 
      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 fund for 
        public charter schools in the District of Columbia, to be 
        administered and disbursed in accordance with paragraph (3).

       (3) Credit enhancement fund for public charter schools

        (A) Distribution of amounts

            Of the amounts in the credit enhancement 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), not 
            later than 1 year after November 22, 2000, 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 10 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.)

                       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

    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), 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), 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 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.
