This subpart applies to each entity which applies for a research, research-training, or research-related grant or cooperative agreement under the Public Health Service (PHS) Act. It requires each such entity to establish uniform policies and procedures for investigating and reporting instances of alleged or apparent misconduct involving research or research training, applications for support of research or research training, or related research activities that are supported with funds made available under the PHS Act. This subpart does not supersede and is not intended to set up an alternative to established procedures for resolving fiscal improprieties, issues concerning the ethical treatment of human or animal subjects, or criminal matters.

As used in this subpart:

Act means the Public Health Service Act, as amended, (42 U.S.C. 201 et seq.).

Inquiry means information gathering and initial factfinding to determine whether an allegation or apparent instance of misconduct warrants an investigation.

Institution means the public or private entity or organization (including federal, state, and other agencies) that is applying for financial assistance from the PHS, e.g., grant or cooperative agreements, including continuation awards, whether competing or noncompeting. The organization assumes legal and financial accountability for the awarded funds and for the performance of the supported activities.

Investigation means the formal examination and evaluation of all relevant facts to determine if misconduct has occurred.

Misconduct or Misconduct in Science means fabrication, falsification, plagiarism, or other practices that seriously deviate from those that are commonly accepted within the scientific community for proposing, conducting, or reporting research. It does not include honest error or honest differences in interpretations or judgments of data.

OSI means the Office of Scientific Integrity, a component of the Office of the Director of the National Institutes for Health (NIH), which oversees the implementation of all PHS policies and procedures related to scientific misconduct; monitors the individual investigations into alleged or suspected scientific misconduct conducted by institutions that receive PHS funds for biomedical or behavioral research projects or programs; and conducts investigations as necessary.

OSIR means the Office of Scientific Integrity Review, a component of the Office of the Assistant Secretary for Health, which is responsible for establishing overall PHS policies and procedures for dealing with misconduct in science, overseeing the activities of PHS research agencies to ensure that these policies and procedures are implemented, and reviewing all final reports of investigations to assure that any findings and recommendations are sufficiently documented. The OSIR also makes final recommendations to the Assistant Secretary for Health on whether any sanctions should be imposed and, if so, what they should be in any case where scientific misconduct has been established.

PHS means the Public Health Service, an operating division of the Department of Health and Human Services (HHS). References to PHS include organizational units within the PHS that have delegated authority to award financial assistance to support scientific activities, e.g., Bureaus, Institutes, Divisions, Centers or Offices.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved may be delegated.

(a) Assurances. Each institution that applies for or receives assistance under the Act for any project or program which involves the conduct of biomedical or behavioral research must have an assurance satisfactory to the Secretary that the applicant:

(1) Has established an administrative process, that meets the requirements of this Subpart, for reviewing, investigating, and reporting allegations of misconduct in science in connection with PHS-sponsored biomedical and behavioral research conducted at the applicant institution or sponsored by the applicant; and

(2) Will comply with its own administrative process and the requirements of this Subpart.

(b) Annual Submission. An applicant or recipient institution shall make an annual submission to the OSI as follows:

(1) The institution's assurance shall be submitted to the OSI, on a form prescribed by the Secretary, as soon as possible after November 8, 1989, but no later than January 1, 1990, and updated annually therefter on a date specified by OSI. Copies of the form may be requested through the Director, OSI.

(2) An institution shall submit, along with its annual assurance, such aggregate information on allegations, inquiries, and investigations as the Secretary may prescribe.

(c) General Criteria. In general, an applicant institution will be considered to be in compliance with its assurance if it:

(1) Establishes, keeps current, and upon request provides the OSIR, the OSI, and other authorized Departmental officials the policies and procedures required by this subpart.

(2) Informs its scientific and administrative staff of the policies and procedures and the importance of compliance with those policies and procedures.

(3) Takes immediate and appropriate action as soon as misconduct on the part of employees or persons within the organization's control is suspected or alleged.

(4) Informs, in accordance with this subpart, and cooperates with the OSI with regard to each investigation of possible misconduct.

(d) Inquiries, Investigations, and Reporting—Specific Requirements. Each applicant's policies and procedures must provide for:

(1) Inquiring immediately into an allegation or other evidence of possible misconduct. An inquiry must be completed within 60 calendar days of its initiation unless circumstances clearly warrant a longer period. A written report shall be prepared that states what evidence was reviewed, summarizes relevant interviews, and includes the conclusions of the inquiry. The individual(s) against whom the allegation was made shall be given a copy of the report of inquiry. If they comment on that report, their comments may be made part of the record. If the inquiry takes longer than 60 days to complete, the record of the inquiry shall include documentation of the reasons for exceeding the 60-day period.

(2) Protecting, to the maximum extent possible, the privacy of those who in good faith report apparent misconduct.

(3) Affording the affected individual(s) confidential treatment to the maximum extent possible, a prompt and thorough investigation, and an opportunity to comment on allegations and findings of the inquiry and/or the investigation.

(4) Notifying the Director, OSI, in accordance with § 50.104(a) when, on the basis of the initial inquiry, the institution determines that an investigation is warranted, or prior to the decision to initiate an investigation if the conditions listed in § 50.104(b) exist.

(5) Notifying the OSI within 24 hours of obtaining any reasonable indication of possible criminal violations, so that the OSI may then immediately notify the Department's Office of Inspector General.

(6) Maintaining sufficiently detailed documentation of inquiries to permit a later assessment of the reasons for determining that an investigation was not warranted, if necessary. Such records shall be maintained in a secure manner for a period of at least three years after the termination of the inquiry, and shall, upon request, be provided to authorized HHS personnel.

(7) Undertaking an investigation within 30 days of the completion of the inquiry, if findings from that inquiry provide sufficient basis for conducting an investigation. The investigation normally will include examination of all documentation, including but not necessarily limited to relevant research data and proposals, publications, correspondence, and memoranda of telephone calls. Whenever possible, interviews should be conducted of all individuals involved either in making the allegation or against whom the allegation is made, as well as other individuals who might have information regarding key aspects of the allegations; complete summaries of these interviews should be prepared, provided to the interviewed party for comment or revision, and included as part of the investigatory file.

(8) Securing necessary and appropriate expertise to carry out a thorough and authoritative evaluation of the relevant evidence in any inquiry or investigation.

(9) Taking precautions against real or apparent conflicts of interest on the part of those involved in the inquiry or investigation.

(10) Preparing and maintaining the documentation to substantiate the investigation's findings. This documentation is to be made available to the Director, OSI, who will decide whether that Office will either proceed with its own investigation or will act on the institution's findings.

(11) Taking interim administrative actions, as appropriate, to protect Federal funds and insure that the purposes of the Federal financial assistance are carried out.

(12) Keeping the OSI apprised of any developments during the course of the investigation which disclose facts that may affect current or potential Department of Health and Human Services funding for the individual(s) under investigation or that the PHS needs to know to ensure appropriate use of Federal funds and otherwise protect the public interest.

(13) Undertaking diligent efforts, as appropriate, to restore the reputations of persons alleged to have engaged in misconduct when allegations are not confirmed, and also undertaking diligent efforts to protect the positions and reputations of those persons who, in good faith, make allegations.

(14) Imposing appropriate sanctions on individuals when the allegation of misconduct has been substantiated.

(15) Notifying the OSI of the final outcome of the investigation.

(a)(1) An institution's decision to initiate an investigation must be reported in writing to the Director, OSI, on or before the date the investigation begins. At a minimum, the notification should include the name of the person(s) against whom the allegations have been made, the general nature of the allegation, and the PHS application or grant number(s) involved. Information provided through the notification will be held in confidence to the extent permitted by law, will not be disclosed as part of the peer review and Advisory Committee review processes, but may be used by the Secretary in making decisions about the award or continuation of funding.

(2) An investigation should ordinarily be completed within 120 days of its initiation. This includes conducting the investigation, preparing the report of findings, making that report available for comment by the subjects of the investigation, and submitting the report to the OSI. If they can be identified, the person(s) who raised the allegation should be provided with those portions of the report that address their role and opinions in the investigation.

(3) Institutions are expected to carry their investigations through to completion, and to pursue diligently all significant issues. If an institution plans to terminate an inquiry or investigation for any reason without completing all relevant requirements under § 50.103(d), a report of such planned termination, including a description of the reasons for such termination, shall be made to OSI, which will then decide whether further investigation should be undertaken.

(4) The final report submitted to the OSI must describe the policies and procedures under which the investigation was conducted, how and from whom information was obtained relevant to the investigation, the findings, and the basis for the findings, and include the actual text or an accurate summary of the views of any individual(s) found to have engaged in misconduct, as well as a description of any sanctions taken by the institution.

(5) If the institution determines that it will not be able to complete the investigation in 120 days, it must submit to the OSI a written request for an extension and an explanation for the delay that includes an interim report on the progress to date and an estimate for the date of completion of the report and other necessary steps. Any consideration for an extension must balance the need for a thorough and rigorous examination of the facts versus the interests of the subject(s) of the investigation and the PHS in a timely resolution of the matter. If the request is granted, the institution must file periodic progress reports as requested by the OSI. If satisfactory progress is not made in the institution's investigation, the OSI may undertake an investigation of its own.

(6) Upon receipt of the final report of investigation and supporting materials, the OSI will review the information in order to determine whether the investigation has been performed in a timely manner and with sufficient objectivity, thoroughness and competence. The OSI may then request clarification or additional information and, if necessary, perform its own investigation. While primary responsibility for the conduct of investigations and inquiries lies with the institution, the Department reserves the right to perform its own investigation at any time prior to, during, or following an institution's investigation.

(7) In addition to sanctions that the institution may decide to impose, the Department also may impose sanctions of its own upon investigators or institutions based upon authorities it possesses or may possess, if such action seems appropriate.

(b) The institution is responsible for notifying the OSI if it ascertains at any stage of the inquiry or investigation, that any of the following conditions exist:

(1) There is an immediate health hazard involved;

(2) There is an immediate need to protect Federal funds or equipment;

(3) There is an immediate need to protect the interests of the person(s) making the allegations or of the individual(s) who is the subject of the allegations as well as his/her co-investigators and associates, if any;

(4) It is probable that the alleged incident is going to be reported publicly.

(5) There is a reasonable indication of possible criminal violation. In that instance, the institution must inform OSI within 24 hours of obtaining that information. OSI will immediately notify the Office of the Inspector General.

Institutions shall foster a research environment that discourages misconduct in all research and that deals forthrightly with possible misconduct associated with research for which PHS funds have been provided or requested. An institution's failure to comply with its assurance and the requirements of this subpart may result in enforcement action against the institution, including loss of funding, and may lead to the OSI's conducting its own investigation.

The provisions of this subpart are applicable to programs or projects for health services which are supported in whole or in part by Federal financial assistance, whether by grant or contract, administered by the Public Health Service.

As used in this subpart:

Arrange for means to make arrangements (other than mere referral of an individual to, or the mere making of an appointment for him or her with, another health care provider) for the performance of a medical procedure on an individual by a health care provider other than the program or project.

Hysterectomy means a medical procedure or operation for the purpose of removing the uterus.

Institutionalized individual means an individual who is (1) involuntarily confined or detained, under a civil or criminal statute, in a correctional or rehabilitative facility, including a mental hospital or other facility for the care and treatment of mental illness, or (2) confined, under a voluntary commitment, in a mental hospital or other facility for the care and treatment of mental illness.

Mentally incompetent individual means an individual who has been declared mentally incompetent by a Federal, State, or local court of competent jurisdiction for any purpose unless he or she has been declared competent for purposes which include the ability to consent to sterilization.

Public Health Service means the Office of the Assistant Secretary for Health, Health Resources and Services Administration, National Institutes of Health, Centers for Disease Control, Alcohol, Drug Abuse and Mental Health Administration and all of their constituent agencies.

The Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

Sterilization means any medical procedure, treatment, or operation for the purpose of rendering an individual permanently incapable of reproducing.

Programs or projects to which this subpart applies shall perform or arrange for the performance of sterilization of an individual only if the following requirements have been met:

(a) The individual is at least 21 years old at the time consent is obtained.

(b) The individual is not a mentally incompetent individual.

(c) The individual has voluntarily given his or her informed consent in accordance with the procedures of § 50.204 of this subpart.

(d) At least 30 days but not more than 180 days have passed between the date of informed consent and the date of the sterilization, except in the case of premature delivery or emergency abdominal surgery. An individual may consent to be sterilized at the time of premature delivery or emergency abdominal surgery, if at least 72 hours have passed after he or she gave informed consent to sterilization. In the case of premature delivery, the informed consent must have been given at least 30 days before the expected date of delivery.

Informed consent does not exist unless a consent form is completed voluntarily and in accordance with all the requirements of this section and § 50.205 of this subpart.

(a) A person who obtains informed consent for a sterilization procedure must offer to answer any questions the individual to be sterilized may have concerning the procedure, provide a copy of the consent form, and provide orally all of the following information or advice to the individual who is to be sterilized:

(1) Advice that the individual is free to withhold or withdraw consent to the procedure any time before the sterilization without affecting his or her right to future care or treatment and without loss or withdrawal of any federally funded program benefits to which the individual might be otherwise entitled:

(2) A description of available alternative methods of family planning and birth control;

(3) Advice that the sterilization procedure is considered to be irreversible;

(4) A thorough explanation of the specific sterilization procedure to be performed;

(5) A full description of the discomforts and risks that may accompany or follow the performing of the procedure, including an explanation of the type and possible effects of any anesthetic to be used;

(6) A full description of the benefits or advantages that may be expected as a result of the sterilization; and

(7) Advice that the sterilization will not be performed for at least 30 days except under the circumstances specified in § 50.203(d) of this subpart.

(b) An interpreter must be provided to assist the individual to be sterilized if he or she does not understand the language used on the consent form or the language used by the person obtaining the consent.

(c) Suitable arrangements must be made to insure that the information specified in paragraph (a) of this section is effectively communicated to any individual to be sterilized who is blind, deaf or otherwise handicapped.

(d) A witness chosen by the individual to be sterilized may be present when consent is obtained.

(e) Informed consent may not be obtained while the individual to be sterilized is:

(1) In labor or childbirth;

(2) Seeking to obtain or obtaining an abortion; or

(3) Under the influence of alcohol or other substances that affect the individual's state of awareness.

(f) Any requirement of State and local law for obtaining consent, except one of spousal consent, must be followed.

(a) Required consent form. The consent form appended to this subpart or another consent form approved by the Secretary must be used.

(b) Required signatures. The consent form must be signed and dated by:

(1) The individual to be sterilized; and

(2) The interpreter, if one is provided; and

(3) The person who obtains the consent; and

(4) The physician who will perform the sterilization procedure.

(c) Required certifications. (1) The person obtaining the consent must certify by signing the consent form that:

(i) Before the individual to be sterilized signed the consent form, he or she advised the individual to be sterilized that no Federal benefits may be withdrawn because of the decision not to be sterilized,

(ii) He or she explained orally the requirements for informed consent as set forth on the consent form, and

(iii) To the best of his or her knowledge and belief, the individual to be sterilized appeared mentally competent and knowingly and voluntarily consented to be sterilized.

(2) The physician performing the sterilization must certify by signing the consent form, that:

(i) Shortly before the performance of the sterilization, he or she advised the individual to be sterilized that no Federal benefits may be withdrawn because of the decision not to be sterilized,

(ii) He or she explained orally the requirements for informed consent as set forth on the consent form, and

(iii) To the best of his or her knowledge and belief, the individual to be sterilized appeared mentally competent and knowingly and voluntarily consented to be sterilized. Except in the case of premature delivery or emergency abdominal surgery, the physician must further certify that at least 30 days have passed between the date of the individual's signature on the consent form and the date upon which the sterilization was performed. If premature delivery occurs or emergency abdominal surgery is required within the 30-day period, the physician must certify that the sterilization was performed less than 30 days but not less than 72 hours after the date of the individual's signature on the consent form because of premature delivery or emergency abdominal surgery, as applicable. In the case of premature delivery, the physician must also state the expected date of delivery. In the case of emergency abdominal surgery, the physician must describe the emergency.

(3) If an interpreter is provided, the interpreter must certify that he or she translated the information and advice presented orally, read the consent form and explained its contents and to the best of the interpreter's knowledge and belief, the individual to be sterilized understood what the interpreter told him or her.

Programs or projects to which this subpart applies shall not perform or arrange for the performance of a sterilization of any mentally incompetent individual or institutionalized individual.

(a) Programs or projects to which this subpart applies shall not perform or arrange for the performance of any hysterectomy solely for the purpose of rendering an individual permanently incapable of reproducing or where, if there is more than one purpose to the procedure, the hysterectomy would not be performed but for the purpose of rendering the individual permanently incapable of reproducing.

(b) Except as provided in paragraph (c) of this section, programs or projects to which this subpart applies may perform or arrange for the performance of a hysterectomy not covered by paragraph (a) of this section only if:

(1) The person who secures the authorization to perform the hysterectomy has informed the individual and her representative, if any, orally and in writing, that the hysterectomy will make her permanently incapable of reproducing; and

(2) The individual or her representative, if any, has signed a written acknowledgment of receipt of that information.

(c)(1) A program or project is not required to follow the procedures of paragraph (b) of this section if either of the following circumstances exists:

(i) The individual is already sterile at the time of the hysterectomy.

(ii) The individual requires a hysterectomy because of a life-threatening emergency in which the physician determines that prior acknowledgment is not possible.

(2) If the procedures of paragraph (b) of this section are not followed because one or more of the circumstances of paragraph (c)(1) exist, the physician who performs the hysterectomy must certify in writing:

(i) That the woman was already sterile, stating the cause of that sterility; or

(ii) That the hysterectomy was performed under a life-threatening emergency situation in which he or she determined prior acknowledgment was not possible. He or she must also include a description of the nature of the emergency.

(a) A program or project must, with respect to any sterilization procedure or hysterectomy it performs or arranges, meet all requirements of this subpart.

(b) The program or project shall maintain sufficient records and documentation to assure compliance with these regulations, and must retain such data for at least 3 years.

(c) The program or project shall submit other reports as required and when requested by the Secretary.

(a) Federal financial assistance adminstered by the Public Health Service may not be used for expenditures for sterilization procedures unless the consent form appended to this section or another form approved by the Secretary is used.

(b) A program or project shall not use Federal financial assistance for any sterilization or hysterectomy without first receiving documentation showing that the requirements of this subpart have been met. Documentation includes consent forms, and as applicable, either acknowledgments of receipt of hysterectomy information or certification of an exception for hysterectomies.

The Secretary will request public comment on the operation of the provisions of this subpart not later than 3 years after their effective date.

The provisions of this subpart are applicable to programs or projects for health services which are supported in whole or in part by Federal financial assistance, whether by grant or contract, appropriated to the Department of Health and Human Services and administered by the Public Health Service.

As used in this subpart: (a) Law enforcement agency means an agency, or any part thereof, charged under applicable law with enforcement of the general penal statutes of the United States, or of any State or local jurisdiction.

(b) Medical procedures performed upon a victim of rape or incest means any medical service, including an abortion, performed for the purpose of preventing or terminating a pregnancy arising out of an incident of rape or incest.

(c) Physician means a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the State in which he or she practices.

(d) Public health service means: (1) An agency of the United States or of a State or local government, that provides health or medical services; and

(2) A rural health clinic, as defined under section 1(d)(aa)(2) of Pub. L. 95-210, 91 Stat. 1485; except that any agency or facility whose principal function is the performance of abortions is specifically excluded from this definition.

Federal financial participation is not available for the performance of an abortion in programs or projects to which this subpart applies except under circumstances described in § 50.304 or § 50.306.

Federal financial participation is available in expenditures for an abortion when a physician has found, and so certified in writing to the program or project, that on the basis of his/her professional judgment, the life of the mother would be endangered if the fetus were carried to term. The certification must contain the name and address of the patient.

Federal financial participation is available in expenditures for medical procedures performed upon a victim of rape or incest if the program or proj-ect has received signed documentation from a law enforcement agency or public health service stating:

(a) That the person upon whom the medical procedure was performed was reported to have been the victim of an incident of rape or incest;

(b) The date on which the incident occurred;

(c) The date on which the report was made, which must have been within 60 days of the date on which the incident occurred;

(d) The name and address of the victim and the name and address of the person making the report (if different from the victim); and

(e) That the report included the signature of the person who reported the incident.

Federal financial participation is unavailable for the performance of abortions or other medical procedures otherwise provided for under §§ 50.304 and 50.306 if the program or project has paid without first having received the certifications and documentation specified in those sections.

Federal financial participation is available with respect to the cost of drugs or devices to prevent implantation of the fertilized ovum, and for medical procedures necessary for the termination of an ectopic pregnancy.

Programs or projects to which this subpart applies must maintain copies of the certifications and documentation specified in §§ 50.304 and 50.306 for three years pursuant to the retention and custodial requirements for rec-ords at 45 CFR 74.20 et seq.

Information in the records or in the possession of programs or projects which is acquired in connection with the requirements of this subpart may not be disclosed in a form which permits the identification of an individual without the individual's consent except as may be necessary for the health of the individual or as may be necessary for the Secretary to monitor the activities of those programs or projects. In any event, any disclosure shall be subject to appropriate safeguards which will minimize the likelihood of disclosures of personal information in identifiable form.

This subpart establishes an informal procedure for the resolution of certain postaward grant and cooperative agreement disputes within the agencies and offices identified in § 50.402.

This subpart applies to all grant and cooperative agreement programs, except block grants, which are administered by the National Institutes of Health; the Health Resources and Services Administration; the Centers for Disease Control and Prevention; the Agency for Toxic Substances and Disease Registry; the Food and Drug Administration; and the Office of the Assistant Secretary for Public Health and Science. For purposes of this regulation, the entities are hereinafter referred to as “agencies.”

The Secretary of Health and Human Services has established a Departmental Appeals Board for the purpose of providing a fair and flexible process for the appeal of written final decisions involving certain grant and cooperative agreement programs administered by constituent agencies of the Department. The regulatory provision which establishes the circumstances under which the Board will accept an appeal (45 CFR 16.3) provides, among other things, that the appellant must have exhausted any preliminary appeal process required by regulation before a formal appeal to the Departmental Board will be allowed. This subpart provides such an informal preliminary procedure for resolution of disputes in order to preclude submission of cases to the Departmental Appeals Board before an agency identified in § 50.402 has had an opportunity to review decisions of its officials and to settle disputes with grantees.

(a) These procedures are applicable to the following adverse determinations under discretionary project grants and cooperative agreements (both referred to in this subpart as grants) issued by the agencies identified at § 50.402;

(1) Termination, in whole or in part, of a grant for failure of the grantee to carry out its approved project in accordance with the applicable law and the terms and conditions of such assistance or for failure of the grantee otherwise to comply with any law, regulation, assurance, term, or condition applicable to the grant.

(2) A determination that an expenditure not allowable under the grant has been charged to the grant or that the grantee has otherwise failed to discharge its obligation to account for grant funds.

(3) A determination that a grant is void.

(4) A denial of a noncompeting continuation award under the project period system of funding where the denial is for failure to comply with the terms of a previous award.

(b) A determination subject to this subpart may not be reviewed by the review committee described in § 50.405 unless an officer or employee of the agency has notified the grantee in writing of the adverse determination. The notification must set forth the reasons for the determination in sufficient detail to enable the grantee to respond and must inform the grantee of the opportunity for review under this subpart.

The head of the agency, or his or her designee, shall appoint review committees to review adverse determinations made by officials for programs under their jurisdiction. A minimum of three employees shall be appointed (one of whom shall be designated as chairperson) either on an ad hoc, case-by-case basis, or as regular members of review committees for such terms as may be designated. None of the members of the review committee reviewing any given appeal may be from the office of the responsible official whose adverse determination is being appealed (e.g., project officer, grants specialist, program manager, grants management officer).

(a) A grantee with respect to whom an adverse determination described in § 50.404(a) above has been made and who desires a review of that determination must submit a request for such review to the head of the appropriate agency or his or her designee no later than 30 days after the written notification of the determination is received, except that if the grantee shows good cause why an extension of time should be granted, the head of the appropriate agency or his or her designee may grant an extension of time.

(b) The request for review must include a copy of the adverse determination, must identify the issue(s) in dispute, and must contain a full statement of the grantee's position with respect to such issue(s) and the pertinent facts and reasons in support of the grantee's position. In addition to the required written statement, the grantee shall provide copies of any documents supporting its claim.

(c) When a request for review has been filed under this subpart with respect to an adverse determination, no action may be taken by the awarding agency pursuant to such determination until the request has been disposed of, except that the filing of the request shall not affect any authority which the agency may have to suspend assistance or otherwise to withhold or defer payments under the grant during proceedings under this subpart. This paragraph does not require the awarding agency to provide continuation funding during the appeal process to a grantee whose noncompeting continuation award has been denied.

(d) Upon receipt of a request for review, the head of the agency or his or her designee will make a decision as to whether the dispute is reviewable under this subpart and will promptly notify the grantee and the office responsible for the adverse determination of this decision. If the head of the agency or his or her designee determines that the dispute is reviewable, he or she will forward the matter to the review committee appointed under § 50.405.

(e) The agency involved will provide the review committee appointed under § 50.405 with copies of all relevant background materials (including applications(s), award(s), summary statement(s), and correspondence) and any additional pertinent information available. These materials must be tabbed and organized chronologically and accompanied by an indexed list identifying each document.

(f) The grantee shall be given an opportunity to provide the review committee with additional statements and documentation not provided in the request for review described in paragraph (b) of this section. This additional submission, which must be organized and indexed as indicated under paragraph (e) of this section, should provide only material that is relevant to the review committee's deliberation of the issues in the case.

(g) The review committee may, at its discretion, invite the grantee and/or the agency staff to discuss the pertinent issues with the committee and to submit such additional information as the committee deems appropriate.

(h) Based on its review, the review committee will prepare a written decision to be signed by the chairperson and each of the other committee members. The review committee shall send the written decision with a transmittal letter to the grantee and shall send a copy of both to the official responsible for the adverse determination. If the decision is adverse to the grantee's position, the transmittal letter must state the grantee's right to appeal to the Departmental Appeals Board under 45 CFR part 16.

This subpart is applicable to programs or projects for health services which are supported in whole or in part by Federal financial assistance, whether by grant or contract, administered by the Public Health Service. It applies to Federal funds and to non-Federal funds which are required to be expended as a condition to receiving Federal funds under such programs or projects.

As used in this subpart:

(a) Public Health Service means the Office of the Assistant Secretary for Health, Health Resources and Services Administration, National Institutes of Health, Centers for Disease Control, Alcohol, Drug Abuse and Mental Health Administration, Food and Drug Administration, and all of their constituent agencies.

(b) Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(c) Program funds means (1) Federal funds provided through grant or contract to support a program or proj-ect covered by § 50.501, and (2) any non-Federal funds that are required as a condition of such grant or contract to be expended to carry out such program or project.

(d) Provider means one who furnishes medical or pharmaceutical services or supplies for which program funds may be expended under any of the programs or projects described in § 50.501.

(e) Acquisition cost means the price generally and currently paid by providers for a drug marketed or sold by a particular formulator or labeler in the package size of drug most frequently purchased by providers, as determined by the Secretary on the basis of drug price information furnished by the Department.

It is the policy of the Secretary that program funds which are utilized for the acquisition of drugs be expended in the most economical manner feasible. In furtherance of this policy, the Secretary has established, in 45 CFR part 19, a procedure for determining the Maximum Allowable Cost for drugs which are purchased with program funds.

(a) The maximum amount which may be expended from program funds for the acquisition of any drug shall be the lowest of

(1) The maximum allowable cost (MAC) of the drug, if any, established in accordance with 45 CFR part 19, plus a dispensing fee determined by the Secretary in accordance with paragraph (b) of this section, to be reasonable;

(2) The acquisition cost of the drug plus a dispensing fee determined by the Secretary, in accordance with paragraph (b) of this section, to be reasonable; or

(3) The provider's usual and customary charge to the public for the drug; Provided, That the MAC established for any drug shall not apply to a brand of that drug prescribed for a patient which the prescriber has certified, in accordance with paragraph (c) of this section, is medically necessary for that patient; And Provided further, That where compensation for drug dispensing is included in other costs allowable under the applicable program statute and regulations, the terms and conditions of the grant or contract, and the applicable cost principles prescribed in 45 CFR part 74, no separate dispensing fee will be recognized.

(b) In determining whether a dispensing fee is reasonable, the Secretary will take into account:

(1) Cost components such as overhead, professional services, and profits,

(2) Payment practices of third-party payment organizations, including other Federal programs such as titles XVIII and XIX of the Social Security Act; and

(3) Any surveys by States, universities or others of costs of pharmacy operations and the fees charged in the particular area.

(c) A certification by a prescriber, pursuant to paragraph (a) of this section, that a brand of drug is medically necessary for a particular patient shall be in the prescriber's own handwriting, in such form and manner as the Secretary may prescribe. An example of an acceptable certification is the notation “brand necessary”. A procedure for checking a box on a form will not constitute an acceptable certification.

This subpart promotes objectivity in research by establishing standards to ensure there is no reasonable expectation that the design, conduct, or reporting of research funded under PHS grants or cooperative agreements will be biased by any conflicting financial interest of an Investigator.

This subpart is applicable to each Institution that applies for PHS grants or cooperative agreements for research and, through the implementation of this subpart by each Institution, to each Investigator participating in such research (see § 50.604(a)); provided, that this subpart does not apply to SBIR Program Phase I applications. In those few cases where an individual, rather than an institution, is an applicant for PHS grants or cooperative agreements for research, PHS Awarding Components will make case-by-case determinations on the steps to be taken to ensure that the design, conduct, and reporting of the research will not be biased by any conflicting financial interest of the individual.

As used in this subpart:

HHS means the United States Department of Health and Human Services, and any components of the Department to which the authority involved may be delegated.

Institution means any domestic or foreign, public or private, entity or organization (excluding a Federal agency).

Investigator means the principal investigator and any other person who is responsible for the design, conduct, or reporting of research funded by PHS, or proposed for such funding. For purposes of the requirements of this subpart relating to financial interests, “Investigator” includes the Investigator's spouse and dependent children.

PHS means the Public Health Service, an operating division of the U.S. Department of Health and Human Services, and any components of the PHS to which the authority involved may be delegated.

PHS Awarding Component means the organizational unit of the PHS that funds the research that is subject to this subpart.

Public Health Service Act or PHS Act means the statute codified at 42 U.S.C. 201 et seq.

Research means a systematic investigation designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research. The term encompasses basic and applied research and product development. As used in this subpart, the term includes any such activity for which research funding is available from a PHS Awarding Component through a grant or cooperative agreement, whether authorized under the PHS Act or other statutory authority.

Significant Financial Interest means anything of monetary value, including but not limited to, salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights and royalties from such rights). The term does not include:

(1) Salary, royalties, or other remuneration from the applicant institution;

(2) Any ownership interests in the institution, if the institution is an applicant under the SBIR Program;

(3) Income from seminars, lectures, or teaching engagements sponsored by public or nonprofit entities;

(4) Income from service on advisory committees or review panels for public or nonprofit entities;

(5) An equity interest that when aggregated for the Investigator and the Investigator's spouse and dependent children, meets both of the following tests: Does not exceed $10,000 in value as determined through reference to public prices or other reasonable measures of fair market value, and does not represent more than a five percent ownership interest in any single entity; or

(6) Salary, royalties or other payments that when aggregated for the Investigator and the Investigator's spouse and dependent children over the next twelve months, are not expected to exceed $10,000.

Small Business Innovation Research (SBIR) Program means the extramural research program for small business that is established by the Awarding Components of the Public Health Service and certain other Federal agencies under Pub. L. 97-219, the Small Business Innovation Development Act, as amended. For purposes of this subpart, the term SBIR Program includes the Small Business Technology Transfer (STTR) Program, which was established by Pub. L. 102-564.

(a) The designated official(s) must: Review all financial disclosures; and determine whether a conflict of interest exists and, if so, determine what actions should be taken by the institution to manage, reduce or eliminate such conflict of interest. A conflict of interest exists when the designated official(s) reasonably determines that a Significant Financial Interest could directly and significantly affect the design, conduct, or reporting of the PHS-funded research. Examples of conditions or restrictions that might be imposed to manage conflicts of interest include, but are not limited to:

(1) Public disclosure of significant financial interests;

(2) Monitoring of research by independent reviewers;

(3) Modification of the research plan;

(4) Disqualification from participation in all or a portion of the research funded by the PHS;

(5) Divestiture of significant financial interests; or

(6) Severance of relationships that create actual or potential conflicts.

(b) In addition to the types of conflicting financial interests described in this paragraph that must be managed, reduced, or eliminated, an Institution may require the management of other conflicting financial interests, as the Institution deems appropriate.

(a) If the failure of an Investigator to comply with the conflict of interest policy of the Institution has biased the design, conduct, or reporting of the PHS-funded research, the Institution must promptly notify the PHS Awarding Component of the corrective action taken or to be taken. The PHS Awarding Component will consider the situation and, as necessary, take appropriate action, or refer the matter to the Institution for further action, which may include directions to the Institution on how to maintain appropriate objectivity in the funded project.

(b) The HHS may at any time inquire into the Institutional procedures and actions regarding conflicting financial interests in PHS-funded research, including a requirement for submission of, or review on site, all records pertinent to compliance with this subpart. To the extent permitted by law, HHS will maintain the confidentiality of all records of financial interests. On the basis of its review of records and/or other information that may be available, the PHS Awarding Component may decide that a particular conflict of interest will bias the objectivity of the PHS-funded research to such an extent that further corrective action is needed or that the Institution has not managed, reduced, or eliminated the conflict of interest in accordance with this subpart. The PHS Awarding Component may determine that suspension of funding under 45 CFR 74.62 is necessary until the matter is resolved.

(c) In any case in which the HHS determines that a PHS-funded project of clinical research whose purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment has been designed, conducted, or reported by an Investigator with a conflicting interest that was not disclosed or managed as required by this subpart, the Institution must require the Investigator(s) involved to disclose the conflicting interest in each public presentation of the results of the research.

Several other regulations and policies apply to this subpart.

They include, but are not necessarily limited to:

(a) An eligible P&A system should work cooperatively with existing advocacy agencies and groups and, where appropriate, consider entering into contracts for protection and advocacy services with organizations already working on behalf of individuals with metal illness. Special consideration should be given to contracting for the services of groups run by individuals who have received or are receiving mental health services or by family members of such individuals.

(b) An eligible P&A system may contract for the operation of all or part of its program with another public or private nonprofit organization with demonstrated experience in working with individuals with mental illness provided that:

(1) Any organization that will operate the full program meets the requirements of section 104(a)(1), 105 and 111 of the Act (42 U.S.C. 10804(a)(1), 10805 and 10821) and has the capacity to perform protection and advocacy activities throughout the State;

(2) The eligible P&A system institutes oversight and monitoring procedures which ensure that this system will be able to meet all applicable terms, conditions and obligations of the Federal grant;

(3) The eligible P&A system and the contractor organization enter into a written agreement that includes at least the following:

(i) A description of the protection and advocacy services to be provided;

(ii) The type of personnel, their qualifications and training;

(iii) The methods to be used;

(iv) A timetable for performance;

(v) A budget;

(vi) Assurances that the contractor will meet all applicable terms and conditions of the grant;

(vii) Assurances that the contractor has adequate management and fiscal systems in place, including insurance coverage, if appropriate:

(viii) Assurances that the contractor's staff is trained to provide advocacy services to and conduct full investigations on behalf of individuals with mental illness; and

(ix) Assurances that the contractor staff is trained to work with family members of clients served by the P&A system where the clients are:

(A) Minors;

(B) Legally competent and choose to involve the family member; or,

(C) Legally incompetent and the legal guardians, conservators or other legal representatives are family members.

(a) Each P&A system shall have a governing authority responsible for its planning, designing, implementing and functioning. It shall, jointly with the advisory council, annually establish program priorities and policies.

(b) If the P&A system is organized with a multi-member governing board:

(1) Each P&A system shall establish policies and procedures for the selection of its governing board members and for the board evaluation of the P&A system director. The terms of board members shall be staggered and for 4 years except that any member appointed to fill a vacancy for an unexpired term shall serve for the remainder of such term. A member who has been appointed for a term of 4 years may not be reappointed to the governing board during the 2-year period beginning on the date on which such 4-year term expired.

(2) The board shall be composed of members who broadly represent or are knowledgeable about the needs of the clients served by the P&A system and shall include a significant representation of individuals with mental illness who are, or have been eligible for services, or have received or are receiving mental health services, and family members, guardians, advocates, or authorized representatives of such individuals.

(3) If the governing authority is organized as a private nonprofit entity, the chairperson of the advisory council shall be a member of the governing board.

(c) Continuing efforts shall be made to include members of racial and ethnic minority groups as board members.

(d) Any member of the advisory council may also serve on the governing board.

(a) Each P&A system shall establish an advisory council to:

(1) Provide independent advice and recommendations to the system.

(2) Work jointly with the governing authority in the development of policies and priorities.

(3) Submit a section of the system's annual report as required under § 51.8.

