from time to time in effect in order to conduct the Corporation's
affairs as a private, for-profit corporation and to carry out the
Corporation's purposes and activities incidental thereto. The
Corporation shall have the power to enter into contracts, to execute
instruments, to incur liabilities, to provide products and services,
and to do all things as are necessary or incidental to the proper
management of the Corporation's affairs and the efficient operation
of a private, for-profit business.
(3) Limitation on ownership of stock
(A) Student Loan Marketing Association
The Student Loan Marketing Association shall not increase
its share of the ownership of the Corporation in excess of 42
percent of the shares of stock of the Corporation outstanding on
September 30, 1996. The Student Loan Marketing Association shall
not control the operation of the Corporation, except that the
Student Loan Marketing Association may participate in the
election of directors as a shareholder, and may continue to
exercise the Student Loan Marketing Association's right to
appoint directors under section 1132f-3 of this title as long as
that section is in effect.
(B) Prohibition
Until such time as the Secretary of the Treasury sells the
stock of the Corporation owned by the Secretary of Education
pursuant to subsection (c) of this section, the Student Loan
Marketing Association shall not provide financial support or
guarantees to the Corporation.
(C) Financial support or guarantees
After the Secretary of the Treasury sells the stock of the
Corporation owned by the Secretary of Education pursuant to
subsection (c) of this section, the Student Loan Marketing
Association may provide financial support or guarantees to the
Corporation, if such support or guarantees are subject to terms
and conditions that are no more advantageous to the Corporation
than the terms and conditions the Student Loan Marketing
Association provides to other entities, including, where
applicable, other monoline financial guaranty corporations in
which the Student Loan Marketing Association has no ownership
interest.
(4) No Federal guarantee
(A) Obligations insured by the Corporation
(i) Full faith and credit of the United States
No obligation that is insured, guaranteed, or otherwise
backed by the Corporation shall be deemed to be an
obligation that is guaranteed by the full faith and credit
of the United States.
(ii) Student Loan Marketing Association
No obligation that is insured, guaranteed, or otherwise
backed by the Corporation shall be deemed to be an
obligation that is guaranteed by the Student Loan Marketing
Association.
(iii) Special rule
This paragraph shall not affect the determination of
whether such obligation is guaranteed for purposes of
Federal income taxes.
(B) Securities offered by the Corporation
No debt or equity securities of the Corporation shall be
deemed to be guaranteed by the full faith and credit of the
United States.
(5) ``Corporation'' defined
The term ``Corporation'' as used in this section means the
College Construction Loan Insurance Association as in existence on
the day before September 30, 1996, and any successor corporation.
(b) Related privatization requirements
(1) Notice requirements
(A) In general
During the six-year period following September 30, 1996, the
Corporation shall include, in each of the Corporation's
contracts for the insurance, guarantee, or reinsurance of
obligations, and in each document offering debt or equity
securities of the Corporation, a prominent statement providing
notice that--
(i) such obligations or such securities, as the case may
be, are not obligations of the United States, nor are such
obligations or such securities, as the case may be,
guaranteed in any way by the full faith and credit of the
United States; and
(ii) the Corporation is not an instrumentality of the
United States.
(B) Additional notice
During the five-year period following the sale of stock
pursuant to subsection (c)(1) of this section, in addition to
the notice requirements in subparagraph (A), the Corporation
shall include, in each of the contracts and documents referred
to in such subparagraph, a prominent statement providing notice
that the United States is not an investor in the Corporation.
(2) Corporate charter
The Corporation's charter shall be amended as necessary and
without delay to conform to the requirements of this section.
(3) Corporate name
The name of the Corporation, or of any direct or indirect
subsidiary thereof, may not contain the term ``College Construction
Loan Insurance Association'', or any substantially similar variation
thereof.
(4) Articles of incorporation
The Corporation shall amend the Corporation's articles of
incorporation without delay to reflect that one of the purposes of
the Corporation shall be to guarantee, insure, and reinsure bonds,
leases, and other evidences of debt of educational institutions,
including Historically Black Colleges and Universities and other
academic institutions which are ranked in the lower investment grade
category using a nationally recognized credit rating system.
