II

104TH CONGRESS

2D SESSION S. 2095

To promote the capacity and accountability of Government corporations and

Government sponsored enterprises.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 19, 1996

Mr. SIMON (for himself and Mr. PRYOR) introduced the following bill; which

was read twice and referred to the Committee on Governmental Affairs

A BILL

To promote the capacity and accountability of Government

corporations and Government sponsored enterprises.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Government Corpora5 tion and Government Sponsored Enterprise Standards

6 Act’’.

7 SEC. 2. PURPOSES.

8 The purposes of this Act are to—

9 (1) ensure that Government corporations and

10 Government sponsored enterprises—
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1 (A) are established and conduct their oper2 ations in conformance with consistent standards

3 as to the applicability of Federal laws; and

4 (B) are fully accountable for their financial

5 soundness and programmatic activities; and

6 (2) provide an orderly process for privatizing

7 selected Government corporations.

8 SEC. 3. DEFINITIONS.

9 For the purposes of this Act the term—

10 (1) ‘‘Government corporation’’ means an agency

11 of the United States within the executive branch

12 that—

13 (A) is designated by law to have corporate

14 form;

15 (B) carries out business type operations to

16 provide goods or services in response to eco17 nomic demand; and

18 (C) produces revenues, potentially on a

19 self-sustaining basis;

20 (2) ‘‘Government sponsored enterprise’’ or

21 ‘‘GSE’’ means an instrumentality that—

22 (A) is chartered under the laws of the

23 United States to provide specialized financial

24 services in furtherance of public purposes;
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1 (B) is owned wholly or in part by private

2 equity owners; and

3 (C) has a relationship to the Federal Gov4 ernment, such as authority to borrow directly or

5 indirectly from the Treasury of the United

6 States, that creates a public perception of im7 plicit Federal backing of its obligations or guar8 anteed securities;

9 (3) ‘‘newly established wholly owned Govern10 ment corporation’’ means a wholly owned Govern11 ment corporation which is established under a stat12 ute enacted after December 31, 1996;

13 (4) ‘‘newly established transitional Government

14 corporation’’ means a transitional Government cor15 poration which is established under a statute en16 acted after December 31, 1996;

17 (5) ‘‘newly established Government sponsored

18 enterprise’’ means a Government sponsored enter19 prise which is established under a statute enacted

20 after December 31, 1996;

21 (6) ‘‘transitional Government corporation’’

22 means a Government corporation that is intended

23 to—

24 (A) operate on a profitmaking basis; and
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1 (B) be converted to private ownership

2 when feasible; and

3 (7) ‘‘wholly owned Government corporation’’—

4 (A) means a Government corporation that

5 is wholly owned or controlled by the Federal

6 Government; and

7 (B) includes a transitional Government

8 corporation except as otherwise provided by law.

9 TITLE I—CLASSIFICATIONS OF

10 GOVERNMENT CORPORA11 TIONS AND GSES

12 SEC. 101. CLASSIFICATION.

13 (a) IN GENERAL.—The Director of the Office of

14 Management and Budget shall—

15 (1) maintain a list of all Government corpora16 tions and Government sponsored enterprises classi17 fied according to the definitions of this Act; and

18 (2) publish such list as a part of the annual

19 budget of the United States Government.

20 (b) RECOMMENDATIONS.—The Director of the Office

21 of Management and Budget shall make legislative rec22 ommendations to the Congress to ensure that this Act ap23 plies to entities established under statutes that are en24 acted or amended after December 31, 1996.
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1 TITLE II—GENERAL PROVISIONS

2 SEC. 201. RESERVATION.

3 The Congress expressly reserves the right to alter,

4 amend or repeal any law establishing or governing the ac5 tivities of a Government corporation or Government spon6 sored enterprise.

7 SEC. 202. AFFILIATES.

8 Each newly established Government corporation or

9 newly established Government sponsored enterprise may

10 establish, acquire or control the activities of a subsidiary

11 or other affiliate only by or under a law of the United

12 States expressly authorizing the action.

13 SEC. 203. APPLICATION OF THIS ACT.

14 On and after the effective date of this Act no entity

15 established under Federal law shall be a Government cor16 poration or Government sponsored enterprise without con17 forming to the requirements and definitions of this Act.

18 TITLE III—WHOLLY OWNED

19 GOVERNMENT CORPORATIONS

20 SEC. 301. APPLICABILITY.

21 This title applies only to newly established wholly

22 owned Government corporations.

23 SEC. 302. GOVERNMENT CORPORATION CONTROL ACT.

24 Each wholly owned Government corporation shall be

25 subject to the provisions of chapter 91 of title 31, United
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1 States Code, that are applicable to wholly owned Govern2 ment corporations under that Act.

