[Title 34 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2001 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

                    34


          Part 400 to End

                         Revised as of July 1, 2001

Education





          Containing a codification of documents of general 
          applicability and future effect
          As of July 1, 2001
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2001



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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 34:
          Chapter IV--Office of Vocational and Adult 
          Education, Department of Education                         3
          Chapter V--Office of Bilingual Education and 
          Minority Languages Affairs, Department of Education      159
          Chapter VI--Office of Postsecondary Education, 
          Department of Education                                  169
          Chapter VII--Office of Educational Research and 
          Improvement, Department of Education                     915
          Chapter XI--National Institute for Literacy              931
          Chapter XII--National Council on Disability              939
  Findings Aids:
      Material Approved for Incorporation by Reference........     951
      Table of CFR Titles and Chapters........................     953
      Alphabetical List of Agencies Appearing in the CFR......     971
      Redesignation Table.....................................     981
      List of CFR Sections Affected...........................     983



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                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  34 CFR 400.1 refers 
                       to title 34, part 400, 
                       section 1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, July 1, 2001), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 523-4534.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

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REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
info@fedreg.nara.gov.

SALES

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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

July 1, 2001.



[[Page ix]]



                               THIS TITLE

    Title 34--Education is presently composed of three volumes (parts 1 
to 299, parts 300 to 399, and part 400 to End). The contents of these 
volumes represent all regulations codified under this title of the CFR 
as of July 1, 2001.

    A redesignation table appears in the Finding Aids section of the 
last volume.

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[[Page 1]]



                           TITLE 34--EDUCATION




                  (This book contains part 400 to End)

  --------------------------------------------------------------------
                                                                    Part

Chapter IV-- Office of Vocational and Adult Education, 
  Department of Education...................................         400

Chapter V-- Office of Bilingual Education and Minority 
  Languages Affairs, Department of Education................         535

Chapter VI-- Office of Postsecondary Education, Department 
  of Education..............................................         600

Chapter VII-- Office of Educational Research and 
  Improvement, Department of Education......................         700

Chapter XI-- National Institute for Literacy................        1100

Chapter XII-- National Council on Disability................        1200

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  CHAPTER IV--OFFICE OF VOCATIONAL AND ADULT EDUCATION, DEPARTMENT OF 
                                EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
400             Vocational and applied technology education 
                    programs--general provisions............           5
401             Indian vocational education program.........          15
402             Native Hawaiian vocational education program          20
403             State vocational and applied technology 
                    education program.......................          23
406             State-administered tech-prep education 
                    program.................................          68
410             Tribally controlled postsecondary vocational 
                    institutions program....................          72
411             Vocational education research program.......          77
412             National network for curriculum coordination 
                    in vocational and technical education...          81
413             National center or centers for research in 
                    vocational education....................          84
415             Demonstration centers for the training of 
                    dislocated workers program..............          89
421             Business and education standards program....          93
425             Demonstration projects for the integration 
                    of vocational and academic learning 
                    program.................................          95
426             Cooperative demonstration program...........          99
427             Bilingual vocational training program.......         106
428             Bilingual vocational instructor training 
                    program.................................         111
429             Bilingual vocational materials, methods, and 
                    techniques program......................         114
460             Adult education--general provisions.........         117
461             Adult education State-administered basic 
                    grant program...........................         119
464             State literacy resource centers program.....         134
472             National workplace literacy program.........         137
477             State program analysis assistance and policy 
                    studies program.........................         144
489             Functional literacy for State and local 
                    prisoners program.......................         147

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490             Life skills for State and local prisoners 
                    program.................................         151
491             Adult education for the homeless program....         154

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PART 400--VOCATIONAL AND APPLIED TECHNOLOGY EDUCATION PROGRAMS--GENERAL PROVISIONS--Table of Contents




Sec.
400.1  What is the purpose of the Vocational and Applied Technology 
          Education Programs?
400.2  What programs are governed by these regulations?
400.3  What other regulations apply to the Vocational and Applied 
          Technology Education Programs?
400.4  What definitions apply to the Vocational and Applied Technology 
          Education Programs?
400.5  Under what conditions may funds under the Act be used for the 
          joint funding of programs?
400.6  What are the requirements for establishing a State Committee of 
          Practitioners?
400.7  What are the provisions governing the issuance of State core 
          standards and measures of performance and State rules or 
          regulations?
400.8  What are the provisions governing student assistance?
400.9  What additional requirements govern the Vocational and Applied 
          Technology Education Programs?
400.10  What are the reporting requirements?

    Authority: 20 U.S.C. 2301 et seq., unless otherwise noted.

    Source: 57 FR 36724, Aug. 14, 1992, unless otherwise noted.



Sec. 400.1  What is the purpose of the Vocational and Applied Technology Education Programs?

    (a) The purpose of the Vocational and Applied Technology Education 
Programs is to make the United States more competitive in the world 
economy by developing more fully the academic and occupational skills of 
all segments of the population.
    (b) The purpose will be achieved principally through concentrating 
resources on improving educational programs leading to academic and 
occupational skill competencies needed to work in a technologically 
advanced society.

(Authority: 20 U.S.C. 2301)



Sec. 400.2  What programs are governed by these regulations?

    The regulations in this part apply to the Vocational and Applied 
Technology Education Programs as follows:
    (a) State-administered programs. (1) State Vocational and Applied 
Technology Education Program (34 CFR part 403).
    (2) State-Administered Tech-Prep Education Program (34 CFR part 
406).
    (3) Supplementary State Grants Program (34 CFR part 407).
    (b) National discretionary programs. (1) Indian Vocational Education 
Program (34 CFR part 401).
    (2) Native Hawaiian Vocational Education Program (34 CFR part 402).
    (3) National Tech-Prep Education Program (34 CFR part 405).
    (4) Community Education Employment Centers Program (34 CFR part 
408).
    (5) Vocational Education Lighthouse Schools Program (34 CFR part 
409).
    (6) Tribally Controlled Postsecondary Vocational Institutions 
Program (34 CFR part 410).
    (7) Vocational Education Research Program (34 CFR part 411).
    (8) National Network for Curriculum Coordination in Vocational and 
Technical Education (34 CFR part 412).
    (9) National Center or Centers for Research in Vocational Education 
(34 CFR part 413).
    (10) Materials Development in Telecommunications Program (34 CFR 
part 414).
    (11) Demonstration Centers for the Training of Dislocated Workers 
Program (34 CFR part 415).
    (12) Vocational Education Training and Study Grants Program (34 CFR 
part 416).
    (13) Vocational Education Leadership Development Awards Program (34 
CFR part 417).
    (14) Vocational Educator Training Fellowships Program (34 CFR part 
418).
    (15) Internships for Gifted and Talented Vocational Education 
Students Program (34 CFR part 419).
    (16) Business and Education Standards Program (34 CFR part 421).
    (17) Educational Programs for Federal Correctional Institutions (34 
CFR part 422).

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    (18) Vocational Education Dropout Prevention Program (34 CFR part 
423).
    (19) Model Centers of Regional Training for Skilled Trades Program 
(34 CFR part 424).
    (20) Demonstration Projects for the Integration of Vocational and 
Academic Learning Program (34 CFR part 425).
    (21) Cooperative Demonstration Programs (34 CFR part 426).
    (22) Bilingual Vocational Training Program (34 CFR part 427).
    (23) Bilingual Vocational Instructor Training Program (34 CFR part 
428).
    (24) Bilingual Materials, Methods, and Techniques Program (34 CFR 
part 429).

(Authority: 20 U.S.C. 2301 et seq.)



Sec. 400.3  What other regulations apply to the Vocational and Applied Technology Education Programs?

    The following regulations apply to the Vocational and Applied 
Technology Education Programs:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs) (applicable to parts 401, 
402, 405, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 
421, 422, 423, 424, 425, 426, 427, 428, and 429 except that 34 CFR 
75.720(b) does not apply to performance reports under parts 401, 402, 
405, 408, 409, 412, 413, 415, 416, 417, 419, 422, 423, 424, 425, 426, 
427, and 428, and to financial reports under parts 412 and 413).
    (3) 34 CFR part 76 (State-Administered Programs) (applicable to 
parts 403, 406, and 407).
    (4) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (5) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities) (not applicable to parts 401, 410, 
411, 413, 418, and 419).
    (6) 34 CFR part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments).
    (7) 34 CFR part 81 (General Education Provisions Act-- Enforcement).
    (8) 34 CFR part 82 (New Restrictions on Lobbying) (not applicable to 
parts 401 and 410).
    (9) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (10) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The Federal Acquisition Regulation (FAR) in 48 CFR chapter 1 and 
the Education Department Acquisition Regulation (EDAR) in 48 CFR chapter 
34 (applicable to contracts under parts 401, 402, 411, 412, 426, 427, 
428, and 429).
    (c) The regulations in this part 400.
    (d) The regulations in 34 CFR parts 401, 402, 403, 405, 406, 407, 
408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 421, 422, 
423, 424, 425, 426, 427, 428, and 429.

(Authority: 20 U.S.C. 2301 et seq.)



Sec. 400.4  What definitions apply to the Vocational and Applied Technology Education Programs?

    (a) Definitions in EDGAR. The following terms used in regulations 
for the Vocational and Applied Technology Education Programs are defined 
in 34 CFR 77.1:

Acquisition
Applicant
Application
Award
Budget
Contract
Department
EDGAR
Elementary school
Facilities
Federally recognized Indian tribal government
Fiscal year
Grant
Grantee
Grant period
Nonprofit
Private
Project
Public
Recipient
Secondary school
Secretary
State educational agency
Subgrant
Subgrantee
Supplies

    (b) Other definitions. The following definitions also apply to the 
regulations for Vocational and Applied Technology Education Programs.
    Act means the Carl D. Perkins Vocational and Applied Technology 
Education Act (20 U.S.C. 2301 et seq.), as amended by Public Law 101-
392, 104 Stat. 753 (1990), and Public Law 102-103, 105 Stat. 497 (1991), 
unless otherwise indicated.

[[Page 7]]

    Administration means activities of a State necessary for the proper 
and efficient performance of its duties under the Act, including 
supervision, but not including curriculum development activities, 
personnel development, or research activities.
    All aspects of an industry includes, with respect to a particular 
industry that a student is preparing to enter, planning, management, 
finances, technical and production skills, underlying principles of 
technology, labor and community issues, health and safety, and 
environmental issues related to that industry.
    Americans with Disabilities Act of 1990 or ADA mean the Act in 42 
U.S.C. 12101 et seq.
    Apprenticeship training program means a program registered with the 
Department of Labor or the State apprenticeship agency in accordance 
with the Act of August 16, 1937, known as the National Apprenticeship 
Act (29 U.S.C. 50), that is conducted or sponsored by an employer, a 
group of employers, or a joint apprenticeship committee representing 
both employers and a union, and that contains all terms and conditions 
for the qualification, recruitment, selection, employment, and training 
of apprentices.
    Area vocational education school means--
    (1) A specialized high school used exclusively or principally for 
the provision of vocational education to individuals who are available 
for study in preparation for entering the labor market;
    (2) The department of a high school exclusively or principally used 
for providing vocational education in not less than five different 
occupational fields to individuals who are available for study in 
preparation for entering the labor market;
    (3) A technical institute or vocational school used exclusively or 
principally for the provision of vocational education to individuals who 
have completed or left high school and who are available for study in 
preparation for entering the labor market; or
    (4) The department or division of a junior college, community 
college, or university that operates under the policies of the State 
board and provides vocational education in not less than five different 
occupational fields leading to immediate employment but not necessarily 
leading to a baccalaureate degree, if, in the case of a school, 
department, or division described in paragraph (3) of this definition or 
in this paragraph, it admits as regular students both individuals who 
have completed high school and individuals who have left high school.
    Career guidance and counseling means programs that--
    (1) Pertain to the body of subject matter and related techniques and 
methods organized for the development in individuals of career 
awareness, career planning, career decision-making, placement skills, 
and knowledge and understanding of local, State, and national 
occupational, educational, and labor market needs, trends, and 
opportunities; and
    (2) Assist those individuals in making and implementing informed 
educational and occupational choices.
    Chapter 1 means chapter 1 of title I of the Elementary and Secondary 
Education Act of 1965, as amended (20 U.S.C. 2701 et seq.).
    Coherent sequence of courses means a series of courses in which 
vocational and academic education are integrated, and which directly 
relates to, and leads to, both academic and occupational competencies. 
The term includes competency-based education, academic education, and 
adult training or retraining, including sequential units encompassed 
within a single adult retraining course, that otherwise meet the 
requirements of this definition.
    Community-based organization means a private nonprofit organization 
of demonstrated effectiveness that is representative of communities or 
significant segments of communities and that provides job training 
services (for example, Opportunities Industrialization Centers, the 
National Urban League, SER-Jobs for Progress, United Way of America, 
Mainstream, the National Puerto Rican Forum, National Council of La 
Raza, WAVE, Inc., Jobs for Youth, organizations operating career intern 
programs, neighborhood groups and organizations, community action

[[Page 8]]

agencies, community development corporations, vocational rehabilitation 
organizations, rehabilitation facilities (as defined in section 7(10) of 
the Rehabilitation Act of 1973 (29 U.S.C. 706(10)), agencies serving 
youth, agencies serving individuals with disabilities, including 
disabled veterans, agencies serving displaced homemakers, union-related 
organizations, and employer-related nonprofit organizations), and an 
organization of demonstrated effectiveness serving non-reservation 
Indians (including the National Urban Indian Council), as well as tribal 
governments and Native Alaskan groups.

(Authority: 20 U.S.C. 2471(6); 41 U.S.C. 1503(5))
    Construction includes construction of new buildings and acquisition, 
expansion, remodeling, and alteration of existing buildings, and 
includes site grading and improvement and architect fees.
    Cooperative education means a method of instruction of vocational 
education for individuals who, through written cooperative arrangements 
between the school and employers, receive instruction, including 
required academic courses and related vocational instruction by 
alternation of study in school with a job in any occupational field. The 
two experiences must be planned and supervised by the school and 
employers so that each contributes to the student's education and 
employability. Work periods and school attendance may be on alternate 
half days, full days, weeks, or other periods of time in fulfilling the 
cooperative program.
    Criminal offender means any individual who is charged with, or 
convicted of, any criminal offense, including a youth offender or a 
juvenile offender.
    Correctional institution means any--
    (1) Prison;
    (2) Jail;
    (3) Reformatory;
    (4) Work farm;
    (5) Detention center; or
    (6) Halfway house, community-based rehabilitation center, or any 
other similar institution designed for the confinement or rehabilitation 
of criminal offenders.
    Curriculum materials means instructional and related or supportive 
material, including materials using advanced learning technology, in any 
occupational field that is designed to strengthen the academic 
foundation and prepare individuals for employment at the entry level or 
to upgrade occupational competencies of those previously or presently 
employed in any occupational field, and appropriate counseling and 
guidance material.
    Disadvantaged refers to individuals (other than individuals with 
disabilities) who have economic or academic disadvantages and who 
require special services and assistance in order to enable these 
individuals to succeed in vocational education programs. This term 
includes individuals who are members of economically disadvantaged 
families, migrants, individuals of limited English proficiency, and 
individuals who are dropouts from, or who are identified as potential 
dropouts from, secondary school. For the purpose of this definition, an 
individual who scores at or below the 25th percentile on a standardized 
achievement or aptitude test, whose secondary school grades are below 
2.0 on a 4.0 scale (on which the grade ``A'' equals 4.0), or who fails 
to attain minimum academic competencies may be considered ``academically 
disadvantaged.'' The definition does not include individuals with 
learning disabilities.
    Displaced homemaker means an individual who--
    (1) Is an adult;
    (2) Has worked as an adult primarily without remuneration to care 
for the home and family, and for that reason has diminished marketable 
skills; and
    (3)(i) Has been dependent on public assistance or on the income of a 
relative but is no longer supported by that income;
    (ii) Is a parent whose youngest dependent child will become 
ineligible to receive assistance under part A of title IV of the Social 
Security Act (42 U.S.C. 601), Aid to Families with Dependent Children, 
within two years of the parent's application for assistance under the 
Carl D. Perkins Vocational and Applied Technology Education Act;
    (iii) Is unemployed or underemployed and is experiencing difficulty 
in obtaining any employment or suitable employment, as appropriate; or

[[Page 9]]

    (iv) Is described in paragraphs (1) and (2) of this definition and 
is a criminal offender.
    Economically disadvantaged family or individual means a family or 
individual that is--
    (1) Eligible for any of the following:
    (i) The program for Aid to Families with Dependent Children under 
part A of title IV of the Social Security Act (42 U.S.C. 601).
    (ii) Benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011).
    (iii) To be counted for purposes of section 1005 of chapter 1 of 
title I of the Elementary and Secondary Education Act of 1965, as 
amended (chapter 1) (20 U.S.C. 2701).
    (iv) The free or reduced-price meals program under the National 
School Lunch Act (42 U.S.C. 1751).
    Note to paragraph (1)(iv): The National School Lunch Act prohibits 
the identification of students by name. However, State and local 
projects may use the total number of students participating in a free or 
reduced-priced meals program to determine eligibility for projects, 
services, and activities under the Vocational and Applied Technology 
Education Programs.
    (v) Participation in programs assisted under title II of the JTPA.
    (2) In receipt of a Pell grant or assistance under a comparable 
State program of need-based financial assistance.
    (3) Determined by the Secretary to be low-income according to the 
latest available data from the Department of Commerce or the Department 
of Health and Human Services Poverty Guidelines.
    (4) Identified as low income according to other indices of economic 
status, including estimates of those indices, if a grantee demonstrates 
to the satisfaction of the Secretary that those indices are more 
representative of the number of economically disadvantaged students 
attending vocational education programs. The Secretary determines, on a 
case-by-case basis, whether other indices of economic status are more 
representative of the number of economically disadvantaged students 
attending vocational education programs, taking into consideration, for 
example, the statistical reliability of any data submitted by a grantee 
as well as the general acceptance of the indices by other agencies in 
the State or local area.

(Authority: 20 U.S.C. 2341(d)(3))
    Eligible recipient means, except as otherwise provided, a local 
educational agency, an area vocational education school, an intermediate 
educational agency, a postsecondary educational institution, a State 
corrections educational agency, or an eligible institution as defined in 
34 CFR 403.117(a).
    General occupational skills means strong experience in, and 
understanding of, all aspects of an industry.
    High technology means state-of-the-art computer, microelectronic, 
hydraulic, pneumatic, laser, nuclear, chemical, telecommunication, and 
other technologies being used to enhance productivity in manufacturing, 
communication, transportation, agriculture, mining, energy, commercial, 
and similar economic activity, and to improve the provision of health 
care.
    IDEA means the Individuals with Disabilities Education Act (20 
U.S.C. 1400 et seq.), formerly entitled ``Education of the Handicapped 
Act.''
    Individual with disabilities means any individual with any 
disability (as defined in section 3(2) of the Americans With 
Disabilities Act of 1990), which includes any individual who--
    (1) Has a physical or mental impairment that substantially limits 
one or more of the major life activities of that individual;
    (2) Has a record of an impairment described in paragraph (1) of this 
definition; or
    (3) Is regarded as having an impairment described in paragraph (1) 
of this definition.
    Note: This definition necessarily includes any individual who has 
been evaluated under part B of the IDEA and determined to be an 
individual with a disability who is in need of special education and 
related services; and any individual who is considered disabled under 
section 504 of the Rehabilitation Act of 1973.

(Authority: 42 U.S.C. 12102(2))
    Individualized education program means a written statement for a 
disabled individual developed in accordance with sections 612(4) and 
614(a)(5) of the IDEA (20 U.S.C. 1412(4) and 1414(a)(5)).

[[Page 10]]

    Institution of higher education. (1) The term means an educational 
institution in any State that--
    (i) Admits as regular students only persons having a certificate of 
graduation from a school providing secondary education, or the 
recognized equivalent of such a certificate;
    (ii) Is legally authorized within such State to provide a program of 
education beyond secondary education;
    (iii) Provides an educational program for which it awards a 
bachelor's degree or provides not less than a two-year program that is 
acceptable for full credit toward such a degree;
    (iv) Is a public or other nonprofit institution; and
    (v) Is accredited by a nationally recognized accrediting agency or 
association, or if not so accredited--
    (A) Is an institution with respect to which the Secretary has 
determined that there is satisfactory assurance, considering the 
resources available to the institution, the period of time, if any, 
during which it has operated, the effort it is making to meet 
accreditation standards, and the purpose for which this determination is 
being made, that the institution will meet the accreditation standards 
of such an agency or association within a reasonable time; or
    (B) Is an institution whose credits are accepted, on transfer, by 
not less than three institutions which are so accredited, for credit on 
the same basis as if transferred from an institution so accredited.
    (2) The term also includes--
    (i) Any school which provides not less than a one-year program of 
training to prepare students for gainful employment in a recognized 
occupation and that meets the provisions of paragraphs (1) (i), (ii), 
(iv), and (v) of this definition; and
    (ii) A public or nonprofit private educational institution in any 
State which, in lieu of the requirement in paragraph (1) of this 
definition, admits as regular students persons who are beyond the age of 
compulsory school attendance in the State in which the institution is 
located and who meet the requirements of section 484(d) of the Higher 
Education Act of 1965 (20 U.S.C. 1091(d)).

(Authority: 20 U.S.C. 1141(a))
    Intermediate educational agency means a combination of school 
districts or counties (those divisions of a State utilized by the 
Secretary of Commerce in compiling and reporting data regarding 
counties) as are recognized in a State as an administrative agency for 
that State's vocational or technical education schools or for vocational 
programs within its public elementary or secondary schools. This term 
includes any other public institution or agency having administrative 
control and direction over a public elementary or secondary school.

(Authority: 20 U.S.C. 2891(5))
    JTPA means the Job Training Partnership Act (29 U.S.C. 1501 et 
seq.).
    Limited English proficiency, if used with reference to individuals, 
means individuals--
    (1)(i) Who were not born in the United States or whose native 
language is a language other than English;
    (ii) Who come from environments where a language other than English 
is dominant; or
    (iii) Who are American Indian and Alaska Natives and who come from 
environments where a language other than English has had a significant 
impact on their level of English language proficiency; and
    (2) Who by reason thereof, have sufficient difficulty speaking, 
reading, writing, or understanding the English language to deny those 
individuals the opportunity to learn successfully in classrooms where 
the language of instruction is English or to participate fully in our 
society.

(Authority: 20 U.S.C. 3223(a)(1))

    Local educational agency means a board of education or other legally 
constituted local school authority having administrative control and 
direction of public elementary or secondary schools in a city, county, 
township, school district, or political subdivision in a State, or any 
other public educational institution or agency having administrative 
control and direction of a vocational education program. For the 
purposes of sections 114, 115, 116, 117, and

[[Page 11]]

240 of the Act (implemented at 34 CFR 403.31 (e) and (f), 403.32(c)(3), 
403.190, 403.191, 403.192, 403.201, 403.202, and 403.204), this term 
includes a State corrections educational agency.
    Measure means a description of an outcome.

(Authority: H.R. Rep. No. 41, 101st Cong., 1st Sess. 13 (1989))
    Postsecondary educational institution means an institution legally 
authorized to provide postsecondary education within a State, a Bureau 
of Indian Affairs-controlled postsecondary institution, or any 
postsecondary educational institution operated by, or on behalf of, any 
Indian tribe that is eligible to contract with the Secretary of the 
Interior for the administration of programs under the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450) or under the 
Act of April 16, 1934 (25 U.S.C. 452).
    Preparatory services means services, programs, or activities 
designed to assist individuals who are not enrolled in vocational 
education programs in the selection of, or preparation for participation 
in, an appropriate vocational education training program. Preparatory 
services may include, but are not limited to--
    (1) Services, programs, or activities related to outreach to, or 
recruitment of, potential vocational education students;
    (2) Career counseling and personal counseling;
    (3) Vocational assessment and testing; and
    (4) Other appropriate services, programs, or activities.
    Private vocational training institution means a business or trade 
school, or technical institution or other technical or vocational 
school, in any State, that--
    (1) Admits as regular students only persons who have completed or 
left elementary or secondary school and who have the ability to benefit 
from the training offered by the institution;
    (2) Is legally authorized to provide, and provides within that 
State, a program of postsecondary vocational or technical education 
designed to fit individuals for useful employment in recognized 
occupations;
    (3) Has been in existence for two years or has been specially 
accredited by the Secretary as an institution meeting the other 
requirements of this definition; and
    (4) Is accredited--
    (i) By a nationally recognized accrediting agency or association 
listed by the Secretary;
    (ii) If the Secretary determines that there is no nationally 
recognized accrediting agency or association qualified to accredit 
schools of a particular category, by a State agency listed by the 
Secretary; or
    (iii) If the Secretary determines that there is no nationally 
recognized or State agency or association qualified to accredit schools 
of a particular category, by an advisory committee appointed by the 
Secretary and composed of persons specially qualified to evaluate 
training provided by schools of that category. The committee shall 
prescribe the standards of content, scope, and quality that must be met 
by those schools and shall also determine whether particular schools 
meet those standards.
    Program effectiveness panel means the panel of experts in the 
evaluation of education programs and in other areas of education, at 
least two-thirds of whom are not Federal employees, who are appointed by 
the Secretary, and who review and assign scores to programs according to 
the criteria in 34 CFR 786.12 or 787.12.
    Program year or academic year mean the twelve-month period during 
which a State operates its vocational education program (which is most 
generally a period beginning on July 1 and ending on the following June 
30).

(Authority: 20 U.S.C. 1225(a))
    Rehabilitation Act of 1973 means the Act in 29 U.S.C. 701 et seq.
    School facilities means classrooms and related facilities, including 
initial equipment, and interests in lands on which the facilities are 
constructed. The term does not include any facility intended primarily 
for events for which admission is to be charged to the general public.
    Sequential course of study means an integrated series of courses 
that are directly related to the educational and

[[Page 12]]

occupational skills preparation of individuals for jobs, or preparation 
for postsecondary education.
    Single parent means an individual who--
    (1) Is unmarried or legally separated from a spouse; and
    (2)(i) Has a minor child or children for which the parent has either 
custody or joint custody; or
    (ii) Is pregnant.
    Small business means a for-profit enterprise employing 500 or fewer 
employees.
    Special populations refers to individuals with disabilities, 
educationally and economically disadvantaged individuals (including 
foster children), individuals of limited English proficiency, 
individuals who participate in programs designed to eliminate sex bias, 
and individuals in correctional institutions.
    Specific job training means training and education for skills 
required by an employer to provide the individual student with the 
ability to obtain employment and to adapt to the changing demands of the 
workplace.
    Spread means the degree to which--
    (1) Project activities and results are demonstrated to others;
    (2) Technical assistance is provided to others to help them 
replicate project activities and results;
    (3) Project activities and results are replicated at other sites; or
    (4) Information and material about or resulting from the project are 
disseminated.
    Standard means the level or rate of an outcome.

(Authority: H.R. Rep. No. 41, 101st Cong., 1st Sess. 13 (1989))
    State means any of the 50 States, the Commonwealth of Puerto Rico, 
the District of Columbia, Guam, American Samoa, the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, and Palau (until the 
Compact of Free Association with Palau takes effect pursuant to section 
101(a) of Public Law 99-658 (48 U.S.C. 1681)).
    State board means a State board designated or created by State law 
as the sole State agency responsible for the administration of 
vocational education or for supervision of the administration of 
vocational education in the State.
    State corrections educational agency means the State agency or 
agencies responsible for carrying out corrections education programs in 
the State.
    State council means the State council on vocational education 
established in accordance with 34 CFR 403.17 through 403.19.
    Supplementary services means curriculum modification, equipment 
modification, classroom modification, supportive personnel, and 
instructional aids and devices.
    Technology education means an applied discipline designed to promote 
technological literacy that provides knowledge and understanding of the 
impacts of technology including its organizations, techniques, tools, 
and skills to solve practical problems and extend human capabilities in 
areas such as construction, manufacturing, communication, 
transportation, power, and energy.
    Transportability means the ease by which project activities and 
results may be replicated at other sites, such as through the 
development and use of guides or manuals that provide step-by-step 
directions for others to follow in order to initiate similar efforts and 
reproduce comparable results.
    Tribally controlled community college means an institution that 
receives assistance under the Tribally Controlled Community College 
Assistance Act of 1978 (25 U.S.C. 1801 et seq.) or the Navajo Community 
College Act (25 U.S.C. 640a).
    Vocational education means organized educational programs offering a 
sequence of courses or instruction in a sequence or aggregation of 
occupational competencies that are directly related to the preparation 
of individuals for paid or unpaid employment in current or emerging 
occupations requiring other than a baccalaureate or advanced degree. 
These programs must include competency-based applied learning that 
contributes to an individual's academic knowledge, higher-order 
reasoning and problem-solving skills, work attitudes, general 
employability skills, and the occupational-specific skills necessary for 
economic independence as a productive and contributing

[[Page 13]]

member of society. This term also includes applied technology education.
    Vocational student organizations means those organizations for 
individuals enrolled in vocational education programs that engage in 
activities as an integral part of the instructional program. These 
organizations may have State and national units that aggregate the work 
and purposes of instruction in vocational education at the local level.
    Wagner-Peyser Act means the Act in 29 U.S.C. 49 et seq.

(Authority: 20 U.S.C. 2471)



Sec. 400.5  Under what conditions may funds under the Act be used for the joint funding of programs?

    (a) Funds made available under the Act may be used to provide 
additional funds under any of the programs in--
    (1) Title II, section 123 and title III of the JTPA; or
    (2) The Wagner-Peyser Act.
    (b) Funds used to carry out paragraph (a) of this section may be 
used only if the--
    (1) Program otherwise meets the requirements of the Act and the 
requirements of the programs in paragraph (a) (1) and (2) of this 
section;
    (2) Program serves the same individuals that are served under the 
Act;
    (3) Program provides services in a coordinated manner with services 
provided under the Act; and
    (4) Funds would be used to supplement, and not supplant, funds 
provided from non-Federal sources.
    (c) Funds that meet the conditions in paragraphs (a) and (b) of this 
section may be used as matching funds.

(Authority: 20 U.S.C. 2468)



Sec. 400.6  What are the requirements for establishing a State Committee of Practitioners?

    (a) Consultation. A State shall appoint a State Committee of 
Practitioners (Committee) after consulting with--
    (1) Local school officials representing eligible recipients;
    (2) Representatives of--
    (i) Organized labor;
    (ii) Business;
    (iii) Superintendents;
    (iv) Community-based organizations;
    (v) Private industry councils established under section 102(a) of 
the JTPA (29 U.S.C. 1512);
    (vi) State councils;
    (vii) Parents;
    (viii) Special populations; and
    (ix) Correctional institutions;
    (3) The administrator appointed under 34 CFR 403.13(a);
    (4) The State administrator of programs assisted under part B of the 
IDEA;
    (5) The State administrator of programs assisted under chapter 1;
    (6) The State administrator of programs for students of limited 
English proficiency; and
    (7) Guidance counselors.
    (b) Committee selection. The State shall select the Committee from 
nominees solicited from--
    (1) State organizations representing school administrators;
    (2) Teachers;
    (3) Parents;
    (4) Members of local boards of education; and
    (5) Appropriate representatives of institutions of higher education.
    (c)(1) Committee membership. The Committee must consist of--
    (i) Representatives of local educational agencies, who must 
constitute a majority of the members of the committee;
    (ii) School administrators;
    (iii) Teachers;
    (iv) Parents;
    (v) Members of local boards of education;
    (vi) Representatives of institutions of higher education; and
    (vii) Students.
    (2) School administrators, teachers, and members of local boards of 
education may be counted as representatives of LEAs for purposes of 
paragraph (c)(1)(i) of this section.

(Authority: 20 U.S.C. 2325 (a) and (d)(1); 2468a)



Sec. 400.7  What are the provisions governing the issuance of State core standards and measures of performance and State rules or regulations?

    (a)(1) State standards and measures. A State shall convene, on a 
regular basis, the Committee established under Sec. 400.6 to review, 
comment on, and propose revisions to a draft proposal that the

[[Page 14]]

State board develops for a statewide system of core standards and 
measures of performance for secondary, postsecondary, and adult 
vocational education programs.
    (2) The Committee shall make recommendations to the State board with 
respect to modifying statewide standards and measures based on 
information provided by the State under 34 CFR 403.201(d).
    (b)(1) State rules and regulations. Except as provided in paragraph 
(b)(2) of this section, before a State publishes any proposed or final 
State rule or regulation for programs, services, or activities covered 
by the Act, the State shall convene the Committee for the purpose of 
reviewing the rule or regulation.
    (2) In an emergency, in which a rule or regulation must be issued 
within a very limited time period to assist eligible recipients with the 
operation of projects, services, or activities, the State--
    (i) May issue a proposed rule or regulation without meeting the 
requirements in paragraph (b)(1) of this section; but
    (ii) Shall immediately convene the Committee to review the rule or 
regulation before it is issued in final form.

    Cross-Reference: See Sec. 400.9(c).

    (3) If a State policy is binding on eligible recipients and has the 
same effect as a formal rule or regulation, although it is not issued as 
one, that policy is covered by this section.

(Authority: 20 U.S.C. 2325(a); 2468a)



Sec. 400.8  What are the provisions governing student assistance?

    (a) The portion of any student financial assistance received under 
the Act that is made available for attendance costs described in 
paragraph (b) of this section may not be considered as income or 
resources in determining eligibility for assistance under any other 
program funded in whole or in part with Federal funds.
    (b) For purposes of this section, attendance costs are --
    (1) Tuition and fees normally assessed a student carrying the same 
academic workload as determined by the institution, including costs for 
rental or purchases of any equipment, materials, or supplies required of 
all students in the same course of study; and
    (2) An allowance for books, supplies, transportation, dependent 
care, and miscellaneous personal expenses for a student attending an 
institution on at least a half-time basis, as determined by the 
institution.

(Authority: 20 U.S.C. 2466d)



Sec. 400.9  What additional requirements govern the Vocational and Applied Technology Education Programs?

