S. 2095 (104th): Government Corporation and Government Sponsored Enterprise Standards Act

104th Congress, 1995–1996. Text as of Sep 19, 1996 (Introduced).

Status & Summary | PDF | Source: GPO

S 2095 IS

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Government Corporation and Government Sponsored Enterprise Standards Act’.

SEC. 2. PURPOSES.

    The purposes of this Act are to--

      (1) ensure that Government corporations and Government sponsored enterprises--

        (A) are established and conduct their operations in conformance with consistent standards as to the applicability of Federal laws; and

        (B) are fully accountable for their financial soundness and programmatic activities; and

      (2) provide an orderly process for privatizing selected Government corporations.

SEC. 3. DEFINITIONS.

    For the purposes of this Act the term--

      (1) ‘Government corporation’ means an agency of the United States within the executive branch that--

        (A) is designated by law to have corporate form;

        (B) carries out business type operations to provide goods or services in response to economic demand; and

        (C) produces revenues, potentially on a self-sustaining basis;

      (2) ‘Government sponsored enterprise’ or ‘GSE’ means an instrumentality that--

        (A) is chartered under the laws of the United States to provide specialized financial services in furtherance of public purposes;

        (B) is owned wholly or in part by private equity owners; and

        (C) has a relationship to the Federal Government, such as authority to borrow directly or indirectly from the Treasury of the United States, that creates a public perception of implicit Federal backing of its obligations or guaranteed securities;

      (3) ‘newly established wholly owned Government corporation’ means a wholly owned Government corporation which is established under a statute enacted after December 31, 1996;

      (4) ‘newly established transitional Government corporation’ means a transitional Government corporation which is established under a statute enacted after December 31, 1996;

      (5) ‘newly established Government sponsored enterprise’ means a Government sponsored enterprise which is established under a statute enacted after December 31, 1996;

      (6) ‘transitional Government corporation’ means a Government corporation that is intended to--

        (A) operate on a profitmaking basis; and

        (B) be converted to private ownership when feasible; and

      (7) ‘wholly owned Government corporation’--

        (A) means a Government corporation that is wholly owned or controlled by the Federal Government; and

        (B) includes a transitional Government corporation except as otherwise provided by law.

TITLE I--CLASSIFICATIONS OF GOVERNMENT CORPORATIONS AND GSES

SEC. 101. CLASSIFICATION.

    (a) IN GENERAL- The Director of the Office of Management and Budget shall--

      (1) maintain a list of all Government corporations and Government sponsored enterprises classified according to the definitions of this Act; and

      (2) publish such list as a part of the annual budget of the United States Government.

    (b) RECOMMENDATIONS- The Director of the Office of Management and Budget shall make legislative recommendations to the Congress to ensure that this Act applies to entities established under statutes that are enacted or amended after December 31, 1996.

TITLE II--GENERAL PROVISIONS

SEC. 201. RESERVATION.

    The Congress expressly reserves the right to alter, amend or repeal any law establishing or governing the activities of a Government corporation or Government sponsored enterprise.

SEC. 202. AFFILIATES.

    Each newly established Government corporation or newly established Government sponsored enterprise may establish, acquire or control the activities of a subsidiary or other affiliate only by or under a law of the United States expressly authorizing the action.

SEC. 203. APPLICATION OF THIS ACT.

    On and after the effective date of this Act no entity established under Federal law shall be a Government corporation or Government sponsored enterprise without conforming to the requirements and definitions of this Act.

TITLE III--WHOLLY OWNED GOVERNMENT CORPORATIONS

SEC. 301. APPLICABILITY.

    This title applies only to newly established wholly owned Government corporations.

SEC. 302. GOVERNMENT CORPORATION CONTROL ACT.

    Each wholly owned Government corporation shall be subject to the provisions of chapter 91 of title 31, United States Code, that are applicable to wholly owned Government corporations under that Act.

SEC. 303. SUNSET.

