‘buyer’) seeking to be recognized as a public or other non-
profit institution, the buyer shall meet the definition of 
a nonprofit institution under section 103(13) if— 
‘‘(i) the buyer pays no more than fair market 
value for any assets of the proprietary institution; 
‘‘(ii) the buyer pays no more than fair market 
value for any service or lease contracts, including 
such service and lease contracts provided by the en-
tity selling the proprietary institution; and 
‘‘(iii) to prevent self-dealing in the case where 
one or more individuals with a substantial ownership 
or controlling interests in the proprietary institution 
will also have substantial or controlling interests in 
the institution seeking to be recognized as a public 
or other nonprofit institution (meaning that one or 
more individuals are on both sides of the trans-
action), the change of control transaction, and any 
substantial asset acquisition, service, or lease agree-
ments with the proprietary institution shall be ap-
proved by a disinterested committee of directors of 
the entity that seeks to be recognized as a public or 
other nonprofit institution. 
‘‘(B) For the purposes of this paragraph, parties to 
the transaction are entitled to a rebuttable presumption 
that the assets, lease contracts, and service contracts that 
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are part of the transaction are purchased at fair market 
value if— 
‘‘(i) the acquiring entity pays no more than fair 
market value for such assets, lease contracts, or 
service contracts; and 
‘‘(ii) the value of the assets, lease contracts, or 
service contracts are evaluated by at least one inde-
pendent third-party entity hired by parties on both 
sides of the transaction. 
‘‘(8)(A) An institution that has been approved for 
conversion by the Secretary shall be subject to a moni-
toring period for a 5-year period beginning on the day 
after the date of such approval. In conducting the moni-
toring of the institution under this paragraph, the Sec-
retary— 
‘‘(i) shall only conduct monitoring to ensure 
that the institution is in compliance with the re-
quirements of section 103(13) and paragraph (7) of 
this subsection; and 
‘‘(ii) may require the institution to submit reg-
ular reports or conduct audits of such institution re-
lating to such compliance. 
‘‘(B) Each institution that is subject to the moni-
toring period under this paragraph shall remit an annual 
fee to the Secretary— 
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‘‘(i) in an amount equal to 0.15 percent of the 
total revenue derived from this title by such institu-
tion for the most recent fiscal year for which data 
is available; and 
‘‘(ii) that shall be exclusively for expenses re-
lated to monitoring of the institution for the period 
described in subparagraph (A)— 
‘‘(I) of which 50 percent shall be used by 
the Secretary, without further appropriation, 
exclusively for expenses related to monitoring of 
the institution during such period; and 
‘‘(II) of which 50 percent shall be remitted 
by the Secretary to the Commissioner of Inter-
nal Revenue, to be available to such Commis-
sioner, without further appropriation, exclu-
sively for monitoring compliance with the Inter-
nal Revenue Code of such institution during 
such period. 
‘‘(C) An institution may not be subject to an annual 
fee under subparagraph (B) for monitoring related to a 
conversion that exceeds $60,000. 
‘‘(D) If the Secretary determines that an institution 
should be subject to the monitoring under this paragraph 
beyond the 5-year period described in subparagraph (A), 
the Secretary shall provide the reasons justifying an exten-
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sion in writing to the institution (and in the Federal Reg-
ister) at least 30 days before the expiration of such period. 
‘‘(E) Any institution that is subject to monitoring 
under this paragraph may seek a waiver to be exempt from 
such monitoring (including the annual fee under subpara-
graph (B)) on an annual basis for any year during the 
monitoring period and the Secretary shall grant such waiv-
er if there is no ongoing contractual or financial relation-
ship between the institution and the former entity or indi-
viduals that previously owned the institution. The Sec-
retary may grant a waiver for more than 1 year in the 
case where the entity that formerly owned the proprietary 
institution has closed or no longer exists and the Secretary 
determines the institution is not at risk of violating the 
requirements of section 103(13) or paragraph (7) of this 
subsection. 
‘‘(9) Any institution that submits an application for 
conversion shall not promote or market itself, in any man-
ner, as a public or other nonprofit institution of higher 
education unless— 
‘‘(A) the Secretary has provided final approval 
of the conversion of the institution to a public or 
other nonprofit institution of higher education under 
this section; 
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