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PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 357 SEC. 4042. GUARANTY AGENCY RESERVES. Section 422 of the Act (20 U.S.C. 1072) is amended by adding at the end the following new subsection: "(g) PRESERVATION AND RECOVERY OF GUARANTY AGENCY RESERVES.— "(1) AUTHORITY TO RECOVER FUNDS.—Notwithstanding any other provision of law, the reserve funds of the guaranty agen- cies, and any assets purchased with such reserve funds, regard- less of who holds or controls the reserves or assets, shcul be considered to be the property of the United States to be used in the operation of the program authorized by this part or the program authorized by part D of this title. However, the Secretaiy may not reauire uie return of all reserve funds of a guaranty agency to the Secretary unless the Secretary deter- mines that such return is in the best interest of the operation of the program authorized by this part or the program autiior- ized by part D of this title, or to ensure the proper maintenance of such agency's funds or assets or the orderly termination of the guaranty agency's operations and the liquidation of its assets. The reserves shall be maintained by each guaranty agency to pay program expenses and contingent liabilities, as authorized by tne Secretary, except that— **(A) the Secretary may direct a guaranty agency to return to the Secretary a portion of its reserve fund wnich the Secretary determines is unnecessary to pay the pro- gram expenses and contingent liabilities of the guaranty agency; "(B) the Secretary may direct the guaranty agency to require the return, to tne guaranty agency or to the Secretary, of any reserve funds or assets held by, or under the control of, any other entity, which the Secretary deter- mines are necessary to pay the program expenses and contingent liabilities of the guaranty agency, or which are required for the orderly termination of the guaranty agency's operations and the liquidation of ite assete; "(C) the Secretory ma^ direct a guaranty agency, or such agenc/s officers or directors, to cease any activities involving expenditure, use or transfer of the guaranty agency's reserve funds or assets which the Secretary deter- mines is a misapplication, misuse, or improper expenditure of such funds or assete; and **(D) any such determination under subpcu'agraph (A) Regulations. or (B) shall be based on stondards prescribed by regulations that are developed through negotiated rulemaking and that include procedures for administrative due process. "(2) TERMINATION PROVISIONS IN CONTRACTS.—(A) To ensure that the funds and assete of the guaranty agency are preserved, any contract with respect to tpe admmistration of a guaranty agency's reserve funds, or th6 administration of any assete purchased or acquired with the^ reserve funds of the guaranty agency, that is entered into or extended by the guaranty agencv, or any other party on behalf of or with the concurrence of tne guaranty agency, after the date of enactment of this subsection shall provide that the contract is terminable by the Secretory upon 30 days notice to the contracting parties if the Secretaiy detormines that such contract includes an impermissible transfer of the reserve funds or assete, or is