    Except as specifically provided by law, each newly established wholly owned Government corporation--

      (1) shall terminate 10 years after the date on which such corporation is established; and

      (2) may be extended for additional 10-year periods by the Congress.

SEC. 304. GENERAL POWERS.

    (a) IN GENERAL- In order to accomplish its statutory purposes and in addition to any other powers that may be authorized by law, each wholly owned Government corporation--

      (1) may adopt, alter, and use a corporate seal, which shall be judicially noticed;

      (2) may sue and be sued in its corporate name and be represented by its own attorneys in all administrative and judicial proceedings, including, with the prior approval of the Attorney General, appeals from decisions of Federal courts;

      (3) may indemnify directors, officers, attorneys, agents, and employees of the corporation for liabilities and expenses relating to corporate activities;

      (4) may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which its business may be conducted and the powers granted to it by law may be exercised and enjoyed;

      (5) may determine the rates or prices of goods or services that it provides, subject to applicable provisions of law;

      (6)(A) may acquire, purchase, lease, and hold real and personal property including patents and proprietary data, as it determines necessary in the transaction of its business, and sell, lease, grant, and dispose of such real and personal property, as it determines necessary to effectuate the purposes of this Act; and

      (B) shall make purchases, contracts for the construction, maintenance, or management and operation of facilities and contracts for supplies or services, except personal services, after advertising, in such manner and at such times sufficiently in advance of opening bids, as the corporation shall determine to be adequate to ensure notice and an opportunity for competition, except that advertising shall not be required when the corporation determines that--

        (i) the making of any such purchase or contract without advertising is necessary in the interest of furthering the purposes of this Act; or

        (ii) advertising is not reasonably practicable;

      (7) with the consent of the agency or Government concerned, may utilize or employ the services, records, facilities or personnel of any State or local Government agency or instrumentality, or voluntary or uncompensated personnel to perform such functions on its behalf as may appear desirable;

      (8) may enter into and perform such contracts, leases, cooperative agreements, or other transactions as may be necessary in the conduct of its business on a reimbursable basis, with any agency or instrumentality of the United States, or with any State, territory, or possession, or with any political subdivision thereof, or with any person, firm, association, or corporation;

      (9) may determine the character of and the necessity for its obligations and expenditures and the manner in which they shall be incurred, allowed, and paid, subject to this Act and other provisions of law

specifically applicable to wholly owned Government corporations;

      (10) may retain and utilize its revenues for any of the purposes of the corporation, including research and development and capital investment, and such revenues and funds of the corporation shall not be subject to apportionment under the provisions of subchapter II of chapter 15 of title 31, United States Code;

      (11) may settle and adjust claims held by the corporation against other persons or parties and claims by other persons or parties against the corporation, except that for purposes of the Contract Disputes Act of 1978, the corporation shall be deemed to be the agency head with respect to contract claims arising with respect to the corporation;

      (12) may exercise, in the name of the United States, the power of eminent domain for the furtherance of the official purposes of the corporation;

      (13) shall have the priority of the United States with respect to the payment of debts out of bankrupt, insolvent, and decedents’ estates;

      (14) may define appropriate information as Government commercial information and exempt such information from mandatory release under section 552(b)(3) of title 5, United States Code, when the corporation determines that such information, if publicly released, would harm the corporation’s legitimate commercial interests or those of a third party;

      (15) may obtain from the Administrator of General Services such services as the Administrator is authorized to provide to agencies of the United States, on the same basis as those services are provided to other agencies of the United States;

      (16) may accept gifts or donations of services, or of property, real, personal, mixed, tangible or intangible, in aid of any purposes of this Act;

      (17) may execute, in accordance with its bylaws, rules and regulations, all instruments necessary and appropriate in the exercise of any of its powers;

      (18) may provide for liability insurance either by contract or by self-insurance; and

      (19) shall pay any settlement or judgment entered against the corporation from the funds of the corporation and not from funds made available pursuant to section 1304 of title 31, United States Code.

