20 U.S.C. § 4357 : US Code - Section 4357: Federal endowment programs for Gallaudet University and the National Technical Institute for the Deaf

Search 20 U.S.C. § 4357 : US Code - Section 4357: Federal endowment programs for Gallaudet University and the National Technical Institute for the Deaf

(a) Establishment of programs
(1) The Secretary and the Board of Trustees of Gallaudet
University are authorized to establish the Gallaudet University
Federal Endowment Fund as a permanent endowment fund, in accordance
with this section, for the purpose of promoting the financial
independence of the University. The Secretary and the Board of
Trustees may enter into such agreements as may be necessary to
carry out the purposes of this section with respect to the
University.
(2) The Secretary and the Board of Trustees or other governing
body of the institution of higher education with which the
Secretary has an agreement under section 4332 of this title are
authorized to establish the National Technical Institute for the
Deaf Federal Endowment Fund as a permanent endowment fund, in
accordance with this section, for the purpose of promoting the
financial independence of NTID. The Secretary and the Board or
other governing body may enter into such agreements as may be
necessary to carry out the purposes of this section with respect to
NTID.
(b) Federal payments
(1) The Secretary shall, consistent with this section, make
payments to the Federal endowment funds established under
subsection (a) of this section from amounts appropriated under
subsection (h) of this section for the fund involved.
(2) Subject to the availability of appropriations, the Secretary
shall make payments to each Federal endowment fund in amounts equal
to sums contributed to the fund from non-Federal sources during the
fiscal year in which the appropriations are made available
(excluding transfers from other endowment funds of the institution
involved).
(c) Investments
(1) Except as provided in subsection (e) of this section, the
University and NTID, respectively, shall invest the Federal
contribution of its Federal endowment fund corpus and income in
instruments and securities offered through one or more cooperative
service organizations of operating educational organizations under
section 501(f) of title 26, or in low-risk instruments and
securities in which a regulated insurance company may invest under
the laws of the State in which the institution involved is located.
(2) In managing the investment of its Federal endowment fund, the
University or NTID shall exercise the judgment and care, under the
prevailing circumstances, that a person of prudence, discretion,
and intelligence would exercise in the management of that person's
own business affairs.
(3) Neither the University nor NTID may invest its Federal
endowment fund corpus or income in real estate, or in instruments
or securities issued by an organization in which an executive
officer, a member of the Board of Trustees of the University or of
the host institution, or a member of the advisory group established
under section 4332 of this title is a controlling shareholder,
director, or owner within the meaning of Federal securities laws
and other applicable laws. Neither the University nor NTID may
assign, hypothocate,(!1) encumber, or create a lien on the Federal
endowment fund corpus without specific written authorization of the
Secretary.
(d) Withdrawals and expenditures
(1) Except as provided in paragraph (3)(B), neither the
University nor NTID may withdraw or expend any of the corpus of its
Federal endowment fund.
(2)(A) The University and NTID, respectively, may withdraw or
expend the income of its Federal endowment fund only for expenses
necessary to the operation of that institution, including expenses
of operations and maintenance, administration, academic and support
personnel, construction and renovation, community and student
services programs, technical assistance, and research.
(B) Neither the University nor NTID may withdraw or expend the
income of its Federal endowment fund for any commercial purpose.
(C) The University and NTID shall maintain records of the income
generated from its respective Federal endowment fund for the prior
fiscal year.
(3)(A) Except as provided in subparagraph (B), the University and
NTID, respectively, may, on an annual basis, withdraw or expend not
more than 50 percent of the income generated from its Federal
endowment fund from the current fiscal year.
(B) The Secretary may permit the University or NTID to withdraw
or expend a portion of its Federal endowment fund corpus or more
than 50 percent of the income generated from its Federal endowment
fund from the prior fiscal year if the institution involved
demonstrates, to the Secretary's satisfaction, that such withdrawal
or expenditure is necessary because of -
(i) a financial emergency, such as a pending insolvency or
temporary liquidity problem;
(ii) a life-threatening situation occasioned by natural
disaster or arson; or
(iii) another unusual occurrence or exigent circumstance.
(e) Investment and expenditure flexibility
The corpus associated with a Federal payment (and its non-Federal
match) made to the Federal endowment fund of the University or NTID
shall not be subject to the investment limitations of subsection
(c)(1) of this section after 10 fiscal years following the fiscal
year in which the funds are matched, and the income generated from
such corpus after the tenth fiscal year described in this
subsection shall not be subject to such investment limitations or
to the withdrawal and expenditure limitations of subsection (d)(3)
of this section.
(f) Recovery of payments
After notice and an opportunity for a hearing, the Secretary is
authorized to recover any Federal payments under this section if
the University or NTID -
(1) makes a withdrawal or expenditure of the corpus or income
of its Federal endowment fund that is not consistent with this
section;
(2) fails to comply with the investment standards and
limitations under this section; or
(3) fails to account properly to the Secretary concerning the
investment of or expenditures from the Federal endowment fund
corpus or income.
(g) Definitions
As used in this section:
(1) The term "corpus", with respect to a Federal endowment fund
under this section, means an amount equal to the Federal payments
to such fund, amounts contributed to the fund from non-Federal
sources, and appreciation from capital gains and reinvestment of
income.
(2) The term "Federal endowment fund" means a fund, or a tax-
exempt foundation, established and maintained pursuant to this
section by the University or NTID, as the case may be, for the
purpose of generating income for the support of the institution
involved.
(3) The term "income", with respect to a Federal endowment fund
under this section, means an amount equal to the dividends and
interest accruing from investments of the corpus of such fund.
(4) The term "institution involved" means the University or
NTID, as the case may be.
(h) Authorization of appropriations
(1) In the case of the University, there are authorized to be
appropriated for the purposes of this section such sums as may be
necessary for each of the fiscal years 1998 through 2003.
(2) In the case of NTID, there are authorized to be appropriated
for the purposes of this section such sums as may be necessary for
each of the fiscal years 1998 through 2003.
(3) Amounts appropriated under paragraph (1) or (2) shall remain
available until expended.
(i) Effective date
The provisions of this section shall take effect as if included
in this chapter as enacted on August 4, 1986.