3 SEC. 303. SUNSET.

4 Except as specifically provided by law, each newly es5 tablished wholly owned Government corporation—

6 (1) shall terminate 10 years after the date on

7 which such corporation is established; and

8 (2) may be extended for additional 10-year peri9 ods by the Congress.

10 SEC. 304. GENERAL POWERS.

11 (a) IN GENERAL.—In order to accomplish its statu12 tory purposes and in addition to any other powers that

13 may be authorized by law, each wholly owned Government

14 corporation—

15 (1) may adopt, alter, and use a corporate seal,

16 which shall be judicially noticed;

17 (2) may sue and be sued in its corporate name

18 and be represented by its own attorneys in all ad19 ministrative and judicial proceedings, including, with

20 the prior approval of the Attorney General, appeals

21 from decisions of Federal courts;

22 (3) may indemnify directors, officers, attorneys,

23 agents, and employees of the corporation for liabil24 ities and expenses relating to corporate activities;
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1 (4) may adopt, amend, and repeal bylaws, rules,

2 and regulations governing the manner in which its

3 business may be conducted and the powers granted

4 to it by law may be exercised and enjoyed;

5 (5) may determine the rates or prices of goods

6 or services that it provides, subject to applicable pro7 visions of law;

8 (6)(A) may acquire, purchase, lease, and hold

9 real and personal property including patents and

10 proprietary data, as it determines necessary in the

11 transaction of its business, and sell, lease, grant,

12 and dispose of such real and personal property, as

13 it determines necessary to effectuate the purposes of

14 this Act; and

15 (B) shall make purchases, contracts for the

16 construction, maintenance, or management and op17 eration of facilities and contracts for supplies or

18 services, except personal services, after advertising,

19 in such manner and at such times sufficiently in ad20 vance of opening bids, as the corporation shall deter21 mine to be adequate to ensure notice and an oppor22 tunity for competition, except that advertising shall

23 not be required when the corporation determines

24 that—
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1 (i) the making of any such purchase or

2 contract without advertising is necessary in the

3 interest of furthering the purposes of this Act;

4 or

5 (ii) advertising is not reasonably prac6 ticable;

7 (7) with the consent of the agency or Govern8 ment concerned, may utilize or employ the services,

9 records, facilities or personnel of any State or local

10 Government agency or instrumentality, or voluntary

11 or uncompensated personnel to perform such func12 tions on its behalf as may appear desirable;

13 (8) may enter into and perform such contracts,

14 leases, cooperative agreements, or other transactions

15 as may be necessary in the conduct of its business

16 on a reimbursable basis, with any agency or instru17 mentality of the United States, or with any State,

18 territory, or possession, or with any political subdivi19 sion thereof, or with any person, firm, association,

20 or corporation;

21 (9) may determine the character of and the ne22 cessity for its obligations and expenditures and the

23 manner in which they shall be incurred, allowed, and

24 paid, subject to this Act and other provisions of law
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1 specifically applicable to wholly owned Government

2 corporations;

3 (10) may retain and utilize its revenues for any

4 of the purposes of the corporation, including re5 search and development and capital investment, and

6 such revenues and funds of the corporation shall not

7 be subject to apportionment under the provisions of

8 subchapter II of chapter 15 of title 31, United

9 States Code;

10 (11) may settle and adjust claims held by the

11 corporation against other persons or parties and

12 claims by other persons or parties against the cor13 poration, except that for purposes of the Contract

14 Disputes Act of 1978, the corporation shall be

15 deemed to be the agency head with respect to con16 tract claims arising with respect to the corporation;

17 (12) may exercise, in the name of the United

18 States, the power of eminent domain for the further19 ance of the official purposes of the corporation;

20 (13) shall have the priority of the United States

21 with respect to the payment of debts out of bank22 rupt, insolvent, and decedents’ estates;

23 (14) may define appropriate information as

24 Government commercial information and exempt

25 such information from mandatory release under sec-
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1 tion 552(b)(3) of title 5, United States Code, when

2 the corporation determines that such information, if

3 publicly released, would harm the corporation’s le4 gitimate commercial interests or those of a third

5 party;

6 (15) may obtain from the Administrator of

7 General Services such services as the Administrator

8 is authorized to provide to agencies of the United

9 States, on the same basis as those services are pro10 vided to other agencies of the United States;

11 (16) may accept gifts or donations of services,

12 or of property, real, personal, mixed, tangible or in13 tangible, in aid of any purposes of this Act;

14 (17) may execute, in accordance with its by15 laws, rules and regulations, all instruments nec16 essary and appropriate in the exercise of any of its

17 powers;

18 (18) may provide for liability insurance either

19 by contract or by self-insurance; and

20 (19) shall pay any settlement or judgment en21 tered against the corporation from the funds of the

22 corporation and not from funds made available pur23 suant to section 1304 of title 31, United States

24 Code.
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1 (b) FEDERAL TORT CLAIMS.—Chapter 171 and sec2 tion 1346(b) of title 28, United States Code, shall not

3 apply to any claims arising from the activities of a wholly

4 owned Government corporation.

