Page:United States Statutes at Large Volume 112 Part 2.djvu/791

 PUBLIC LAW 105-244—OCT. 7, 1998 112 STAT. 1675 selected by the gUEu-anty agency, with the approval of the Secretary. Earnings from the Federal Fund shall be the sole property of the Federal Government. "(c) ADDITIONAL DEPOSITS. —After the establishment of the Federal Fund, a guaranty agency shall deposit into the Federal Fund— "(1) all amounts received from the Secretary as payment of reinsurance on loans pursuant to section 428(c)(1); "(2) from amounts collected on behalf of the obligation of a defaulted borrower, a percentage amount equal to the complement of the reinsurance percentage in effect when pay- ment under the guaranty agreement was made— "(A) with respect to the defaulted loan pursuant to sections 428(c)(6)(A) and 428F(a)(l)(B); and "(B) with respect to a loan that the Secretary has repaid or discharged under section 437; "(3) insurance premiums collected from borrowers pursuant to sections 428(b)(1)(H) and 428H(h); "(4) all amounts received from the Secretary as payment for supplemental preclaims activity performed prior to the date of enactment of this section; "(5) 70 percent of amounts received after such date of enactment from the Secretary as payment for administrative cost allowances for loans upon which insurance was issued prior to such date of enactment; and "(6) other receipts as specified in regulations of the Secretary. "(d) USES OF FUNDS. — Subject to subsection (f), the Federal Fund may only be used by a guaranty agency— "(1) to pay lender claims pursuant to sections 428(b)(l)(G), 428( j), 437, and 439(q); and "(2) to pay into the Agency Operating Fund established pursuant to section 422B (in this section and section 422B referred to as the "Operating Fund") a default aversion fee in accordance with section 428(1). "(e) OWNERSHIP OF FEDERAL FUND. —The Federal Fund, and any nonliquid asset (such as a building or equipment) developed or purchased by the guaranty agency in whole or in part with Federal reserve funds, regardless of who holds or controls the Federal reserve funds or such asset, shall be considered to be the property of the United States, prorated based on the percentage of such asset developed or purchased with Federal reserve funds, which property shall be used in the operation of the program authorized by this part, as provided in subsection (d). The Secretary may restrict or regulate the use of such asset only to the extent necessary to reasonably protect the Secretary's prorated share of the value of such asset. The Secretary may direct a guaranty agency, or such agency's officers or directors, to cease any activity involving expenditures, use, or transfer of the Federal Fund administered by the guaranty agency that the Secretary determines is a misapplication, misuse, or improper expenditure of the Federal Fund or the Secretary's share of such asset. "(f) TRANSITION. — "(1) IN GENERAL. —In order to establish the Operating Fund, each guaranty agency may transfer not more than 180 days' cash expenses for normal operating expenses (not including claim payments) as a working capital reserve as defined in

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