(b) Members of the council shall include attorneys, mental health professionals, individuals from the public who are knowledgeable about mental illness, the advocacy needs of persons with mental illness and have demonstrated a substantial commitment to improving mental health services, a provider of mental health services, individuals who have received or are receiving mental health services and family members of such individuals. Continuing efforts shall be made to include members of racial and ethnic minority groups on the advisory council.

(1) At least 60 percent of the membership of the advisory council shall be comprised of individuals who have received or are receiving mental health services or who are family members of such individuals. At least one family member shall be a primary care giver for an individual who is currently a minor child or youth who is receiving or has received mental health services;

(2) The council shall be chaired by an individual who has received or is receiving mental health services or who is a family member of such an individual;

(3) The advisory council shall meet no less than three times annually. The terms of council members shall be staggered and for 4 years except that any member appointed to fill a vacancy for an unexpired term shall serve for the remainder of such term. A member who has been appointed for a term of 4 years may not be reappointed to the council during the 2-year period beginning on the date on which such 4-year term expired.

(c) Each P&A system shall provide its advisory council with reports, materials and fiscal data to enable review of existing program policies, priorities and performance outcomes. Such submissions shall be made at least annually and shall report expenditures for the past two fiscal years, as well as projected expenses for the next fiscal year, identified by budget category (e.g., salary and wages, contract for services, administrative expenses) including the amount allotted for training of each the advisory council, governing board and staff.

(d) Reimbursement of expenses. (1) Allotments may be used to pay for all or a part of the expenses incurred by members of the advisory council in order to participate in its activities. Expenses may include transportation costs, parking, meals, hotel costs, per diem expenses, stipends or subsistence allowances, and the cost of day care or child care (or its equivalent for the child's travel and subsistence expenses) for their dependents with mental illness or developmental disabilities.

(2) Each P&A system shall establish its own policies and procedures for reimbursement of expenses of council members, taking into account the needs of individual council members, available resources, and applicable restrictions on use of grant funds, including the restrictions in §§ 51.31(e) and 51.6(e).

(a) Program priorities and policies shall be established annually by the governing authority, jointly with the advisory council. Priorities shall specify short-term program goals and objectives, with measurable outcomes, to implement the established priorities. In developing priorities, consideration shall be given to, at a minimum, case selection criteria, the availability of staff and monetary resources, and special problems and cultural barriers faced by individuals with mental illness who are multiply handicapped or who are members of racial or ethnic minorities in obtaining protection of their rights. Systemic and legislative activities shall also be addressed in the development and implementation of program priorities.

(b) Members of the public shall be given an opportunity, on an annual basis, to comment on the priorities established by, and the activities of, the P&A system. Procedures for public comment must provide for notice in a format accessible to individuals with mental illness, including such individuals who are in residential facilities, to family members and representatives of such individuals and to other individuals with disabilities. Procedures for public comment must provide for receipt of comments in writing or in person.

(a) The P&A system shall establish procedures to address grievances from:

(1) Clients or prospective clients of the P&A system to assure that individuals with mental illness have full access to the services of the program; and

(2) Individuals who have received or are receiving mental health services in the State, family members of such individuals, or representatives of such individuals or family members to assure that the eligible P&A system is operating in compliance with the Act.

(b) At a minimum, the grievance procedures shall provide for:

(1) An appeal to the governing authority from any final staff review and/or determination; in cases where the governing authority is the director of the P&A system, the final review and/or determination shall be made by a superior of the governing authority, e.g., a supervisor, or by an independent entity, e.g., an appointed board or committee.

(2) Reports, at least annually, to the governing authority and the advisory council describing the grievances received and processed and their resolution;

(3) Identification of individuals responsible for review;

(4) A timetable to ensure prompt notification concerning the grievance procedure to clients, prospective clients or persons denied representation, and to ensure prompt resolution;

(5) A written response to the grievant; and

(6) Protection of client confidentiality.

The P&A system must develop appropriate policies and procedures to avoid actual or apparent conflict of interest involving clients, employees, contractors and subcontractors, and members of the governing authority and advisory council, particularly with respect to matters affecting client services, particular contracts and subcontracts, grievance review procedures, reimbursements and expenses, and the employment or termination of staff.

A P&A system shall provide training for program staff, and may also provide training for contractors, governing board and advisory council members to enhance the development and implementation of effective protection and advocacy services for individuals with mental illness, including at a minimum:

(a)(1) Training of program staff to work with family members of clients served by the program where the individual with mental illness is:

(i) A minor,

(ii) Legally competent and chooses to involve the family member; or

(iii) Legally incompetent and the legal guardian, conservator or other legal representative is a family member.

(2) This training may be provided by individuals who have received or are receiving mental health services and family members of such individuals.

(b) Training to enhance sensitivity to and understanding of individuals with mental illness who are members of racial or ethnic minorities and to develop strategies for outreach to those populations.

(c) Training to conduct full investigations of abuse or neglect.

(a) Consistent with State and Federal law and the canons of professional ethics, a P&A system may use any appropriate technique and pursue administrative, legal or other appropriate remedies to protect and advocate on behalf of individuals with mental illness to address abuse, neglect or other violations of rights.

(b) A P&A system shall establish policies and procedures to guide and coordinate advocacy activities. The P&A system shall not implement a policy or practice restricting the remedies which may be sought on behalf of individuals with mental illness or compromising the authority of the P&A system to pursue such remedies through litigation, legal action or other forms of advocacy. However, this requirement does not prevent the P&A system from placing limitations on case or client acceptance criteria developed as part of the annual priorities. Prospective clients must be informed of any such limitations at the time they request service.

(c) Wherever possible, the program should establish an ongoing presence in residential mental health care or treatment facilities, and relevant hospital units.

(d) Program activities should be carried out in a manner which allows program staff to:

(1) Interact regularly with those individuals who are current or potential recipients of protection and advocacy services;

(2) Interact regularly with staff providing care or treatment;

(3) Obtain information and review records; and

(4) Communicate with family members, social and community service workers and others involved in providing care or treatment.

(e) A P&A system may support or provide training, including related travel expenses, for individuals with mental illness, family members of such individuals, and other persons who are not program staff, contractors, or board or council members, to increase knowledge about protection and advocacy issues, to enhance leadership capabilities, or to promote Federal-State and intra-State cooperation on matter related to mental health system improvement. Decisions concerning the selection of individuals to receive such training shall be made in accordance with established policies, procedures and priorities of the P&A system.

(f) A P&A system may monitor, evaluate and comment on the development and implementation of Federal, State and local laws, regulations, plans, budgets, levies, projects, policies and hearings affecting individuals with mental illness as a part of federally funded advocacy activities. A P&A system shall carry out systemic advocacy—those efforts to implement changes in policies and practices of systems that impact persons with mental illness.

(g) Determination of “probable cause” may result from P&A system monitoring or other activities, including observation by P&A system personnel, and reviews of monitoring and other reports prepared by others whether pertaining to individuals with mental illness or to general conditions affecting their health or safety.

(h) A P&A which is a public P&A system shall be free from hiring freezes, reductions in force, prohibitions on staff travel, or other policies imposed by the State to the extend that such policies would impact program staff or activities funded with Federal dollars and would prevent the P&A system from carrying out its mandates under the Act.

(i) A P&A system may exercise its authority under State law where the authority exceeds the authority required by the Act. However, State law must not diminish the required authority of the Act.

(a) Each P&A system is encouraged to develop and employ techniques such as those involving negotiation, conciliation and mediation to resolve disputes early in the protection and advocacy process.

(b) Disputes should be resolved whenever possible through nonadversarial process involving negotiation, mediation and conciliation. Consistent with State and Federal laws and canons of professional responsibility, family members should be involved in this process, as appropriate, where the individual with mental illness is:

(1) A minor,

(2) Legally competent and chooses to involve the family member, or

(3) Legally incompetent and the legal guardian, conservator or other legal representative is a family member or the legal guardian, conservator or other legal representative chose to involve the family member.

(c) A P&A system must exhaust in a timely manner all administrative remedies, where appropriate, prior to initiating legal action in a Federal or State court.

(d) Paragraph (c) of this section does not apply to any legal action instituted to prevent or eliminate imminent serious harm to an individual with mental illness nor does it apply in circumstances where administrative procedures do not exist. If in pursing administrative remedies, the P&A system determines that any matter with respect to an individual with mental illness with mental illness with not be resolved within a reasonable time, the P&A system may pursue alternative remedies, including initiating legal action.

(e) A P&A system shall be held to the standard of exhaustion of remedies provided under State and Federal law. The Act imposes no additional burden respecting exhaustion of remedies.

(a) Access to records shall be extended promptly to all authorized agents of a P&A system.

(b) A P&A system shall have access to the records of any of the following individuals with mental illness:

(1) An individual who is a client of the P&A system if authorized by that individual or the legal guardian, conservator or other legal representative.

(2) An individual, including an individual who has died or whose whereabouts is unknown to whom all of the following conditions apply:

(i) The individual, due to his or her mental or physical condition, is unable to authorize the P&A system to have access.

(ii) The individual does not have a legal guardian, conservator or other legal representative, or the individual's guardian is the State or one of its political subdivisions; and

(iii) A complaint or report has been received and the P&A system has determined that there is probable cause to believe that the individual has been or may be subject to abuse or neglect.

(3) An individual who has a legal guardian, conservator, or other legal representative, with respect to whom a complaint or report has been received by the P&A system and with respect to whom the P&A system has determined that there is probable cause to believe that the health or safety of the individual is in serious and immediate jeopardy, whenever all of the following conditions exists:

(i) The P&A system has made a good faith effort to contact the representative upon prompt receipt of the representative's name and address;

(ii) The P&A system has made a good faith effort to offer assistance to the representative to resolve the situation; and

(iii) The representative has failed or refused to act on behalf of the individual.

(1) Information and individual records, obtained in the course of providing intake, assessment, evaluation, supportive and other services, including medical records, financial records, and reports prepared or received by a member of the staff of a facility or program rendering care or treatment. This includes records stored or maintained in locations other than the facility or program as long as the system has obtained appropriate consent consistent with section 105(a)(4) of the Act. The system shall request of facilities that in requesting records from service providers or other facilities on residents that they indicate in the release form the records may be subject to review by a system.

(2) Reports prepared by an agency charged with investigating abuse neglect, or injury occurring at a facility rendering care or treatment, or by or for the facility itself, that describe any or all of the following:

(i) Abuse, neglect, or injury occurring at the facility;

(ii) The steps taken to investigate the incidents;

(iii) Reports and records, including personnel records, prepared or maintained by the facility, in connection with such reports of incidents; or

(iv) Supporting information that was relied upon in creating a report, including all information and records used or reviewed in preparing reports of abuse, neglect or injury such as records which describe persons who were interviewed, physical and documentary evidence that was reviewed, and the related investigative findings.

(3) Discharge planning records.

(4) Reports prepared by individuals and entities performing certification or licensure reviews, or by professional accreditation organizations, as well as related assessments prepared for the facility by its staff, contractors or related entities, except that nothing in this section is intended to preempt State law protecting records produced by medical care evaluation or peer review committees.

(5) Professional, performance, building or other safety standards, demographic and statistical information relating to the facility.

(d) A P&A system shall have reasonable access and authority to interview and examine all relevant records of any facility service recipient (consistent with the provisions of section 105(a)(4) of the Act) or employee.

(e) A P&A system shall be permitted to inspect and copy records, subject to a reasonable charge to offset duplicating costs.

(a) Access to facilities and residents shall be extended to all authorized agents of a P&A system.

(b) A P&A system shall have reasonable unaccompanied access to public and private facilities and programs in the State which render care or treatment for individuals with mental illness, and to all areas of the facility which are used by residents or are accessible to residents. The P&A system shall have reasonable unaccompanied access to residents at all times necessary to conduct a full investigation of an incident of abuse or neglect. This authority shall include the opportunity to interview any facility service recipient, employee, or other persons, including the person thought to be the victim of such abuse, who might be reasonably believed by the system to have knowledge of the incident under investigation. Such access shall be afforded, upon request, by the P&A system when:

(1) An incident is reported or a complaint is made to the P&A system;

(2) The P&A system determines there is probable cause to believe that an incident has or may have occurred; or

(3) The P&A system determines that there is or may be imminent danger of serious abuse or neglect of an individual with mental illness.

(c) In addition to access as prescribed in paragraph (b) of this section, a P&A system shall have reasonable unaccompanied access to facilities including all area which are used by residents, are accessible to residents, and to programs and their residents at reasonable times, which at a minimum shall include normal working hours and visiting hours. Residents include adults or minors who have legal guardians or conservators. P&A activities shall be conducted so as to minimize interference with facility programs, respect residents' privacy interests, and honor a resident's request to terminate an interview. This access is for the purpose of:

(1) Providing information and training on, and referral to programs addressing the needs of individuals with mental illness, and information and training about individual rights and the protection and advocacy services available from the P&A system, including the name, address, and telephone number of the P&A system.

(2) Monitoring compliance with respect to the rights and safety of residents; and

(3) Inspecting, viewing and photographing all areas of the facility which are used by residents or are accessible to residents.

(d) Unaccompanied access to residents shall include the opportunity to meet and communicate privately with individuals regularly, both formally and informally, by telephone, mail and in person. Residents include minors or adults who have legal guardians or conservators.

(e) The right of access specified in paragraph (c) of this section shall apply despite the existence of any State or local laws or regulations which restrict informal access to minors and adults with legal guardians or conservators. The system shall make very effort to ensure that the parents of minors or guardians of individuals in the care of a facility are informed that the system will be monitoring activities at the facility and may in the course of such monitoring have access to the minor or adult with a legal guardian. The system shall take no formal action on behalf of individuals with legal guardians or conservators, or initiate a formal attorney/client or advocate/client relationship without appropriate consent, except in emergency situations as described in § 51.41(b)(3).

(f) A P&A system providing representation to individuals with mental illness in Federal facilities shall have all the rights and authority accorded other representatives of residents of such facilities pursuant to State and Federal laws.

If a P&A system's access to facilities, programs, residents or records covered by the Act or this part is delayed or denied, the P&A system shall be provided promptly with a written statement of reasons, including, in the case of a denial for alleged lack of authorization, the name, address and telephone number of the legal guardian, conservator, or other legal representative of an individual with mental illness. Access to facilities, records or residents shall not be delayed or denied without the prompt provision of written statements of the reasons for the denial.

(a) Records maintained by the P&A system are the property of the P&A system which must protect them from loss, damage, tampering or use by unauthorized individuals. The P&A system must:

(1) Except as provided elsewhere in this section, keep confidential all records and information, including information contained in any automated electronic database pertaining to:

(i) Clients to the same extent as is required under Federal or State laws for a provider of mental health services;

(ii) Individuals who have been provided general information or technical assistance on a particular matter;

(iii) Identity of individuals who report incidents of abuse or neglect or furnish information that forms the basis for a determination that probable cause exists; and

(iv) Names of individuals who are residents and provide information for the record.

(2) Have written policies governing access to, storage of, duplication and release of information from client records; and

(3) Obtain written consent from the client, if competent, or from his or her legal representative, from individuals who have been provided general information or technical assistance on a particular matter and from individuals who furnish reports or information that forms the basis for a determination of probable cause, before releasing information to individuals not otherwise authorized to receive it.

(b) Nothing in this subpart shall prevent the P&A system from. (1) Issuing a public report of the results of an investigation which maintains the confidentiality of the individuals listed in paragraph (a)(1) of this section or,

(2) Reporting the results of an investigation which maintains the confidentiality of individual service recipients to responsible investigative or enforcement agencies should an investigation reveal information concerning the facility, its staff, or employees warranting possible sanctions or corrective action. this information may be reported to agencies responsible for facility licensing or accreditation, employee discipline, employee licensing or certification, or criminal prosecution.

(c) For purposes of any periodic audit, report, or evaluation of the performance of the P&A system, the Secretary shall not require the P&A system to disclose the identity, or any other personally identifiable information, of any individual requesting assistance under a program. This requirement does not restrict access by the Department or other authorized Federal or State officials to client records or other records of the P&A system when deemed necessary for audit purposes and for monitoring P&A system compliance with applicable Federal or State laws and regulations. The purpose of obtaining such information is solely to determine that P&A systems are spending their grant funds awarded under the Act on serving individuals with mental illness. Officials that have access to such information must keep it confidential to the maximum extent permitted by law and regulations. If photostatic copies of materials are provided, then the destruction of such evidence is required once such reviews have been completed.

(d) Subject to the restrictions and procedures set out in this section, implementing section 106 (a) and (b) of the Act (42 U.S.C. 10806 (a) and (b)), this part does not limit access by a legal guardian, conservator, or other legal representative of an individual with mental illness, unless prohibited by State or Federal law, court order or the attorney-client privilege.

(a) Except as provided in paragraph (b) of this section, if a P&A system has access to records pursuant to section 105(a)(4) of the Act (42 U.S.C. 10805(a)(4)) which, under Federal or State law, are required to be maintained in a confidential manner by a provider of mental health services, it may not disclose information from such records to the individual who is the subject of the information if the mental health professional responsible for supervising the provision of mental health services to that individual has given the P&A system a written determination that disclosure of such information to the individual would be detrimental to the individual's health. The provider shall be responsible for giving any such written determination to the P&A system at the same time as access to the records containing the information is granted.

(b)(1) If the disclosure of information has been denied under paragraph (a) of this section to an individual, the following individuals or the P&A system may select another mental health professional to review the information and to determine if disclosure of the information would be detrimental to the individual's health:

(i) Such individual;

(ii) The legal guardian, conservator or other legal representative of the individual; or

(iii) An eligible P&A system, acting on behalf of an individual:

(A) Whose legal guardian is the State; or

(B) Whose legal guardian, conservator, or other legal representative has not, within a reasonable time after the denial of access to information under paragraph (a), selected a mental health professional to review the information.

(2) If such mental health professional determines, based on professional judgment, that disclosure of the information would not be detrimental to the health of the individual, the P&A system may disclose such information to the individual.

(c) The restriction in paragraph (b) of this section does not affect the P&A system's access to the records.

The regulations of this subpart are applicable to all project grants authorized by section 330 of the Public Health Service Act (42 U.S.C. 254c).

As used in this part:

(a) Act means the Public Health Service Act.

(b) Catchment area means the area served by a project funded under section 330 of the Act.

(c)(1) Community health center or center means an entity which, through its staff and supporting resources or through contracts or cooperative arrangements with other public or private entities, provides for all residents of its catchment area:

(i) Primary health services;

(ii) As determined by the Secretary to be appropriate for particular centers, supplemental health services necessary for the adequate support of primary health services;

(iii) Referral to providers of supplemental health services and payment, as determined by the Secretary to be appropriate and feasible, for their provision of such services;

(iv) Environmental health services, as determined by the Secretary to be appropriate for particular centers; and

(v) Information on the availability and proper use of health services.

(2) For purposes of paragraph (c)(1) of this section, the provision of a given service by a center will be determined by the Secretary to be appropriate where:

(i) There is a need, as determined by the Secretary, for the provision of such service in the catchment area; and

(ii) The provision of such service by the center is feasible, taking into consideration the center's projected revenues, other resources, and grant support under this part.

(d) Environmental health services means the detection and alleviation of unhealthful conditions of the environment of the catchment area, such as problems associated with water supply, sewage treatment, solid waste disposal, rodent and parasite infestation, and housing conditions. For the purposes of this part, the detection and alleviation of unhealthful conditions of the environment includes the notification of and making of arrangements with appropriate Federal, State, or local authorities responsible for correcting such conditions.

(e) Medically underserved population means the population of an urban or rural area designated by the Secretary as an area with a shortage of personal health services or a population group designated by the Secretary as having a shortage of such services. Medically underserved areas will be designated by the Secretary and a list of those designated will be published in the Federal Register from time to time, taking into consideration the following factors, among others:

(1) Available health resources in relation to size of the area and its population, including appropriate ratios of primary care physicians in general or family practice, internal medicine, pediatrics, or obstetrics and gynecology to population;

(2) Health indices for the population of the area, such as infant mortality rate;

(3) Economic factors affecting the population's access to health services, such as percentage of the population with incomes below the poverty level; and

(4) Demographic factors affecting the population's need and demand for health services, such as percentage of the population age 65 and over.

(f) Nonprofit, as applied to any private agency, institution, or organization, means one which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

(g) Physician means a licensed doctor of medicine or doctor of osteopathy.

(h) Primary health services means:

(1) Diagnostic, treatment, consultative, referral, and other services rendered by physicians, and, where feasible, by physician's extenders, such as physicians' assistants, nurse clinicians, and nurse practitioners;

(2) Diagnostic laboratory services and diagnostic radiologic services;

(3) Preventive health services, including medical social services, nutritional assessment and referral, preventive health education, children's eye and ear examinations, prenatal and post-partum care, prenatal services, well child care (including periodic screening), immunizations, and voluntary family planning services;

(4) Emergency medical services, including provision, through clearly defined arrangements, for access of users of the center to health care for medical emergencies during and after the center's regularly scheduled hours;

(5) Transportation services as needed for adequate patient care, sufficient so that residents of the catchment area served by the center with special difficulties of access to services provided by the center receive such services; and

(6) Preventive dental services provided by a licensed dentist or other qualified personnel, including (i) oral hygiene instruction; (ii) oral prophylaxis, as necessary; and (iii) topical application of fluorides, and the prescription of fluorides for systemic use when not available in the community water supply.

(i) Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(j) Supplemental health services means health services which are not included as primary health services and which are:

(1) Inpatient and outpatient hospital services;

(2) Home health services;

(3) Extended care facility services;

(4) Rehabilitative services (including physical and occupational therapy) and long-term physical medicine;

(5) Mental health services, including services of psychiatrists, psychologists, and other appropriate mental health professionals;

(6) Dental services other than those provided as primary health services;

(7) Vision services, including routine eye and vision examinations and provision of eyeglasses, as appropriate and feasible;

(8) Allied health services;

(9) Pharmaceutical services, including the provision of prescription drugs;

(10) Therapeutic radiologic services;

(11) Public health services (including nutrition education and social services);

(12) Ambulatory surgical services;

(13) Health education services; and

(14) Services, including the services of outreach workers, which promote and facilitate optimal use of primary health services and services referred to in the preceding subparagraphs of this paragraph and, if a substantial number of individuals in the population served by the center are of limited English-speaking ability, the services of outreach workers and other personnel fluent in the language or languages spoken by such individuals.

Any public or nonprofit private entity is eligible to apply for a grant under this part.

(a) An application for a grant under this part shall be submitted to the Secretary at such time and in such form and manner as the Secretary may prescribe.

(b) The application shall contain a budget and narrative plan of the manner in which the applicant intends to conduct the project and carry out the requirements of this part. The application must describe how and the extent to which the project has met, or plans to meet, each of the requirements in subpart B (relating to grants for planning and developing community health centers), subpart C (relating to grants for the operation of community health centers), or subpart D (relating to grants for the operation of community health projects), as applicable. In addition, applications must include:

(1) A statement of specific, measurable objectives and the methods to be used to assess the achievement of the objectives in specified time periods and at least on an annual basis.

(2) The precise boundaries of the catchment area to be served by the applicant, including an identification of the medically underserved population or populations within the catchment area. In addition, the application shall include information sufficient to enable the Secretary to determine that the applicant's catchment area meets the following criteria:

(i) The size of such area is such that the services to be provided by the applicant are available and accessible to the residents of the area promptly and as appropriate;

(ii) The boundaries of such area conform, to the extent practicable, to relevant boundaries of political subdivisions, school districts, and areas served by Federal and State health and social service programs; and

(iii) The boundaries of such area eliminate, to the extent possible, barriers resulting from the area's physical characteristics, its residential patterns, its economic and social groupings, and available transportation.

(3) The results of an assessment of the need that the population served or proposed to be served has for the services to be provided by the project (or in the case of applications for planning and development projects, the methods to be used in assessing such need), utilizing, but not limited to, the factors set forth in § 51c.102(e)(1)-(4).

(4) Position descriptions for key personnel who will be utilized in carrying out the activities of the project and a statement indicating the need for the positions to be supported with grant funds to accomplish the objectives of the project.

(5) Letters and other forms of evidence showing that efforts have been made to secure financial and professional assistance and support for the project within the proposed catchment area and the continuing involvement of the community in the development and operation of the project.

(6) An assurance that an independent certified public accountant, or a public accountant licensed before December 31, 1970, will be engaged to certify that the system for the management and control of its financial assets will be in accord with sound financial management practices, including applicable Federal requirements.

(7) A list of all services proposed to be provided by the project.

(8) A list of services which are to be provided directly by the project through its own staff and resources and a description of any contractual or other arrangements (including copies of documents, where available) entered into, or planned for the provision of services.

(9) The schedule of fees and/or payments and schedule of discounts for services provided by the project.

(10) Evidence that all applicable requirements for review and/or approval of the application under title XV of the Act have been met.

(11) An assurance that the project will be conducted in accordance with the applicable requirements of this part.

(c) The application must be executed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the statute, the applicable regulations of this part, and any additional conditions of the grant.

(a) The amount of any award under this part will be determined by the Secretary on the basis of his estimate of the sum necessary for a designated portion of direct project costs plus an additional amount for indirect costs, if any, which will be calculated by the Secretary either:

(1) On the basis of the estimate of the actual indirect costs reasonably related to the project; or

(2) On the basis of a percentage of all, or a portion of, the estimated direct costs of the project when there are reasonable assurances that the use of such percentage will not exceed the approximate actual indirect costs. Such award may include an estimated provisional amount for indirect costs or for designated direct costs (such as fringe benefit rates) subject to upward (within the limits of available funds) as well as downward adjustments to actual costs when the amount properly expended by the grantee for provisional items has been determined by the Secretary: Provided, however, That no grant shall be made for an amount in excess of the total cost found necessary by the Secretary to carry out the project.

(i) In determining the percentage of project costs to be borne by the grantee, factors which the Secretary will take into consideration will include the following:

(A) The ability of the grantee to finance its share of project costs from non-Federal sources;

(B) The need in the area served by the project for the services to be provided; and

(C) The extent to which the project will provide services in an innovative manner which the Secretary desires to stimulate in the interest of developing more effective health service delivery systems on a regional or national basis.

(ii) At any time after approval of an application under this part, the Secretary may retroactively agree to a percentage of project costs to be borne by the grantee lower than that determined pursuant to paragraph (a)(2)(i) of this section where he finds that changed circumstances justify a smaller contribution.

(iii) In determining the grantee's share of project costs, costs borne by Federal grant funds, or costs used to match other Federal grants, may not be included except as otherwise provided by law or regulations.

(b) All grant awards shall be in writing, and shall set forth the amount of funds granted and the period for which support is recommended.

(c) Neither the approval of any proj-ect nor any grant award shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved project or portion thereof. For continuation support, grantees must make separate application.

(a) Any funds granted pursuant to this part, as well as other funds to be used in performance of the approved project, may be expended solely for carrying out the approved project in accordance with section 330 of the Act, the applicable regulations of this part, the terms and conditions of the award, and the applicable cost principles prescribed in subpart Q of 45 CFR part 74.

(b) Project funds awarded under this part may be used for, but need not be limited to, the following:

(1) The costs of acquiring and modernizing existing buildings (including the costs of amortizing the principal of, and paying interest on, loans), but only in accordance with subpart E of this part and as approved in the grant award;

(2) The costs of obtaining technical assistance to develop and improve the management capability of the project, but only as approved by the Secretary;

(3) The reimbursement of members of the grantee's governing board, if any, for reasonable expenses actually incurred by reason of their participation in board activities;

(4) The reimbursement of governing board members for wages lost by reason of participation in the activities of such board if the member is from a family with an annual family income below $10,000 or if the member is a single person with an annual income below $7,000;

(5) The cost of delivering health services, including services rendered on a prepaid capitation basis, to residents of the project's catchment area within the following limitations: grant funds may be used to pay the full cost of project services to individuals and families with annual incomes at or below those set forth in the most recent “CSA Income Poverty Guidelines” (45 CFR 1060.2) issued by the Community Services Administration; and to pay the portion of the cost of services provided in accordance with the schedule of discounts which, under such schedule, is uncompensated; Provided, That (i) charges will be made to such individuals and families in accordance with § 51c.303(f) of subpart C; (ii) reasonable effort shall be made to collect such charges under a billing and collections system; and (iii) the charge to grant funds shall exclude any amounts collected pursuant to paragraph (b)(5)(ii) of this section;

(6) The cost of insurance for medical emergency and out-of-area coverage;

(7) The cost of providing to the staff of the project training related to the provision of health services provided or to be provided by the project, and, to the staff and governing board, if any, training related to the management of an ambulatory care facility, consistent with the applicable requirements of 45 CFR part 74; and

(8) The cost of developing and maintaining a reserve fund where required by State law for prepaid health care plans.

(c) Prior approval by the Secretary of revisions of the budget and project plan is required whenever there is to be a significant change in the scope or nature of project activities.

The Secretary shall from time to time make payments to a grantee of all or a portion of any grant award, either in advance or by way of reimbursement for expenses incurred or to be incurred, to the extent he determines such payments necessary to promote prompt initiation and advancement of the approved project.

(a) Attention is called to the requirements of title VI of the Civil Rights Act of 1964 (78 Stat. 252, (42 U.S.C. 2000d et seq.)) and in particular section 601 of such Act which provides that no person in the United States shall on the grounds of race, color, or national origin be excluded from participation, in be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal Financial assistance. A regulation implementing such title VI, which applies to grants made under this part, has been issued by the Secretary of Health and Human Services with the approval of the President (45 CFR part 80). In addition, no person shall, on the grounds of age, sex, creed, or marital status (unless otherwise medically indicated), be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity so receiving Federal financial assistance.

(b) Attention is called to the requirements of section 504 of the Rehabilitation Act of 1973, as amended, which provides that no otherwise qualified handicapped individual in the United States shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.

All information as to personal facts and circumstances obtained by the project staff about recipients of services shall be held confidential, and shall not be divulged without the individual's consent except as may be required by law or as may be necessary to provide service to the individual or to provide for medical audits by the Secretary or his designee with appropriate safeguards for confidentiality of patient records. Otherwise, information may be disclosed only in summary, statistical, or other form which does not identify particular individuals.

Except as may otherwise be provided under the terms and conditions of the award, the grantee may copyright without prior approval any publications, films, or similar materials developed or resulting from a project supported by a grant under this part, subject, however, to a royalty-free, nonexclusive, and irrevocable license or right in the Government to reproduce, translate, publish, use, disseminate, and dispose of such materials and to authorize others to do so.

(a) Accounting for grant award payments. All payments made by the Secretary shall be recorded by the grantee in accounting records separate from the records of all other funds, including funds derived from other grant awards. With respect to each approved project, the grantee shall account for the sum total of all amounts paid as well as other funds and in-kind contributions by presenting or otherwise making available evidence satisfactory to the Secretary of expenditure for direct and indirect costs meeting the requirements of this part: Provided, however, That when the amount awarded for indirect costs was based on a predetermined fixed-percentage of estimated direct costs, the amount allowed for indirect costs shall be computed on the basis of such predetermined fixed-percentage rates applied to the total, or a selected element thereof, of the reimbursable direct costs incurred.

(b) Accounting for interest earned on grant funds. Pursuant to section 203 of the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213), a State will not be held accountable for interest earned on grant funds, pending their disbursement for grant purposes. A State, as defined in section 102 of the Intergovernmental Cooperation Act, means any one of the several States, the District of Columbia, Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State, but does not include the government of the political subdivisions of the State. All grantees other than a State, as defined, must return all interest earned on grant funds to the Federal Government.

(c) Grant closeout—(1) Date of final accounting. A grantee shall render, with respect to each approved project, a full account, as provided herein, as of the date of the termination of grant support. The Secretary may require other special and periodic accounting.

(2) Final settlement. There shall be payable to the Federal Government as final settlement with respect to each approved project the total sum of:

(i) Any amount not accounted for pursuant to paragraph (a) of this section;

(ii) Any credits for earned interest pursuant to paragraph (b) of this section;

(iii) Any other amounts due pursuant to subparts F, M, and O of 45 CFR part 74.

The provisions of 45 CFR part 74, establishing uniform administrative requirements and cost principles, shall apply to all grants under this part to State and local governments as those terms are defined in subpart A of that part 74. The relevant provisions of the following subparts of part 74 shall also apply to grants to all other grantee organizations under this part:

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 330(c) of the Act for projects for planning and developing community health centers which will serve medically underserved populations.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 51c.104 of subpart A, contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of § 51c.203.

A project for the planning and developing of a community health center supported under this subpart must:

(a) Prepare an assessment of the need of the population proposed to be served by the community health center for the services set forth in § 51c.102(c)(1) of subpart A, with special attention to the need of the medically underserved population for such services. Such assessment of need shall, at a minimum, consider the factors listed in § 51c.102(e)(1)-(4).

(b) Design a community health center program for such population, based on such assessment, which indicates in detail how the proposed community health center will fulfill the needs identified in the assessment prepared pursuant to paragraph (a) of this section and how it will meet the requirements contained in subpart C of this part.

(c) Develop a plan for the implementation of the program designed pursuant to paragraph (b) of this section. Such implementation plan shall provide for the time-phased recruitment and training of the personnel essential for the operation of a community health center and the gradual assumption of operational status of the project so that the project will, in the judgment of the Secretary, meet the requirements contained in subpart C of this part as of the end of the project period.

(d) Implement the plan developed pursuant to paragraph (c) of this section in accordance with such paragraph.

(e) Make efforts to secure, within the proposed catchment area of such center to the extent possible, financial and professional assistance and support for the project.

(f) Initiate and encourage continuing community involvement in the development and operation of the project.

(g) Establish standards and qualifications for personnel (including the project director).

(h) Utilize, to the maximum extent feasible, other Federal, State, local, and private resources available for support of the project, prior to use of project funds under this subpart.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 330(c) of the Act and the applicable regulations of this part, taking into account:

(1) The degree to which the proposed project satisfactorily provides for the elements set forth in § 51c.203;

(2) The relative need of the population to be served for the services to be provided;

(3) The administrative and management capability of the applicant;

(4) The potential of the project for development of new and effective methods for health services delivery and management;

(5) The soundness of the fiscal plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(6) The extent to which community resources will be utilized in the proj-ect;

(7) The extent to which grants approved under this part will provide for an appropriate distribution of resources throughout the country, taking into consideration the following factors;

(i) The urban-rural area to be served;

(ii) The nature of the organization applying; and

(iii) The organizational structure for delivery of services;

(8) Whether the project's catchment area is exclusive of the area served by a community health center;

(9) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other Federally assisted health services or reimbursement programs or projects.

(b) The Secretary may:

(1) Make no more than two grants under this subpart for the same project.

(2) Make a grant under this subpart to an entity which has been awarded one or more grants under section 330(d)(1)(A) and/or section 330(d)(1)(B) of the Act only if the grant under this subpart is for a new project.

The regulations of this subpart, in addition to the regulations of subpart A, are applicable to grants awarded pursuant to section 330(d)(1)(A) of the Act for the costs of operation of community health centers which serve medically underserved populations.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 51c.104 of subpart A,

(a) Be submitted by an entity which may be a co-applicant which the Secretary determines is a community health center, and

(b) Contain information sufficient to enable the Secretary to determine that the center will meet the requirements of § 51c.103.

A community health center supported under this subpart must:

(a) Provide the health services of the center so that such services are available and accessible promptly, as appropriate, and in a manner which will assure continuity of service to the residents of the center's catchment area.

(b) Implement a system for maintaining the confidentiality of patient records in accordance with the requirements of § 51c.110 of subpart A.

(c) Have an ongoing quality assurance program which provides for the following:

(1) Organizational arrangements, including a focus of responsibility, to support the quality assurance program and the provision of high quality patient care;

(2) Periodic assessment of the appropriateness of the utilization of services and the quality of services provided or proposed to be provided to individuals served by the center. Such assessments shall:

(i) Be conducted by physicians or by other licensed health professionals under the supervision of physicians;

(ii) Be based on the systematic collection and evaluation of patient records; and

(iii) Identify and document the necessity for change in the provision of services by the center and result in the institution of such change, where indicated.

(d) Develop management and control systems which are in accordance with sound financial management procedures, including the provision for an audit on an annual basis (unless waived for cause by the Secretary) by an independent certified public accountant or a public accountant licensed prior to December 31, 1970, to determine, at a minimum, the fiscal integrity of grant financial transactions and reports, and compliance with the regulations of this part and the terms and conditions of the grant.

(e) Where the cost of care and services furnished by or through the proj-ect is to be reimbursed under title XIX or title XX of the Social Security Act, obtain or make every reasonable effort to obtain a written agreement with the title XIX or title XX State agency for such reimbursement.

(f) Have prepared a schedule of fees or payments for the provision of its services designed to cover its reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the patient's ability to pay. Provided, That such schedule of discounts shall provide for a full discount to individuals and families with annual incomes at or below those set forth in the most recent CSA Proverty Income Guidelines (45 CFR 1060.2) and for no discount to individuals and families with annual incomes greater than twice those set forth in such Guidelines, except that nominal fees for services may be collected from individuals with annual incomes at or below such levels where imposition of such fees is consistent with project goals.

