20 U.S.C. § 4357 — Federal endowment programs for Gallaudet University and the National Technical Institute for the Deaf

(a) (1) The Secretary^* and Gallaudet’s Board of Trustees may establish the Gallaudet University^* Federal Endowment Fund as a permanent endowment fund under this section to promote the University’s financial independence. They may enter into agreements necessary for that purpose. (2) The Secretary and the Board of Trustees or other governing body of the higher-education institution covered by the Secretary’s agreement under section 4332 may establish the National Technical Institute for the Deaf Federal Endowment Fund as a permanent endowment fund under this section to promote NTID’s financial independence. They may enter into agreements necessary for that purpose.

(b) (1) Consistent with this section, the Secretary must make payments to the funds established under subsection (a) from amounts appropriated under subsection (h) for the applicable fund. (2) Subject to available appropriations, the Secretary must pay each fund an amount equal to contributions made to that fund from non-Federal sources during the fiscal year in which the appropriations become available, excluding transfers from the institution’s other endowment funds.

(c) (1) Except as subsection (e) provides, Gallaudet and NTID^* must invest the Federal contribution to their respective fund’s corpus and income in instruments and securities offered through one or more cooperative service organizations of operating educational organizations under section 501(f) of title 26, or in low-risk instruments and securities in which a regulated insurance company may invest under the law of the State^* where the institution is located. (2) In managing the fund’s investments, the institution must use the judgment and care that, under the circumstances, a person of prudence, discretion, and intelligence would use in managing that person’s own business affairs. (3) Neither institution may invest its fund corpus or income in real estate or in instruments or securities issued by an organization in which an executive officer, a trustee of Gallaudet or the host institution, or a member of the advisory group established under section 4332 is a controlling shareholder, director, or owner within the meaning of Federal securities laws and other applicable laws. This section does not define “Federal securities laws” or “other applicable laws.” Neither institution may assign, hypothecate, encumber, or create a lien on the fund corpus without the Secretary’s specific written authorization.

(d) (1) Except as paragraph (3)(B) provides, neither institution may withdraw or spend any fund corpus. (2) (A) Each institution may withdraw or spend its fund income only for expenses necessary to operate that institution, including operations and maintenance, administration, academic and support personnel, construction^* and renovation, community and student services, technical assistance, and research. (B) Neither institution may use fund income for a commercial purpose. (C) Each institution must keep records of income generated by its fund during the prior fiscal year. (3) (A) Except as subparagraph (B) provides, each institution may annually withdraw or spend no more than 50 percent of the income generated by its fund during the current fiscal year. (B) The Secretary may allow an institution to withdraw or spend part of its corpus or more than 50 percent of its prior-fiscal-year income if the institution shows, to the Secretary’s satisfaction, that it is necessary because of (i) a financial emergency, such as pending insolvency or a temporary liquidity problem; (ii) a life-threatening situation caused by a natural disaster or arson; or (iii) another unusual occurrence or exigent circumstance.

(e) The corpus connected with a Federal payment, and its non-Federal match, is no longer subject to subsection (c)(1)’s investment limits after 10 fiscal years following the fiscal year in which the funds are matched. Income produced by that corpus after the tenth fiscal year is also no longer subject to those investment limits or subsection (d)(3)’s withdrawal and spending limits.

(f) After notice and an opportunity for a hearing, the Secretary may recover Federal payments if Gallaudet or NTID (1) withdraws or spends corpus or income inconsistently with this section; (2) fails to comply with this section’s investment standards and limits; or (3) fails to properly account to the Secretary for investment of, or spending from, corpus or income.

(g) In this section: (1) “Corpus,” for a Federal endowment fund, means Federal payments to the fund, non-Federal contributions, and appreciation from capital gains and reinvested income. (2) “Federal endowment fund” means a fund or tax-exempt foundation established and maintained under this section by Gallaudet or NTID to generate income supporting the institution involved. (3) “Income,” for a Federal endowment fund, means dividends and interest accruing from investments of the fund corpus. (4) “Institution involved” means Gallaudet or NTID, as applicable.

(h) (1) For Gallaudet, necessary sums are authorized to be appropriated for each fiscal year 2009 through 2014. (2) For NTID, necessary sums are authorized for each fiscal year 2009 through 2014. (3) Amounts appropriated under paragraph (1) or (2) remain available until expended.

(i) This section takes effect as if it had been included in this chapter when the chapter was enacted on August 4, 1986.