(5) Requirements until stock sale
Notwithstanding subsection (d) of this section, the requirements
of sections 1132f-3 and 1132f-9 of this title, as such sections were
in effect on the day before September 30, 1996, shall continue to be
effective until the day immediately following the date of closing of
the purchase of the Secretary of Education's stock (or the date of
closing of the final purchase, in the case of multiple transactions)
pursuant to subsection (c)(1) of this Act.\1\
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\1\ So in original. Probably should be ``section.''
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(c) Sale of federally owned stock
(1) Purchase by the Corporation
The Secretary of the Treasury shall sell and the Corporation
shall purchase, within 90 days after September 30, 1996, the stock
of the Corporation held by the Secretary of Education at a price
determined by the binding, independent appraisal of a nationally
recognized financial firm, except that the 90-day period may be
extended by mutual agreement of the Secretary of the Treasury and
the Corporation to not more than 150 days after September 30, 1996.
The appraiser shall be jointly selected by the Secretary of the
Treasury and the Corporation. In the event that the Secretary of the
Treasury and the Corporation cannot agree on the appraiser, then the
Secretary of the Treasury and the Corporation shall name an
independent third party to select the appraiser.
(2) Reimbursement of costs and expenses of sale
The Secretary of the Treasury shall be reimbursed from the
proceeds of the sale of the stock under this subsection for all
reasonable costs and expenses related to such sale, except that one-
half of all reasonable costs and expenses relating to the
independent appraisal under paragraph (1) shall be borne by the
Corporation.
(3) Deposit into account
Amounts collected from the sale of stock pursuant to this
subsection that are not used to reimburse the Secretary of the
Treasury pursuant to paragraph (2) shall be deposited into the
account established under subsection (e) of this section.
(4) Assistance by the Corporation
The Corporation shall provide such assistance as the Secretary
of the Treasury and the Secretary of Education may require to
facilitate the sale of the stock under this subsection.
(5) Report to Congress
Not later than 6 months after September 30, 1996, the Secretary
of the Treasury shall report to the appropriate committees of
Congress on the completion and terms of the sale of stock of the
Corporation pursuant to this subsection.
(d) Omitted
(e) Establishment of account
(1) In general
Notwithstanding any other provision of law, the District of
Columbia Financial Responsibility and Management Assistance
Authority shall establish an account to receive--
(A) amounts collected from the sale and proceeds resulting
from the exercise of stock warrants pursuant to section 1087-
3(c)(9) of this title;
(B) amounts and proceeds remitted as compensation for the
right to assign the ``Sallie Mae'' name as a trademark or
service mark pursuant to section 1087-3(e)(3) of this title; and
(C) amounts and proceeds collected from the sale of the
stock of the Corporation and deposited pursuant to subsection
(c)(3) of this section.
(2) Amounts and proceeds
(A) Amounts and proceeds relating to Sallie Mae
The amounts and proceeds described in subparagraphs (A) and
(B) of paragraph (1) shall be used to finance public elementary
and secondary school facility construction and repair within the
District of Columbia or to carry out the District of Columbia
School Reform Act of 1995.
(B) Amounts and proceeds relating to Connie Lee
The amounts and proceeds described in subparagraph (C) of
paragraph (1) shall be used to finance public and public charter
elementary and secondary school facility construction and repair
within the District of Columbia. Of such amounts and proceeds,
$5,000,000 shall be set aside for a credit enhancement revolving
fund for public charter schools in the District of Columbia, to
be administered and disbursed in accordance with paragraph (3).
(3) Credit enhancement revolving fund for public charter
schools
(A) Distribution of amounts
Of the amounts in the credit enhancement revolving fund
established under paragraph (2)(B)--
(i) 50 percent shall be used to make grants under
subparagraph (B); and
(ii) 50 percent shall be used to make grants under
subparagraph (C).
(B) Grants to eligible nonprofit corporations
(i) In general
Using the amounts described in subparagraph (A)(i), the
Mayor of the District of Columbia shall make and disburse
grants to eligible nonprofit corporations to carry out the
purposes described in subparagraph (E).
(ii) Administration
The Mayor shall administer the program of grants under
this subparagraph, except that if the committee described in
subparagraph (C)(iii) is in operation and is fully
functional prior to the date the Mayor makes the grants, the
Mayor may delegate the administration of the program to the
committee.
(C) Other grants
(i) In general
Using the amounts described in subparagraph (A)(ii), the
Mayor of the District of Columbia shall make grants to
entities to carry out the purposes described in subparagraph
(E).