(g) Make every reasonable effort, including the establishment of systems for eligibility determination, billing, and collection, to:

(1) Collect reimbursement for its costs in providing health services to persons who are entitled to insurance benefits under title XVIII of the Social Security Act, to medical assistance under a State plan approved under title XIX of such Act, to social services and family planning under title XX of such Act, or to assistance for medical expenses under any other public assistance program, grant program, or private health insurance or benefit program on the basis of the schedule of fees prepared pursuant to paragraph (f) of this section without application of any discounts, and

(2) Secure from patients payments for services in accordance with the schedule of fees and discounts required by paragraph (f) of this section.

(h) Have a governing board which meets the requirements of § 51c.304.

(i) Have developed an overall plan and budget for the center that:

(1) Provides for an annual operating budget and a three-year financial management plan which include all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items;

(2) Provides for a capital expenditures plan for at least a three-year period (including the year to which the operating budget described in paragraph (i)(1) of this section is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objective of, each anticipated expenditure in excess of $100,000 related to the acquisition of land, the improvement of land, buildings, and equipment and the replacement, modernization and expansion of buildings and equipment which would, under generally accepted accounting principles, be considered capital items;

(3) Provides for plan review and updating at least annually; and

(4) Is prepared under the direction of the governing board, by a committee consisting of representatives of the governing board, and administrative staff, and the medical staff, if any, of the center.

(j) Establish basic statistical data, cost accounting, management information, and reporting or monitoring systems which shall enable the center to provide such statistics and other information as the Secretary may reasonably require relating to the center's costs of operation, patterns of utilization of services, and the availability, accessibility, and acceptability of its services and to make such reports to the Secretary in a timely manner with such frequency as the Secretary may reasonably require.

(k) Review its catchment area annually to insure that the criteria set out in § 51c.104(b)(2) of subpart A are met and, where such criteria are not met, revise its catchment area, with the approval of the Secretary, to conform to such criteria to the extent feasible.

(l) In the case of a center which serves a population including a substantial proportion of individuals of limited English-speaking ability, have developed a plan and made arrangements responsive to the needs of such populations for providing services to the extent practicable in the language and cultural context most appropriate to such individuals, and have identified an individual on its staff who is fluent in both that language and in English and whose responsibilities include providing guidance to such individuals and to appropriate staff members with respect to cultural sensitivities and bridging linguistic and cultural differences. If more than one non-English language is spoken by such group or groups, an individual or individuals fluent in those languages and English shall be so identified.

(m) Be operated in a manner calculated to preserve human dignity and to maximize acceptability and effective utilization of services.

(n) To the extent possible, coordinate and integrate project activities with the activities of other Federally funded, as well as State and local, health services delivery projects and programs serving the same population.

(o) Establish means for evaluating progress toward the achievement of the specific objectives of the project.

(p) Provide sufficient staff, qualified by training and experience, to carry out the activities of the center.

(q) Assure that facilities utilized in the performance of the project meet applicable fire and life safety codes.

(r) Utilize, to the maximum extent feasible, other Federal, State, and local, and private resources available for support of the project, prior to use of project funds under this part.

(s) Provide for community participation through, for example, contributions of cash or services, loans of full-or part-time staff, equipment, space, materials, or facilities.

(t) Where the center will provide services through contract or other cooperative arrangements with other providers of services, establish rates and methods of payment for health care. Such payments must be made pursuant to agreements, with a schedule of rates and payment procedures maintained by the project. The proj-ect must be prepared to substantiate that such rates are reasonable and necessary.

(u) Operate in a manner such that no person shall be denied service by reason of his inability to pay therefor: Provided, however, That a charge for the provision of services will be made to the extent that a third party (including a Government agency) is authorized or is under legal obligation to pay such charges.

(v) In addition to the above, projects which are supported with grant funds for the operation of a prepaid health care plan also must provide:

(1) A marketing and enrollment plan, including market analysis, marketing strategy, and enrollment growth projections.

(2) A plan that provides for funding on a capitation basis of such portion of the residents of the catchment area of the center, as the Secretary shall determine.

(3) An assurance that services shall be available to all residents of the catchment area without regard to method of payment or health status.

A governing board for the center shall be established by an applicant as follows:

(a) Size. The board shall consist of at least 9 but not more than 25 members, except that this requirement may be waived by the Secretary for good cause shown.

(b) Composition. (1) A majority of the board members shall be individuals who are or will be served by the center and who, as a group, represent the individuals being or to be served in terms of demographic factors, such as race, ethnicity, sex.

(2) No more than one-half of the remaining members of the board may be individuals who derive more than 10 percent of their annual income from the health care industry.

(3) The remaining members of the board shall be representative of the community in which the center's catchment area is located and shall be selected for their expertise in community affairs, local government, finance and banking, legal affairs, trade unions, and other commercial and industrial concerns, or social service agencies within the community.

(4) No member of the board shall be an employee of the center, or spouse or child, parent, brother or sister by blood or marriage of such an employee. The project director may be a non-voting, ex-officio member of the board.

(c) Selection of members. The method of selection of all governing board members shall be prescribed in the by-laws or other internal governing rules of the center. Such by-laws or other rules must specify a process of selection of individuals on the governing board who represent the population served or to be served by the center so that such individuals, as a group, are representative of such population. Such process of selection in the by-laws or other rules is subject to approval by the Secretary.

(d) Functions and responsibilities. (1) The governing board for the center shall have authority for the establishment of policy in the conduct of the center.

(2) The governing board shall hold regularly scheduled meetings, at least once each month, for which minutes shall be kept.

(3) The governing board shall have specific responsibility for:

(i) Approval for the selection and dismissal of a project director or chief executive officer of the center;

(ii) Establishing personnel policies and procedures, including selection and dismissal procedures, salary and benefit scales, employee grievance procedures, and equal opportunity practices;

(iii) Adopting policy for financial management practices, including a system to assure accountability for center resources, approval of the annual project budget, center priorities, eligibility for services including criteria for partial payment schedules, and long-range financial planning;

(iv) Evaluating center activities including services utilization patterns, productivity of the center, patient satisfaction, achievement of project objectives, and development of a process for hearing and resolving patient grievances;

(v) Assuring that the center is operated in compliance with applicable Federal, State, and local laws and regulations; and

(vi) Adopting health care policies including scope and availability of services, location and hours of services, and quality-of-care audit procedures.

Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 330(d)(1)(A) of the Act and the applicable regulations of this part, taking into consideration;

(a) The extent to which the project would provide for the elements set forth in § 51c.303;

(b) The relative need of the population to be served for the services to be provided;

(c) The potential of the center for the development of new and effective methods for health services delivery and management;

(d) The soundness of the fiscal plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(e) The administrative and management capability of the applicant;

(f) The extent to which grants approved under this part will provide for an appropriate distribution of resources throughout the country, taking into consideration the following factors:

(1) The urban-rural area to be served;

(2) The nature of the organization applying;

(3) The organizational structure for delivery of services;

(g) The number of users of the center and the level of utilization of services in previous operational periods, if any;

(h) Whether the center's catchment area is exclusive of the area served by another center;

(i) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other Federally assisted health services or reimbursement programs or projects;

(j) The extent to which community resources will be utilized by the proj-ect;

(k) The extent to which the center will provide preventive health services so as to maintain and improve the health status of the population served; and

(l) The extent to which center operations will emphasize direct health services, efficiency of operations and sound financial management.

The regulations of this subpart, in addition to the regulations of subpart A are applicable to grants awarded pursuant to section 330(d)(1)(B) of the Act for the costs of operation of projects which provide health services to medically underserved populations.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 51c.104 of subpart A, contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of § 51c.403 of this subpart.

A project for the operation of a community health project supported under this subpart must:

(a) Meet all of the requirements of § 51c.303 of this part except for paragraph (h).

(b) Provide those services enumerated in § 51c.102(c)(1) of this part which the Secretary determines to be feasible and desirable and which are specified in the grant award.

(c) Establish a governing board meeting the requirements of § 51c.304 by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 330(d)(1)(B) of the Act and the applicable regulations of this part,

(1) Where the project meets the requirements of § 51c.403(a); and

(2) Taking into consideration the following:

(i) The degree to which the project would provide the services enumerated in § 51c.102(c)(1) and the feasibility of its providing all of such enumerated services by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart;

(ii) Whether the project will have a governing board meeting the requirements of § 51c.304 by the end of the period of support under section 330(d)(1)(B) of the Act and this subpart;

(iii) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other Federally assisted health service or reimbursement programs or projects;

(iv) The need of the population to be served for the services to be provided;

(v) The potential of the project for the development of new and effective methods for health services delivery and management;

(vi) The soundness of the fiscal plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(vii) The administrative and management capacity of the applicant; and

(viii) The extent to which community resources will be utilized in the proj-ect.

(b) The Secretary may:

(1) Make no more than two grants for the same entity under section 330(d)(1)(B) of the Act;

(2) Not make any grant under section 330(d)(1)(B) to an entity which, for the same project, has been awarded more than one grant under section 330(c) of the Act;

(3) Not make a grant under section 330(d)(1)(B) to an entity which has been awarded a grant under section 330(d)(1)(A) of the Act.

The regulations of this subpart, in addition to the regulations of the other applicable subparts of this part, are applicable to grants under section 330 of the Act for project costs which include the cost of acquisition and/or modernization of existing buildings (including the cost of amortizing the principal of, and paying the interest on, loans), except that, these regulations are not applicable to grants for project costs which include the costs of modernization of existing buildings if those costs can otherwise be supported under subparts B, C, or D of this part.

(a) Equipment means nonexpendable personal property as defined in 45 CFR 74.132.

(b) Existing building means a completed or substantially completed structure, and may include the realty on which it is or is to be located.

(c) Modernization means the alteration, repair, remodeling and/or renovation of a building (including the initial equipment thereof and improvements to the building's site) which, when completed, will render the building suitable for use by the project for which the grant is made.

(a) General requirements. An application for a grant under this part for a project under subparts B, C, or D which includes the acquisition and/or modernization of an existing building must include the following:

(1) A legal description of the site and a drawing showing the location of the building;

(2) A description of the architectural, structural, and other pertinent characteristics of the building sufficient to show that it is or that it will be, after alteration and renovation or after modernization, suitable for use by the project;

(3) A detailed estimate of the cost of the proposed acquisition and/or modernization;

(4) A description of, and copies of any relevant documents concerning, any existing or proposed financing arrangements for the acquisition and/or modernization;

(5) The proposed schedule for acquisition and/or modernization and occupancy;

(6) An assessment of the environmental impact of the proposed acquisition and/or modernization as called for by section 102(2)(c) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(c)) and such information as may be necessary to comply with the National Historic Preservation Act of 1966 (16 U.S.C. 470(f));

(7) Reasonable assurances that—

(i) The applicant has or will obtain a fee simple or such other estate or interest in the site, including necessary easements and rights-of-way, sufficient to assure for a period of not less than 20 years (in the case of interim facilities, for the period constituting the estimated useful life of such facilities) undisturbed use and possession for the purpose of the operation of the project;

(ii) The building will be used for the purposes for which the grant is made;

(iii) The building complies, or after alteration and renovation or after modernization will comply, with applicable State and local codes and with:

(A) “American National Standard Specifications for Making Buildings and Facilities Accessible to, and Usable by, the Physically Handicapped” Number ANSI A117.1-1961 (R 1971), as modified by other standards prescribed by the Secretary or the Administrator of the General Services Administration. The applicant shall be responsible for conducting inspections to insure compliance with the specifications;

(B) The applicable standards set forth in Life Safety Code 1973, NFPA No. 101, which is hereby incorporated by reference and made a part hereof. Copies of such document are available for examination at the Department's and Regional Offices' Information Centers listed in 45 CFR 5.31 and may also be obtained from the National Fire Protection Association, 470 Atlantic Avenue, Boston, MA 02210 for $3.00 per copy.

(iv) In the case of a public applicant with an approved project which involves the displacement of persons or businesses on or after January 2, 1971, whose real property has or will be taken, the applicant will comply with the provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L. 91-646) and the applicable regulations issued thereunder (45 CFR part 15);

(v) Sufficient funds will be available to meet any portion of the cost of acquiring and/or modernizing the building not borne by the grant under this part;

(vi) Sufficient funds will be available after acquisition and/or modernization of the building for effective use of the building for the purposes of the proj-ect;

(vii) The applicable requirements of the Flood Disaster Protection Act of 1973 have been met;

(8) Such other information as the Secretary may reasonably require.

(b) Requirement for acquisition grants. Except for a grant solely for amortization of principal and payment of interest on an existing loan, an application for a grant for a project which includes the acquisition of an existing building must include, in addition to the requirements of paragraph (a) of this section, evidence satisfactory to the Secretary that the applicant has explored other alternatives to the proposed acquisition (such as leasing facilities or acquiring other facilities in the project's catchment area) and that the proposed acquisition constitutes the soundest alternative from a financial and program standpoint.

(c) Requirements for modernization grants. In addition to the requirements of paragraph (a) of this section, an application for a grant for a project which includes modernization of an existing building must include the following:

(1) Plans and specifications for the proposed modernization which conform to the standards specified in § 51c.503(a)(7)(iii);

(2) Reasonable assurance that any laborer or mechanic employed by any contractor or subcontractor in the performance of work on the modernization project will be paid wages at rates not less than those prevailing on similar work in the locality as determined by the Secretary of Labor under the Davis-Bacon Act (40 U.S.C. 276a et seq.) and will receive compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in any workweek in excess of 8 hours in any calendar day; and

(3) Copies of any construction and materials contracts already entered into for the proposed modernization.

(a) General requirements. A grantee which has received a grant under section 330 of the Act for a project which includes the acquisition and/or modernization of an existing building must:

(1) Assurances. Comply with the assurances provided pursuant to this subpart.

(2) Approval of estimated cost. Not enter into any contract for the acquisition and/or modernization funded under this subpart where the cost of such acquisition and/or modernization exceeds the estimates in the application, without the prior approval of the Secretary.

(3) Non-default. Make every effort to prevent any default on any loan secured by the building and, in the event of a default, promptly notify the Secretary of the default and make every effort on a timely basis to cure the default.

(b) Requirements for acquisition grants. In addition to the requirements of paragraph (a) of this section, a grantee which has received a grant under section 330 of the Act for a proj-ect which includes the acquisition of an existing building must:

(1) Bona-fide sale. Acquire or, in the case of a grant solely for amortization of principal and payment of interest on an existing loan, have acquired the existing building pursuant to a bona-fide sale involving an actual cost to the applicant and resulting in additional or improved facilities for the purposes of the project.

(2) Standards of construction and equipment. Except in the case of a grant solely for amortization of principal and payment of interest on an existing loan, obtain a determination by the Secretary that the facility conforms (or upon completion of any necessary alteration and renovation or modernization will conform) to the standards set forth in § 51c.503(a)(7)(iii) of this subpart before entering into a final or unconditional contract for the acquisition. Where the Secretary finds that exceptions to or modifications of any such standards would be consistent with the purposes of the Act and of the program, he may authorize such exceptions or modifications.

(3) Financing. Where the grantee will obtain a loan secured by the building in order to acquire the building, obtain such financing at the lowest current rate prevailing in the area for comparable loans on comparable facilities.

(c) Requirements for modernization grants. In addition to the requirements of paragraph (a) of this section, a grantee which has received a grant under section 330 of the Act for a proj-ect which includes the modernization of an existing building must:

(1) Costs in excess of approved costs. Finance all costs in excess of the estimated costs approved in the application and submit to the Secretary for prior approval any changes that substantially alter the scope of the function, utilities, or safety of the facility.

(2) Competitive bids. (i) Obtain the approval of the Secretary before the project is advertised or placed on the market for bidding; such approval must include a determination by the Secretary that the final plans and specifications conform to the standards set forth in § 51c.503(a)(7)(iii) of these regulations.

(ii) Except as otherwise provided by State or local law, contract for construction (including the purchase and installation of built-in equipment) on a lump sum fixed-price basis, and award contracts on the basis of competitive bidding obtained by public advertising with award of the contracts to the lowest responsive and responsible bidders. The provision for exceptions based on State and local law shall not be invoked to give local contractors or suppliers a percentage preference over non-local contractors bidding for the same contract. Such practices are precluded by this paragraph.

(3) Construction contracts. (i) Include the following conditions and provisions in all construction contracts for the modernization project:

(A) The provisions set forth in “DHHS Requirements for Federally Assisted Construction Contracts Regarding Labor Standards and Equal Employment Opportunities,” Form DHHS 514 (rev. 7/76) (issued by the Office of Grants Administration Policy, U.S. Department of Health and Human Services) pertaining to the Davis-Bacon Act, the Contract Work Hours Standards Act, and the Copeland Act (Anti-Kickback) Regulations, except in the case of contracts in the amount of $2,000 or less; and pertaining to Executive Order 11246, 30 FR 12319 (September 24, 1965), as amended, relating to nondiscrimination in construction contract employment, except in the case of contracts in the amount of $10,000 or less;

(B) That the contractor shall furnish performance and payment bonds each of which shall be in the full amount of the contract price, and shall maintain, during the life of the contract, adequate fire, workmen's compensation, public liability, and property damage insurance: Provided, however, That in the case of a State or local unit of government which enters into a construction contract of less than $100,000, State or local provisions with respect to performance and payment bonds shall be deemed to meet the requirements of this paragraph; and

(C) That the Secretary shall have access at all reasonable times to work wherever it is in preparation or progress, and the contractor shall provide proper facilities for such access and inspection.

(ii) Executive Order 11246. Comply with the applicable requirements of Executive Order 11246, 30 FR 12319 (September 24, 1965) as amended, relating to nondiscrimination in construction contract employment, and the applicable rules, regulations, and procedures prescribed pursuant thereto.

(4) Modernization supervision. Provide and maintain competent and adequate architectural or engineering supervision and inspection at the modernization site to insure that the completed work conforms with the plans and specifications.

(5) Completion responsibility. Complete the modernization in accordance with the grant application and the approved plans and specifications.

(6) Progress reports. Furnish progress reports and such other information concerning the modernization as the Secretary may require.

(d) The Secretary may at any time approve exceptions to the provisions of this section where he finds that such exceptions are not inconsistent with section 330 of the Act, other requirements of law, or the purposes of the program.

The cost of acquisition and/or modernization of existing buildings for which funds may be granted under this part will be determined by the Secretary, utilizing such documentation submitted by the applicant as the Secretary may prescribe (including the reports of such real estate appraisers as the Secretary may approve) and other relevant factors, taking into consideration only that portion of the existing building necessary for the operation of the approved project.

Grant funds may be used to amortize the principal of or pay interest on a loan or mortgage on an existing building acquired under this part, including a building purchased by a grantee prior to the promulgation of this part, but only if the building is being used for the purposes of section 330 and complies with the applicable provisions of this subpart and only to the extent the Secretary finds such principal amounts and interest rates to be reasonable.

No grant for the acquisition of a facility which has previously received a Federal grant for construction, acquisition, or equipment shall serve either to reduce or restrict the liability of the applicant or any other transferor or transferee from any obligation of accountability imposed by the Federal Government by reason of such prior grant.

In determining whether there is good cause for waiver of any right of recovery which he may have against a nonprofit private agency by reason of any payments made pursuant to a loan guarantee, or against a public agency by reason of the failure of such agency to make payments of principal and interest on a direct loan to such agency, the Secretary shall take into consideration the extent to which:

(a) The facility with respect to which the loan guarantee or direct loan was made will continue to be devoted by the applicant or other owner to use for the purpose for which it was constructed or another public or nonprofit purpose which will promote the purposes of the Act;

(b) There are reasonable assurances that for the remainder of the repayment period of the loan other public or non-profit facilities not previously utilized for the purpose for which the facility was constructed will be so utilized and are substantially equivalent in nature and extent for such purposes; and

(c) Such recovery would seriously curtail the provision of medical services to persons in need of such services in the area.

No official of the Department of Health and Human Services will approve any proposal to modify the terms of a loan guaranteed under title VI of the Public Health Service Act (42 U.S.C. 291 et seq.) and this subpart which would permit the use of the guaranteed loan (or the guarantee) as collateral for an issue of tax-exempt securities.

(a) Fees will be charged for the processing of requests for parity, and for major and minor modifications of the terms of documents evidencing and securing direct and guaranteed loans. In accordance with the requirements of the User Charge Statute, 31 U.S.C. 9701(b), the Secretary determines the amount of the application fee that must be submitted with each type of modification.

(1) As used in this section, a request for parity allows new debt to share lien position (i.e. collateral) with an existing Hill-Burton loan.

(2) As used in this section, a major modification is any modification involving the release of $100,000 or more of collateral; a corporate restructuring that involves a transfer of assets; master indenture requests; modifications to a sinking fund; defeasance requests and requests for additional secured indebtedness; and any, other modification that involves a comparably significant use of Department resources.

(3) As used in this section, a minor modification is any modification involving the release of less than $100,000 of collateral; an easement; and any other modification that involves a comparable use of Department resources.

(b) A request for modification is to be accompanied by a certified check or money order in the amount of the appropriate fee, payable to the U.S. Treasury. The fees for modification requests submitted on or after October 28, 1986 are as follows:

(1) $1,500 for a minor modification,

(2) $4,500 for a major modification, and

(3) $5,500 for a request for parity.

(c) A submitter may withdraw its request for modification within 10 business days following its receipt and receive a refund of the fee.

(d) If the Secretary determines that a change in the amount of a fee is appropriate, the Department will issue a notice of proposed rulemaking in the Federal Register to announce the proposed amount.

Act, as used in this part, means the Federal Mine Safety and Health Act of 1977, as amended (30 U.S.C. 801 et seq.).

Secretary means the Secretary of Health and Human Services and any other officer or empolyee of the Department of Health and Human Services to whom the authority involved has been delegated.

Miner or coal miner means any individual who works or has worked in or around a coal mine or coal preparation facility in the extraction or preparation of coal. The term also includes an individual who works or has worked in coal mine construction or transportation in or around a coal mine, to the extent that the individual was exposed to coal dust as a result of employment.

Any State or public or private entity may apply for a grant under this part.

(a) The Secretary will give preference to a State, which meets the requirements of this part and applies for a grant under this part, over other applicants in that State.

(b) Within the limits of funds available for these purposes the Secretary may award grants to assist in the carrying out of those programs which will in the Secretary's judgment best promote the purposes of section 427(a) of the Act, taking into account;

(1) The number of miners to be served and their needs; and

(2) The quality and breadth of services to be provided.

All information as to personal facts and circumstances obtained by the grantee's staff about recipients of services shall be held confidential and shall not be disclosed without the individual's consent except as may be required by law or as may be necessary to provide service to the individual or to provide for audits with appropriate safeguards for confidentiality of patient records. Otherwise, information may be disclosed only in summary, statistical, or other form which does not identify particular individuals.

Grantees must carry out their projects in accordance with their applications and the provisions of this part.

The Secretary may, for good cause shown, waive provisions of these regulations.

Other regulations which apply to the Black Lung Clinics Program include, but are not limited to, the following:

An approvable State application must contain assurances that the State will:

(a) Provide the following services for active and inactive miners in the State:

(1) Primary care;

(2) Patient and family education and counseling;

(3) Outreach;

(4) Patient care coordination, including individual patient care plans for all patients;

(5) Antismoking advice; and

(6) Other symptomatic treatments.

(b) Provide medical services in consultation with a physician with special training or experience in the diagnosis and treatment of respiratory diseases.

(c) Meet all criteria for approval and designation by the Department of Labor under 20 CFR part 725 to perform disability examination and provide treatment under the Act.

(d) Use grant funds under this part to supplement and not supplant existing services of the State.

(e) Provide the services described above for those miners previously served by a Black Lung Clinic in the State for which grant support expires during the funding period of the State's grant.

(f) Provide services described above regardless of a person's ability to pay.

(g) Audit its expenditures from amounts received under this part in accordance with the provisions of Attachment P, Audit Requirements, of Office of Management and Budget Circular A-102, Uniform Requirements for Assistance to State and Local Governments, as adopted for the Department of Health and Human Services by 45 CFR part 74.

An approvable application must contain the following:

(a) A plan for the provision of the services required by § 55a.201(a), consistent with the requirements of § 55a.201 (b) and (c). The plan must also contain at least the following elements:

(1) A description of the target population to whom services are to be provided, including a statement of the need for services;

(2) An assurance that charges shall be made for services rendered as follows:

(i) A schedule shall be maintained listing fees or payments for the provision of services, designed to cover reasonable costs of operations;

(ii) A schedule of discounts adjusted on the basis of a patient's ability to pay shall be maintained. The schedule of discounts must provide for a full discount to individuals and families with annual incomes at or below the poverty line established in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), (except that nominal fees for service may be requested, but not required, from individuals and families with annual incomes at or below the poverty line). No discounts shall be provided to individuals and families with annual incomes greater than twice the poverty line; and

(iii) Where third-party payors (including Government Agencies) are authorized or under a legal obligation to pay all or a portion of such charges, all services covered by that reimbursement plan will be billed and every reasonable effort will be made to obtain payment.

(b) An assurance that no person will be denied services because of inability to pay.

(c) An assurance that grant funds received under this part will be used to supplement and not supplant existing services of the grantee.

The regulations of this subpart are applicable to all grants authorized by section 319 of the Public Health Service Act (42 U.S.C. 247d).

As used in this part:

(a) Act means the Public Health Service Act (42 U.S.C. 201 et seq.), as amended.

(b)(1) Agriculture means farming in all its branches, including—

(i) Cultivation and tillage of the soil;

(ii) The production, cultivation, growing, and harvesting of any commodity grown on, in, or as an adjunct to or part of a commodity grown in, or on, the land; and

(iii) Any practice (including preparation and processing for market and delivery to storage or to market or to carriers for transportation to market) performed by a farmer or on a farm incident to or in conjunction with an activity described in subsection (ii).

(c) Catchment area means the geographic area served by a project funded under section 319 of the Act.

(d) Environmental health services means the detection and alleviation of unhealthful conditions of the environment of the persons served by the project, such as problems associated with water supply, sewage treatment, solid waste disposal, rodent and parasite infestation, field sanitation, and housing conditions and the treatment of medical conditions arising therefrom. For the purposes of this part, the detection and alleviation of unhealthful conditions of the environment includes the notification of appropriate Federal, State, or local authorities responsible for correcting such conditions and the making of arrangements therefor with such authorities.

(e) Health professionals means professionals (such as physicians, dentists, nurses, podiatrists, optometrists, and physicians' extenders) who are engaged in the delivery of health services and who meet all applicable Federal or State requirements to provide their professional services.

(f) High impact area means a catchment area which has not less than 6,000 migratory agricultural workers, seasonal agricultural workers, and members of the families of such workers residing within its boundaries for more than two months in the most recent calendar year for which statistical data acceptable to the Secretary is available.

(g)(1) Migrant health center means an entity which either through its staff and supporting resources or through contracts or cooperative arrangements with other public or private entities provides for migratory agricultural workers, seasonal agricultural workers, and the members of the families of such workers, within its catchment area:

(i) Primary health services;

(ii) As determined by the Secretary to be appropriate for particular centers, supplemental health services necessary for the adequate support of primary health services;

(iii) Referral to providers of supplemental health services and payment, as determined by the Secretary to be appropriate and feasible, for the provision of such services;

(iv) Environmental health services, as determined by the Secretary to be appropriate for particular centers;

(v) As determined by the Secretary to be appropriate for particular centers, infectious and parasitic disease screening and control services;

(vi) As determined by the Secretary to be appropriate for particular centers, accident prevention programs, including prevention of excessive exposure to pesticides through, but not limited to, notification of appropriate Federal, State or local authorities of hazardous conditions due to pesticide use; and

(vii) Information on the availability and proper use of health services.

(2) For purposes of paragraph (g)(1) of this section, the provision of a given service by a center will be determined by the Secretary to be appropriate where

(i) There is a need, as determined by the Secretary, for the provision of such service to individuals described in paragraph (g)(1) of this section in the catchment area; and

(ii) The provision of such service by the center is feasible, taking into consideration the center's projected revenues, other resources, and grant support under this part.

(h) Migratory agricultural worker means an individual whose principal employment is in agriculture on a seasonal basis, who has been so employed within the last 24 months, and who establishes for the purpose of such employment a temporary place of abode;

(i) Nonprofit, as applied to any private agency, institution, or organization, means one which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

(j) Physician means a licensed doctor of medicine or doctor of osteopathy.

(k) Primary care means preventive, diagnostic, treatment, consultant, referral, and other services rendered by physicians (including, as appropriate, physicians' extenders), routine associated laboratory services and diagnostic radiologic services, and emergency health services.

(l) Primary health services means:

(1) Diagnostic, treatment, consultative referral, and other services rendered by physicians and, where feasible, by physicians' extenders, such as physicians' assistants, nurse clinicians, and nurse practitioners;

(2) Diagnostic laboratory services and diagnostic radiologic services;

(3) Preventive health services, including children's eye and ear examinations, prenatal and post-partum care, perinatal services, well child care (including periodic screening), immunizations, and voluntary family planning services;

(4) Emergency medical services, including provision, through clearly defined arrangements, for access of users of the center to health care for medical and dental emergencies during and after the center's regularly scheduled hours;

(5) Transportation services as needed for adequate patient care, sufficient so that residents of the catchment area served by the center with special difficulties of access to services provided by the center receive such services; and

(6) Preventive dental services provided by a licensed dentist or other qualified personnel, including—

(i) Oral hygiene instruction;

(ii) Oral prophylaxis, as necessary; and

(iii) Topical application of fluorides, and the prescription of fluorides for systemic use when not available in the community water supply.

(m) Seasonal agricultural worker means an individual whose principal employment is in agriculture on a seasonal basis and who is not a migratory agricultural worker.

(n) Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(o) Supplemental health services means health services which are not included as primary health services and which are:

(1) Inpatient and outpatient hospital services;

(2) Home health services;

(3) Extended care facility services;

(4) Rehabilitative services (including physical and occupational therapy) and long-term physical medicine;

(5) Mental health services, including services of psychiatrists, psychologists, and other appropriate mental health professionals;

(6) Dental services other than those provided as primary health services;

(7) Vision services, including routine eye and vision examinations and provision of eyeglasses, as appropriate and feasible;

(8) Allied health services;

(9) Pharmaceutical services, including the provision of prescription drugs;

(10) Therapeutic radiologic services;

(11) Ambulatory surgical services;

(12) Public health services (including nutrition education and social services);

(13) Health education services; and

(14) Services including the services of outreach workers, which promote and facilitate optimal use of primary health services and services referred to in the preceding subparagraphs of this paragraph and, if a substantial number of individuals in the population served by the center are of limited English-speaking ability, the services of outreach workers and other personnel fluent in the language or languages spoken by such individuals.

Any public or nonprofit private entity is eligible to apply for a grant under this part.

(a) An application for a grant under this part shall be submitted to the Secretary at such time and in such form and manner as the Secretary may prescribe.

(b) The application shall contain a budget and narrative plan of the manner in which the applicant intends to conduct the project and carry out the requirements of this part. The application must describe how and the extent to which the project has met, or plans to meet, each of the requirements in subpart B (relating to grants for planning and development of migrant health centers), subpart C (relating to grants for the operation of migrant health centers), subpart D (relating to grants for the operation of migrant health entities), subpart E (relating to grants for planning and developing migrant health programs), subpart F (relating to grants for the operation of migrant health programs), or subpart G (relating to grants for technical assistance), as applicable. In addition, applications must include:

(1) A statement of specific, measurable objectives and the methods to be used to assess the achievement of the objectives in specified time periods and at least on an annual basis.

(2) The precise boundaries of the catchment area to be served by the applicant. In addition, the application shall include information sufficient to enable the Secretary to determine that the applicant's catchment area meets the following criteria:

(i) The size of such area is such that the services to be provided by the applicant are available and accessible to the residents of the area promptly and as appropriate;

(ii) The boundaries of such area conform, to the extent practicable, to relevant boundaries of political subdivisions, school districts, and areas served by Federal and State health and social service programs; and

(iii) The boundaries of such area eliminate, to the extent possible, barriers resulting from the area's physical characteristics, its residential patterns, its economic and social groupings, and available transportation.

(3)(i) The number of migratory agricultural workers and members of their families, and seasonal agricultural workers and members of their families which resided in the project's catchment area in the most recent calendar year for which statistical data acceptable to the Secretary is available; and

(ii) The approximate period or periods of residence of all groups of migratory agricultural workers and their families counted under paragraph (b)(3)(i) of this section.

(4) The results of an assessment of the need that the population to be served has for the services to be provided by the project (or in the case of applications for planning and development projects, the methods to be used in assessing such need), taking into consideration the following factors:

(i) Available health resources in relation to size of the catchment area and population of migratory and seasonal agricultural workers and their families in such area, including appropriate ratios of primary care physicians in general or family practice, internal medicine, pediatrics, or obstetrics and gynecology, to such population;

(ii) Health indices for such population, such as infant mortality rate;

(iii) Economic factors affecting such population's use of health services, such as percentage of such population with incomes below the poverty level;

(iv) Demographic factors affecting such population's need and demand for health services, such as percentage of such population age 65 and over; and

(v) Special factors of access resulting from the conditions of employment of such workers (including working hours, housing, and sanitation).

(5) Position descriptions for personnel who will be utilized in carrying out the activities of the project and a statement indicating the need for the positions to be supported with grant funds to accomplish the objectives of the project.

(6) Letters and other forms of evidence showing that efforts have been made to secure financial and professional assistance and support for the project within the proposed catchment area and the continuing involvement of the community in the development and operation of the project.

(7) An assurance that an independent certified public accountant will be engaged to certify that the project's system for the management and control of its finances will be in accord with sound financial management practices, including applicable Federal requirements.

(8) A list of all services proposed to be provided by the project.

(9) A list of services which are to be provided directly by the project through its own staff and resources and a description of any contractual or other arrangements (including copies of documents, where available) entered into, or planned for the provision of services.

(10) The schedule of fees and/or payments and schedule of discounts for services provided by the project.

(11) If the applicant provides services to populations other than migratory and seasonal agricultural workers and their families, identification of such populations.

(12) Evidence that all applicable requirements for review and/or approval of the application under title XV of the Act have been met.

(13) An assurance that the project will be conducted in accordance with the applicable requirements of this part.

(c) The application must be executed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the statute, the applicable regulations of this part, and any additional conditions of the grant.

(a) The amount of any award under this part will be determined by the Secretary on the basis of his estimate of the sum necessary for a designated portion of direct project costs plus an additional amount for indirect costs, if any, which will be calculated by the Secretary either:

(1) On the basis of the estimate of the actual indirect costs reasonably related to the project; or

(2) On the basis of a percentage of all, or a portion of, the estimated direct costs of the project when there are reasonable assurances that the use of such percentage will not exceed the approximate actual indirect costs. Such award may include an estimated provisional amount for indirect costs or for designated direct costs (such as fringe benefit rates) subject to upward (within the limits of available funds) as well as downward adjustments to actual costs when the amount properly expended by the grantee for provisional items has been determined by the Secretary: Provided, however, That no grant shall be made for an amount in excess of the total costs found necessary by the Secretary to carry out the project.

(i) In determining the percentage of project costs to be borne by the grantee, factors which the Secretary will take into consideration will include the following:

(A) The ability of the grantee to finance its share of project costs from non-Federal sources;

(B) The need in the area served by the project for the services to be provided; and

(C) The extent to which the project will provide services in an innovative manner which the Secretary desires to stimulate in the interest of developing more effective health service delivery systems on a regional or national basis.

(ii) At any time after approval of an application under this part, the Secretary may retroactively agree to a percentage of project costs to be borne by the grantee lower than that determined pursuant to paragraph (a)(2)(i) of this section where he finds that changed circumstances justify a smaller contribution.

(iii) In determining the grantee's share of project costs, costs borne by Federal grant funds, or costs used to match other Federal grants, may not be included except as otherwise provided by law or regulations.

(b) All grant awards shall be in writing, and shall set forth the amount of funds granted and the period for which support is recommended.

(c) Neither the approval of any proj-ect nor any grant award, shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved project or portion thereof. For continuation support, grantees must make separate application.

(a) Grants under sections 319(c) (1)(A), 319(d)(1)(A), 319(d)(1)(B) of the Act and subparts B, C, and D of this part shall be made in accordance with the following priorities:

(1) Highest priority will be given to approvable applications which propose to serve catchment areas in which 6,000 or more migratory agricultural workers and members of their families reside for more than two months in the calendar year.

(2) Second priority will be given to approvable applications which propose to serve catchment areas in which fewer than 6,000 but more than 1,000 migratory agricultural workers and members of their families reside for more than two months in the applicable calendar year.

(3) Third priority will be given to approvable applications which propose to serve catchment areas in which migratory agricultural workers and members of their families reside but in which fewer than 1,000 such persons reside for more than two months in the applicable calendar year.

(4) Fourth priority will be given to approvable applications which propose to serve catchment areas in which migratory agricultural workers and members of their families reside in the applicable calendar year but in which no such persons reside for more than two months in such year.

(5) Fifth priority will be given to approvable applications which propose to serve catchment areas in which no migratory agricultural workers or members of their families reside for any period in the applicable calendar year but in which 6,000 or more seasonal agricultural workers and the members of their families reside.

