Sec. 69.617  Schools and Libraries Corporation and Rural Health Care 
          Corporation.

    (a) Schools and Libraries and Rural Health Care Corporations. The 
association shall incorporate two unaffiliated corporations. The two 
corporations shall be not-for-profit, non-stock corporations 
incorporated in the state of Delaware. The corporations shall be 
designated the Schools and Libraries Corporation and the Rural Health 
Care Corporation. After incorporating the Schools and Libraries 
Corporation and the Rural Health Care Corporation, the association shall 
take such steps as are necessary to make the Corporations independent 
of, and unaffiliated with, the association and independent subsidiary. 
The association shall submit to the Commission for approval the proposed 
articles of incorporation, bylaws, and any documents necessary to 
incorporate the Schools and Libraries Corporation and Rural Health Care 
Corporation by August 1, 1997. The Schools and Libraries Corporation and 
Rural Health Care Corporation should continue to perform their 
designated functions, as described in Secs. 69.618 and 69.619, after the 
date on which the permanent Administrator is selected and commences 
operations.
    (b) Schools and Libraries Corporation's Board of Directors. The 
Board of Directors of the Schools and Libraries Corporation shall 
consist of seven directors and will be composed as follows:
    (1) The three directors representing eligible schools on the 
independent subsidiary's Board of Directors also shall serve on the 
Board of Directors of the Schools and Libraries Corporation;
    (2) The director representing eligible libraries on the independent 
subsidiary's Board of Directors also shall serve on the Board of 
Directors of the Schools and Libraries Corporation.
    (3) One director representing one of the categories of 
telecommunications service providers on the independent subsidiary's 
Board of Directors also shall serve on the Schools and Libraries 
Corporation's Board of Directors. The independent subsidiary's Board of 
Directors shall select the telecommunications service provider 
representative who will serve on the Schools and Libraries Corporation's 
Board of Directors within seven calendar days of the first meeting of 
the independent subsidiary's Board of Directors;
    (4) One independent director who does not represent schools, 
libraries, or service providers shall be selected by the Chairman of the 
Federal Communications Commission to serve on the

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Schools and Libraries Corporation's Board of Directors. The Chairman of 
the Federal Communications Commission will select such an independent 
director simultaneously with selection of the independent subsidiary's 
Board members.
    (5) The directors representing schools, libraries, and service 
providers and the independent director on the Schools and Libraries 
Corporation's Board of Directors shall submit to the Chairman of the 
Federal Communications Commission a candidate to serve as the Chief 
Executive Officer (CEO) of the Schools and Libraries Corporation. The 
chosen CEO shall serve on the Schools and Libraries Corporation's Board 
of Directors.
    (c) Rural Health Care Corporation's Board of Directors. The Board of 
Directors of the Rural Health Care Corporation shall consist of five 
directors and will be composed as follows:
    (1) The director representing rural health care providers on the 
independent subsidiary's Board of Directors also shall serve on the 
Rural Health Care Corporation's Board of Directors;
    (2) An additional director representing rural health care providers 
also shall serve on the Rural Health Care Corporation's Board of 
Directors. Interested parties shall submit nominations for the 
additional director representing rural health care providers 
simultaneously with submitting nominations for the independent 
subsidiary's Board of Directors, as described in Sec. 69.614(c). The 
Chairman of the Federal Communications Commission will select the 
additional rural health care provider representative simultaneously with 
the selection of the members of the independent subsidiary's Board of 
Directors.
    (3) One director representing one of the categories of 
telecommunications service providers on the independent subsidiary's 
Board of Directors also shall serve on the Rural Health Care 
Corporation's Board of Directors. The independent subsidiary's Board of 
Directors shall select the telecommunications service provider 
representative who will serve on the Rural Health Care Corporation's 
Board within seven calendar days of the first meeting of the independent 
subsidiary's Board of Directors;
    (4) One independent director who does not represent rural health 
care providers or service providers shall be selected by the Chairman of 
the Federal Communications Commission to serve on the Rural Health Care 
Corporation's Board of Directors. The Chairman will select, 
simultaneously with selection of the independent subsidiary's Board of 
Directors, the independent director to serve on the Rural Health Care 
Corporation's Board of Directors;
    (5) The directors representing rural health care providers and 
service providers and the independent director on the Rural Health Care 
Corporation's Board of Directors shall submit to the Chairman of the 
Federal Communications Commission a candidate to serve as the chief 
executive officer (CEO) of the Rural Health Care Corporation. The chosen 
CEO shall serve on the Rural Health Care Corporation's Board of 
Directors.
    (d) All of the Board members of the Schools and Libraries 
Corporation and Rural Health Care Corporation shall be appointed for 
two-year terms. Directors may be reappointed for subsequent terms 
pursuant to the appointment process used initially to select the 
Corporations' Boards of Directors described in Sec. 69.617 (b) and (c). 
In the event that a director vacates his or her seat prior to the 
completion of his or her term, the Corporation will notify the Common 
Carrier Bureau of such vacancy and a successor will be chosen pursuant 
to the initial nomination and appointment process described in 
Sec. 69.617(b) and (c). Removal of members from the Board of the Schools 
and Libraries Corporation or Rural Health Care Corporation may only 
occur with the approval of the Chairman of the Federal Communications 
Commission.
    (e) All Board of Directors meetings of the Rural Health Care 
Corporation and the Schools and Libraries Corporation shall be open to 
the public and held in Washington, D.C.
    (f) Each member of the Board of Directors of the Rural Health Care 
Corporation and Schools and Libraries Corporation shall be entitled to 
receive reimbursement for expenses directly

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incurred as a result of his or her participation on such Board of 
Directors.

[ 62 FR 41308 , Aug. 1, 1997]