5 SEC. 305. OFFICERS AND EMPLOYEES.

6 Officers and employees of a wholly owned Govern7 ment corporation shall be officers and employees of the

8 United States. The corporation shall appoint and fix the

9 compensation of such officers and employees (including at10 torneys) and agents of the corporation as are determined

11 necessary to effect this Act, define their authority and du12 ties, and delegate to officers, employees, and agents such

13 of the powers vested in the corporation as the corporation

14 may decide, without regard to any administratively im15 posed limits on the number or grade of personnel, and any

16 such officer, employee, or agent shall be subject to the su17 pervision only of the corporation.

18 SEC. 306. OBLIGATIONS AND GUARANTEES.

19 The full faith and credit of the United States is

20 pledged to the payment of all obligations issued or guaran21 teed by each wholly owned Government corporation.
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1 SEC. 307. CONTRIBUTIONS TO RETIREMENT AND

2 DISABILITY AND EMPLOYEES’ COMPENSA3 TION FUNDS.

4 (a) RETIREMENT CONTRIBUTIONS.—Each wholly

5 owned corporation shall contribute to the Civil Service Re6 tirement and Disability Fund established under section

7 8348 of title 5, United States Code, or other applicable

8 Federal retirement fund, on the basis of annual billings

9 as determined by the Office of Personnel Management, for

10 the Government contribution to the Federal retirement

11 system applicable to the corporation’s employees and their

12 beneficiaries.

13 (b) COMPENSATION CONTRIBUTIONS.—Each wholly

14 owned corporation shall contribute to the Employees’

15 Compensation Fund established under section 8147 of

16 title 5, United States Code, on the basis of annual billings

17 as determined by the Secretary of Labor, for the benefit

18 payments made from such Fund on account of the cor19 poration’s employees.

20 (c) ADMINISTRATIVE COSTS.—The annual billings

21 under subsections (a) and (b) shall include a statement

22 of the fair portion of the cost of administration of the re23 spective funds, which shall be paid into the Treasury as

24 miscellaneous receipts.
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1 SEC. 308. FINANCIAL STATEMENTS.

2 Except as otherwise provided by law, each wholly

3 owned Government corporation shall—

4 (1) maintain a system of accounts and publish

5 its financial statements annually on the basis of gen6 erally accepted accounting principles; and

7 (2) be subject to audit on the basis of auditing

8 standards that are consistent with the private sec9 tor’s generally accepted commercial auditing stand10 ards.

11 SEC. 309. NEW ACTIVITIES.

12 No wholly owned Government corporation shall en13 gage in new types of business activities before such activi14 ties are included in the annual budget program that is

15 approved by the Congress.

16 SEC. 310. REVENUES FOREGONE.

17 There are authorized to be appropriated to each whol18 ly owned Government corporation each year such sums as

19 are determined by the corporation to be equal to revenues

20 foregone by the corporation as a result of the operation

21 of laws that direct the corporation, for reasons of national

22 policy to provide goods or services at prices or rates below

23 a reasonable estimate of the cost of production.

24 SEC. 311. BUDGET LIMITATIONS.

25 The funds, accounts, receipts and outlays of wholly

26 owned Government corporations are exempt from any gen-
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1 eral budget limitation imposed by statute upon expendi2 tures and net lending (budget outlays) of the United

3 States, sequestration order or discretionary spending

4 limit, including application of the Balanced Budget and

5 Emergency Deficit Control Act of 1985 or similar laws.

6 SEC. 312. PAYMENTS IN LIEU OF TAXES.

7 (a) EXEMPTION.—Wholly owned Government cor8 porations, including their franchises, property and income,

9 shall be exempt from all taxation imposed in any manner

10 or form by any State, county, municipality or local taxing

11 authority, or any subdivision thereof, except—

12 (1) as otherwise provided by law; and

13 (2) each such corporation shall make payments

14 to State and local governments in lieu of property

15 taxes upon real property of the corporation.

16 (b) PAYMENTS.—The corporation shall make pay17 ments described under subsection (a)(2) in the amounts,

18 at the times and upon the terms that the corporation de19 termines appropriate, and the corporation’s determination

20 in these matters shall be final.

21 TITLE IV—TRANSITIONAL

22 GOVERNMENT CORPORATIONS

23 SEC. 401. APPLICABILITY.

24 This title applies only to newly established transi25 tional Government corporations.
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1 SEC. 402. SUNSET.

2 Each transitional Government corporation shall have

3 succession for a period of 5 years from the date of enact4 ment of the statute establishing such corporation, unless

5 otherwise provided by law.

