112 STAT. 1674 PUBLIC LAW 105-244—OCT. 7, 1998 "(3) REQUIRED SHARE.— The Secretary shall require each guaranty agency to return reserve funds under paragraph (1) on the basis of the agency's required share. For purposes of this paragraph, a guaranty agency's required share shall be determined as follows: " (A) EQUAL PERCE^^^AGE. —The Secretary shall require each guaranty agency to return an amount representing an equal percentage reduction in the amount of reserve funds held by the agency on September 30, 1996. "(B) CALCULATION.— The equal percentage reduction shall be the percentage obtained by dividing— " (i) $250,000,000, by "(ii) the total amount of all guaranty agencies' reserve funds held on September 30, 1996, less any amounts subject to recall under subsection (h). "(C) SPECIAL RULE. —Notwithstanding subparagraphs (A) and (B), the percentage reduction under subparagraph (B) shall not result in the depletion of the reserve funds of any agency which charges the 1.0 percent insurance premium pursuant to section 428(b)(1)(H) below an amount equal to the amount of lender claim payments paid during the 90 days prior to the date of the return under this subsection. If any additional amount is required to be returned after deducting the total of the required shares under subparagraph (B) and as a result of the preceding sentence, such additional simount shall be obtained by imposing on each guaranty agency to which the preceding sentence does not apply, an equal percentage reduction in the amount of the agency's remaining reserve funds. "(4) OFFSET OF REQUIRED SHARES.—If any guaranty agency returns to the Secretary any reserve funds in excess of the amount required under this subsection or subsection (h), the total amount required to be returned under paragraph (1) shall be reduced by the amount of such excess reserve funds returned. "(5) DEFINITION OF RESERVE FUNDS.— The term 'reserve funds' when used with respect to a guaranty agency— "(A) includes any reserve funds in cash or liquid assets held by the guaranty agency, or held by, or under the control of, any other entity; and "(B) does not include buildings, equipment, or other nonliquid assets.". SEC. 413. GUARANTY AGENCY REFORMS. (a) FEDERAL STUDENT LOAN RESERVE FUND.— Part B of title IV is amended by inserting after section 422 (20 U.S.C. 1072) the following new section: 20 USC 1072a. "SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND. Deadline. "(a) ESTABLISHMENT.— Each guaranty agency shall, not later than 60 days after the date of enactment of this section, deposit all funds, securities, and other liquid assets contained in the reserve fund established pursuant to section 422 into a Federal Student Loan Reserve Fund (in this section and section 422B referred to as the 'Federal Fund'), which shall be an account of a type selected by the agency, with the approval of the Secretary. "(b) INVESTMENT OF FUNDS. —Funds transferred to the Federal Fund shall be invested in obligations issued or guaranteed by the United States or a State, or in other similarly low-risk securities
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