(6) Lowest priority will be given to approvable applications which propose to serve catchment areas in which no migratory agricultural workers or members of their families reside for any period in the applicable calendar year and in which fewer than 6,000 seasonal agricultural workers and the members of their families reside.

(b) Grants under sections 319(c) (1)(B) and 319(d)(1)(C) of the Act and subparts E and F of this part will be made in accordance with priorities set forth in paragraphs (a)(2) through (a)(6) of this section, in the order set forth.

(c) For the purposes of this section, the applicable calendar year will be the calendar year for which data is provided in accordance with § 56.104(b)(3) of this subpart.

(a) Any funds granted pursuant to this part, as well as other funds to be used in performance of the approved project, may be expended solely for carrying out the approved project in accordance with section 319 of the Act, the applicable regulations of this part, the terms and conditions of the award, and the applicable cost principles prescribed in subpart Q of 45 CFR part 74.

(b) Project funds awarded under this part may be used for, but need not be limited to, the following:

(1) The costs of acquiring and modernizing existing buildings (including the costs of amortizing the principal of, and paying interest on, loans), but only in accordance with subpart H of this part and as approved in the grant award;

(2) The costs of obtaining technical assistance to develop and improve the management or service capability of the project but only as approved by the Secretary;

(3) To reimburse members of the grantee's governing board established pursuant to § 56.304 of subpart C, or advisory council established pursuant to § 56.603(q) of subpart F, if any, for reasonable expenses actually incurred by reason of their participation in the activities of such board or council;

(4) To reimburse such governing board or advisory council members who are individuals eligible to be served by the project for wages lost by reason of participation in the activities of such board or council;

(5) The cost of delivering health services to migratory agricultural workers, seasonal agricultural workers and the members of their families within the project's catchment area, within the following limitations: grant funds may be used to pay the full cost of project services to such individuals and families with annual incomes at or below those set forth in the most recent “CSA Income Poverty Guidelines” (45 CFR 1060.2) issued by the Community Services Administration, and to pay the portion of the cost of services provided in accordance with the schedule of discounts which, under such schedule, is uncompensated; Provided, That

(i) Charges will be made to such individuals and families in accordance with § 56.303(f) of subpart C or § 56.603(e) of subpart F, as applicable;

(ii) Reasonable effort shall be made to collect such charges under a billing and collections system; and

(iii) The charge to grant funds shall exclude any amounts collected pursuant to paragraph (b)(5)(ii) of this section;

(6) The cost of insurance for medical emergency and out-of-area coverage; and

(7) The cost of providing to the staff and governing board, if any, of the project training related to the management of an ambulatory care facility, and to the staff of a project funded under subpart C, D, or F of this part, training related to the provision of primary, supplemental and environmental health services provided or to be provided by the project, consistent with the applicable requirements of 45 CFR part 74.

(c) Prior approval by the Secretary of revisions of the budget and project plan is required whenever there is to be a significant change in the scope or nature of project activities.

The Secretary shall from time to time make payments to a grantee of all or a portion of any grant award, either in advance or by way of reimbursement for expenses incurred or to be incurred, to the extent he determines such payments necessary to promote prompt initiation and advancement of the approved project.

(a) Attention is called to the requirements of title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C. 2000d et seq.) and in particular section 601 of such Act which provides that no person in the United States shall on the grounds of race, color, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. A regulation implementing such title VI, which applies to grants made under this part, has been issued by the Secretary of Health and Human Services with the approval of the President (45 CFR part 80). In addition, no person shall, on the grounds of age, sex, creed, or marital status (unless otherwise medically indicated), be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity so receiving Federal financial assistance.

(b) Attention is called to the requirements of section 504 of the Rehabilitation Act of 1973, as amended, which provides that no otherwise qualified handicapped individual in the United States shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.

All information as to personal facts and circumstances obtained by the project staff about recipients of services shall be held confidential and shall not be divulged without the individual's consent except as may be required by law or as may be necessary to provide service to the individual or to provide for medical audits by the Secretary or his designee with appropriate safeguards for confidentiality of patient records. Otherwise, information may be disclosed only in summary, statistical, or other form which does not identify particular individuals.

Except as may otherwise be provided under the terms and conditions of the award, the grantee may copyright without prior approval any publications, films, or similar materials developed or resulting from a project supported by a grant under this part, subject, however, to a royalty-free, non-exclusive, and irrevocable license or right in the Government to reproduce, translate, publish, use, disseminate, and dispose of such materials and to authorize others to do so.

(a) Accounting for grant award payments. All payments made by the Secretary shall be recorded by the grantee in accounting records separate from the records of all other funds, including funds derived from other grant awards. With respect to each approved project, the grantee shall account for the sum total of all amounts paid as well as other funds and in-kind contributions by presenting or otherwise making available evidence satisfactory to the Secretary of expenditures for direct and indirect costs meeting the requirements of this part: Provided, however, That when the amount awarded for indirect costs was based on a predetermined fixed-percentage of estimated direct costs, the amount allowed for indirect costs shall be computed on the basis of such predetermined fixed-percentage rates applied to the total, or a selected element thereof, of the reimbursable direct costs incurred.

(b) Accounting for interest earned on grant funds. Pursuant to section 203 of the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213), a State will not be held accountable for interest earned on grant funds, pending their disbursement for grant purposes. A State, as defined in section 102 of the Intergovernmental Cooperation Act, means any one of the several States, the District of Columbia, Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State, but does not include the government of the political subdivisions of the State. All grantees other than a State, as so defined, must return all interest earned on grant funds to the Federal Government.

(c) Grant closeout—(1) Date of final accounting. A grantee shall render, with respect to each approved project, a full account, as provided herein, as of the date of the termination of grant support. The Secretary may require other special and periodic accounting.

(2) Final settlement. There shall be payable to the Federal Government as final settlement with respect to each approved project, the sum of:

(i) Any amount not accounted for pursuant to paragraph (a) of this section;

(ii) Any credits for earned interest pursuant to paragraph (b) of this section;

(iii) Any other amounts due pursuant to subparts F, M, and O of 45 CFR part 74.

The provisions of 45 CFR part 74, establishing uniform administrative requirements and cost principles, shall apply to all grants under this part to States and local governments as those terms are defined in subpart A of that part 74. The relevant provisions of the following subparts of part 74 shall also apply to grants to all other grantee organizations under this part:

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 319(c)(1)(A) of the Act for projects for planning and developing migrant health centers in high impact areas.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 56.104 of subpart A of this part, contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of this part.

A project for planning and developing a migrant health center supported under this subpart must:

(a) Determine (by survey or other appropriate means) the approximate number of (1) migratory agricultural workers and the members of their families, and (2) seasonal agricultural workers and the members of their families, within the proposed catchment area in the calendar year in which the grant is made and the period of time these workers and their families reside in the catchment area during such year.

(b) Prepare an assessment of the need of the population proposed to be served by the migrant health center for the services set forth in § 56.102(g)(1) of subpart A of this part. This assessment of need must, at a minimum, include the factors listed in § 56.104(b)(3) (i)-(iv).

(c) Design a migrant health center program for such population, based on the assessment prepared pursuant to paragraph (b) of this section which indicates in detail how the proposed center will fulfill the needs identified in that assessment and meet the requirements of subpart C of this part.

(d) Develop a plan for the implementation of the program designed pursuant to paragraph (c) of this section. This implementation plan must provide for the time-phased recruitment and training of the personnel essential for the operation of a migrant health center and the gradual assumption of operational status of the project so that the project will, in the judgment of the Secretary, meet the requirements contained in subpart C of this part by the end of the project period.

(e) Implement the plan developed pursuant to paragraph (d) of this section in accordance with such paragraph.

(f) Make efforts to secure within the proposed catchment area of such center, to the extent possible, financial and professional assistance and support for the project.

(g) Initiate and encourage continuing community involvement in the development and operation of the proj-ect through, for example, contributions or loans of cash, services, equipment, full-or part-time staff, space, materials, or facilities.

(h) Provide for sufficient staff, qualified by training and experience, to carry out the project and establish standards and qualifications for personnel (including the project director).

(i) Utilize, to the maximum extent feasible, other Federal, State, local, and private resources available for support of the project, prior to use of project funds under this subpart.

(j) Provide the means for evaluating the project's progress in achievement of its specific objectives, and submit such progress reports on the project as the Secretary may from time to time request.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which, in his judgment, will provide needed health services in a catchment area which will not be served by another project funded under this part and meet the applicable requirements of section 319(c)(1)(A) of the Act and this part, in accordance with priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part; Provided, That in the case of applicants which propose to serve substantially the same catchment areas or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107,

(1) Priority shall be given to applications submitted by community-based organizations which are representative of the population to be served by the project. For purposes of this paragraph, an applicant shall be deemed to be such an organization if it provides a formal mechanism (such as membership on the organization's governing body or membership on an advisory body) which gives migratory seasonal agricultural workers and their families significant involvement in the formulation of the organization's policies; and

(2) Where all such applicants are community-based organizations representative of the population to be served by the project, the Secretary shall award the grant to the applicants which will, in his judgment, best promote the purposes of section 319(c)(1)(A) of the Act and the applicable regulations of this part, taking into account with respect to each application:

(i) The degree to which the proposed project satisfactorily provides for the elements set forth in § 56.203;

(ii) The administrative and management capability of the applicant;

(iii) The extent to which community resources will be utilized in the proj-ect; and

(iv) The degree to which the applicant intends to integrate services supported by a grant under this part with health services provided under other federally assisted health services or reimbursement programs or projects.

(b) The Secretary shall award no more than two grants under this subpart for the same project.

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 319(d)(1)(A) of the Act for the costs of operation of migrant health centers in high impact areas.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 56.104 of subpart A of this part,

(a) Be submitted by an entity (which may be a co-applicant) which the Secretary determines is a migrant health center, and

(b) Contain information sufficient to enable the Secretary to determine that the center will meet the requirements of this part.

A migrant health center supported under this subpart must:

(a) Provide the health services of the center so that such services are available and accessible promptly, as appropriate, and in a manner which will assure continuity of service to the migratory and seasonal agricultural workers and their families within the center's catchment area.

(b) Implement a system for maintaining the confidentiality of patient records in accordance with the requirements of § 56.111 of subpart A of this part.

(c) Have an ongoing quality assurance program which provides for the following:

(1) Organizational arrangements, including a focus of responsibility, to support the quality assurance program and the provision of high quality patient care;

(2) Periodic assessment of the appropriateness of the utilization of services and the quality of services provided or proposed to be provided by the center, and by other providers through contract or other cooperative arrangement with the center. Such assessments must:

(i) Be conducted by physicians or by other appropriate health professionals under the supervision of physicians or, as appropriate, by health professionals who are peers of the health professionals who provided the services;

(ii) Be based on the systematic collection and evaluation of patient rec-ords; and

(iii) Identify and document the necessity for change in the provision of services by the center and result in the institution of such change, where indicated.

(d) Develop management and control systems which are in accordance with sound financial management procedures, including the provision for an audit (1) conducted in accordance with the “Guide for Audits of Migrant Health Grants” of the DHHS Audit Agency, and (2) conducted with reasonable frequency, usually annually but not less frequently than every two years (unless waived for cause by the Secretary), to be made by qualified individuals who are sufficiently independent of those who authorize the expenditure of Federal funds to produce unbiased opinions, conclusions, or judgments, and to determine, at a minimum, the fiscal integrity of grant financial transactions and reports, and compliance with the applicable regulations of this part and the terms and conditions of the grant.

(e) Where the cost of care and services furnished by or through the center is to be reimbursed under title XIX or title XX of the Social Security Act, obtain or make every reasonable effort to obtain a written agreement with the title XIX or title XX State agency for such reimbursement.

(f) Have prepared a schedule of fees or payments for the provision of its services designed to cover its reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the patient's ability to pay. The schedule of discounts must provide for a full discount to individuals and families with annual incomes at or below those set forth in the most recent CSA Poverty Income Guidelines (42 CFR 1060.2) (except that nominal fees for service may be collected from such individuals and families) and for no discount to individuals and families with annual incomes greater than twice those set forth in such Guidelines.

(g) Make every reasonable effort, including the establishment of systems for eligibility determination, billing, and collection, to

(1) Collect reimbursement for its costs in providing health services to persons who are entitled to insurance benefits under title XVIII of the Social Security Act, to medical assistance under a State plan approved under title XIX of such Act, to social services and family planning under title XX of such Act, or to assistance for medical expenses under any other public assistance program, grant program, or private health insurance or benefit program on the basis of the schedule of fees prepared pursuant to paragraph (f) of this section without application of any discounts, and

(2) Secure from patients payments for services in accordance with the schedule of fees and discounts required by paragraph (f) of this section.

(h) Have a governing board which meets the requirements of § 56.304.

(i) Have developed an overall plan and budget for the center that:

(1) Provides for an annual operating budget and a three-year financial management plan which includes all anticipated income and expenses related to items which would, under generally accepted accounting principles, be considered income and expense items;

(2) Provides for a capital expenditure plan for at least a three-year period (including the year to which the operating budget described in paragraph (h)(i)(1) is applicable) which includes and identifies in detail the anticipated sources of financing for, and the objective of, each anticipated expenditure in excess of $100,000 related to the acquisition of land, the improvement of land, buildings, and equipment and the replacement, modernization and expansion of buildings and equipment which would, under generally accepted accounting principles, be considered capital items;

(3) Provides for plan review and updating at least annually; and

(4) Is prepared under the direction of the governing board by a committee consisting of representatives of the governing board, the administrative staff, and the medical staff, if any, of the center.

(j) Establish basic statistical data, cost accounting, management information, and reporting or monitoring systems which will enable the center to provide such statistics and other information as the Secretary may reasonably require relating to the center's costs of operation, patterns of utilization of services, and the availability, accessibility, and acceptability of its services, and to make such reports to the Secretary in a timely manner with such frequency as the Secretary may reasonably require.

(k) Review its catchment area annually to insure that the criteria set out in § 56.104(b)(2) are met and, if criteria are not met, revise its catchment area, with the approval of the Secretary, to conform with such criteria to the extent feasible.

(l) In the case of a center which serves a population including a substantial proportion of individuals of limited English-speaking ability, have developed a plan and made arrangements responsive to the needs of such populations for providing services to the extent practicable in the language and cultural context most appropriate to such individuals, and have identified an individual on its staff who is fluent in both that language and in English and whose responsibilities include providing guidance to such individuals and to appropriate staff members with respect to cultural sensitivities and bridging linguistic and cultural differences. If more than one non-English language is spoken by such group or groups, an individual or individuals fluent in those languages and English must be so identified.

(m) Be operated in a manner calculated to preserve human dignity and to maximize acceptability and effective utilization of services.

(n) To the extent possible, coordinate and integrate project activities with the activities of other federally funded, as well as State and local, health services delivery projects and programs serving the same population.

(o) Establish means for evaluating progress toward the achievement of the specific objectives of the project.

(p) Provide sufficient staff, qualified by training and experience, to carry out the activities of the center.

(q) Assure that facilities utilized in the performance of the project meet applicable fire and life safety codes.

(r) Utilize, to the maximum extent feasible, other Federal, State and local, and private resources available for support of the project, prior to use of project funds under this part.

(s) Provide for community participation through, for example, contributions of cash or services, loans of full- or part-time staff, equipment, space, materials, or facilities.

(t) Where the center will provide services through contract or other cooperative arrangements with other providers of services, the center must:

(1) Enter into the contract or arrangement only if the provider of services will provide the services in a timely manner and make the services accessible and acceptable to the population to be served;

(2) Make payment for services so provided only pursuant to agreements with the providers in accordance with a schedule of rates and payment procedures established and maintained by the center. The center must be prepared to substantiate that such rates are reasonable and necessary;

(3) Directly provide at least primary care unless the center has made arrangements for the provision of primary care which include transfer of all medical and financial information relating to such care to the center; and

(4) Enter into contracts or arrangements for the provision of primary health services only if alternative resources are reasonably available to provide these services in the event of termination of such arrangements.

(u) Operate in a manner such that no migratory or seasonal agricultural worker or member of their family will be denied service by reason of his or her inability to pay therefor. Provided, however, That a charge for the provision of services will be made to the extent that a third party (including a Government agency) is authorized or is under legal obligation to pay such charges.

The governing board of the center must meet the following requirements:

(a) Size. The board must consist of at least 9 but not more than 25 members except that this provision may be waived by the Secretary for good cause shown.

(b) Composition. (1) A majority of the board members must be migratory and seasonal agricultural workers and members of their families who are or will be served by the center and who, as a group, represent the individuals being or to be served in terms of demographic factors, such as race, ethnicity, and sex.

(2) No more than two-thirds of the remaining members of the board may be individuals who derive more than 10 percent of their annual income from the health care industry.

(3) The remaining members of the board must be representatives of the community in which the center's catchment area is located and shall be selected for their expertise in relevant subject areas, such as community affairs, local government, finance and banking, legal affairs, trade unions, and other commercial and industrial concerns, or social services within the community.

(4) No member of the board shall be an employee of the center, or spouse or child, parent, brother or sister by blood of marriage of such an employee. The project director may be a nonvoting, ex-officio member of the board.

(c) Selection of members. The method of selection must be prescribed in the by-laws or other internal governing rules of the center. Such by-laws or other rules must specify a process of selection of individuals on the governing board who represent the population served or to be served by the center so that such individuals, as a group, are representative of such population. Such process of selection in the by-laws or other rules is subject to approval by the Secretary.

(d) Functions and responsibilities. (1) The governing board shall have authority for the establishment of policy in the conduct of the center.

(2) The governing board shall hold regularly scheduled meetings, at least once each month, except for periods of the year, as specified in the bylaws, during which monthly meetings are not practical due to migration out of the catchment area.

(3) Minutes must be kept for all regularly scheduled meetings of the board.

(4) The governing board shall have specific responsibility for:

(i) Approval of the selection and dismissal of the project director or chief executive officer of the center;

(ii) Establishing personnel policies and procedures, including selection and dismissal procedures, salary and benefit scales;

(iii) The development of bylaws which specify the responsibility of the board and principal operating officials of the centers;

(iv) Adopting policy for financial management practices, including a system to assure accountability for center resources, approval of the annual project budget, center priorities, eligibility for services, including criteria for partial payment schedules, and long-range financial planning;

(v) Evaluating center activities, including services utilization patterns, productivity of the center, patient satisfaction, achievement of project objectives, and development of a process for hearing and resolving patient grievances;

(vi) Assuring that the center is operated in compliance with applicable Federal, State, and local laws and regulations; and

(vii) Adopting health care policies including scope and availability of services, location and hours of services, and quality assurance procedures.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which, in his judgment, will provide needed health services in a catchment area which will not be served by another project funded under this part and meet the applicable requirements of section 319(d)(1)(A) of the Act and this part, in accordance with priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part: Provided, That in the case of applicants which propose to serve substantially the same catchment area or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107, the Secretary will award grants to the applicants which, in his judgment, will best promote the purpose of section 319(d)(1)(A) of the Act and the applicable regulations of this part, taking into account with respect to each application:

(1) The extent to which the project would provide for the elements set forth in § 56.303;

(2) The capability of the applicant to provide quality health care services;

(3) The soundness of the financial management plan for assuring effective utilization of grant funds and maximizing non-grant revenue;

(4) The administrative and management capability of the applicant;

(5) The capability of the applicant to provide primary health services directly. In evaluating the relative capability of the applicant to provide such services directly, the Secretary shall take into consideration whether the direct provision of such services is inappropriate because:

(i) Provision of such services through contract or other arrangement would be more cost-effective;

(ii) Provision of such services directly would unnecessarily duplicate existing resources; or

(iii) Provision of such services other than directly would enhance the accessibility or acceptability of such services to the population to be served.

(6) The degree to which the applicant intends to integrate services supported by a grant under this part with health services provided under other federally assisted health services or reimbursement programs or projects;

(7) The extent that community resources will be utilized by the project; and

(8) Consistent with the other requirements of this part, the degree to which and the manner in which the applicant provides specific health services which the Secretary has, through publication of a notice in the Federal Register, established as services which should receive emphasis by applicants.

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 319(d)(1)(B) of the Act for the costs of operation of entities which intend to become migrant health centers and which provide health services to migratory agricultural workers, seasonal agricultural workers, and the members of their families in high impact areas.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 56.104 of subpart A of this part,

(a) Be submitted by an entity which the Secretary determines intends to become a migrant health center but which will not, at the time of the grant award, meet one or more of the requirements of paragraphs (a) through (l) of § 56.303 of subpart C of this part; and

(b) Contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of this part. Such information must include a plan which identifies which requirements of § 56.303 will not be met at the time of grant award and provides a timetable for and a detailed statement of the means to be employed in meeting those requirements.

A project for the operation of a migrant health entity supported under this subpart must:

(a) Meet all of the requirements of § 56.303 of this part, Provided, That the project will not be required to meet the requirements of paragraphs (c), (h), (i), or (n) of such section if the Secretary finds that meeting any such requirement is not feasible or practical at the time of grant award.

(b) Provide those services enumerated in § 56.102(g)(1) of subpart A of this part which are specified in the grant award.

(c) Meet the requirements of § 56.303 of subpart C of this part by the end of the period of support under section 319(d)(1)(B) of the Act and this subpart, in accordance with the plan submitted under § 56.402(b) of this subpart.

(a) Within the limits of funds determined by the Secretary to be available for such purposes, the Secretary may award grants under this subpart to applicants therefor which, in his judgment, will provide needed health services in a catchment area not served by another project funded under this part and meet the applicable requirements of section 319(d)(1)(B) of the Act and this part, in accordance with the priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part; Provided, That in the case of applicants which propose to serve substantially the same catchment area or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107, the Secretary will award the grant to the applicants which, in his judgment, will best promote the purposes of section 319(d)(1)(B) of the Act and the applicable regulations of this part, taking into account with respect to each application:

(1) The degree to which the project would provide the services enumerated in § 56.102(g)(1) and the feasibility of its providing all of such enumerated services by the end of the period of support under section 319(d)(1)(B) of the Act and this subpart;

(2) The degree to which the applicant intends to integrate services supported by a grant under this subpart with health services provided under other federally assisted health service or reimbursement programs or projects;

(3) The capability of the project to provide quality health care services;

(4) The administrative and management capability of the applicant; and

(5) The capability of the applicant to provide primary health services directly. In evaluating the relative capability of the applicant to provide such services directly, the Secretary shall take into consideration whether the direct provision of services is inappropriate because:

(i) Provision of such services through contract or other arrangement would be more cost-effective;

(ii) Provision of such services directly would unnecessarily duplicate existing resources; or

(iii) Provision of the services other than directly would enhance the accessibility or acceptability of the services to the population served.

(6) The extent to which community resources will be utilized by the proj-ect; and

(7) Consistent with the other requirements of this part, the degree to which and the manner in which the applicant provides specific health services which the Secretary has, through publication of a notice in the Federal Register, established as services which should receive emphasis by applicants.

(b) The Secretary shall:

(1) Make no more than two grants for the same entity under section 319(d)(1)(B) of the Act;

(2) Not make any grant under section 319(d)(1)(B) to an entity which, for the same project, has been awarded more than one grant under section 319(c) of the Act;

(3) Not make a grant under section 319(d)(1)(B) to an entity which has been awarded a grant under section 319(d)(1)(A) of the Act.

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 319(c)(1)(B) of the Act for projects to plan and develop migrant health programs to provide health services to migratory agricultural workers, seasonal agricultural workers and the members of their families in areas in which no migrant health center exists and in which not more than 6,000 migratory agricultural workers and their families reside for more than two months.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 56.104 of subpart A of this part,

(a) Be submitted for a project within a catchment area which

(1) Is not served, in whole or in part, by a migrant health center, and

(2) Has not more than 6,000 migratory agricultural workers and members of their families residing therein for more than 2 months per year; and

(b) Contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of this part.

A project for the planning and development of a migrant health program supported under this subpart must:

(a) Determine (by survey or other appropriate means) the approximate number of

(1) Migratory agricultural workers and the members of their families, and

(2) Seasonal agricultural workers and the members of their families within the project's catchment area in the calendar year in which the grant is made and the period of time these workers and their families reside in the catchment area during such year.

(b) Prepare an assessment of need of the population proposed to be served by the migrant health program for the services set forth in § 56.603(a) of subpart F of this part. This assessment of need must, at a minimum, consider the factors listed in § 56.104(b)(3) (i)-(iv).

(c) Design a migrant health program for such population, based on such assessment, which indicates in detail how the proposed program will fulfill the needs identified in that assessment and meet the requirements of subpart F of this part.

(d) Develop a plan for the implementation of the program designed pursuant to paragraph (c) of this section. The implementation plan must provide for the time-phased recruitment and training of the personnel essential for the operation of a migrant health program and the gradual assumption of operational status of the project so that the project will, in the judgment of the Secretary, meet the requirements of subpart F of this part as of the end of the project period.

(e) Implement the plan developed pursuant to paragraph (d) of this section in accordance with such paragraph.

(f) Make efforts to secure within the proposed catchment area of such proj-ect, to the extent possible, financial and professional assistance and support for the project.

(g) Initiate and encourage continuing community involvement in the development and operation of the proj-ect through, for example, contributions or loans of cash, services, equipment, full- or part-time staff, space, materials, or facilities.

(h) Provide for sufficient staff, qualified by training and experience, to carry out the project and establish standards and qualifications for personnel (including the project director).

(i) Utilize, to the maximum extent feasible, other Federal, State, local, and private resources available for support of the project, prior to use of project funds under this subpart.

(j) Provide for the means of evaluating the project's progress in achievement of its specific objectives and submission of such progress reports on the project as the Secretary may from time to time request.

(a) Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which, in his judgment, will provide needed health services in a catchment area not served by another project funded under this part and meet the applicable requirements of section 319(c)(1)(B) of the Act and this part, in accordance with priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part; Provided, That in the case of applicants which propose to serve substantially the same catchment areas or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107,

(1) Priority shall be given to applications submitted by community-based organizations which are representative of the population to be served by the project. For purposes of this paragraph, an applicant shall be deemed to be such an organization if it provides a formal mechanism (such as membership on the organization's governing body or membership on an advisory body) which gives migratory and seasonal agricultural workers and their families significant involvement in the formulation of the organization's policies; and

(2) Where all such applicants are community-based organizations representative of the population to be served by the project, the Secretary shall award the grant to the applicants which will, in his judgment, best promote the purposes of section 319(c)(1)(B) of the Act and the applicable regulations of this part, taking into account with respect to each application:

(i) The degree to which the proposed project satisfactorily provides for the elements set forth in § 56.203;

(ii) The administrative and management capability of the applicant;

(iii) The extent to which community resources will be utilized in the proj-ect; and

(iv) The degree to which the applicant intends to integrate services supported by a grant under this part with health services provided under other federally assisted health services or reimbursement programs or projects.

(b) The Secretary shall award no more than one grant under this subpart for the same project.

The regulations of this subpart, in addition to the regulations of subpart A of this part, are applicable to grants awarded pursuant to section 319(d)(1)(C) of the Act for projects for operating programs to provide health services to migratory agricultural workers, seasonal agricultural workers and the members of their families in areas in which no migrant health center exists and in which not more than 6,000 migratory agricultural workers and their families reside for more than two months.

To be approved by the Secretary under this subpart, an application for a grant must, in addition to meeting the requirements of § 56.104 of subpart A of this part,

(a) Be submitted for a project with a catchment area which

(1) Is not served, in whole or in part, by a migrant health center, and

(2) Has not more than 6,000 migratory agricultural workers and the members of their families residing therein for more than two months per year; and

(b) Contain information sufficient to enable the Secretary to determine that the project for which the grant is sought will meet the requirements of this part.

A project for operating a migrant health program supported under this subpart must:

(a) Provide to migratory and seasonal agricultural workers and the members of their families in its catchment area one or more of the following groups of services so that such services are available and accessible promptly as appropriate, and in a manner which will assure continuity of care, as approved by the Secretary and set forth (including specific services to be provided) in the grant award:

(1) Emergency health care, including diagnostic and treatment services in an ambulatory health care setting or hospital and dental services for the alleviation of acute pain and suffering for medical emergencies, when provision of such services is necessary to avoid jeopardizing the patient's condition until appropriate services from other providers can reasonably be obtained;

(2) Primary care;

(3) Arrangements with existing health care facilities to furnish primary health services (other than primary care);

(4) Other services set forth in § 56.102(g)(1) which are needed to improve the health of such individuals.

(b) Implement a system for maintaining the confidentiality of patient records in accordance with the requirement of § 56.111 of subpart A of this part.

(c) Develop management and control systems which are in accordance with sound financial management procedures, including the provision for an audit conducted in accordance with the DHHS Audit Agency Guide for Audits of Migrant Health Grants, as amended, on at least an annual basis (unless waived for cause by the Secretary), by an independent certified public accountant or public accountant licensed before December 31, 1970, to determine, at a minimum, the fiscal integrity of grant financial transactions and reports and compliance with the regulations of this part and the terms and conditions of the grant.

(d) When the cost of care and services furnished by or through the proj-ect is to be reimbursed under title XIX or title XX of the Social Security Act, obtain or make every reasonable effort to obtain a written agreement with the title XIX or title XX State agency for such reimbursement.

(e) Have prepared a schedule of fees or payments for the provision of its services designed to cover its reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the patient's ability to pay. The schedule of discounts must provide for a full discount to individuals and families with annual incomes at or below those set forth in the most recent CSA Poverty Income Guidelines (42 CFR 1060.2) (except that nominal fees for service may be collected from individuals and families with annual incomes at or below such levels if imposition of such fees is consistent with project goals) and for no discount to individuals and families with annual incomes greater than twice those set forth in the Guidelines.

(f) Make every reasonable effort, including the establishment of systems for eligibility determination, billing, and collection, to

(1) Collect reimbursement for its costs in providing health services to persons who are entitled to insurance benefits under title XVIII of the Social Security Act, to medical assistance under a State plan approved under title XIX of such Act, to social services and family planning under title XX of such Act, or to assistance for medical expenses under any other public assistance program, grant program, or private health insurance or benefit program on the basis of the schedule of fees prepared pursuant to paragraph (e) of this section without application of any discounts, and

(2) Secure from patients payments for services in accordance with the schedule of fees and discounts required by paragraph (e) of this section.

(g) Develop an overall financial management plan and an operating budget for the project which include and identify, in accordance with generally accepted accounting principles, all anticipated current income and expense items and capital income and expense items, if any.

(h) Establish basic statistical data, cost accounting, management information, and reporting or monitoring systems which will meet the project's management needs and shall enable the project to provide such statistics and other information as the Secretary may reasonably require relating to the project's costs of operation, patterns of utilization of services, and the availability, accessibility, and acceptability of its services, and to make such reports to the Secretary in a timely manner with such frequency as the Secretary may reasonably require.

(i) Review its catchment area annually to insure that the criteria set out in § 56.104(b)(2) are met and, where such criteria are not met, revise its catchment area, with the approval of the Secretary, to conform with such criteria to the extent feasible.

(j) In the case of a project which serves a population including a substantial proportion of individuals of limited English-speaking ability, have a plan and made arrangements responsive to the needs of these populations for providing services to the extent practicable in the language and cultural context most appropriate to such individuals, and have identified an individual on its staff who is fluent in both that language and in English and whose responsibilities include providing guidance to such individuals and to appropriate staff members with respect to cultural sensitivities and bridging linguistic and cultural differences. If more than one non-English language is spoken by such group or groups, an individual or individuals fluent in those languages and English must be so identified.

(k) Be operated in a manner calculated to preserve human dignity and to maximize acceptability and effective utilization of services.

(l) To the extent possible, coordinate and integrate project activities with the activities of other federally funded, as well as State and local, health services delivery projects and programs serving the same population.

(m) Establish means for evaluating progress toward the achievement of the specific objectives of the project.

(n) Provide sufficient staff, qualified by training and experience, to carry out the activities of the project.

(o) Assure that facilities utilized in the performance of the project meet applicable fire and life safety codes.

(p) Utilize, to the maximum extent feasible, other Federal, State and local, and private resources available for support of the project, prior to use of project funds under this part.

(q) Provide for community participation through, for example, contributions of cash or services, loans of full- or part-time staff, equipment, space, materials, or facilities, and, to the extent feasible, establishment of an advisory council to advise with respect to the overall management of the proj-ect including services to be provided, the manner of their provision, and appointment of personnel. The membership of such advisory council shall be representative of the population to be served in terms of appropriate demographic characteristics, such as race, sex, and ethnicity.

(r) Where the project will provide services through contract or other cooperative arrangements with other providers of services, the project must

(1) Enter into any such contract or arrangement only if the provider of services will provide the services in a timely manner and make the services accessible and acceptable to the population to be served; and

(2) Make payment for services so provided in accordance with a schedule of rates and payment procedures established and maintained by the project. The project must be prepared to substantiate that such rates are reasonable and necessary.

(s) Operate in a manner such that no migratory or seasonal agricultural worker or member of their families will be denied service by reason of his or her inability to pay therefor. Provided, however, That a charge for the provision of services will be made to the extent that a third party (including a Government agency) is authorized or is under legal obligation to pay such charges.

(t) Have an ongoing quality assurance program as described in § 56.303(c) except as the Secretary finds that such a program would not be feasible.

(a) Within the limit of funds determined by the Secretary to be available the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, provide needed health services in a catchment area which will not be served by another project funded under this part and meet the applicable requirements of section 319(d)(1)(C) of the Act and this subpart, in accordance with priorities established pursuant to section 319(b) of the Act and § 56.107 of subpart A of this part; Provided, That in the case of applicants which propose to serve substantially the same catchment areas or where available funds are insufficient to fund all approvable applications within a priority category specified in § 56.107,

(1) Priority shall be given to applications submitted by community-based organizations which are representative of the population to be served by the project. For purposes of this paragraph, an applicant shall be deemed to be such an organization if it provides a formal mechanism (such as membership on the organization's governing body or membership on an advisory body) which gives migratory seasonal agricultural workers and their families significant involvement in the formulation of the organization's policies; and

(2) Where all such applicants are community-based organizations representative of the population to be served by the project, the Secretary shall award the grant to the applicants which will, in his judgment, best promote the purposes of section 319(d)(1)(C) of the Act and the applicable regulations of this part, taking into account with respect to each application:

(i) The degree to which the proposed project satisfactorily provides for the elements set forth in § 56.203;

(ii) The administrative and management capability of the applicant;

(iii) The extent to which community resources will be utilized in the proj-ect; and

(iv) The degree to which the applicant intends to integrate services supported by a grant under this part with health services provided under other federally assisted health services or reimbursement programs or projects.

The regulations of this subpart, in addition to the regulations of subpart A of this part except as otherwise set forth herein, are applicable to grants awarded pursuant to section 319(g) of the Act for the provision of technical and other non-financial assistance to grantees under sections 319(c)(1)(A), 319(d)(1)(A) and 319(d)(1)(B) of the Act.

To be approved by the Secretary under this subpart, an application for a grant must meet the requirements of §§ 56.104(a), 56.104(b) (1), (4), (7), (10), and (11), and 56.104(c) of subpart A of this part.

A project for the provision of technical assistance to migrant health centers and entities which intend to become migrant health centers which is supported under this subpart must:

(a) Provide to such centers and entities as are specified in the grant award, such technical and other nonfinancial assistance (such as fiscal and program management assistance or training of the staff of such center or entity in such management) as may be specified in the grant award. Such technical or other nonfinancial assistance shall be designed to assist such centers and entities in:

(1) Developing plans for becoming migrant centers; and/or

(2) Meeting the requirements of sections 319(f)(2) of the Act.

(b) Provide such assistance through its own staff or resources.

(c) Where the project will provide training to the staff of a center or entity in management or the provision of health services, provide such training consistent, as applicable, with § 56.108(b)(7).

(d) Maintain such records and make such reports on the expenditure of funds under this subpart and provision of such assistance as the Secretary may require.

Within the limits of funds determined by the Secretary to be available for such purpose, the Secretary may award grants under this subpart to applicants therefor which will, in his judgment, best promote the purposes of section 319(g) of the Act and applicable regulations of this part, taking into consideration:

(a) The cost-effectiveness of the application; and

(b) The number of centers and entities to be served by the applicant.

The provisions of 42 CFR part 51c, subpart E, establishing requirements for the acquisition and modernization of existing buildings, shall apply to all grants under section 319 of the Act for project costs which include the cost of acquisition and/or modernization of existing buildings (including the cost of amortizing the principal of, and paying the interest on, loans); except that, for purposes of this subpart, references within subpart E to part 51c, or to subparts of part 51c, shall be deemed to be references to part 56, or to the appropriate subparts of part 56, and references to section 330 of the Act shall be deemed to be references to section 319 of the Act.

The regulations of this subpart apply to the federal capital contributions made by the Secretary to public or other nonprofit health professions schools for the establishment of health professions student loan funds and to loans made to students by schools from these funds.

As used in this subpart:

Act means the Public Health Service Act, as amended.

Date upon which a student ceases to be a full-time student means the first day of the month which is nearest to the date upon which an individual ceases to be a full-time student as defined in this section.