6 SEC. 403. PRIVATIZATION PLANNING.

7 (a) STRATEGIC PLAN.—No later than 4 years after

8 the date of enactment of the statute establishing such cor9 poration, and no later than 4 years after the date of any

10 extension of the statute establishing such corporation,

11 each transitional Government corporation shall prepare a

12 strategic plan for privatizing the corporation and submit

13 such plan to the President and Congress. The plan shall

14 provide that proceeds from the return of capital to the

15 United States shall be deposited in the general fund of

16 the Treasury.

17 (b) CONSIDERATION OF ALTERNATIVE MEANS OF

18 TRANSFERRING OWNERSHIP.—The plan shall include con19 sideration of alternative forms of privatization, including

20 consideration of the relative benefits and costs of complete

21 or partial sale of corporate assets or of the going concern

22 in 1 or more units to 1 or more privately owned entities

23 established under the laws of a State or of the District

24 of Columbia.
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1 (c) CONSIDERATION OF FACTORS.—The plan shall

2 include consideration of relevant factors including assess3 ment whether privatization will—

4 (1) result in a return to the United States at

5 least equal to the net present value of the corpora6 tion;

7 (2) not result in ownership, control or domina8 tion of the assets or of the acquiring entity or enti9 ties, as the case may be, by an alien, a foreign cor10 poration, or a foreign government;

11 (3) not be inimical to the health and safety of

12 the public or the common defense and security; and

13 (4) contribute to the competitive structure of

14 the relevant market.

15 (d) EVALUATION AND RECOMMENDATION.—The plan

16 shall evaluate the relative merits of the alternatives consid17 ered and the estimated return on the Government’s invest18 ment in the corporation achievable through each alter19 native. The plan shall include the corporation’s rec20 ommendation on the preferred means of privatization.

21 (e) GAO EVALUATION.—No later than 60 days after

22 the submission of the plan to the Congress, the Comptrol23 ler General shall submit a report to Congress evaluating

24 the extent to which—
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1 (1) the privatization plan would result in any

2 ongoing obligation or undue cost to the Federal Gov3 ernment; and

4 (2) the revenues gained by the Federal Govern5 ment under the privatization plan would represent at

6 least the net present value of the corporation.

7 TITLE V—GOVERNMENT

8 SPONSORED ENTERPRISES

9 SEC. 501. APPLICABILITY.

10 This title applies only to newly established Govern11 ment sponsored enterprises.

12 SEC. 502. SUNSET.

13 Each Government sponsored enterprise shall have

14 succession for a period of 10 years, subject to review by

15 the Congress and extension for additional periods of 10

16 years, unless otherwise provided by law. The Secretary of

17 the Treasury shall consider the applicable sunset period

18 in determining the maturities of obligations that each Gov19 ernment sponsored enterprise may issue. The Secretary of

20 the Treasury shall issue any regulations that the Secretary

21 determines to be appropriate for the implementation of

22 this title.

23 SEC. 503. FINANCIAL SAFETY AND SOUNDNESS.

24 (a) REQUIRED PROVISIONS.—The statute establish25 ing any Government sponsored enterprise shall address is-
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1 sues of financial safety and soundness by including re2 quirements that provide for—

3 (1) effective Federal supervision of financial

4 safety and soundness;

5 (2) adequate capital for the GSE; and

6 (3) the GSE to achieve and maintain a high in7 vestment grade rating, as prescribed in subsection

8 (b), throughout the existence of the GSE.

9 (b) RATING.—

10 (1) IN GENERAL.—Not later than 1 year after

11 the effective date of the statute establishing each

12 new GSE subject to this Act, the Secretary of the

13 Treasury shall, for each such GSE, contract with 2

14 nationally recognized statistical rating organizations

15 to—

16 (A) assess the likelihood that the GSE will

17 not be able to meet its obligations from its own

18 resources with an assumption that there is no

19 recourse to any implicit Government guarantee

20 and to express that likelihood as a traditional

21 credit rating; and

22 (B) review the rating of the GSE as fre23 quently as the Secretary determines is appro24 priate, but not less than annually.
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1 (2) REIMBURSEMENT.—A Government spon2 sored enterprise shall reimburse the Secretary of the

3 Treasury for the full cost of activities under this

4 title, as determined by the Secretary of the

5 Treasury. Such reimbursement shall be credited to

6 the account of the Secretary of the Treasury.

7 (3) COMMENTS.—The Secretary of the Treas8 ury shall—

9 (A) submit comments to the Congress on

10 any difference between the evaluation of the

11 rating organizations and that of the Secretary,

12 with special attention to capital adequacy; and

13 (B) report on any actions the Secretary de14 termines appropriate to ensure that each GSE

15 continuously maintains a high investment grade

16 rating.