    (b) FEDERAL TORT CLAIMS- Chapter 171 and section 1346(b) of title 28, United States Code, shall not apply to any claims arising from the activities of a wholly owned Government corporation.

SEC. 305. OFFICERS AND EMPLOYEES.

    Officers and employees of a wholly owned Government corporation shall be officers and employees of the United States. The corporation shall appoint and fix the compensation of such officers and employees (including attorneys) and agents of the corporation as are determined necessary to effect this Act, define their authority and duties, and delegate to officers, employees, and agents such of the powers vested in the corporation as the corporation may decide, without regard to any administratively imposed limits on the number or grade of personnel, and any such officer, employee, or agent shall be subject to the supervision only of the corporation.

SEC. 306. OBLIGATIONS AND GUARANTEES.

    The full faith and credit of the United States is pledged to the payment of all obligations issued or guaranteed by each wholly owned Government corporation.

SEC. 307. CONTRIBUTIONS TO RETIREMENT AND DISABILITY AND EMPLOYEES’ COMPENSATION FUNDS.

    (a) RETIREMENT CONTRIBUTIONS- Each wholly owned corporation shall contribute to the Civil Service Retirement and Disability Fund established under section 8348 of title 5, United States Code, or other applicable Federal retirement fund, on the basis of annual billings as determined by the Office of Personnel Management, for the Government contribution to the Federal retirement system applicable to the corporation’s employees and their beneficiaries.

    (b) COMPENSATION CONTRIBUTIONS- Each wholly owned corporation shall contribute to the Employees’ Compensation Fund established under section 8147 of title 5, United States Code, on the basis of annual billings as determined by the Secretary of Labor, for the benefit payments made from such Fund on account of the corporation’s employees.

    (c) ADMINISTRATIVE COSTS- The annual billings under subsections (a) and (b) shall include a statement of the fair portion of the cost of administration of the respective funds, which shall be paid into the Treasury as miscellaneous receipts.

SEC. 308. FINANCIAL STATEMENTS.

    Except as otherwise provided by law, each wholly owned Government corporation shall--

      (1) maintain a system of accounts and publish its financial statements annually on the basis of generally accepted accounting principles; and

      (2) be subject to audit on the basis of auditing standards that are consistent with the private sector’s generally accepted commercial auditing standards.

SEC. 309. NEW ACTIVITIES.

    No wholly owned Government corporation shall engage in new types of business activities before such activities are included in the annual budget program that is approved by the Congress.

SEC. 310. REVENUES FOREGONE.

    There are authorized to be appropriated to each wholly owned Government corporation each year such sums as are determined by the corporation to be equal to revenues foregone by the corporation as a result of the operation of laws that direct the corporation, for reasons of national policy to provide goods or services at prices or rates below a reasonable estimate of the cost of production.

SEC. 311. BUDGET LIMITATIONS.

    The funds, accounts, receipts and outlays of wholly owned Government corporations are exempt from any general budget limitation imposed by statute upon expenditures and net lending (budget outlays) of the United States, sequestration order or discretionary spending limit, including application of the Balanced Budget and Emergency Deficit Control Act of 1985 or similar laws.

SEC. 312. PAYMENTS IN LIEU OF TAXES.

    (a) EXEMPTION- Wholly owned Government corporations, including their franchises, property and income, shall be exempt from all taxation imposed in any manner or form by any State, county, municipality or local taxing authority, or any subdivision thereof, except--

      (1) as otherwise provided by law; and

      (2) each such corporation shall make payments to State and local governments in lieu of property taxes upon real property of the corporation.

    (b) PAYMENTS- The corporation shall make payments described under subsection (a)(2) in the amounts, at the times and upon the terms that the corporation determines appropriate, and the corporation’s determination in these matters shall be final.

TITLE IV--TRANSITIONAL GOVERNMENT CORPORATIONS

SEC. 401. APPLICABILITY.

    This title applies only to newly established transitional Government corporations.

SEC. 402. SUNSET.