(ii) Participation of schools
A public charter school in the District of Columbia may
receive a grant under this subparagraph to carry out the
purposes described in subparagraph (E) in the same manner as
other entities receiving grants to carry out such
activities.
(iii) Administration through committee
The Mayor shall carry out this subparagraph through the
committee appointed by the Mayor under the second sentence
of paragraph (2)(B) (as in effect prior to November 22,
2000). The committee may enter into an agreement with a
third party to carry out its responsibilities under this
subparagraph.
(iv) Cap on administrative costs
Not more than 5 percent of the funds available for
grants under this subparagraph may be used to cover the
administrative costs of making grants under this
subparagraph.
(D) Special rule regarding eligibility of nonprofit corporations
In order to be eligible to receive a grant under this
paragraph, a nonprofit corporation must provide appropriate
certification to the Mayor or to the committee described in
subparagraph (C)(iii) (as the case may be) that it is duly
authorized by two or more public charter schools in the District
of Columbia to act on their behalf in obtaining financing (or in
assisting them in obtaining financing) to cover the costs of
activities described in subparagraph (E)(i).
(E) Purposes of grants
(i) In general
The recipient of a grant under this paragraph shall use
the funds provided under the grant to carry out activities
to assist public charter schools in the District of Columbia
in--
(I) obtaining financing to acquire interests in real
property (including by purchase, lease, or donation),
including financing to cover planning, development, and
other incidental costs;
(II) obtaining financing for construction of
facilities or the renovation, repair, or alteration of
existing property or facilities (including the purchase
or replacement of fixtures and equipment), including
financing to cover planning, development, and other
incidental costs; and
(III) enhancing the availability of loans (including
mortgages) and bonds.
(ii) No direct funding for schools
Funds provided under a grant under this subparagraph may
not be used by a recipient to make direct loans or grants to
public charter schools.
(Pub. L. 104-208, div. A, title I, Sec. 101(e) [title VI, Sec. 603],
Sept. 30, 1996, 110 Stat. 3009-233, 3009-290; Pub. L. 106-113, div. A,
title I, Sec. 153, Nov. 29, 1999, 113 Stat. 1526; Pub. L. 106-522,
Sec. 161, Nov. 22, 2000, 114 Stat. 2483; Pub. L. 106-553, Sec. 1(a)(1)
[Sec. 161], Dec. 21, 2000, 114 Stat. 2762, 2762A-45; Pub. L. 106-554,
Sec. 1(a)(4) [div. A, Sec. 406(a)], Dec. 21, 2000, 114 Stat. 2763,
2763A-189; Pub. L. 107-96, Dec. 21, 2001, 115 Stat. 936.)
References in Text
The District of Columbia Business Corporation Act, referred to in
subsec. (a)(2), is act June 8, 1954, ch. 269, 68 Stat. 179, as amended,
which is not classified to the Code.
Sections 1132f-3 and 1132f-9 of this title, referred to in subsecs.
(a)(3)(A) and (b)(5), were repealed by subsec. (d) of this section.
The District of Columbia School Reform Act of 1995, referred to in
subsec. (e)(2)(A), is Pub. L. 104-134, title I, Sec. 101(b) [title II],
Apr. 26, 1996, 110 Stat. 1321-77, 1321-107, as amended, which amended
sections 6322, 6364, and 6365 of this title and enacted provisions set
out as a note under section 6322 of this title. For complete
classification of this Act to the Code, see Tables.
Codification
Section was formerly classified to section 1132f-10 of this title.
Section enacted as part of the Student Loan Marketing Association
Reorganization Act of 1996, and not as part of the Higher Education Act
of 1965 which comprises this chapter.
Section is comprised of section 101(e) [title VI, Sec. 603] of div.
A of Pub. L. 104-208. Subsec. (d) of section 603 of title VI of section
101(e) of Pub. L. 104-208, repealed sections 1132f to 1132f-9 of this
title.
Amendments
2001--Subsec. (e)(2)(B). Pub. L. 107-96, par. (2), which directed
amendment of section 161 of Pub. L. 106-522, by inserting ``revolving''
after ``enhancement'' in second sentence of par. (2)(B), was executed by
revising the amendment by Pub. L. 106-522, Sec. 161(1), which had
amended the second sentence of subsec. (e)(2)(B) of this section, to
reflect the probable intent of Congress. See 2000 Amendment note below.