17 (4) REQUIREMENT.—Each such GSE shall

18 achieve and maintain throughout the existence of the

19 GSE 1 of the 2 highest investment grade ratings

20 awarded by each statistical rating organization de21 scribed in paragraph (5). The Secretary of the

22 Treasury may waive the requirements of this para23 graph by published order on such terms and condi24 tions and for such periods of times as the Secretary

25 determines appropriate.
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1 (5) DEFINITION.—For the purposes of this sec2 tion, the term ‘‘nationally recognized statistical rat3 ing organization’’ means—

4 (A) any entity effectively recognized by the

5 Division of Market Regulation of the Securities

6 and Exchange Commission as a nationally rec7 ognized statistical rating organization for the

8 purposes of the capital rules for broker-dealers;

9 or

10 (B) an entity similar to an entity described

11 under subparagraph (A), which is designated by

12 the Secretary of the Treasury.

13 (c) REPORTS.—The Comptroller General of the Unit14 ed States and the Office of Management and Budget each

15 shall report to the Congress upon the adequacy of provi16 sions for effective Federal supervision of safety and sound17 ness, including the adequacy of capital standards, con18 tained in any bill to create a Government sponsored enter19 prise. Each report shall also recommend provisions to be

20 included in such bill to assure compliance with subsection

21 (b).

22 SEC. 504. PUBLIC PURPOSES.

23 (a) REQUIRED PROVISIONS.—The statute establish24 ing any Government sponsored enterprise shall prescribe

25 the public purposes of the Government sponsored enter-
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1 prise in sufficiently specific terms to enable the Congress

2 to make an oversight determination of the accomplishment

3 of such purposes.

4 (b) PLAN FOR REMOVAL OF GOVERNMENT SPONSOR5 SHIP.—

6 (1) IN GENERAL.—No later than 1 year after

7 the enactment of the statute establishing a Govern8 ment sponsored enterprise, and no later than 1 year

9 after the date of any extension of the statute estab10 lishing such Government sponsored enterprise, the

11 Federal agency responsible for supervision of the

12 Government sponsored enterprise, or the Secretary

13 of the Treasury with respect to Government spon14 sored enterprises that are not subject to supervision

15 by such a Federal agency, shall—

16 (A) prepare a strategic plan for the re17 moval of Government sponsorship from the

18 Government sponsored enterprise; and

19 (B) submit such plan to the President and

20 the Congress.

21 (2) CONTENT OF PLAN.—The strategic plan

22 shall set standards and propose milestones for the

23 Government sponsored enterprise to accomplish its

24 statutory mission and for the removal of Govern25 ment sponsorship.
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1 (3) REVISION OF PLAN.—The Federal agency

2 or the Secretary of the Treasury, as the case may

3 be, shall update and revise a strategic plan at least

4 every 3 years.

5 (4) GSE VIEWS.—To the extent that the Gov6 ernment sponsored enterprise holds views different

7 from those of the Federal agency or the Secretary,

8 the Government sponsored enterprise shall—

9 (A) prepare a strategic plan for the re10 moval of Government sponsorship from the

11 Government sponsored enterprise; and

12 (B) submit such plan to the President and

13 the Congress.

14 (c) ULTRA VIRES ACTS OF A GOVERNMENT SPON15 SORED ENTERPRISE.—The programs, activities, and

16 transactions of each Government sponsored enterprise

17 shall be subject to review by the Federal agency respon18 sible for supervision of the financial safety and soundness

19 of the Government sponsored enterprise, or by the Sec20 retary of the Treasury with respect to Government spon21 sored enterprises that are not subject to financial super22 vision by such a Federal agency. The Federal agency or

23 the Secretary of the Treasury, as the case may be, shall

24 report at least annually to the President and the Congress

25 on any transactions or undertakings which the agency or
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1 Secretary determines were carried out or made without

2 authority of law. Such acts shall be null and void except

3 to the extent that the Congress enacts legislation to au4 thorize any such act.

5 SEC. 505. ANNUAL REPORT ON IMPACT OF BORROWING BY

6 GOVERNMENT SPONSORED ENTERPRISES ON

7 PUBLIC DEBT.

8 (a) GENERAL REQUIREMENT.—The Secretary of the

9 Treasury shall annually prepare and submit to the Con10 gress a report assessing the financial safety and soundness

11 of the activities of all Government sponsored enterprises

12 and the impact of the operations of such corporations on

13 Federal borrowing.

14 (b) ACCESS TO RELEVANT INFORMATION.—

15 (1) INFORMATION FROM GSES.—Each Govern16 ment sponsored enterprise shall—

17 (A) provide full and prompt access to the

18 Secretary to its books and records; and

19 (B) promptly provide any other informa20 tion requested by the Secretary.

