§ 4357. — Federal endowment programs for Gallaudet University and the National Technical Institute for the Deaf.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 20USC4357]
TITLE 20--EDUCATION
CHAPTER 55--EDUCATION OF THE DEAF
SUBCHAPTER II--GENERAL PROVISIONS
Sec. 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.
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\1\ So in original. Probably should be ``hypothecate,''
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(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.
(Pub. L. 99-371, title II, Sec. 207, as added Pub. L. 102-421, title I,
Sec. 137(2), Oct. 16, 1992, 106 Stat. 2159; amended Pub. L. 103-73,
title II, Sec. 204(f), Aug. 11, 1993, 107 Stat. 735; Pub. L. 105-244,
title IX, Sec. 919, Oct. 7, 1998, 112 Stat. 1831.)
Prior Provisions
A prior section 4357, Pub. L. 99-371, title II, Sec. 207, formerly
title IV, Sec. 407, Aug. 4, 1986, 100 Stat. 791; renumbered title II,
Sec. 207, Pub. L. 102-421, title I, Sec. 101(b)(5), (6), Oct. 16, 1992,
106 Stat. 2151, provided for Gallaudet University Federal endowment
program, prior to repeal effective Oct. 1, 1992, by Pub. L. 102-421,
title I, Secs. 137(1), 161, Oct. 16, 1992, 106 Stat. 2159, 2164.
Amendments
1998--Subsec. (b)(2). Pub. L. 105-244, Sec. 919(1)(A), amended par.
(2) generally. Prior to amendment, par. (2) read as follows: ``Subject
to the availability of appropriations and the non-Federal matching
requirements of paragraph (3), the Secretary shall make payments to each
Federal endowment fund in amounts equal to sums contributed to the fund
from non-Federal sources (excluding transfers from other endowment funds
of the institution involved).''
Subsec. (b)(3). Pub. L. 105-244, Sec. 919(1)(B), struck out par. (3)
which read as follows: ``Effective for fiscal year 1993 and each
succeeding fiscal year, for any fiscal year in which the sums
contributed to the Federal endowment fund of the institution involved
from non-Federal sources exceed $1,000,000, the non-Federal contribution
to the Federal endowment fund shall be $2 for each Federal dollar
provided in excess of $1,000,000 (excluding transfers from other
endowment funds of the institution involved).''
Subsec. (c)(1). Pub. L. 105-244, Sec. 919(2), inserted ``the Federal
contribution of'' after ``shall invest''.
Subsec. (d)(2)(C). Pub. L. 105-244, Sec. 919(3)(A), substituted
``The University'' for ``Beginning on October 1, 1992, the University''.
Subsec. (d)(3)(A). Pub. L. 105-244, Sec. 919(3)(B), substituted
``current'' for ``prior''.
Subsec. (h)(1), (2). Pub. L. 105-244, Sec. 919(4), substituted
``1998 through 2003'' for ``1993 through 1997''.
1993--Subsec. (c)(3). Pub. L. 103-73, Sec. 204(f)(1), substituted
``advisory group established under section 4332 of this title'' for
``Advisory Board of NTID''.
Subsec. (e). Pub. L. 103-73, Sec. 204(f)(2), substituted ``such
investment limitations or'' for ``such investment limitations and''.
Subsec. (i). Pub. L. 103-73, Sec. 204(f)(3), substituted ``this
chapter as enacted on August 4, 1986'' for ``the provisions of the
Education of the Deaf Act of 1986''.
Effective Date of 1998 Amendment
Amendment by Pub. L. 105-244 effective Oct. 1, 1998, except as
otherwise provided in Pub. L. 105-244, see section 3 of Pub. L. 105-244,
set out as a note under section 1001 of this title.
Section Referred to in Other Sections
This section is referred to in sections 4353, 4354 of this title.