    In addition to the Act, applicable Federal laws, and regulations, 
the following requirements apply to Vocational and Applied Technology 
Education Programs:
    (a) A State that receives funds under the Act shall cooperate with 
the Secretary in supplying the information the Secretary requires, in 
the form the Secretary requires, and shall comply in its reports with 
the information system developed by the Secretary under section 421 of 
the Act.
    (b) Nothing in the Act is to be construed to be inconsistent with 
applicable Federal laws guaranteeing civil rights, or is intended to, or 
has the effect of, limiting or diminishing any obligations imposed under 
the IDEA or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
794).
    (c) Any State rule, regulation, or policy imposed on the 
administration or operation of programs funded under the Act, including 
any rule, regulation, or policy based on a State's interpretation of any 
Federal law, regulation, or guideline, must be identified as a State 
imposed requirement.
    (d) Funds provided under the Act may not be used for the purpose of 
directly providing incentives or inducements to relocate a business or 
enterprise from one State to another State if the relocation would 
result in a reduction in the number of jobs available in the State where 
the business enterprise is located before the incentives or inducements 
are offered.
    (e) A State may not take into consideration payments under the Act 
in determining for any educational agency or institution in that State 
the eligibility for State aid or the amount of

[[Page 15]]

State aid with respect to public education within the State.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2421, 2424, 2466c, 2468b, 2468c, and 2468e(a)(2))



Sec. 400.10  What are the reporting requirements?

    (a) Recipients of grants and cooperative agreements shall report 
information about students, projects, evaluations, dissemination, 
expenditures, accomplishments, and any other information, as may be 
required by the Secretary.
    (b) Recipients of grants and cooperative agreements under--
    (1) Parts 401, 402, 405, 408, 409, 413, 415, 416, 417, 419, 422, 
423, 424, 425, 426, 427, and 428 shall submit performance reports at 
least semi-annually;
    (2) Part 412 shall submit monthly progress and financial status 
reports and an annual impact report; and
    (3) Part 413 shall submit monthly exception reports and quarterly 
financial status reports.
    (c) Recipients of grants under parts 403, 406, and 407 shall submit 
annual performance and financial reports.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2301 et seq.)



PART 401--INDIAN VOCATIONAL EDUCATION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
401.1  What is the Indian Vocational Education Program?
401.2  Who is eligible for an award?
401.3  What activities may the Secretary fund?
401.4  What regulations apply?
401.5  What definitions apply?

               Subpart B--How Does One Apply for an Award?

401.10  How are applications submitted?

            Subpart C--How Does the Secretary Make an Award?

401.20  How does the Secretary evaluate an application?
401.21  What selection criteria does the Secretary use?
401.22  What additional factors may the Secretary consider?
401.23  Is the Secretary's decision not to make an award under the 
          Indian Vocational Education Program subject to a hearing?

         Subpart D--What Conditions Must Be Met After an Award?

401.30  How do the Indian Self-Determination Act and the Act of April 
          16, 1934 affect awards under the Indian Vocational Education 
          Program?
401.31  What are the evaluation requirements?

    Authority: 20 U.S.C. 2313(b), unless otherwise noted.

    Source: 57 FR 36730, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 401.1  What is the Indian Vocational Education Program?

    The Indian Vocational Education Program provides financial 
assistance to projects that provide vocational education for the benefit 
of Indians.

(Authority: 20 U.S.C. 2313(b))



Sec. 401.2  Who is eligible for an award?

    (a) The following entities are eligible for an award under this 
program:
    (1) A tribal organization of any Indian tribe that is eligible to 
contract with the Secretary of the Interior under the Indian Self-
Determination and Education Assistance Act or under the Act of April 16, 
1934.
    (2) A Bureau-funded school offering a secondary program.
    (b) Any tribal organization or Bureau-funded school described in 
paragraph (a) of this section may apply individually or jointly as part 
of a consortium with one or more eligible tribal organizations or 
schools.
    (c)(1) A consortium shall enter into an agreement signed by all 
members of the consortium, and designating one member of the consortium 
as the applicant and grantee.
    (2) The agreement must detail the activities each member of the 
consortium plans to perform, and must bind each member to every 
statement and assurance made in the application.
    (3) The applicant shall submit the agreement with its application.

[[Page 16]]


    Cross-Reference: See 34 CFR 75.127-75.129--Group applications.

(Authority: 20 U.S.C. 2313(b))



Sec. 401.3  What activities may the Secretary fund?

    (a) The Secretary provides financial assistance through grants, 
contracts, or cooperative agreements to plan, conduct, and administer 
projects or portions of projects that are authorized by and consistent 
with the purposes of the Act. In the case of a grant to a Bureau-funded 
school, the Secretary provides a minimum grant of $35,000.
    (b) Projects funded under this program are in addition to other 
programs, services, and activities made available under other provisions 
of the Act to--
    (1) Eligible Indians in need of vocational education; and
    (2) Eligible Indian tribes as community-based organizations that 
receive State vocational education assistance.
    (c) An award under this program may be used to provide a stipend to 
a student who--
    (1) Is enrolled in a vocational education project funded under this 
program; and
    (2) Has an acute economic need that cannot be met through work-study 
programs.
    (d) The amount of a stipend may be the greater of either the minimum 
hourly wage prescribed by State or local law, or the minimum hourly wage 
set under the Fair Labor Standards Act. A stipend may not be paid for 
time a student is not in attendance in a project.

(Authority: 20 U.S.C. 2313(b) (1) and (3))



Sec. 401.4  What regulations apply?

    The following regulations apply to the Indian Vocational Education 
Program:
    (a) The regulations in 34 CFR part 400 (except that 34 CFR parts 79 
and 82 do not apply to this program).
    (b) The regulations in this part 401.

(Authority: 20 U.S.C. 2313(b))



Sec. 401.5  What definitions apply?

    (a) The definitions in 34 CFR 400.4 apply to this part.
    (b) The following definitions also apply to this part:
    Act of April 16, 1934 means the Federal law commonly known as the 
``Johnson-O'Malley Act'' that authorizes the Secretary of the Interior 
to make contracts for the education of Indians and other purposes (25 
U.S.C. 455-457).
    Acute economic need means an income that is at or below the national 
poverty level according to the latest available data from the Department 
of Commerce or the Department of Health and Human Services Poverty 
Guidelines.
    Bureau means the Bureau of Indian Affairs, Department of the 
Interior.
    Bureau-funded school means--
    (1) A Bureau-operated elementary or secondary day or boarding school 
or a Bureau-operated dormitory for students attending a school other 
than a Bureau school;
    (2) An elementary or secondary school or a dormitory that receives 
financial assistance for its operation under a contract or agreement 
with the Bureau under sections 102, 104(1), or 208 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450f, 450h(1), and 
458d); or
    (3) A school for which assistance is provided under the Tribally 
Controlled Schools Act of 1988.

(Authority: 20 U.S.C. 2313(b); 25 U.S.C. 2019 (3), (4), and (5))

    Indian means a person who is a member of an Indian tribe.

(Authority: 25 U.S.C. 450b(d))

    Indian tribe means any Indian tribe, band, Nation, or other 
organized group or community, including any Alaska Native village or 
regional or village corporation as defined in or established pursuant to 
the Alaska Native Claims Settlement Act (85 Stat. 688) that is federally 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians.

(Authority: 25 U.S.C. 450b(e))

    Stipend means a subsistence allowance for a student that is 
necessary for the student to participate in a project funded under this 
program.
    Tribal organization means the recognized governing body of any 
Indian

[[Page 17]]

tribe or any legally established organization of Indians that is 
controlled, sanctioned, or chartered by that governing body or that is 
democratically elected by the adult members of the Indian community to 
be served by the organization and that includes the maximum 
participation of Indians in all phases of its activities. However, in 
any case where a contract is let or grant made to an organization to 
perform services benefiting more than one Indian tribe, the approval of 
each of those Indian tribes must be a prerequisite to the letting or 
making of that contract or grant.

(Authority: 20 U.S.C. 2313(a)(1)(A), (b); 25 U.S.C. 450b(l))



               Subpart B--How Does One Apply for an Award?



Sec. 401.10  How are applications submitted?

    (a) An application from a tribal organization, other than a Bureau-
funded school, must be submitted to the Secretary by the Indian tribe.
    (b) An application for a project to serve more than one Indian tribe 
must be approved by each tribe to be served.
    (c) An application from a Bureau-funded school may be submitted 
directly to the Secretary.

(Authority: 20 U.S.C. 2313(b)(1); 25 U.S.C. 450b)



            Subpart C--How Does the Secretary Make an Award?



Sec. 401.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 401.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 401.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 401.21.
    (e) In addition to the 100 points to be awarded based on the 
criteria in Sec. 401.21, the Secretary awards--
    (1) Up to 5 points to applications that propose exemplary approaches 
that involve, coordinate with, or encourage tribal economic development 
plans; and
    (2) Five points to applications from tribally controlled community 
colleges that--
    (i) Are accredited or are candidates for accreditation by a 
nationally recognized accreditation organization as an institution of 
postsecondary vocational education; or
    (ii) Operate vocational education programs that are accredited or 
are candidates for accreditation by a nationally recognized 
accreditation organization and issue certificates for completion of 
vocational education programs.

(Authority: 20 U.S.C. 2313(b))



Sec. 401.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (20 points) The Secretary reviews each 
application to determine the extent to which it--
    (1) Proposes measurable goals for student enrollment, completion, 
and placement (including placement in jobs or military specialties and 
in continuing education or training opportunities) that are realistic in 
terms of stated needs, resources, and job opportunities in each 
occupation for which training is to be provided;
    (2) Proposes goals that take into consideration any related goals or 
standards developed for Job Opportunities and Basic Skills (JOBS) 
programs (42 U.S.C. 681 et seq.) and Job Training Partnership Act (JTPA) 
(29 U.S.C. 1501 et seq.) training programs operating in the area, and, 
where appropriate, any goals set by the State board for vocational 
education for the occupation and geographic area;
    (3) Describes, for each occupation for which training is to be 
provided, how successful program completion will be determined in terms 
of academic and vocational competencies demonstrated by enrollees prior 
to completion and

[[Page 18]]

any academic or work credentials acquired by enrollees upon completion;
    (4) Demonstrates the active commitment in the project's planning and 
operation by advisory committees, tribal planning offices, the JOBS 
program office, the JTPA program director, and potential employers such 
as tribal enterprises, private enterprises (on or off reservation), and 
other organizations;
    (5) Is targeted to individuals with inadequate skills to assist 
those individuals in obtaining new employment; and
    (6) Includes a thorough description of the approach to be used 
including some or all of the following components:
    (i) Methods of participant selection.
    (ii) Assessment and feedback of participant progress.
    (iii) Coordination of vocational instruction, academic instruction, 
and support services such as counseling, transportation, and child care.
    (iv) Curriculum and, if appropriate, approaches for providing on-
the-job training experience.
    (b) Need. (15 points) The Secretary reviews each application to 
determine the extent to which the project addresses specific needs, 
including--
    (1) The job market and related needs (such as educational level) of 
the target population;
    (2) Characteristics of that population, including an estimate of 
those to be served by the project;
    (3) How the project will meet the needs of the target population; 
and
    (4) A description of any ongoing and planned activities relative to 
those needs, including, if appropriate, how the State plan developed 
under 34 CFR 403.30 through 403.34 is designed to meet those needs.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The establishment of objectives that are clearly related to 
project goals and activities and are measurable with respect to 
anticipated enrollments, completions, and placements;
    (2) A management plan that describes the chain of command, how staff 
will be managed, how coordination among staff will be accomplished, and 
timelines for each activity; and
    (3) The way the applicant intends to use its resources and personnel 
to achieve each objective.
    (d) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications of the project director;
    (ii) The qualifications of each of the other key personnel to be 
used on the project;
    (iii) The time, including justification for the time that each one 
of the key personnel, including the project director, will commit to the 
project; and
    (iv) Subject to the Indian preference provisions of the Indian Self-
Determination Act (25 U.S.C. 450 et seq.) that apply to grants and 
contracts to tribal organizations, how the applicant, as part of its 
nondiscriminatory employment practices, will ensure that its personnel 
are selected for employment without regard to race, color, national 
origin, gender, age, or disabling condition.
    (2) To determine personnel qualifications, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in fields particularly related to the objectives of the 
project; and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is adequate to support the project activities;
    (2) Costs are reasonable in relation to the objectives of the 
project and the number of participants to be served; and
    (3) The budget narrative justifies the expenditures.
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which--
    (1) The plan identifies, at a minimum, types of data to be collected 
and reported with respect to the academic

[[Page 19]]

and vocational competencies demonstrated by participants and the number 
and kind of academic and work credentials acquired by participants who 
complete the training;
    (2) The plan identifies, at a minimum, types of data to be collected 
and reported with respect to the achievement of project goals for the 
enrollment, completion, and placement of participants. The data must be 
broken down by sex and by occupation for which the training was 
provided;
    (3) The methods of evaluation are appropriate for the project and, 
to the extent possible, are objective and produce data that are 
quantifiable; and
    (4) The methods of evaluation provide periodic data that can be used 
by the project for ongoing program improvement.
    (g) Employment opportunities. (10 points) The Secretary reviews each 
application to determine the quality of the plan for job placement of 
participants who complete training under this program, including--
    (1) The expected employment opportunities (including any military 
specialties) and any additional educational or training opportunities 
that are related to the participants' training;
    (2) Information and documentation concerning potential employers' 
commitment to hire participants who complete the training; and
    (3) An estimate of the percentage of trainees expected to be 
employed (including self-employed individuals) in the field for which 
they were trained following completion of the training.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2313(b))



Sec. 401.22  What additional factors may the Secretary consider?

    The Secretary may decide not to award a grant or cooperative 
agreement if--
    (a) The proposed project duplicates an effort already being made; or
    (b) Funding the project would create an inequitable distribution of 
funds under this part among Indian tribes.

(Authority: 20 U.S.C. 2313(b))



Sec. 401.23  Is the Secretary's decision not to make an award under the Indian Vocational Education Program subject to a hearing?

    (a) After receiving written notice from an authorized official of 
the Department that the Secretary will not award a grant or cooperative 
agreement to an eligible applicant under Sec. 401.2(a)(1), an Indian 
tribal organization has 30 calendar days to make a written request to 
the Secretary for a hearing to review the Secretary's decision.
    (b) Within 10 business days of the Department's receipt of a hearing 
request, the Secretary designates a Department employee who is not 
assigned to the Office of Vocational and Adult Education to serve as a 
hearing officer. The hearing officer conducts a hearing and issues a 
written decision within 75 calendar days of the Department's receipt of 
the hearing request. The hearing officer establishes rules for the 
conduct of the hearing. The hearing officer conducts the hearing solely 
on the basis of written submissions unless the officer determines, in 
accordance with standards in 34 CFR 81.6(b), that oral argument or 
testimony is necessary.
    (c) The Secretary does not make any award under this part to an 
Indian tribal organization until the hearing officer issues a written 
decision on any appeal brought under this section.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2313(b); 25 U.S.C. 450f)



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 401.30  How do the Indian Self-Determination Act and the Act of April 16, 1934 affect awards under the Indian Vocational Education Program?

    (a) Grants, cooperative agreements, or contracts with tribal 
organizations are subject to the terms and conditions of section 102 of 
the Indian Self-Determination Act (25 U.S.C. 450f). These awards must be 
conducted by the recipient or contractor in accordance with the 
provisions of sections 4, 5, and 6 of the Act of April 16, 1934, that 
are relevant to the projects administered

[[Page 20]]

under this part. Section 4 contains requirements pertaining to 
submission of an education plan by a contractor. Section 5 pertains to 
participation of parents of Indian children. Section 6 pertains to 
reimbursement for educating non-resident students.
    (b) Grants to Bureau-funded schools are not subject to the 
requirements of the Indian Self-Determination Act or the Act of April 
16, 1934.

(Authority: 20 U.S.C. 2313 (b)(1)(A)(ii)(I) and (II))



Sec. 401.31  What are the evaluation requirements?

    (a) Each grantee shall annually provide and budget for either an 
internal or external evaluation, or both, of its activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The annual evaluation must include--
    (1) Descriptions and analyses of the accuracy of records and the 
validity of measures used by the project to establish and report on the 
academic and vocational competencies demonstrated and the academic and 
work credentials acquired;
    (2) Descriptions and analyses of the accuracy of records and the 
validity of measures used by the project to establish and report on 
participant enrollment, completion, and placement by sex and socio-
economic status for each occupation for which training has been 
provided;
    (3) The grantee's progress in achieving the objectives in its 
approved application, including any approved revisions of the 
application;
    (4) If applicable, actions taken by the grantee to address 
significant barriers impeding progress; and
    (5) The effectiveness of the project in promoting key elements for 
participants' job readiness, including--
    (i) Coordination of services;
    (ii) Improved attendance rates; and
    (iii) Improved basic and vocational skills competencies.

(Approved by the Office of Management and Budget under Control Number 
1830-0013)

(Authority: 20 U.S.C. 2313(b))



PART 402--NATIVE HAWAIIAN VOCATIONAL EDUCATION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
402.1  What is the Native Hawaiian Vocational Education Program?
402.2  Who is eligible for an award?
402.3  What activities may the Secretary fund?
402.4  What regulations apply?
402.5  What definitions apply?

Subpart B [Reserved]

            Subpart C--How does the Secretary Make an Award?

402.20  How does the Secretary evaluate an application?
402.21  What selection criteria does the Secretary use?

         Subpart D--What Conditions Must Be Met After an Award?

402.30  What are the evaluation requirements?

    Authority: 20 U.S.C. 2313(c), unless otherwise noted.

    Source: 57 FR 36733, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 402.1  What is the Native Hawaiian Vocational Education Program?

    The Native Hawaiian Vocational Education Program provides financial 
assistance to projects that provide vocational training and related 
activities for the benefit of native Hawaiians.

(Authority: 20 U.S.C. 2313(c))



Sec. 402.2  Who is eligible for an award?

    Any organization that primarily serves and represents native 
Hawaiians and that is recognized by the Governor of the State of Hawaii 
is eligible to apply for an award under this program.

(Authority: 20 U.S.C. 2313(c))



Sec. 402.3  What activities may the Secretary fund?

    The Secretary provides assistance through grants, contracts, or 
cooperative agreements to plan, conduct, and administer programs, or 
portions of

[[Page 21]]

programs, that provide vocational training and related activities for 
the benefit of native Hawaiians.

(Authority: 20 U.S.C. 2313(c))



Sec. 402.4  What regulations apply?

    The following regulations apply to the Native Hawaiian Vocational 
Education Program:
    (a) The regulations in 34 CFR part 400.
    (b) The regulations in this part 402.

(Authority: 20 U.S.C. 2313(c))



Sec. 402.5  What definitions apply?

    The following definitions apply to the Native Hawaiian Vocational 
Education Program:
    (a) The definitions in 34 CFR 400.4 apply to this part.
    (b) The following definition also applies to this part:
    Native Hawaiian means any individual who has any ancestors who were 
natives, prior to 1778, of the area that now comprises the State of 
Hawaii.

(Authority: 20 U.S.C. 2313(a)(1)(B))

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 402.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 402.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 402.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
points for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, as announced in a notice published in the 
Federal Register, the Secretary may assign the reserved 15 points among 
the criteria in Sec. 402.21.

(Authority: 20 U.S.C. 2313(c))



Sec. 402.21  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria to evaluate an 
application:
    (a) Program design. (35 points) The Secretary reviews each 
application to determine the extent to which--
    (1) The application presents a complete program design, including 
identifying the services to be provided, who will provide them, how they 
will be provided, and the expected outcomes for each activity;
    (2) The proposed program is designed to meet the identified 
vocational education needs of native Hawaiians;
    (3) The application proposes an effective plan for coordination with 
the office of the Hawaii State director for vocational education; and
    (4) If vocational training is proposed within the project--
    (i) Proposes measurable goals for student enrollment, completion, 
and placement.
    (ii) Proposes goals that take into consideration any related 
standards and measures developed for Job Opportunities and Basic Skills 
(JOBS) programs (42 U.S.C. 681 et seq.) and any Job Training Partnership 
Act (JTPA) (29 U.S.C. 1501 et seq.) programs in that geographic area;
    (iii) Proposes goals that take into consideration any standards set 
by the State board for vocational education for the occupation and 
geographic area; and
    (iv) Describes how successful program completion will be determined 
for each occupation for which training is to be provided, in terms of 
the academic and vocational competencies demonstrated by enrollees prior 
to successful completion and any academic or work credentials acquired 
upon completion.
    (b) Management plan. (25 points) The Secretary reviews each 
application to determine the quality of the management plan for the 
project, including--
    (1) The chain of command, how staff will be managed, how 
coordination among staff will be accomplished, and timelines for each 
activity;
    (2) A clear description of the interrelationship among goals, 
objectives, and activities;

[[Page 22]]

    (3) The way the applicant plans to use the resources and personnel 
from the grant to achieve each objective; and
    (4) How any contracts awarded by the grantee will be awarded, 
monitored, and evaluated.
    (c) Key personnel. (10 points)
    (1) The Secretary reviews each application to determine the quality 
of key personnel the applicant plans to use on the project, including--
    (i) The qualifications of the project director;
    (ii) The qualifications of each of the other key personnel to be 
used on the project;
    (iii) The time, including justification for the time, that each one 
of the key personnel, including the project director, will commit to the 
proposed project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that personnel for this project are selected for 
employment without regard to race, color, national origin, gender, age, 
or disabling condition.
    (2) To determine personnel qualifications, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in fields particularly related to the objectives of the 
project; and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (d) Evaluation plan. (10 points)
    (1) The Secretary reviews each application to determine the quality 
of the project's plan for an independent evaluation of the project, 
including, if applicable, the extent to which the plan includes 
activities during the formative stages of the project to help guide and 
improve the project, as well as a final evaluation that includes summary 
data and recommendations.
    (2) The Secretary reviews each application to determine whether, for 
any training programs proposed--
    (i) The plan identifies, at a minimum, types of data to be collected 
and reported with respect to the academic and vocational competencies 
demonstrated by participants and the number and kinds of academic and 
work credentials acquired by completers; and
    (ii) The plan identifies, at a minimum, types of data to be 
collected and reported with respect to enrollment, completion, and 
placement of participants by sex and socio-economic status for each 
occupation for which training is provided.
    (e) Budget and cost-effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is detailed and tied to the proposed activities;
    (2) The budget narrative is explanatory and justifies expenses;
    (3) The budget is adequate to support the project; and
    (4) Costs are reasonable in relation to the objectives of the 
project.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2313(c))



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 402.30  What are the evaluation requirements?

    (a) Each grantee shall annually provide and budget for an external 
evaluation of its activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The annual evaluation must include--
    (1) The grantee's progress in achieving the objectives in its 
approved application, including any approved revisions of the 
application; and
    (2) If applicable, actions taken by the grantee to address 
significant barriers impeding progress when training is provided by the 
project, including--
    (i) Descriptions and analyses of the accuracy of records and the 
validity of measures used by the project to establish and report on the 
academic and vocational competencies demonstrated and the academic and 
work credentials acquired; and
    (ii) Descriptions and analyses of the accuracy of records and the 
validity of measures used by the project to establish and report on 
participant enrollment, completion, and placement by sex and socio-
economic status for each

[[Page 23]]

occupation for which training has been provided.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2313(c))



PART 403--STATE VOCATIONAL AND APPLIED TECHNOLOGY EDUCATION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
403.1  What is the State Vocational and Applied Technology Education 
          Program?
403.2  Who is eligible for an award?
403.3  What regulations apply?
403.4  What definitions apply?

      Subpart B--What Are the State's Organizational and Planning 
                            Responsibilities?

403.10  What is the State board?
403.11  What are the principal responsibilities of the State board?
403.12  What are the additional responsibilities of the State board?
403.13  What are the personnel requirements regarding the elimination of 
          sex discrimination and sex stereotyping?
403.14  What are the personnel requirements regarding coordination with 
          services for individuals with disabilities?
403.15  What are the personnel requirements regarding coordination with 
          services under chapter 1 of title I of the Elementary and 
          Secondary Education Act?
403.16  What are the personnel requirements regarding coordination with 
          programs for individuals of limited English proficiency?
403.17  What are the State's responsibilities regarding a State council 
          on vocational education?
403.18  What are the membership requirements of a State council on 
          vocational education?
403.19  What are the responsibilities of a State council on vocational 
          education?

             Subpart C--How Does a State Apply for a Grant?

403.30  What documents must a State submit to receive a grant?
403.31  How is the State plan developed?
403.32  What must the State plan contain?
403.33  What procedures does a State use to submit its State plan?
403.34  When are amendments to the State plan required?

       Subpart D--How Does the Secretary Make a Grant to a State?

403.50  How does the Secretary make allotments?
403.51  How does the Secretary make reallotments?
403.52  When does the Secretary approve State plans and amendments?

Subpart E--What Kinds of Activities Does the Secretary Assist Under the 
                             Basic Programs?

                                 General

403.60  What are the basic programs?
403.61  What projects, services, and activities are permissible under 
          the basic programs?
403.62  What administrative provisions apply?
403.63  How does a State carry out the State Vocational and Applied 
          Technology Education Program?

             State Programs and State Leadership Activities

403.70  How must funds be used under the State Programs and State 
          Leadership Activities?
403.71  In what additional ways may funds be used under the State 
          Programs and State Leadership Activities?

 Single Parents, Displaced Homemakers, and Single Pregnant Women Program

403.80  Who is eligible for a subgrant or contract?
403.81  How must funds be used under the Single Parents, Displaced 
          Homemakers, and Single Pregnant Women Program?
403.82  In what settings may the Single Parents, Displaced Homemakers, 
          and Single Pregnant Women Program be offered?

                           Sex Equity Program

403.90  Who is eligible for a subgrant or contract?
403.91  How must funds be used under the Sex Equity Program?
403.92  Under what circumstances may the age limit under the Sex Equity 
          Program be waived?

                     Programs for Criminal Offenders

403.100  What are the requirements for designating a State corrections 
          educational agency to administer the Programs for Criminal 
          Offenders?
403.101  How must funds be used under the Programs for Criminal 
          Offenders?
403.102  What other requirements apply to the Program for Criminal 
          Offenders?

[[Page 24]]

    Secondary, Postsecondary, and Adult Vocational Education Programs

403.110  Who is eligible for a subgrant or contract?
403.111  How must funds be used under the Secondary School Vocational 
          Education Program and the Postsecondary and Adult Vocational 
          Education Programs?
403.112  How does a State allocate funds under the Secondary School 
          Vocational Education Program to local educational agencies?
403.113  How does a State allocate funds under the Secondary School 
          Vocational Education Program to area vocational education 
          schools and intermediate educational agencies?
403.114  How does a State determine the number of economically 
          disadvantaged students attending vocational education programs 
          under the Secondary School Vocational Education Program?
403.115  What appeal procedures must be established under the Secondary 
          School Vocational Education Program?
403.116  How does a State allocate funds under the Postsecondary and 
          Adult Vocational Education Programs?
403.117  What definitions apply to the Postsecondary and Adult 
          Vocational Education Programs?
403.118  Under what circumstances may the Secretary waive the 
          distribution requirements for the Postsecondary and Adult 
          Vocational Education Programs?
403.119  Under what circumstances may the State waive the distribution 
          requirements for Secondary School Vocational Education Program 
          or the Postsecondary and Adult Vocational Education Programs?
403.120  How does a State reallocate funds under the Secondary School 
          Vocational Education Program and the Postsecondary and Adult 
          Vocational Education Programs?

Subpart F--What Kinds of Activities Does the Secretary Assist Under the 
                            Special Programs?

                                 General

403.130  What are the Special Programs?
403.131  Who is eligible for an award under the Special Programs?

 Vocational Education Support Programs by Community-Based Organizations

403.140  What activities does the Secretary support under the State 
          Assistance for Vocational Education Support Programs by 
          Community-Based Organizations?
403.141  What are the application requirements for the State Assistance 
          for Vocational Education Support Programs by Community-Based 
          Organizations?

               Consumer and Homemaking Education Programs

403.150  What activities does the Secretary support under the Consumer 
          and Homemaking Education Programs?
403.151  How must funds be used under the Consumer and Homemaking 
          Education Programs?

          Comprehensive Career Guidance and Counseling Programs

403.160  What activities does the Secretary support under the 
          Comprehensive Career Guidance and Counseling Programs?
403.161  How must funds be used under the Comprehensive Career Guidance 
          and Counseling Programs?

        Business-Labor-Education Partnership for Training Program

403.170  What activities does the Secretary support under the Business-
          Labor-Education Partnership for Training Program?
403.171  Who is eligible to apply to a State board for an award?
403.172  What special considerations must the State board give in 
          approving projects, services, and activities?
403.173  What expenses are allowable?
403.174  What additional fiscal requirements apply to the Business-
          Labor-Education Partnership for Training Program?

      Subpart G--What Financial Conditions Must Be Met by a State?

403.180  How must a State reserve funds for the basic programs?
403.181  What are the cost-sharing requirements applicable to the basic 
          programs?
403.182  What is the maintenance of fiscal effort requirement?
403.183  Under what circumstances may the Secretary waive the 
          maintenance of effort requirement?
403.184  How does a State request a waiver of the maintenance of effort 
          requirement?
403.185  How does the Secretary compute maintenance of effort in the 
          event of a waiver?
403.186  What are the administrative cost requirements applicable to a 
          State?
403.187  How may a State provide technical assistance?
403.188  What is a State's responsibility for the cost of services and 
          activities for members of special populations?

       Subpart H--What Conditions Must Be Met by Local Recipients?

403.190  What are the requirements for receiving a subgrant or contract?
403.191  What are the requirements for program evaluation?

[[Page 25]]

403.192  What are the requirements for program improvement?
403.193  What are the information requirements regarding special 
          populations?
403.194  What are the comparability requirements?
403.195  What are the administrative cost requirements applicable to 
          local recipients?
403.196  What are the requirements regarding supplanting?
403.197  What are the requirements for the use of equipment?

Subpart I--What Are the Administrative Responsibilities of a State Under 
     the State Vocational and Applied Technology Education Program?

403.200  What are the State's responsibilities for ensuring compliance 
          with the comparability requirements?
403.201  What are the State's responsibilities for developing and 
          implementing a statewide system of core standards and measures 
          of performance?
403.202  What must each State's system of core standards and measures of 
          performance include?
403.203  What are the State's responsibilities for a State assessment?
403.204  What are the State's responsibilities for program evaluation 
          and improvement?
403.205  What are the State's responsibilities for members of special 
          populations?
403.206  What are the State's responsibilities regarding a State 
          occupational information coordinating committee?
403.207  What are the State's responsibilities to the National Center or 
          Centers for Research in Vocational Education?
403.208  What are the requirements regarding supplanting?

Appendix A to Part 403--Examples for 34 CFR 403.111(a) and 403.111(c)(3)
Appendix B to Part 403--Examples for 34 CFR 403.194--Comparability 
          Requirements

    Authority: 20 U.S.C. 2301 et seq., unless otherwise noted.

    Source: 57 FR 36735, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 403.1  What is the State Vocational and Applied Technology Education Program?

    (a) Under the State Vocational and Applied Technology Education 
Program, the Secretary makes grants to States, to assist them, local 
educational agencies, postsecondary educational institutions, and other 
agencies and institutions to administer and conduct vocational education 
programs that are authorized by the Act.
    (b) The State Vocational and Applied Technology Education Program 
consists of the programs under the basic programs for vocational 
education authorized by title II of the Act and listed in Sec. 403.60, 
and the special programs authorized by title III of the Act that are 
covered by the State plan and listed in Sec. 403.130.

(Authority: 20 U.S.C. 2301 et seq.)



Sec. 403.2  Who is eligible for an award?

    Except as otherwise provided in Sec. 403.131, a State is eligible 
for an award under the State Vocational and Applied Technology Education 
Program.

(Authority: 20 U.S.C. 2311 and 2311a)



Sec. 403.3  What regulations apply?

    The following regulations apply to the State Vocational and Applied 
Technology Education Program:
    (a) The regulations in 34 CFR part 400.
    (b) The regulations in this part 403.

(Authority: 20 U.S.C. 2301 et seq.)



Sec. 403.4  What definitions apply?

    The definitions in 34 CFR 400.4 apply to the State Vocational and 
Applied Technology Education Program.

(Authority: 20 U.S.C. 2471)



      Subpart B--What Are the State's Organizational and Planning 
                            Responsibilities?



Sec. 403.10  What is the State board?

    A State that desires to participate in the programs authorized by 
the Act shall, consistent with State law, designate or establish a State 
board of vocational education (State board). The State board must be the 
sole State agency responsible for the administration or the supervision 
of the State's vocational and applied technology education program.

(Authority: 20 U.S.C. 2321(a))

[[Page 26]]



Sec. 403.11  What are the principal responsibilities of the State board?

    The principal responsibilities of the State board must include--
    (a) The coordination of the development, submission, and 
implementation of the State plan;
    (b) The evaluation of the programs, services, and activities 
assisted under the Act, as required by Secs. 403.32 (a)(7) and (b)(9) 
and 403.201 through 403.204;
    (c) The development, in consultation with the State council on 
vocational education, of the State plan and its submission to the 
Secretary, as required by Secs. 403.30 through 403.34;
    (d) Consultation with the State council on vocational education and 
other appropriate agencies, groups, and individuals, including business, 
industry, and labor, involved in the planning, administration, 
evaluation, and coordination of programs funded under the Act;
    (e) Convening and meeting as a State board, consistent with 
applicable State law and procedure, when the State board determines it 
is necessary to meet to carry out its functions under the Act, but not 
less than four times annually; and
    (f) The adoption of those procedures the State board considers 
necessary to implement State level coordination with the State job 
training coordinating council in order to encourage cooperation between 
programs under the Act and programs under the Job Training Partnership 
Act (JTPA) (29 U.S.C. 1501 et seq.).

(Authority: 20 U.S.C. 2321(a))



Sec. 403.12  What are the additional responsibilities of the State board?