Default means the failure of a borrower of a loan made under this subpart to make an installment payment when due, or comply with any other term of the promissory note for such loan, except that a loan made under this subpart shall not be considered to be in default if the loan is discharged in bankruptcy, the borrower's repayment schedule has been renegotiated and the borrower is complying with the renegotiated schedule, or the loan is in forbearance.

Federal capital loan means a loan made by the Secretary to a school under section 744(a) of the Act, as in effect prior to October 1, 1977, the proceeds of which are to be returned to the Secretary.

Full-time student means a student who is enrolled in a health professions school and pursuing a course of study which is a full-time academic workload, as determined by the school, leading to a degree specified in section 722(b) of the Act.

Grace period means the period of 1 year beginning on the date upon which a student ceases to be a full-time student at a school of medicine, osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry, or veterinary medicine.

Health professions school or school, for purposes of this subpart, means a public or private nonprofit school of medicine, school of dentistry, school of osteopathic medicine, school of pharmacy, school of podiatric medicine, school of optometry, or school of veterinary medicine as defined in section 799(1)(A) of the Act.

Health professions student loan means the amount of money advanced to a student by a school from a health professions student loan fund under a properly executed promissory note.

Institutional capital contribution means the money provided by a school, in an amount not less than one-ninth of the federal capital contribution, and deposited in a health professions student loan fund.

National of the United States means: (1) A citizen of the United States, or (2) a person who, though not a citizen of the United States, owes permanent allegiance to the United States, as defined in the Immigration and Nationality Act, at 8 U.S.C. section 1101(a)(22).

School year means the traditional approximately 9-month September to June annual session. For the purpose of computing school year equivalents for students who, during a 12-month period, attend for a longer period than the traditional school year, the school year will be considered to be 9 months in length.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

(a) Each school seeking a Federal capital contribution must submit an application at the time and in the form and manner that the Secretary may require. The application must be signed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the statute, the regulations of this subpart, and the terms and conditions of the award.

(b) Each application will be reviewed to determine eligibility and the reasonableness of the amount of Federal support requested. The Secretary may require the applicant to submit additional data for this purpose.

(c) An application will not be approved unless an agreement between the Secretary and the applicant school for a Federal capital contribution under section 721 of the Act is reached.

(a) Annual payment. The Secretary will make payments to each school with which he or she has entered into an agreement under the Act at a time determined by him or her. If the total of the amounts requested for any fiscal year by all schools for Federal capital contributions exceeds the amount of Federal funds determined by the Secretary at the time of payment to be available for this purpose, the payment to each school will be reduced to whichever is smaller:

(1) The amount requested in the application, or

(2) An amount which bears the same ratio to the total amount of Federal funds determined by the Secretary at the time of payment to be available for that fiscal year for the Health Professions Student Loan Program as the number of full-time students estimated by the Secretary to be enrolled in that school bears to the estimated total number of full-time students in all participating schools during that year. Amounts remaining after these payments are made will be distributed in accordance with this paragraph among schools whose applications requested more than the amount paid to them, but with whatever adjustments that may be necessary to prevent the total paid to any school from exceeding the total requested by it.

(b) Method of payment. The payment of Federal capital contributions to a school will be paid in a manner that avoids unnecessary accumulations of money in any health professions student loan fund.

(c) Reallocation of funds remitted to the Secretary. All funds from a student loan fund established under this subpart which are remitted to the Secretary in any fiscal year shall be available for allotment under this subpart, in the same fiscal year and the succeeding fiscal year, to schools which, during the period beginning on July 1, 1972, and ending on September 30, 1985, established student loan funds with Federal capital contributions under this subpart. The Secretary will from time to time set dates by which the schools must file applications to receive a portion of these funds. If the total of the amounts requested for any fiscal year by eligible schools exceeds the amount of funds determined by the Secretary at the time of payment to be available for this purpose, the payment to each school will be reduced to whichever is smaller:

(1) The amount requested in the application, or

(2) An amount which bears the same ratio to the total amount of returned funds determined by the Secretary at the time of payment to be available for that fiscal year for the Health Professions Student Loan program as the number of full-time students estimated by the Secretary to be enrolled in that school bears to the estimated total number of full-time students in all eligible schools during that year.

(a) Funds established with Federal capital contributions. Any fund established by a school with Federal capital contributions will be accounted for separately from other funds, providing a clear audit trail for all transactions. At all times the fund must contain monies representing the institutional capital contribution. The school must at all times maintain all monies relating to the fund in one or more interest-bearing accounts or investment instruments which meet OMB requirements established for Federal monies held by third parties. The school must place all earnings into the fund but may first deduct from total earnings any reasonable and customary charges incurred through the use of an interest-bearing account. An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments, and shall be responsible for reimbursing the fund for any losses that occur due to the use of investments that are not federally insured.

(1) The Federal capital contribution fund is to be used by the school only for:

(i) Health professions student loans to full-time students;

(ii) Capital distribution as provided in section 728 of the Act or as agreed to by the school and the Secretary; and

(iii) Costs of litigation, costs associated with membership in credit bureaus, and to the extent specifically approved by the Secretary, other collection costs that exceed the usual expenses incurred in the collection of health professions student loans.

(2) A school must review the balance in the fund on at least a semi-annual basis to determine whether the fund balance compared with projected levels of expenditures and collections exceeds its needs. A school in closing status must review the balance in the fund on a quarterly basis. Monies identified as in excess of the school's needs must be reported, and the Federal share returned to the Federal Government, by the due date of the required report which identifies the excess monies. The school's determination is subject to the review and approval of the Secretary.

(b) Funds established with Federal capital loans. (1) Each Federal capital loan is subject to the terms of the promissory note executed by an authorized official on behalf of the borrowing school.

(2) The Federal capital loans must be carried in a special account of the school, to be used by the school only for (i) repayments of principal and interest on Federal capital loans; and (ii) costs of litigation; costs associated with membership in credit bureaus; and, to the extent specifically approved by the Secretary, other collection costs that exceed the usual expenses incurred in the collection of health professions student loans.

(c) Failure to comply with the requirements of this section will subject a school to the noncompliance provisions of § 57.218 and the Department's Claims Collections regulations (45 CFR part 30), as appropriate.

(a) Determination of eligibility. (1) Applicants are eligible for consideration for a health professions student loan if they are:

(i) Residents of the United States and either a citizen or national of the United States, an alien lawfully admitted for permanent residence in the United States, a citizen of the Commonwealth of the Northern Mariana Islands, a citizen of the Republic of Palau, a citizen of the Republic of the Marshall Islands, or a citizen of the Federated States of Micronesia;

(ii) Enrolled, or accepted for enrollment in the school as full-time students;

(iii) In need of the amount of the loan to pursue a full-time course of study at the school;

(iv) Of exceptional financial need in the case of students of medicine or osteopathic medicine. A student will be considered to demonstrate exceptional financial need if the school determines that his or her resources, as described in paragraph (b)(1) of this section, do not exceed the lesser of $6,700 or one-half of the costs of attendance at the school. Summer earnings, educational loans, veterans (G.I.) benefits and earnings during the school year will not be considered as resources in determining whether an applicant meets the eligibility criteria for exceptional financial need, but will be considered in determining the amount of funds a student may receive; and

(v) In compliance with the requirement to register for the draft, if required to do so under section 3 of the Military Selective Service Act.

(2) An applicant who has previously attended an institution of higher education must submit a financial aid transcript which includes at least the following data:

(i) Applicant's name and social security number;

(ii) Amounts and sources of loans and grants previously received by the applicant for study at an institution of higher education;

(iii) Whether the applicant is in default on any of these loans, or owes a refund on any grants;

(iv) Certification from each institution previously attended by the applicant that the applicant has received no financial aid, if applicable; and

(v) From each institution previously attended, the signature of an official authorized by the institution to sign such transcripts on behalf of the institution.

(b) Selection of applicants. The school will select qualified applicants, including medical (M.D. and D.O.) applicants, and determine the amount of student loans by considering:

(1) The financial resources available to the student by using one of the national need analysis systems or any other procedure approved by the Secretary of Education in combination with other information which the school has regarding the student's financial status. The school must take into account, regardless of the tax status of the student, the expected contribution from parents, spouse, self or other family members; and

(2) The costs reasonably necessary for the student's attendance at the school, including any special needs and obligations which directly affect the student's ability to attend the school on a full-time basis. The school must document the criteria used for determining these costs.

(c) Selection of medical (M.D. and D.O.) student applicants. In addition to the factors in § 57.206(b), the school must select medical (M.D. and D.O.) students graduating after June 30, 1979, based on the order of greatest need, taking into consideration the other resources available to the student through the school. For purposes of establishing priority for selecting medical (M.D. and D.O.) student applicants to receive health professions student loans, summer earnings, educational loans, veterans (G.I.) benefits, and earnings during the school year will be considered as financial resources.

(d) Verification of loan information. The school must verify, to the best of its ability, the information provided by the student on the loan application. To comply with this requirement, a school may require that a student provide, for example: Photocopies of the parents', student's, and spouse's Federal income tax forms with original signatures for the most recent tax year (or certification that no Federal income tax return was filed); tax returns that are certified as having been received by the Internal Revenue Service; or other documentation that the school considers necessary to help assure that information on the loan application is correct.

The total of the health professions student loans made from the fund to any student for a school year may not exceed $2,500 and the cost of tuition. The maximum amount loaned during a 12-month period to any student enrolled in a school which provides a course of study longer than the 9-month school year may be proportionately increased.

(a) Promissory note form. Each health professions student loan must be evidenced by a properly executed promissory note in a form approved by the Secretary. The school must safeguard the promissory note against fire, theft, and tampering.

(1) Each promissory note must state that the loan will bear interest on the unpaid balance computed only for periods during which repayment of the loan is required, at the rate of 5 percent per year.

(2) Each promissory note must contain an acceleration clause provided by the Secretary, which will permit the acceleration of delinquent loans at the school's option.

(3) A copy of each executed note must be supplied by the school to the student borrower.

(b) Security. A school must require security or endorsement if the borrower is a minor and if, under the applicable State law, the note signed by him or her would not create a binding obligation. The school may not require security or endorsement in any other circumstances.

(c) Disclosure requirements. (1) For any loan made after June 30, 1986, the school shall, at the time the loan is made, provide the following loan information to the student:

(i) The yearly and cumulative maximum amounts that may be borrowed by the student;

(ii) The terms under which repayment of the loan will begin;

(iii) The maximum number of years in which the loan must be repaid;

(iv) The interest rate that will be paid by the borrower and the minimum amount of the required monthly payment;

(v) The amount of any other fees charged to the borrower by the lender;

(vi) Any options the borrower may have for deferral, cancellation, prepayment, consolidation, or other refinancing of the loan;

(vii) A definition of default on the loan and a specification of the consequences which will result to the borrower if the borrower defaults, including a description of any arrangements which may be made with credit bureau organizations;

(viii) To the extent practicable, the effect of accepting the loan on the eligibility of the borrower for other forms of student assistance; and

(ix) A description of the actions that may be taken by the Federal Government to collect the loan, including a description of the type of information concerning the borrower that the Federal Government may disclose to:

(A) Officers, employees, or agents of the Department of Health and Human Services,

(B) Officers, employees, or agents of schools with which the Secretary has an agreement under this subpart, or

(C) Any other person involved in the collection of a loan under this subpart.

(2) For any loan made after June 30, 1986, the school shall, prior to the borrower's completion or termination of studies at the school, provide the following loan information to the student:

(i) Each amount borrowed by the student under this subpart;

(ii) The total amount borrowed by the student under this subpart; and

(iii) A schedule for the repayment of the amounts borrowed under this subpart, including the number, amount, and frequency of payments to be made.

(3) In addition to the requirements set forth in paragraphs (c)(1) and (c)(2) of this section, the school must comply with the applicable requirements of Truth in Lending Regulation Z (12 CFR part 226).

(a) Health professions student loans from any fund may be paid to or on behalf of student borrowers in installments considered appropriate by the school except that a school may not pay to or on behalf of any borrower more during any given installment period (e.g., semester, term, or quarter) than the school determines the student needs for that period.

(b) No payment may be made from a fund to or on behalf of any student borrower if at the time of the payment the borrower is not a full-time student.

(a) Each health professions student loan, including accrued interests, will be repayable in equal or graduated periodic installments in amounts calculated on the basis of a 10-year repayment period. Except as otherwise provided in this paragraph, repayment of a loan must begin one year after the student ceases to be a full-time student.

(1) If a borrower reenters the same or another school as a full-time student within the 1-year period, the date upon which interest will accrue and the repayment period will begin will be determined by the date on which the student last ceases to be a full-time student at that school.

(2) The following periods will be excluded from the 10-year repayment period:

(i) All periods for up to a total of 3 years of active duty performed by the borrower as a member of the Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration Corps or the U.S. Public Health Service Corps;

(ii) All periods for up to a total of 3 years of service as a volunteer under the Peace Corps Act;

(iii) All periods of advanced professional training including internships and residencies, except as specified in paragraph (a)(2)(vi) of this section;

(iv) All periods during which the borrower is pursuing a full-time course of study at an eligible health professions school;

(v) A period not in excess of 2 years during which a borrower who is a full-time student in a health professions school leaves the school, with the intent to return to such school as a full-time student, to engage in a full-time educational activity which is directly related to the health profession for which the individual is preparing. To qualify for such deferment, the full-time educational activity must be one which:

(A) Is part of a joint-degree program or a formal program of joint study in conjunction with the health profession for which the borrower is preparing at the school; or

(B) Is an activity which will enhance the borrower's knowledge and skills in the health profession for which the borrower is preparing at the school, as determined by the school.

(vi) A period not in excess of 2 years during which a borrower who is a graduate of a health professions school participates in:

(A) A fellowship training program which is directly related to the health profession for which the borrower prepared at the school, as determined by the school from which the borrower received his or her loan, and is engaged in by the borrower no later than 12 months after the completion of the borrower's participation in advanced professional training as described in paragraph (a)(2)(iii) of this section, or prior to the completion of such borrower's participation in such training. To qualify for such deferment, the fellowship training program must be one which:

(1) Is a full-time activity in research or research training or in health care policy; and

(2) Is a formally established fellowship program which was not created for a specific individual; or

(B) A full-time educational activity which is directly related to the health profession for which the borrower prepared at the school, as determined by the school from which the borrower received his or her loan, and is engaged in by the borrower no later than 12 months after the completion of the borrower's participation in advanced professional training as described in paragraph (a)(2)(iii) of this section, or prior to the completion of the borrower's participation in such training. To qualify for such deferment, the full-time educational activity must be one which:

(1) Is part of a joint-degree program in conjunction with the health profession for which the borrower prepared at the school; or

(2) Is required for licensure, registration, or certification in the health profession for which the borrower received the HPSL loan; or

(3) Is a full-time educational program in public health, health administration, or a health care discipline directly related to the health profession for which the borrower received the loan.

(3) To receive a deferment, a borrower must, no later than 30 days prior to the onset of the activity (or no later than 30 days prior to the due date of the first payment if the borrower begins the activity during the grace period), and annually thereafter, provide the lending school with evidence of his or her status in the deferrable activity, and evidence that verifies deferment eligibility of the activity. This evidence must include certification by the Program Director or other authorized official that the borrower's activity meets the deferment requirements. The borrower must also notify the school upon completion or termination of the activity. It is the responsibility of the borrower to provide the lending school with all required information or other information regarding the requested deferment. The school may deny a request for deferment if it is not filed in accordance with the requirements of this section.

(4) Subject to the provisions of paragraph (b)(3) of this section, a borrower must establish a repayment schedule with the school providing for payments not less often than quarterly. Any borrower whose repayment is delinquent more than 60 days must establish a monthly repayment schedule with the school. However, a borrower may at his or her option and without penalty, prepay all or part of the principal and accrued interest at any time.

(5) A school may grant forbearance whenever extraordinary circumstances such as unemployment, poor health or other personal problems temporarily affect the borrower's ability to make scheduled loan repayments.

(b)(1) Each school at which a fund is established must exercise due diligence in the collection of health professions student loans due the fund. In the exercise of due diligence, a school must follow procedures which are at least as extensive and effective as those used in the collection of other student loan accounts due the school, and must use the steps outlined below in accordance with collection practices which are generally accepted among institutions of higher education:

(i) Conduct and document an entrance interview (individually or in groups) with the borrower prior to disbursing HPSL funds in an academic year. During the entrance interview the school must obtain documentation which indicates that the borrower is aware of the rights and responsibilities associated with HPSL funds and personal information which would assist in locating the borrower if he or she fails to keep the school informed of his or her current address. The requirements of this subparagraph may be met by correspondence, if the school determines that a face-to-face meeting (individually or in groups) is impracticable.

(ii) Conduct and document an exit interview (individually or in groups) with the borrower. During the exit interview, the school must provide each borrower with information necessary to carry out the terms of repayment, remind the borrower of the rights and responsibilities associated with HPSL funds, and update the personal information collected prior to disbursing HPSL funds which would assist in locating the borrower if he or she fails to keep the school informed of his or her current address. If the borrower terminates studies without advance notice, the school must document attempts to inform the borrower of the substance of the exit interview and to secure exit interview information from the borrower by mail.

(iii) Notify the borrower in writing of the impending repayment obligation at least twice during the grace period;

(iv) Notify a borrower who is in deferment status in writing of the impending repayment obligation 1 to 3 months prior to the expiration of the approved period of deferment;

(v) Perform regular billing;

(vi) Follow up past due payments with a series of at least four documented and reasonably spaced attempts to contact the borrower, at least three of which must be in writing at not more than 30-day intervals, prior to the loan becoming 120 days past due, provided that the school has a current address for the borrower;

(vii) Perform address searches when necessary;

(viii) Use collection agents, which may include the use of an internal collection agent;

(ix) Institute legal proceedings against borrowers after all other attempts at collection have failed, unless the school determines, subject to the approval of the Secretary, that such litigation would not be cost-effective; and

(x) Become a member of a credit bureau and notify the credit bureau of accounts past due by more than 120 days.

(2) Late charge. (i) For any health professions student loan made after June 30, 1969, but prior to October 22, 1985, the school may fix a charge for failure of the borrower to pay all or any part of an installment when it is due and, in the case of a borrower who is entitled to deferment under section 722(c) of the Act for any failure to file timely and satisfactory evidence of the entitlement. The amount of the charge may not exceed $1 for the first month or part of a month by which the installment or evidence is late and $2 for each succeeding month or part of a month. The school may elect to add the amount of this charge to the principal amount of the loan as of the day after the day on which the installment or evidence was due, or to make the amount of the charge payable to the school no later than the due date of the next installment following receipt of the notice of the charge by the borrower.

(ii) For any health professions student loan made on or after October 22, 1985, the school shall assess a charge for failure of the borrower to pay all or any part of an installment when the loan is more than 60 days past due and, in the case of a borrower who is entitled to deferment under section 722(c) of the Act, for any failure to file satisfactory evidence of the entitlement within 60 days of the date payment would otherwise be due. No charge may be made if the loan is less than 61 days past due. The amount of this charge may not exceed an amount equal to 6 percent of the amount due at the time the charge is calculated. The school may elect to add the amount of this charge to the principal amount of the loan as of the day on which the charge is calculated, or to make the amount of the charge payable to the school no later than the due date of the next installment following receipt of the notice of the charge by the borrower.

(3) With respect to any health professions student loan made after June 30, 1969, the school may require the borrower to make payments of at least $15 per month on all outstanding health professions student loans during the repayment period.

(4) A school must, on an annual basis, review and assess the collectibility of any loan more than 3 years past due. If the school determines that the prospects of future collection are promising enough to justify periodic review of the debt, and neither the statute of limitations nor the 10-year repayment period has expired, the school may retain the account for continued collections, provided that it makes an attempt at least semi-annually to collect from the borrower. When the due diligence procedures required by paragraph (b)(1) of this section have been exhausted, the school is responsible for determining the collection methods it will use for the semi-annual collection effort required on these loans. If the school determines that the prospects of future collection are not promising, or when the statute of limitations or the 10-year repayment period has expired, the loan must be considered uncollectible. A school may determine a loan to be uncollectible sooner than 3 years past due when it has evidence that the loan cannot be collected, but in no case should a school consider a loan as uncollectible if it has not been in default for a least 120 days. A school is not subject to the requirements in paragraphs (b)(4) (i) and (iii) of this section for loans that became uncollectible, as determined by the school, before August 1, 1985.

(i) A school must request permission to write off an uncollectible loan within 30 days of the determination that it is uncollectible or reimburse the fund in the full amount of the loan, pursuant to § 57.210(b)(4)(iii). The 30-day period for submitting the loan for write-off review begins on the date that the determination of uncollectibility is made, in accordance with paragraph (b)(4) of this section. In any instance where the Secretary determines that a school has failed to exercise due diligence in the collection of a loan, in accordance with the applicable regulatory requirements, the school will be required to place in the fund the full amount of principal, interest, and penalty charges that remains uncollected on the loan. Reimbursement must be made by the following June 30 or December 31, whichever is sooner, except that in no case will a school be required to reimburse the fund in less than 30 days following the Secretary's disapproval of the request for write-off approval.

(ii) If the Secretary determines that a school has exercised due diligence in the collection of a loan, in accordance with the applicable regulatory requirements, or if the school determines that the loan was uncollectible prior to August 1, 1985, the school will be permitted to reduce its accounts receivable for the HPSL fund by the full amount of principal, interest, and penalty charges that remains uncollected on that loan and will not be required to return the Federal share of the loss to the Secretary.

(iii) If a school does not request permission to write off an uncollectible loan within the required timeframe, it must reimburse the fund for the full amount of principal, interest, and penalty charges that remains uncollected on that loan. This reimbursement must be made by the following June 30 or December 31, whichever is sooner, except that in no case will a school be required to reimburse the fund in less than 30 days following its determination that a loan is uncollectible.

(iv) Failure to comply with the requirement of this section will subject a school to the noncompliance provisions of § 57.218 and the Department's Claims Collection regulations (45 CFR part 30), as appropriate.

(5) Disclosure of taxpayer identity information. Upon written request by the Secretary, the Secretary of the Internal Revenue Service (IRS) may disclose the address of any taxpayer who has defaulted on a health professions student loan, for use only by officers, employees, or agents of the Department, to locate the defaulted borrower to collect the loan. Any such mailing address may be disclosed by the Secretary to any school from which the defaulted borrower received a health professions student loan, for use only by officers, employees, or agents of the school whose duties relate to the collection of health professions student loan funds, to locate the defaulted borrower to collect the loan. Any school which requests and obtains this address information must comply with the requirements of the Secretary and the IRS regarding the safeguarding and proper handling of this information.

(a) Permanent and total disability. The Secretary will cancel a student borrower's indebtedness in accordance with section 722(d) of the Act if the borrower is found to be permanently and totally disabled on recommendation of the school and as supported by whatever medical certification the Secretary may require. A borrower is totally and permanently disabled if he or she is unable to engage in any substantial gainful activity because of a medically determinable impairment, which the Secretary expects to continue for a long time or to result in death.

(b) Death. The Secretary will cancel a student borrower's indebtedness in accordance with section 722(d) of the Act upon the death of the borrower. The school to which the borrower was indebted must secure a certification of death or whatever official proof is conclusive under State law.

Individuals who received health professions student loans as students of medicine, osteopathic medicine, dentistry or optometry prior to November 18, 1971, may still receive cancellation of these loans for practicing in a shortage area or for practicing in a rural shortage area characterized by low family income. The regulations set forth in 42 CFR 57.215(b) (1976), as adopted on February 7, 1974 remain applicable to cancellation on this basis. The provisions can be found at 39 FR 4774 (February 7, 1974) and a copy can be obtained by writing to the Division of Student Assistance, Bureau of Health Professions, Room 8-34, Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857.

(a) For loans made prior to October 22, 1985, in the event that insufficient funds are available to the Secretary in any fiscal year to enable him or her to pay to all schools their proportionate shares of all loans and interest canceled under this subpart for practice in a shortage area, death, or disability:

(1) Each school will be paid an amount bearing the same ratio to the total of the funds available for that purpose as the principal of loans canceled by that school in that fiscal year bears to the total principal of loans canceled by all schools in that year; and

(2) Any additional amounts to which a school is entitled will be paid by the Secretary at the time of distribution of the assets of the school's Fund under section 728 of the Act.

(b) For loans made on or after October 22, 1985, a school may assess the borrower a charge to insure against the loss of the institutional share of a loan canceled due to the borrower's death or permanent and total disability. The school must develop annually a rate which reflects its cancellation experience. This charge shall not exceed .6 percent of the loan amount. Funds collected under this provision must be maintained by the school in an insured, interest-bearing account (with any earned interest credited to this insurance fund), and used only to reimburse the school for the institutional share of any HPSL loan made on or after October 22, 1985, that is canceled due to the borrower's death or permanent and total disability. A school is not required to establish a separate bank account, but is required to maintain separate accountability.

In the event that the Secretary undertakes to repay educational loans under section 722(k) of the Act, he or she will use the following criteria to make a determination as to each applicant's eligibility:

(a) An applicant will be considered to have failed to complete the course of study leading to the first professional degree for which an eligible education loan was made upon certification by a health professions school that the individual ceased to be enrolled in the school subsequent to November 17, 1971;

(b) An applicant will be considered to be in exceptionally needy circumstances if, upon comparison of the income and other financial resources of the applicant with his or her expenses and financial obligations, the Secretary determines that repayment of the loan would constitute a serious economic burden on the applicant. In making this determination, the Secretary will take into consideration the applicant's net financial assets, his or her potential earning capacity, and the relationship of the income available to the applicant to the low-income levels published annually by the Secretary under paragraph (c) of this section;

(c) An applicant will be considered to be from a low-income family if the applicant comes from a family with an annual income below a level based on low-income thresholds according to family size published by the U.S. Bureau of the Census, adjusted annually for changes in the Consumer Price Index, and adjusted by the Secretary for use in this program, and the family has no substantial net financial assets. Income levels as adjusted will be published annually by the Secretary in the Federal Register.

(d) An applicant will be considered to be from a disadvantaged family if the individual comes from a family in which the annual income minus unusual expenses which contribute to the economic burdens borne by the family does not exceed the low-income levels published by the Secretary under paragraph (c) of this section and the family has no substantial net financial assets;

(e) An applicant will be considered as not having resumed his or her health professions studies within two years following the date the individual ceased to be a student upon a certification so stating from the applicant; and

(f) An applicant will be considered as not reasonably expected to resume his or her health professions studies within two years following the date upon which he or she terminated these studies, based upon consideration of the reasons for the applicant's failure to complete these studies, taking into account such factors as academic, medical, or financial difficulties.

(a) Each Federal capital contribution and Federal capital loan is subject to the condition that the school must maintain those records and file with the Secretary those reports relating to the operation of its health professions student loan funds as the Secretary may find necessary to carry out the purposes of the Act and these regualtions. A school must submit required reports to the Secretary within 45 days of the close of the reporting period.

(1) A school which fails to submit a required report for its Federal capital contribution fund within 45 days of the close of the reporting period:

(i) Shall be prohibited from receiving new Federal capital contributions;

(ii) Must place the revolving fund and all subsequent collections in an insured interest-bearing account; and

(iii) May make no loan disbursements.

(2) A school that fails to submit a complete report within 6 months of the close of the reporting period will be subject to termination. The Secretary will provide the school with a written notice specifying his or her intention to terminate the school's participation in the program and stating that the school may request, within 30 days of the receipt of this notice, a formal hearing. If the school requests a hearing, it must within 90 days of the receipt of the notice, submit material, factual issues in dispute to demonstrate that there is cause for a hearing. These issues must be both substantive and relevant. The hearing will be held in the Washington, DC metropolitan area. The Secretary will deny a hearing if:

(i) The request for a hearing is untimely (i.e., fails to meet the 30-day requirement);

(ii) The school does not provide a statement of material, factual issues in dispute within the 90-day required period; or

(iii) The statement of factual issues in dispute is frivolous or inconsequential.

(3) The school must also comply with the requirements of 45 CFR part 74 and section 798(e) of the Act concerning recordkeeping, audit, and inspection.

(b) The following student records must be retained by the school for 5 years after an individual student ceases to be a full-time student:

(1) Approved student applications for health professions student loans;

(2) Documentation of the financial need of applicants; and

(3) Copy of financial aid transcript(s).

(c) The following repayment records for each individual borrower must be retained for at least 5 years from the date of retirement of a loan:

(1) The amount and date of each loan;

(2) The amount and date of each payment or cancellation;

(3) Records of periods of deferment;

(4) Date, nature and result of each contact with the borrower or proper endorser in the collection of an overdue loan;

(5) Copies of all correspondence to or from the borrower and endorser;

(6) Copies of all correspondence with collection agents related to the individual borrower;

(7) Copies of all correspondence with a credit bureau related to an individual borrower; and

(8) Copies of all correspondence relating to uncollectible loans which have been written off by the Federal Government or repaid by the school.

(d) The school must also retain other records as the Secretary may prescribe. In all cases where questions have arisen as a result of a Federal audit, the records must be retained until resolution of all questions.

(e) Institutional officials who have information which indicates the potential or actual commission of fraud or other offenses against the United States, involving these loan funds, should promptly provide this information to the appropriate Regional Office of Inspector General for Investigations.

(a) Participating schools are advised that in addition to complying with the terms and conditions of these regulations, several other regulations apply under this subpart. These include, but are not limited to:

(b) The recipient may not discriminate on the basis of religion in the admission of individuals to its training programs.

On June 30, 1984, and on each June 30 thereafter, except as provided in paragraph (b) of this section, each school must have a default rate (as calculated under paragraph (a) of this section) of not more than 5 percent.

(a) The default rate for each school shall be the ratio (stated as a percentage) that the defaulted principal amount outstanding of the school bears to the matured loans of the school. For this purpose:

(1) The term defaulted principal amount outstanding means the total amount borrowed from the loan fund of a school that has reached the repayment stage (minus any principal amount repaid or canceled) on loans in default for more than 120 days; and

(2) The term matured loans means the total principal amount of all loans made by a school under this subpart minus the total principal amount of loans made by the school to students who are:

(i) Enrolled in a full-time course of study at the school; or

(ii) In their grace period.

(b) Any school that has a default rate greater than 5 percent on June 30 of any year will be required to:

(1) Reduce its default rate by 50 percent (or a school with a default rate below 10 percent must reduce its rate to 5 percent) by the close of the following 6-month period; and

(2) By the end of each succeeding 6-month period, reduce its default rate to 50 percent of the required rate for the previous 6-month period, until it reaches 5 percent.

(c) Any school subject to the provisions of paragraph (b) of this section which fails to comply with those requirements will receive no new HPSL funds and will be required to:

(1) Place the revolving fund monies and all subsequent collections into an insured interest-bearing account;

(2) Make no loan disbursements; and

(3) By the end of the succeeding 6-month period, reduce its default rate to 50 percent of the rate it failed to achieve under paragraph (b) of this section, or 5 percent. A school that meets this requirement wil be permitted to resume the use of its health professions student loan funds, but must continue to comply with the requirements of paragraph (b)(2) of this section if its default rate is still greater than 5 percent.

(d) Any school subject to the provisions of paragraph (c)(3) of this section which fails to comply with those requirements will be subject to termination. The Secretary will provide the school with a written notice specifying his or her intention to terminate the school's participation in the program and stating that the school may request, within 30 days of the receipt of this notice, a formal hearing. If the school requests a hearing, it must within 90 days of the receipt of the notice, submit material, factual issues in dispute to demonstrate that there is cause for a hearing. These issues must be both substantive and relevant. The hearing will be held in the Washington, DC metropolitan area. The Secretary will deny a hearing if:

(1) The request for a hearing is untimely (i.e., fails to meet the 30-day requirement);

(2) The school does not provide a statement of material, factual issues in dispute within the 90-day required period; or

(3) The statement of factual issues in dispute is frivolous or inconsequential.

The Secretary may with respect to any agreement entered into with any school under § 57.205, impose additional conditions prior to or at the time of any award when in his or her judgment these conditions are necessary to assure or protect the advancement of the purposes of the agreement, the interest of the public health, or the conservation of funds awarded.

Wherever the Secretary finds that a participating school has failed to comply with the applicable provisions of the Act or the regulations of this subpart, he or she may, on reasonable notice to the school, withhold further payment of Federal capital contributions, and take such other action, including the termination of any agreement, as he or she finds necessary to enforce the Act and regulations. In this case no further expenditures shall be made from the health professions student loan fund or funds involved until the Secretary determines that there is no longer any failure of compliance.

If, within 20 years after completion of construction (or, in the case of interim facilities prior to the time at which teaching in such facilities is moved to a permanent facility, whichever comes first), the facility shall cease to be used for any one or more of the purposes for which it was constructed, the Secretary, in determining whether there is good cause for releasing the applicant or other owner of the facility from the obligation so to use the facility, shall take into consideration the extent to which:

(a) The facility will be devoted by the applicant or other owner to the teaching of other health personnel;

(b) There are reasonable assurances that for the remainder of such period other facilities not previously utilized for nurse training will be so utilized and are substantially the equivalent in nature and extent for such purposes.

These regulations apply to grants awarded to public or private nonprofit institutions for the purpose of providing traineeships to registered nurses enrolled in nurse anesthetist training programs.

Act means the Public Health Service Act, as amended.

Fiscal Year means the Federal fiscal year, beginning October 1 and ending the following September 30.

National of the United States means a citizen of the United States or a person who, though not a citizen of the United States, owes permanent allegiance to the United States (as defined in 8 U.S.C. 1101(a)(22), the Immigration and Nationality Act).

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Nurse anesthetist means a registered nurse who has successfully completed a nurse anesthetist training program.

Nurse anesthetist training program means a full-time educational program which:

(1) Is designed to qualify registered nurses as nurse anesthetists;

(2) Is accredited by the Council on Accreditation of Nurse Anesthesia Educational Programs; and

(3) Has students enrolled in the program who are beyond the twelfth month of study.

Registered nurse means a person who has graduated from a school of nursing and is licensed to practice as a registered/professional nurse in a State.

School of nursing means a collegiate, associate degree, or diploma school of nursing as defined in section 853 of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services, to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Trainee means a student who is receiving a traineeship from a grant under this subpart.

Any public or private nonprofit institution which is located in a State and administers a nurse anesthetist training program is eligible to apply for a grant by submitting an application at the time and in the form that the Secretary may prescribe.

Within the limits of funds available, the Secretary will award a grant to each eligible institution whose application is found to meet the requirements of section 831(a) of the Act and these regulations. In determining the funding of applications, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The Notice of Grant Award specifies the period during which grant funds are available for obligation by the grantee. This period, called the budget period, will not exceed 1 year.

(b) The grant will initially be funded for 1 year, and subsequent awards will also be for 1 year at a time. Decisions about the amount of all awards will be made by formula as described in § 57.506 of these regulations. In all cases awards require a determination by the Secretary that funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) The Secretary will use the following formula to determine the amount of the grant to be awarded to each approved nurse anesthetist training program:

(b) Students will be counted as of October 15 of the Federal fiscal year in which application is made.

(a) A grantee shall only spend funds it receives under this subpart for traineeships according to § 57.508, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) A grantee may not spend grant funds for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of the budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and made available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's need for that period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Expenditures from traineeship funds are limited to:

(a) Tuition and fees, in accordance with the established rates of the institution, except as limited by the Secretary.

(b) Stipends in whatever amount the grantee determines that each trainee needs to pursue the training program, as long as that amount does not exceed the limits established by the Public Health Service. Stipends may only be paid to the trainee in monthly installments.

(c) A transportation allowance for travel to field training if the site is beyond a reasonable commuting distance and requires the trainee to establish a temporary new residence. However, the grantee may not pay an allowance for daily commuting from the new place of residence to the field training headquarters.

To be eligible for a traineeship, a registered nurse must:

(a) Be a resident of the United States and either a citizen or national of the United States, an alien lawfully admitted for permanent residence in the United States, a citizen of the Commonwealth of the Northern Mariana Islands, a citizen of the Republic of Palau, a citizen of the Republic of the Marshall Islands, or a citizen of the Federated States of Micronesia;

(b) Be enrolled as a full-time student beyond the twelfth month of study in a nurse anesthetist training program;

(c) Demonstrate financial need, as determined by the institution; and

(d) Not be receiving concurrent support for the same training from another Federal education award which provides a stipend or otherwise duplicates financial provisions except education benefits under the Veteran's Readjustment Benefits Act and loans from Federal sources.

(a)(1) The grantee must complete a statement which documents the appointment of each trainee. To complete this statement the grantee must require each trainee to provide information and documentation of his or her eligibility.

(2) The statement of appointment must be completed by the beginning of the training period or as soon thereafter as possible if the trainee receives notice of his or her traineeship appointment after the training period has begun. The statement of appointment must include information to document the eligibility of the trainee and certify that there will be compliance with all applicable Public Health Service terms and conditions governing the appointment. The program director must sign the statement on behalf of the grantee, and the trainee must sign it thus certifying the statements are true and complete. The original copy of the statement must be retained by the grantee to be available for program review and financial audit. A copy shall be provided to the trainee for his or her records.

(b) The grantee may not require trainees to perform any work which is not an integral part of the nurse anesthetist training program and required for all students in the program, or to perform services which detract from or prolong their training.