    Each transitional Government corporation shall have succession for a period of 5 years from the date of enactment of the statute establishing such corporation, unless otherwise provided by law.

SEC. 403. PRIVATIZATION PLANNING.

    (a) STRATEGIC PLAN- No later than 4 years after the date of enactment of the statute establishing such corporation, and no later than 4 years after the date of any extension of the statute establishing such corporation, each transitional Government corporation shall prepare a strategic plan for privatizing the corporation and submit such plan to the President and Congress. The plan shall provide that proceeds from the return of capital to the United States shall be deposited in the general fund of the Treasury.

    (b) CONSIDERATION OF ALTERNATIVE MEANS OF TRANSFERRING OWNERSHIP- The plan shall include consideration of alternative forms of privatization, including consideration of the relative benefits and costs of complete or partial sale of corporate assets or of the going concern in 1 or more units to 1 or more privately owned entities established under the laws of a State or of the District of Columbia.

    (c) CONSIDERATION OF FACTORS- The plan shall include consideration of relevant factors including assessment whether privatization will--

      (1) result in a return to the United States at least equal to the net present value of the corporation;

      (2) not result in ownership, control or domination of the assets or of the acquiring entity or entities, as the case may be, by an alien, a foreign corporation, or a foreign government;

      (3) not be inimical to the health and safety of the public or the common defense and security; and

      (4) contribute to the competitive structure of the relevant market.

    (d) EVALUATION AND RECOMMENDATION- The plan shall evaluate the relative merits of the alternatives considered and the estimated return on the Government’s investment in the corporation achievable through each alternative. The plan shall include the corporation’s recommendation on the preferred means of privatization.

    (e) GAO EVALUATION- No later than 60 days after the submission of the plan to the Congress, the Comptroller General shall submit a report to Congress evaluating the extent to which--

      (1) the privatization plan would result in any ongoing obligation or undue cost to the Federal Government; and

      (2) the revenues gained by the Federal Government under the privatization plan would represent at least the net present value of the corporation.

TITLE V--GOVERNMENT SPONSORED ENTERPRISES

SEC. 501. APPLICABILITY.

    This title applies only to newly established Government sponsored enterprises.

SEC. 502. SUNSET.

    Each Government sponsored enterprise shall have succession for a period of 10 years, subject to review by the Congress and extension for additional periods of 10 years, unless otherwise provided by law. The Secretary of the Treasury shall consider the applicable sunset period in determining the maturities of obligations that each Government sponsored enterprise may issue. The Secretary of the Treasury shall issue any regulations that the Secretary determines to be appropriate for the implementation of this title.

SEC. 503. FINANCIAL SAFETY AND SOUNDNESS.

    (a) REQUIRED PROVISIONS- The statute establishing any Government sponsored enterprise shall address issues of financial safety and soundness by including requirements that provide for--

      (1) effective Federal supervision of financial safety and soundness;

      (2) adequate capital for the GSE; and

      (3) the GSE to achieve and maintain a high investment grade rating, as prescribed in subsection (b), throughout the existence of the GSE.

    (b) RATING-

      (1) IN GENERAL- Not later than 1 year after the effective date of the statute establishing each new GSE subject to this Act, the Secretary of the Treasury shall, for each such GSE, contract with 2 nationally recognized statistical rating organizations to--

        (A) assess the likelihood that the GSE will not be able to meet its obligations from its own resources with an assumption that there is no recourse to any implicit Government guarantee and to express that likelihood as a traditional credit rating; and

        (B) review the rating of the GSE as frequently as the Secretary determines is appropriate, but not less than annually.

      (2) REIMBURSEMENT- A Government sponsored enterprise shall reimburse the Secretary of the Treasury for the full cost of activities under this title, as determined by the Secretary of the Treasury. Such reimbursement shall be credited to the account of the Secretary of the Treasury.