    (a) The State board shall make available to each private industry 
council established within the State under section 102 of the JTPA a 
current listing of all programs assisted under the Act.
    (b)(1) The State board, in consultation with the State council on 
vocational education established under Sec. 403.17, shall establish a 
limited number of (but at least two) technical committees to advise the 
State council and the State board on the development of model curricula 
to address State labor market needs. The technical committees shall 
develop an inventory of skills that may be used by the State board to 
define state-of-the-art model curricula. This inventory must identify 
the type and level of knowledge and skills needed for entry, retention, 
and advancement in occupational areas taught in the State.
    (2) The State board shall establish procedures that are consistent 
with the purposes of the Act for membership, operation, and duration of 
the technical committees. Their membership must be composed of 
representatives of--
    (i) Employers from any relevant industry or occupation for which the 
committee is established;
    (ii) Trade or professional organizations representing any relevant 
occupations; and
    (iii) Organized labor, if appropriate.
    (c) Except for the functions described in Sec. 403.11, the State 
board may delegate any of its other administrative, operational, or 
supervisory responsibilities, in whole or in part, to one or more 
appropriate State agencies.
    (d) The State board shall carry out the responsibilities described 
in Secs. 403.13 through 403.18 and 403.200 through 403.208.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2321(a)(1), (f), (g))



Sec. 403.13  What are the personnel requirements regarding the elimination of sex discrimination and sex stereotyping?

    (a) A State that desires to participate in the State Vocational and 
Applied Technology Education Program shall assign one individual, within 
the appropriate agency established or designated by the State board 
under Sec. 403.12(c), to administer vocational education programs within 
the State, to work full-time to assist the State board to fulfill the 
purposes of the Act by--
    (1) Administering the program of vocational education for single 
parents, displaced homemakers, and single pregnant women described in 
Sec. 403.81, and the sex equity program described in Sec. 403.91;
    (2) Gathering, analyzing, and disseminating data on the--

[[Page 27]]

    (i) Adequacy and effectiveness of vocational education programs in 
the State in meeting the education and employment needs of women, 
including the preparation of women for employment in technical 
occupations, new and emerging occupational fields, and occupations 
regarded as nontraditional for women; and
    (ii) Status of men and women students and employees in the programs 
described in paragraph (a)(2)(i) of this section;
    (3) Reviewing and commenting upon, and making recommendations 
concerning, the plans of local educational agencies, area vocational 
education schools, intermediate educational agencies, and postsecondary 
educational institutions to ensure that the needs of women and men for 
training in nontraditional jobs are met;
    (4)(i) Reviewing vocational educational programs, including career 
guidance and counseling, for sex stereotyping and sex bias, with 
particular attention to practices that tend to inhibit the entry of 
women in high technology occupations; and
    (ii) Submitting recommendations, to the State board for inclusion in 
the State plan, for programs and policies to overcome sex bias and sex 
stereotyping in the programs described in paragraph (a)(4)(i) of this 
section;
    (5) Submitting to the State board an assessment of the State's 
progress in meeting the purposes of the Act with regard to overcoming 
sex discrimination and sex stereotyping;
    (6) Reviewing proposed actions on grants, contracts, and the 
policies of the State board to ensure that the needs of women are 
addressed in the administration of the Act;
    (7) Developing recommendations for programs of information and 
outreach to women concerning vocational education and employment 
opportunities for women, including opportunities for careers as 
technicians and skilled workers in technical fields and new and emerging 
occupational fields;
    (8) Providing technical assistance and advice to local educational 
agencies, postsecondary institutions, and other interested parties in 
the State on expanding vocational opportunities for women;
    (9) Assisting administrators, instructors, and counselors in 
implementing programs and activities to increase access for women, 
including displaced homemakers and single heads of households, to 
vocational education and to increase male and female students' 
enrollment in nontraditional programs;
    (10) Developing an annual plan for the use of all funds available 
for programs described in Secs. 403.81 and 403.91;
    (11) Managing the distribution of funds pursuant to Secs. 403.81 and 
403.91;
    (12) Monitoring the use of funds distributed to recipients under 
Secs. 403.81 and 403.91;
    (13) Evaluating the effectiveness of programs and activities 
supported by funds under Secs. 403.81 and 403.91;
    (14) On a competitive basis, allocating and distributing to eligible 
recipients or community-based organizations subgrants or contracts to 
carry out the Programs for Single Parents, Displaced Homemakers, and 
Single Pregnant Women and the Sex Equity Program;
    (15) Ensuring that each subgrant or contract awarded under the 
Programs for Single Parents, Displaced Homemakers, and Single Pregnant 
Women and the Sex Equity Program is of sufficient size, scope, and 
quality to be effective;
    (16) Developing procedures for the collection from eligible 
recipients or community-based organizations that receive funds under 
Secs. 403.81 and 403.91 of data appropriate to the individuals served in 
programs under Secs. 403.81 and 403.91 in order to permit an evaluation 
of effectiveness of those programs as required by paragraph (a)(13) of 
this section; and
    (17) Cooperating in the elimination of sex bias and sex stereotyping 
in Consumer and Homemaking Education Programs.
    (b) A State shall, in accordance with Sec. 403.180(b)(4)(i), reserve 
at least $60,000 to carry out the provisions of paragraph (a) of this 
section, including the provision of necessary and reasonable staff 
support.
    (c) For the purposes of this section, the term ``State'' includes 
only the

[[Page 28]]

fifty States and the District of Columbia.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2312(a)(4)(A), 2321(b), 2335b, 2362(a)(3))



Sec. 403.14  What are the personnel requirements regarding coordination with services for individuals with disabilities?

    (a) A State desiring to participate in programs authorized by the 
Act shall designate or assign the head of the State office responsible 
for administering part B of the Individuals with Disabilities Education 
Act (IDEA) (20 U.S.C. 1400 et seq.) to review the implementation of the 
provisions of the Act as they relate to students with disabilities by 
reviewing all or a representative sample of applications of eligible 
recipients to ensure that--
    (1) Individuals with disabilities are receiving vocational 
educational services;
    (2) Applications of the eligible recipients provide assurances of 
compliance with the requirements of section 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 794) and the IDEA and regulations implementing 
those statutes, regarding equal access to programs; and
    (3) Eligible recipients have--
    (i) Identified the number of students with disabilities enrolled in 
the eligible recipients' vocational programs;
    (ii) Assessed the vocational needs of those students; and
    (iii) Developed an adequate plan to provide supplementary services 
sufficient to meet the needs of those students.
    (b) For the purposes of this section, the term ``State'' includes 
only the fifty States, the District of Columbia, and the Commonwealth of 
Puerto Rico.

(Authority: 20 U.S.C. 2321(c))



Sec. 403.15  What are the personnel requirements regarding coordination with services under chapter 1 of title I of the Elementary and Secondary Education Act?

    (a) A State desiring to participate in programs authorized by the 
Act shall designate or assign the head of the State office or other 
appropriate individual responsible for coordinating services under 
chapter 1 of title I of the Elementary and Secondary Education Act of 
1965, as amended (chapter 1) (20 U.S.C. 2701 et seq.) to review all or a 
representative sample of applications from eligible recipients to ensure 
that--
    (1) The number of economically disadvantaged students has been 
identified; and
    (2) The needs of economically disadvantaged students are being met 
as outlined in the applications of eligible recipients.
    (b) For the purposes of this section, the term ``State'' includes 
only the fifty States, the District of Columbia, and the Commonwealth of 
Puerto Rico.

(Authority: 20 U.S.C. 2321 (c) and (d))



Sec. 403.16  What are the personnel requirements regarding coordination with programs for individuals of limited English proficiency?

    (a) A State desiring to participate in programs authorized by the 
Act shall designate or assign the head of the State office or other 
appropriate individual responsible for administering programs for 
students of limited English proficiency to review all or a 
representative sample of applications from eligible recipients to ensure 
that--
    (1) The number of students of limited English proficiency has been 
identified; and
    (2) The needs of students of limited English proficiency for 
participation in vocational education programs are being met as outlined 
in the applications of eligible recipients.
    (b) For the purposes of this section, the term ``State'' includes 
only the fifty States, the District of Columbia, and the Commonwealth of 
Puerto Rico.

(Authority: 20 U.S.C. 2321 (c) and (e))



Sec. 403.17  What are the State's responsibilities regarding a State council on vocational education?

    (a) A State desiring to participate in the State Vocational and 
Applied Technology Education Program shall establish a State council on 
vocational education. The State council must be appointed--
    (1) By the Governor; or

[[Page 29]]

    (2) By the State board of education, in a State in which the members 
of the State board of education are elected, including election by the 
State legislature.
    (b) Each State shall certify to the Secretary the establishment and 
membership of the State council by June 1 prior to the beginning of each 
State plan period described in Sec. 403.30.
    (c) Each State shall recertify to the Secretary any new member of 
the State council not more than 60 days after a position on the State 
council is vacated.

(Authority: 20 U.S.C. 2322 (a), (b))



Sec. 403.18  What are the membership requirements of a State council on vocational education?

    (a) Each State council must be composed of 13 individuals, and must 
be broadly representative of citizens and groups within the State having 
an interest in vocational education.
    (b) Each State council must consist of--
    (1) Seven individuals who are representative of the private sector 
in the State and who must constitute a majority of the membership--
    (i) Five of whom must be representatives of business, industry, 
trade organizations, and agriculture including--
    (A) One member who is representative of small business concerns; and
    (B) One member who is a private sector member of the State job 
training coordinating council established pursuant to section 122 of the 
JTPA; and
    (ii) Two of whom must be representatives of labor organizations; and
    (2) Six individuals, one of whom must be representative of special 
education, who are representative of--
    (i) Secondary and postsecondary vocational institutions (equitably 
distributed among those institutions);
    (ii) Career guidance and counseling organizations within the State; 
and
    (iii) Individuals who have special knowledge and qualifications with 
respect to the special educational and career development needs of 
special populations, including women, disadvantaged individuals, 
individuals with disabilities, individuals with limited English 
proficiency, and minorities.
    (c) The State council may include members of vocational student 
organizations and school boards but may not include employees of the 
State board of vocational education.
    (d) In selecting individuals to serve on the State council on 
vocational education, the State shall give due consideration to the 
appointment of individuals who serve on a private industry council under 
the JTPA, or on State councils established under other related Federal 
programs.

(Authority: 20 U.S.C. 2322(a))



Sec. 403.19  What are the responsibilities of a State council on vocational education?

    (a)(1) The State council on vocational education shall meet as soon 
as practical after the Secretary accepts its certification and shall 
select from among its membership a chairperson who must be a 
representative of the private sector.
    (2) The State council on vocational education shall adopt rules that 
govern the time, place, and manner of meeting, as well as council 
operating procedures and staffing. The rules must provide for at least 
one public meeting each year at which the public is given an opportunity 
to express views concerning the vocational education program of the 
State.
    (b) Each State council on vocational education, during each State 
plan period described in Sec. 403.30 unless otherwise indicated in the 
regulations in this section, shall--
    (1) Meet with the State board or its representatives to advise on 
the development of the subsequent State plan, or any amendments to the 
current State plan, while the State plan or amendment is being 
developed;
    (2) Make recommendations to the State board and make reports to the 
Governor, the business community, and general public of the State, 
concerning--
    (i) The State plan;
    (ii) Policies the State should pursue to strengthen vocational 
education, with particular attention to programs for individuals with 
disabilities; and
    (iii) Initiatives and methods the private sector could undertake to 
assist in

[[Page 30]]

the modernization of vocational education programs;
    (3) Analyze and report on the distribution of all vocational 
education funds in the State and on the availability of vocational 
education activities and services within the State;
    (4) Consult with the State board on the establishment of evaluation 
criteria for vocational education programs within the State;
    (5) Submit recommendations to the State board on the conduct of 
vocational education programs conducted in the State that emphasize the 
use of business concerns and labor organizations;
    (6) Assess and report on the distribution of financial assistance 
under the Act, particularly the distribution of financial assistance 
between secondary vocational education programs and postsecondary 
vocational education programs;
    (7) Recommend procedures to the State board to ensure and enhance 
the participation of the public in the provision of vocational education 
at the local level within the State, particularly the participation of 
local employers and local labor organizations;
    (8) Report to the State board on the extent to which individuals who 
are members of special populations are provided with equal access to 
quality vocational education programs;
    (9) Analyze and review corrections education programs; and
    (10)(i) At least once every two years--
    (A) Evaluate the extent to which vocational education, employment, 
and training programs in the State represent a consistent, integrated, 
and coordinated approach to meeting the economic needs of the State;
    (B) Evaluate the vocational education program delivery system 
assisted under the Act, and the job training program delivery system 
assisted under the JTPA, in terms of the delivery systems' adequacy and 
effectiveness in achieving the purposes of both Acts; and
    (C) Make recommendations to the State board on the adequacy and 
effectiveness of the coordination that takes place between vocational 
education and the JTPA;
    (ii) Comment on the adequacy or inadequacy of State action in 
implementing the State plan;
    (iii) Make recommendations to the State board on ways to create 
greater incentives for joint planning and collaboration between the 
vocational education system and the job training system at the State and 
local levels; and
    (iv) Advise, in writing, the Governor, the State board, the State 
job training coordinating council, the Secretary, and the Secretary of 
Labor of these findings and recommendations.
    (c)(1) Each State council on vocational education may--
    (i) Obtain the services of the professional, technical, and clerical 
personnel necessary to enable it to carry out its functions under the 
Act;
    (ii) Contract for the services necessary to enable it to carry out 
its evaluation functions; and
    (iii) Submit a statement to the Secretary reviewing and commenting 
upon the State plan.
    (2)(i) The expenditure of funds awarded to a State council on 
vocational education by the Secretary must be solely determined by that 
State council and may not be diverted or reprogrammed for any other 
purpose by any State board, agency, or individual.
    (ii) Each State council on vocational education shall designate an 
appropriate State agency, or other public agency, eligible to receive 
funds under the Act, to act as its fiscal agent for purposes of 
disbursement, accounting, and auditing.
    (3) Each State council on vocational education shall carry out its 
functions, whether directly or by way of contract for services, 
independent of programmatic and administrative control by other State 
boards, agencies, and individuals.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2322(c)-(e) and (f)(2); 2323(c))

[[Page 31]]



             Subpart C--How Does A State Apply for a Grant?



Sec. 403.30  What documents must a State submit to receive a grant?

    (a) A State that desires to participate in the State Vocational and 
Applied Technology Education Program shall submit to the Secretary a 
State plan for a three-year period, in the case of the initial plan, and 
a two-year period thereafter, together with annual revisions the State 
board determines to be necessary.
    (b) Each State shall carry out its programs under the State 
Vocational and Applied Technology Education Program on the basis of 
program years that coincide with program years under section 104(a) of 
the JTPA.
    (c) The provisions of 34 CFR 76.103 do not apply to the State 
Vocational and Applied Technology Education Program.

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2323)



Sec. 403.31  How is the State plan developed?

    (a) In formulating the State plan, and any amendments to the State 
plan, the State board shall meet with, and utilize, the State council on 
vocational education established under Sec. 403.17.
    (b) After providing appropriate and sufficient notice to the public, 
the State board shall conduct at least two public hearings in the State 
for the purpose of affording all segments of the public and interested 
organizations and groups an opportunity to present their views and make 
recommendations regarding the State plan.
    (c) A State shall provide public notice of hearings on the State 
plan at least 30 days prior to the hearings.
    (d) In developing a State plan, the State shall conduct an 
assessment according to Sec. 403.203.
    (e) The State board shall develop the portion of each State plan 
relating to the amount and uses of any funds proposed to be reserved for 
adult education, postsecondary education, tech-prep education, and 
secondary education after consultation with the State agency responsible 
for supervision of community colleges, technical institutes, or other 
two-year postsecondary institutions primarily engaged in providing 
postsecondary vocational education and the State agency responsible for 
secondary education. If a State agency finds that a portion of the final 
State plan is objectionable, that agency shall file its objections with 
the State board.
    (f) The State board shall, in developing the State plan, take into 
consideration the relative training and retraining needs of secondary, 
adult, and postsecondary students.

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2323(a)(2) and 2324(a))



Sec. 403.32  What must the State plan contain?

    (a) Assurances. To participate in the programs authorized under the 
State Vocational and Applied Technology Program, the State shall, in its 
State plan, provide assurances that --
    (1) The State board will comply with the applicable requirements of 
titles I, II, III, and V of the Act and regulations implementing those 
requirements (including the maintenance of fiscal effort requirement in 
Sec. 403.182);
    (2) Eligible recipients will comply with the requirements of titles 
I, II, III, and V of the Act and the regulations implementing those 
requirements;
    (3) The State board will develop measurable goals and accountability 
measures for meeting the needs of individuals who are members of special 
populations;
    (4) The State board will conduct adequate monitoring of projects, 
services, and activities conducted by eligible recipients to ensure that 
the eligible recipients are meeting the goals described in paragraph 
(a)(3) of this section;
    (5) To the extent consistent with the number and location of 
individuals who are members of special populations enrolled in private 
secondary schools, the State will provide for the participation of those 
individuals in the vocational education projects, services, and 
activities assisted under Secs. 403.112 and 403.113;

[[Page 32]]


    Cross-Reference: See 34 CFR 76.650-76.662, Participation of Students 
Enrolled in Private Schools.

    (6) The State will comply with the provisions of Sec. 403.180, and 
will distribute all of the funds reserved for the Secondary School 
Vocational Education Program and the Postsecondary and Adult Vocational 
Education Programs to eligible recipients pursuant to Secs. 403.112, 
403.113, and 403.116;
    (7) The State will develop and implement a system of standards for 
performance and measures of performance for vocational education 
programs at the State level that meets the requirements of Secs. 403.201 
and 403.202;
    (8) In the use of funds available for programs for single parents, 
displaced homemakers, or single pregnant women under Sec. 403.81, the 
State will--
    (i) Emphasize assisting individuals with the greatest financial 
need; and
    (ii) Give special consideration to displaced homemakers who, because 
of divorce, separation, or the death or disability of a spouse, must 
prepare for paid employment;
    (9) The State will furnish relevant training and vocational 
education activities to men and women who desire to enter occupations 
that are not traditionally associated with their sex;
    (10) The State will fund programs of personnel development and 
curriculum development to further the goals identified in the State 
plan;
    (11) The State has thoroughly assessed the vocational education 
needs of identifiable segments of the population in the State that have 
the highest rates of unemployment, and those needs are reflected in and 
addressed by the State plan;
    (12) The State board will cooperate with the State council in 
carrying out the Board's duties under the State plan;
    (13) None of the funds expended under the Act will be used to 
acquire equipment (including computer software) in any instance in which 
that acquisition results in a direct financial benefit to any 
organization representing the interests of the purchasing entity or its 
employees or any affiliate of such an organization;
    (14) State and local funds will be used in the schools of each local 
educational agency that are receiving funds under the Act to provide 
services that, taken as a whole, are at least comparable to services 
being provided in schools in those agencies that are not receiving funds 
under the Act;

    Cross-Reference: See Secs. 403.194 and 403.200.

    (15)(i) The State board will provide leadership (qualified by 
experience and knowledge in guidance and counseling), supervision, and 
resources for comprehensive career guidance, vocational counseling, and 
placement programs; and
    (ii) As a component of the assurances described in paragraph 
(a)(15)(i) of this section, the State board will annually assess and 
include in the State plan a report on the degree to which expenditures 
aggregated within the State for career guidance and vocational 
counseling from allotments under title II of the Act are not less than 
expenditures for guidance and counseling within the State under the Carl 
D. Perkins Vocational Education Act in Fiscal or Program Year 1988;

(Authority: H.R. Rep. No. 660, 101st Cong., 1st Sess. 111 (1990))

    (16) The State will provide for such fiscal control and fund 
accounting procedures as may be necessary to ensure the proper 
disbursement of, and accounting for, Federal funds paid to the State, 
including those funds paid by the State to eligible recipients under the 
Act;
    (17) Funds made available under title II of the Act will be used to 
supplement, and to the extent practicable increase, the amount of State 
and local funds that would in the absence of those Federal funds be made 
available for the uses specified in the State plan and the local 
application, and in no case supplant those State or local funds;

    Cross-Reference: See Secs. 403.196 and 403.208.

    (18) Individuals who are members of special populations will be 
provided with equal access to recruitment, enrollment, and placement 
activities;
    (19) Individuals who are members of special populations will be 
provided with equal access to the full range of

[[Page 33]]

vocational education programs available to individuals who are not 
members of special populations, including occupationally specific 
courses of study, cooperative education, apprenticeship programs, and, 
to the extent practicable, comprehensive career guidance and counseling 
services, and will not be discriminated against on the basis of their 
status as members of special populations;
    (20) Vocational education programs and activities for individuals 
with disabilities will be provided in the least restrictive environment 
in accordance with section 612(5)(B) of the IDEA and will, if 
appropriate, be included as a component of the individualized education 
program developed under section 614(a)(5) of that Act;
    (21) Students with disabilities who have individualized education 
programs developed under section 614(a)(5) of the IDEA, with respect to 
vocational education programs, will be afforded the rights and 
protections guaranteed those students under sections 612, 614, and 615 
of that Act;
    (22) Students with disabilities who do not have individualized 
education programs developed under section 614(a)(5) of the IDEA or who 
are not eligible to have such a program, with respect to vocational 
education programs, will be afforded the rights and protections 
guaranteed those students under section 504 of the Rehabilitation Act of 
1973 (29 U.S.C. 794) and, for the purpose of the State Vocational and 
Applied Technology Education Programs, those rights and protections will 
include making vocational education programs readily accessible to 
eligible individuals with disabilities through the provision of services 
described Sec. 403.190(b)(3);
    (23) Vocational education planning for individuals with disabilities 
will be coordinated among appropriate representatives of vocational 
education, special education, and State vocational rehabilitation 
agencies;
    (24) The provision of vocational education to each student with 
disabilities will be monitored to determine if that education is 
consistent with the individualized education program developed for the 
student under section 614(a)(5) of the IDEA, in any case in which an 
individualized education program exists;
    (25) The provision of vocational education will be monitored to 
ensure that disadvantaged students and students of limited English 
proficiency have access to that education in the most integrated setting 
possible;
    (26)(i) The requirements of the Act relating to individuals who are 
members of special populations--
    (A) Will be carried out under the general supervision of individuals 
in the appropriate State educational agency or State board who are 
responsible for students who are members of special populations; and
    (B) Will meet education standards of the State educational agency or 
State board;
    (ii) With respect to students with disabilities, the supervision 
carried out under paragraph (a)(26)(i) of this section will be carried 
out consistent with, and in conjunction with, supervision by the State 
educational agency or State board carried out under section 612(6) of 
the IDEA;
    (27) Funds received under the Business-Labor-Education Partnership 
for Training Program will be awarded on a competitive basis solely for 
vocational education programs, including programs that--
    (i) Provide apprenticeships and internships in industry;
    (ii) Provide new equipment;
    (iii) Provide teacher internships or teacher training;
    (iv) Bring representatives of business and organized labor into the 
classroom;
    (v) Increase the access to, and quality of, programs for individuals 
who are members of special populations;
    (vi) Strengthen coordination between vocational education programs 
and the labor and skill needs of business and industry;
    (vii) Address the economic development needs of the area served by 
the partnership;
    (viii) Provide training and career counseling that will enable 
workers to retain their jobs;
    (ix) Provide training and career counseling that will enable workers 
to upgrade their jobs; and

[[Page 34]]

    (x) Address the needs of new and emerging industries, particularly 
industries in high-technology fields;
    (28) In administering the Business-Labor-Education Partnership for 
Training Program, the State board will--
    (i) Give preference to partnerships that coordinate with local 
chambers of commerce (or the equivalent), local labor organizations, or 
local economic development plans;
    (ii) Give priority to programs offered by partnerships that provide 
job training in areas or skills where there are significant labor 
shortages; and
    (iii) Ensure an equitable distribution of assistance under this part 
between urban and rural areas;
    (29) Except as provided in paragraph (a)(30) of this section, not 
less than 50 percent of the aggregate cost of programs and projects 
assisted under the Business-Labor-Education Partnership for Training 
Program will be provided from non-Federal sources, and not less than 50 
percent of the non-Federal share will be provided by businesses or labor 
organizations participating in the partnerships; and
    (30) In the event that a partnership includes a small business or 
labor organization, 40 percent of the aggregate cost of the programs and 
projects assisted under the Business-Labor-Education Partnership for 
Training Program will be provided from non-Federal sources and not less 
than 50 percent of the non-Federal share will be provided by 
participating business or labor organizations.
    (b) Descriptions. To participate in programs authorized under the 
State Vocational and Applied Technology Education Program, the State 
must include the following descriptions in the State plan:
    (1) The procedures and criteria for, and the results of, each of the 
assessments required by Sec. 403.203, including the needs identified by 
the assessments.
    (2) The plans for the use of the funds and how those planned uses 
reflect the needs described in paragraph (b)(1) of this section.
    (3) The manner in which the State will comply with the requirements 
in the Act regarding access and services for individuals who are members 
of special populations and a description of the responsiveness of 
programs to the special needs of those students.
    (4) The estimated distribution, for each instructional level--
secondary, postsecondary, and adult--of funds to corrections educational 
agencies as prescribed by Sec. 403.100, of funds to local educational 
agencies, area vocational education schools, or intermediate educational 
agencies as prescribed by Secs. 403.112 and 403.113, and of funds to 
eligible institutions or consortia of eligible institutions as 
prescribed by Sec. 403.116.
    (5) The criteria the State board will use --
    (i) In approving applications of eligible recipients; and
    (ii) For spending the amounts reserved for the State under 
Sec. 403.180(b).
    (6) How funds expended for occupationally specific training will be 
used for occupations in which job openings are projected or available, 
based on a labor market analysis that is not limited to the area in 
which the school is located.

(Authority: H.R. Rep. No. 660, 101st Cong., 1st Sess. 109 (1990))

    (7) In each State plan submitted after Fiscal Year 1991, the 
progress the State has made in achieving the goals described in previous 
State plans.
    (8) The methods of administration necessary for the prompt and 
efficient administration of programs under the Act.
    (9) How the State will implement program evaluations with eligible 
recipients as prescribed in Secs. 403.191, 403.192, 403.201(a) (3) and 
(4), and 403.204.
    (10) The methods proposed for the joint planning and coordination of 
programs carried out under the Act with programs conducted under the 
JTPA, the Adult Education Act (20 U.S.C. 1201 et seq.), chapter 1, the 
IDEA, and the Rehabilitation Act of 1973, and with apprenticeship 
programs.
    (11) Procedures by which an area vocational educational school, 
intermediate educational agency, or local educational agency may appeal 
decisions adverse to its interests with respect to programs assisted 
under the Act.

[[Page 35]]


    Cross-Reference: See 34 CFR 76.401.

    (12) How the State will comply with the provisions of 
Secs. 403.32(a)(18)-(26), 403.115, and 403.205.
    (13) The State's rationale for distribution of funds under the 
Secondary School Vocational Education Program and the Postsecondary and 
Adult Vocational Education Programs.
    (14) The State corrections educational agency or agencies designated 
to administer vocational education programs assisted under the Act, and 
the plan for the use of funds provided under Sec. 403.180(b)(5).
    (15) Any delegation of functions under Sec. 403.12(c).
    (16) The manner in which the State board will comply with the 
applicable requirements of titles I, II, III, and V of the Act 
(including the maintenance of fiscal effort requirements in 
Sec. 403.182).
    (17) A summary of recommendations made at public hearings on the 
State plan and the State board's response.
    (18) How the State will determine which LEAs are located in a rural 
sparsely-populated area for purposes of Sec. 403.112(d)(3).
    (19) Which indices of economic status the State will use to 
determine the number of economically disadvantaged students attending 
vocational educational programs for the purposes of Sec. 403.114.
    (20) What method the State will use to distribute minimal amounts 
for the purpose of Sec. 403.119(a).
    (21) As appropriate, what method the State will use to distribute 
funds under Sec. 403.118.
    (c) Consultations. A State desiring to participate in the State 
Vocational and Applied Technology Education Program shall include in its 
State plan--
    (1) A statement, if any, from the State advisory council on 
vocational education reviewing and commenting on the State plan;
    (2) As necessary, the State's reasons for not accepting the 
recommendations of the State Committee of Practitioners for modifying 
standards and measures to be used in the statewide system of core 
standards and measures of performance; and
    (3) As necessary, the State's response to any objections raised by 
State agencies consulted during the development of the State plan as 
required by Sec. 403.31(e).

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2321(a)(2); 2322(e); 2323(a)(2)(B), (b); 2324(a); 
2325(a), (d)(3); 2328(a); 2336(a)(1); 2341(b)(2), (d)(3); 2341b(a); 
2392(b); 2463; and 2468e(a)(1))

[57 FR 36735, Aug. 14, 1992, as amended at 59 FR 38512, July 28, 1994]



Sec. 403.33  What procedures does a State use to submit its State plan?

    (a)(1) The State board shall submit its State plan for review and 
comment to the State job training coordinating council under section 122 
of the JTPA not less than sixty days before the State plan is submitted 
to the Secretary.
    (2) If the matters raised by the comments of the State job training 
coordinating council are not addressed in the State plan, the State 
board shall submit those comments to the Secretary with the State plan.
    (b) The State board shall submit its State plan for review and 
comment to the State council on vocational education not less than sixty 
days before the State plan is submitted to the Secretary.

    Cross-Reference: See Sec. 403.19(c)(1)(iii).

    (c) Each State plan must be submitted to the Secretary by May 1 
preceding the beginning of the first fiscal year for which the plan is 
to be in effect.
    (d) The State plan is considered to be the general application 
required by section 435 of the General Education Provisions Act (20 
U.S.C. 1232d).

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2322(d)(1) and (2)(A), (e); 2323(a)(2)(A); and 
2324(b))



Sec. 403.34  When are amendments to the State plan required?

    The State board, in consultation with the State council, shall 
submit amendments to the State plan to the Secretary when required by 34 
CFR 76.140 or when changes in program conditions, labor market 
conditions, funding, or other factors require substantial amendment of 
an approved State

[[Page 36]]

plan. All amendments must be submitted for review by the State job 
training coordinating council and the State council on vocational 
education before submittal to the Secretary.

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2323(c))



       Subpart D--How Does the Secretary Make a Grant to a State?



Sec. 403.50  How does the Secretary make allotments?

    (a)(1) From funds made available under section 3(c) of the Act for 
the basic programs listed in Sec. 403.60, and under section 3(d) of the 
Act for the special programs listed in Sec. 403.130, the Secretary 
allots funds each fiscal year according to the provisions of section 101 
of the Act to the 50 States, the Commonwealth of Puerto Rico, the 
District of Columbia, and the Virgin Islands.
    (2) Upon approval of its State plan and any annual amendments, the 
Secretary makes one or more grant awards from those allotments to a 
State.
    (b)(1) From funds made available under sections 3(b)(2) of the Act, 
the Secretary allots funds each fiscal year for State councils on 
vocational education according to the provisions of section 112(f)(1) of 
the Act.
    (2) The Secretary makes an award to a State council upon the State 
council's submission of an annual budget covering the proposed 
expenditures of the State council for the following program year, and 
when the Secretary has determined that the State plan is in 
substantially approvable form.
    (c) From funds made available under section 3(b)(1)(B) of the Act 
for the territories, the Secretary allots funds each fiscal year 
according to the provisions of section 101A(a) of the Act.
    (d)(1) The Secretary awards funds remaining after allotments are 
made under paragraph (c) of this section to the Center for the 
Advancement of Pacific Education (CAPE) or its successor entity, such as 
the Pacific Regional Educational Laboratory.
    (2) CAPE or its successor entity shall make grants for vocational 
education and training in Guam, American Samoa, Palau, the Commonwealth 
of the Northern Marianas, the Federated States of Micronesia, and the 
Republic of the Marshall Islands for the purpose of providing direct 
educational services, including--
    (i) Teacher and counselor training and retraining;
    (ii) Curriculum development; and
    (iii) Improving vocational education and training programs in 
secondary schools and institutions of higher education (as defined in 
Sec. 403.117(b)), or improving cooperative programs involving both 
secondary schools and institutions of higher education.
    (3) CAPE may not use more than five percent of the funds received 
under paragraph (d)(1) of this section for administrative costs.

(Authority: 20 U.S.C. 2311; 2311a; and 2461)



Sec. 403.51  How does the Secretary make reallotments?

    (a)(1) If the Secretary determines that any amount of a State's 
allotment under Sec. 403.50(a) will not be required for any fiscal year 
for carrying out the program for which the allotment was made, the 
Secretary reallots those funds to one or more States that demonstrate a 
current need for additional funds and the ability to use them promptly 
and effectively upon reallotment.
    (2) The Secretary announces in the Federal Register the dates on 
which funds will be reallotted.
    (b)(1) No funds reallotted under paragraph (a) of this section may 
be used for any purpose other than the purposes for which they were 
appropriated.
    (2) Any amount reallotted to a State under paragraph (a) of this 
section remains available for obligation during the succeeding fiscal 
year and is deemed to be part of the State's allotment for the fiscal 
year in which the reallotted funds are obligated.

(Authority: 20 U.S.C. 2311(b))



Sec. 403.52  When does the Secretary approve State plans and amendments?

    (a)(1) The Secretary approves a State plan, or an amendment to a 
State plan,

[[Page 37]]

within sixty days of its receipt unless the plan or amendment is--
    (i) Inconsistent with the requirements and purposes of the Act; or
    (ii) Not of sufficient quality to meet the objectives of the Act, 
including the objective of developing and implementing program 
evaluations and improvements.
    (2) Before the Secretary finally disapproves a State plan, or an 
amendment to a State plan, the Secretary gives reasonable notice and an 
opportunity for a hearing to the State board.
    (b)(1) In reviewing a State plan, or an amendment to a State plan, 
the Secretary considers available comments from--
    (i) The State council on vocational education;
    (ii) The State agency responsible for supervision of community 
colleges, technical institutes, or other two-year postsecondary 
institutions primarily engaged in providing postsecondary vocational 
education;
    (iii) The State agency responsible for secondary education;
    (iv) The State Committee of Practitioners established under 34 CFR 
400.6; and
    (v) The State job training coordinating council.
    (2) In reviewing an amendment to a State plan, the Secretary 
considers available comments from the State job training coordinating 
council and the State council on vocational education.

(Authority: 20 U.S.C. 2323(c), 2324, and 2325(d)(3))



Subpart E--What Kinds of Activities Does the Secretary Assist Under the 
                             Basic Programs?

