PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 357 SEC. 4042. GUARANTY AGENCY RESERVES. Section 422 of the Act (20 U.S.C. 1072) is amended by adding at the end the following new subsection: "(g) PRESERVATION AND RECOVERY OF GUARANTY AGENCY RESERVES.— "(1) AUTHORITY TO RECOVER FUNDS. —Notwithstanding any other provision of law, the reserve funds of the guaranty agencies, and any assets purchased with such reserve funds, regardless of who holds or controls the reserves or assets, shall be considered to be the property of the United States to be used in the operation of the program authorized by this part or the program authorized by part D of this title. However, the Secretary may not reauire uie return of all reserve funds of a guaranty agency to the Secretary unless the Secretary determines that such return is in the best interest of the operation of the program authorized by this part or the program autiiorized by part D of this title, or to ensure the proper maintenance of such agency's funds or assets or the orderly termination of the guaranty agency's operations and the liquidation of its assets. The reserves shall be maintained by each guaranty agency to pay program expenses and contingent liabilities, as authorized by the Secretary, except that—
- (A) the Secretary may direct a guaranty agency to
return to the Secretary a portion of its reserve fund which the Secretary determines is unnecessary to pay the program expenses and contingent liabilities of the guaranty agency; "(B) the Secretary may direct the guaranty agency to require the return, to the guaranty agency or to the Secretary, of any reserve funds or assets held by, or under the control of, any other entity, which the Secretary determines are necessary to pay the program expenses and contingent liabilities of the guaranty agency, or which are required for the orderly termination of the guaranty agency's operations and the liquidation of ite assete; "(C) the Secretary ma^ direct a guaranty agency, or such agenc/s officers or directors, to cease any activities involving expenditure, use or transfer of the guaranty agency's reserve funds or assets which the Secretary determines is a misapplication, misuse, or improper expenditure of such funds or assete; and
- (D) any such determination under subpcu'agraph (A) Regulations.
or (B) shall be based on stondards prescribed by regulations that are developed through negotiated rulemaking and that include procedures for administrative due process. "(2) TERMINATION PROVISIONS IN CONTRACTS.—(A) To ensure that the funds and assete of the guaranty agency are preserved, any contract with respect to tpe admmistration of a guaranty agency's reserve funds, or th6 administration of any assete purchased or acquired with the^ reserve funds of the guaranty agency, that is entered into or extended by the guaranty agency, or any other party on behalf of or with the concurrence of the guaranty agency, after the date of enactment of this subsection shall provide that the contract is terminable by the Secretary upon 30 days notice to the contracting parties if the Secretary detormines that such contract includes an impermissible transfer of the reserve funds or assete, or is
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