      (3) COMMENTS- The Secretary of the Treasury shall--

        (A) submit comments to the Congress on any difference between the evaluation of the rating organizations and that of the Secretary, with special attention to capital adequacy; and

        (B) report on any actions the Secretary determines appropriate to ensure that each GSE continuously maintains a high investment grade rating.

      (4) REQUIREMENT- Each such GSE shall achieve and maintain throughout the existence of the GSE 1 of the 2 highest investment grade ratings awarded by each statistical rating organization described in paragraph (5). The Secretary of the Treasury may waive the requirements of this paragraph by published order on such terms and conditions and for such periods of times as the Secretary determines appropriate.

      (5) DEFINITION- For the purposes of this section, the term ‘nationally recognized statistical rating organization’ means--

        (A) any entity effectively recognized by the Division of Market Regulation of the Securities and Exchange Commission as a nationally recognized statistical rating organization for the purposes of the capital rules for broker-dealers; or

        (B) an entity similar to an entity described under subparagraph (A), which is designated by the Secretary of the Treasury.

    (c) REPORTS- The Comptroller General of the United States and the Office of Management and Budget each shall report to the Congress upon the adequacy of provisions for effective Federal supervision of safety and soundness, including the adequacy of capital standards, contained in any bill to create a Government sponsored enterprise. Each report shall also recommend provisions to be included in such bill to assure compliance with subsection (b).

SEC. 504. PUBLIC PURPOSES.

    (a) REQUIRED PROVISIONS- The statute establishing any Government sponsored enterprise shall prescribe the public purposes of the Government sponsored enterprise in sufficiently specific terms to enable the Congress to make an oversight determination of the accomplishment of such purposes.

    (b) PLAN FOR REMOVAL OF GOVERNMENT SPONSORSHIP-

      (1) IN GENERAL- No later than 1 year after the enactment of the statute establishing a Government sponsored enterprise, and no later than 1 year after the date of any extension of the statute establishing such Government sponsored enterprise, the Federal agency responsible for supervision of the Government sponsored enterprise, or the Secretary of the Treasury with respect to Government sponsored enterprises that are not subject to supervision by such a Federal agency, shall--

        (A) prepare a strategic plan for the removal of Government sponsorship from the Government sponsored enterprise; and

        (B) submit such plan to the President and the Congress.

      (2) CONTENT OF PLAN- The strategic plan shall set standards and propose milestones for the Government sponsored enterprise to accomplish its statutory mission and for the removal of Government sponsorship.

      (3) REVISION OF PLAN- The Federal agency or the Secretary of the Treasury, as the case may be, shall update and revise a strategic plan at least every 3 years.

      (4) GSE VIEWS- To the extent that the Government sponsored enterprise holds views different from those of the Federal agency or the Secretary, the Government sponsored enterprise shall--

        (A) prepare a strategic plan for the removal of Government sponsorship from the Government sponsored enterprise; and

        (B) submit such plan to the President and the Congress.

    (c) ULTRA VIRES ACTS OF A GOVERNMENT SPONSORED ENTERPRISE- The programs, activities, and transactions of each Government sponsored enterprise shall be subject to review by the Federal agency responsible for supervision of the financial safety and soundness of the Government sponsored enterprise, or by the Secretary of the Treasury with respect to Government sponsored enterprises that are not subject to financial supervision by such a Federal agency. The Federal agency or the Secretary of the Treasury, as the case may be, shall report at least annually to the President and the Congress on any transactions or undertakings which the agency or Secretary determines were carried out or made without authority of law. Such acts shall be null and void except to the extent that the Congress enacts legislation to authorize any such act.

SEC. 505. ANNUAL REPORT ON IMPACT OF BORROWING BY GOVERNMENT SPONSORED ENTERPRISES ON PUBLIC DEBT.

    (a) GENERAL REQUIREMENT- The Secretary of the Treasury shall annually prepare and submit to the Congress a report assessing the financial safety and soundness of the activities of all Government sponsored enterprises and the impact of the operations of such corporations on Federal borrowing.