                                 General



Sec. 403.60  What are the basic programs?

    The following basic programs are authorized by title II of the Act:
    (a) State Programs and State Leadership Activities.
    (b) Programs for Single Parents, Displaced Homemakers, and Single 
Pregnant Women.
    (c) Sex Equity Programs.
    (d) Programs for Criminal Offenders.
    (e) Secondary School Vocational Education Programs.
    (f) Postsecondary and Adult Vocational Education Programs.

(Authority: 20 U.S.C. 2302)



Sec. 403.61  What projects, services, and activities are permissible under the basic programs?

    Projects, services, and activities described in Secs. 403.70, 
403.71, 403.81, 403.91, 403.101, and 403.111 may include--
    (a) Work-site programs such as cooperative vocational education, 
programs with community-based organizations, work-study, and 
apprenticeship programs;
    (b) Placement services and activities for students who have 
successfully completed vocational education programs; and
    (c) Programs that involve students in addressing the needs of the 
community in the production of goods or services that contribute to the 
community's welfare or that involve the students with other community 
development planning, institutions, and enterprises.

(Authority: 20 U.S.C. 2468e(c))



Sec. 403.62  What administrative provisions apply?

    (a) Any project assisted with funds made available for the basic 
programs must be of sufficient size, scope, and quality to give 
reasonable promise of meeting the vocational education needs of the 
students involved in the project.
    (b) Each State board receiving financial assistance for the basic 
programs may consider granting academic credit for vocational education 
courses that integrate core academic competencies.

(Authority: 20 U.S.C. 2468e (b) and (d))



Sec. 403.63  How does a State carry out the State Vocational and Applied Technology Education Program?

    (a) Unless otherwise indicated in the regulations in this part, a 
State board shall carry out projects, services, and activities under the 
State Vocational and Applied Technology Education Program--
    (1) Directly;
    (2) Through a school operated by the State board;

[[Page 38]]

    (3) Through awards to State agencies or institutions, such as 
vocational schools or correctional institutions; or
    (4) Through awards to eligible recipients.
    (b) For the purpose of paragraph (a) of this section, a State board 
acts directly if it--
    (1) Carries out projects, services, or activities using its own 
staff (except at a school operated by the State board); or
    (2) Contracts for statewide projects, services, or activities such 
as research, curriculum development, and teacher training.
    (c) The regulations in this part also authorize a State to carry out 
certain projects, services, and activities under the State Vocational 
and Applied Technology Education Program by making an award to an entity 
other than an eligible recipient, such as a community-based 
organization, employers, private vocational training institutions, 
private postsecondary education institutions, labor organizations, and 
joint labor management apprenticeship programs.
    (d) If projects, services, and activities are carried out by a 
school operated by the State board under paragraph (a)(2) of this 
section or are carried out by a State agency or institution under 
paragraph (a)(3) of this section, the requirements dealing with local 
applications (Secs. 403.190 and 403.32(b)(5)(i)) apply in the same 
manner as to other eligible recipients.

(Authority: 20 U.S.C. 2323(b)(5), (6); 2335(a)(3); 2335b; 2342(c)(2)(N); 
and 2343)

             State Programs and State Leadership Activities



Sec. 403.70  How must funds be used under the State Programs and State Leadership Activities?

    A State shall use funds reserved under section 102(a)(3) of the Act 
for the State Programs and State Leadership Activities in accordance 
with Sec. 403.180(b)(3) to conduct programs, projects, services, and 
activities that include--
    (a) Professional development activities--
    (1) For vocational teachers and academic teachers working with 
vocational education students, including corrections educators and 
counselors and educators and counselors in community-based 
organizations; and
    (2) That include inservice and preservice training of teachers in 
programs and techniques, including integration of vocational and 
academic curricula, with particular emphasis on training of minority 
teachers;
    (b) Development, dissemination, and field testing of curricula, 
especially curricula that--
    (1) Integrate vocational and academic methodologies; and
    (2) Provide a coherent sequence of courses through which academic 
and occupational skills may be measured; and
    (c) Assessment of programs conducted with assistance under the Act 
including the development of--
    (1) Performance standards and measures for those programs; and
    (2) Program improvement and accountability with respect to those 
programs.

(Authority: 20 U.S.C. 2331(b))



Sec. 403.71  In what additional ways may funds be used under the State Programs and State Leadership Activities?

    In addition to the required activities in Sec. 403.70, a State may 
use funds reserved under section 102(a)(3) of the Act for the State 
Programs and State Leadership Activities in accordance with 
Sec. 403.180(b)(3) for programs, projects, services, and activities that 
include--
    (a) The promotion of partnerships among business, education 
(including educational agencies), industry, labor, community-based 
organizations, or governmental agencies;
    (b) The support for tech-prep education as described in 34 CFR part 
406;
    (c)(1) The support of vocational student organizations that are an 
integral part of the vocational education instructional program, 
especially with respect to efforts to increase minority participation in 
those organizations.
    (2) The support of vocational student organizations may include, but 
is not limited to, expenditures for--

[[Page 39]]

    (i) The positions of State executive secretaries and State advisors 
for vocational student organizations;
    (ii) Leadership development workshops;
    (iii) The development of curriculum for vocational student 
organizations; and
    (iv) Field or laboratory work incidental to vocational training so 
long as the activity is supervised by vocational education personnel who 
are qualified in the occupational area and is available to all students 
in the instructional program without regard to membership in any student 
organization.
    (3) The support of vocational student organizations may not 
include--
    (i) Lodging, feeding, conveying, or furnishing transportation to 
conventions or other forms of social assemblage;
    (ii) Purchase of supplies, jackets, and other effects for students' 
personal ownership;
    (iii) Cost of non-instructional activities such as athletic, social, 
or recreational events;
    (iv) Printing and disseminating non-instructional newsletters;
    (v) Purchase of awards for recognition of students, advisors, and 
other individuals; or
    (vi) Payment of membership dues;
    (d) Leadership and instructional programs in technology education; 
and
    (e) Data collection.

(Authority: 20 U.S.C. 2331(c); H.R. Rep. No. 660, 101st Cong., 1st Sess. 
117 (1990))

 Single Parents, Displaced Homemakers, and Single Pregnant Women Program



Sec. 403.80  Who is eligible for a subgrant or contract?

    Eligible recipients and community-based organizations are eligible 
for an award under the Single Parents, Displaced Homemakers, and Single 
Pregnant Women Program.

(Authority: 20 U.S.C. 2335(a)(2), (3); 2335b(1))



Sec. 403.81  How must funds be used under the Single Parents, Displaced Homemakers, and Single Pregnant Women Program?

    A State shall use funds reserved in accordance with 
Sec. 403.180(b)(2)(i) for individuals who are single parents, displaced 
homemakers, or single pregnant women only to--
    (a) Provide, subsidize, reimburse, or pay for preparatory services, 
including instruction in basic academic and occupational skills, 
necessary educational materials, and career guidance and counseling 
services in preparation for vocational education and training that will 
furnish single parents, displaced homemakers, and single pregnant women 
with marketable skills;
    (b) Make grants to eligible recipients for expanding preparatory 
services and vocational education services if the expansion directly 
increases the eligible recipients' capacity for providing single 
parents, displaced homemakers, and single pregnant women with marketable 
skills;
    (c) Make grants to community-based organizations for the provision 
of preparatory and vocational education services to single parents, 
displaced homemakers, and single pregnant women if the State determines 
that the community-based organizations have demonstrated effectiveness 
in providing comparable or related services to single parents, displaced 
homemakers, and single pregnant women, taking into account the 
demonstrated performance of such organizations in terms of cost, the 
quality of training, and the characteristics of the participants;
    (d) Make preparatory services and vocational education and training 
more accessible to single parents, displaced homemakers, and single 
pregnant women by assisting those individuals with dependent care, 
transportation services, or special services and supplies, books, and 
materials, or by organizing and scheduling the programs so that those 
programs are more accessible; or
    (e) Provide information to single parents, displaced homemakers, and 
single pregnant women to inform those individuals of vocational 
education programs, related support services, and career counseling.

(Authority: 20 U.S.C. 2335(a))

[[Page 40]]



Sec. 403.82  In what settings may the Single Parents, Displaced Homemakers, and Single Pregnant Women Program be offered?

    The programs and services described in Sec. 403.81 may be provided 
in postsecondary or secondary school settings, including area vocational 
education schools, and community-based organizations that meet the 
requirements of Sec. 403.81(c), that serve single parents, displaced 
homemakers, and single pregnant women.

(Authority: 20 U.S.C. 2335(b))

                           Sex Equity Program



Sec. 403.90  Who is eligible for a subgrant or contract?

    Eligible recipients and community-based organizations are eligible 
for an award under the Sex Equity Program.

(Authority: 20 U.S.C. 2335b(1))



Sec. 403.91  How must funds be used under the Sex Equity Program?

    Except as provided in Sec. 403.92, each State shall use amounts 
reserved for the Sex Equity Program in accordance with 
Sec. 403.180(b)(2)(ii) only for--
    (a) Programs, services, comprehensive career guidance and 
counseling, and activities to eliminate sex bias and stereotyping in 
secondary and postsecondary vocational education;
    (b) Preparatory services and vocational education programs, 
services, and activities for girls and women, aged 14 through 25, 
designed to enable the participants to support themselves and their 
families; and
    (c) Support services for individuals participating in vocational 
education programs, services, and activities described in paragraphs (a) 
and (b) of this section, including dependent-care services and 
transportation.

(Authority: 20 U.S.C. 2335a(a))



Sec. 403.92  Under what circumstances may the age limit under the Sex Equity Program be waived?

    The individual appointed under Sec. 403.13(a) may waive the 
requirement in Sec. 403.91(b) with respect to age limitations if the 
individual determines (through appropriate research) that the waiver is 
essential to meet the objectives of Sec. 403.91.

(Authority: 20 U.S.C. 2335a(b))

                     Programs for Criminal Offenders



Sec. 403.100  What are the requirements for designating a State corrections educational agency to administer the Programs for Criminal Offenders?

    (a) The State Board shall designate one or more State corrections 
educational agencies to administer programs assisted under the Act for 
juvenile and adult criminal offenders in correctional institutions in 
the State including correctional institutions operated by local 
authorities.
    (b) Each State corrections educational agency that desires to be 
designated under paragraph (a) of this section shall submit to the State 
board a plan for the use of funds.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2336(a))



Sec. 403.101  How must funds be used under the Programs for Criminal Offenders?

    In administering programs receiving funds reserved under 
Sec. 403.180(b)(5) for criminal offenders, each State corrections 
educational agency designated under Sec. 403.100(a) shall--
    (a) Give special consideration to providing--
    (1) Services to offenders who are completing their sentences and 
preparing for release; and
    (2) Grants for the establishment of vocational education programs in 
correctional institutions that do not have such programs;
    (b) Provide vocational education programs for women who are 
incarcerated;
    (c) Improve equipment; and
    (d) In cooperation with eligible recipients, administer and 
coordinate vocational education services to offenders before and after 
their release.

(Authority: 20 U.S.C. 2336(b))



Sec. 403.102  What other requirements apply to the Program for Criminal Offenders?

    Each State corrections educational agency designated under 
Sec. 403.100(a)

[[Page 41]]

shall meet the requirements in Secs. 403.191 and 403.192.

(Authority: 20 U.S.C. 2471(22))

    Secondary, Postsecondary, and Adult Vocational Education Programs



Sec. 403.110  Who is eligible for a subgrant or contract?

    (a) Subject to the requirements of paragraph (c) of this section, 
the following entities are eligible for an award under the Secondary 
School Vocational Education Program:
    (1) A local educational agency.
    (2) An area vocational education school or intermediate educational 
agency that meets the requirements in Sec. 403.113.
    (b) Subject to the requirements of paragraph (c) of this section, 
the following entities are eligible for an award under the Postsecondary 
and Adult Vocational Education Programs:
    (1) An institution of higher education as defined in 
Sec. 403.117(b), including a nonprofit institution that satisfies the 
conditions set forth in Sec. 403.111(d)(14).
    (2) A local educational agency serving adults.
    (3) An area vocational education school serving adults that offers 
or will offer a program that meets the requirements of Sec. 403.111 and 
seeks to receive assistance under the Secondary School Vocational 
Education Program or the Postsecondary and Adult Vocational Education 
Programs.
    (c) Only an entity that provides or will provide vocational 
education in a program that meets the requirements of Sec. 403.111 is 
eligible to receive an award under the Secondary School Vocational 
Education Program or the Postsecondary and Adult Vocational Education 
Program.

(Authority: 20 U.S.C. 2341(a) and (d); 2341a (a) and (d)(1); and 
2342(c))



Sec. 403.111  How must funds be used under the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Programs?

    (a)(1) Each eligible recipient that receives an award under 
Sec. 403.112, Sec. 403.113, or Sec. 403.116 shall use funds under that 
award to improve vocational education programs.
    (2) Projects assisted with funds awarded under Sec. 403.112, 
Sec. 403.113, or Sec. 403.116 must--
    (i) Provide for the full participation of individuals who are 
members of special populations by providing the supplementary and other 
services required by Sec. 403.190(b) necessary for them to succeed in 
vocational education; and

    Cross-Reference: See appendix A to part 403 and Secs. 403.190(c) and 
403.193(e).

    (ii) Operate at a limited number of sites or with respect to a 
limited number of program areas.
    (3) If an eligible recipient that receives an award under 
Sec. 403.112, Sec. 403.113, or Sec. 403.116 meets the requirements in 
this section and Secs. 403.190(b) and 403.193, it may use those Federal 
funds to serve students who are not members of special populations.
    (b) Each eligible recipient that receives an award under 
Sec. 403.112, Sec. 403.113, or Sec. 403.116 shall give priority for 
assistance under those sections to sites or program areas that serve the 
highest concentrations of individuals who are members of special 
populations.

    Examples: Methods by which an eligible recipient may give priority 
to sites or program areas that serve the highest concentrations of 
individuals who are members of special populations include, but are not 
limited to, the following:
    Example 1: Method to give priority to a limited number of sites. 
Based on data from the preceding fiscal year--
    (a) First, a local educational agency ranks each site based on the 
percentage of the site's total enrollment of students who are members of 
special populations.
    (b) Second, the local educational agency establishes a funding cut-
off point for sites above the district-wide percentage of special 
populations enrollment. The local educational agency funds sites above 
the cut-off point but does not fund sites below that point.
    Example 2: Method to give priority to a limited number of program 
areas. Based on data from the preceding fiscal year--
    (a) First, a postsecondary institution ranks each program area based 
on the percentage of the program area's total enrollment of students who 
are members of special populations.
    (b) Second, the postsecondary institution establishes a funding cut-
off point for program areas that rank above the institution-

[[Page 42]]

wide average percentage of special populations enrollment. The 
postsecondary institution funds projects in a program area that is above 
the cut-off point but does not fund projects in program areas below that 
point.
    Example 3: Method to give priority to a limited number of sites. 
Based on data from the preceding fiscal year--
    (a) First, an LEA or postsecondary institution identifies a site 
with a high concentration of special populations;
    (b) Second, the LEA or postsecondary institution identifies a 
program area at the site (such as health occupations) in which the 
participation rate for members of special populations has been lower 
than the overall rate of participation for members of special 
populations at the site; and
    (c) Third, the LEA or postsecondary institution funds a project at 
the site designed to improve the participation rate of members of 
special populations in that program area.
    Note to examples in Sec. 403.111: Absolute counts of special 
population members may be used to determine the sites or program areas 
with the highest concentrations of special population members instead 
of, or in combination with, percentages of special population members.
    (c) Funds made available from an award under Sec. 403.112, 
Sec. 403.113, or Sec. 403.116 must be used to provide vocational 
education in programs that--
    (1) Are of sufficient size, scope, and quality as to be effective;
    (2) Integrate academic and vocational education in those programs 
through coherent sequences of courses so that students achieve both 
academic and occupational competencies; and
    (3) Provide for the equitable participation of members of special 
populations in vocational education consistent with the assurances and 
requirements in Secs. 403.190(b) and 403.193, so that these populations 
have an opportunity to enter vocational education that is equal to that 
afforded to the general student population.

    Cross-Reference: See appendix A to part 403.

    (d) In carrying out the provisions of paragraph (c) of this section, 
an eligible recipient under Secs. 403.112, 403.113, or Sec. 403.116 may 
use funds for activities that include, but are not limited to--
    (1) Upgrading of curriculum;
    (2) Purchase of equipment, including instructional aids;
    (3) Inservice training of both vocational instructors and academic 
instructors working with vocational education students for integrating 
academic and vocational education;
    (4) Guidance and counseling;
    (5) Remedial courses;
    (6) Adaptation of equipment;
    (7) Tech-prep education programs;
    (8) Supplementary services designed to meet the needs of special 
populations;
    (9) Payment in whole or in part with funds under Sec. 403.112, 
Sec. 403.113, or Sec. 403.116 for a special populations coordinator, who 
must be a qualified counselor or teacher, to ensure that individuals who 
are members of special populations are receiving adequate services and 
job skill training;
    (10) Apprenticeship programs;
    (11) Programs that are strongly tied to economic development efforts 
in the State;
    (12) Programs that train adults and students for all aspects of an 
occupation in which job openings are projected or available;
    (13) Comprehensive mentor programs in institutions of higher 
education offering comprehensive programs in teacher preparation, which 
seek to use fully the skills and work experience of individuals 
currently or formerly employed in business and industry who are 
interested in becoming classroom instructors and to meet the need of 
vocational educators who wish to upgrade their teaching competencies; or
    (14) Provision of education and training through arrangements with 
private vocational training institutions, private postsecondary 
educational institutions, employers, labor organizations, and joint 
labor-management apprenticeship programs if those institutions, 
employers, labor organizations, or programs can make a significant 
contribution to obtaining the objectives of the State plan and can 
provide substantially equivalent training at a lesser cost, or can 
provide equipment or services not available in public institutions.

(Authority: 20 U.S.C. 2342)



Sec. 403.112  How does a State allocate funds under the Secondary School Vocational Education Program to local educational agencies?

    (a) Reservation of funds. From the portion of its allotment under

[[Page 43]]

Sec. 403.180(b)(1) for the basic programs, each fiscal year a State may 
reserve funds for the Secondary School Vocational Education Program.
    (b) General rule. Except as provided in paragraphs (c) and (d) of 
this section and Sec. 401.119, a State shall distribute funds reserved 
for the Secondary School Vocational Education Program to local 
educational agencies (LEAs) according to the following formula:
    (1) From 70 percent of the amount reserved, an LEA must be allocated 
an amount that bears the same relationship to the 70 percent as the 
amount the LEA was allocated under section 1005 of chapter 1 (20 U.S.C. 
2711) in the fiscal or program year preceding the fiscal or program year 
in which the allocation is made bears to the total amount received under 
section 1005 of chapter 1 by all LEAs in the State in that preceding 
year.
    (2) From 20 percent of the amount reserved, an LEA must be allocated 
an amount that bears the same relationship to the 20 percent as the 
number of students with disabilities who have individualized education 
programs under section 614(a)(5) of the IDEA served by the LEA in the 
fiscal or program year preceding the fiscal or program year in which the 
allocation is made bears to the total number of those students served by 
all LEAs in the State in that preceding year.
    (3) From 10 percent of the amount reserved, an LEA must be allocated 
an amount that bears the same relationship to the 10 percent as the 
number of students enrolled in schools and adults enrolled in vocational 
education training programs under the jurisdiction of the LEA in the 
fiscal or program year preceding the fiscal or program year in which the 
allocation is made bears to the number of students enrolled in schools 
in kindergarten through 12th grade and adults enrolled in vocational 
education training programs under the jurisdiction of all LEAs in the 
State in that preceding year.

    Example: Assume that a State has reserved $5,000,000 of its basic 
programs funds under Title II of the Act for secondary school programs.
    (a)(1) All LEAs in the State were allocated a total of $80,000,000 
under section 1005 of Chapter 1 in the preceding fiscal year. Of that 
amount, school district ``A'' was allocated $400,000.
    (2) The allocation for school district ``A'' is calculated by 
multiplying $3,500,000 (70 percent of $5,000,000) by .005 of the State 
total ($400,000$80,000,000). The allocation for school district 
``A'' would be $17,500 under paragraph (b)(1) of this section.
    (b)(1) All LEAs in a State served a total of 100,000 students with 
disabilities who have individualized education programs under section 
614(a)(5) of the IDEA in the preceding fiscal year. Of that total, 
school district ``A'' served 400 of those students in the preceding 
fiscal year.
    (2) The allocation for school district ``A'' is calculated by 
multiplying $1,000,000 (20 percent of $5,000,000) by .004 of the State 
total (400100,000). The allocation for school district ``A'' 
would be $4,000 under paragraph (b)(2) of this section.
    (c)(1) All LEAs in a State enrolled a total of 1,000,000 students 
(including adults enrolled in vocational education training programs in 
those LEAs) in the preceding fiscal year. Of that number school district 
``A'' enrolled 3,500 of those students in the preceding fiscal year.
    (2) The allocation for school district ``A'' is calculated by 
multiplying 500,000 (10 percent of $5,000,000) by .0035 of the State 
total (3,5001,000,000). The allocation for school district ``A'' 
would be $1,750 under paragraph (b)(3) of this section.

    (c) Exception to the general rule. In applying the provisions in 
paragraph (b) of this section, a State may not distribute funds to an 
LEA that operates only elementary schools, but shall instead distribute 
funds that would have been allocated for those ineligible LEAs as 
follows:
    (1) If an LEA that operates only elementary schools sends its 
graduating students to a single local or regional educational agency 
that provides secondary school services to secondary school students in 
the same attendance area, a State shall distribute to that local or 
regional educational agency any amounts under paragraph (b) of this 
section that would otherwise have been allocated to LEAs operating only 
elementary schools.
    (2) If an LEA that operates only elementary schools sends its 
graduating students to two or more local or regional educational 
agencies that provide secondary school services to secondary students in 
the same attendance area, the State shall distribute to those local or 
regional educational

[[Page 44]]

agencies an amount based on the proportionate number of students each 
agency received in the previous year from the LEA that operates only 
elementary schools.
    (d)(1) Minimum grant amount. Except as provided in paragraph (d)(3) 
of this section, an LEA is not eligible for a grant under the Secondary 
School Vocational Education Program unless the amount allocated to the 
LEA under paragraph (b) of this section is not less than $15,000.
    (2)(i) An LEA may enter into a consortium with one or more LEAs for 
the purpose of providing services under the Secondary School Vocational 
Education Program in order to meet the minimum grant requirement in 
paragraph (d)(1) of this section.
    (ii) A consortium arrangement under paragraph (d)(2)(i) of this 
section must serve primarily as a structure for operating joint projects 
that provide services to all participating local educational agencies.
    (iii) A project operated by a consortium must meet the size, scope, 
and quality requirement of Sec. 403.111(c)(1).

    Example: Under the distribution formula for the Secondary School 
Vocational Education Program, three LEAs earn $5,000 each (which is less 
than the $15,000 minimum grant amount for each LEA). The LEAs form a 
consortium in order to receive an award. One of the LEAs is designated 
as the fiscal agent for the consortium and receives the $15,000 award 
for the consortium. The consortium may operate and fund with the $15,000 
a project or projects for the benefit of all participating LEAs. The 
fiscal agent of the consortium may not subgrant back to the 
participating LEAs the amounts they contributed to the consortium.

    (3) A State may waive paragraph (d)(1) of this section in any case 
in which the LEA--
    (i) Is located in a rural, sparsely populated area;
    (ii) Demonstrates that it is unable to enter into a consortium for 
purposes of providing services under the Secondary School Vocational 
Education Program; and
    (iii) Demonstrates that the projects to be assisted meet the size, 
scope, and quality requirements in Sec. 403.111(c)(1).
    (4) Any amounts that are not distributed by reason of paragraph 
(d)(1) of this section must be redistributed in accordance with the 
provisions in paragraph (b) of this section.

    Cross-Reference: See 34 CFR 403.113(d).

(Authority: 20 U.S.C. 2341 (a), (b), and (c))



Sec. 403.113  How does a State allocate funds under the Secondary School Vocational Education Program to area vocational education schools and intermediate educational agencies?

    (a) A State shall distribute funds reserved under Sec. 403.112(a) 
directly to the appropriate area vocational education school or 
intermediate educational agency in any case in which--
    (1) The area vocational education school or intermediate educational 
agency and an LEA--
    (i) Have formed or will form a consortium for the purpose of 
receiving funds reserved under Sec. 403.112(a); or
    (ii) Have entered into or will enter into a cooperative arrangement 
for the purpose of receiving funds reserved under Sec. 403.112(a); and
    (2)(i) The area vocational education school or intermediate 
educational agency serves a proportion of students with disabilities and 
students who are economically disadvantaged that is approximately equal 
to or greater than the proportion of those students attending the 
secondary schools under the jurisdiction of all of the LEAs sending 
students to the area vocational education school or the intermediate 
educational agency; or
    (ii) The area vocational education school or intermediate 
educational agency demonstrates that it is unable to meet the criterion 
in paragraph (a)(2)(i) of this section due to the lack of interest by 
students with disabilities and students who are economically 
disadvantaged in attending vocational education programs in that area 
vocational education school or intermediate educational agency.
    (b) If an area vocational education school or intermediate 
educational agency meets the requirements of paragraph (a) of this 
section, then the amount that would otherwise be allocated to the LEA 
may be distributed to the area vocational education school, the 
intermediate educational agency, and the LEA--

[[Page 45]]

    (1) Based on each school's or entity's relative share of students 
with disabilities and students who are economically disadvantaged who 
are attending vocational education programs that meet the requirements 
of Sec. 403.111 (based, if practicable, on the average enrollment for 
the prior 3 years); or
    (2) On the basis of an agreement between the LEA and the area 
vocational education school or intermediate educational agency.
    (c) Notwithstanding paragraphs (a) and (b) of this section, and 
Secs. 403.114 and 403.115, prior to distributing funds to any LEA that 
would receive an allocation that is not sufficient to conduct a program 
that meets the requirements of Sec. 403.111(c), a State shall encourage 
the LEA to--
    (1) Form a consortium or enter a cooperative agreement with an area 
vocational education school or intermediate educational agency offering 
programs that meet the requirements of Sec. 403.111(c), and that are 
accessible to economically disadvantaged students and students with 
disabilities that would be served by the LEA; and
    (2) Transfer its allocation to an area vocational education school 
or intermediate educational agency.
    (d) If an LEA's allocation under Sec. 403.112 meets the minimum 
grant requirement in Sec. 403.112(d), and the allocation is distributed 
in part to an area vocational education school or an intermediate 
educational agency pursuant to paragraphs (a) and (b) of this section, 
the LEA may retain the amount not distributed to the area vocational 
education school or an intermediate educational agency even though that 
amount is less than the minimum grant required by Sec. 403.112(d).

(Authority: 20 U.S.C. 2341(d) (1), (2), and (5))



Sec. 403.114  How does a State determine the number of economically disadvantaged students attending vocational education programs under the Secondary School Vocational Education Program?

    (a) For the purposes of Sec. 403.113, a State may determine the 
number of economically disadvantaged students attending vocational 
education programs on any of the following bases:
    (1) Eligibility for one of the following:
    (i) Free or reduced-price meals under the National School Lunch Act 
(42 U.S.C. 1751 et seq.).
    (ii) The program for aid to Families with Dependent Children under 
part A of title IV of the Social Security Act (42 U.S.C. 601).
    (iii) Benefits under the Food Stamp Act of 1977 (7 U.S.C. 2011).
    (iv) To be counted for purposes of section 1005 of chapter 1.
    (v) Participation in programs assisted under title II of the JTPA.
    (2) Receipt of a Pell grant or assistance under a comparable State 
program of need-based financial assistance.
    (3) Status of an individual who is determined by the Secretary to be 
low-income according to the latest available data from the Department of 
Commerce or the Department of Health and Human Services Poverty 
Guidelines.
    (4) Other indices of economic status, including estimates of those 
indices, if the State demonstrates to the satisfaction of the Secretary 
that those indices are more representative of the number of economically 
disadvantaged students attending vocational education programs. The 
Secretary determines, on a case-by-case basis, whether other indices of 
economic status are more representative of the number of economically 
disadvantaged students attending vocational education programs, taking 
into consideration, for example, the statistical reliability of any data 
submitted by a grantee as well as the general acceptance of the indices 
by other agencies in the State or local area.
    (b) If a State elects to use more than one factor described in 
paragraph (a) of this section for purposes of determining the number of 
economically disadvantaged students enrolled in vocational education 
programs, the State shall ensure that the data used are not duplicative.

(Authority: 20 U.S.C. 2341(d)(3) and 2471(15))

[[Page 46]]



Sec. 403.115  What appeal procedures must be established under the Secondary School Vocational Education Program?

    The State board shall establish an appeals procedure for resolution 
of any dispute arising between an LEA and an area vocational education 
school or an intermediate educational agency with respect to the 
allocation procedures described in Secs. 403.112 and 403.113, including 
the decision of an LEA to leave a consortium.

    Cross-Reference: See 34 CFR 76.401, Disapproval of an application--
opportunity for a hearing.

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2341(d)(4))



Sec. 403.116  How does a State allocate funds under the Postsecondary and Adult Vocational Education Programs?

    (a) Reservation of funds. From the portion of its allotment under 
Sec. 403.180(b)(1) for the basic programs, each fiscal year a State may 
reserve funds for the Postsecondary and Adult Vocational Education 
Programs.
    (b) General rule. (1) A State shall distribute funds reserved for 
Postsecondary and Adult Vocational Education Programs to eligible 
institutions or consortia of eligible institutions within the State.
    (2) Except as provided in paragraph (c) of this section and 
Secs. 403.118 and 403.119, each eligible institution or consortium of 
eligible institutions must receive an amount that bears the same 
relationship to the amount of funds reserved for the Postsecondary and 
Adult Vocational Education Programs as the number of Pell Grant 
recipients and recipients of assistance from the Bureau of Indian 
Affairs enrolled in programs meeting the requirements of Sec. 403.111, 
including meeting the definition of vocational education in 34 CFR 
400.4, offered by the eligible institution or consortium of eligible 
institutions in the fiscal or program year preceding the fiscal or 
program year in which the allocation is made bears to the number of 
those recipients enrolled in these programs within the State in that 
preceding year.
    (c) Minimum grant amount. (1) A State may not provide a grant under 
paragraph (b) of this section to any institution or consortium of 
eligible institutions for an amount that is less than $50,000.
    (2) Any amounts that are not allocated by reason of paragraph (c)(1) 
of this section must be redistributed to eligible institutions or 
consortia of eligible institutions in accordance with the provisions of 
paragraph (b) of this section.
    (d) In order for a consortium of eligible institutions to receive 
assistance under this section, the consortium must operate joint 
projects that--
    (1) Provide services to all postsecondary institutions participating 
in the consortium; and
    (2) Are of sufficient size, scope, and quality as to be effective.

(Authority: 20 U.S.C. 2341a (a) and (c))

[57 FR 36735, Aug. 14, 1992, as amended at 59 FR 38513, July 28, 1994]



Sec. 403.117  What definitions apply to the Postsecondary and Adult Vocational Education Programs?

    For the purposes of Secs. 403.116, 403.118, and 403.120 the 
following definitions apply:
    (a) Eligible institution means an institution of higher education, 
an LEA serving adults, or an area vocational education school serving 
adults that offers or will offer a program that meets the requirements 
of Sec. 403.111 and seeks to receive assistance under Sec. 403.116.
    (b)(1) Institution of higher education means an educational 
institution in any State that--
    (i) Admits as regular students only persons having a certificate of 
graduation from a school providing secondary education, or the 
recognized equivalent of that certificate, or who are beyond the age of 
compulsory school attendance;
    (ii) Is legally authorized within the State to provide a program of 
education beyond secondary education;
    (iii) Provides an educational program for which it awards a 
bachelor's degree or provides not less than a two-year program which is 
acceptable for full credit toward such a degree, or in the

[[Page 47]]

case of a hospital or health care facility, that provides training of 
not less than one year for graduates of accredited health professions 
programs, leading to a degree or certificate upon completion of that 
training;
    (iv) Is a public or other nonprofit institution; and
    (v) Is accredited by a nationally recognized accrediting agency or 
association approved by the Secretary for this purpose or, if not so 
accredited--
    (A) Is an institution with respect to which the Secretary has 
determined that there is satisfactory assurance, considering the 
resources available to the institution, the period of time, if any, 
during which it has operated, the effort it is making to meet 
accreditation standards, and the purpose for which this determination is 
being made, that the institution will meet the accreditation standards 
of such an agency or association within a reasonable time; or
    (B) Is an institution whose credits are accepted, on transfer, by 
not less than three institutions that are so accredited, for credit on 
the same basis as if transferred from an institution so accredited.
    (2) This term also includes any school that provides not less than a 
one-year program of training to prepare students for gainful employment 
in a recognized occupation and that meets the provisions of paragraphs 
(b)(1) (i), (ii), (iv), and (v) of this definition. If the Secretary 
determines that a particular category of these schools does not meet the 
requirements of paragraph (b)(1)(v) because there is no nationally 
recognized accrediting agency or association qualified to accredit 
schools in that category, the Secretary, pending the establishment of 
such an accrediting agency or association, appoints an advisory 
committee, composed of persons specially qualified to evaluate training 
provided by schools in that category, that must--
    (i) Prescribe the standards of content, scope, and quality that must 
be met in order to qualify schools in that category to participate in 
the program pursuant to this part; and
    (ii) Determine whether particular schools not meeting the 
requirements of paragraph (b)(1)(v) of this definition meet those 
standards.

(Authority: 20 U.S.C. 1085)

    (c) Pell Grant recipient means a recipient of financial aid under 
subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070a-l et seq.).

(Authority: 20 U.S.C. 2341a(d))



Sec. 403.118  Under what circumstances may the Secretary waive the distribution requirements for the Postsecondary and Adult Vocational Education Programs?

