
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 10USC6975]

 
                         TITLE 10--ARMED FORCES
 
                    Subtitle C--Navy and Marine Corps
 
                    PART III--EDUCATION AND TRAINING
 
                CHAPTER 603--UNITED STATES NAVAL ACADEMY
 
Sec. 6975. Acceptance of guarantees with gifts for major 
        projects
        
    (a) Acceptance Authority.--Subject to subsection (c), the Secretary 
of the Navy may accept from a donor or donors a qualified guarantee for 
the completion of a major project for the benefit of the Naval Academy.
    (b) Obligation Authority.--The amount of a qualified guarantee 
accepted under this section shall be considered as contract authority to 
provide obligation authority for purposes of Federal fiscal and 
contractual requirements. Funds available for a project for which such a 
guarantee has been accepted may be obligated and expended for the 
project without regard to whether the total amount of the funds and 
other resources available for the project (not taking into account the 
amount of the guarantee) is sufficient to pay for completion of the 
project.
    (c) Notice of Proposed Acceptance.--The Secretary of the Navy may 
not accept a qualified guarantee under this section for the completion 
of a major project until after the expiration of 30 days following the 
date upon which a report of the facts concerning the proposed guarantee 
is submitted to Congress.
    (d) Prohibition on Commingling of Funds.--The Secretary of the Navy 
may not enter into any contract or other transaction involving the use 
of a qualified guarantee and appropriated funds in the same contract or 
transaction.
    (e) Definitions.--In this section:
        (1) Major project.--The term ``major project'' means a project 
    for the purchase or other procurement of real or personal property, 
    or for the construction, renovation, or repair of real or personal 
    property, the total cost of which is, or is estimated to be, at 
    least $1,000,000.
        (2) Qualified guarantee.--The term ``qualified guarantee'', with 
    respect to a major project, means a guarantee that--
            (A) is made by one or more persons in connection with a 
        donation, specifically for the project, of a total amount in 
        cash or securities that, as determined by the Secretary of the 
        Navy, is sufficient to defray a substantial portion of the total 
        cost of the project;
            (B) is made to facilitate or expedite the completion of the 
        project in reasonable anticipation that other donors will 
        contribute sufficient funds or other resources in amounts 
        sufficient to pay for completion of the project;
            (C) is set forth as a written agreement that provides for 
        the donor to furnish in cash or securities, in addition to the 
        donor's other gift or gifts for the project, any additional 
        amount that may become necessary for paying the cost of 
        completing the project by reason of a failure to obtain from 
        other donors or sources funds or other resources in amounts 
        sufficient to pay the cost of completing the project; and
            (D) is accompanied by--
                (i) an irrevocable and unconditional standby letter of 
            credit for the benefit of the Naval Academy that is in the 
            amount of the guarantee and is issued by a major United 
            States commercial bank; or
                (ii) a qualified account control agreement.

        (3) Qualified account control agreement.--The term ``qualified 
    account control agreement'', with respect to a guarantee of a donor, 
    means an agreement among the donor, the Secretary of the Navy, and a 
    major United States investment management firm that--
            (A) ensures the availability of sufficient funds or other 
        financial resources to pay the amount guaranteed during the 
        period of the guarantee;
            (B) provides for the perfection of a security interest in 
        the assets of the account for the United States for the benefit 
        of the Naval Academy with the highest priority available for 
        liens and security interests under applicable law;
            (C) requires the donor to maintain in an account with the 
        investment management firm assets having a total value that is 
        not less than 130 percent of the amount guaranteed; and
            (D) requires the investment management firm, at any time 
        that the value of the account is less than the value required to 
        be maintained under subparagraph (C), to liquidate any noncash 
        assets in the account and reinvest the proceeds in Treasury 
        bills issued under section 3104 of title 31.

        (4) Major united states commercial bank.--The term ``major 
    United States commercial bank'' means a commercial bank that--
            (A) is an insured bank (as defined in section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813));
            (B) is headquartered in the United States; and
            (C) has net assets in a total amount considered by the 
        Secretary of the Navy to qualify the bank as a major bank.

        (5) Major united states investment management firm.--The term 
    ``major United States investment management firm'' means any broker, 
    dealer, investment adviser, or provider of investment supervisory 
    services (as defined in section 3 of the Securities Exchange Act of 
    1934 (15 U.S.C. 78c) or section 202 of the Investment Advisers Act 
    of 1940 (15 U.S.C. 80b-2)) or a major United States commercial bank 
    that--
            (A) is headquartered in the United States; and
            (B) holds for the account of others investment assets in a 
        total amount considered by the Secretary of the Navy to qualify 
        the firm as a major investment management firm.

(Added Pub. L. 106-65, div. B, title XXVIII, Sec. 2871(b)(1), Oct. 5, 
1999, 113 Stat. 873; amended Pub. L. 106-398, Sec. 1 [[div. A], title X, 
Sec. 1087(a)(17)], Oct. 30, 2000, 114 Stat. 1654, 1654A-291.)


                            Prior Provisions

    A prior section 6975, added Pub. L. 103-337, div. A, title V, 
Sec. 556(b)(1), Oct. 5, 1994, 108 Stat. 2774, related to position of 
athletic director of Naval Academy and to administration of 
nonappropriated fund account for athletics program of Naval Academy, 
prior to repeal by Pub. L. 104-106, div. A, title V, Sec. 533(b), Feb. 
10, 1996, 110 Stat. 315; Pub. L. 105-85, div. A, title X, 
Sec. 1073(d)(1)(C), Nov. 18, 1997, 111 Stat. 1905, effective Oct. 5, 
1994.


                               Amendments

    2000--Subsec. (e)(5). Pub. L. 106-398 inserted a closing parenthesis 
after ``80b-2)'' in introductory provisions.