21 (2) INFORMATION FROM SUPERVISORY AGEN22 CIES.—In conducting the studies under this section,

23 the Secretary of the Treasury may request informa24 tion from, or the assistance of, any Federal depart-
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1 ment or agency authorized by law to supervise the

2 activities of any Government sponsored enterprise.

3 (3) CONFIDENTIALITY OF INFORMATION.—

4 (A) IN GENERAL.—The Secretary of the

5 Treasury shall determine and maintain the con6 fidentiality of any book, record, or information

7 made available under this subsection in a man8 ner that the Secretary determines appropriate

9 for the material submitted by the Government

10 sponsored enterprise involved.

11 (B) EXEMPTION FROM PUBLIC DISCLO12 SURE REQUIREMENTS.—The Department of the

13 Treasury shall be exempt from section 552 of

14 title 5, United States Code, with respect to any

15 book, record, or information made available

16 under this subsection and determined by the

17 Secretary to be confidential under subpara18 graph (A).

19 (C) PENALTY FOR UNAUTHORIZED DIS20 CLOSURE.—Any officer or employee of the De21 partment of the Treasury shall be subject to the

22 penalties set forth in section 1906 of title 18,

23 United States Code, if—

24 (i) within the scope of employment,

25 such officer or employee has possession of
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1 or access to any book, record, or informa2 tion made available under this subsection

3 and determined by the Secretary to be con4 fidential under subparagraph (A); and

5 (ii) such officer or employee discloses

6 the material in any manner other than—

7 (I) to an officer or employee of

8 the Department of the Treasury; or

9 (II) pursuant to the exception

10 under section 1906 of title 18, United

11 States Code.

12 (c) ASSESSMENT OF RISK.—

13 (1) IN GENERAL.—In assessing the financial

14 safety and soundness of the activities of Government

15 sponsored enterprises, and the impact of the activi16 ties of such enterprises on Federal borrowing, the

17 Secretary of the Treasury shall quantify the risks

18 associated with each Government sponsored enter19 prise. In quantifying such risks, the Secretary shall

20 determine—

21 (A) the volume and type of securities out22 standing which are issued or guaranteed by

23 each Government sponsored enterprise;

24 (B) the capitalization of each Government

25 sponsored enterprise; and
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1 (C) the degree of risk involved in the oper2 ations of each Government sponsored enterprise

3 due to factors such as credit risk, interest rate

4 risk, management and operations risk, and

5 business risk.

6 (2) PUBLICLY AVAILABLE INFORMATION.—The

7 Secretary shall also report on the quality and timeli8 ness of information available to the public and the

9 Federal Government concerning the extent and na10 ture of the activities of Government sponsored enter11 prises and the financial risk associated with such

12 activities.

13 (d) ASSESSMENT OF IMPACT.—In assessing the im14 pact on Federal borrowing, the Secretary shall report

15 upon the impact of the issuance or guarantee of securities

16 by Government sponsored enterprises on—

17 (1) the rate of interest and amount of discount

18 offered on obligations issued by the Secretary each

19 year; and

20 (2) the marketability of such obligations.

21 (e) DATE FOR SUBMISSION OF REPORT.—The report

22 required by subsection (a) shall be submitted to the Con23 gress no later than January 1 of the first calendar year

24 beginning after the date of the enactment of this section,

25 and no later than each January 1 thereafter.
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1 SEC. 506. AUDITS.

2 (a) IN GENERAL.—Each Government sponsored en3 terprise shall have an annual independent audit made of

4 its financial statements by an independent public account5 ant in accordance with generally accepted auditing stand6 ards. In conducting an audit under this subsection, the

7 independent public accountant shall determine and report

8 on—

9 (1) whether the financial statements of the Gov10 ernment sponsored enterprise are presented fairly in

11 accordance with generally accepted accounting prin12 ciples; and

13 (2) each transaction or undertaking which the

14 auditor believes was carried out or made without au15 thority of law.

16 (b) AUDIT BY COMPTROLLER GENERAL.—

17 (1) IN GENERAL.—The programs, activities, re18 ceipts, expenditures, and financial transactions of

19 each Government sponsored enterprise shall be sub20 ject to audit by the Comptroller General of the Unit21 ed States under such rules and regulations as may

22 be prescribed by the Comptroller General. The rep23 resentatives of the General Accounting Office shall—

24 (A) have access to such books, accounts, fi25 nancial records, reports, files, and such other

26 papers, things, or property belonging to or in
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1 use by the GSE and necessary to facilitate the

2 audit; and

3 (B) be afforded full facilities for verifying

4 transactions with the balances or securities held

5 by depositories, fiscal agents, and custodians.