    The Secretary may waive Sec. 403.116(b)(2) for any fiscal or program 
year for which a State submits to the Secretary an application for such 
a waiver that--
    (a) Demonstrates that the formula in Sec. 403.116(b)(2) does not 
result in a distribution of funds to the institutions or consortia of 
eligible institutions within the State that have the highest numbers of 
economically disadvantaged individuals and that an alternative formula 
would result in such a distribution.
    (b) Includes a proposal for an alternative formula that may include 
criteria relating to the number of individuals attending institutions or 
consortia of eligible institutions within the State who--
    (1) Receive need-based postsecondary financial aid provided from 
public funds;
    (2) Are members of families participating in the program for aid to 
families with dependent children under part A of title IV of the Social 
Security Act (42 U.S.C. 601);
    (3) Are enrolled in postsecondary educational institutions that--
    (i) Are funded by the State;
    (ii) Do not charge tuition; and
    (iii) Serve only economically disadvantaged students;
    (4) Are enrolled in programs serving economically disadvantaged 
adults;
    (5) Are participants in programs assisted under the JTPA;
    (6) Are Pell Grant recipients; and
    (c) Proposes an alternative formula that--

[[Page 48]]

    (1) Includes direct counts of students enrolled in the institutions 
or consortia of eligible institutions;
    (2) Directly relates to the status of students as economically 
disadvantaged individuals;
    (3) Is to be uniformly applied to all eligible institutions;
    (4) Does not include fund pools for specific types of institutions 
or consortia of eligible institutions;
    (5) Does not include the direct assignment of funds to a particular 
institution or consortium of eligible institutions on a non-formula 
basis; and
    (6) Identifies a more accurate count of economically disadvantaged 
individuals in the aggregate than does the formula in 
Sec. 403.116(b)(2).

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2341a(b))

[57 FR 36735, Aug. 14, 1992, as amended at 59 FR 38513, July 28, 1994]



Sec. 403.119  Under what circumstances may the State waive the distribution requirements for Secondary School Vocational Education Program or the Postsecondary and Adult Vocational Education Programs?

    (a) This section applies in any fiscal or program year in which a 
State reserves 15 percent or less under Sec. 403.180(b)(1) for 
distribution under--
    (1) The Secondary School Vocational Education Program; or
    (2) The Postsecondary and Adult Vocational Education Programs.
    (b) Notwithstanding the provisions and Sec. 403.112, Sec. 403.113, 
or Sec. 403.116, as applicable, in order to result in a more equitable 
distribution of funds for programs serving the highest numbers of 
economically disadvantaged individuals, the State may distribute the 
funds described in paragraph (a) of this section--
    (1) On a competitive basis; or
    (2) Through any alternative method determined by the State.

(Authority: 20 U.S.C. 2341b)



Sec. 403.120  How does a State reallocate funds under the Secondary School Vocational Education Program and the Postsecondary and Adult Vocational Education Programs?

    (a) In any fiscal or program year that an LEA, area vocational 
school, intermediate school district, or consortium of those entities, 
or an eligible institution, or consortium of eligible institutions, does 
not obligate all of the amounts it is allocated for that year under the 
Secondary School Vocational Education Program or the Postsecondary and 
Adult Vocational Education Programs, the LEA, area vocational education 
school, intermediate school district, or consortium of those entities, 
or the eligible institution, or consortium of eligible institutions, 
shall return any unobligated amounts to the State to be reallocated 
under Sec. 403.112(b), Sec. 403.113, or Sec. 403.116(b), as applicable.
    (b) In any fiscal or program year in which amounts allocated under 
Sec. 403.112(b), Sec. 403.113, Sec. 403.116(b), or Sec. 403.118 are 
returned to the State and the State is unable to reallocate those 
amounts according to those sections in time for the amounts to be 
obligated in the fiscal or program year, the State shall retain the 
amounts to be distributed in combination with amounts reserved under 
Sec. 403.112(b), Sec. 403.113, Sec. 403.116(b), or Sec. 403.118 for the 
following fiscal or program year.

(Authority: 20 U.S.C. 2341c)

[57 FR 36735, Aug. 14, 1992, as amended at 59 FR 38513, July 28, 1994]



Subpart F--What Kinds of Activities Does the Secretary Assist Under the 
                            Special Programs?

                                 General



Sec. 403.130  What are the Special Programs?

    The following special programs are authorized by title III of the 
Act and are subject to the requirements of the State plan:
    (a) State Assistance for Vocational Education Support Programs by 
Community-Based Organizations.
    (b) Consumer and Homemaking Education Program.

[[Page 49]]

    (c) Comprehensive Career Guidance and Counseling Programs.
    (d) Business-Labor-Education Partnerships for Training Program.

(Authority: 20 U.S.C. 2302(d)(A)-(D))



Sec. 403.131  Who is eligible for an award under the Special Programs?

    (a) The fifty States, the District of Columbia, Puerto Rico, and the 
Virgin Islands are eligible for an award under the--
    (1) State Assistance for Vocational Education Support and Programs 
by Community-Based Organizations;
    (2) Consumer and Homemaking Education Programs; and
    (3) Comprehensive Career Guidance and Counseling Programs.
    (b) States, as defined in 34 CFR 400.4(b), are eligible for the 
Business-Labor-Education Partnerships for Training Program.

(Authority: 20 U.S.C. 2302(d)(A)-(D))

 Vocational Education Support Programs by Community-Based Organizations



Sec. 403.140  What activities does the Secretary support under the State Assistance for Vocational Education Support Programs by Community-Based Organizations?

    (a) The State shall provide, in accordance with its State plan, and 
from its allotment for this program, financial assistance to joint 
projects of eligible recipients and community-based organizations within 
the State that provide the following special vocational education 
services and activities:
    (1) Outreach programs that facilitate the entrance of youth into a 
program of transitional services and subsequent entrance into vocational 
education, employment, or other education and training.
    (2) Transitional services such as attitudinal and motivational 
prevocational training programs.
    (3) Prevocational educational preparation and basic skills 
development conducted in cooperation with business concerns.
    (4) Special prevocational preparations programs targeted to inner-
city youth, non-English speaking youth, Appalachian youth, and the youth 
of other urban and rural areas having a high density of poverty who need 
special prevocational education programs.
    (5) Career intern programs.
    (6) Model programs for school dropouts.
    (7) The assessment of students' needs in relation to vocational 
education and jobs.
    (8) Guidance and counseling to assist students with occupational 
choices and with the selection of a vocational education program.
    (b) Individuals with disabilities who are educationally or 
economically disadvantaged may participate in projects under this 
program.

(Authority: 20 U.S.C. 2352, 2471(6))



Sec. 403.141  What are the application requirements for the State Assistance for Vocational Education Support Programs by Community-Based Organizations?

    (a) Each community-based organization and eligible recipient that 
desire to participate in this program shall jointly prepare and submit 
an application to the State board at the time and in the manner 
established by the State board.
    (b) The State board also may establish requirements relating to the 
contents of the applications, except that each application must 
contain--
    (1) An agreement among the community-based organization and the 
eligible recipients in the area to be served that includes the 
designation of one or more fiscal agents for the project;
    (2) A description of how the funds will be used, together with 
evaluation criteria to be applied to the project;
    (3) Assurances that the community-based organization will give 
special consideration to the needs of severely economically and 
educationally disadvantaged youth, ages sixteen through twenty-one, 
inclusive;
    (4) Assurances that business concerns will be involved, as 
appropriate, in services and activities for which assistance is sought;
    (5) A description of the efforts the community-based organization 
will make to collaborate with the eligible recipients participating in 
the joint project;

[[Page 50]]

    (6) A description of the manner in which the services and activities 
for which assistance is sought will serve to enhance the enrollment of 
severely economically and educationally disadvantaged youth into the 
vocational education programs; and
    (7) Assurances that the projects conducted by the community-based 
organization will conform to the applicable standards of performance and 
measures of effectiveness required of vocational education programs in 
the State.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2351)

               Consumer and Homemaking Education Programs



Sec. 403.150  What activities does the Secretary support under the Consumer and Homemaking Education Programs?

    (a) The State shall conduct, in accordance with its State plan, and 
from its allotment for this program, consumer and homemaking education 
projects that may include--
    (1) Instructional projects, services, and activities that prepare 
youth and adults for the occupation of homemaking;
    (2) Instruction in the areas of--
    (i) Food and nutrition;
    (ii) Individual and family health;
    (iii) Consumer education;
    (iv) Family living and parenthood education;
    (v) Child development and guidance;
    (vi) Housing and home management, including resource management; and
    (vii) Clothing and textiles.
    (b) The State shall use the funds for this program for projects, 
services, and activities--
    (1) For residents of economically depressed areas;
    (2) That encourage the participation of traditionally underserved 
populations;
    (3) That encourage, in cooperation with the individual appointed 
under Sec. 403.13(a), the elimination of sex bias and sex stereotyping;
    (4) That improve, expand, and update Consumer and Homemaking 
Education Programs, especially those that specifically address needs 
described in paragraphs (b) (1), (2), and (3) of this section; and
    (5) That address priorities and emerging concerns at the local, 
State, and national levels.
    (c) The State may use the funds described in paragraph (a) of this 
section for--
    (1) Program development and the improvement of instruction and 
curricula relating to--
    (i) Managing individual and family resources;
    (ii) Making consumer choices;
    (iii) Balancing work and family;
    (iv) Improving responses to individual and family crises (including 
family violence and child abuse);
    (v) Strengthening parenting skills (especially among teenage 
parents);
    (vi) Preventing teenage pregnancy;
    (vii) Assisting the aged, individuals with disabilities, and members 
of at risk populations (including the homeless);
    (viii) Improving individual, child, and family nutrition and 
wellness;
    (ix) Conserving limited resources;
    (x) Understanding the impact of new technology on life and work;
    (xi) Applying consumer and homemaking education skills to jobs and 
careers; and
    (xii) Other needs as determined by the State; and
    (2) Support services and activities designed to ensure the quality 
and effectiveness of programs, including--
    (i) The demonstration of innovative and exemplary projects;
    (ii) Community outreach to underserved populations;
    (iii) The application of academic skills (such as reading, writing, 
mathematics, and science) through consumer and homemaking education 
programs;
    (iv) Curriculum development;
    (v) Research;
    (vi) Program evaluation;
    (vii) The development of instructional materials;
    (viii) Teacher education;
    (ix) The upgrading of equipment;
    (x) Teacher supervision;
    (xi) State leadership, including the activities of student 
organizations; and
    (xii) State administration, subject to Sec. 403.151(c).

(Authority: 20 U.S.C. 2361, 2362(a), (b))

[[Page 51]]



Sec. 403.151  How must funds be used under the Consumer and Homemaking Education Programs?

    (a) A State shall use not less than one-third of its allotment under 
the Consumer and Homemaking Education Program in economically depressed 
areas or areas with high rates of unemployment for projects, services, 
and activities designed to assist consumers, and to help improve the 
home environment and the quality of family life.
    (b)(1) The State board shall ensure that the experience and 
information gained through carrying out projects, services, and 
activities under this program are shared with program administrators for 
the purpose of program planning.
    (2) The State board shall use funds from its allotment under this 
program to provide State leadership and one or more full-time State 
administrators qualified by experience and educational preparation in 
home economics education.
    (3) For purposes of the Consumer and Homemaking Education Program, 
State leadership includes, but is not limited to, curriculum 
development, personnel development, research, dissemination activities, 
and technical assistance.
    (c) A State may use, in addition to funds reserved under 
Sec. 403.180(b)(4), not more than six percent of its allotment under 
this program for State administration of projects, services, and 
activities under this program.

(Authority: 20 U.S.C. 2362(c), 2363)

          Comprehensive Career Guidance and Counseling Programs



Sec. 403.160  What activities does the Secretary support under the Comprehensive Career Guidance and Counseling Programs?

    (a) The State shall conduct, in accordance with its State plan, from 
its allotment for this program, career guidance and counseling projects, 
services, and activities that are--
    (1) Organized and administered by certified counselors; and
    (2) Designed to improve, expand, and extend career guidance and 
counseling programs to meet the career development, vocational 
education, and employment needs of vocational education students and 
potential students.
    (b) The purposes of the projects, services, and activities described 
in paragraph (a) of this section must be to--
    (1) Assist individuals to--
    (i) Acquire self-assessment, career planning, career decision-
making, and employability skills;
    (ii) Make the transition from education and training to work;
    (iii) Maintain the marketability of their current job skills in 
established occupations;
    (iv) Develop new skills to move away from declining occupational 
fields and enter new and emerging fields in high-technology areas and 
fields experiencing skill shortages;
    (v) Develop mid-career job search skills and to clarify career 
goals; and
    (vi) Obtain and use information on financial assistance for 
postsecondary and vocational education, and job training; and
    (2)(i) Encourage the elimination of sex, age, disabling conditions, 
and race bias and stereotyping;
    (ii) Provide for community outreach;
    (iii) Enlist the collaboration of the family, the community, 
business, industry, and labor; and
    (iv) Be accessible to all segments of the population, including 
women, minorities, individuals with disabilities, and economically 
disadvantaged individuals.
    (c) The projects, services, and activities described in paragraph 
(a) of this section must consist of--
    (1) Instructional activities and other services at all educational 
levels to help students develop the skills described in paragraph (b)(1) 
of this section;
    (2) Services and activities designed to ensure the quality and 
effectiveness of career guidance and counseling projects such as--
    (i) Counselor education, including the education of counselors 
working with individuals with limited English proficiency;
    (ii) Training support personnel;
    (iii) Curriculum development;
    (iv) Research and demonstration projects;
    (v) Experimental projects;

[[Page 52]]

    (vi) The development of instructional materials;
    (vii) The acquisition of equipment;
    (viii) State and local leadership;
    (ix) The development of career information delivery systems; and
    (x) Local administration, including supervision;
    (xi) State administration, including supervision, subject to 
Sec. 403.161(c);
    (3) Projects that provide opportunities for counselors to obtain 
firsthand experience in business and industry; and
    (4) Projects that provide students with an opportunity to become 
acquainted with business, industry, the labor market, and training 
opportunities, including secondary educational programs that--
    (i) Have at least one characteristic of an apprenticeable occupation 
as recognized by the Department of Labor or the State Apprenticeship 
Agency, in accordance with the National Apprenticeship Act (29 U.S.C. 
50);
    (ii) Are conducted in concert with local business, industry, labor, 
and other appropriate apprenticeship training entities; and
    (iii) Are designed to prepare participants for an apprenticeable 
occupation or provide information concerning apprenticeable occupations 
and their prerequisites.

(Authority: 20 U.S.C. 2382(a), (b))



Sec. 403.161  How must funds be used under the Comprehensive Career Guidance and Counseling Programs?

    (a) A State shall use not less than twenty percent of its allotment 
under the Career Guidance and Counseling Program for projects, services, 
and activities designed to eliminate sex, age, and race bias and 
stereotyping under Sec. 403.160(b)(2) to ensure that projects, services, 
and activities under this program are accessible to all segments of the 
population, including women, disadvantaged individuals, individuals with 
disabilities, individuals with limited English proficiency, and 
minorities.
    (b)(1) The State board shall ensure that the experience and 
information gained through carrying out projects, services, and 
activities under this program are shared with program administrators for 
the purpose of program planning.
    (2) The State board shall use funds from its allotment under this 
program to provide State leadership that is qualified by experience and 
knowledge in guidance and counseling.
    (3) For purposes of Comprehensive Career Guidance and Counseling 
Programs, State leadership includes, but is not limited to curriculum 
development, personnel development, research, dissemination activities, 
and technical assistance; and
    (c) A State may use, in addition to funds reserved under 
Sec. 403.180(b)(4), not more than six percent of its allotment under 
this program for State administration of projects, services, and 
activities under this program.

(Authority: 20 U.S.C. 2382(c), 2383)

        Business-Labor-Education Partnership for Training Program



Sec. 403.170  What activities does the Secretary support under the Business-Labor-Education Partnership for Training Program?

    The State board shall, in accordance with the State plan, from its 
allotment for this program, support the establishment and operation of 
projects, services, and activities, that--
    (a) Provide incentives for the coordination of the Business-Labor-
Education Partnership for Training Program with related efforts under 
the--
    (1) National Tech-Prep Education Program in 34 CFR part 405;
    (2) State-Administered Tech-Prep Education Program in 34 CFR part 
406; and
    (3) JTPA; and
    (b) May only include, in addition to the activities described in 
Sec. 403.32(a)(27) through (30),--
    (1) Training and retraining of instructional and guidance personnel;
    (2) Curriculum development and the development or acquisition of 
instructional and guidance equipment and materials;
    (3) Acquisition and operation of communications and 
telecommunications equipment and other high technology equipment for 
programs authorized by this part;

[[Page 53]]

    (4) Other activities authorized by title III of the Act as may be 
essential to the successful establishment and operation of projects, 
services, and activities under the Business-Labor-Education Partnership 
for Training Program, including activities and related services to 
ensure access of women, minorities, individuals with disabilities, and 
economically disadvantaged individuals; and
    (5) Providing vocational education to individuals in order to assist 
their entry into, or advancement in, high-technology occupations or to 
meet the technological need of other industries or businesses.

(Authority: 20 U.S.C. 2392(b) and 2393 (a), (d)(1))



Sec. 403.171  Who is eligible to apply to a State board for an award?

    (a) The State board awards subgrants or contracts to partnerships 
between--
    (1) An area vocational education school, a State agency, a local 
educational agency, a secondary school funded by the Bureau of Indian 
Affairs, an institution of higher education, a State corrections 
educational agency, or an adult learning center; and
    (2) Business, industry, labor organizations, or apprenticeship 
programs.
    (b) A partnership receiving an award from a State board must include 
as partners at least one entity from paragraph (a)(1) of this section 
and at least one entity from paragraph (a)(2) of this section, and may 
include more than one entity from each group.

(Authority: 20 U.S.C. 2392(a)(1))



Sec. 403.172  What special considerations must the State board give in approving projects, services, and activities?

    The State board, in approving projects, services, and activities 
assisted under the Business-Labor-Education Partnership Training 
Program, shall give special consideration to the following:
    (a) The level and degree of business and industry participation in 
the development and operation of the program.
    (b) The current and projected demand within the State or relevant 
labor market area for workers with the level and type of skills the 
program is designed to produce.
    (c) The overall quality of the proposal, with particular emphasis on 
the probability of successful completion of the program by prospective 
trainees and the capability of the eligible recipient, with assistance 
from participating business or industry, to provide high quality 
training for skilled workers and technicians in high technology.
    (d) The commitment to serve, as demonstrated by special efforts to 
provide outreach, information, and counseling, and by the provision of 
remedial instruction and other assistance, all segments of the 
population, including women, minorities, individuals with disabilities, 
and economically disadvantaged individuals.
    (e) Projects, services, and activities to provide vocational 
education for individuals who have attained 55 years of age in order to 
assist their entry into, or advancement in, high-technology occupations 
or to meet the technological needs of other industries or businesses.

(Authority: 20 U.S.C. 2393-(b) and (d)(2))



Sec. 403.173  What expenses are allowable?

    The State board shall use funds awarded under the Business-Labor-
Education Partnership for Training Program only for--
    (a) Expenses incurred in carrying out the programs, services, and 
activities described in Sec. 403.170, including, for example, expenses 
for--
    (1) The introduction of new vocational education programs, 
particularly in economically depressed urban and rural areas;
    (2) The introduction or improvement of basic skills instruction, 
including English-as-a-second-language instruction, in order for an 
individual to be eligible for employment, to continue employment, or to 
be eligible for career advancement;
    (3) Costs associated with coordination between vocational education 
programs, business, and industry, including advisory council meetings 
and newsletters; and

[[Page 54]]

    (4) Transportation and child-care services for students necessary to 
ensure access of women, minorities, individuals with disabilities, and 
economically disadvantaged individuals to projects, services, and 
activities authorized by the Business-Labor-Education Partnership for 
Training Program; and
    (b)(1) Subject to paragraph (b)(2) of this section, expenditures for 
necessary and reasonable administrative costs of the State board and of 
eligible partners.
    (2) Total expenditures for administrative costs of the State board 
and of eligible partners may not exceed 10 percent of the State's 
allotment for this program in the first year and five percent of that 
allotment in each subsequent year.

(Authority: 20 U.S.C. 2392(d) and 2393(a)(1))



Sec. 403.174  What additional fiscal requirements apply to the Business-Labor-Education Partnership for Training Program?

    (a) The business and industrial share of the costs required in 
Sec. 403.32(a)(29) may be in the form of either allowable costs or the 
fair market value of in-kind contributions such as facilities, overhead, 
personnel, and equipment.
    (b) The State board shall use equal amounts from its allotment under 
this program and from its allotment for basic programs to provide the 
Federal share of cost of projects, services, and activities under this 
program.
    (c) If an eligible partner demonstrates to the satisfaction of the 
State that it is incapable of providing all or part of the non-Federal 
portion of the costs of projects, services, and activities, as required 
by Sec. 403.32(a)(29), the State board may designate funds available 
under parts A and C of title II of the Act or funds available from State 
sources in place of the non-Federal portion.

(Authority: 20 U.S.C. 2392(c))



      Subpart G--What Financial Conditions Must Be Met by a State?



Sec. 403.180  How must a State reserve funds for the basic programs?

    (a)(1) Except as provided in paragraph (a)(2) of this section, each 
State shall reserve from its allotment under the basic programs 
authorized by title II of the Act, for--
    (i) The Program for Single Parents, Displaced Homemakers, and Single 
Pregnant Women under Sec. 403.81, and the Sex Equity Program under 
Sec. 403.91, respectively, an amount that is not less than the amount 
the State reserved for each of those programs under section 202 of the 
Carl D. Perkins Vocational Education Act (CDPVEA) from its Fiscal Year 
(FY) 1991 grant from the FY 1990 appropriation; and
    (ii) The Program for Criminal Offenders under Sec. 403.101 an amount 
that is not less than--
    (A) The amount the State reserved for projects, services, or 
activities under section 202(6) of the CDPVEA from its FY 1991 grant 
from the FY 1990 appropriation; and
    (B) The amount of Federal funds under the CDPVEA, other than the one 
percent reserved under section 202(6) of the Act, that the State and its 
eligible recipients obligated for projects, services, and activities for 
criminal offenders in correctional institutions from its FY 1991 grant 
from the FY 1990 appropriation.
    (2) In any year in which a State receives an amount for purposes of 
carrying out programs under title II of the Act that is less than the 
amount the State received for those purposes in its FY 1991 grant award 
from the FY 1990 appropriation under the CDPVEA, the State shall ratably 
reduce the amounts reserved under paragraph (a)(1) of this section in 
the same proportion that the amount for carrying out programs under 
title II of the Act is less than the amount the State received for those 
purposes from the FY 1990 appropriation.

[[Page 55]]

    (b) Except as provided in paragraph (a) of this section, from its 
allotment for the basic programs authorized by title II of the Act, a 
State shall reserve--
    (1) At least 75 percent for the Secondary School Vocational 
Education Program and the Postsecondary and Adult Vocational Education 
Programs described in Sec. 403.111;
    (2) Ten and one-half percent for the Program for Single Parents, 
Displaced Homemakers, and Single Pregnant Women described in Sec. 403.81 
and the Sex Equity Program described in Sec. 403.91, as follows:
    (i) Not less than seven percent for the Program for Single Parents, 
Displaced Homemakers, and Single Pregnant Women.
    (ii) Not less than three percent for the Sex Equity Program;
    (3) Not more than eight and one-half percent for State Programs and 
State Leadership Activities described in Secs. 403.70 and 403.71;
    (4) Not more than five percent or $250,000, whichever is greater, 
for administration of the State plan, of which--
    (i) Not less than $60,000 must be available for carrying out the 
provisions in Sec. 403.13, regarding the personnel requirements for 
eliminating sex discrimination and sex stereotyping; and
    (ii) The remaining amounts may be used for the costs of--
    (A) Developing the State plan;
    (B) Reviewing local applications;
    (C) Monitoring and evaluating program effectiveness;
    (D) Providing technical assistance;
    (E) Ensuring compliance with all applicable Federal laws, including 
required services and activities for individuals who are members of 
special populations; and
    (F) Supporting the activities of the technical committees it 
establishes under Sec. 403.12(b)(1); and
    (5) One percent for Programs for Criminal Offenders described in 
Sec. 403.101.
    (c) The procedure for meeting the ``hold-harmless'' requirements in 
Sec. 403.180(a) and the $250,000 minimum for State administration 
provision in Sec. 403.180(b)(4) is as follows:
    (1) If the five percent reserved for administration is less than the 
$250,000 minimum allowed by paragraph (b)(4) of this section, or if any 
of the amounts reserved for the Program for Single Parents, Displaced 
Homemakers, and Single Pregnant Women in Sec. 403.81, the Sex Equity 
Program in Sec. 403.91, or the Program for Criminal Offenders in 
Sec. 403.101, respectively, is less than the amount reserved for that 
program in FY 1990 (funds from the FY 1990 appropriation awarded in the 
States FY 1991 grant), a State shall subtract any amount necessary to 
satisfy the $250,000 minimum for State administration or any of the 
``hold-harmless'' amounts from the total basic programs award received 
by the State.
    (2) The State shall reserve $250,000 for administration and shall 
reserve for any program not meeting the ``hold-harmless'' requirement an 
amount necessary to meet that requirement.
    (3) The State shall reserve from the remainder of the basic program 
award an amount for each of the remaining programs that is proportionate 
to the amount that program would have received in the absence of a 
shortfall in the amounts reserved for administration or to meet the 
``hold-harmless'' requirements in paragraph (a)(1) of this section.

    Example 1: (a) A State receives a basic programs award of 
$4,000,000. Five percent of the basic programs award equals $200,000, 
which is $50,000 less than the $250,000 minimum that may be reserved for 
State administration. To determine the amount of funds that will be 
reserved for each program under title II, parts A, B, and C of the Act, 
the State first subtracts $250,000 for State administration from the 
$4,000,000 basic programs award ($4,000,000 -$250,000 = $3,750,000).
    (b) Second, the State determines the amount that would have been 
reserved for each of the programs under title II, parts A, B, and C of 
the Act in the absence of a shortfall in the set-aside amount for 
administration, as follows:

3.0%  x $4,000,000 =              $120,000  for Sex Equity Programs.
7.5%  x $4,000,000 =               300,000  for Programs for Single
                                             Parents, Displaced
                                             Homemakers, and Single
                                             Pregnant Women.
8.5%  x $4,000,000 =               340,000  for State Programs and State
                                             Leadership Activities.

[[Page 56]]

 
1.0%  x $4,000,000 =                40,000  for Programs for Criminal
                                             Offenders.
75%  x $4,000,000 =              3,000,000  for part C of title II.
                              -------------
                                 3,800,000
 

    (c) Third, the State converts each of these amounts into a 
percentage by dividing each amount by the sum of the amounts the 
programs would have received in the absence of a shortfall ($3,800,000) 
and multiplies the remaining basic programs award ($3,750,000) by these 
percentages to determine the amount to reserve for each program under 
parts A, B, and C of title II of the Act, as follows:

($120,000/$3,800,000)  x          $118,421  for Sex Equity Programs.
 $3,750,000 =
($300,000/$3,800,000)  x           296,053  for Programs for Single
 $3,750,000 =                                Parents, Displaced
                                             Homemakers, and Single
                                             Pregnant Women.
($340,000/$3,800,000)  x           335,526  for State Programs and State
 $3,750,000 =                                Leadership Activities.
($40,000/$3,800,000)  x             39,474  for Programs for Criminal
 $3,750,000 =                                Offenders.
($3,000,000/$3,800,000)  x       2,960,526  for part C of title II.
 $3,750,000 =
                              -------------
                                 3,750,000
 

    This example assumes that amounts reserved meet the ``hold-
harmless'' requirement of section 102(c)(1) of the Act.
    Example 2: A State's seven percent reserve from its FY 1992 grant 
for the Program for Single Parents, Displaced Homemakers, and Single 
Pregnant Women is $1,400,000 and the amount reserved for that program 
from its FY 1991 grant was $1,581,000. Therefore, the amount of FY 1992 
funds reserved for that program is $181,000 less than the amount 
reserved in FY 1991. The State received a basic programs award of 
$20,000,000 in FY 1992. The other programs under title II, part B meet 
the ``hold-harmless'' requirement in Sec. 403.180(a)(1), and the amount 
reserved for State administration exceeds $250,000. The State determines 
the amount of funds to be reserved for each program under title II, 
parts A, B, and C of the Act as follows:
    (a) First, the State subtracts $1,581,000 from the $20,000,000 total 
basic programs award ($20,000,000 -$1,581,000 = $18,419,000).
    (b) Second, the State determines the amount that would have been 
reserved for each of the programs under parts A, B, and C of title II of 
the Act in the absence of a shortfall in the set-aside amount for the 
Program for Single Parents, Displaced Homemakers, and Single Pregnant 
Women, as follows:

5.0%  x $20,000,000 =           $1,000,000  for administration.
3.5%  x $20,000,000 =              700,000  for Sex Equity Programs.
8.5%  x $20,000,000 =            1,700,000  for State Programs and State
                                             Leadership Activities.
1.0%  x $20,000,000 =              200,000  for Programs for Criminal
                                             Offenders.
75.0%  x $20,000,000 =          15,000,000  for part C of title II.
                              -------------
                                18,600,000
 

    (c) Third, the State converts each of these amounts into a 
percentage by dividing each amount by the sum of the amounts the 
programs would have earned in the absence of a shortfall ($18,600,000) 
and multiplies the remaining basic programs award ($18,419,000) by these 
percentages to determine the amount to reserve for each program under 
parts A, B, and C of title II of the Act, as follows:

($1,000,000/$18,600,000)  x       $990,269  for administration.
 $18,419,000 =
($700,000/$18,600,000)  x          693,188  for Sex Equity Programs.
 $18,419,000 =
($1,700,000/$18,600,000)  x      1,683,457  for State Programs and State
 $18,419,000 =                               Leadership Activities.
($200,000/$18,600,000)  x          198,054  for Programs for Criminal
 $18,419,000 =                               Offenders.
($15,000,000/$18,600,000)  x    14,854,032  for part C of title II.
 $18,419,000 =
                              -------------
                                18,419,000
 

    This example assumes that amounts reserved for the Sex Equity 
Program and Programs for Criminal Offenders meet the ``hold-harmless'' 
requirement of section 102(c) (1) and (2) of the Act.
    Example 3: A State's one percent reserved from its FY 1992 grant for 
Programs for Criminal Offenders is $200,000 and the amount reserved for 
that program under section 202(6) of the CDPVEA plus other amounts 
obligated for projects, services, and activities for criminal offenders 
in correctional institutions from its FY 1991 grant from the FY 1990 
appropriations totals $250,000. Therefore, the amount of FY 1992 funds 
reserved for that program is $50,000 less than the amount reserved and 
obligated for that program in FY 1991. The State received a basic 
programs award of $20,000,000 in FY 1992. The other programs under title 
II, part B meet the ``hold-harmless'' requirement of Sec. 403.180(a)(1) 
and the amount reserved for State administration exceeds $250,000. The 
State determines the amount of funds to be reserved for each program 
under title II, parts A, B, and C of the Act as follows:
    (a) First, the State subtracts $250,000 from the $20,000,000 total 
basic programs award ($20,000,000 -$250,000 = $19,750,000).
    (b) Second, the State determines the amount that would have been 
reserved for each of the programs under parts A, B, and C of title II of 
the Act in the absence of a

[[Page 57]]

shortfall in the set-aside amount for the Programs for Criminal 
Offenders, as follows:

5.0%  x 20,000,000 =            $1,000,000  for administration.
3.5%  x 20,000,000 =               700,000  for Sex Equity Programs.
7.0%  x 20,000,000 =             1,400,000  for Programs for Single
                                             Parents, Displaced
                                             Homemakers, and Single
                                             Pregnant Women.
8.5%  x 20,000,000 =             1,700,000  for State Programs and State
                                             Leadership Activities.
75.0%  x 20,000,000 =           15,000,000  for part C of title II.
                              -------------
                                19,800,000
 

    (c) Third, the State converts each of these amounts into a 
percentage by dividing each amount by the sum of the amounts the 
programs would have earned in the absence of a shortfall ($19,800,000) 
and multiplies the remaining basic programs award ($19,750,000) by these 
percentages to determine the amount to reserve for each program under 
parts A, B, and C of title II of the Act, as follows:

($1,000,000/$19,800,000)  x       $997,475  for administration.
 $19,750,000 =
($700,000/$19,800,000)  x         $698,232  for Sex Equity Programs.
 $19,750,000 =
($1,400,000/$19,800,000)  x     $1,396,465  for Programs for Single
 $19,750,000 =                               Parents, Displaced
                                             Homemakers, and Single
                                             Pregnant Women.
($1,700,000/$19,800,000)  x     $1,695,707  for State Programs and State
 $19,750,000 =                               Leadership Activities.
($15,000,000/$19,800,000)  x   $14,962,121  for part C of title II.
 $19,750,000 =
                             --------------
                               $19,750,000
 

    This example assumes that amounts reserved for the Sex Equity 
Program and for the Program for Single Parents, Displaced Homemakers, 
and Single Pregnant Women meet the ``hold-harmless'' requirement of 
sections 102(c) (1) and (2) of the Act.

    (d) The procedure for meeting the ratable reduction provision in 
paragraph (a)(2) of this section is as follows:
    (1) If a State's basic programs award under title II of the Act for 
FY 1992 or in future years is less than that State's basic grant amount 
in FY 1991, a State shall determine the percentage that the basic 
programs award is of the FY 1991 basic programs award.
    (2) The State shall multiply the amounts reserved in FY 1991 for 
each of the three programs covered by the ``hold-harmless'' provisions 
in paragraph (a)(1) of this section by this percentage.
    (3) The State shall compare the amounts that would be reserved for 
these programs in FY 1992 to determine if these amounts are less than 
the ratably reduced hold-harmless amounts, and if so, shall proceed with 
the calculation required by paragraph (c) of this section except using 
the ratably reduced ``hold-harmless'' amounts.

(Authority: 20 U.S.C. 2312)



Sec. 403.181  What are the cost-sharing requirements applicable to the basic programs?