The initial appointment to a traineeship must be made for a full academic year, not to exceed 12 months, except that a shorter appointment may be made when necessary to enable the trainee to complete the training program. A second appointment may not exceed 6 months. The total period of support for any trainee may not exceed 18 months.

(a) The grantee must terminate a traineeship:

(1) Upon request of the trainee;

(2) If the trainee withdraws from the grantee institution; or

(3) If the grantee determines that:

(i) The trainee is no longer an enrolled student; or

(ii) The trainee is not eligible or able to continue in accordance with its standards and practices.

(b) The grantee must deposit any Federal portion of the tuition refund owed to a trainee into the grant account and provide written notice to the trainee that it is doing so.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

The Secretary may impose additional conditions on any grant award before or at the time of any award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

The regulations in this subpart apply to the award of grants to public or private nonprofit schools of medicine or osteopathic medicine, and other public or private nonprofit entities under section 750 of the Public Health Service Act (42 U.S.C. 293n) to meet the costs of projects to plan, develop, and operate or maintain programs for the training of physician assistants.

As used in this subpart:

Act means the Public Health Service Act, as amended.

Budget period means the interval of time into which the approved activity is divided for budgetary and reporting purposes, as specified in the grant award document.

Health professional shortage area means an area designated under section 332 of the Act.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Physician assistant means an individual who is qualified by academic and clinical training to provide patient care services under the supervision and responsibility of a doctor of medicine or osteopathic medicine and who meets the requirements of 42 CFR 57.802.

Primary care means health care which may be initiated by the patient or the provider, or both, in a variety of settings, and which consists of a broad range of personal health care services including promotion and maintenance of health, prevention of illness and disability, basic care during acute and chronic phases of illness, guidance and counseling of individuals and families, and referral to other health care providers and community resources when appropriate. In providing the services

(1) The physical, emotional, social, and economic status of the patient is considered in the context of his or her cultural and environmental background, including the family and community, and

(2) The patient is provided timely access to the health care system.

Program for the Training of Physician Assistants or Program means a program for the training of physician assistants as defined in 42 CFR 57.801-57.803.

Project director means an individual designated by the grantee in the grant application and approved by the Secretary to direct the project being supported under this subpart.

Project period means the total time for which support for a project has been approved including any extensions of the project.

School of medicine or school of osteopathic medicine means a public or private nonprofit school which provides training leading respectively to a degree of doctor of medicine or a degree of doctor of osteopathic medicine, and which is accredited as provided in section 799(1)(E) of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Supervised clinical practice means supervised clinical practice as defined in 42 CFR 57.802.

Any public or private nonprofit school of medicine or osteopathic medicine or public or private nonprofit entity located in a State is eligible to apply for a grant under this subpart.

(a) Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

(b) The application must be signed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the terms and conditions of any award, including the regulations of this subpart.

(c) In addition to other pertinent information which the Secretary may require, an application for a grant under this subpart must contain:

(1) A detailed description of the proposed project and of the manner in which the applicant intends to conduct the project and carry out the requirements of section 750 of the Act and this subpart, in particular, the requirements of § 57.705. This must include a budget for the proposed proj-ect and a justification for the amount of grant funds requested.

(2) A copy of all laws and regulations pertaining to the practice of physician assistants in the State or States in which the applicant's supervised clinical practice will be conducted and in which the applicant will be encouraging its graduates to work.

(3) A description of the present employment of any graduates of the program, to the extent available, and a description of the methods to be used by the program in placing its graduates.

A project supported under this subpart must be conducted in accordance with the following requirements:

(a) The project must conduct its program for the training of physician assistants in accordance with the requirements in 42 CFR 57.803.

(b) The program must (1) be accredited as an Educational Program for the Physician Assistant by the American Medical Association's Committee on Allied Health Education and Accreditation, or (2) have received a Letter of Review from the Accreditation Review Committee on Education for the Physician Assistant.

(c) The program must be operational no later than 12 months after the award of a grant under this subpart.

(d) The project must be conducted under the direction of the project director who must be employed full-time at the grantee institution(s). If the project director becomes unable to function in this capacity, the Secretary must be notified as soon as possible.

(e) The project must evaluate the supervised clinical practice conducted by the program with respect to:

(1) The variety of patient contact and care experiences afforded to participating students;

(2) The adequacy and quality of supervision provided to participating students; and

(3) The adequacy of the physical setting or settings in which the supervised clinical practice takes place.

(f)(1) The project must provide on an annual basis, upon request and in a format acceptable to the Secretary, information in the aggregate regarding student characteristics, student attrition rate and student performance.

(2) The project must provide on an annual basis, upon request and in a format acceptable to the Secretary, information in the aggregate regarding the employment of its graduates including place of employment.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will approve or disapprove all applications filed in accordance with § 57.704, taking into consideration:

(1) The degree to which the project plan adequately provides for meeting the requirements set forth in § 57.705 and 42 CFR 57.803;

(2) The potential effectiveness of the project in carrying out the purposes of section 750 of the Act and this subpart;

(3) The capability of the applicant to carry out the proposed project;

(4) The local, regional, and national needs the project proposes to serve;

(5) The adequacy of the project's plan for placing graduates in health professional shortage areas;

(6) The soundness of the fiscal plan for assuring effective use of grant funds;

(7) The potential of the project to continue on a self-sustaining basis after the period of grant support; and

(8) The adequacy of the project's plan to develop and use methods designed to attract and maintain minority and disadvantaged students to train as physician assistants.

(b) In determining the funding of applications approved under paragraph (a) of this section, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) General. (1) Within the limits of funds available for this purpose, the Secretary may award grants to those applicants whose projects will, in his or her judgment best promote the purposes of section 750 of the Act as determined in accordance with § 57.706.

(2) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 5 years.

(3) Neither the approval of any project nor any grant award shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved project or portion of an approved project. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(b) The Secretary will determine the amount of any award on the basis of his or her estimate of the sum necessary for the cost (including both direct and indirect costs) of the project.

(c) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, existence of legislative authority, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

The Secretary will from time to time make payments to a grantee of all or a portion of any grant award, either in advance or by way of reimbursement.

(a) Grant funds must be spent solely for carrying out the approved project under section 750 of the Act, these regulations, the terms and conditions of the grant award, and applicable cost principles specified in subpart Q of 45 CFR part 74.

(b) Grant funds may not be spent for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to these grants. They include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may with respect to any grant award impose additional conditions prior to or at the time of any award when, in his or her judgment, these conditions are necessary to assure or protect advancement of the grant, the interest of the public health, or the conservation of grant funds.

(a) Section 750 of the Public Health Service Act (42 U.S.C. 293n) requires the Secretary to develop regulations for programs for the training of physician assistants. The purpose of this subpart is to comply with this requirement.

(b) The regulations in this subpart apply to all programs for the training of physician assistants supported under title VII of the Public Health Service Act.

For purpose of this subpart:

Academic year means the approximately 9-12 month period of time during which the program is in session.

Disease prevention is the health strategy which emphasizes the development of individual and community measures to protect against disease or environmental hazards and their harmful consequence.

Full-time student means a student who is enrolled in a program and pursuing a course of study which constitutes a full-time academic workload, as determined by the program, and which leads to a degree, diploma, or certificate of completion.

Geriatric medicine is the prevention, diagnosis, care and treatment of illness and disability as required by the distinct needs of the elderly.

Health professional shortage area means an area designated under section 322 of the Public Health Service Act.

Health promotion is the health strategy which emphasizes individual responsibility for one's health, and community efforts to maintain and enhance well-being through lifestyle changes.

Home health care is the provision of medical and other health care services to maintain or restore the health of an ill or disabled person in their place of residence.

Medical director means the individual responsible for providing competent medical direction of the program.

Physician assistant means an individual who is qualified by academic and clinical training to provide patient care services under the supervision and responsibility of a doctor of medicine or osteopathic medicine. At a minimum, the physician assistant is competent to:

(1) Do the initial and follow-up evaluation of patients of various age groups in any setting to elicit a detailed and accurate history, perform an appropriate physical examination, and record and present pertinent data, including interpretive recommendations, in a manner meaningful to the physician;

(2) Perform or assist in the performance of routine laboratory and related studies as appropriate for a specific practice setting, such as blood studies, urinalyses, and electrocardiographic tracings;

(3) Perform routine therapeutic procedures such as injections, immunizations, and the assessment, suturing, and care of wounds;

(4) Instruct and counsel patients regarding physical and mental health, including matters such as nutrition, illness, treatment, normal growth and development, and age, sex, or lifestyle risk factors;

(5) Perform the following functions in a hospital setting: patient work-ups, making patient rounds, recording patient progress notes, accurately and appropriately transcribing or executing standing orders and other specific orders at the direction of the supervising physician, and compiling and recording detailed progress reports and narrative case summaries;

(6) Deliver or assist in the delivery of services, including the review and monitoring of treatment and therapy plans, to patients requiring initial or continuing care in settings other than a hospital, such as the home, nursing homes, and extended care facilities;

(7) Evaluate and treat life-threatening emergency situations;

(8) Interact with those community health services and other community resources which will facilitate the patient's care and continuity of care.

Primary care means primary care, as defined in 42 CFR 57.702.

Supervised clinical practice means direct participation in patient care by observation, examination, and performance of procedures as are appropriate for the assigned role of the student for the purposes of instruction under the guidance and responsibility of a physician who holds a full and unrestricted license in the State in which the supervised clinical practice is located.

A program for the training of physician assistants must:

(a)(1) Be accredited as an Educational Program for the Physician Assistant by the American Medical Association's Committee on Allied Health Education and Accreditation; or

(2) Have received a Letter of Review from the Accreditation Review Committee on Education for the Physician Assistant for its plans for a program for the training of physician assistants;

(b) Have a medical director who is licensed to practice medicine or osteopathic medicine in the State in which the program is located (or any State if the program is conducted by a Federal health facility) and who is experienced in the delivery of the type of health care services for which the program provides training;

(c) Have an enrollment of not less than eight full-time students in each class;

(d) Be a minimum of 1 academic year in length;

(e) Consist of supervised clinical practice and at least 4 months (in the aggregate) of classroom instruction;

(f) Provide training to students in the areas of primary care, health promotion, disease prevention, geriatric medicine and home health care;

(g) Develop and use methods designed to encourage graduates of the program to work in health professional shortage areas, such as periods of supervised clinical practice in those areas;

(h) Develop and use methods for placing graduates in positions for which they have been trained, including methods for placing graduates in positions in health professional shortage areas; and

(i) Develop and use a method for evaluating the effectiveness of the program in training physician assistants, including:

(1) Evaluation by faculty and students of the program in relation to its objectives;

(2) Evaluation of student performance in classroom instruction and supervised clinical practice; and

(3) Evaluation of the number of graduates employed and the characteristics of their employment, such as geographical location, setting, and functions performed; and

(4) Award a degree, diploma, or certificate of completion to individuals who have successfully completed the program.

These regulations apply to the award of grants under section 749 of the Public Health Service Act (42 U.S.C. 293m) to public or private nonprofit schools of dentistry and to accredited postgraduate dental training institutions to meet the costs of projects to:

(a) Plan, develop and operate an approved residency training program in the general practice of dentistry or an approved advanced educational program in the general practice of dentistry; and

(b) Provide financial assistance (in the form of traineeships and fellowships) to participants in such a program who are in need of financial assistance and who plan to practice general dentistry.

As used in this subpart:

Accredited postgraduate dental training institution means a public or private nonprofit institution which operates a postgraduate dental training program that has received an accreditation classification of “accreditation eligible,” “preliminary provisional approval,” “provisional approval,” “conditional approval,” or “approval” by the Commission on Dental Accreditation.

Act means the Public Health Service Act, as amended.

Approved residency training program, approved advanced educational program, or program means a general practice residency program or an advanced educational program in general dentistry which has received an accreditation classification of “accreditation eligible,” “preliminary provisional approval,” “provisional approval,” “conditional approval,” or “approval” by the Commission on Dental Accreditation.

Budget period means an interval of time into which the project period is divided for budgetary purposes, as specified in the grant award document.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned or operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Practice of general dentistry means a practice of dentistry in which the dentist:

(1) Serves as a patient's first contact with the dental care system and provides the means of timely entry into that system;

(2) Evaluates the patient's general medical status and relates this to anticipated dental treatment;

(3) Assumes continuing responsibility for the patient's dental care and provides a comprehensive range of services which will minimize the need for patient referral; and

(4) Coordinates dental treatment provided by dental specialists and by dental auxiliary personnel, including dental hygienists, dental assistants, and expanded function dental auxiliaries.

Project period means the total time for which support for a project has been approved, including any extensions thereof.

School of dentistry means a public or private nonprofit school which provides training leading to a degree of doctor of dentistry or an equivalent degree and which is accredited as provided in section 799(1)(E) of the Act.

Secretary means the Secretary of Health and Human Services, and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Any public or private nonprofit school of dentistry or accredited postgraduate dental training institution located in a State is eligible to apply for a grant.

(a) To apply for a grant under this subpart, each entity shall submit an application in the form and at such time as the Secretary may prescribe.

(b) The application must be signed by an individual authorized to act for the applicant and to assume, on behalf of the applicant, the obligations imposed by the terms and conditions of any award including the regulations of this subpart.

(c) In addition to other pertinent information that the Secretary may require, an application for a grant under this subpart must contain:

(1) A full and adequate description of the proposed project and of the manner in which the applicant intends to conduct the project and carry out the requirements of this subpart; and

(2) A budget justification for the funds requested. If the applicant requests funds for stipend support of participants, the applicant must provide evidence showing that income available from other sources, including income derived from services of the participants in the program, will be insufficient to pay their stipends and that grant funds will not be used to supplant other available funds.

A project supported under this subpart must meet the following requirements:

(a) The general practice residency or advanced education program in general dentistry must be accredited by the American Dental Association Commission on Dental Accredation;

(b) Each project must have at least two participants enrolled in the training program; and

(c) Each participant who receives stipend support must sign a statement of intent to work in the practive of general dentistry.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposal as contained in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will award grants to applicants whose projects will best promote the purposes of section 749 of the Act. The Secretary will approve or disapprove applications filed in accordance with §7thnsp;57.1104, taking into consideration, among other factors, the degree to which:

(1) The proposal addresses the legislative intent of the program and has a well-documented rationale;

(2) The objectives of the proposed project are consistent with the program's rationale, and are measurable and achievable within the project period;

(3) The proposed project's methodology is consistent with the objectives and explained in appropriate detail;

(4) The evaluation is linked to the objectives and addresses the project outcomes;

(5) The applicant demonstrates the administrative and managerial capability to carry out the proposed project;

(6) The proposed budget is complete, appropriate, cost-effective, and clearly justified;

(7) The plan for institutionalizing the project outcomes is specific and realistic; and

(8) The proposal plans to attract, maintain, and graduate minority and disadvantaged students.

(b) In determining the funding of applications approved under paragraph 9a) of this section, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) General. (1) Within the limit of funds available, the Secretary will award grants to those applicants whose approved projects will, in his or her judgment, best promote the purposes of section 749 of the Act, as determined in accordance with § 57.1106.

(2) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 3 years.

(3) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, existence of legislative authority, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(4) Neither the approval of any project nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation or other award with respect to any approved project or any portion of an approved project. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(b) Determination of grant amount. The Secretary will determine the amount of any award under this subpart on the basis of his or her estimate of the sum necessary for the cost (including both direct and indirect costs) of the project. In addition, in determining the amount of stipend support to be made available for the general practice residency program, the amount of any stipend must be limited to that portion of the annual amount normally paid to other residents by the applicant which the Secretary determines, on the basis of the documentation required in the application, cannot reasonably be paid from other available funds, including the incomes derived from the residents' services. For the advanced educational program in general dentistry, stipends for participants (who are postdoctoral students) must be paid in accordance with established Public Health Service postdoctoral stipend rates.

The Secretary will, from time to time, make payments to a grantee of all or a portion of any grant award, either in advance or by way of reimbursement.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

(c) Grants funds may not be used for sectarian instruction or for any religious purpose.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may with respect to any grant award impose additional conditions prior to or at the time of any award when in his or her judgment these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

These regulations apply to the award of grants under section 747 of the Public Health Service Act (42 U.S.C. 293k) to schools of medicine or osteopathic medicine, hospitals, and other public or private nonprofit entities for projects to: (a) Plan, develop, and operate, or participate in predoctoral, graduate, or faculty development educational programs in family medicine; and (b) provide financial assistance to trainees participating in predoctoral or graduate educational programs who are in need of financial assistance and who plan to practice family medicine or to trainees in faculty development programs who plan to teach in family medicine training programs.

Act means the Public Health Service Act, as amended.

Clerkship means supervised clinical training in a specific field of medicine for predoctoral medical (M.D. or D.O.) students.

Faculty development program means a systematic training program to increase faculty competence in teaching skills and in other areas related to academic responsibilities.

Family medicine means the field of medicine, including osteopathic general practice, in which the physician:

(a) Serves as a physician of first contact with families and with patients of all ages and provides a means of entry into the health care system;

(b) Evaluates the patient's total health needs, provides personal medical care within one or more fields of medicine, and refers the patient, when indicated, to appropriate sources of care while preserving the continuity of care;

(c) Assumes responsibility with the patient for comprehensive and continuous health care and acts as a leader or coordinator of others providing health services; and

(d) Considers the patient's total health care within the context of his or her environment, including the community and the family or comparable social units.

Hospital means a public or other nonprofit hospital which is accredited by the Joint Commission on Accreditation of Hospitals or the American Osteopathic Association.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Osteopathic internship program means an internship which emphasizes family medicine and is approved by the American Osteopathic Association.

Preceptorship means an educational experience in which the trainee works individually with a designated physician, the preceptor, who teaches and personally supervises clinical activity.

Predoctoral training program means an educational program in family medicine, including courses, clerkships or preceptorships in family medicine, which is part of a course of study leading to the degree of doctor of medicine or osteopathic medicine, and student assistantships in family medicine.

Residency training program means:

(a) A residency program in family practice which is fully or provisionally accredited by the Accreditation Council for Graduate Medical Education; or

(b) A postdoctoral program in osteopathic general practice which emphasizes family medicine and is approved by the American Osteopathic Association.

School of medicine or osteopathic medicine means a public or private nonprofit school in a State which provides training leading, respectively, to a degree of doctor of medicine or to a degree of doctor of osteopathic medicine and which is accredited as provided in section 799(1)(E) of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employer of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Student assistantship means a research program in family medicine for predoctoral medical (M.D. or D.O.) students.

Trainee means a medical (M.D. or D.O.) student, intern, resident, or physician participating in a training program supported by a grant under these regulations.

(a) For predoctoral training programs, an applicant must be a school of medicine or osteopathic medicine located in a State.

(b) For graduate and faculty development training programs, an applicant must be located in a State and be a school of medicine or osteopathic medicine, a hospital, or a public or private nonprofit entity which provides either health or educational programs as one of its major functions.

(c) Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

(a) General requirements. A project supported under this subpart must meet the following requirements:

(1) Each project must have a project director who works at the grantee institution or training site institution, has relevant training and experience, and has been approved by the Secretary to direct the project.

(2) Each project must have an appropriate administrative and organizational plan and appropriate faculty, staff, and facility resources for the achievement of stated objectives.

(3) Each project must systematically evaluate the educational program including trainees and faculty preceptors, the administration of the program and the degree to which program and educational objectives are met.

(4) Each project, other than a faculty development project, must use ambulatory care settings where family medicine is practiced and in which an adequate portion of the clinical training is conducted.

(5) Each project, other than a faculty development project, must have a family medicine curriculum which:

(i) Is appropriate for the academic level of the trainees and the specific length and nature of the educational program;

(ii) Supplements any practical (including clinical) experiences with related education activities; and

(iii) Emphasizes subjects pertinent to:

(A) Ambulatory care;

(B) Psychosocial skills and topics; and

(C) Related nonclinical areas relevant to the practitioner of family medicine.

(b) Additional requirements for predoctoral training programs. In addition to the requirements of paragraph (a) of this section, projects for predoctoral training programs must also meet the following additional requirements:

(1) The training program must be sponsored and supervised by an appropriate administrative unit in family medicine, the faculty of which participates in the preparation of the preclerkship curriculum and required courses and activities, for which faculty may be interdisciplinary, such as physical diagnosis and clinical pathological conferences, and which coordinates the predoctoral offering of clerkships and other clinical experiences oriented to family medicine.

(2) Each training program must be part of an integrated institutional strategy to provide education and training in family medicine designed to encourage an appropriate percentage of its graduates, annually, to seek graduate training in family medicine and eventually to enter a career in family medicine.

(3) For projects which include preceptorships in family medicine:

(i) The project must provide medical (M.D. or D.O.) students with ambulatory care training in a community setting.

(ii) Preceptors must have practices which are consistent with the principles of family medicine and must be selected by the administrative unit in family medicine.

(iii) Stipend support from grant funds may be given to trainees who are not receiving academic credit for the preceptorship only if they (A) need it; (B) indicate an interest in working in the field of family medicine; and (C) engage in the preceptorship full time for at least 4 consecutive weeks. Stipend support from grant funds may be given to trainees who are receiving academic credit for the preceptorship only when the three conditions above are met and, additionally, when the trainee incurs extraordinary living expenses due to participation in the preceptorship.

(4) For projects for student assistantships:

(i) A family medicine faculty member of the administrative unit, identified under paragraph (b)(1) of this section, must supervise each student assistant.

(ii) The grantee must give preference in admission to the training program to applicants considering a career in academic family medicine.

(iii) Stipend support from grant funds may be given to trainees who are not receiving academic credit for the assistantship only if they (A) need it; (B) indicate an interest in working in the field of family medicine; and (C) engage in the assistantship full time for at least 8 consecutive weeks. Stipend support from grant funds may be given to trainees who are receiving academic credit for the assistantship only when the three conditions above are met and, additionally, when the trainees incurs extraordinary living expenses, due to participation in the assistantship.

(c) Additional requirements for graduate training projects (except faculty development). In addition to the requirements of paragraph (a) of this section, projects for approved or accredited residency training programs must meet the following additional requirements:

(1) Each program must have a supervisor of training with appropriate experience and training who is responsible for coordination and supervision of training in the program.

(2) Each program must use an appropriate resident or intern recruitment and selection process which assures that residents and interns in the program have applied specifically for training in the approved graduate training program.

(3) Each program must provide education for a sufficient number of interns or residents to provide an adequate collegial environment for the educational program and to enhance cost efficiency.

(4) Each program must have an adequate number of qualified faculty with training and experience in family medicine, behavioral sciences, and liaison specialties, for the number of interns or resident in the program. The faculty of the program must engage in periodic educational activities to improve their teaching skills.

(5) Each program must provide an appropriate amount of clinical training for each intern or resident in ambulatory care settings emphasizing family medicine in each year of the training program. This training will be for the purpose of assuring an adequate education in the principles of the practice of family medicine throughout the program. In addition, each training program must provide clinical training in other ambulatory care settings relevant to family medicine, such as emergency units.

(6) Each program must have adequate facilities for the provision of the educational activities and, in particular, have family medicine ambulatory care space sufficient to provide an adequate clinical experience for the interns or residents.

(7) Each intern or resident must serve a sufficient number of families and individual patients with a variety of health care needs to provide the trainee with a broad clinical experience.

(d) Additional requirements for faculty development programs. (1) Each project must have a curriculum which:

(i) Directly applies to family medicine training programs;

(ii) Emphasizes improvement of pedagogical skills for clinical and classroom settings; and

(iii) Uses didactic and nondidactic teaching strategies.

(2) Only physicians who teach or intend to teach in family medicine are eligible to participate as trainees in the program.

(3) Each program must have a sufficient number of trainees participating during the conduct of any educational activities to provide a collegial environment and to make the program cost efficient.

(4) Stipend support from grant funds may be no longer than 24 cumulative months for any trainee.

(5) To be eligible for financial assistance from grant funds, a trainee must:

(i) Intend to teach in family medicine training program on a full-time basis; and

(ii) Be a full-time participant in the training program for at least 3 months.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will approve projects which best promote the purposes of section 747 of the Act and these regulations. The Secretary will consider, among other factors:

(1) The degree to which the proposed project provides for the project requirements in § 57.1604;

(2) The administrative and management ability of the applicant to carry out the proposed project in a cost-effective manner; and

(3) The potential of the project to continue on a self-sustaining basis.

(b) In determining the funding of projects approved under paragraph (a) of this section, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 5 years.

(b) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation or other award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Grantees may not spend grant funds for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to these grants. They include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may impose additional conditions on any grant award before or at the time of an award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

These regulations apply to the award of grants under section 747 of the Public Health Service Act (42 U.S.C. 293k) to schools of medicine and osteopathic medicine to meet the costs of projects to establish, maintain, or improve academic administrative units to provide clinical instruction in family medicine. These projects may include:

(a) The planning and development of model predoctoral, faculty development, and graduate medical education programs; and

(b) Academic and clinical activities relevant to the field of family medicine.

Academic administrative unit or unit means a department, division, or other formal academic unit of a school of medicine or osteopathic medicine or clinical campuses of such schools that provides clinical instruction in family medicine.

Act means the Public Health Service Act, as amended.

Clinical campus means a geographically separate educational entity of an accredited medical school that is recognized and identified as a clinical campus by the American Academy of Family Physicians and that has been given the responsibility to coordinate or provide all clinical training for that clinical campus.

Family medicine includes “osteopathic general practice” and means the field of medicine in which the physician:

(a) Serves as a physician of first contact with families and patients of all ages and provides a means of entry into the health care system;

(b) Evaluates the patient's total health needs, provides personal medical care within one or more fields of medicine, and refers the patient, when indicated, to appropriate sources of care while preserving the continuity of care;

(c) Assumes responsibility with the patient for comprehensive and continuous health care and acts as a leader or coordinator of others providing health services; and

(d) Considers the patient's total health care within the context of his or her environment, including the community and the family or comparable social units.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Other major clinical units means formal academic units at the applicant school or its clinical campus that offer clinical instruction in internal medicine, obstetrics and gynecology, pediatrics, psychiatry, or surgery.

Residency training program means a 3-year residency program in family practice that is fully or provisionally accredited by the Accreditation Council for Graduate Medical Education, or the equivalent of such a program as determined by the Secretary. In the case of osteopathic medicine, a postgraduate program of no less than 2 years' duration, including the osteopathic internship, as approved or provisionally approved by the American Osteopathic Association will be deemed such an equivalent.

School of medicine or osteopathic medicine means a public or private nonprofit school in a State which provides training leading, respectively, to a degree of doctor of medicine or to a degree of doctor of osteopathic medicine and which is accredited as provided in section 799(1)(E) of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Any school of medicine or osteopathic medicine which is located in a State is eligible to apply for a grant. Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

Existing units supported under this subpart must meet all the requirements of this section no later than 12 months after initial award of the grant. Units which are being established with the aid of grants under this subpart must meet the requirement of paragraph (a) of this section no later than 12 months after initial award, and the remaining requirements of this section no later than 24 months after initial award of the grant. However, within the first 12 months of grant support, units which are being established must submit a continuation application. This application is expected to include a plan which details, in a format determined by the applicant, how the remaining project requirements will be met by the end of the second year of grant support. In addition to units that are initially establishing under this subpart, those that change organizational status (i.e., from division to department) are also considered establishing units for the purpose of this subpart. Those that maintain organizational status are considered existing units.

(a) Each project must have a project director, who works at the grantee institution in an administrative unit of the grantee institution on an appointment consistent with other major departments, heads or will head the unit, and has relevant training and experience in family medicine.

(b) The unit must have academic status comparable to that of one of the other major clinical units at the institution.

(c) The unit must have administrative autonomy comparable to that of other academic units.

(d) The unit must have control over a residency training program. The program must have the capacity to enroll a total of at least 9 interns or residents annually. A unit whose applicant school or clinical campus does not have a residency program accredited under its direct authority will be considered as meeting this requirement if it has a written affiliation agreement with a hospital which conducts a residency program as described.

(e) The unit (or units in the case of schools with one or more decentralized units) must have responsibility for providing instruction to each member of the student body who is engaged in an education program leading to a degree in doctor of medicine or doctor of osteopathic medicine. The amount of mandatory and elective curriculum must be comparable to the amount of mandatory and elective curriculum time required for other major clinical units at the school.

(f) The unit must have, in the judgment of the Secretary, a sufficient number of full-time faculty to conduct the instruction. The number of family medicine faculty in the unit must be comparable to that of full-time faculty responsible for conducting the instruction of one of the other major clinical units either at the school or at the clinical campus, whichever is the same as the unit receiving the grant funds.

(g) Each project must evaluate the program of instruction required in paragraph (f) of this section, including evaluation of faculty competence, the administration of the program, and the degree to which program objectives are met.

(h) Where projects include the planning and development of model predoctoral, faculty development, or graduate medical education programs, those programs must be designed to eventually meet the requirements of the regulations implementing section 747 of the Act, 42 CFR part 57, subpart Q.

As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will award grants to applicants whose projects will best promote the purposes of section 747 of the Act and this subpart. The Secretary will consider, among other factors:

(a) The degree to which the proposed project adequately provides for the project requirements in § 57.1704;

(b) The administrative and management capability of the applicant to carry out the proposed project in a cost-effective manner;

(c) The qualifications of the proposed staff and faculty of the unit; and

(d) The potential of the project to continue on a self-sustaining basis.

(a) The notice of grant award specifies how long the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 5 years.

(b) Generally, the grant will initially be funded for 1 year and subsequent noncompeting continuation awards will also be for 1 year at a time. Decisions regarding noncompeting continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, and the availability of funds. In all cases, noncompeting continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application, nor the award of any grant, shall commit or obligate the United States in any way to make any additional, supplemental, noncompeting continuation or other award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, the terms and conditions of the grant award, and the applicable cost principles in subpart Q of 45 CFR part 74, and these regulations.

(b) Grantees may not spend grant funds for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amount awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to grants under the subpart. These include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may impose additional conditions on any grant award before or at the time of an award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

These regulations apply to grants to eligible schools and entities under section 740 of the Public Health Service Act (42 U.S.C. 293d) to assist individuals from disadvantaged backgrounds to enter and graduate from health professions schools and schools of allied health.

Act means the Public Health Service Act, as amended.

Allied health professions means professions which support, complement, or supplement the professional functions of physicians, dentists, and other health professionals in the delivery of health care to patients, or assist environmental engineers and other personnel in environmental health control and preventive medicine activities.

Community-based program means a program whose organizational headquarters is located in and which primarily serves: A Metropolitan Statistical Area, as designated by the Office of Management and Budget; a Bureau of Economic Analysis, U.S. Department of Commerce designated nonmetropolitan economic area; a county; or Indian tribe(s) as defined in 42 CFR 36.102(c), i.e., an Indian tribe, band, nation, rancheria, Pueblo, colony or community, including an Alaska Native Village or regional or village corporation.

Health professions means the professions of medicine, dentistry, osteopathic medicine, pharmacy, optometry, podiatric medicine, veterinary medicine, public health, chiropractic, health administration, and clinical psychology.

Health professions schools means schools of medicine, dentistry, osteopathic medicine, pharmacy, optometry, podiatric medicine, veterinary medicine, public health, chiropractic, graduate programs in health administration, or graduate programs in clinical psychology, as defined in section 799(1)(A), (B), (C), and (D) of the Act and as accredited in section 799(1)(E) of the Act.

National of the United States (as defined in 8 U.S.C. 1101(a)(22), the Immigration and Nationality Act) means a citizen of the United States or a person who, though not a citizen of the United States, owes permanent allegiance to the United States.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

School of allied health means a public or private nonprofit college, junior college, university or hospital-based educational entity which provides or is accredited to provide a degree program in an allied health discipline and which meets all the criteria in section 799(4) of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands and the Federated States of Micronesia.

(a) Health professions schools, schools of allied health, and public or private nonprofit health or educational entities which are located in a State and provide health or educational programs as one of their major functions may apply for a grant under this subpart. Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

(b) Applicants which offer degree programs in the allied health professions must meet relevant standards and guidelines established by appropriate:

(1) Accrediting bodies recognized by the Secretary of Education, or

(2) Federal or State agencies.

To be eligible for educational assistance under this program, an individual must:

(a) Be a resident of the United States and either a citizen or national of the United States, an alien lawfully admitted for permanent residence in the United States, a citizen of the Commonwealth of the Northern Mariana Islands, a citizen of the Republic of Palau, a citizen of the Republic of the Marshall Islands, or a citizen of the Federated States of Micronesia;

(b) Have completed at least the junior year of high school (or its equivalent), except in the case of Model Demonstration programs; and

(c) Come from a disadvantaged background. For this program, an individual from a disadvantaged background is one who:

(1) Comes from an environment that has inhibited the individual from obtaining the knowledge, skill, and abilities required to enroll in and graduate from a health professions school, or from a program providing education or training in an allied health profession; or

(2) Comes from a family with an annual income below a level based on low income thresholds according to family size published by the U.S. Bureau of the Census, adjusted annually for changes in the Consumer Price Index, and adjusted by the Secretary for use in all health professions programs. The Secretary will periodically publish these income levels in the Federal Register.

(a) The Secretary will award grants to meet the cost of carrying out one or more of the following five purposes:

(1) To identify individuals from disadvantaged backgrounds for education in the health or allied health professions through the development and application of criteria for this purpose, and to recruit these individuals through motivational activities which may involve dissemination of information, exposure to role models and health facilities, and counseling.

(2) To provide individuals from disadvantaged backgrounds, for a period prior to their entry into a regular course of education of such a school, preliminary education designed to assist them to complete successfully such regular course of education in a health professions school or school of allied health, or to refer them to institutions which provide it. Preliminary education in this context is education designed to expand the academic ability of disadvantaged students during their preprofessional training. It may not include classes already taught as part of the regular course of education leading to a high school diploma or undergraduate degree. It may not be offered to students before they complete the junior year of high school.

(3) To provide information to individuals from disadvantaged backgrounds about financial aid available to students in health professions schools, or schools of allied health, or schools and entities which provide training necessary to qualify for enrollment in health professions schools or schools of allied health.

(4) To facilitate the entry of individuals from disadvantaged backgrounds into health professions schools or schools of allied health by engaging in activities which assist them to compete for admission, such as instruction designed to improve their performance on admission tests, and by assisting admission committees with the evaluation of disadvantaged applicants.

(5) To provide counseling or other retention services, such as tutorial assistance and assistance in adjusting to the environment of the school, which are designed to help individuals from disadvantaged backgrounds who are enrolled in health professions schools or schools of allied health to complete this education.

(b) The grantee must carry out at least two of the five purposes, even if grant funds are requested or awarded for only one of them.

(c) The grantee must evaluate its program based on the plan provided in the grant application.

(d) Grantees which: (1) Are schools of medicine, osteopathic medicine, public health, dentistry, veterinary medicine, optometry, pharmacy, allied health, chiropractic, podiatric medicine, and public and private nonprofit schools that offer graduate programs in clinical psychology; and

(2) Have a proportionate enrollment of individuals from disadvantaged backgrounds that is less than 200 percent of the national average percentage of such individuals in all schools of each health professions discipline must assure the Secretary that during a period of 3 years, commencing on the date of the award of the grant, they will increase their first-year enrollment of individuals from disadvantaged backgrounds by at least 20 percent over enrollments in the base year of 1987.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will decide which applications to approve by considering, among other factors:

(1) The degree to which the proposed project adequately provides for the requirements in § 57.1805;

(2) The number and types of individuals who can be expected to benefit from the project;

(3) The administrative and management ability of the applicant to carry out the proposed project in a cost-effective manner;

(4) The adequacy of the staff and faculty;

(5) The soundness of the budget; and

(6) The potential of the project to continue without further support under this program.

(b) Within the limits of funds available, the Secretary will award grants to approved applicants with projects that will best promote the purposes of section 740 of the Act. Of the amounts appropriated under this section for any fiscal year, 10 percent shall be obligated for community-based programs and 70 percent shall be obligated for grants to institutions of higher education and not more than 5 percent of such funds may be obligated for grants having the primary purpose of informing individuals about the existence and general nature of health careers. Section 740(a)(2)(G) authorizes the payment of such stipends as the Secretary may approve for participants in a project for any period of education at any school eligible for a grant under this subpart.

(c) Funding priority. (1) In determining the funding of applications approved under paragraph (a) of this section, the Secretary shall give priority to schools described in § 57.1805(d), beginning in fiscal year 1992—

(i) Which previously received a grant under this subpart and increased its first-year enrollment of individuals from disadvantaged backgrounds by at least 20 percent over that enrollment in the base year 1987 by the end of 3 years from the date of the award of the HCOP grant; and

(ii) Which had not previously received a grant under this subpart that increased its first-year enrollment of individuals from disadvantaged backgrounds by at least 20 percent over that enrollment in the base year 1987, over any period of time.

(2) In addition, should specific needs warrant, the Secretary will also consider other special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 3 years.

(b) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be funded for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of factors such as the grantee's progress and management practices, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation or other award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Any balance of federally-obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during the budget period it becomes apparent to the Secretary that the amount of Federal funds provided and made available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts provided by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

(c) The grantee may spend grant funds to provide one round trip for each individual in the program between his or her residence and the training site if:

(1) The training site is beyond a reasonable commuting distance and requires the individual to establish a temporary new residence; and

(2) The educational assistance is not offered at a time when the individual would be at the training site as a student in a regular course of education leading to a high school diploma, associate degree, undergraduate degree, or degree in the health or allied health professions.