    (b) ACCESS TO RELEVANT INFORMATION-

      (1) INFORMATION FROM GSES- Each Government sponsored enterprise shall--

        (A) provide full and prompt access to the Secretary to its books and records; and

        (B) promptly provide any other information requested by the Secretary.

      (2) INFORMATION FROM SUPERVISORY AGENCIES- In conducting the studies under this section, the Secretary of the Treasury may request information from, or the assistance of, any Federal department or agency authorized by law to supervise the activities of any Government sponsored enterprise.

      (3) CONFIDENTIALITY OF INFORMATION-

        (A) IN GENERAL- The Secretary of the Treasury shall determine and maintain the confidentiality of any book, record, or information made available under this subsection in a manner that the Secretary determines appropriate for the material submitted by the Government sponsored enterprise involved.

        (B) EXEMPTION FROM PUBLIC DISCLOSURE REQUIREMENTS- The Department of the Treasury shall be exempt from section 552 of title 5, United States Code, with respect to any book, record, or information made available under this subsection and determined by the Secretary to be confidential under subparagraph (A).

        (C) PENALTY FOR UNAUTHORIZED DISCLOSURE- Any officer or employee of the Department of the Treasury shall be subject to the penalties set forth in section 1906 of title 18, United States Code, if--

          (i) within the scope of employment, such officer or employee has possession of or access to any book, record, or information made available under this subsection and determined by the Secretary to be confidential under subparagraph (A); and

          (ii) such officer or employee discloses the material in any manner other than--

            (I) to an officer or employee of the Department of the Treasury; or

            (II) pursuant to the exception under section 1906 of title 18, United States Code.

    (c) ASSESSMENT OF RISK-

      (1) IN GENERAL- In assessing the financial safety and soundness of the activities of Government sponsored enterprises, and the impact of the activities of such enterprises on Federal borrowing, the Secretary of the Treasury shall quantify the risks associated with each Government sponsored enterprise. In quantifying such risks, the Secretary shall determine--

        (A) the volume and type of securities outstanding which are issued or guaranteed by each Government sponsored enterprise;

        (B) the capitalization of each Government sponsored enterprise; and

        (C) the degree of risk involved in the operations of each Government sponsored enterprise due to factors such as credit risk, interest rate risk, management and operations risk, and business risk.

      (2) PUBLICLY AVAILABLE INFORMATION- The Secretary shall also report on the quality and timeliness of information available to the public and the Federal Government concerning the extent and nature of the activities of Government sponsored enterprises and the financial risk associated with such activities.

    (d) ASSESSMENT OF IMPACT- In assessing the impact on Federal borrowing, the Secretary shall report upon the impact of the issuance or guarantee of securities by Government sponsored enterprises on--

      (1) the rate of interest and amount of discount offered on obligations issued by the Secretary each year; and

      (2) the marketability of such obligations.

    (e) DATE FOR SUBMISSION OF REPORT- The report required by subsection (a) shall be submitted to the Congress no later than January 1 of the first calendar year beginning after the date of the enactment of this section, and no later than each January 1 thereafter.

SEC. 506. AUDITS.

    (a) IN GENERAL- Each Government sponsored enterprise shall have an annual independent audit made of its financial statements by an independent public accountant in accordance with generally accepted auditing standards. In conducting an audit under this subsection, the independent public accountant shall determine and report on--

      (1) whether the financial statements of the Government sponsored enterprise are presented fairly in accordance with generally accepted accounting principles; and

      (2) each transaction or undertaking which the auditor believes was carried out or made without authority of law.

    (b) AUDIT BY COMPTROLLER GENERAL-

      (1) IN GENERAL- The programs, activities, receipts, expenditures, and financial transactions of each Government sponsored enterprise shall be subject to audit by the Comptroller General of the United States under such rules and regulations as may be prescribed by the Comptroller General. The representatives of the General Accounting Office shall--

        (A) have access to such books, accounts, financial records, reports, files, and such other papers, things, or property belonging to or in use by the GSE and necessary to facilitate the audit; and

        (B) be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians.