    (a) A State shall match, from non-Federal sources and on a dollar-
for-dollar basis, the funds reserved for administration of the State 
plan under Sec. 403.180(b)(4).
    (b) The matching requirement under paragraph (a) of this section may 
be applied overall, rather than line-by-line, to State administrative 
expenditures.
    (c) A State shall provide from non-Federal sources for State 
administration under the Act an amount that is not less than the amount 
provided by the State from non-Federal sources for State administrative 
costs for the preceding fiscal or program year.

    Example for paragraph (b): From the five percent reserved for the 
administration of the State plan, a State must reserve $60,000 to carry 
out the provisions in Sec. 403.13. The $60,000 must be matched, but the 
matching funds need not be used for the activities described in 
Sec. 403.13.


(Authority: 20 U.S.C. 2312(b) and 2468d; H.R. Rep. No. 660, 101st Cong., 
2nd Sess. 103-104 (1990))



Sec. 403.182  What is the maintenance of fiscal effort requirement?

    The Secretary may not make a payment under the Act to a State for 
any fiscal year unless the Secretary determines that the fiscal effort 
per student, or the aggregate expenditures of that State, from State 
sources, for vocational education for the fiscal year (or program year) 
preceding the fiscal year (or program year) for which the determination 
is made, at least equaled its effort or expenditures for vocational

[[Page 58]]

education for the second preceding fiscal year (or program year).

(Authority: 20 U.S.C. 2463(a))



Sec. 403.183  Under what circumstances may the Secretary waive the maintenance of effort requirement?

    (a) The Secretary may waive the maintenance of effort requirement in 
Sec. 403.182 for a State for one year only if--
    (1) The Secretary determines that a waiver would be equitable due to 
exceptional or uncontrollable circumstances affecting the State's 
ability to maintain fiscal effort; and
    (2) The State has decreased its expenditures for vocational 
education from non-Federal sources by no more than five percent.
    (b) For purposes of this section, ``exceptional or uncontrollable 
circumstances'' include, but are not limited to, the following:
    (1) A natural disaster.
    (2) An unforeseen and precipitous decline in financial resources.
    (c) The Secretary does not consider tax initiatives or referenda to 
be exceptional or uncontrollable circumstances.

(Authority: 20 U.S.C. 2463(b))



Sec. 403.184  How does a State request a waiver of the maintenance of effort requirement?

    A State seeking a waiver of the maintenance of effort requirement in 
Sec. 403.182 shall--
    (a) Submit to the Secretary a request for a waiver; and
    (b) Include in the request--
    (1) The reason for the request;
    (2) Information that demonstrates that a waiver is justified; and
    (3) Any additional information the Secretary may require.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2463(b))



Sec. 403.185  How does the Secretary compute maintenance of effort in the event of a waiver?

    If a State has been granted a waiver of the maintenance of effort 
requirement that allows it to receive a grant for a fiscal year, the 
Secretary determines whether the State has met that requirement for the 
grant to be awarded for the year after the year of the waiver by 
comparing the amount spent for vocational education from non-Federal 
sources in the first preceding fiscal year (or program year) with the 
amount spent in the third preceding fiscal year (or program year).

    Example: Because exceptional or uncontrollable circumstances 
prevented a State from maintaining its level of fiscal effort in a 
program year 1989 (July 1, 1988-June 30, 1989) at the level of its 
fiscal effort in program year 1988 (July 1, 1987-June 30, 1988), the 
Secretary granted the State a waiver of the maintenance of effort 
requirement that permits the State to receive its fiscal year 1990 grant 
(a grant that is awarded on or after July 1, 1990 from funds 
appropriated in the fiscal year 1990 appropriation). To be eligible to 
receive its fiscal year 1991 grant (the grant to be awarded for the year 
after the year of the waiver), the State's expenditures from the first 
preceding program year (July 1, 1989-June 30, 1990) must equal or exceed 
its expenditures from the third preceding program year (July 1, 1987 to 
June 30, 1988).

(Authority: 20 U.S.C. 2463(c))



Sec. 403.186  What are the administrative cost requirements applicable to a State?

    (a) Basic Programs. A State may use only funds reserved under 
Sec. 403.180(b)(4) to administer the programs under title II of the Act, 
including Programs for Criminal Offenders.
    (b) Special Programs. (1) A State may use the funds reserved under 
Sec. 403.180(b)(4) to administer any of the special programs listed in 
Sec. 403.130.
    (2) In addition to the funds reserved under Sec. 403.180(b)(4), a 
State may use only an amount of funds from its allotment for the State 
Assistance for Vocational Education Support Programs by Community-Based 
Organizations that is necessary and reasonable for the proper and 
efficient State administration of that program.
    (3) In addition to the funds reserved under Sec. 403.180(b)(4), a 
State may use the amounts reserved for the Consumer and Homemaking 
Education Program, the Comprehensive Career Guidance and Counseling 
Program, and the Business-Labor-Education Partnership for Training 
Program under Secs. 403.151(c), 403.161(c), and 403.173(b), 
respectively,

[[Page 59]]

for the proper and efficient administration of each program.

(Authority: 20 U.S.C. 2302(d) (A)-(D) and 2312(a))



Sec. 403.187  How may a State provide technical assistance?

    (a) Except as provided in paragraph (b) of this section, a State may 
use only an amount of the funds reserved for each of the basic programs 
listed in Sec. 403.60 and the special programs listed in Sec. 403.130 to 
pay the costs of providing technical assistance that is necessary and 
reasonable to promote or enhance the quality and effectiveness of that 
program.
    (b) A State may not use funds reserved under Sec. 403.180(b)(1) for 
the Secondary School Vocational Education Program and the Postsecondary 
and Adult Vocational Education Program to pay the costs of providing 
technical assistance.
    (c) In providing technical assistance under paragraph (a) of this 
section, a State may not use amounts to an extent that would interfere 
with achieving the purposes of the program for which the funds were 
awarded.

(Authority: 20 U.S.C. 2302(d) (A)-(D), 2312(a), and 2323(b)(5))



Sec. 403.188  What is a State's responsibility for the cost of services and activities for members of special populations?

    A State is not required to use non-Federal funds to pay the cost of 
services and activities that it provides to members of special 
populations pursuant to Sec. 403.32(a) (18)-(26) or to pay the cost of 
services and activities that eligible recipients provide to members of 
special populations pursuant to Secs. 403.111 (a)(2)(i) and (c)(3), 
403.190(b), or 403.193, unless this requirement is imposed by other 
applicable laws.

(Authority: 20 U.S.C. 2328)



       Subpart H--What Conditions Must be Met by Local Recipients?



Sec. 403.190  What are the requirements for receiving a subgrant or contract?

    (a) Each eligible recipient desiring financial assistance under the 
Secondary School Vocational Education Program or the Postsecondary and 
Adult Vocational Education Program must submit to the State board, 
according to requirements established by the State board, an application 
covering the same period as the State plan, for the use of that 
assistance. The State board shall determine requirements for local 
applications, except that each application must--
    (1) Contain a description of--
    (i) The vocational education program to be funded, including--
    (A) The extent to which the program incorporates each of the 
requirements described in Sec. 403.111 (a), (b), and (c); and
    (B) How the eligible recipient will use the funds available under 
Sec. 403.112, Sec. 403.113, or Sec. 403.116 and from other sources to 
improve the program with regard to each requirement and activity 
described in Sec. 403.111 (c) and (d);
    (ii) How the needs of individuals who are members of special 
populations will be assessed and the planned use of funds to meet those 
needs;
    (iii) How access to programs of good quality will be provided to 
students who are economically disadvantaged (including foster children), 
students with disabilities, and students of limited English proficiency 
through affirmative outreach and recruitment efforts;
    (iv) The program evaluation standards the applicant will use to 
measure its progress;
    (v) The methods to be used to coordinate vocational education 
services with relevant programs conducted under the JTPA, including 
cooperative arrangements established with private industry councils 
established under section 102(a) of that Act, in order to avoid 
duplication and to expand the range of and accessibility to vocational 
education services;
    (vi) The methods used to develop vocational educational programs in 
consultation with parents and students of special populations;
    (vii) How the eligible recipient coordinates with community-based 
organizations;
    (viii) The manner and the extent to which the eligible recipient 
considered the demonstrated occupational needs

[[Page 60]]

of the area in assisting programs funded under the Act;
    (ix) How the eligible recipient will provide a vocational education 
program that--
    (A) Integrates academic and occupational disciplines so that 
students participating in the program are able to achieve both academic 
and occupational competence; and
    (B) Offers coherent sequences of courses leading to a job skill; and
    (x) How the eligible recipient will monitor the provision of 
vocational education to individuals who are members of special 
populations, including the provision of vocational education to students 
with individualized education programs developed under the IDEA;
    (2) Provide assurances that--
    (i) The programs funded under Sec. 403.112, Sec. 403.113, or 
Sec. 403.116 will be carried out according to the requirements regarding 
special populations;
    (ii) The eligible recipient will provide a vocational program that--
    (A) Encourages students through counseling to pursue coherent 
sequences of courses;
    (B) Assists students who are economically disadvantaged, students of 
limited English proficiency, and students with disabilities to succeed 
through supportive services such as counseling, English-language 
instruction, child care, and special aids;
    (C) Is of a size, scope, and quality as to bring about improvement 
in the quality of education offered by the school; and
    (D) Seeks to cooperate with the sex equity program carried out under 
Sec. 403.91; and
    (iii) The eligible recipient will provide sufficient information to 
the State to enable the State to comply with the requirements in 
Sec. 403.113; and
    (3) Contain a report on the number of individuals in each of the 
special populations.
    (b) Each eligible recipient desiring financial assistance under 
title II of the Act must provide assurances to the State board that, 
with respect to any project that is funded under a basic program listed 
in Sec. 403.60 or a special program listed in Sec. 403.130, it will--
    (1) Assist students who are members of special populations to enter 
vocational education programs, and, with respect to students with 
disabilities, assist in fulfilling the transitional service requirement 
of section 626 of the IDEA;
    (2) Assess the special needs of students participating in projects 
receiving assistance under a basic program listed in Sec. 403.60 or a 
special program listed in Sec. 403.130, with respect to their successful 
completion of the vocational education program in the most integrated 
setting possible;
    (3) Provide supplementary services, as defined in 34 CFR 400.4(b), 
to students who are members of special populations;
    (4) Provide guidance, counseling, and career development activities 
conducted by professionally trained counselors and teachers who are 
associated with the provision of those special services; and
    (5) Provide counseling and instructional services designed to 
facilitate the transition from school to post-school employment and 
career opportunities.
    (c) Each eligible recipient desiring financial assistance under 
Title II of the Act must provide the services and activities described 
in paragraph (b) of this section, to the extent possible with funds 
awarded under the Act, and indicate in its local application whether any 
non-Federal funds will be used for this purpose.

    Cross-Reference: See Sec. 403.193(e).

    (d) Each eligible recipient desiring financial assistance under the 
Act shall provide sufficient information to the State, as the State 
board requires, to demonstrate to the State board that the eligible 
recipient's projects comply with Sec. 403.32(a)(18)-(26).
    (e) Each eligible recipient desiring financial assistance under the 
Act shall--
    (1) Provide the assurance described in Sec. 403.14(a)(2); and
    (2) Include in its application, as appropriate--
    (i) The number of disabled students, economically disadvantaged 
students, and students with limited English proficiency in its 
vocational program;

[[Page 61]]

    (ii) An assessment of the vocational needs of its students with 
disabilities, economically disadvantaged students, and students with 
limited English proficiency; and
    (iii) A plan to provide supplementary services sufficient to meet 
the needs identified in the assessment described in paragraph 
(e)(2)(ii).

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2321(c)(1), (d), (e); 2328; and 2343)



Sec. 403.191  What are the requirements for program evaluation?

    (a)(1) Beginning in the 1992-1993 school year, each recipient of 
financial assistance under Sec. 403.112, Sec. 403.113, or Sec. 403.116 
shall evaluate annually the effectiveness of the particular projects, 
services, and activities receiving assistance under a basic program 
listed in Sec. 403.60, or a special program listed in Sec. 403.130, 
unless the State board determines pursuant to Sec. 403.201(a)(3) that a 
broader evaluation is required. A recipient may conduct the evaluation 
required under this paragraph by evaluating either the entire population 
of participants or a representative sample of participants.
    (2) The annual evaluation must be based on the standards and 
measures developed by the State board in accordance with Secs. 403.201 
and 403.202, including any modifications made by the recipient in 
accordance with paragraph (b) of this section.
    (b)(1) Each recipient may modify the State standards and measures 
based on--
    (i) Economic, geographic, or demographic factors; or
    (ii) The characteristics of the populations to be served.
    (2) Modifications must conform to the assessment criteria contained 
in the State plan.
    (c) Each recipient, as part of the annual evaluation required in 
paragraph (a) of this section, and with the full participation of 
representatives of special populations, shall--
    (1) Identify and adopt strategies to overcome barriers that are 
resulting in lower rates of access to, or success in, vocational 
education programs for members of special populations; and
    (2) Evaluate the progress of individuals who are members of special 
populations.
    (d) Each recipient, as a part of the annual evaluation required in 
paragraph (a) of this section, shall evaluate its progress in providing 
vocational education students with strong experience in and 
understanding of all aspects of the industries the students are 
preparing to enter.
    (e) Each recipient may use funds awarded under a basic program 
listed in Sec. 403.60 or a special program listed in Sec. 403.130 to 
support the cost of conducting the evaluation required under paragraphs 
(a) through (d) of this section to the extent that the costs are--
    (1) Reasonable and necessary;
    (2) Related to the purposes for which the funds were awarded; and
    (3) Consistent with applicable requirements, such as the requirement 
in Sec. 403.196 to use funds awarded under title II of the Act to 
supplement, and not to supplant, State and local funds.

(Authority: 20 U.S.C. 2325(a) and 2327(a))



Sec. 403.192  What are the requirements for program improvement?

    (a) If, beginning not less than one year after implementing the 
program evaluation required in Sec. 403.191, a recipient determines, 
through its annual evaluation, that it is not making substantial 
progress in meeting the standards and measures developed by the State 
under Secs. 403.201 and 403.202, the recipient shall develop a plan for 
program improvement for the succeeding school year.
    (b) The plan must be developed in consultation with teachers, 
parents, and students concerned with or affected by the program, and 
must describe how the recipient will identify and modify projects, 
services, and activities receiving assistance under the programs listed 
in Secs. 403.60 and 403.130 that are in need of improvement, including a 
description of--
    (1) Vocational education and career development strategies designed 
to achieve progress in improving the effectiveness of the recipient's 
projects, services, and activities receiving assistance under the 
programs listed in Secs. 403.60 and 403.130 evaluated under 
Sec. 403.191(a)(1); and

[[Page 62]]

    (2) If necessary, the strategies designed to improve supplementary 
services provided to individuals who are members of special populations.

    Cross Reference: See 34 CFR 403.204.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2327(b))



Sec. 403.193  What are the information requirements regarding special populations?

    (a)(1) Each local educational agency that receives funds under Title 
II of the Act shall provide to students who are members of special 
populations and their parents information concerning--
    (i) The opportunities available in vocational education;
    (ii) The requirements for eligibility for enrollment in those 
vocational education programs;
    (iii) Special courses that are available;
    (iv) Special services that are available;
    (v) Employment opportunities; and
    (vi) Placement.
    (2) Each area vocational education school or intermediate 
educational agency that receives funds under title II of the Act shall 
provide the information described in paragraph (a)(1) of this section to 
the students who are members of special populations and their parents in 
any local educational agency whose allocation was distributed in its 
entirety under Sec. 403.113 to the area vocational education school or 
intermediate educational agency.
    (b) The information described in paragraph (a)(1) of this section 
must be provided at least one year before the students enter, or are of 
an appropriate age for, the grade level in which vocational education 
programs are first generally available in the State, but in no case 
later than the beginning of the ninth grade.
    (c) Each eligible institution or consortium of eligible institutions 
that receives funds under Title II of the Act shall--
    (1) Provide the information described in paragraph (a)(1) of this 
section to each individual who requests information concerning, or seeks 
admission to, vocational education programs offered by the institution 
or consortium of eligible institutions; and
    (2) If appropriate, assist in the preparation of applications 
relating to that admission.
    (d) Information described under paragraph (a)(1) of this section 
must, to the extent practicable, be in a language and form that parents 
and students understand.
    (e) An eligible recipient is not required by this part to use non-
Federal funds to pay the cost of services and activities required by 
this section and Secs. 403.111(a)(2)(i) and (c)(3) and 403.190(b) unless 
this requirement is imposed by other applicable laws.

(Authority: 20 U.S.C. 2328(b) and (c) and 2342(a) and (c)(1)(C))

[57 FR 36735, Aug. 14, 1992, as amended at 59 FR 38513, July 28, 1994]



Sec. 403.194  What are the comparability requirements?

    (a) A local educational agency may receive an award of Federal funds 
under the State plan only if--
    (1) The local educational agency uses State and local funds to 
provide services in secondary schools or sites served with Federal funds 
awarded under the State plan that, taken as a whole, are at least 
comparable to those services being provided in secondary schools or 
sites that are not being served with Federal funds awarded under the 
State plan; or
    (2) In the event that the local educational agency serves all its 
secondary schools or sites with Federal funds awarded under the State 
plan, the local educational agency uses State and local funds to provide 
services that, taken as a whole, are substantially comparable in each 
secondary school or site.

    Cross-Reference: See appendix B to part 403.

    (b) The comparability requirements in paragraph (a) of this section 
do not apply to--
    (1) A local educational agency with only one secondary school or 
site; or
    (2) A consortium composed of more than one local educational agency, 
except that, within a consortium, each local educational agency itself 
must meet the comparability requirements

[[Page 63]]

unless it is exempt under paragraph (b)(1) of this section.
    (c)(1) A local educational agency shall develop written procedures 
for complying with the comparability requirements in paragraph (a) of 
this section, including a process for demonstrating annually that State 
and local funds are used to provide services in served schools and sites 
that are at least comparable to the services provided with State and 
local funds in schools or sites in the local educational agency that are 
not served with funds awarded under the State plan.
    (2) In reaching the determination as to whether comparability 
requirements in paragraph (a) of this section were met, the local 
educational agency's written procedures--
    (i) Do not have to take into account unpredictable changes in 
student enrollment or personnel assignments that occur after the 
beginning of a school year; and
    (ii) May not take into account any State and local funds spent in 
carrying out the following types of programs:
    (A) Special local programs designed to meet the educational needs of 
educationally deprived children, including compensatory education for 
educationally deprived children, that were excluded in the preceding 
fiscal year from comparability determinations under section 
1018(d)(1)(B) of chapter 1 (20 U.S.C. 2728(d)(1)(B)).
    (B) Bilingual education for children of limited English proficiency.
    (C) Special education for children with disabilities.
    (D) State phase-in programs that were excluded in the preceding 
fiscal year from comparability determinations under section 
1018(d)(2)(B) of chapter 1 (20 U.S.C. 2728(d)(2)(B)).

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2323(b)(19))



Sec. 403.195  What are the administrative cost requirements applicable to local recipients?

    (a) Except as provided in paragraphs (b) and (c) of this section, 
each eligible recipient, including a State corrections educational 
agency, that receives an award under a basic program listed in 
Sec. 403.60 or a special program listed in Sec. 403.130, may use no more 
than the amount of funds from each award that is necessary and 
reasonable for the proper and efficient administration of the projects, 
services, and activities for which the award was made.
    (b) Each eligible recipient that receives an award under 
Sec. 403.112, Sec. 403.113, or Sec. 403.116 may use no more than five 
percent of those funds for administrative costs.
    (c) Each eligible partner that receives an award under the Business-
Labor-Education Partnership for Training Program may use no more funds 
under that award for administrative costs than the amounts prescribed in 
Sec. 403.173(b).

(Authority: 20 U.S.C. 2342(c); 2393(a)(1) and (c))



Sec. 403.196  What are the requirements regarding supplanting?

    (a) Funds made available under title II of the Act must be used to 
supplement, and to the extent practicable increase the amount of State 
and local funds that would in the absence of funds under title II of the 
Act be made available for the purposes specified in the State plan and 
the local application.
    (b) Notwithstanding paragraph (a) of this section and 
Sec. 403.32(a)(17), funds made available under title II of the Act may 
be used to pay the costs of vocational education services required by an 
individualized education program developed pursuant to sections 612(4) 
and 614(a)(5) of the IDEA (20 U.S.C. 1412(4) and 1414(a)(5)), in a 
manner consistent with section 614(a)(1) of that Act, and services 
necessary to meet the requirements of section 504 of the Rehabilitation 
Act of 1973 with respect to ensuring equal access to vocational 
education.
    (c) Any expenditures pursuant to paragraph (b) of this section must 
increase the amount of funds that would otherwise be available to meet 
the costs of an individualized education program or to comply with 
section 504 of the Rehabilitation Act of 1973.

(Authority: 20 U.S.C. 2468e(a)(1))

[[Page 64]]



Sec. 403.197  What are the requirements for the use of equipment?

    (a) Equipment purchased with funds under Sec. 403.112, Sec. 403.113, 
or Sec. 403.116, when not being used to carry out the purposes of the 
Act for which it was purchased, may be used for other vocational 
education purposes if the acquisition of the equipment was reasonable 
and necessary for the purpose of conducting a properly designed project 
or activity under the Secondary School Vocational Education Program or 
the Postsecondary and Adult Vocational Education Program.
    (b) Equipment purchased with funds under Sec. 403.112, Sec. 403.113, 
or Sec. 403.116, when not being used to carry out the purposes of the 
Act for which it was purchased or other vocational education purposes, 
may be used for other instructional purposes if--
    (1) The acquisition of the equipment was reasonable and necessary 
for the purpose of conducting a properly designed project or activity 
under the Secondary School Vocational Education Program or the 
Postsecondary and Adult Vocational Education Program; and
    (2) The other use of the equipment is after regular school hours or 
on weekends.
    (c) The use of equipment under paragraphs (a) and (b) of this 
section must--
    (1) Be incidental to the use of that equipment for the purposes 
under the Secondary School Vocational Education Program or the 
Postsecondary and Adult Vocational Education Program for which it was 
purchased;
    (2) Not interfere with the use of that equipment for the purposes 
under the Secondary School Vocational Education Program or the 
Postsecondary and Adult Vocational Education Program for which it was 
purchased; and
    (3) Not add to the cost of using that equipment for the purposes 
under the Secondary School Vocational Education Program or the 
Postsecondary and Adult Vocational Education Program for which it was 
purchased.

(Authority: 20 U.S.C. 2342(c)(3))



Subpart I--What Are the Administrative Responsibilities of a State Under 
     the State Vocational and Applied Technology Education Program?



Sec. 403.200  What are the State's responsibilities for ensuring compliance with the comparability requirements?

    (a) The State board may not make a payment under the Act to a local 
educational agency unless the LEA is in compliance with Sec. 403.194. As 
indicated in Sec. 403.194(a), an LEA may demonstrate its compliance with 
the comparability requirements by filing an appropriate assurance.
    (b) The State board shall monitor each local educational agency's 
compliance with the comparability requirements in Sec. 403.194.
    (c) If, after a local educational agency receives an award of 
Federal funds under the State plan, the local educational agency is 
found not to be in compliance with the comparability requirements, the 
State board shall--
    (1) Withhold all or a portion of the local educational agency's 
grant award, but not less than the amount or percentage by which the 
local educational agency failed to achieve comparability under the local 
educational agency's procedures established pursuant to Sec. 403.194(c); 
or
    (2) Require repayment of the amount or percentage by which the local 
educational agency failed to achieve comparability if the local 
educational agency is found not to be in compliance after the period of 
availability of the funds awarded has ended.

(Authority: 20 U.S.C. 2323(b)(19))



Sec. 403.201  What are the State's responsibilities for developing and implementing a statewide system of core standards and measures of performance?

    (a)(1) Each State board receiving funds under the Act shall develop 
and implement a statewide system of core standards and measures of 
performance for secondary, postsecondary, and adult vocational education 
programs.
    (2) This system must--
    (i) Be developed and implemented by September 25, 1992; and

[[Page 65]]

    (ii) Apply to all programs assisted under the Act.
    (3) The State board must determine whether a recipient of funds 
under Sec. 403.112, Sec. 403.113, or Sec. 403.116 must evaluate more 
than the particular projects, services, and activities receiving 
assistance under a basic program listed in Sec. 403.60 or a special 
program listed in Sec. 403.130 in order to carry out a valid, reliable, 
and otherwise meaningful evaluation of the effectiveness of these 
projects, services, and activities as required by Sec. 403.191(a)(1), 
using the standards and measures developed pursuant to paragraph (a)(1) 
of this section.
    (4) If a State board determines under paragraph (a)(3) of this 
section that a recipient must evaluate more than the particular 
projects, services, and activities receiving assistance under a basic or 
special program, the State board shall--
    (i) Determine whether the entire local vocational education 
program--or which projects, services, and activities in addition to the 
ones assisted under a basic or special program--must be evaluated to 
assess the effectiveness of the particular projects, services, and 
activities receiving assistance under a basic program or a special 
program; and
    (ii) Require a recipient to conduct an evaluation consistent with 
the State board's determination under paragraph (a)(4)(i) of this 
section.
    (b) To assist in the development and implementation of the Statewide 
system addressed in paragraph (a) of this section, the State board shall 
appoint a State Committee of Practitioners (Committee), as prescribed in 
34 CFR 400.6.
    (c) The State board shall convene the Committee on a regular basis 
to review, comment on, and propose revisions to the State board's draft 
proposal for a system of core standards and measures of performance for 
vocational education programs assisted under the Act.
    (d) To assist the Committee in formulating recommendations for 
modifying standards and measures of performance, the State board shall 
provide the Committee with information concerning differing types of 
standards and measures including--
    (1) The advantages and disadvantages of each type of standard or 
measure; and
    (2) Instances in which those standards and measures--
    (i) Have been effective; and
    (ii) Have not been effective.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2325(a) and (d))



Sec. 403.202  What must each State's system of core standards and measures of performance include?

    (a) The statewide system of core standards and measures of 
performance for vocational education programs must include--
    (1) Measures of learning and competency gains, including student 
progress in the achievement of basic and more advanced academic skills;
    (2) One or more measures of the following:
    (i) Student competency attainment.
    (ii) Job or work skill attainment or enhancement including student 
progress in achieving occupational skills necessary to obtain employment 
in the field for which the student has been prepared, including 
occupational skills in the industry the student is preparing to enter.
    (iii) Retention in school or completion of secondary school or its 
equivalent.
    (iv) Placement into additional training or education, military 
service, or employment;
    (3) Incentives or adjustments that are--
    (i) Designed to encourage service to targeted groups or special 
populations; and
    (ii) Developed for each student, and, if appropriate, consistent 
with the student's individualized education program developed under 
section 614(a)(5) of the IDEA; and
    (4) Procedures for using existing resources and methods developed in 
other programs receiving Federal assistance.
    (b) In developing the standards and measures included in the system 
developed under paragraph (a) of this section, the State board shall 
take into consideration and shall provide, to the

[[Page 66]]

extent appropriate, for consistency with--
    (1) Standards and measures developed under job opportunities and 
basic skills training programs established and operated under a plan 
approved by the Secretary of Health and Human Services that meets the 
requirements of section 402(a)(19) of the Social Security Act (42 U.S.C. 
687); and
    (2) Standards prescribed by the Secretary of Labor under section 106 
of the JTPA.

    Cross-Reference: See 34 CFR 400.6.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2325(b), (c))



Sec. 403.203  What are the State's responsibilities for a State assessment?

    (a) Each State board receiving assistance under the Act shall 
conduct an assessment of the quality of vocational education programs 
throughout the State using measurable objective criteria.
    (b) In developing the assessment criteria, the State board shall--
    (1) Consult with representatives of the groups described in 34 CFR 
400.6(c); and
    (2) Use information gathered by the National Occupational 
Information Coordinating Committee and, if appropriate, other 
information.
    (c) Each State board shall--
    (1) Develop assessment criteria no later than the beginning of the 
1991-1992 school year; and
    (2) Widely disseminate those criteria.
    (d) Assessment criteria must include at least the following factors, 
but may include others:
    (1) Integration of academic and vocational education.
    (2) Sequential courses of study leading to both academic and 
occupational competencies.
    (3) Increased student work skill attainment and job placement.
    (4) Increased linkages between secondary and postsecondary 
educational institutions.
    (5) Instruction and experience, to the extent practicable, in all 
aspects of an industry the students are preparing to enter.
    (6) The ability of the eligible recipients to meet the needs of 
special populations with respect to vocational education.
    (7) Raising the quality of vocational education programs in schools 
with a high concentration of poor and low-achieving students.
    (8) The relevance of programs to the workplace and to the 
occupations for which students are to be trained, and the extent to 
which those programs reflect a realistic assessment of current and 
future labor market needs, including needs in areas of emerging 
technologies.
    (9) The ability of the vocational curriculum, equipment, and 
instructional materials to meet the demands of the work force.
    (10) Basic and higher order current and future workplace 
competencies that will reflect the hiring needs of employers.
    (11) The capability of vocational education programs to meet the 
needs of individuals who are members of special populations.
    (12) Other factors considered appropriate by the State board.
    (e) The assessment must include an analysis of--
    (1) The relative academic, occupational, training, and retraining 
needs of secondary, adult, and postsecondary students; and
    (2) The capability of vocational education programs to provide 
vocational education students, to the extent practicable, with--
    (i) Strong experience in, and understanding of, all aspects of the 
industry the students are preparing to enter (including planning, 
management, finances, technical and production skills, underlying 
principles of technology, labor and community issues, and health, 
safety, and environmental issues); and
    (ii) Strong development and use of problem-solving skills and basic 
and advanced academic skills (including skills in the areas of 
mathematics, reading, writing, science, and social studies) in a 
technological setting.
    (f)(1) Each State board shall complete the initial assessment 
required by paragraph (a) of this section before March 25, 1991, and, 
therefore, at least

[[Page 67]]

six months prior to the required submission of a new State plan to the 
Secretary.
    (2) Each State board shall conduct an assessment under this section 
prior to the submission of each new State plan to the Secretary.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2323(a)(3), (b)(3)(B), and 2326)



Sec. 403.204  What are the State's responsibilities for program evaluation and improvement?

    (a) If, one year after an eligible recipient has implemented its 
program improvement plan described in Sec. 403.192, the State finds that 
the eligible recipient has not made sufficient progress in meeting the 
standards and measures developed as required by Secs. 403.201 and 
403.202, the State shall work jointly with the recipient and with 
teachers, parents, and students concerned with or affected by the 
program, to develop a joint plan for program improvement.
    (b) Each joint plan required by paragraph (a) of this section must 
contain--
    (1) A description of the technical assistance and program activities 
the State will provide to enhance the performance of the eligible 
recipient;
    (2) A reasonable timetable to improve school performance under the 
plan;
    (3) A description of vocational education strategies designed to 
improve the performance of the program as measured by the local 
evaluation; and
    (4) If necessary, a description of strategies designed to improve 
supplementary services provided to individuals who are members of 
special populations.
    (c) The State, in conjunction with the eligible recipient, shall 
annually review and revise the joint plan developed under paragraph (a) 
of this section and provide appropriate assistance until the recipient 
sustains fulfillment of State and local standards and measures developed 
under Secs. 403.201 and 403.202 for more than one year.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2327(c), (d))



Sec. 403.205  What are the State's responsibilities for members of special populations?

    The State board shall--
    (a) Establish effective procedures, including an expedited appeals 
procedure, by which students who are members of special populations and 
their parents, teachers, and concerned area residents will be able to 
participate directly in State and local decisions that influence the 
character of programs under the Act affecting their interests; and
    (b) Provide technical assistance and design procedures necessary to 
ensure that those individuals referred to in paragraph (a) of this 
section are given access to the information needed to use those 
procedures.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2328(d))



Sec. 403.206  What are the State's responsibilities regarding a State occupational information coordinating committee?

    (a) A State that receives funds under the Act shall establish a 
State occupational information coordinating committee composed of 
representatives of the State board, the State employment security 
agency, the State economic development agency, the State job training 
coordinating council, and the agency administering the vocational 
rehabilitation program.
    (b) With funds made available to it by the National Occupational 
Information Coordinating Committee, the State occupational information 
coordinating committee shall--
    (1) Implement an occupational information system in the State that 
will meet the common needs for the planning for, and the operation of, 
programs of the State board assisted under the Act and of the 
administering agencies under the JTPA; and
    (2) Use the occupational information system to implement a career 
information delivery system.

(Authority: 20 U.S.C. 2422(b))

[[Page 68]]



Sec. 403.207  What are the State's responsibilities to the National Center or Centers for Research in Vocational Education?

    A State shall forward to the National Center for Research in 
Vocational Education a copy of an abstract for each new research, 
curriculum development, or personnel development project it supports, 
and the final report on each project.

(Authority: 20 U.S.C. 2404(c))



Sec. 403.208  What are the requirements regarding supplanting?

    (a) The State board is subject to the prohibition against 
supplanting in Sec. 403.196.
    (b) The State board shall monitor each eligible recipient's 
compliance with the supplanting requirements in Sec. 403.196.

(Authority: 20 U.S.C. 2468e(a)(1))

Appendix A to Part 403--Examples for 34 CFR 403.111(a) and 403.111(c)(3)

    Illustration of providing full participation under 34 CFR 
403.111(a). An educationally disadvantaged student is enrolled in a 
course that is part of a vocational education program and is having 
trouble understanding a math concept (e.g., negative numbers) necessary 
to succeed in the course. To ensure the student's full participation in 
the course, a local educational agency may use funds awarded under 
Sec. 403.112 as needed to provide tutoring in negative numbers to enable 
the student to understand the concept well enough to complete the 
vocational education course.
    Illustrations of providing equitable participation under 34 CFR 
403.111(c)(3). Example 1: An area vocational education school conducts 
an informal meeting to provide the information required in 
Sec. 403.193(a) regarding the area vocational education school's 
vocational education programs, to parents of students who are members of 
special populations in a local educational agency whose allocation was 
distributed to the area vocational education school under Sec. 403.113. 
The area vocational education school conducts the meeting at a time and 
in a location convenient for these parents and students. At the meeting, 
the area vocational education school provides a staff person to assist 
students or their parents to complete any forms necessary to enroll in 
the area vocational education school's vocational education program.
    Example 2: A hearing-impaired student in a local educational agency 
could participate in the vocational education program only if an 
interpreter is provided for that student. The local educational agency 
cannot refuse to admit the student because of the need for an 
interpreter.

