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the Corporation or converted to long-term subordinated
debt securities having a par amount not less than the
amounts appropriated pursuant to section 19 and subject
to such phase, or a combination thereof, as contemplated
by such plan.
(i) BOARD OF DIRECTORS.—
(1) CORPORATION.—
(A) INITIAL
BOARD.—Before the end of
the 120-day period beginning on the transition
date, a special meeting of the stockholders of
the Corporation shall be held, at which all di-
rectors of the Corporation shall be elected to
serve a 1-year term or until any such director’s
successor has been elected.
(B) NOMINATION; SELECTION CRITERIA.—
The candidates for election to the board of di-
rectors under paragraph (1) shall be nominated
by the existing board of directors and 4 of such
candidates shall be nominated in accordance
with the selection criteria set out in section
10(a)(3).
(C) SUBSEQUENT BOARDS.—After the 1st
election of a board of directors pursuant to sub-
paragraph (A), the directors shall be elected
and subject to removal by the stockholders of
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the Corporation, as provided in the District of
Columbia Business Corporation Act, except that
the nomination of candidates for each election
of the board of directors shall continue to re-
flect the requirements of section 10(a)(3).
(2) INSURANCE CORPORATION.—
(A) INITIAL
BOARD.—Promptly following
the special meeting of the stockholders of the
Corporation pursuant to paragraph (1), a spe-
cial meeting of the stockholders of the Insur-
ance Corporation shall be held, at which all di-
rectors or the Insurance Corporation shall be
elected to serve a 1-year term or until any such
director’s successor has been elected.
(B) SUBSEQUENT BOARDS.—After the 1st
election of a board of directors pursuant to sub-
paragraph (A), the directors shall be elected
and subject to removal by the stockholders of
the Insurance Corporation, as provided in the
District of Columbia Business Corporation Act.
(j) TRANSMITTAL OF FINAL PLAN AFTER COMPLE-
TION.—The Corporation shall transmit copies of the final
strategic plan for transition to the President and the Con-
gress upon completion of such transition.
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SEC. 14. STATUS AND APPLICABILITY OF CERTAIN FED-
ERAL LAWS.
(a) BEFORE THE TRANSITION DATE.—Before the
transition date, the Corporation, the Insurance Corpora-
tion, and any other subsidiary of the Corporation, shall—
(1) not be agencies of the United States; and
(2) comply with all Federal laws regulating the
budgetary and auditing practices of a government
corporation, except as otherwise provided in this Act.
(b) SUBSEQUENT TO THE TRANSITION DATE.—On
and after the transition date, the Corporation, the Insur-
ance Corporation, and any other subsidiary of the Cor-
poration shall not be considered to be an agency, instru-
mentality, or establishment of the United States Govern-
ment or a government corporation or a government-con-
trolled corporation, for purposes of any Federal law, ex-
cept as otherwise provided in this Act.
(c) AUTHORIZED INVESTMENTS AND SECURITY.—All
obligations issued by the Corporation shall be authorized
investments for any person created under the laws of the
United States or any State to the same extent that the
person may hold or invest in obligations issued by or guar-
anteed as to principal or interest by the United States or
any agency or instrumentality of the United States.
(d) EFFECT
OF
AND EXEMPTIONS FROM OTHER
LAWS.—
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(1) EXEMPT SECURITIES.—All equity and debt
securities and other obligations issued by the Cor-
poration or the Insurance Corporation pursuant to
this Act shall be deemed to be exempt securities
within the meaning of laws administered by the Se-
curities and Exchange Commission to the same ex-
tent as securities which are direct obligations of, or
obligations fully guaranteed as to principal or inter-
est by, the United States.
(2) OPEN
MARKET
OPERATIONS
AND
STATE
TAX EXEMPT STATUS.—The obligations of the Cor-
poration shall be deemed to be obligations of the
United States for the purposes of the provision des-
ignated as (b)(2) of the 2nd undesignated paragraph
of section 14 of the Federal Reserve Act and section
3124 of title 31, United States Code.
(3) NO PRIORITY AS A FEDERAL CLAIM.—The
priority established in favor of the United States by
section 3713 of title 31, United States Code, shall
not apply with respect to any indebtedness of the
Corporation or the Insurance Corporation.
(e) FEDERAL RESERVE BANKS AS DEPOSITARIES,
CUSTODIANS, AND FISCAL AGENTS.—The Federal reserve
banks may act as depositaries for, or custodians or fiscal
agents of, the Corporation and the Insurance Corporation.
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(f) ACCESS
TO BOOK-ENTRY SYSTEM.—The Sec-
retary may authorize the Corporation and the Insurance
Corporation to use the book-entry system of the Federal
reserve system.
SEC. 15. COMPLIANCE WITH DAVIS-BACON ACT.
NIC shall take such action as may be necessary to
ensure that projects assisted in whole or in part under
the provisions of this Act shall incorporate a provision re-
quiring in any contract relating to any construction, recon-
struction, rehabilitation, replacement, or expansion of
such project, that not less than the wages prevailing in
the locality, as predetermined by the Secretary of Labor
pursuant to the Act of March 3, 1931 (40 U.S.C. 276a;
commonly referred to as the ‘‘Davis-Bacon Act’’) shall be
paid to all laborers and mechanics employed to perform
such contracts.
SEC. 16. OBLIGATIONS NOT FEDERALLY GUARANTEED;
STATE LAWS.
(a) STATUS OF SECURITIES.—
(1) NO
FULL
FAITH
AND
CREDIT
OF
THE
U.S.—Obligations of the Corporation or the Insur-
ance Corporation, and obligations insured by any
such corporation shall not be obligations of, or guar-
anteed as to principal or interest by, the United
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States or any agency of the United States and the
obligations shall so plainly state.
(2) FINANCING NOT TREATED AS U.S. GUARAN-
TEE.—The provision of assistance of any kind or na-
ture from NIC shall not be treated as a direct or in-
direct guarantee of any payment of principal or in-
terest on any security by the United States for pur-
poses of section 149(b) of the Internal Revenue
Code of 1986 or any other law.
(b) STATE LAWS.—The receipt by any entity of any
assistance under this Act, directly or indirectly, and any
financial assistance provided by any governmental entity
in connection with such assistance under this Act shall be
valid and lawful notwithstanding any State or local restric-
tions regarding extensions of credit or other benefits to
private persons or entities, or other similar restrictions.
SEC. 17. AUDITS; REPORTS TO THE PRESIDENT AND THE
CONGRESS.
(a) ACCOUNTING.—The books of account of NIC
shall be maintained in accordance with generally accepted
accounting principles and shall be subject to an annual
audit by independent public accountants of nationally rec-
ognized standing.
(b) REPORTS.—NIC shall submit to the President
and the Congress, within 90 days after the end of each