      (2) REPORT TO CONGRESS- A report on each such audit shall be submitted by the Comptroller General to the Congress. The GSE shall reimburse the General Accounting Office for the full cost of any such audit as billed therefor by the Comptroller General.

      (3) ACCESS TO INFORMATION- To carry out this subsection, the representatives of the General Accounting Office shall have access, upon request to the GSE or any auditor for an audit of the GSE under subsection (a), to any books, accounts, financial records, reports, flies, or other papers, things, or property belonging to or in use by the GSE and used in any such audit and to any papers, records, files, and reports of the auditor used in such an audit.

      (4) PROGRAM AUDITS- At least every 3 years the Comptroller General shall conduct program audits of each Government sponsored enterprise under this section. Each audit and report by the Comptroller General shall include specifically each transaction or undertaking which the Comptroller General believes was carried out or made without authority of law.

SEC. 507. SHAREHOLDER RIGHTS.

    To the extent consistent with Federal law, shareholders in an investor-owned Government sponsored enterprise shall have the rights relative to the GSE and its management that are accorded to shareholders under the Business Corporation Act of the District of Columbia.

SEC. 508. JURISDICTION.

    All securities issued or guaranteed by a Government sponsored enterprise shall be subject to the laws administered by the Securities and Exchange Commission.

SEC. 509. EQUITY SECURITIES.

    No equity securities issued by a Government sponsored enterprise shall be lawful investments for--

      (1) any institution with deposits or other liabilities insured or otherwise guaranteed by an agency of the Federal Government; or

      (2) any Government Sponsored Enterprise other than the Government sponsored enterprise that issues the equity securities.

SEC. 510. FEDERAL INVESTMENTS.

    No securities issued or guaranteed by a Government sponsored enterprise shall be lawful investments or accepted as security for any fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority and control of the United States or any officer or officer thereof.

SEC. 511. TAXATION.

    Each Government sponsored enterprise, including its activities, holdings and income, and income from securities issued or guaranteed by a Government sponsored enterprise, shall be subject to all taxation imposed by Federal, State, and local governments and taxing authorities to the same extent as other business organizations, and income from their securities, are taxed.

SEC. 512. REPORT TO THE CONGRESS.

    A Government sponsored enterprise shall submit an annual report to the Congress including--

      (1) a list including the name and address of each contractor, consultant, agent, or employee paid by the Government sponsored enterprise to engage in--

        (A) grassroots organizing or campaigning;

        (B) public relations, media consulting, or image advertising; or

        (C) lobbying, including the direct and indirect lobbying of the Congress;

      (2) an itemization of all costs associated with activities described in paragraph (1) whether incurred by the Government sponsored enterprise or by any of its contractors, consultants, agents, or employee listed under such paragraph, including entertainment expenses, travel expenses, advertising costs, salaries, billing rates and the total amount billed for services;

      (3) a description of any lobbying of the Congress or the executive branch by employees, board members, or officers of the Government sponsored enterprise;

      (4) a description of any effort by the Government sponsored enterprise or its agents to encourage others to lobby the Congress or the executive branch;

      (5) a list of all charitable donations paid by the Government sponsored enterprise on behalf of Members of Congress or members of the executive branch;

      (6) a list of the salaries and other compensation (including the present value of stock options) and benefits paid to the officers and board members of the Government sponsored enterprise; and

      (7) a list of all Government sponsored enterprise employees who have been employed by either the Congress or the Federal Government in the 5 years preceding the report, and such employees’ salary prior to being employed by the Government sponsored enterprise and the salary of each such employee.

TITLE VI--GOVERNMENT CORPORATION CONTROL ACT

SEC. 601. DEFINITIONS.

    (a) GOVERNMENT CORPORATION- Section 9101(1) of title 31, United States Code, is amended to read as follows:

      ‘(1) ‘Government corporation’ means a wholly owned Government corporation and a Government sponsored enterprise.’.