Subsec. (e)(3). Pub. L. 107-96, pars. (1), (3), amended Pub. L. 106-
522, Sec. 161(2). See 2000 Amendment note below.
Pub. L. 107-96, par. (2), which directed amendment of section 161 of
Pub. L. 106-522, by inserting ``revolving'' after ``enhancement'' in
heading of par. (3) and in par. (3)(A), was executed by revising the
amendment by Pub. L. 106-522, Sec. 161(2), which had added subsec.
(e)(3) to this section, to reflect the probable intent of Congress. See
2000 Amendment note below.
Subsec. (e)(3)(C)(iv). Pub. L. 107-96, proviso, which directed
amendment of the cap on administrative costs as amended by Pub. L. 106-
522, Sec. 161, by substituting ``5 percent'' for ``10 percent'', could
not be executed because the words ``10 percent'' did not appear in this
section after the amendment of Pub. L. 106-522, Sec. 161(2), by Pub. L.
107-96, par. (3). See 2000 Amendment note below.
2000--Subsec. (e)(2)(B). Pub. L. 106-553, Sec. 1(a)(1)
[Sec. 161(1)], which directed amendment identical to amendment by Pub.
L. 106-522, Sec. 161(1), below, was repealed by Pub. L. 106-554,
Sec. 1(a)(4) [div. A, Sec. 406(a)]. See Effective Date and Construction
of 2000 Amendment note below.
Pub. L. 106-522, Sec. 161(1), as amended by Pub. L. 107-96, par.
(2), amended second sentence generally. Prior to amendment, second
sentence read as follows: ``Of such amounts and proceeds, $5,000,000
shall be set aside for use as a credit enhancement fund for public
charter schools in the District of Columbia, with the administration of
the fund (including the making of loans) to be carried out by the Mayor
through a committee consisting of three individuals appointed by the
Mayor of the District of Columbia and two individuals appointed by the
Public Charter School Board established under section 2214 of the
District of Columbia School Reform Act of 1995.''
Subsec. (e)(3). Pub. L. 106-553, Sec. 1(a)(1) [Sec. 161(2)], which
directed amendment identical to amendment by Pub. L. 106-522,
Sec. 161(2), below, was repealed by Pub. L. 106-554, Sec. 1(a)(4) [div.
A, Sec. 406(a)]. See Effective Date and Construction of 2000 Amendment
note below.
Pub. L. 106-522, Sec. 161(2), as amended by Pub. L. 107-96, pars.
(1) to (3), added par. (3).
1999--Subsec. (e)(2)(B). Pub. L. 106-113 inserted ``and public
charter'' after ``public'' and inserted at end ``Of such amounts and
proceeds, $5,000,000 shall be set aside for use as a credit enhancement
fund for public charter schools in the District of Columbia, with the
administration of the fund (including the making of loans) to be carried
out by the Mayor through a committee consisting of three individuals
appointed by the Mayor of the District of Columbia and two individuals
appointed by the Public Charter School Board established under section
2214 of the District of Columbia School Reform Act of 1995.''
Effective Date of 2001 Amendment
Pub. L. 107-96, Dec. 21, 2001, 115 Stat. 936, provided that the
amendments made by that act to section 161 of Pub. L. 106-522 are
effective as if included in Pub. L. 106-522.
Effective Date and Construction of 2000 Amendment
Pub. L. 106-554, Sec. 1(a)(4) [div. A, Sec. 406], Dec. 21, 2000, 114
Stat. 2763, 2763A-189, provided that:
``(a) The provisions of H.R. 5547 (as enacted into law by H.R. 4942
of the 106th Congress) [H.R. 5547 as enacted by section 1(a)(1) of Pub.
L. 106-553, amending this section and enacting provisions set out as a
note under section 6301 of Title 31, Money and Finance] are repealed and
shall be deemed for all purposes (including section 1(b) of H.R. 4942
[Pub. L. 106-553, 1 U.S.C. 112 note]) to have never been enacted.
``(b) The repeal made by this section shall take effect as if
included in H.R. 4942 of the 106th Congress [Pub. L. 106-553] on the
date of its enactment [Dec. 21, 2000].''
Section Referred to in Other Sections
This section is referred to in section 1087-3 of this title.
