Page:United States Statutes at Large Volume 112 Part 2.djvu/793

 PUBLIC LAW 105-244 -~O CT. 7, 1998 112 STAT. 1677 "(A) EXTENSION PERMITTED.—The Secretary shall extend the period for repayment of interest that was transferred in accordance with paragraph (2) from 2 years to 5 years if the Secretary determines that— "(i) the cash flow of the Operating Fund will be negative as a result of repayment as required by paragraph (3); "(ii) the repayment of the interest transferred will substantially diminish the financial circumstances of the guaranty agency; and "(iii) the guaranty agency has demonstrated— "(I) that the agency is able to repay all transferred fund* by the end of the 8th year following the date of establishment of the Operating Fund; and "(II) that the agency will be financially sound on the completion of repayment. "(B) REPAYMENT OF INCOME ON TRANSFERRED FUNDS. — All repayments made to the Federal Fund during the 6th, 7th, and 8th years following the establishment of the Operating Fund of interest that was transferred shall include the sums transferred plus any income earned from the investment of the sums transferred after the 5th year. "(7) INVESTMENT OF FEDERAL FUNDS. — Funds transferred from the Federal Fund to the Operating Fund for operating expenses shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly lowrisk securities selected by the guaranty agency, with the approval of the Secretary. "(8) SPECIAL RULE.— In calculating the minimum reserve level required by section 428(c)(9)(A), the Secretary shall include all amounts owed to the Federal Fund by the guaranty agency in the calculation.". (b) AGENCY OPERATING FUND ESTABLISHED.—Part B of title IV is further amended by inserting after section 422A (as added by subsection (a)) the following new section: "SEC. 422B. AGENCY OPERATING FUND. 20 USC 1072b. "(a) ESTABLISHMENT.— Each guaranty agency shall, not later Deadline, than 60 days after the date of enactment of this section, establish a fund designated as the Operating Fund. "(b) INVESTMENT OF FUNDS. — Funds deposited into the Operating Fund shall be invested at the discretion of the guaranty agency in accordance with prudent investor standards. "(c) ADDITIONAL DEPOSITS.— A f l«r the establishment of the Operating Fund, the guaranty agency shall deposit into the Operating Fund— "(1) the loan processing and issuance fee paid by the Secretary pursuant to section 428(f); "(2) 30 percent of amounts received after the date of enactment of this section from the Secretary as payment for administrative cost allowances for loans upon which insurance was issued prior to such date of enactment; "(3) the account maintenance fee paid by the Secretary in accordance with section 458; "(4) the default aversion fee paid in accordance with section 428(1);

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