(d) The grantee may spend grant funds to pay individuals in the program a stipend when the grantee determines that:

(1) The condition in paragraph (c)(2) of this section exists;

(2) No other Federal financial assistance program is authorized to provide this support; and

(3) The individual needs this support to participate in the program.

(e) The grantee may not spend grant funds to pay tuition or fees, train program staff, retrain health professionals, or for sectarian instruction, or for any religious purpose.

Several other Department regulations apply to grantees. They include but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may impose additional conditions on any grant award before or at the time of any award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

In the event the Secretary of Defense decides to enter into one or more contracts under 10 U.S.C. 2127(d), the regulations in this subpart outline considerations the Secretary of Defense will take into account in determining whether an accredited civilian educational institution has increased its total enrollment for the sole purpose of accepting members of the Armed Forces health professions scholarship program.

As used in this subpart:

(a) Institution means a college, university, or other institution or a department, division, or other administrative unit within a college, university, or other institution, which provides primarily or exclusively a course of study in medicine, dentistry, or other health profession, as determined under regulations prescribed by the Secretary of Defense, leading to a degree in one of said health professions, and which is accredited by an accrediting agency or association recognized by the United States Commissioner of Education.

(b) Enrollment in any fiscal year means the number of full-time students enrolled in an institution on October 15 of said year and pursuing a course of study which constitutes a full-time academic workload, as determined by the institution, leading to a degree in medicine, dentistry, or other health profession, as determined under regulations prescribed by the Secretary of Defense: Provided, That if the Secretary of Defense finds that a date other than October 15 would more accurately reflect an institution's enrollment in any fiscal year, the Secretary of Defense may use such other date in place of October 15 in making his determination under this subpart.

(c) Fiscal year means the Federal fiscal year beginning July 1 and ending on the following June 30.

(d) Program means the Armed Forces health professions scholarship program established under section 2(a) of the Uniformed Services Health Professions Revitalization Act of 1972 (86 Stat. 713, Pub. L. 92-426), and codified in chapter 105 of 10 U.S.C.

In the event the Secretary of Defense decides to enter into one or more contracts under 10 U.S.C. 2127(d), his determination as to whether an institution has increased its total enrollment in any fiscal year for the sole purpose of accepting members of the program will take into account the following considerations:

(a) A comparison of the total enrollment in said fiscal year with the total enrollments in immediately preceding fiscal years;

(b) Any increases in enrollment to which the institution has directly or indirectly committed itself in said fiscal year under: (1) Other Federal programs, such as those set forth in title VII and VIII of the Public Health Service Act (42 U.S.C. 292 et seq.), the Veterans' Administration Medical School Assistance and Health Manpower Training Act of 1972 (Pub. L. 92-541, 86 Stat. 1100 (38 U.S.C. 5070 et seq.)) and section 225 of the Public Health Service Act (sec. 5, Pub. L. 92-585, 86 Stat. 1293 (42 U.S.C. 234)); (2) programs of State or local governments or other public or private agencies, or (3) any legally binding arrangement: Provided, That insofar as a single increase may be applied to satisfy the commitments under two or more programs and/or other arrangements, said increase shall be considered to meet all such commitments;

(c) Any unusual factors, such as: (1) An institution having been newly established or (2) an institution experiencing what is for it an abnormal rate of attrition and/or admission.

These regulations apply to grants awarded to public or nonprofit private health professions schools under section 739 of the Public Health Service Act (42 U.S.C. 293c) to assist such schools in supporting programs of excellence in health professions education for minority individuals.

Act means the Public Health Service Act, as amended.

Health professions school means any accredited school of medicine, dentistry, osteopathic medicine, pharmacy, optometry, podiatric medicine, veterinary medicine, public health, and chiropractic or graduate programs in health administration, or graduate programs in clinical psychology, as defined in section 799(1) (A), (B), (C), and (D) of the Act and as accredited in section 799(1)(E) of the Act.

Minority means an individual whose race/ethnicity is classified as American Indian or Alaskan Native, Asian or Pacific Islander, Black, or Hispanic.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

A health professions school described in section 799(1) (A), (B), (C), and (D) of the Act which has received support under section 788B (Advanced Financial Distress Assistance) of the Act for Fiscal Year 1987, may apply for a grant under this subpart. Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at the time the Secretary may prescribe.

(a) The Secretary will award grants to meet the cost of carrying out three or more of the following six purposes, one of which must be the purpose provided in paragraph (a)(1) of this section:

(1) Develop a plan to achieve institutional improvements, including financial independence, to enable such school to support programs of excellence in health professions education for minority individuals. This plan must be submitted within 6 months of the date of grant award;

(2) Improve the capacity of such school to recruit and retain faculty;

(3) Provide improved access to the library and information resources of such school;

(4) Establish, strengthen, or expand programs to enhance the academic performance of students in such school;

(5) Establish, strengthen, or expand programs to increase the number and quality of applicants for admission to such school. Activities designed to increase the number and quality of applicants to these schools may not be offered to students prior to the ninth grade; and

(6) Develop curricula and carry out faculty training programs in order to enable such school to become, for the Nation's health care providers, a resource with respect to the health problems of minority communities, such as higher infant mortality rates and higher incidences of acquired immunodeficiency syndrome.

(b) Each project must evaluate its program based on the evaluation plan provided in the grant application.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will decide which applications to approve by considering, among other factors:

(1) The degree to which the applicant can arrange to continue the proposed project beyond the federally funded project period;

(2) The degree to which the proposed project meets three or more of the purposes as described in § 57.2104;

(3) The relationship of the objectives of the proposed project to the goals of the plan that will be developed pursuant to § 57.2104(a)(1);

(4) The administration and managerial ability of the applicant to carry out the project in a cost effective manner;

(5) The adequacy of the staff and faculty to carry out the program;

(6) The soundness of the budget for assuring effective utilization of grant funds, and the proportion of total program funds which come from non-federal sources and the degree to which they are projected to increase over the grant period;

(7) The number of individuals who can be expected to benefit from the project; and

(8) The overall impact the project will have on strengthening the school's capacity to train minority health professionals and increase the supply of minority health professionals available to serve minority populations in underserved areas.

(b) In determining the funding of applications approved under paragraph (a) of this section, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 3 years.

(b) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding the continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress, including the degree that the projected portion of non-federal funds supporting the project has been met, and management practices, the existence of legislative authority, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried foward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

(c) The grantee may spend grant funds to pay individual participants in the program a per diem when the grantee determines that—

(1) The training program requires the individual to establish a temporary new residence;

(2) The program is offered at a time when the individual would not be at the training site in a regular course of education or employed as a faculty member at that institution; and

(3) No other Federal financial assistance program is authorized to provide this support.

(d) The grantee may spend grant funds to provide one round trip per participant between the place of residence and the training site, provided that conditions in paragraphs (c)(1) and (2) of this section are met.

(e) The grantee may not spend grant funds for stipends, licensing exams, loan or scholarship support, support of research faculty or projects and related activities, establishment of research centers, establishment of planning offices, support of commercial ventures, entertainment, dependency allowances, new construction of facilities, acquisition of land, fund raising, or for sectarian instruction or any religious purpose.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may impose additional conditions on any grant award before or at the time of any award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

The regulations of this subpart are applicable to scholarship grants awarded under section 784 of the Public Health Service Act, which authorizes the Secretary to award scholarship grants to students of medicine and osteopathy who agree to engage in the full-time practice of primary care for a prescribed period of time (a) in a physician shortage area or (b) in such manner as to assure that of the patients receiving medical care in such practice a substantial portion will consist of migratory agricultural workers or members of their families.

To be eligible for a scholarship grant under this subpart, the applicant must:

(a) Be a national of the United States or a permanent resident of the Trust Territory of the Pacific Islands or a lawful permanent resident of the United States, Puerto Rico, the Virgin Islands or Guam;

(b) Be a full-time student in a school located in the United States, the Trust Territory of the Pacific Islands, Puerto Rico, the Virgin Islands, the Canal Zone, American Samoa or Guam; and

(c) Agree to engage in the full-time practice of primary care as defined in § 57.2202(j) in accord with conditions specified in § 57.2209.

Each eligible applicant desiring a scholarship grant under this subpart shall submit an application at such time and in such form as the Secretary may prescribe.

(a) When funds determined by the Secretary to be available for scholarship grants under this subpart are insufficient to permit the awarding of scholarships to all individuals applying therefor, the Secretary shall accord priority to eligible applicants as follows:

(1) First priority for scholarship grants shall be accorded to applicants who (i) are from a low-income background as defined in § 57.2202 (i), (ii) reside in a physician shortage area and (iii) agree to return to such area and engage in the full-time practice of primary care. For purposes of this paragraph, an individual resides in a physician shortage area if he presently is residing in such an area or if he (or his parents) resided in such an area in the year prior to his admission to an institution of higher education.

(2) Second priority shall be accorded to applicants meeting the criteria in paragraphs (a)(1) (ii) and (iii) of this section.

(3) Third priority shall be accorded to applicants meeting the criterion in paragraph (a)(1)(i) of this section.

(4) Fourth priority shall be accorded to other applicants.

(b) Where there are insufficient funds available to make scholarship grants to all members of any single priority grouping enumerated in paragraph (a) of this section, the following criteria will be used to accord priority within each affected priority group:

(1) Within the priority groupings specified in paragraphs (a) (1) and (2) of this section, the Secretary shall rank recipients according to the degree of the severity of shortage of physicians practicing primary care in such area. Scholarship grants shall be awarded within each priority group first to applicants within that grouping from physician shortage areas with the least favorable ratio of such physicians to the population to be served.

(2) Within the priority groupings specified in paragraphs (a) (3) and (4) of this section, the Secretary shall award scholarship grants within each priority group first to applicants who agree to practice primary care in a physician shortage area with a substantial portion of migratory agricultural workers in such area; second, to applicants within that grouping who agree to practice in a physician shortage area; and third, to applicants within that grouping who agree to practice in such place or places, facility or facilities, and in such manner as the Secretary finds necessary to assure that, of the patients receiving medical care in such practice, a substantial portion will consist of persons who are migratory agricultural workers or members of their families.

The Secretary may award scholarship grants to individuals who have been selected to receive scholarship grants in accordance with § 57.2205. Any such award under this subpart shall state the specific conditions under which the award is being made and shall indicate the distribution between funds awarded to cover the costs of tuition and fees payable to the school and funds awarded for the costs of equipment, supplies, books, and living expenses payable to the individual.

(a) The amount of the scholarship grant to any student for any academic year shall be the total of (1) the lesser of (i) $5,000 or (ii) the amount determined by the Secretary to be the cost of tuition and fees; plus (2) an allowance for equipment, supplies, books and living expenses which shall be the lesser of (i) $3,600 or (ii) the difference between $5,000 and the amount determined pursuant to paragraph (a)(1) of this section.

(b) The maximum amount of a scholarship grant during a 12-month period to any student enrolled in a school which provides a course of study longer than the traditional 9-month academic year may be proportionately increased.

The portion of a scholarship grant awarded for the costs of tuition and fees as indicated on the notice of grant award document will be paid directly to the school upon receipt of an invoice from the school. The portion of the scholarship grant awarded for the costs of equipment, supplies, books, and living expenses will be paid to the individual in equal monthly installments.

(a) Any scholarship grant made to any individual under this subpart shall be awarded upon the condition that such individual will, following completion of his professional training, engage in the full-time practice of primary care for a period of 12 continuous months for each academic year (i.e., 9 months) for which a scholarship grant was made, as follows:

(1) In the case of any individual selected pursuant to § 57.2205(a) (1) or (2), such practice must be in the physician shortage area to which such individual agreed to return: Provided however, That if the Secretary determines at the time the individual proposes to engage in the required practice that such area is no longer a physician shortage area and cannot reasonably be expected to become such an area within 2 years from such time, such practice shall, at the option of the individual, be either in any then current physician shortage area, or in such place or places, facility, or facilities, and in such manner as the Secretary finds necessary to assure that, of the patients receiving medical care in such practice, a substantial portion will consist of persons who are migratory agricultural workers or members of their families.

(2) In the case of any individual selected pursuant to § 57.2205(a) (3) or (4), such practice must be in accordance with the agreement described in § 57.2205(b)(2) (i.e., in a physician shortage area with a substantial portion of migratory agricultural workers in such area; a physician shortage area; or in such place or places, facility or facilities, and in such manner as may be necessary to assure that, of the patients receiving medical care in such practice, a substantial portion will consist of persons who are migratory agricultural workers or members of their families; as the case may be).

(b) Subject to the provision of § 57.2211(f) and except as provided in paragraph (c) of this section, any individual to whom the conditions of this section apply must complete the practice required by paragraph (a) of this section within a period beginning on the date of completion by the individual of his professional training, as determined by the Secretary, and not to exceed the period of practice determined in accordance with such paragraph (a) of this section, plus 6 months.

(c) Where an individual to whom the conditions of this section apply is currently performing an active duty service obligation under section 235 of the Act, the individual must complete the practice required by paragraph (a) of this section within a period beginning on the date of completion by the individual of his service obligation under section 225 of the Act or completion of his internship and residency training (not to exceed four years) if not previously received, whichever comes later, and not to exceed the period of practice determined in accordance with paragraph (a) of this section, plus 6 months.

(d) Where an individual has received scholarship grant support for four academic years, such individual shall be considered to have received scholarship grant support for only three academic years if the Secretary determines (1) that such individual has served his internship or residency in a hospital (i) which is located in a physician shortage area, or (ii) in which a substantial portion of the patients of such hospital consists of persons who are migratory agricultural workers or members of the families of such workers and (2) that while so serving such internship or residency, he has received training or professional experience designed to prepare him to engage in the practice of primary care.

(e) For purposes of paragraph (c)(2) of this section, (1) internships which will be recognized by the Secretary as providing training or professional experience designed to prepare an individual to engage in the practice of primary care are: Rotating internships without a major emphasis, rotating internships with an emphasis on internal medicine, rotating internships with an emphasis on pediatrics, rotating internships with an emphasis on obstetrics and gynecology, straight internships in internal medicine, straight internships in pediatrics and straight internships in obstetrics and gynecology; Provided, That such internships are approved or provisionally approved by the Council on Medical Education of the American Medical Association or the Board of Trustees of the American Osteopathic Association; and

(2) Residencies which will be recognized as providing such training or experience are those in general practice, family practice, general internal medicine, general pediatrics and general obstetrics and gynecology; Provided, That such residencies are approved or provisionally approved by the Council on Medical Education of the American Medical Association or the Board of Trustees of the American Osteopathic Association.

(f) No individual who has received a scholarship grant under this subpart may enter into an agreement with the Secretary pursuant to section 741(f) of the Act until either (1) such individual has completed the practice required by paragraph (a) of this section, or (2) the Secretary has determined that the United States is entitled to recover from such individual an amount determined in accordance with § 57.2210. In no case, however, shall a scholarship grant under this subpart be considered an educational loan for purposes of section 741(f) of the Act.

(a) Subject to the provision of § 57.2211, if any individual fails to complete the course of study or fails, within the time period set forth in § 57.2209(b), to meet the applicable conditions of practice imposed by receipt of a scholarship grant for the full number of months to which such condition is applicable, the United States shall be entitled to recover from such individual an amount determined in accordance with section 784(c)(3) of the Act; Provided however, That no interest shall accrue on any amount due the United States during any period for which the Secretary has suspended the obligation to repay pursuant to § 57.2211(b).

(a) Any obligation of any individual under this subpart will be cancelled upon the death of such individual as documented by a certification of death, or such other official proof as is conclusive under State law, and submitted to the Secretary.

(b) Subject to the provision of paragraph (f) of this section, where an individual fails to complete the practice required by § 57.2209(a) within the period prescribed in § 57.2209(b), the Secretary may waive or suspend for such period as determined by the Secretary the obligation of such individual to repay pursuant to § 57.2210 where the Secretary determines that compliance by such individual with such obligation (1) is impossible, or (2) would involve extreme hardship to such individual and enforcement of such obligation with respect to such individual would be against equity and good conscience.

(c) For purposes of paragraph (b)(1) of this section, compliance by an individual will be deemed impossible where the Secretary determines, on the basis of such information and documentation as he may require, that the individual is permanently and totally disabled.

(d) For purposes of paragraph (b)(2) of this section, in determining whether compliance by an individual would involve extreme hardship to such individual and would be against equity and good conscience, the Secretary will take into consideration the following:

(1) The individual's present financial resources and obligations;

(2) The individual's estimated future financial resources and obligations;

(3) The reasons for the individual's failure to complete such practice within the prescribed period, such as problems of a personal nature; and

(4) The extent to which the individual is practicing his profession in a manner consistent with the purposes of section 784 of the Act.

(e) Where the Secretary determines that compliance by an individual with his obligation to engage in the practice of primary care in a specified shortage area pursuant to § 57.2209(a) is impossible or would involve extreme hardship to such individual and enforcement of such obligation with respect to such individual would be against equity and good conscience, the Secretary may waive such obligation and permit the individual at his option to practice either in any then current physician shortage area, or in such place or places, facility or facilities, and in such manner as the Secretary finds necessary to assure that, of the patients receiving medical care in such practice, a substantial portion will consist of persons who are migratory agricultural workers or members of their families. The Secretary will take into consideration in determining whether to grant a waiver under this paragraph the extent to which the individual has problems of a personal nature, e.g., physical or mental disability, terminal illness in the family, or need for financial support that cannot be supplied by the required service, which intrude upon the individual's ability to perform the required service in the specified shortage area.

(f) The Secretary may extend the period (prescribed in § 57.2209(b)) within which an individual must complete the practice required pursuant to § 57.2209(a) for a period not to exceed one year where the Secretary finds that (1) such individual is unable to complete such practice within such period because of a temporary physical or mental disability, or (2) completion by such individual of such practice within such period would involve extreme hardship to such individual and that failure to so extend such period would be against equity and good conscience.

The regulations of this subpart are applicable to the award of grants to public or private nonprofit schools of nursing and public health, public or private nonprofit schools of medicine which received grants under section 822(a) of the Public Health Service Act (42 U.S.C. 296m) prior to October 1, 1985, public or private nonprofit hospitals, and other public or private nonprofit entities under section 822(a) to meet the cost of projects to (a) plan, develop, and operate, (b) expand, or (c) maintain programs for the education of nurse practitioners or nurse midwives.

As used in this subpart:

(a) Act means the Public Health Service Act, as amended.

(b) Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(c) Council means the National Advisory Council on Nursing Education and Practice (established by section 851 of the Act).

(d) School of nursing means a collegiate associate degree, or diploma school of nursing.

(e) Collegiate school of nursing means a department, division, or other administrative unit in a college or university which provides primarily or exclusively a program of education in professional nursing and allied subjects leading to the degree of bachelor of arts, bachelor of science, bachelor of nursing, or to an equivalent degree, or to a graduate degree in nursing, and including advanced education related to such program of education provided by such school, but only if such program, or such unit, college or university is accredited as provided in section 853(6) of the Act.

(f) Associate degree school of nursing means a department, division or other administrative unit in a junior college, community college, college, or university which provides primarily or exclusively a 2-year program of education in professional nursing and allied subjects leading to an associate degree in nursing or to an equivalent degree, but only if such program, or such unit, college, or university is accredited as provided in section 853(6) of the Act.

(g) Diploma school of nursing means a school affiliated with a hospital or university, or an independent school, which provides primarily or exclusively a program of education in professional nursing and allied subjects leading to a diploma or to equivalent indicia that such program has been satisfactorily completed, but only if such program, or such affiliated school or such hospital or university or such independent school is accredited as provided in section 853(6) of the Act.

(h) School of medicine means a school which provides education leading to a degree of doctor of medicine and which is accredited by a recognized body or bodies approved for such purpose by the Secretary of Education.

(i) School of public health means a school which provides education leading to a graduate degree in public health and which is accredited by a recognized body or bodies approved for such purpose by the Secretary of Education.

(j) Nonprofit refers to the status of an entity which is a corporation or association or is owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

(k) State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

(l) Program director means a qualified individual designated by the grantee and approved by the Secretary who is to be functionally responsible for the education program being supported under this subpart.

(m) Project period mean the total time for which support for a project has been approved, including any extensions thereof.

(n) Budget period means the interval of time into which the approved activity is divided for budgetary and reporting purposes.

(o) Programs for the education of nurse practitioners or nurse midwives means full-time educational programs for registered nurses (irrespective of the type of school of nursing in which the nurses received their training) which meets the guidelines prescribed by the Secretary in the Appendix to this subpart and which has as its objective the education of nurses (including pediatric and geriatric nurses) who will, upon completion of their studies in such programs, be qualified to effectively provide primary health care, including primary health care in homes and in ambulatory care facilities, long-term care facilities (where appropriate), and other health care institutions.

(p) Nurse practitioner means a registered nurse who has successfully completed a formal program of study designed to prepare registered nurses to perform in an expanded role in the delivery of primary health care including the ability to:

(1) Assess the health status of individuals and families through health and medical history taking, physical examination, and defining of health and developmental problems;

(2) Institute and provide continuity of health care to clients (patients), work with the client to insure understanding of and compliance with the therapeutic regimen within established protocols, and recognize when to refer the client to a physician or other health care provider;

(3) Provide instruction and counseling to individuals, families, and groups in the areas of health promotion and maintenance, including involving such persons in planning for their health care; and

(4) Work in collaboration with other health care providers and agencies to provide, and where appropriate, coordinate services to individuals and families.

(q) Nurse-midwife means a registered nurse who has completed a formal program of study designed to prepare registered nurses to perform in an expanded role in the delivery of primary health care to women and babies including the management of normal antepartum, intrapartum, and postpartum care as well as family planning and gynecology.

(r)(1) Primary health care means care which may be initiated by the client or provider in a variety of settings and which consists of a broad range of personal health care services including:

(i) Promotion and maintenance of health;

(ii) Prevention of illness and disability;

(iii) Basic care during acute and chronic phases of illness;

(iv) Guidance and counseling of individuals and families;

(v) Referral to other health care providers and community resources when appropriate; and

(vi) Nurse midwifery services (when appropriate).

(2) In providing such services—

(i) The physical, emotional, social, and economic status, as well as the cultural and environmental backgrounds, of individuals, families, and communities (where applicable) are considered;

(ii) The client is provided access to the health care system; and

(iii) A single provider or team of providers, along with the client, is responsible for the continuing coordination and management of all aspects of basic health services needed for individual and family care.

(a) Eligible applicants. To be eligible for a grant under this subpart the applicant shall:

(1) Be a public or private nonprofit school of nursing or public health, a public or private nonprofit school of medicine which received grants under this subpart prior to October 1, 1985, public or private nonprofit hospital; or other public or private nonprofit entity; and

(2) Be located in a State.

(b) Eligible projects. A grant under this subpart may be made to an eligible applicant to meet the cost of:

(1) A project to plan, develop, and operate a program for the education of nurse practitioners or nurse midwives (which will be in operation no later than 12 months after the award of a grant under this subpart);

(2) A project to expand a program for the education of nurse practitioners or nurse midwives through one or a combination of the following activities:

(i) A planned increase in student enrollment;

(ii) The addition to the program of one or more fields of clinical practice;

(iii) The addition of a new education site for the total program; or

(3) A project to maintain a program for the education of nurse practitioners and nurse midwives.

(a) Each eligible applicant desiring a grant under this subpart shall submit an application in such form and at such time as the Secretary may prescribe.

(b) The application shall be executed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the terms and conditions of any award, including the regulations of this subpart.

(c) In addition to such other pertinent information as the Secretary may require, an application for a grant under this subpart shall contain the following:

(1) A full and adequate description of the proposed project, including:

(i) Information concerning the need for and significance of the proposed project.

(ii) A description of the setting in which the education program will be conducted and the primary health care needs to which such program will be responsive.

(iii) A detailed description of the planning and developmental activities to be carried out or which have been accomplished by the applicant.

(iv) A detailed time plan for each year of the project period, identifying target dates for project activities and including any plans for continuing such activities beyond the project period.

(v) A description of specific measurable objectives for the proposed proj-ect consistent with the purposes of section 822 of the Act.

(vi) A detailed plan for achieving the stated objectives of the proposed proj-ect.

(vii) A description of the program curriculum, including course content and the number of hours of classroom instruction, supervised laboratory, and clinical practice.

(viii) A plan and methodology for evaluating the education program in accordance with the requirements of § 57.2405(c).

(ix) Where the education includes a preceptorship, a description of such preceptorship, including length, type of practice, and amount of faculty supervision.

(x) A description of recruitment plans and criteria for the selection and admission of students.

(xi) An estimate of the number of students to be enrolled during the project period.

(xii) In the case of a project to expand a nurse practitioner or nurse midwifery education program, a description of the manner in which the program is to be expanded and a plan for achieving such expansion during the project period.

(2) Evidence satisfactory to the Secretary that the applicant has secured any required institutional clearances and approvals for the planning, development, and operation of the program.

(3) Information concerning the background and qualifications of the program director, staff, and consultants.

(4) Evidence satisfactory to the Secretary that the applicant will have available adequate faculty, staff facilities, clinical practice settings, and equipment for the conduct of the proposed project.

(5) A description of any written agreements with other institutions or organizations for carrying out the proposed project.

(6) A detailed budget for the proposed project and a justification of the amount of grant funds requested.

(7) A description of financial resources available to the applicant to assure the sound establishment, maintenance, and continuation of the proposed project beyond the project period.

(d) The application shall contain an assurance satisfactory to the Secretary that—

(1) In the case of a project to plan, develop, and operate a program for the education of nurse practitioners or nurse midwives, such program will upon its development meet the guidelines set forth in the Appendix of this subpart, or

(2) In the case of a project to expand or maintain a program for the education of nurse practitioners or nurse midwives, such program meets the guidelines set forth in the appendix to this subpart.

A project supported under this subpart shall be conducted in accordance with the following requirements:

(a) The project shall conduct its program for the education of nurse practitioners or nurse midwives in accordance with the guidelines prescribed by the Secretary and set forth in the Appendix to this subpart.

(b) The program director shall be responsible for the conduct of the education program unless replaced by another individual found by the Secretary to be qualified to carry out such responsibilities. Where the program director becomes unable to function in such capacity, the Secretary shall be notified as soon as possible.

(c) In accordance with the plan set forth in its approved application, the project shall evaluate the effectiveness of the program in relation to its purposes and objectives.

(a) Evaluation. (1) Within the limits of funds available for such purpose, the Secretary, after consultation with the Council, may award grants to those applicants whose projects will in his judgment best promote the purposes of section 822 of the Act, taking into consideration:

(i) The degree to which the project plan adequately provides for meeting the requirements set forth in § 57.2405 and the appendix to this subpart;

(ii) The potential effectiveness of the proposed project in carrying out the education purposes of section 822 of the Act and this subpart;

(iii) The capability of the applicant to carry out the proposed project;

(iv) The extent to which the project has joint program direction by qualified nurse and physician educators;

(v) The soundness of the fiscal plan for assuring effective utilization of grant funds; and

(vi) The potential of the project to continue on a self-sustaining basis after the project period.

(2) Pursuant to section 822(a)(1) of the Act, the Secretary will give special consideration to:

(i) Projects for programs for the education of nurse practitioners or nurse midwives who will practice in health professional shortage areas (designated under section 332 of the Act); and

(ii) Projects for education programs which emphasize education respecting the special problems of geriatric patients (particularly problems in the delivery of preventive care, acute care, and long-term care, including home health care and institutional care to such patients) and education to meet the particular needs of nursing home patients and patients confined to their homes.

(3) In determining the funding of applications approved under paragraph (a)(1) of this section, the Secretary will also consider other special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(b) Grant awards. (1) The Secretary will determine the amount of any award on the basis of his or her estimate on the sum necessary for the cost (including both direct and indirect costs) of the project.

(2) All grant awards shall be in writing and shall set forth the amount of funds granted and the period for which such funds will be available for obligation by the grantee.

(3) Neither the approval of any proj-ect nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved project or portion thereof. For continuation support, grantees must make separate application at such times and in such form as the Secretary may prescribe.

(c) Noncompeting continuation awards. If a grantee has filed an application for continuation support and within the limits of funds available for this purpose, the Secretary may make a grant award for an additional budget period for any previously approved project if (1) the application is for a project which meets the regulations of this subpart and (2) on the basis of such progress and accounting records as may be required, the Secretary finds that the project's activities during the current budget period justify continued support of the project for an additional budget period. If the Secretary decides to continue support, the amount of the grant award will be determined in accordance with paragraph (b)(1) of this section. If the Secretary decides not to continue supporting a project for an additional budget period, he will notify the grantee in writing before the end of the current budget period. In addition, the Secretary may provide financial support for the orderly phaseout of the supported project, if he determines that such support is necessary.

The Secretary will from time to time make payments to the grantee of all or a portion of any grant award, either by way of reimbursement for expenses incurred in the budget period, or in advance for expenses to be incurred, to the extent he determines such payments necessary to promote prompt intitiation and advancement of the approved project.

(a) Any funds granted pursuant to this subpart shall be expended solely for carrying out the approved project in accordance with section 822 of the Act, the regulations of this subpart, the terms and conditions of the award, and the applicable cost principles prescribed by subpart Q of 45 CFR part 74; Provided, That such funds shall not be expended for sectarian instruction or for any religious purpose.

(b) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

The Secretary may with respect to any grant award impose additional conditions prior to or at the time of any award when in his judgment such conditions are necessary to assure or protect advancement of the approved project, the interests of the public health, or the conservation of grant funds.

The regulations of this subpart apply to the award of grants to public and private nonprofit collegiate schools of nursing under section 821 of the Public Health Service Act (42 U.S.C. 296l) to meet the costs of projects to:

(a) Plan, develop, and operate new programs; or

(b) Significantly expand existing programs leading to advanced degrees that prepare nurses to serve as nurse educators or public health nurses, or in other clinical nurse specialties determined by the Secretary to require advanced education.

As used in this subpart:

Act means the Public Health Service Act, as amended.

Advanced nurse education program means a program of study in a collegiate school of nursing which leads to masters' and doctoral degrees and which prepares nurses to serve as nurse educators, administrators, or researchers or to serve in clinical nurse specialties determined by the Secretary to require advanced education.

Budget period means the interval of time into which the approved activity is divided for budgetary purposes, as specified in the grant award document.

Collegiate school of nursing means a department, division, or other administrative unit in a college or university which provides primarily or exclusively a program of education in professional nursing and allied subjects leading to the degree of bachelor of arts, bachelor of science, bachelor of nursing, or to an equivalent degree, or to masters' and doctoral degrees in nursing, and including advanced education related to this type of educational program provided by the school, but only if the program, or unit, college or university is accredited.

Construction means (1) the construction of new buildings and the acquisition, expansion, remodeling, replacement, and alteration of existing buildings including architects' fees but not including the cost of acquisition of land (except in the case of acquisition of an existing building), offsite improvements, living quarters, or patient-care facilities, and (2) equipping new buildings and existing buildings, whether or not acquired, expanded, remodeled, or altered.

Council means the National Advisory Council on Nurse Education and Practice established by section 851(a) of the Act.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Professional nurse means a registered nurse who has received initial nursing preparation from a diploma, associate degree, or collegiate school of nursing as defined in section 853 of the Act and who is currently licensed to practice nursing.

Project period means the total time for which support for a project has been approved, as specified in the grant award document.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

(a) Eligible applicants. To be eligible for a grant under this subpart the applicant shall:

(1) Be a public or private nonprofit collegiate school of nursing.

(2) Be located in a State.

(b) Eligible projects. A grant under this subpart may be made to an eligible applicant to meet the cost of:

(1) A project to plan, develop, and operate an advanced nurse education program. The planning period of this project is limited to 1 year. The project must enroll students before the end of the project period;

(2) A project to significantly expand an advanced nurse education program through one or more of the following activities:

(i) The addition to the masters' or doctoral program of a new clinical, research, or functional (administration or teaching) specialty area,

(ii) A planned increase in student enrollment during the project period, or

(iii) The addition of a new educational site for the program; or

(a) Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

(b) The application shall be signed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the terms and conditions of any award, including the regulations of this subpart.

(c) In addition to other pertinent information which the Secretary may require, an application for a grant under this subpart shall contain:

(1) A proposal for a project to:

(i) Plan, develop, and operate; or

(ii) Significantly expand an advanced nurse education program;

(2) Information documenting the need for the proposed project;

(3) A description of specific attainable and measurable objectives for the proposed project consistent with the purposes of section 821 of the Act;

(4) A detailed plan for achieving and measuring the stated objectives of the proposed project;

(5) A description of the anticipated impact of the proposed project, including its potential contribution to nursing;

(6) Evidence satisfactory to the Secretary that the applicant will have available adequate resources for the conduct of the proposed project, including adequate faculty, staff, equipment, facilities, and an appropriate clinical practice setting or settings;

(7) A detailed budget for the proposed project and a justification of the amount of grant funds requested;

(8) A description of any Federal financial support related to the proposed project which the applicant is currently receiving;

(9) A detailed timetable for carrying out the activities of the proposed proj-ect, including any plans for continuing activities beyond the project period;

(10) A description of the background and qualifications of the project staff and any proposed consultants;

(11) Information concerning the source and number of potential students for the education program and a description of plans, if any, to encourage graduates of the education program to practice in States in need of nurses prepared in the specialty in which education is to be provided;

(12) A plan to sustain the project beyond the period during which Federal assistance is available; and

(13) A plan to attract and retain a higher than average number of minority and financially needy students.

(d) In the case of a project to significantly expand an advanced nurse education program, the application shall contain an assurance satisfactory to the Secretary that the applicant will expend, in carrying out the program for which a grant under this subpart is sought, an amount of non-Federal funds (excluding costs of construction) at least as great as the average amount of non-Federal funds (excluding expenditures of a nonrecurring nature, including costs of construction) expended for this purpose during the 3 fiscal years immediately preceding the fiscal year for which the grant is sought.

(a) A project supported under this subpart shall be conducted in accordance with its approved application.

(b) A project supported under this subpart shall enroll professional nurses, as defined in § 57.2502, or students who will be professional nurses, as defined in § 57.2502, at or prior to completion of the advanced nurse education program.

(a) Evaluation. Within the limits of funds available for this purpose, the Secretary, after consultation with the Council, may award grants to those applicants whose projects will, in his or her judgment, best promote the purposes of section 821 of the Act, taking into consideration among other pertinent factors:

(1) The need for the proposed project including, with respect to projects to provide education in professional nursing specialties determined by the Secretary to require advanced education:

(i) The current or anticipated need for professional nurses educated in the specialty; and

(ii) The relative number of programs offering advanced education in the specialty;

(2) The need for nurses in the specialty in which education is to be provided in the State in which the education program is located, as compared with the need for these nurses in other States;

(3) The degree to which the applicant proposes to recruit students from States in need of nurses in the specialty in which education is to be provided, and to promote their return to these States following education;

(4) The degree to which the applicant proposes to encourage graduates to practice in States in need of nurses in the specialty in which education is to be provided;

(5) The potential effectiveness of the proposed project in carrying out the educational purposes of section 821 of the Act and this subpart;

(6) The capability of the applicant to carry out the proposed project;

(7) The soundness of the fiscal plan for assuring effective utilization of grant funds; and

(8) The potential of the project to continue on a self-sustaining basis after the period of grant support; and

(9) The degree to which the applicant proposes to attract, retain and graduate minority and financially needy students.

(b) Funding preference. In determining the funding of applications approved under paragraph (a) of this section, the Secretary may from time to time announce in the Federal Register special factors relating to national needs.

(c) Grant awards. (1) The Secretary will determine the amount of any award on the basis of his or her estimate on the sum necessary for the cost (including both direct and indirect costs) of the project.

(2) All grant awards shall be in writing and shall set forth the amount of funds granted and the period for which the funds will be available for obligation by the grantee.

(3) Neither the approval of any project nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation, or other award with respect to any approved project or portion thereof. For continuation support, grantees must make separate application annually in a form and at the time that the Secretary may require.

(d) Noncompeting continuation awards. Within the limits of funds available for this purpose, the Secretary may make a grant award for an additional budget period for any previously approved project on the basis of an application and those progress and accounting records which may be required. If the Secretary finds that the project's activities during the current budget period justify continued support of the project for an additional budget period, and the Secretary decides to continue support, the amount of the grant award will be determined in accordance with paragraph (c)(1) of this section. If the Secretary decides not to continue support for an additional budget period, he or she will notify the grantee in writing before the end of the current budget period. The Secretary may provide financial support for the orderly phase-out of the supported project, if he or she determines that this support is necessary.

The Secretary will from time to time make payments to the grantee of all or a portion of any grant award, either by way of reimbursement for expenses incurred in the budget period, or in advance for expenses to be incurred, to the extent he or she determines these payments necessary to promote prompt initiation and advancement of the approved project.

(a) Any funds granted under this subpart as well as other funds to be used in performance of the approved project shall be expended solely for carrying out the approved project in accordance with section 821 of the Act, the regulations of this subpart, the terms and conditions of the award, except that funds shall not be expended for sectarian instruction or for any religious purpose.