    (b) GOVERNMENT SPONSORED ENTERPRISE- Section 9101(2) of title 31, United States Code, is amended to read as follows:

      ‘(2) ‘Government sponsored enterprise’ means the Federal Home Loan Banks, the Farm Credit Banks, the Banks for Cooperatives of the Farm Credit System, and such other Government sponsored enterprises as the Secretary of the Treasury may designate from time to time.’.

    (c) WHOLLY OWNED GOVERNMENT CORPORATION- Section 9101(3) of title 31, United States Code, is amended by adding at the end:

        ‘(O) The National Railroad Passenger Corporation.

        ‘(P) The Federal Deposit Insurance Corporation.

        ‘(Q) The National Credit Union Administration Central Liquidity Facility.

        ‘(R) The Rural Telephone Bank.

        ‘(S) The Resolution Trust Corporation.’.

SEC. 602. AUDITS.

    Section 9105 of title 31, United States Code, is amended to read as follows:

‘Sec. 9105. Audits

    ‘(a) The programs, activities, receipts, expenditures and financial transactions of each wholly owned Government corporation shall be audited annually by the Comptroller General of the United States under such rules and regulations as may be prescribed by the Comptroller General. The representatives of the General Accounting Office shall have access to such books, accounts, financial records, reports, files and such other papers, things, or property belonging to or in use by the corporation and necessary to facilitate the audit, and they shall be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians. The representatives of the General Accounting Office shall have access, upon request to the corporation or any auditor for an audit of the corporation under this section, to any books, financial records, reports, files or other papers, things, or

property belonging to or in use by the corporation and used in any such audit and to papers, records, files, and reports of the auditor used in such an audit. In conducting such audit, the Comptroller General may make a contract, without regard to section 3709 of the Revised Statutes (41 U.S.C. 5), for professional services with a firm or organization for a temporary period or special purpose.

    ‘(b) The Comptroller General of the United States shall make a report to the Congress on each audit conducted under this section. The report to the Congress shall contain such comments and information as the Comptroller General determines necessary to inform the Congress of the financial operations and condition of the corporation, together with such recommendations as the Comptroller General determines advisable. The report shall also show specifically any program, expenditure, or other financial transaction or undertaking, observed, or reviewed in the course of the audit which, in the opinion of the Comptroller General, has been carried out or made without authority of law. A copy of each such report shall be furnished to the President, the Secretary of the Treasury, and to the corporation at the time submitted to the Congress.

    ‘(c) A Government corporation shall reimburse the Comptroller General of the United States for the cost of the audit as determined by the Comptroller General. Such reimbursement shall be credited to the account of the Comptroller General. An audit under this section is in place of an audit of the financial transactions of a Government corporation the Comptroller General is required to make in reporting to the Congress or the President under another law.’.

SEC. 603. FORMER MIXED-OWNERSHIP GOVERNMENT CORPORATIONS.

    Sections 9103-9105 of title 31, United States Code, shall not apply to wholly owned government corporations that formerly were designated mixed-ownership corporations under the Government Corporation Control Act, except as otherwise provided by law.

SEC. 604. ACCOUNTS AND OBLIGATIONS.

    (a) ACCOUNTS- Section 9107(c) of title 31, United States Code, is amended--

      (1) in paragraph (2) by striking ‘mixed-ownership Government corporation’ and inserting ‘Government sponsored enterprise’; and

      (2) in paragraph (3) by striking ‘Federal Intermediate Credit Banks, the Central Banks for Cooperatives, the Regional Banks for Cooperatives, or the Federal Land Banks’ and inserting ‘Government sponsored enterprises’.

    (b) OBLIGATIONS- Section 9108(d)(1) of title 31, United States Code, is amended by striking ‘mixed-ownership Government corporation’ and inserting ‘Government sponsored enterprise’.

TITLE VII--SEPARABILITY

SEC. 701. SEPARABILITY.

    If any provision of this Act or the application thereof to any person or circumstances is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances shall not be affected thereby.