REDESIGNATION OF AND AMENDMENTS TO PART E.

SEC. 707. REDESIGNATION OF AND AMENDMENTS TO PART E. (a) Redesignation.— Part E of title VII of the Act (20 U.S.C. 1132f et seq.) is redesignated as part D. (b) Authority To Provide Direct Insurance to Higher Rated Institutions.— Section 752(c) of the Act (20 U.S.C. 1132f—1(c)) is amended by adding at the end the following new paragraph: “(5) Notwithstanding paragraph (1), the Corporation may issue primary insurance or guarantees covering the assets or obligations of institutions which are, without insurance or guarantee, listed by a nationally recognized statistical rating organization at or above the third highest rating of such organization, subject to all of the following conditions and limitations: “(A) The proposed transaction shall have been declined for coverage by all unaffiliated monoline insurers that are authorized to write financial guarantee insurance and that, in the previous year, provided primary insurance or guarantees on educational facility obligations. The Secretary shall publish by January 31 of each year a list of all such insurers. “(B) Within 2 business days of receiving complete documentation concerning a proposed transaction by an institution seeking insurance from the Corporation pursuant to this paragraph (5), an insurer shall offer to provide coverage or execute an affidavit of declination, or its failure to respond shall be deemed a declination. The institution seeking insurance from the Corporation shall file with the 106 STAT. 754Corporation the affidavits from all declining insurers, as well as an affidavit of the institution’s financial advisor specifically identifying the pertinent terms of the proposed transaction, the requested insurance coverage, and the date on which complete documentation concerning the proposed transaction was submitted to each insurer and certifying that such information was provided to each insurer that declined coverage. “(C) The proceeds of the assets or obligations insured or guaranteed by the Corporation pursuant to this paragraph shall be used exclusively for the renovation, repair, replacement, or construction of academic and educational facilities and shall not be used for the renovation, repair, replacement, or construction of athletic facilities. “(D) The aggregate par value of assets and obligations insured or guaranteed by the Corporation under this paragraph (5) shall not exceed— “(i) $100,000,000 per year during calendar years 1993, 1994, and 1995; or “(ii) $150,000,000 per year during calendar years 1996 and 1997. “(E) The aggregate dollar amount of transactions under this paragraph (5) shall not exceed— “(i) in calendar year 1993, 1994, or 1995, 10 percent of the aggregate dollar amount of assets and obligations directly covered by primary insurance or guarantees issued by the Corporation under this section in such year; or “(ii) in calendar year 1996 or 1997, 15 percent of the aggregate dollar amount of assets and obligations directly covered by primary insurance or guarantees issued by the Corporation under this section in such year”.