   Appendix B to Part 403--Examples for 34 CFR 403.194--Comparability 
                              Requirements

    Methods by which a local educational agency can demonstrate its 
compliance with the comparability requirements in 34 CFR 403.194(a) 
include the following:
    Example 1: The local educational agency files with the State board a 
written assurance that it has established and implemented--
    (a) A district-wide salary schedule;
    (b) A policy to ensure equivalence among secondary schools or sites 
in teachers, administrators, and auxiliary personnel; and
    (c) A policy to ensure equivalency among secondary schools or sites 
in the provision of curriculum materials and instructional supplies.
    Example 2: The local educational agency establishes and implements 
other procedures for ensuring comparability, such as the following:
    (a) Comparing the average number of students per instructional staff 
in each secondary school or site served with Federal funds awarded under 
the State plan with the average number of students per instructional 
staff in secondary schools or sites not served with Federal funds 
awarded under the State plan. A served school is considered comparable 
if its average does not exceed 110 percent of the average of schools or 
sites in the local educational agency not served with Federal funds 
awarded under the State plan; or
    (b) Comparing the average instructional staff salary expenditures 
per student in each secondary school or site served with Federal funds 
awarded under the State plan with the average instructional staff salary 
expenditure per student in schools or sites in the local educational 
agency not served with Federal funds awarded under the State plan. A 
served school is considered comparable if its average is at least 90 
percent of the average of schools or sites not served with Federal funds 
awarded under the State plan.



PART 406--STATE-ADMINISTERED TECH-PREP EDUCATION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
406.1  What is the State-Administered Tech-Prep Education Program?
406.2  Who is eligible for an award?

[[Page 69]]

406.3  What activities may the Secretary fund?
406.4  What regulations apply?
406.5  What definitions apply?

             Subpart B--How Does a State Apply for a Grant?

406.10  What must the State application contain?

       Subpart C--How Does the Secretary Make a Grant to a State?

406.20  How does the Secretary make allotments?
406.21  How does the Secretary make reallotments?

 Subpart D--What Conditions Must Be Met After a State Receives an Award?

406.30  Who is eligible to apply to a State for an award?
406.31  How does a State carry out the State-Administered Tech-Prep 
          Education Program?
406.32  What are the local application requirements?
406.33  What are the reporting requirements?

    Authority: 20 U.S.C. 2394-2394e, unless otherwise noted.

    Source: 57 FR 36763, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 406.1  What is the State-Administered Tech-Prep Education Program?

    If the annual appropriation for tech-prep education exceeds 
$50,000,000, the State-Administered Tech-Prep Education Program provides 
financial assistance for--
    (a) Planning and developing four-year or six-year programs designed 
to provide a tech-prep education program leading to a two-year associate 
degree or certificate; and
    (b) Planning and developing, in a systematic manner, strong, 
comprehensive links between secondary schools and postsecondary 
educational institutions.

(Authority: 20 U.S.C. 2394(b))

[57 FR 36763, Aug. 14, 1992, as amended at 59 FR 38513, July 28, 1994]



Sec. 406.2  Who is eligible for an award?

    A State board of vocational education (State board) in the fifty 
States, Puerto Rico, the District of Columbia, or the Virgin Islands is 
eligible for an allotment under this program.

(Authority: 20 U.S.C. 2394a(b))



Sec. 406.3  What activities may the Secretary fund?

    (a) The Secretary makes allotments to State boards to provide 
funding for consortia described in Sec. 406.30 for tech-prep education 
projects.
    (b) A State board assists projects that must--
    (1) Be carried out under an articulation agreement between the 
members of the consortium;
    (2) Consist of the two years or four years of secondary school 
preceding graduation and two years of higher education, or an 
apprenticeship training program of at least two years following 
secondary instruction, with a common core of required proficiency in 
mathematics, science, communications, and technologies designed to lead 
to an associate degree or certificate in a specific career field;
    (3) Include the development of tech-prep education program curricula 
appropriate to the needs of the consortium participants;
    (4) Include in-service training for teachers that--
    (i) Is designed to train teachers to implement tech-prep education 
program curricula effectively;
    (ii) Provides for joint training for teachers from all participants 
in the consortium; and
    (iii) May provide training on weekends, evenings, or during the 
summer in the form of sessions, institutes, or workshops;
    (5) Include training activities for counselors designed to enable 
counselors to more effectively--
    (i) Recruit students for tech-prep education programs;
    (ii) Ensure that students successfully complete tech-prep education 
programs; and
    (iii) Ensure that students are placed in appropriate employment;
    (6) Provide equal access to the full range of tech-prep education 
programs to individuals who are members of special populations, 
including the development of tech-prep education program services 
appropriate to the needs of

[[Page 70]]

these individuals so that these individuals have an opportunity to enter 
tech-prep education that is equal to the opportunity afforded to the 
general student population; and
    (7) Provide preparatory services that assist all populations to 
participate in tech-prep education programs.
    (c) A project assisted under this part may also--
    (1) Provide for the acquisition of tech-prep education program 
equipment; and
    (2) Acquire, as part of the planning activities of the tech-prep 
education program, technical assistance from State or local entities 
that have successfully designed, established, and operated tech-prep 
education programs.

(Authority: 20 U.S.C. 2394a, 2394b)

[57 FR 36763, Aug. 14, 1992, as amended at 59 FR 38514, July 28, 1994]



Sec. 406.4  What regulations apply?

    The following regulations apply to the State-Administered Tech-Prep 
Education Program:
    (a) The regulations in this part 406.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2394-2394e)



Sec. 406.5  What definitions apply?

    (a) The definitions in 34 CFR 400.4 apply to this part.
    (b) The following definitions also apply to this part:
    Articulation agreement means a commitment to a program designed to 
provide students with a non-duplicative sequence of progressive 
achievement leading to competencies in a tech-prep education program.
    Community college--
    (1) Has the meaning provided in 34 CFR 400.4 for the term 
Institution of higher education for an institution that provides not 
less than a two-year program that is acceptable for full credit toward a 
bachelor's degree; and
    (2) Includes tribally controlled community colleges.
    Institution of higher education includes an institution offering 
apprenticeship programs of at least two years beyond the completion of 
secondary school, and includes, in addition to the institutions covered 
by the definition of the term institution of higher education in 34 CFR 
400.4, a--
    (1) Proprietary institution of higher education;
    (2) Postsecondary vocational institution;
    (3) Department, division, or other administrative unit in a college 
or university that provides primarily or exclusively an accredited 
program of education in professional nursing and allied subjects leading 
to the degree of bachelor of nursing, or to be an equivalent degree, or 
to a graduate degree in nursing; and
    (4) Department, division, or other administrative unit in a junior 
college, community college, college, or university that provides 
primarily or exclusively an accredited two-year program of education in 
professional nursing and allied subjects leading to an associate degree 
in nursing or an equivalent degree.
    Tech-prep education program means a combined secondary and 
postsecondary program that--
    (1) Leads to an associate degree or two-year certificate;
    (2) Provides technical preparation in at least one field of 
engineering technology, applied science, mechanical, industrial, or 
practical art or trade, or agriculture, health, or business;
    (3) Builds student competence in mathematics, science, and 
communications (including through applied academics) through a 
sequential course of study; and
    (4) Leads to placement in employment.

(Authority: 20 U.S.C. 1088 and 2394e)



             Subpart B--How Does a State Apply for a Grant?



Sec. 406.10  What must the State application contain?

    To receive a grant under this program, a State board shall submit an 
application to the Secretary at such time, in such manner, as the 
Secretary prescribes. The State board may submit an application along 
with the State plan submitted in accordance with 34 CFR 403.30. The 
application must include a description of--

[[Page 71]]

    (a) The requirements for State board approval of funding of a local 
tech-prep education project, including--
    (1) Whether the State board intends to make awards on a competitive 
basis or on the basis of a formula; and
    (2) If a formula is to be used, a description of that formula;
    (b) How the State board will perform the following:
    (1) Approve applications based on their potential to create an 
effective tech-prep education program as described in Sec. 406.3(b).
    (2) Give special consideration to applicants that--
    (i) Provide for effective employment placement activities or 
transfer of students to four-year baccalaureate degree programs;
    (ii) Are developed in consultation with business, industry, labor 
unions, and institutions of higher education that award baccalaureate 
degrees; and
    (iii) Address effectively the issues of dropout prevention and re-
entry and the needs of minority youth of limited English proficiency, 
youth with disabilities, and disadvantaged youth;
    (3) Ensure an equitable distribution of assistance between urban and 
rural consortium participants;
    (c) How the State board will ensure that local recipients meet the 
requirements of this program; and
    (d) How activities under this program will be coordinated with other 
tech-prep education programs, services, and activities provided under 
the State plan.

(Approved by the Office of Management and Budget under Control No. 1830-
0029)

(Authority: 20 U.S.C. 2394c (b)-(e))

[57 FR 36763, Aug. 14, 1992, as amended at 59 FR 38514, July 28, 1994]



       Subpart C--How Does the Secretary Make a Grant to a State?



Sec. 406.20  How does the Secretary make allotments?

    The Secretary determines the amount of each State's allotment 
according to a formula in section 101(a)(2) of the Act.

(Authority: 20 U.S.C. 2394a(b)(1))



Sec. 406.21  How does the Secretary make reallotments?

    (a)(1) If the Secretary determines that any amount of a State's 
allotment under Sec. 406.20 will not be required for any fiscal year for 
carrying out the program under this part, the Secretary reallots those 
funds to one or more States that demonstrate a current need for 
additional funds and the ability to use them promptly and effectively 
upon reallotment.
    (2) The Secretary announces in the Federal Register the dates on 
which funds will be reallotted.
    (b)(1) No funds reallotted under paragraph (a) of this section may 
be used for any purpose other than the purposes for which they were 
appropriated.
    (2) Any amount reallotted to a State under paragraph (a) of this 
section remains available for obligation during the succeeding fiscal 
year and is deemed to be part of the State's allotment for the fiscal 
year in which the reallotted funds are obligated.

(Authority: 20 U.S.C. 2311(a) and (d) and 2394a(b)(1))



 Subpart D--What Conditions Must Be Met After a State Receives an Award?



Sec. 406.30  Who is eligible to apply to a State for an award?

    (a) A State board shall provide subgrants or contracts to consortia 
between--
    (1) A local educational agency, intermediate educational agency, 
area vocational education school serving secondary school students, or 
secondary school funded by the Bureau of Indian Affairs; and
    (2) A nonprofit institution of higher education that--
    (i) Is qualified as an institution of higher education as defined in 
Sec. 406.5, including institutions receiving assistance under the 
Tribally Controlled Community College Assistance Act of 1978 (25 U.S.C. 
1801 et seq.);
    (ii) Is not prohibited from receiving assistance under part B of the 
Higher Education Act of 1965 pursuant to the provisions of section 
435(a)(3) of that Act; and

[[Page 72]]

    (iii) Offers a two-year associate degree program, a two-year 
certificate program, or a two-year apprenticeship training program that 
follows secondary instruction; or
    (3) A proprietary institution of higher education that--
    (i) Is qualified as an institution of higher education as defined in 
Sec. 406.5;
    (ii) Is not subject to a default management plan required by the 
Secretary; and
    (iii) Offers a two-year associate degree program.
    (b) A consortia must include at least one entity from paragraph 
(a)(1) of this section and at least one entity from either paragraph 
(a)(2) or (a)(3) of this section, and may include more than one entity 
from each group.

(Authority: 20 U.S.C. 2394a)



Sec. 406.31  How does a State carry out the State-Administered Tech-Prep Education Program?

    (a) A State board carries out the program by--
    (1) Providing State administration of its grant; and
    (2) Awarding subgrants or contracts to eligible consortia on a 
competitive basis or on the basis of a formula determined by the State 
board.
    (b) A State board may use funds reserved under 34 CFR 403.180(b)(3) 
to provide support for the State-administered Tech-Prep Education 
Program.
    (c) A State board may use no more than the amount of funds from its 
award under this part that is necessary and reasonable for--
    (1) The proper and efficient administration of this program; and
    (2) Technical assistance to promote or enhance the quality and 
effectiveness of the State's tech-prep education program.

(Authority: 20 U.S.C. 2331(c)(2); 2394a(b))



Sec. 406.32  What are the local application requirements?

    (a) Each consortium that desires to receive an award shall submit an 
application to the State board.
    (b) The application must be submitted at the time and contain the 
information prescribed by the State board, and must contain--
    (1) An articulation agreement between the participants in the 
consortium; and
    (2) A three-year plan for the development and implementation of 
activities under this part.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)

(Authority: 20 U.S.C. 2394c(a)-(b))



Sec. 406.33  What are the reporting requirements?

    The State board shall, in conjunction with recipients of subgrants 
and contracts, with respect to assistance received under this part, 
submit to the Secretary reports as may be required by the Secretary to 
ensure that grantees are complying with the requirements of this part.

(Approved by the Office of Management and Budget under Control No. 1830-
0030)


(Authority: 20 U.S.C. 2394a-2394e)



PART 410--TRIBALLY CONTROLLED POSTSECONDARY VOCATIONAL INSTITUTIONS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
410.1  What is the Tribally Controlled Postsecondary Vocational 
          Institutions Program?
410.2  Who is eligible for an award?
410.3  What activities may the Secretary fund?
410.4  What regulations apply?
410.5  What definitions apply?

               Subpart B--How Does One Apply for an Award?

410.10  What must an application contain?

            Subpart C--How Does the Secretary Make an Award?

410.20  How does the Secretary apply the selection criteria in 
          Sec. 410.21?
410.21  What selection criteria does the Secretary use for institutional 
          support grants?
410.22  What additional factors does the Secretary consider?
410.23  How does the Secretary select grantees for institutional support 
          grants?
410.24  How does the Secretary award additional grants?

[[Page 73]]

         Subpart D--What Conditions Must Be Met After an Award?

410.30  What expenses are allowable under an institutional support 
          grant?
410.31  What other provisions apply to this program?

    Authority: 20 U.S.C. 2397-2397h, unless otherwise noted.

    Source: 57 FR 36773, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 410.1  What is the Tribally Controlled Postsecondary Vocational Institutions Program?

    The Tribally Controlled Postsecondary Vocational Institutions 
Program provides grants for the operation and improvement of tribally 
controlled postsecondary vocational institutions to ensure continued and 
expanded educational opportunities for Indian students, and to allow for 
the improvement and expansion of the physical resources of those 
institutions.

(Authority: 20 U.S.C. 2397 and 2397c)



Sec. 410.2  Who is eligible for an award?

    A tribally controlled postsecondary vocational institution is 
eligible for assistance under this part if it--
    (a) Is governed by a board of directors or trustees, a majority of 
whom are Indians;
    (b) Demonstrates adherence to stated goals, a philosophy, or a plan 
of operation that fosters individual Indian economic and self-
sufficiency opportunity, including programs that are appropriate to 
stated tribal goals of developing individual entrepreneurships and self-
sustaining economic infrastructures on reservations;
    (c) Has been in operation for at least three years;
    (d) Holds accreditation with or is a candidate for accreditation by 
a nationally recognized accrediting authority for postsecondary 
vocational education; and
    (e) Enrolls the full-time equivalency of not fewer than 100 
students, of whom a majority are Indians.

(Authority: 20 U.S.C. 2397b)



Sec. 410.3  What activities may the Secretary fund?

    The Secretary provides grants for basic support for the education 
and training of Indian students, including--
    (a) Training costs;
    (b) Educational costs;
    (c) Equipment costs;
    (d) Administrative costs; and
    (e) Costs of operation and maintenance of the institution.

(Authority: 20 U.S.C. 2397a)



Sec. 410.4  What regulations apply?

    The following regulations apply to the Tribally Controlled 
Postsecondary Vocational Institutions Program:
    (a) The regulations in this part 410.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2397-2397h)



Sec. 410.5  What definitions apply?

    (a) The definitions in 34 CFR 400.4 apply to this part, except for 
the definition of the term Act.
    (b) The following definitions also apply to this part:
    Act means the Tribally Controlled Vocational Institutions Support 
Act of 1990.
    Indian means a person who is a member of an Indian tribe.
    Indian student count means a number equal to the total number of 
Indian students enrolled in each tribally controlled vocational 
institution, determined as follows:
    (1) The registrations of Indian students as in effect on October 1 
of each year.
    (2) Credits or clock hours toward a certificate earned in classes 
offered during a summer term must be counted toward the computation of 
the Indian student count in the succeeding fall term.
    (3) Credits or clock hours toward a certificate earned in classes 
during a summer term must be counted toward the computation of the 
Indian student count if the institution at which the student is in 
attendance has established criteria for the admission of the student on 
the basis of the student's ability to benefit from the education or

[[Page 74]]

training offered. The institution is presumed to have established those 
criteria if the admission procedures for those studies include 
counseling or testing that measures the student's aptitude to 
successfully complete the course in which the student has enrolled. 
Credit earned by the student for purposes of obtaining a high school 
degree or its equivalent may not be counted toward the computation of 
the Indian student count.
    (4) Indian students earning credits in any continuing education 
program of a tribally controlled vocational institution must be included 
in determining the sum of all credit or clock hours.
    (5) Credits or clock hours earned in a continuing education program 
must be converted to the basis that is in accordance with the 
institution's system for providing credit for participation in those 
programs.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaskan native village or 
regional or village corporation as defined in or established pursuant to 
the Alaskan Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that 
is federally recognized as eligible for the special programs and 
services provided by the United States to Indians because of their 
status as Indians.
    Tribally controlled postsecondary vocational institution means an 
institution of higher education that is formally controlled, or has been 
formally sanctioned or chartered by the governing body of an Indian 
tribe or tribes, and that offers technical degrees or certificate 
granting programs. This term does not include an institution that is a 
tribally controlled community college as defined in 34 CFR 400.4. (See 
Cong. Rec. S4116 (daily ed. April 5, 1990) (Statement of Senator 
Bingaman); Cong. Rec. H1708 (daily ed. May 9, 1989) (Statement of Rep. 
Richardson)).

(Authority: 20 U.S.C. 2397h and 25 U.S.C. 1801 (1) and (2))



               Subpart B--How Does One Apply for an Award?



Sec. 410.10  What must an application contain?

    (a) An application for a grant under the Tribally Controlled 
Postsecondary Vocational Institutions Program must include the 
following:
    (1) Documentation showing that the institution is eligible according 
to the requirements in Sec. 410.2.
    (2) A description of the fiscal control and fund accounting 
procedures to be used for all funds received under this program that 
will allow the Secretary to monitor expenditures and the Education 
Department Inspector General, the U.S. Comptroller General, or an 
independent non-Federal auditor to audit the institution's programs.
    (3) The institution's operating expenses for the preceding fiscal 
year, including allowable expenses listed in Sec. 410.30.
    (4) The institution's Indian student count.
    (b) An application for an institutional support grant must also 
contain a comprehensive development plan addressing the following:
    (1) The institutional mission statement, i.e., a broad statement of 
purpose, that identifies the institution's distinguishing 
characteristics, including the characteristics of the students the 
institution serves and plans to serve and the programs of study it 
offers and proposes to offer.
    (2) Data for the past three academic years reflecting the number and 
required qualifications of the teaching and administrative staff, the 
number of students enrolled, attendance rates, dropout rates, graduation 
rates, rate of job placement or college enrollment after graduation, and 
the most significant scholastic problems affecting the student 
population.
    (3) A description of how the institution is responsive to the 
current and projected labor market needs in its geographic area, 
including the institution's plans for placement of students.
    (4) Assumptions concerning the institutional environment, the 
potential number of students to be served, enrollment trends, and 
economic factors that could affect the institution.
    (5) Major problems or deficiencies that inhibit the institution from 
realizing its mission.
    (6) Long-range and short-range goals that will chart the growth and 
development of the institution and address the

[[Page 75]]

problems identified under paragraph (b)(5) of this section.
    (7) Measurable objectives related to reaching each goal.
    (8) Time-frames for achieving the goals and objectives described in 
paragraphs (b)(6) and (7) of this section.
    (9) Priorities for implementing improvements concerning 
instructional and student support, capital expenditures, equipment, and 
other priority areas.
    (10) Major resource requirements necessary to achieve the 
institution's goals and objectives, including personnel, finances, 
equipment, and facilities.
    (11) A detailed budget identifying the costs to be paid with a grant 
under this program and resources available from other Federal, State, 
and local sources that will be used to achieve the institution's goals 
and objectives. Budget and cost information must be sufficiently 
detailed to enable the Secretary to determine the amount of payments 
pursuant to section 386(b)(2) of the Act. The statement must include 
information on allowable expenses listed in Sec. 410.30.
    (12) Strategies and resources for objectively evaluating the 
institution's progress towards, and success in, achieving its goals and 
objectives.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2397b, 2397c(a), 2397d(b)(2)(B), and 2397f)



            Subpart C--How Does the Secretary Make an Award?



Sec. 410.20  How does the Secretary apply the selection criteria in Sec. 410.21?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 410.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 410.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion in Sec. 410.21 is indicated in parentheses 
after the heading for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 410.21.

(Authority: 20 U.S.C. 2397-2397h)



Sec. 410.21  What selection criteria does the Secretary use for institutional support grants?

    The Secretary uses the following criteria to evaluate an application 
for an institutional support grant:
    (a) Institutional goals and objectives. (10 points) The Secretary 
reviews each application to determine the extent to which the 
applicant's current and future institutional goals and objectives are--
    (1) Realistic and defined in terms of measurable results; and
    (2) Directly related to the problems to be solved.
    (b) Comprehensive development plan. (25 points) The Secretary 
reviews each application to determine the extent to which the plan is 
effectively designed to meet the applicant's current and future 
institutional goals and objectives, including instructional and student 
support needs, and equipment and capital requirements.
    (c) Implementation strategy. (20 points) The Secretary reviews each 
application to determine the extent to which an applicant's 
implementation strategy--
    (1) For each major activity funded under this program, is 
comprehensive and likely to be effective, taking into account the 
applicant's past performance and the data for the past three academic 
years reflecting the number and required qualifications of the teaching 
and administrative staff, the number of students enrolled, attendance 
rates, dropout rates, graduation rates, rate of job placement or college 
enrollment after graduation, and the most significant scholastic 
problems affecting the student population;
    (2) Includes a realistic timetable for each such activity; and
    (3) Includes a staff management plan likely to ensure effective 
administration of the project activities.
    (d) Budget and cost effectiveness. (20 points) The Secretary reviews 
each application to determine the extent to which--

[[Page 76]]

    (1) The budget is adequate to support the proposed activities to be 
funded under this program, including capital expenditures and 
acquisition of equipment, if applicable;
    (2) Costs are necessary and reasonable in relation to similar 
activities the institution carried out in previous years; and
    (3) The budget narrative justifies the expenditures.
    (e) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the evaluation plan the 
institution plans to use to determine its progress towards, and success 
in, achieving its goals and objectives, including the extent to which--
    (1) The plan identifies, at a minimum, types of data to be 
collected, expected outcomes, and how those outcomes will be measured;
    (2) The methods of evaluation are appropriate and, to the extent 
possible, are objective and produce data that are quantifiable; and
    (3) The methods of evaluation provide periodic data that can be used 
for ongoing program improvement.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2397-2397h)



Sec. 410.22  What additional factors does the Secretary consider?

    (a) After evaluating applications according to the criteria in 
Sec. 410.21 and consulting, to the extent practicable, with boards of 
trustees and the tribal governments chartering the institutions being 
considered, the Secretary determines whether the most highly rated 
applications are equitably distributed among Indian tribes.
    (b) The Secretary may select other applications for funding if doing 
so would improve the distribution of projects among Indian tribes.
    (c) In addition to the criteria in Sec. 410.21, the Secretary 
considers whether funding a particular applicant duplicates an effort 
already being made.

(Authority: 20 U.S.C. 2397-2397h)



Sec. 410.23  How does the Secretary select grantees for institutional support grants?

    (a) The Secretary selects at least two eligible applicants for 
funding.
    (b) If only one or two applicants are eligible, the Secretary 
selects each eligible applicant. The amount of each grant is determined 
by the quality of the application, based on the selection criteria in 
Sec. 410.22, and the respective needs of the applicants.
    (c) If there are more than two eligible applicants, the Secretary 
ranks each application using the selection criteria in Sec. 410.22. The 
Secretary funds two or more applicants. The number of grants made and 
the amount of each grant is determined by taking into account the 
quality of the applications and the respective needs of the applicants.
    (d) For fiscal years subsequent to the first year of funding, the 
Secretary follows the procedure in paragraphs (a) through (c) of this 
section, except that if appropriations for that fiscal year are not 
sufficient to pay in full the total amount that approved applicants are 
eligible to receive, the Secretary allocates the available grant amounts 
as required by section 388(a) of the Act.

(Authority: 20 U.S.C. 2397c(b))



Sec. 410.24  How does the Secretary award additional grants?

    If funds remain after providing grants to all eligible institutions, 
the Secretary makes awards as follows:
    (a) The Secretary allocates funds to institutions receiving their 
first grant under this part in an amount equal to the training equipment 
costs necessary to implement training programs.
    (b) If funds remain after the Secretary makes awards under paragraph 
(a) of this section, the Secretary reviews training equipment needs at 
each institution receiving assistance under this part at the end of the 
five-year period beginning on the first day of the first year for which 
the institution received a grant under this part, and provides 
allocations for other training equipment needs if it is demonstrated by 
the institution that its training equipment has become obsolete for its

[[Page 77]]

purposes, or that the development of other training programs is 
appropriate.

(Authority: 20 U.S.C. 2397d(d))



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 410.30  What expenses are allowable under an institutional support grant?

    An institutional support grant may only be used to pay expenses 
associated with the following:
    (a) The maintenance and operation of the program, including--
    (1) Development costs;
    (2) Costs of basic and special instruction, including special 
programs for individuals with disabilities and academic instruction;
    (3) Materials;
    (4) Student costs;
    (5) Administrative expenses;
    (6) Boarding costs;
    (7) Transportation;
    (8) Student services;
    (9) Day care and family support programs for students and their 
families, including contributions to the costs of education for 
dependents; and
    (10) Training equipment costs necessary to implement training 
programs.
    (b) Capital expenditures, including operations and maintenance, 
minor improvements and repair, and physical plant maintenance costs.
    (c) Costs associated with repair, upkeep, replacement, and upgrading 
of instructional equipment.

(Authority: 20 U.S.C. 2397d(a), (d))



Sec. 410.31  What other provisions apply to this program?

    (a) Except as specifically provided in the Act, eligibility for 
assistance under this part may not preclude any tribally controlled 
postsecondary vocational institution from receiving Federal financial 
assistance under any program authorized under the Higher Education Act 
of 1965 (20 U.S.C. 1001 et seq.) or any other applicable program for the 
benefit of institutions of higher education or vocational education.
    (b) No tribally controlled postsecondary vocational institution for 
which an Indian tribe has designated a portion of the funds appropriated 
for the tribe from funds appropriated under the Act of November 2, 1921 
(25 U.S.C. 13) may be denied a contract for that portion under the 
Indian Self-Determination and Education Assistance Act (25 U.S.C. 450 et 
seq.) (except as provided in that Act), or denied appropriate contract 
support to administer that portion of the appropriated funds.

(Authority: 20 U.S.C. 2397e)



PART 411--VOCATIONAL EDUCATION RESEARCH PROGRAM--Table of Contents




                           Subpart A--General

Sec.
411.1  What is the Vocational Education Research Program?
411.2  Who is eligible for an award?
411.3  What activities may the Secretary fund?
411.4  What regulations apply?
411.5  What definitions apply?

Subpart B [Reserved]

             Subpart C--How Does the Secretary Make a Grant?

411.20  How does the Secretary evaluate an application?
411.21  What selection criteria does the Secretary use?
411.22  What additional factors may the Secretary consider?
411.23  How does the Secretary evaluate unsolicited applications?
411.24  How does the Secretary select an unsolicited application for 
          funding?

    Authority: 20 U.S.C. 2401 and 2402, unless otherwise noted.

    Source: 57 FR 36776, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 411.1  What is the Vocational Education Research Program?

    The Vocational Education Research Program is designed to--
    (a) Improve access to vocational educational programs for 
individuals with disabilities, individuals who are disadvantaged, men 
and women who are entering nontraditional occupations, adults who are in 
need of retraining, single parents, displaced homemakers, single 
pregnant women, individuals with limited English proficiency, and

[[Page 78]]

individuals who are incarcerated in correctional institutions;
    (b) Support research and development activities that make the United 
States more competitive in the world economy by developing more fully 
the academic and occupational skills of all segments of the population 
by concentrating resources on improving educational programs leading to 
academic and occupational skill competencies needed to work in a 
technologically advanced society;
    (c) Improve the competitive process by which research projects are 
awarded;
    (d) Encourage the dissemination of findings of research projects 
assisted under the Act to all States; and
    (e) Support research activities that are readily applicable to the 
vocational education setting and are of practical application to 
vocational education administrators, counselors, instructors, and others 
involved in vocational education.

(Authority: 20 U.S.C. 2401)



Sec. 411.2  Who is eligible for an award?

    (a) Any individual or public or private agency, organization, or 
institution may apply for an award under this part.
    (b) Any individual researcher, community college, State advisory 
council, or State or local educator may submit an unsolicited research 
application.

(Authority: 20 U.S.C. 2402(a), (b))



Sec. 411.3  What activities may the Secretary fund?

    The Secretary may directly, or through grants, cooperative 
agreements, or contracts, conduct applied research on aspects of 
vocational education that are specially related to the Act, including 
the following:
    (a) Applied research on--
    (1) Effective methods for providing quality vocational education to 
individuals with disabilities, disadvantaged individuals, men and women 
in nontraditional fields, adults, single parents, displaced homemakers, 
single pregnant women, individuals with limited English proficiency, and 
individuals who are incarcerated in correctional institutions;
    (2) The development and implementation of performance standards and 
measures that fit within the needs of State boards of vocational 
education or eligible recipients as defined in 34 CFR 400.4 in carrying 
out the provisions of the Act and on the relationship of those standards 
and measures to the data system established under section 421 of the 
Act. Research may include an evaluation of existing performance 
standards and measures and dissemination of that information to State 
boards of vocational education and eligible recipients;
    (3) Strategies for coordinating local, State, and Federal vocational 
education, employment training, and economic development programs to 
maximize their efficacy and for improving worker training and 
retraining;
    (4) The constructive involvement of the private sector in public 
vocational education;
    (5) Successful methods of reinforcing and enhancing basic and more 
advanced academic and problem-solving skills in vocational settings;
    (6) Successful methods for providing students, to the maximum extent 
practicable, with experience in and understanding of all aspects of the 
industry those students are preparing to enter; and
    (7) The development of effective methods for providing quality 
vocational education to individuals with limited English proficiency, 
including research related to bilingual vocational training.
    (b) An evaluation of the use of performance standards and measures 
under the Act and the effect of those standards and measures on the 
participation of students in vocational education programs and on the 
outcomes of students in those programs, especially students who are 
members of special populations as defined in 34 CFR 400.4.

(Authority: 20 U.S.C. 2402(a))



Sec. 411.4  What regulations apply?

    The following regulations apply to the Vocational Education Research 
Program:
    (a) The regulations in this part 411.

[[Page 79]]

    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2401 and 2402)



Sec. 411.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2401 and 2402)

Subpart B [Reserved]



             Subpart C--How Does the Secretary Make a Grant?



Sec. 411.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 411.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of the 
section, based on the criteria in Sec. 411.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 411.21.
    (e) The Secretary awards five points to applications submitted by 
public or private postsecondary institutions.

(Authority: 20 U.S.C. 2402)



Sec. 411.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) National need. (20 points) The Secretary reviews each 
application to determine the extent to which the project would make a 
contribution of national significance, as measured by such factors as--
    (1) The need for the project in relation to any program priority 
announced in the Federal Register; and
    (2) The likelihood that the project will make an important 
contribution to vocational education.
    (b) Plan of operation. (25 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) High quality in the design of the project;
    (2) An effective plan of management that ensures proper and 
efficient administration of the project;
    (3) A clear description of how the objectives of the project relate 
to the purposes of the program;
    (4) The quality of the applicant's plans to use its resources and 
personnel to achieve each objective; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disability.
    (c) Key personnel. (15 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications of the project director;
    (ii) The qualifications of each of the other key personnel to be 
used in the project;
    (iii) The appropriateness of the time that each one of the key 
personnel, including the project director, will commit to the project; 
and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability.
    (2) To determine personnel qualifications under paragraphs (c)(1)(i) 
and (ii) of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience and training in project management; and
    (iii) Any other qualifications that pertain to the quality of the 
project.
    (d) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget for the project is adequate to support the project 
activities; and

[[Page 80]]

    (2) Costs are reasonable and necessary in relation to the objectives 
of the project.
    (e) Evaluation plan. (5 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the applicant's methods of 
evaluation--
    (1) Are clearly explained and appropriate to the project;
    (2) To the extent possible, are objective and produce data that are 
quantifiable;
    (3) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results;
    (4) If appropriate, identifies expected outcomes of the project 
participants and how those outcomes will be measured;
    (5) If appropriate, will provide a comparison between intended and 
observed results, and lead to the demonstration of a clear link between 
the observed results and the specific treatment of project participants; 
and
    (6) To the extent possible, include a third party evaluation.
    (f) Adequacy of resources. (5 points) The Secretary reviews each 
application to determine the adequacy of the resources that the 
applicant plans to devote to the project, including facilities, 
equipment, and supplies.
    (g) Dissemination plan. (5 points) The Secretary reviews each 
application to determine the quality of the dissemination plan for the 
project, including--
    (1) The extent to which the project is designed to yield outcomes 
that can be readily disseminated;
    (2) A clear description of the project outcomes; and
    (3) A detailed description of how information and materials will be 
disseminated, including--
    (i) Provisions for publicizing the project at the local, State, and 
national levels by conducting or delivering presentations at 
conferences, workshops, and other professional meetings and by preparing 
materials for journals articles, newsletters, and brochures;
    (ii) Provisions for demonstrating the methods and techniques used by 
the project to others interested in replicating these methods and 
techniques; and
    (iii) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2402)



Sec. 411.22  What additional factors may the Secretary consider?