6 (2) REPORT TO CONGRESS.—A report on each

7 such audit shall be submitted by the Comptroller

8 General to the Congress. The GSE shall reimburse

9 the General Accounting Office for the full cost of

10 any such audit as billed therefor by the Comptroller

11 General.

12 (3) ACCESS TO INFORMATION.—To carry out

13 this subsection, the representatives of the General

14 Accounting Office shall have access, upon request to

15 the GSE or any auditor for an audit of the GSE

16 under subsection (a), to any books, accounts, finan17 cial records, reports, flies, or other papers, things, or

18 property belonging to or in use by the GSE and

19 used in any such audit and to any papers, records,

20 files, and reports of the auditor used in such an

21 audit.

22 (4) PROGRAM AUDITS.—At least every 3 years

23 the Comptroller General shall conduct program au24 dits of each Government sponsored enterprise under

25 this section. Each audit and report by the Comptrol-
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1 ler General shall include specifically each transaction

2 or undertaking which the Comptroller General be3 lieves was carried out or made without authority of

4 law.

5 SEC. 507. SHAREHOLDER RIGHTS.

6 To the extent consistent with Federal law, sharehold7 ers in an investor-owned Government sponsored enterprise

8 shall have the rights relative to the GSE and its manage9 ment that are accorded to shareholders under the Busi10 ness Corporation Act of the District of Columbia.

11 SEC. 508. JURISDICTION.

12 All securities issued or guaranteed by a Government

13 sponsored enterprise shall be subject to the laws adminis14 tered by the Securities and Exchange Commission.

15 SEC. 509. EQUITY SECURITIES.

16 No equity securities issued by a Government spon17 sored enterprise shall be lawful investments for—

18 (1) any institution with deposits or other liabil19 ities insured or otherwise guaranteed by an agency

20 of the Federal Government; or

21 (2) any Government Sponsored Enterprise

22 other than the Government sponsored enterprise

23 that issues the equity securities.
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1 SEC. 510. FEDERAL INVESTMENTS.

2 No securities issued or guaranteed by a Government

3 sponsored enterprise shall be lawful investments or accept4 ed as security for any fiduciary, trust, and public funds,

5 the investment or deposit of which shall be under the au6 thority and control of the United States or any officer or

7 officer thereof.

8 SEC. 511. TAXATION.

9 Each Government sponsored enterprise, including its

10 activities, holdings and income, and income from securities

11 issued or guaranteed by a Government sponsored enter12 prise, shall be subject to all taxation imposed by Federal,

13 State, and local governments and taxing authorities to the

14 same extent as other business organizations, and income

15 from their securities, are taxed.

16 SEC. 512. REPORT TO THE CONGRESS.

17 A Government sponsored enterprise shall submit an

18 annual report to the Congress including—

19 (1) a list including the name and address of

20 each contractor, consultant, agent, or employee paid

21 by the Government sponsored enterprise to engage

22 in—

23 (A) grassroots organizing or campaigning;

24 (B) public relations, media consulting, or

25 image advertising; or
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1 (C) lobbying, including the direct and indi2 rect lobbying of the Congress;

3 (2) an itemization of all costs associated with

4 activities described in paragraph (1) whether in5 curred by the Government sponsored enterprise or

6 by any of its contractors, consultants, agents, or em7 ployee listed under such paragraph, including enter8 tainment expenses, travel expenses, advertising

9 costs, salaries, billing rates and the total amount

10 billed for services;

11 (3) a description of any lobbying of the Con12 gress or the executive branch by employees, board

13 members, or officers of the Government sponsored

14 enterprise;

15 (4) a description of any effort by the Govern16 ment sponsored enterprise or its agents to encourage

17 others to lobby the Congress or the executive

18 branch;

19 (5) a list of all charitable donations paid by the

20 Government sponsored enterprise on behalf of Mem21 bers of Congress or members of the executive

22 branch;

23 (6) a list of the salaries and other compensation

24 (including the present value of stock options) and
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1 benefits paid to the officers and board members of

2 the Government sponsored enterprise; and

3 (7) a list of all Government sponsored enter4 prise employees who have been employed by either

5 the Congress or the Federal Government in the 5

6 years preceding the report, and such employees’ sal7 ary prior to being employed by the Government

8 sponsored enterprise and the salary of each such

9 employee.

10 TITLE VI—GOVERNMENT

11 CORPORATION CONTROL ACT

12 SEC. 601. DEFINITIONS.

13 (a) GOVERNMENT CORPORATION.—Section 9101(1)

14 of title 31, United States Code, is amended to read as

15 follows:

16 ‘‘(1) ‘Government corporation’ means a wholly

17 owned Government corporation and a Government

18 sponsored enterprise.’’.