(b) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

The Secretary may with respect to any grant award impose additional conditions prior to or at the time of any award when in his or her judgment such conditions are necessary to assure or protect advancement of the approved project, the interests of the public health, or the conservation of grant funds.

These regulations apply to grants under section 736 of the Public Health Service Act (42 U.S.C. 293) for scholarships for full-time students of exceptional financial need.

Act means the Public Health Service Act, as amended.

Full-time student means a student enrolled in a school and pursuing a course of study which constitutes a full-time academic workload, as determined by the school, leading to a degree from a health professions school, as specified in section 799(1)(A) of the Act.

Health professions school or school means, for this subpart, a public or private nonprofit school of medicine, osteopathic medicine, dentistry, optometry, podiatric medicine, pharmacy, or veterinary medicine providing a course of study, or a portion thereof, as defined in section 799(1)(A) of the Act and as accredited in section 799(1)(E) of the Act.

National of the United States means (1) a citizen of the United States, or (2) a person who, though not a citizen of the United States, owes permanent allegiance to the United States, as defined in the Immigration and Nationality Act, at 8 U.S.C. 1101(a)(22).

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

(a) A scholarship may be awarded only to a student who:

(1) Is a resident of the United States, and either a citizen or national of the United States, an alien lawfully admitted for permanent residence in the United States, a citizen of the Commonwealth of the Northern Mariana Islands, a citizen of the Republic of Palau, a citizen of the Republic of the Marshall Islands, or a citizen of the Federated States of Micronesia.

(2) Has been accepted for enrollment as a full-time student by a health professions school.

(3) Has exceptional financial need as determined under paragraph (b) of this section.

(b)(1) For the purpose of this subpart, a student will have exceptional financial need if the school determines that his or her resources, as described in (b)(2) of this section, do not exceed the lesser of $5,000 or one-half of the cost of attendance at the school.

(2) The school will determine the financial resources of a student by using one of the national need analysis systems or any other procedure approved by the Secretary of Education and other information which the school has regarding the student's financial status. The school must take into account, regardless of the tax status of the student, the expected contribution from parents, spouse, or other family members. Student summer earnings, educational loans, veterans (G.I) benefits and earnings during the school year will not be considered resources for purposes of this subpart.

(3) The school will determine cost of attendance at the school by considering expenses reasonably necessary for the student's attendance at the school, including any special needs and obligations which directly affect the student's ability to attend the school on a full-time basis. The school must document the criteria used for determining these costs.

(c) A recipient of a National Health Service Corps Scholarship, under section 751 of the Act, or an Indian Health Scholarship, under section 757 of the Act, is ineligible for a scholarship under this subpart.

A scholarship will consist of:

(a) The tuition of the student in such school year;

(b) The cost of all other reasonable educational expenses including fees, books, and laboratory expenses of the student for the school year; and

(c) A stipend of $400 per month (adjusted in accordance with section 338A(g)(3) of the Act) for 12 consecutive months beginning with the first month of the school year.

(a) A school which receives a grant under this subpart must award each scholarship successively to the eligible individual as specified in § 57.2803(b)(1) of greatest financial need at that school.

(b) The Secretary will make a randomized list of all eligible applicant schools of medicine, dentistry and osteopathic medicine and a second randomized list of all remaining eligible applicant schools. To the extent of available funds, the Secretary will award grant funds sufficient for one scholarship to each eligible applicant school on the first list, and then proceed to the list of all other eligible applicant schools and award one scholarship to each school in the same manner. These scholarships must go to students who have no financial resources for the first year of study at the school, as determined under § 57.2804. The Secretary will then allocate any remaining funds according to paragraph (c) of this section.

(c)(1) Proceeding in sequence through the list of schools of medicine, dentistry and osteopathic medicine, the Secretary will award each school of medicine, dentistry, and osteopathic medicine sufficient grant funds for a second scholarship which must be given to a student with no financial resources as determined under § 57.2804. This procedure will be repeated until all the scholarship requests of the applicant schools of medicine, osteopathic medicine, and dentistry for scholarships for students with no financial resources have been satisfied or until all the available grant funds have been allocated. If there are additional grant funds, the Secretary will then proceed to the list of all other eligible applicant schools and will allocate scholarships for students with no financial resources using the same procedure.

(2) If additional grant funds remain after fulfilling all requests for scholarships for students with no financial resources at all eligible applicant schools, using the method described in paragraph (c)(1) of this section the Secretary will allocate funds for scholarships to students who have resources from one to 500 dollars. With any remaining funds after completion of these awards, the Secretary will, in the same manner, award grants for scholarships to students with resources in increments of $500 until all grant funds are awarded or students who have $5,000 in resources or 50 percent of the cost of education at the school have received awards.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application, the authorizing legislation, terms and conditions of the grant award, and these regulations.

(b) The grantee must discontinue all scholarship payments and remit the unused balance of the scholarship to the Federal Government in the event that a recipient ceases to be a full-time student at the school.

Several other regulations apply to these grants. They include, but are not limited to:

The Secretary may impose additional conditions on any grant award before or at the time of an award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

These regulations apply to grants to eligible schools under section 740(a)(2) (F) and (d) of the Public Health Service Act for financial assistance for disadvantaged health professions students of exceptional financial need.

Act means the Public Health Service Act, as amended.

Full-time student means a student enrolled in a school and pursuing a course of study which constitutes a full-time academic workload, as determined by the school, leading to a degree from a school of medicine, school of osteopathic medicine, or school of dentistry, as specified in section 799(1)(A) of the Act.

National of the United States means—

(1) A citizen of the United States; or

(2) A person who, though not a citizen of the United States, owes permanent allegiance to the United States, as defined in the Immigration and Nationality Act, at 8 U.S.C. 1101(a)(22).

School means a public or private nonprofit school of medicine, osteopathic medicine, or dentistry, as defined in section 799(1)(A) of the Act.

School year means the traditional approximately 9-month September to June annual session. For the purpose of computing school year equivalents for students who, during a 12-month period, attend for a longer period than the traditional school year, the school year will be considered to be 9 months in length.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

(a) Any school located in a State may apply for a grant. Each school seeking a grant must submit an application at the time and in the form and manner that the Secretary may require. The application must be signed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the statute, the regulations of this subpart, and the terms and conditions of the award.

(b) Each application will be reviewed to determine eligibility and the reasonableness of the amount of Federal support requested. The Secretary may require the applicant to submit additional data for this purpose.

(a) Determination of eligibility. An individual is eligible for consideration for financial assistance under this program if he or she:

(1) Is a resident of the United States and either a citizen or national of the United States, an alien lawfully admitted for permanent residence in the United States, a citizen of the Commonwealth of the Northern Mariana Islands, a citizen of the Republic of Palau, a citizen of the Republic of the Marshall Islands, or a citizen of the Federated States of Micronesia.

(2) Is enrolled or has been accepted for enrollment as a full-time student at a school;

(3) Comes from a disadvantaged background. For purposes of this program, an individual from a disadvantaged background is one who—

(i) Comes from an environment that has inhibited the individual from obtaining the knowledge, skills, and abilities required to enroll in and graduate from a school; or

(ii) Comes from a family with an annual income below a level based on low income thresholds according to family size published by the U.S. Bureau of the Census, adjusted annually for changes in the Consumer Price Index, and adjusted by the Secretary for use in all health professions programs. The Secretary will periodically publish these income levels in the Federal Register; and

(4) Has exceptional financial need. For purposes of this program, a student will have exceptional financial need if the school determines that the student's resources, as described in paragraph (b)(1) of this section, do not exceed the lesser of $5,000 or one-half of the cost of attendance at the school. Student summer earnings, educational loans, veterans (G.I.) benefits, and earnings during the school year will not be considered resources for purposes of determining whether a student has exceptional financial need.

(b) Selection of aid recipients. The school will select qualified recipients and determine the amount of aid to be awarded to provide its needy students with the maximum possible benefit.

(1) In determining the amount of aid an eligible student needs to pursue a full-time course of study at the school, the school will take into consideration:

(i) The financial resources available to the student by using one of the national need analysis systems or any other procedure approved by the Secretary of Education in combination with other information which the school has regarding the student's financial status. The school must take into account, regardless of the tax status of the student, the expected contribution from parents, spouse, self, or (as appropriate) other family members. In making this determination, the school must consider photocopies of the parents', student's, and spouse's Federal income tax forms with original signatures for the most recent tax year (or certification that no Federal income tax return was filed and documentation of the total income for the most recent tax year), and may require tax returns that are certified as having been received by the Internal Revenue Service (IRS); and

(ii) The costs reasonably necessary for the student's attendance at the school. The school must document the criteria used for determining these costs. This documentation must include resource materials used by the school to determine the dollar amount for each category of expenses in its standard student budgets.

(2) The school must select aid recipients in order of greatest need, as determined by the school. The school may consider other scholarship, grant, or fellowship funds that a student has received or will receive for the award period when determining the order of greatest need.

(a) The total award made under this program to any student, plus all other sources of aid the student has received or will receive for the award period, may not exceed the amount the school determines that the student needs to meet the costs of education (i.e., tuition, fees, books, equipment, other expenses required by the school, and reasonable living expenses) for the period covered by the award. The total award made under this program to any student may be less than the amount the school determines that the student needs to meet the costs of education for the period covered by the award.

(b) The total award made under this program to any student for a school year may not exceed $10,000. The maximum amount awarded during a 12-month period to any student enrolled in a school which provides a full-time course of study longer than the traditional 9-month school year may be proportionately increased.

(c) The school must disburse this award to the student in payments based on the student's need during each academic period (e.g. semester, quarter, trimester) of a school year.

(a) The amount of the grant to each eligible school will be the amount requested in its application, except that if the total of the amounts requested for any fiscal year by all schools for these funds exceeds the amount of Federal funds determined by the Secretary at the time of payment to be available for this purpose, the grant to each school will be reduced to whichever is smaller:

(1) The amount requested in the application; or

(2) An amount which bears the same ratio to the total amount of Federal funds determined by the Secretary at the time of grant award to be available for that fiscal year for this program as the number of eligible students at the school bears to the total number of eligible students at all participating schools during that year.

(b) Amounts remaining after the calculation described in paragraph (a) will be distributed in accordance with paragraph (a)(2) of this section among schools whose applications requested more than the amount paid to them, but with whatever adjustments may be necessary to prevent the total grant to any school from exceeding the amount requested by it.

(a) A school shall only spend funds it receives under this subpart in accordance with the approved application, the authorizing legislation, terms and conditions of the grant award, and these regulations.

(b) The school must discontinue all payments to a recipient in the event that the recipient ceases to be a full-time student at the school, and must remit any unused balance of funds to the Federal Government in the event it is unable to make full use of its grant award during the award period.

Several other regulations apply to these grants. They include, but are not limited to, the following:

(a) Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

(b) The school must also maintain the following records in computer, electronic, microfiche, microfilm, or paper form:

(1) A record of all recipients of aid under this program which includes, for each recipient, a copy of the total need analysis and determination of resources, documentation for any changes made to the need analysis report used by the school, documentation that the recipient met the eligibility requirements, a copy of the student budget used to determine the recipient's costs of attendance, and documentation of other sources of aid received by the recipient;

(2) A record of the amount of funds awarded to each recipient; and

(3) A record of each institutional application for funding, including documentation to support the number of eligible students listed on each application and how they met the eligibility criteria.

(c) Institutional officials who have information which indicates the potential or actual commission of fraud or other offenses against the United States, involving these funds, should promptly provide this information to the appropriate Regional Office of Inspector General for Investigations.

The Secretary may impose additional conditions on any grant award before or at the time of an award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

These regulations apply to the award of grants under section 763 of the Public Health Service Act (42 U.S.C. 294b) to schools of medicine, osteopathic medicine and public health to meet the costs of projects to (a) plan and develop new approved residency training programs and to maintain or improve existing approved residency training programs in preventive medicine and (b) provide financial assistance to residency trainees enrolled in such programs.

Academic year means course work sufficient to satisfy the requirements for the Master of Public Health degree or its equivalent which is required by all approved residency programs. In the usual situation, this course work is taken during a single year.

Act means the Public Health Service Act, as amended.

Approved residency training program means the entirety or that part of a residency training program in preventive medicine which is fully or provisionally accredited by the Accreditation Council for Graduate Medical Education or approved by the American Osteopathic Association.

Clinical year means postgraduate training which provides experience in direct patient care including ambulatory and inpatient experience. The one year of required training can be provided in an accredited program in one of the recognized clinical specialties or through clinical training sponsored by a preventive medicine residency training program. The clinical year is generally a prerequisite for the preventive medicine residency training program or the first year of such program.

Field year means specialized instruction and supervised experience in the resident's selected area of emphasis, and is usually one year in duration. The field year is usually the last year of the preventive medicine residency training program and is generally conducted at a site remote from that of such program.

Fields of Preventive Medicine means the following group of basic components common to all preventive medicine specialties (a) biostatistics, (b) epidemiology, (c) administration of health and medical programs, (d) environmental hazards to health, (e) social, cultural and behavorial factors in medicine, and (f) the application of preventive principles in clinical practice.

Full-time faculty means an individual or individuals who are employed as faculty of a school of medicine, osteopathic medicine or public health on a full-time basis as defined by the general policies of the applicant institution.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Preventive Medicine is a specialized area of medical practice composed of distinct disciplines which use skills focusing on the health of defined populations in order to promote and maintain health and well-being and prevent disease, disability, and premature death. The specialties of preventive medicine are: General preventive medicine, public health, occupational health, and aerospace medicine.

Program Director means an individual appointed by the grantee institution to direct and supervise the residency training program who is certified or otherwise qualified as required by the Accreditation Council for Graduate Medical Education.

Secretary means the Secretary of Health and Human Services, and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Accredited public or private nonprofit schools of medicine, osteopathic medicine or public health located in a State are eligible to apply for a grant. Each eligible applicant desiring a grant under this subpart shall submit an application at the time and in such a form that the Secretary may prescribe. To be eligible for a grant, an applicant must demonstrate that it has, or will have by the end of 1 year of grant support, full-time faculty with training and experience in the fields of preventive medicine and support from other faculty members trained in public health and other relevant specialties and disciplines.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will decide which applications to approve by considering, among other factors:

(1) The potential effectiveness of the proposed project in carrying out the training purposes of section 763 of the PHS Act;

(2) The extent of responsiveness to the project requirements described in § 57.3004;

(3) The administrative and management capability of the applicant to carry out the proposed project in a cost-effective manner;

(4) The degree to which the proposed training program emphasizes health promotion and disease prevention;

(5) The degree to which the applicant demonstrates institutional commitment to the proposed program; and

(6) The history of the program including number of residents who successfully completed the program.

(b) In determining the funding of applications approved under paragraph (a) of this section, the Secretary will consider any special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 3 years.

(b) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, existence of legislative authority, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation or other award with respect to any approved application or portion of any approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) The amount of any award will be limited to that portion of the annual program costs which the Secretary determines, on the basis of the documentation required in the application, cannot reasonably be paid from other available funds. Moreover, the amount of any stipend will be limited to that portion of the annual amount normally paid to other residents by the applicant which the Secretary determines, on the basis of the documentation required in the application, cannot reasonably be paid from other available funds. The applicant must document attempts to pursue other sources of funding.

(b) Stipend support may only be given to residents in the academic and field years of training, and support to each resident is limited to 2 years of training, excluding the clinical year.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Grantees may not spend grant funds for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds awarded and available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts awarded by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

The Secretary may impose additional conditions in the grant award before or at the time of the award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

The regulations of this subpart apply to grants to schools of medicine and osteopathic medicine and public or private nonprofit hospitals and other public or private nonprofit entities under section 748 of the Public Health Service Act (42 U.S.C. 293l) to assist in meeting the cost of projects—

(a) To plan, develop and operate approved residency training programs in internal medicine and/or pediatrics which emphasize the training of residents for the practice of general internal medicine and/or general pediatrics;

(b) To provide financial assistance (in the form of traineeships and fellowships) to residents who are participants in this type of program, and who plan to practice general internal medicine and/or general pediatrics;

(c) To plan, develop and operate a program for the training of physicians who plan to teach in a general internal medicine and/or general pediatrics training program; and

(d) To provide financial assistance (in the form of traineeships or fellowships) to physicians who are participants in any such program and who plan to teach in a general internal medicine and/or general pediatrics training program.

For purposes of this subpart:

Act means the Public Health Service Act, as amended.

Approved residency training program or program is the entirety or that part of a residency training program which is fully or provisionally accredited by the Accreditation Council for Graduate Medical Education or approved by the American Osteopathic Association and which emphasizes the training of residents for the practice of general internal medicine or general pediatrics.

Faculty development program means a systematic training program to increase faculty competence in teaching skills and in other areas related to academic responsibility.

Health professional shortage area means an area designated under section 332 of the Act.

Nonprofit refers to the status of an entity which is a corporation or association, or is owned and operated by one or more corporations or associations, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

Nurse practitioner means a nurse practitioner as defined in 42 CFR 57.2402.

Practice of general internal medicine or general pediatrics means a practice which is limited to adult or child and adolescent medicine respectively, and in which the physician:

(1) Serves as physician of first contact with the patient and provides a timely means of entry into the health care system;

(2) Evaluates the patient's health needs, provides personal health care and refers the patient, if indicated, to appropriate sources of health care while preserving the continuity of care;

(3) Assumes with the patient responsibility for the patient's longitudinal and comprehensive (including preventive and psychosocial) health care and acts as coordinator of the provision of health services to the patient;

(4) Considers the patient's health care within the context of his or her environment including the community and family or comparable social units; and

(5) Where applicable, plans and shares the above functions with other physicians.

Project director means a fully licensed physician on the faculty of the grantee, designated by the grantee in the grant application and approved by the Secretary to direct the project being supported under this subpart.

School of medicine and osteopathic medicine means a public or private nonprofit school which provides training leading respectively to a degree of doctor of medicine or to a degree of doctor of osteopathic medicine and which is accredited as provided in section 799(1)(E) of the Act.

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department to whom the authority involved has been delegated.

State means, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Republic of Palau, the Republic of the Marshall Islands, and the Federated States of Micronesia.

Trainee means an allopathic or osteopathic general internist or general pediatrician participating in a faculty development training program supported by a grant under section 748 and receiving stipend support for such grant.

Any school of medicine or osteophathic medicine, public or private nonprofit hospital or any other public or private nonprofit entity, located in a State, may apply for a grant under this subpart. Each eligible applicant desiring a grant under this subpart shall submit an application in the form and at such time as the Secretary may prescribe.

In addition to other pertinent information which the Secretary may require, an application for a grant under this subpart must contain the following:

(a) A proposal for a project to plan, develop, and operate an approved residency training or faculty development program in internal medicine and/or pediatrics—

(1) Which emphasizes the training of residents for the practice of general internal medicine and/or general pediatrics and faculty for teaching in such programs, and

(2) Which may provide financial assistance to residents and trainees who are participants in the programs and who plan to practice or teach in general internal medicine and/or general pediatrics.

(b) A full and adequate description of the proposed project and of the manner in which the applicant intends to conduct the project and carry out the requirements of this subpart.

(c) A description of the resources to be used by the applicant for the conduct of the proposed project, including faculty, staff, equipment, facilities, and appropriate clinical practice settings (including those which are used to meet the requirements of § 57.3105(j) and (l)).

(d) In programs other than faculty development, a description of the type and amount of training to be offered to residents in each year of each residency program in accordance with the requirements of § 57.3105 with special attention to the requirements of § 57.3105(a)(11).

(e) In programs other than faculty development, the number of residents to be enrolled in each program, at each level of training, for each year of the project period.

(f) A detailed budget for the proposed project and a justification of the amount of grant funds requested.

(g) Documentation showing that funds available from other sources will be insufficient to meet the costs of the project and that grant funds will not be used to supplant other available funds.

(h) If stipend support is requested by an applicant to provide a portion of the salary of residents enrolled in the program, documentation showing that income available from alternative sources, including income derived from the services of the residents in the program, will be insufficient to pay their salaries and that grant funds will not be used to supplant other available funds. Stipend support requested for trainees in the faculty development program must be paid in accordance with established Public Health Service postdoctoral stipend levels.

(a) For each residency program, a proj-ect must:

(1) Have a residency program director.

(2) Employ an individual with relevant experience or training who is responsible for curriculum development and evaluation.

(3) Employ faculty members experienced in the practice of general internal medicine and/or general pediatrics who participate as instructors at principal training settings.

(4) Employ individual(s) with formal education in behavioral sciences who participate in the preparation and implementation of the curriculum and in clinical consultation.

(5) Use a resident recruitment and selection process which assures that residents in the program have applied specifically for training in a program that emphasizes the practice of general internal medicine and/or general pediatrics.

(6) Provide financial assistance from grant funds only to residents who have signed statements of their intention to specialize or work in the practice of general internal medicine and/or general pediatrics.

(7) Have, in each program of a school of medicine, at least four residents in training by the beginning of the second year of Federal support, and at least 12 residents in training by the beginning of the fourth year of Federal support. By the beginning of the fourth year of Federal support, a program may meet this requirement with less than 12 residents in training if the number of internal medicine or pediatric residents in primary care training is at least 50 percent of the total number of internal medicine or pediatric residents at the institution. The Secretary may suspend this requirement for a period which he or she finds appropriate if the Secretary determines that a grantee has made a good faith effort to comply with the requirement and has met the other requirements of this Subpart and the Act, but is unable to have the required number of residents in the program due to circumstances beyond its control.

(8) Have, in each program of a school of osteopathic medicine, at least two residents in training by the beginning of the second year of Federal support; and at least six residents in training in 3-year programs and at least four residents in training in 2-year programs by the beginning of the fourth year of Federal support. The Secretary may suspend any of these requirements for a period which he or she finds appropriate if the Secretary determines a grantee has made a good faith effort to comply with the requirement and has met the other requirements of this Subpart and the Act, but is unable to have the required number of residents in the program due to circumstances beyond its control.

(9) Plan to have residents distributed so that there is no decrease in numbers of residents in successive levels of training by the time the program is fully operational.

(10) Use one or more ambulatory care training settings which actively promote the practice of general internal medicine and/or general pediatrics, and which:

(i) Attract patients for primarily longitudinal and comprehensive (including psychosocial and preventive) health care;

(ii) Organize personnel, including residents, into functional units providing comprehensive health services and provide residents with experience working with various types of health personnel;

(iii) Have systems for referring patients to other specialists, and subspecialists, which assure coordination with the patients' own practitioners of general internal medicine and/or general pediatrics;

(iv) Use an appointment system which facilitates the assignment of patients to their practitioner of general internal medicine and/or general pediatrics or to a particluar team of practitioners; and

(v) Use a medical record system which:

(A) Gives practitioners of general internal medicine and/or general pediatrics ready access to a patient's medical records including data relating to members of the patient's family which is pertinent to the patient's care;

(B) Is suitable for audit by organizations or individuals who perform this work with adequate safeguards against unauthorized disclosures; and

(C) Assures systematic review of the records.

(11) Make provision for each resident to serve a panel of patients and/or families who recognize him or her as their provider of longitudinal and comprehensive (including preventive and psychosocial) health care. The panel must be sufficiently numerous and varied to provide the resident with broad clinical experience. The clinical experience must be scheduled principally in ambulatory care settings as described in paragraph (a)(10) of this section.

(12) Offer ambulatory care training relevant to general internal medicine and/or general pediatrics in settings such as emergency rooms and specialty clinics.

(13) Have a planned curriculum which:

(i) Supplements the residents' inpatient and ambulatory patient care experiences with related educational activities such as courses, presentations, discussions, and reading assignments;

(ii) Emphasizes subjects pertaining to:

(A) Ambulatory care;

(B) Psychosocial skills and topics; and

(C) Non-clinical areas relevant to the practitioner of general internal medicine and/or general pediatrics; and

(iii) Is annually evaluated, using previously established criteria and objectives in a manner which includes the participation of residents.

(14) Develop and use systematic procedures to assess the individual resident's needs and to assist in educational planning and evaluation of the resident's competence.

(b) For each faculty development program, a project must:

(1) Have a project director who is employed by the grantee or training institution, has relevant training and experience, and has been approved by the Secretary to direct the project;

(2) Have an appropriate administrative and organizational plan and appropriate faculty, staff and facility resources to achieve the stated objectives;

(3) Have a curriculum which:

(i) Directly applies to general internal medicine and/or general pediatrics,

(ii) Emphasizes improvement of pedagogical skills and techniques for clinical teaching in classroom and ambulatory health care settings, and

(iii) Uses structured didactic and experiential teaching strategies.

(iv) With respect to training programs of 9 or more months duration, the curriculum must also include:

(A) A research component, with a research project to be completed by each trainee, and

(B) An administrative component which addresses the non-teaching roles and functions of faculty;

(4) Systematically evaluate the educational program, including trainees and faculty, the administration of the program, and the degree to which the program and educational objectives are met;

(5) Have as trainees only physicians who teach or plan teaching careers in general internal medicine and/or general pediatrics;

(6) To be eligible for stipend support from grant funds, a trainee must:

(i) Be a general internist or a general pediatrician,

(ii) Intend to teach in a general internal medicine and/or general pediatrics program on a full-time basis,

(iii) Be a full-time participant in the training project for at least 3 months, and

(iv) Receive less than full institutional salary during the period of Federal support of stipends; and

(7) Stipend support from grant funds may be no longer than 24 cumulative months for any trainee.

(a) As required by section 798(a) of the Act, each application for a grant under this subpart shall be submitted to a peer review group, composed principally of non-Federal experts, for an evaluation of the merits of the proposals made in the application. The Secretary may not approve such an application unless a peer review group has recommended the application for approval. The Secretary will award grants to applicants whose projects best promote the purposes of section 748 of the Act. The Secretary will take into consideration, among other factors:

(1) The degree to which the proposed project adequately provides for the project requirements set forth in § 57.3105;

(2) The administrative and management capability of the applicant to carry out the proposed project in a cost-effective manner;

(3) The qualifications of the proposed staff and faculty;

(4) The potential of the project to continue on a self-sustaining basis; and

(5) For faculty development programs, the applicant must demonstrate the institution's commitment to general internal medicine and/or general pediatrics as defined under § 57.3102.

(b) In determining the funding of applications approved under paragraph (a) of this section, the Secretary shall give priority to applicants that demonstrate a commitment to general internal medicine and general pediatrics in their medical education training programs. However, should specific needs warrant, the Secretary will consider any other special factors relating to national needs as the Secretary may from time to time announce in the Federal Register.

(a) The notice of grant award specifies the length of time the Secretary intends to support the project without requiring the project to recompete for funds. This period, called the project period, will not exceed 5 years.

(b) Generally, the grant will initially be funded for 1 year, and subsequent continuation awards will also be for 1 year at a time. Decisions regarding continuation awards and the funding levels of these awards will be made after consideration of such factors as the grantee's progress and management practices, and the availability of funds. In all cases, continuation awards require a determination by the Secretary that continued funding is in the best interest of the Federal Government.

(c) Neither the approval of any application nor the award of any grant shall commit or obligate the United States in any way to make any additional, supplemental, continuation or other award with respect to any approved application or portion of an approved application. For continuation support, grantees must make separate application at such times and in such a form as the Secretary may prescribe.

(a) A grantee shall only spend funds it receives under this subpart according to the approved application and budget, the authorizing legislation, terms and conditions of the grant award, applicable cost principles specified in subpart Q of 45 CFR part 74, and these regulations.

(b) Grantees may not spend grant funds for sectarian instruction or for any religious purpose.

(c) Any balance of federally obligated grant funds remaining unobligated by the grantee at the end of a budget period may be carried forward provided specific approval is granted by the Secretary. If at any time during a budget period it becomes apparent to the Secretary that the amount of Federal funds provided and made available to the grantee for that period, including any unobligated balance carried forward from prior periods, exceeds the grantee's needs for the period, the Secretary may adjust the amounts provided by withdrawing the excess. A budget period is an interval of time (usually 12 months) into which the project period is divided for funding and reporting purposes.

Several other regulations apply to grants under this subpart. These include, but are not limited to:

Each entity which receives a grant under this subpart must meet the requirements of 45 CFR part 74 concerning audit and inspection.

The Secretary may impose additional conditions in the grant award before or at the time of the award if he or she determines that these conditions are necessary to assure or protect the advancement of the approved activity, the interest of the public health, or the conservation of grant funds.

The regulations in this subpart establish the criteria to be used in determining allowable increases in tuition and other educational costs for which the Secretary is responsible for payment under the following sections of the Public Health Service Act: The National Health Service Corps Scholarship Program (sec. 338A) (42 U.S.C. 254l) and the Indian Health Scholarship Program (awarded pursuant to sec. 338A-339G of the PHS Act) (25 U.S.C. 1613a). These programs are referred to herein as the “scholarship programs.” The regulations apply to increases in tuition and other educational costs occurring after the school year beginning immediately before October 1, 1981.

(a) The Secretary is responsible for increases in tuition and other educational costs only if the same increase is charged to all students in the same category (for example, the same class year or place of residence) and without regard to whether the student is receiving support under the scholarship programs. A student participating in the scholarship programs may not be denied eligibility because of this participation for any discounts or rebates in tuition or other educational costs given to all other students in the same category at the institution.

(b) Institutions whose enrollment contains 25 percent or more students participating in the scholarship programs, and whose percentage increase in tuition and other educational costs in any school year exceeds the previous calendar year's average inflation rate as indicated by the Consumer Price Index for All Urban Areas, may be requested to provide the Secretary with detailed cost breakdowns justifying the increase.

(c) In the case of a school which is requested to provide the Secretary with cost increase justification under paragraph (b) of this section, the Secretary will be responsible for increases in tuition and other educational costs charged to students participating in the scholarship programs over the amount charged for the school year immediately preceding the increase only to the extent that they are: (1) Attributable to uncontrollable costs, such as fuel costs, mandated cost-of-living increases in wages, salaries and fringe benefits, (2) attributable to costs of maintaining and improving the quality of the health professions education provided by the institution, such as hiring additional faculty to improve the faculty-student ratio, costs incurred in off-site training of students, and necessary improvements in teaching equipment. Increases in patient care and research costs are allowable as part of an increase in tuition and other educational costs only to the extent that they can be documented as clearly necessary to maintain and improve the quality of the education being supported; or (3) attributable to loss of revenue from other sources which was used solely for the maintenance and improvement of the educational system.

(d) If the Secretary, after reviewing all available data, information, and justifications submitted by an institution, determines that an increase in tuition and other educational costs is not allowable under the criteria described in paragraph (a) or (c) of this section, the Secretary will provide the affected institution a detailed written explanation of the basis of that determination. The Secretary will be responsible for that portion of tuition and other educational costs the Secretary determines to be allowable.

The regulations of this subpart apply to cooperative agreements entered into by the Secretary under section 781 of the Public Health Service Act (42 U.S.C. 295g-1) with schools of medicine or osteopathy for the planning, development, and operation of area health education center programs.

Act means the Public Health Service Act.

Allied health personnel means individuals as defined in 42 CFR 58.502.

Area health education center or center means a public or nonprofit private entity which has a cooperative arrangement with one or more schools of medicine or osteopathy for the planning, development, and operation of an area health education center program. A center must be an entity which is recognized under the laws of the State in which it is located and which has as one of its principal functions the operation of the area health education center.

Area health education center program or project means a cooperative program among one or more schools of medicine or osteopathy and one or more area health education centers, which is capable of performing the functions described in sections 781(c) and (d) (2) of the Act and § 57.3804 of these regulations, and which is designed to improve the distribution, supply, quality, utilization, and efficiency of health personnel in the health services delivery system and to encourage the regionalization of educational responsibilities of health professions schools.

Cooperative agreement means a legal instrument that reflects an assistance relationship between the Federal Government and the recipient in which substantial programmatic involvement is anticipated between the Federal agency and the recipient during performance of the contemplated activity.

Clerkship means supervised clinical training.

Continuing medical education or continuing education means any education for the purpose of maintaining or enhancing the knowledge, attitudes or abilities of a health professional in his or her field which does not lead to any formal advanced standing in the profession.

Health professional means any physician, dentist, optometrist, podiatrist, pharmacist, nurse, nurse practitioner, physician assistant or allied health personnel.

Nurse practitioner means an individual as defined in 42 CFR 57.2402.

Physician assistant means an individual as defined in 42 CFR 57.802.

Preceptorship means an educational experience in which the student works with a designated health professional, the preceptor, who teaches in the student's field of study and personally supervises the student's clinical activity.

School of medicine, osteopathy, dentistry, optometry, podiatry, pharmacy, public health or veterinary medicine means a school as defined in section 701(4) of the Act which is accredited as provided in section 772(b) of the Act.

School of nursing means a collegiate, associate degree or diploma school of nursing as defined in section 853 of the Act.

Training center for allied health professions means a training center as defined in 42 CFR 58.402

Secretary means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

State means, in addition to the several States, only the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, and the Trust Territory of the Pacific Islands.

(a) Any public or nonprofit private school of medicine or osteopathy located in a State is eligible to submit a proposal.

(b) More than one accredited school of medicine or osteopathy may submit a joint proposal for the planning, development and operation of an area health education center program. In this case, each school must conduct the activities required by section 781(c) of the Act and § 57.3804(d) of these regulations.

A project supported under this subpart must be conducted in accordance with the following requirements:

(a) Each area health education center program must have a program director who holds a faculty appointment at a medical or osteopathic school participating in the program and who is responsible for the overall direction and coordination of the program.

(b) Each area health education center program must have a program advisory committee to advise the program director on all aspects of the conduct of the program including administration, education and evaluation. This committee must include representatives of schools and programs of health professions which actively participate in the area health education center program under § 57.3804(d)(5) of this subpart and section 781(c)(4) of the Act, individuals with training and experience in the fields of medicine or osteopathy, dentistry, nursing, and an allied health profession, as well as a representative of each of the centers cooperating in the program.

(c) Each area health education center program must annually evaluate its activities to ascertain the extent to which it is meeting the purposes described in section 781(a) of the Act.

(d) Requirements for schools of medicine or osteopathy. A school of medicine or osteopathy participating in an area health education program (with the exception of a school whose only function is to provide resources by purchase agreement to a center) must meet the following requirements. However, a school of medicine or osteopathy must fulfill the requirement of § 57.3804(d)(4) only if no other school of medicine or osteopathy participating in the program meets this requirement. Each school of medicine or osteopathy must:

(1) Have a cooperative arrangement with an area health education center, as evidenced by a written agreement. This agreement must provide at a minimum that the schools participating in the program will perform the following functions:

(i) Provide faculty to assist in the conduct of the center's educational activities, as necessary;

(ii) Provide an agreed upon amount of funds to the center to assist the center in meeting the costs of its activities, including those described in section 781(d)(2) of the Act;

(iii) Be responsible for the quality of the education received in the center, including evaluating the quality of the educational programs required by section 781(d)(2) of the Act and the performance of its students while receiving clinical training in the center. The area health education center must agree to conduct the activities described in section 781(d)(2) of the Act and these regulations, and assist the schools participating in the program in meeting the requirements in section 781(c) of the Act and these regulations.

(2) Provide for the active participation in the program by individuals who are associated with the administration of the school, and staff or faculty members of each of the departments (or specialties if the school has no departments) of internal medicine, pediatrics, obstetrics and gynecology, surgery, psychiatry and family medicine. These persons may participate in the program in either the school or center and must perform, among others, the following functions: provide guidance on educational program or curriculum development and operation; instruct students (including residents and other practicing health professionals); perform student or program evaluation; and assist in program administration.

(3) Conduct no less than 10 percent of all undergraduate medical or osteopathic clinical education of the school in one or more centers and in clinical settings which are part of or affiliated with a center and in which the center arranges and supports the clinical education. The school shall assure that, annually, the ratio of student weeks of clinical education received by its undergraduate students in centers to the total number of student weeks of clinical education received by its undergraduate students, in any location, is no less than 0.10. For purposes of this paragraph, undergraduate medical or osteopathic clinical education means any clerkships, preceptorships, or other educational activities which are offered in the following fields: family medicine, internal medicine and its subspecialties, pediatrics and its subspecialties, dermatology, obstetrics and gynecology, surgery and its subspecialties, anesthesiology, psychiatry and its subspecialties, neurology, physical medicine and rehabilitation, emergency medicine, nuclear medicine and general preventive medicine, including community medicine. Courses, seminars, and other educational programs which are entirely didactic or laboratory in nature or which are primarily in anatomy, biochemistry, physiology, microbiology, pharmacology, or pathology are not included in this definition.

(i) The Secretary may waive, for good cause shown, all or part of the requirement of this paragraph if another such school participating in the same program meets the requirement.

(ii) To obtain a waiver, a school must submit a written request to the Secretary fully describing and documenting the good cause and stating which school meets the requirement. This request must include the following information:

(A) The extent to which the school for which the waiver has been requested has attempted to meet this requirement. A description of efforts and the reasons why the school cannot meet the requirement must demonstrate that the school has made a good faith effort, but constraints beyond its control have caused these efforts to be unsuccessful.

(B) The length of time for which this waiver is requested, and a plan and t