19 (b) GOVERNMENT SPONSORED ENTERPRISE.—Sec20 tion 9101(2) of title 31, United States Code, is amended

21 to read as follows:

22 ‘‘(2) ‘Government sponsored enterprise’ means

23 the Federal Home Loan Banks, the Farm Credit

24 Banks, the Banks for Cooperatives of the Farm

25 Credit System, and such other Government spon-
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1 sored enterprises as the Secretary of the Treasury

2 may designate from time to time.’’.

3 (c) WHOLLY OWNED GOVERNMENT CORPORA4 TION.—Section 9101(3) of title 31, United States Code,

5 is amended by adding at the end:

6 ‘‘(O) The National Railroad Passenger

7 Corporation.

8 ‘‘(P) The Federal Deposit Insurance

9 Corporation.

10 ‘‘(Q) The National Credit Union Adminis11 tration Central Liquidity Facility.

12 ‘‘(R) The Rural Telephone Bank.

13 ‘‘(S) The Resolution Trust Corporation.’’.

14 SEC. 602. AUDITS.

15 Section 9105 of title 31, United States Code, is

16 amended to read as follows:

17 ‘‘§ 9105. Audits

18 ‘‘(a) The programs, activities, receipts, expenditures

19 and financial transactions of each wholly owned Govern20 ment corporation shall be audited annually by the Comp21 troller General of the United States under such rules and

22 regulations as may be prescribed by the Comptroller Gen23 eral. The representatives of the General Accounting Office

24 shall have access to such books, accounts, financial

25 records, reports, files and such other papers, things, or
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1 property belonging to or in use by the corporation and

2 necessary to facilitate the audit, and they shall be afforded

3 full facilities for verifying transactions with the balances

4 or securities held by depositories, fiscal agents, and

5 custodians. The representatives of the General Accounting

6 Office shall have access, upon request to the corporation

7 or any auditor for an audit of the corporation under this

8 section, to any books, financial records, reports, files or

9 other papers, things, or property belonging to or in use

10 by the corporation and used in any such audit and to pa11 pers, records, files, and reports of the auditor used in such

12 an audit. In conducting such audit, the Comptroller Gen13 eral may make a contract, without regard to section 3709

14 of the Revised Statutes (41 U.S.C. 5), for professional

15 services with a firm or organization for a temporary period

16 or special purpose.

17 ‘‘(b) The Comptroller General of the United States

18 shall make a report to the Congress on each audit con19 ducted under this section. The report to the Congress shall

20 contain such comments and information as the Comptrol21 ler General determines necessary to inform the Congress

22 of the financial operations and condition of the corpora23 tion, together with such recommendations as the Comp24 troller General determines advisable. The report shall also

25 show specifically any program, expenditure, or other fi-
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1 nancial transaction or undertaking, observed, or reviewed

2 in the course of the audit which, in the opinion of the

3 Comptroller General, has been carried out or made with4 out authority of law. A copy of each such report shall be

5 furnished to the President, the Secretary of the Treasury,

6 and to the corporation at the time submitted to the Con7 gress.

8 ‘‘(c) A Government corporation shall reimburse the

9 Comptroller General of the United States for the cost of

10 the audit as determined by the Comptroller General. Such

11 reimbursement shall be credited to the account of the

12 Comptroller General. An audit under this section is in

13 place of an audit of the financial transactions of a Govern14 ment corporation the Comptroller General is required to

15 make in reporting to the Congress or the President under

16 another law.’’.

17 SEC. 603. FORMER MIXED-OWNERSHIP GOVERNMENT COR18 PORATIONS.

19 Sections 9103–9105 of title 31, United States Code,

20 shall not apply to wholly owned government corporations

21 that formerly were designated mixed-ownership corpora22 tions under the Government Corporation Control Act, ex23 cept as otherwise provided by law.
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1 SEC. 604. ACCOUNTS AND OBLIGATIONS.

2 (a) ACCOUNTS.—Section 9107(c) of title 31, United

3 States Code, is amended—

4 (1) in paragraph (2) by striking ‘‘mixed-owner5 ship Government corporation’’ and inserting ‘‘Gov6 ernment sponsored enterprise’’; and

7 (2) in paragraph (3) by striking ‘‘Federal Inter8 mediate Credit Banks, the Central Banks for Co9 operatives, the Regional Banks for Cooperatives, or

10 the Federal Land Banks’’ and inserting ‘‘Govern11 ment sponsored enterprises’’.

12 (b) OBLIGATIONS.—Section 9108(d)(1) of title 31,

13 United States Code, is amended by striking ‘‘mixed-owner14 ship Government corporation’’ and inserting ‘‘Government

15 sponsored enterprise’’.

16 TITLE VII—SEPARABILITY

17 SEC. 701. SEPARABILITY.

18 If any provision of this Act or the application thereof

19 to any person or circumstances is held invalid, the remain20 der of this Act, and the application of such provision to

21 other persons or circumstances shall not be affected

22 thereby.

Æ