    After evaluating the applications according to the criteria in 
Sec. 411.21 the Secretary may select other than the most highly rated 
applications for funding if doing so would--
    (a) Improve the geographical distribution of projects funded under 
this program; or
    (b) Contribute to the funding of a variety of approaches for 
carrying out the activities under this part.

(Authority: 20 U.S.C. 2401 and 2402)



Sec. 411.23  How does the Secretary evaluate unsolicited applications?

    (a) At any time during a fiscal year, the Secretary may accept and 
consider for funding an unsolicited application that has not been 
submitted under a competition announced in the Federal Register for that 
fiscal year, if the project proposes activities described in Sec. 411.3.
    (b) Notwithstanding the provisions of 34 CFR 75.100, the Secretary 
may fund an unsolicited application without publishing an application 
notice in the Federal Register.
    (c) The Secretary may select an unsolicited application for funding 
in accordance with the procedures in Secs. 411.20(e) and 411.24.
    (d) The Secretary assigns the 15 points reserved under 
Sec. 411.20(b) as follows:
    (1) Ten points to the selection criterion in Sec. 411.21(a)--
national need.
    (2) Five points to the selection criterion in Sec. 411.21(b)--plan 
of operation.

(Authority: 20 U.S.C. 2402)

[[Page 81]]



Sec. 411.24  How does the Secretary select an unsolicited application for funding?

    (a) After evaluating an unsolicited research application on the 
basis of the criteria in Sec. 411.21, the Secretary compares that 
application to other unsolicited research applications the Secretary has 
received.
    (b) The Secretary may fund an unsolicited research application at 
any time during the fiscal year.

(Authority: 20 U.S.C. 2402)



PART 412--NATIONAL NETWORK FOR CURRICULUM COORDINATION IN VOCATIONAL AND TECHNICAL EDUCATION--Table of Contents




                           Subpart A--General

Sec.
412.1  What is the National Network for Curriculum Coordination in 
          Vocational and Technical Education?
412.2  Who is eligible for an award?
412.3  What activities may the Secretary fund?
412.4  What is the National Network of Directors Council?
412.5  What regulations apply?
412.6  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

412.20  How does the Secretary evaluate an application?
412.21  What selection criteria does the Secretary use?

         Subpart D--What Conditions Must Be Met After an Award?

412.30  What additional activities must be carried out by Curriculum 
          Coordination Centers?
412.31  What existing dissemination systems must be used?

    Authority: 20 U.S.C. 2402(c), unless otherwise noted.

    Source: 57 FR 36778, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 412.1  What is the National Network for Curriculum Coordination in Vocational and Technical Education?

    The National Network for Curriculum Coordination in Vocational and 
Technical Education (Network) is a system of six curriculum coordination 
centers that disseminate information resulting from research and 
development activities carried out under the Act, in order to ensure 
broad access at the State and local levels to the information being 
disseminated.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.2  Who is eligible for an award?

    State and local educational agencies, postsecondary educational 
institutions, and other public and private agencies, organizations, and 
institutions are eligible for an award under this program.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.3  What activities may the Secretary fund?

    (a) The Secretary provides grants, cooperative agreements, or 
contracts to six regional curriculum coordination centers (CCCs).
    (b) Each CCC must--(1) Provide for national dissemination of 
information on effective vocational and technical education programs and 
materials, with particular attention to regional programs;
    (2) Be accessible by electronic means;
    (3) Provide leadership and technical assistance in the design, 
development, and dissemination of curricula for vocational education;
    (4) Coordinate the sharing of information among the States with 
respect to vocational and technical education curricula;
    (5) Reduce duplication of effort in State activities for the 
development of vocational and technical education curricula; and
    (6) Promote the use of research findings with respect to vocational 
education curricula.
    (c) The six regional CCCs assisted with funds under this program 
must

[[Page 82]]

serve States according to the Department of Education's regional 
alignment as follows:
    (1) The Northeast Curriculum Coordination Center serves Connecticut, 
Maine, Massachusetts, New Hampshire, New Jersey, New York, Puerto Rico, 
Rhode Island, Vermont, and the Virgin Islands.
    (2) The Southeast Curriculum Coordination Center serves Alabama, 
Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, 
and Tennessee.
    (3) The East Central Curriculum Coordination Center serves Delaware, 
the District of Columbia, Indiana, Illinois, Maryland, Michigan, 
Minnesota, Ohio, Pennsylvania, Virginia, West Virginia, and Wisconsin.
    (4) The Midwest Curriculum Coordination Center serves Arkansas, 
Iowa, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma, and 
Texas.
    (5) The Northwest Curriculum Coordination Center serves Alaska, 
Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, 
Washington, and Wyoming.
    (6) The Western Curriculum Coordination Center serves American 
Samoa, Arizona, California, Guam, Hawaii, Nevada, the Northern Mariana 
Islands, and Palau until the Compact of Free Association with Palau 
takes effect.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.4  What is the National Network of Directors Council?

    (a) The National Network of Directors Council (Council) enhances the 
effectiveness of the Network by--
    (1) Planning for inter-center coordination, dissemination, and 
diffusion activities;
    (2) Providing leadership to ensure cohesiveness for overall Network 
functions;
    (3) Promoting the adoption and adaptation of curriculum materials;
    (4) Maintaining liaison with dissemination systems described in 
Sec. 412.32;
    (5) Convening at least twice a year; and
    (6) Planning for and participating in an annual meeting of CCCs that 
includes activities such as displays of current curriculum materials 
from each CCC, inservice training sessions, and hands-on experience with 
new technologies in vocational and technical education. This meeting 
must be held in a different region each year.
    (b) The Council is composed of the six CCC directors and a liaison 
from the Department. One of the CCC directors serves as chair for the 
Council and has responsibilities for submitting minutes of Council 
meetings to the Secretary.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.5  What regulations apply?

    The following regulations apply to the National Network for 
Curriculum Coordination in Vocational and Technical Education:
    (a) The regulations in this part 412.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.6  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2402(c))

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 412.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 412.21.
    (b) The Secretary may award up to 100 points, including 15 points to 
be distributed in accordance with paragraph (d) of this section, based 
on the criteria in Sec. 412.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 412.21.

(Authority: 20 U.S.C. 2402(c))

[[Page 83]]



Sec. 412.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Regional need. (30 points) The Secretary reviews each 
application to determine the applicant's understanding of and 
responsiveness to the needs of the region, including the extent to which 
the applicant--
    (1) Demonstrates an understanding of the leadership responsibilities 
associated with serving as a resource center and facilitator for States 
in a region, including the region's need for inservice training, holding 
regional meetings, providing technical assistance, coordinating with 
State directors of vocational education, maintaining a lending library, 
and disseminating information regularly;
    (2) Proposes adequate mechanisms and procedures for reporting the 
results of curriculum networking services and activities of the 50 
States, District of Columbia, Puerto Rico, and the Outlying Areas;
    (3) Demonstrates the capacity to disseminate information on 
effective vocational education materials, including curriculum 
materials;
    (4) Demonstrates an understanding of the operation of the Vocational 
Education Curriculum Materials and ADVOCNET Systems and the need for 
establishing a Tech-Prep education clearinghouse; and
    (5) Demonstrates the capacity to undertake the responsibilities 
associated with participation as a member of the Network Directors 
Council described in Sec. 412.4.
    (b) Plan of operation. (25 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the design of the project;
    (2) The extent to which the management plan ensures proper and 
efficient administration of the project;
    (3) How well the objectives of the project relate to the purpose of 
the program;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disability.
    (c) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the proposed project, including--
    (i) The qualifications of the project director;
    (ii) The qualifications of each of the other key personnel to be 
used in the project;
    (iii) The appropriateness of the time that each person referred to 
in paragraphs (c)(1) (i) and (ii) of this section will commit to the 
project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability.
    (2) To determine the personnel qualifications under paragraphs 
(c)(1)(i) and (ii) of this section, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in the fields related to the objectives of the project; 
and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (d) Institutional commitment. (10 points) The Secretary reviews each 
application to determine the extent to which the applicant--
    (1) Has experience with vocational education curriculum and 
dissemination;
    (2) Will initiate and maintain liaison functions with regional 
States; and
    (3) Will provide adequate facilities, equipment, and supplies.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is cost effective and adequate to support the project 
activities; and
    (2) The budget contains costs that are reasonable in relation to the 
objectives of the project.
    (f) Evaluation plan. (5 points) The Secretary reviews each 
application to determine the quality of the project's

[[Page 84]]

evaluation plan, including the extent to which the plan--
    (1) Is clearly explained and is appropriate to the project; and
    (2) Identifies expected outcomes of the services provided and how 
those services will be measured.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2402(c))



         Subpart D--What Conditions Must Be Met After An Award?



Sec. 412.30  What additional activities must be carried out by Curriculum Coordination Centers?

    In carrying out the activities described in Sec. 412.3, each CCC 
must perform the following activities:
    (a) Assist States in the development, adaptation, adoption, 
dissemination, and use of curriculum materials and services and other 
information resulting from research and development activities carried 
out under the Act, including performing these activities during at least 
two regional meetings involving States served by the CCC. One of these 
regional meetings must be conducted jointly with the other five CCCs and 
their regional States at the meeting described in Sec. 412.4(a)(6).
    (b) Coordinate with other curriculum coordination centers funded 
under this part.
    (c) Coordinate with the State salaried State liaison representative 
(SLR), who is appointed by the State director of vocational education. 
The SLR has primary responsibilities for liaison activities within the 
States, including--
    (1) Obtaining new curriculum and research and development materials 
for Network sharing;
    (2) Informing localities and State agencies of Network services;
    (3) Disseminating CCC related materials;
    (4) Arranging for intrastate and interstate development and 
dissemination activities;
    (5) Arranging for technical assistance and inservice training 
workshops;
    (6) Participating in regional CCC meetings; and
    (7) Fostering adoption and adaptations of materials available 
through the CCC.
    (d) Maintain a lending library with a collection of vocational 
education curriculum, research, and development materials for use by the 
States served by the CCC.
    (e) Each CCC must participate in the Council activities described in 
Sec. 412.4.

(Authority: 20 U.S.C. 2402(c))



Sec. 412.31  What existing dissemination systems must be used?

    In carrying out its activities, each CCC must use existing 
dissemination systems, including the National Diffusion Network and the 
National Center or Centers for Research in Vocational Education, in 
order to ensure broad access at the State and local levels to the 
information being disseminated.

(Authority: 20 U.S.C. 2402(c))



PART 413--NATIONAL CENTER OR CENTERS FOR RESEARCH IN VOCATIONAL EDUCATION--Table of Contents




                           Subpart A--General

Sec.
413.1  What is the National Center or Centers for Research in Vocational 
          Education?
413.2  Who is eligible to apply for the National Center or Centers?
413.3  What kinds of activities are carried out?
413.4  How does the Secretary designate a National Center or Centers?
413.5  What regulations apply?
413.6  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

413.20  How does the Secretary evaluate an application?
413.21  What selection criteria does the Secretary use to evaluate an 
          application proposing research and development activities?
413.22  What selection criteria does the Secretary use to evaluate an 
          application proposing dissemination and training activities?

[[Page 85]]

         Subpart D--What Conditions Must Be Met After an Award?

413.30  What are the restrictions on the use of funds?
413.31  Must a National Center have a director?
413.32  What are the requirements for coordination?
413.33  What substantive studies must the National Center or Centers 
          conduct and submit?
413.34  What activities must be performed during the final year of an 
          award?

    Authority: 20 U.S.C. 2404, unless otherwise noted.

    Source: 57 FR 36780, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 413.1  What is the National Center or Centers for Research in Vocational Education?

    The Secretary supports the establishment of one or two National 
Centers for Research in Vocational Education (National Center) in the 
areas of--
    (a) Applied research and development; and
    (b) Dissemination and training.

(Authority: 20 U.S.C. 2404)



Sec. 413.2  Who is eligible to apply for the National Center or Centers?

    An institution of higher education or consortium of institutions of 
higher education may apply to be a National Center under this part.

    Cross-Reference: See 34 CFR 75.127 through 75.129, Group 
Applications.

(Authority: 20 U.S.C. 2404(a)(5))



Sec. 413.3  What kinds of activities are carried out?

    The Secretary provides a grant or cooperative agreement to a 
National Center or Centers that are designed to perform either one or 
both of the following activities:
    (a) Applied research and development activities. (1) A major purpose 
of the National Center is to design and conduct research and development 
activities that are consistent with the purposes of the Act, including--
    (i) Longitudinal studies that extend over a period of years;
    (ii) Supplementary and short-term activities; and
    (iii) Upon negotiation with the center, and if funds are provided 
pursuant to section 404(d) of the Act, such other topics as the 
Secretary may designate.
    (2) The National Center shall conduct applied research and 
development activities that include examination of the following:
    (i) Economic changes that affect the skills that employers seek and 
entrepreneurs need.
    (ii) Integration of academic and vocational education.
    (iii) Efficient and effective practices for addressing the needs of 
special populations.
    (iv) Efficient and effective methods for delivering vocational 
education.
    (v) Articulation of school and college instruction with high quality 
work experience.
    (vi) Recruitment, education, and enhancement of vocational teachers 
and other professionals in the field.
    (vii) Accountability processes in vocational education, including 
identification and evaluation of the use of appropriate performance 
standards for student, program, and State-level outcomes.
    (viii) Effective practices that educate students in all aspects of 
the industry the students are preparing to enter.
    (ix) Effective methods for identifying and inculcating literacy and 
other communication skills essential for effective job preparation and 
job performance.
    (x) Identification of strategic, high priority occupational skills 
and skills formation approaches needed to maintain the competitiveness 
of the United States workforce, sustain high-wage, high-technology jobs, 
and address national priorities such as technical jobs needed to protect 
and restore the environment.
    (xi) Identification of practices and strategies that address 
entrepreneurial development for minority-owned enterprises.
    (3) The applied research and development activities must include--
    (i) An emphasis on the recruitment, education, and enhancement of 
minority and female vocational teachers and professionals; and

[[Page 86]]

    (ii) Activities that aid in the development of minorities and women 
for leadership roles in vocational education.
    (b) Dissemination and training activities. (1) A major purpose of 
the National Center is to design and conduct dissemination and training 
activities that are consistent with the purposes of the Act, including--
    (i) The broad dissemination of the results of the research and 
development conducted by the National Center;
    (ii) The development and utilization of a national level 
dissemination network including functions such as clearinghouses, 
databases, and telecommunications;
    (iii) Planning, developing, and conducting training activities; and
    (iv) Upon negotiation with the Center and if funds are provided 
pursuant to section 404(d) of the Act, such other topics as the 
Secretary may designate.
    (2) The National Center shall conduct dissemination and training 
activities that include the following:
    (i) Teacher and administrator training and leadership development.
    (ii) Technical assistance to ensure that programs serving special 
populations are effective in delivering well-integrated and 
appropriately articulated vocational and academic offerings for 
secondary, postsecondary, and adult students.
    (iii) Needs assessment, design, and implementation of new and 
revised programs with related curriculum materials to facilitate 
vocational-academic integration.
    (iv) Evaluation and follow-through to maintain and extend quality 
programs.
    (v) Assistance in technology transfer and articulation of program 
offerings from advanced technology centers to minority enterprises.
    (vi) Assistance to programs and States on the use of accountability 
indicators, including appropriate and innovative performance standards.
    (vii) Delivery of information and services using advanced 
technology, if appropriate, to increase the effectiveness and efficiency 
of knowledge transfer.
    (viii) Development of processes for synthesis of research, in 
cooperation with a broad array of users, including vocational and non-
vocational educators, employers and labor organizations.
    (ix) Dissemination of exemplary curriculum and instructional 
materials, and development and publication of curriculum materials (in 
conjunction with vocational and nonvocational constituency groups, if 
appropriate).
    (x) Technical assistance in recruiting, hiring, and advancing 
minorities in vocational education.
    (3) The training and leadership development activities must include 
an emphasis on--
    (i) Training minority and female teachers; and
    (ii) Programs and activities that aid in the development of 
minorities and women for leadership roles in vocational education.
    (4) Advanced technology may include audio-video cassettes, 
electronic networking, satellite-assisted programming, computer-based 
conferencing, and interactive video.

(Authority: 20 U.S.C. 2404 (b) and (c); House Report No. 101-660, 101st 
Cong. 2nd Sess. p. 143 (1990))



Sec. 413.4  How does the Secretary designate a National Center or Centers?

    (a) The Secretary designates a National Center or Centers once every 
five years.
    (b) In designating the National Center or Centers for Research in 
Vocational Education, the Secretary may support--
    (1) One National Center that conducts both research and development 
activities and dissemination and training activities; or
    (2) Two National Centers: one that conducts research and development 
activities and one that conducts dissemination and training activities.

(Authority: 20 U.S.C. 2404)



Sec. 413.5  What regulations apply?

    The following regulations apply to the National Center or Centers:
    (a) The regulations in this part 413.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2404)

[[Page 87]]



Sec. 413.6  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part, except that the 
term ``institution of higher education'' has the same meaning as 
provided in 34 CFR 403.117(b).

(Authority: 20 U.S.C. 1085(b) and 2404)

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 413.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Secs. 413.21 and 413.22.
    (b) The Secretary may award up to 100 points to each set of criteria 
in Secs. 413.21 and 413.22, including a reserved 10 points for each set 
of criteria to be distributed in accordance with paragraph (d) of this 
section.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Secs. 413.21 and 413.22.
    (e) The Secretary may hold two separate competitions, with the same 
closing date, for the National Center or Centers. One competition will 
be held for research and development activities and the second 
competition will be held for dissemination and training activities. An 
institution of higher education or consortium of higher education 
institutions may submit a research and development application; a 
dissemination and training application; or both as separate applications 
under separate covers.
    (f) The Secretary evaluates applications for the research and 
development center and the dissemination and training center 
independently against the criteria in Secs. 413.21 and 413.22 whether an 
institution or consortium of institutions is competing for either or 
both sets of activities.
    (g) In accordance with section 404(a)(5) of the Act, the Secretary 
will give preference in grant selection to institutions or consortia of 
institutions that demonstrate the ability to carry out both the research 
and development and the dissemination and training activities 
effectively, either directly or by contract.
    (h) An institution or consortium of institutions that has submitted 
two applications and applied for a single grant for the purpose of 
carrying out both activities and that has earned 80 points or higher on 
each of its two applications, will be deemed by the Secretary to have 
demonstrated the ability to carry out both activities effectively.
    (i) The Secretary will award a single grant to an institution or 
consortium of institutions that has both--
    (1) Demonstrated the ability to carry out both program activities 
effectively, in accordance with paragraph (h) of this section; and
    (2) Earned the highest combined score among those institutions or 
consortia of institutions that have demonstrated the ability to carry 
out both activities effectively.
    (j) If no institution or consortium of institutions is selected for 
a single grant award, the institution or consortia of institutions 
ranking highest in each of the two competitions will each receive a 
grant award.

(Authority: 20 U.S.C. 2404)



Sec. 413.21  What selection criteria does the Secretary use to evaluate an application proposing research and development activities?

    The Secretary uses the following selection criteria in evaluating 
each research and development application:
    (a) Program factors. (20 points) The Secretary reviews each 
application to determine the extent to which each of the required 
research and development activities described in Sec. 413.3(a)(2) will 
be of high quality and effective.
    (b) Plan of operation. (35 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
proposed center, including--
    (1) The applicant's plan for managing the National Center;
    (2) The procedures the applicant will use to implement the National 
Center

[[Page 88]]

particularly with regard to the public or private nonprofit institution 
of higher education with which it is associated and, in the case of a 
consortium, with the other member institutions of the consortium;
    (3) The applicant's plan for managing the National Center's 
activities and personnel, including--
    (i) Quality control procedures for its activities;
    (ii) Procedures for assuring compliance with timelines;
    (iii) Coordination procedures for communicating among staff, 
subcontractors, members of the consortium, if any, and the Department of 
Education;
    (iv) Procedures for ensuring that adequate progress is being made 
toward achieving the goals of the grantee by subcontractors, and members 
of a consortium; and
    (v) Procedures for ensuring that adequate budget, accounting, and 
recordkeeping procedures will be used;
    (4) The quality of the applicant's detailed plans for year one of 
the National Center, including--
    (i) Methodology and plan of operation;
    (ii) Tasks and timelines;
    (iii) Deliverables; and
    (iv) Dissemination plans for each project; and
    (5) The quality of the applicant's general plans for developing 
appropriate, coherent, and effective vocational education research and 
development activities, or dissemination and training activities, or 
both, for years two through five.
    (c) Key personnel. (10 points) The Secretary reviews each 
application to determine the qualifications of the key personnel the 
applicant plans to use for the National Center, including--
    (1) The extent to which the Director of the National Center has--
    (i) Appropriate professional qualifications, relevant project 
management experience, and administrative skills;
    (ii) A commitment to work full-time at the National Center;
    (iii) A clear commitment to the goals of the project; and
    (iv) Sufficient authority to effectively manage the activities of 
the National Center;
    (2) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability; and
    (3) The extent to which other key personnel to be used for the 
National Center--
    (i) Have experience and training in project management and in fields 
related to the proposed activities they will be carrying out; and
    (ii) Will commit sufficient time to the project.
    (d) Vocational education experience. (10 points) The Secretary 
reviews each application to determine the extent to which the applicant 
understands the state of knowledge and practice related to vocational 
education, including--
    (1) The applicant's experience in conducting applied research and 
development activities, dissemination and training activities, or both, 
in the field of vocational education of the type described in 
Sec. 413.3;
    (2) The applicant's capacity for conducting applied research and 
development activities, dissemination and training activities, or both, 
in the field of vocational education of the type described in 
Sec. 413.3; and
    (3) How the activities of the National Center will contribute to the 
advancement of relevant theory and practice in vocational education.
    (e) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The Center has an adequate budget that is cost effective;
    (2) The budget is adequate to support the Center's activities; and
    (3) Costs are reasonable in relation to the objectives of the 
Center.
    (f) Coordination activities. (5 points) The Secretary reviews each 
application to determine the extent to which there is an effective plan 
for the coordination of activities described in Sec. 413.3 (a) and (b), 
and whether these activities are carried out between two institutions or 
within one institution.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2404)

[[Page 89]]



Sec. 413.22  What selection criteria does the Secretary use to evaluate an application proposing dissemination and training activities?

    The Secretary uses the following selection criteria in evaluating 
each dissemination and training application:
    (a) Program factors. (20 points) The Secretary reviews each 
application to determine the extent to which each of the required 
dissemination and training activities, described in Sec. 413.3(b), will 
be of high quality and effective.
    (b) The selection criteria and points in Sec. 413.21 (b), (c), (d), 
(e), and (f).

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2404)



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 413.30  What are the restrictions on the use of funds?

    (a) A National Center that performs both research and development 
activities and dissemination and training activities shall use at least 
two-thirds of its award for applied research and development.
    (b) Not more than 10 percent of each year's budget for a National 
Center may be used to respond to field-initiated needs unanticipated 
prior to the annual funding period and that are in the mission of the 
National Center, but not part of the scope of work of the grant or 
cooperative agreement.

(Authority: 20 U.S.C. 2404(a)(3) and (b))



Sec. 413.31  Must a National Center have a director?

    A National Center must have a full-time director who is appointed by 
the institution serving as the grantee.

(Authority: 20 U.S.C. 2404)



Sec. 413.32  What are the requirements for coordination?

    If the Secretary designates two National Centers, the two centers 
must coordinate their activities.

(Authority: 20 U.S.C. 2404)



Sec. 413.33  What substantive studies must the National Center or Centers conduct and submit?

    (a) The National Center conducting research and development 
activities shall annually prepare a study on the research conducted on 
approaches that lead to effective articulation for the education-to-work 
transition, including tech-prep programs, cooperative education or other 
work-based programs, such as innovative apprenticeship or mentoring 
approaches.
    (b) The National Center conducting dissemination and training 
activities shall annually prepare a study of its dissemination and 
training activities.
    (c) Annual studies described in paragraphs (a) and (b) of this 
section must be submitted to the Secretary of Education, the Secretary 
of Labor, the Secretary of Health and Human Services, the Committee on 
Labor and Human Resources of the Senate, and the Committee on Education 
and Labor of the House of Representatives.

(Authority: 20 U.S.C. 2404 (b)(2) and (c)(2))



Sec. 413.34  What activities must be performed during the final year of an award?

    During the fifth year of the award cycle, the National Center or 
Centers shall develop and remain prepared to implement a contingency 
plan for completing all substantive work by the end of the eleventh 
month of that year and transferring all projects, services, and 
activities to a successor during the twelfth month of that year.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2404)



PART 415--DEMONSTRATION CENTERS FOR THE TRAINING OF DISLOCATED WORKERS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
415.1  What is the Demonstration Centers for the Training of Dislocated 
          Workers Program?
415.2  Who is eligible for an award?
415.3  What activities may the Secretary fund?
415.4  What regulations apply?
415.5  What definitions apply?

[[Page 90]]

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

415.20  How does the Secretary evaluate an application?
415.21  What selection criteria does the Secretary use?
415.22  What additional factors may the Secretary consider?

         Subpart D--What Conditions Must Be Met After an Award?

415.30  What are the evaluation requirements?

    Authority: 20 U.S.C. 2413, unless otherwise noted.

    Source: 57 FR 36784, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 415.1  What is the Demonstration Centers for the Training of Dislocated Workers Program?

    The Demonstration Centers for the Training of Dislocated Workers 
Program provides financial assistance for establishing one or more 
demonstration centers for the retraining of dislocated workers.

(Authority: 20 U.S.C. 2413(a))



Sec. 415.2  Who is eligible for an award?

    A private nonprofit organization that is eligible to receive funding 
under title III of the Job Training Partnership Act (29 U.S.C. 1651 et 
seq.) is eligible to receive an award under this program.

(Authority: 20 U.S.C. 2413(d))



Sec. 415.3  What activities may the Secretary fund?

    (a) The Secretary provides grants or cooperative agreements for one 
or more centers that demonstrate the retraining of dislocated workers.
    (b) Each center funded by the Secretary must be designed and 
operated to provide for the use of appropriate existing Federal, State, 
and local programs and resources.
    (c) Each center may use funds to provide for--
    (1) The recruitment of unemployed workers;
    (2) Vocational evaluation;
    (3) Assessment and counseling services;
    (4) Vocational and technical training;
    (5) Support services; or
    (6) Job placement assistance.

(Authority: 20 U.S.C. 2413(a))



Sec. 415.4  What regulations apply?

    The following regulations apply to the Demonstration Centers for the 
Training of Dislocated Workers Program:
    (a) The regulations in this part 415.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2413)



Sec. 415.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2413)

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 415.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 415.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 415.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, as announced in a notice published in the 
Federal Register, the Secretary may assign the reserved 15 points among 
the criteria in Sec. 415.21.

(Authority: 20 U.S.C. 2413)



Sec. 415.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (10 points) The Secretary reviews each 
application to assess the extent to which the proposed

[[Page 91]]

demonstration center for the training of dislocated workers will--
    (1) Be located in a service area with a high concentration of 
dislocated workers, as supported by specific evidence of the need for 
the proposed demonstration center;
    (2) Provide vocational education and technical training to meet 
current and projected occupational needs;
    (3) Provide trainees with appropriate vocational evaluation, 
assessment, and counseling, support services, and job placement 
assistance;
    (4) Result in trainees becoming employed in jobs related to their 
training upon completion of their training; and
    (5) Use other appropriate Federal, State, and local programs to 
retrain, or provide services to, dislocated workers.
    (b) Educational significance. (10 points) The Secretary reviews each 
application to determine the extent to which the applicant--
    (1) Bases the proposed demonstration center for the training of 
dislocated workers on successful model vocational education programs 
that include components similar to the components required by this 
program, as evidenced by empirical data from those programs, in such 
factors as--
    (i) Student performance and achievement in vocational and technical 
training;
    (ii) High school graduation;
    (iii) Placement of students in jobs, including military service; and
    (iv) Successful transfer of students to a variety of postsecondary 
education programs;
    (2) Proposes project objectives that contribute to the improvement 
of education; and
    (3) Proposes to use innovative techniques to address educational 
problems and needs that are of national significance.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the project design, especially the establishment 
of measurable objectives for the project that are based on the project's 
overall goals;
    (2) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project over the 
award period;
    (3) How well the objectives of the project relate to the purpose of 
the program;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective including the use of appropriate 
existing Federal, State, and local programs; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disability.
    (d) Evaluation plan. (15 points) The Secretary reviews each 
application to determine the quality of the project's evaluation plan, 
including the extent to which the plan--
    (1) Is clearly explained and is appropriate to the project;
    (2) To the extent possible, is objective and will produce data that 
are quantifiable;
    (3) Identifies expected outcomes of the participants and how those 
outcomes will be measured;
    (4) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results;
    (5) Will provide a comparison between intended and observed results, 
and lead to the demonstration of a clear link between the observed 
results and the specific treatment of project participants; and
    (6) Will yield results that can be summarized and submitted to the 
Secretary for review by the Department's Program Effectiveness Panel as 
defined in 34 CFR 400.4(b).
    (e) Demonstration and dissemination. (10 points) The Secretary 
reviews each application for information to determine the effectiveness 
and efficiency of the plan for demonstrating and disseminating 
information about project activities and results throughout the project 
period, including--
    (1) High quality in the design of the dissemination plan and 
procedures for evaluating the effectiveness of the dissemination plan;

[[Page 92]]

    (2) Provisions for publicizing the project at the local, State, and 
national levels by conducting or delivering presentations at 
conferences, workshops, and other professional meetings and by preparing 
materials for journal articles, newsletters, and brochures;
    (3) Identification of target groups and provisions for demonstrating 
the methods and techniques used by the project to others interested in 
replicating these methods and techniques, such as by inviting them to 
observe project activities;
    (4) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (5) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.
    (f) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications, in relation to project requirements, of the 
project director;
    (ii) The qualifications, in relation to project requirements, of 
each of the other key personnel to be used in the project;
    (iii) The appropriateness of the time that each person referred to 
in paragraphs (f)(1) (i) and (ii) of this section will commit to the 
project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability.
    (2) To determine personnel qualifications under paragraphs (f)(1) 
(i) and (ii) of this section, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in fields related to the objectives of the project; and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (g) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is cost effective and adequate to support the project 
activities;
    (2) The budget contains costs that are reasonable and necessary in 
relation to the objectives of the project; and
    (3) The budget proposes using non-Federal resources available from 
appropriate employment, training, and education agencies in the State to 
provide project services and activities and to acquire demonstration 
center equipment and facilities.
    (h) Adequacy of resources and commitment. (5 points) (1) The 
Secretary reviews each application to determine the extent to which the 
applicant plans to devote adequate resources to the project. The 
Secretary considers the extent to which--
    (i) The facilities that the applicant plans to use are adequate; and
    (ii) The equipment and supplies that the applicant plans to use are 
adequate.
    (2) The Secretary reviews each application to determine the 
commitment to the project, including whether the--
    (i) Uses of non-Federal resources are adequate to provide project 
services and activities, especially resources of community organizations 
and State and local educational agencies; and
    (ii) Applicant has the capacity to continue, expand, and build upon 
the project when Federal assistance under this part ends.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2413)



Sec. 415.22  What additional factors may the Secretary consider?

    After evaluating the applications according to the criteria in 
Sec. 415.21, the Secretary may select applications other than the most 
highly rated applications if doing so would improve the geographical 
distribution of projects funded under this program.

(Authority: U.S.C. 2413)

[[Page 93]]



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 415.30  What are the evaluation requirements?

    (a) Each grantee shall provide and budget for an independent 
evaluation of grant activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The evaluation must be based on student achievement, completion, 
and placement rates and project and product spread and transportability.
    (d) A proposed project evaluation design must be submitted to the 
Secretary for review and approval prior to the end of the first year of 
the project period.
    (e) A summary of evaluation activities and results that can be 
reviewed by the Department's Program Effectiveness Panel, as defined in 
34 CFR 400.4(b), must be submitted to the Secretary during the last year 
of the project period.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2413)



PART 421--BUSINESS AND EDUCATION STANDARDS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
421.1  What is the Business and Education Standards Program?
421.2  Who is eligible for an award?
421.3  What activities may the Secretary fund?
421.4  What regulations apply?
421.5  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

421.20  How does the Secretary evaluate an application?
421.21  What selection criteria does the Secretary use?

         Subpart D--What Conditions Must Be Met After an Award?

421.30  What is the cost-sharing requirement?

    Authority: 20 U.S.C. 2416, unless otherwise noted.

    Source: 57 FR 36796, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 421.1  What is the Business and Education Standards Program?

    The Business and Education Standards Program provides financial 
assistance for organizing and operating business-education-labor 
technical committees that will develop national standards for 
competencies in industries and trades.

(Authority: 20 U.S.C. 2416)



Sec. 421.2  Who is eligible for an award?

    The following entities are eligible for an award under this program:
    (a) Industrial trade associations.
    (b) Labor organizations.
    (c) National joint apprenticeship committees.
    (d) Comparable national organizations, such as educational 
associations, industry councils, business and industry organizations, 
and associations of private or national research organizations.

(Authority: 20 U.S.C. 2416)



Sec. 421.3  What activities may the Secretary fund?

    The Secretary provides grants and cooperative agreements for 
projects that organize and operate business-labor-education technical 
committees that propose national standards for competencies in 
industries and trades, including standards for--
    (a) Major divisions or specialty areas identified within occupations 
studied;
    (b) Minimum hours of study to be competent in those divisions or 
specialty areas;
    (c) Minimum tools and equipment required in those divisions or 
specialty areas;
    (d) Minimum qualifications for instructional staff; and
    (e) Minimum tasks to be included in any course of study purporting 
to prepare individuals for work in those divisions or specialty areas.

(Authority: 20 U.S.C. 2416)

[[Page 94]]



Sec. 421.4  What regulations apply?

    The following regulations apply to the Business and Education 
Standards Program:
    (a) The regulations in this part 421.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2416)



Sec. 421.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2416)

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 421.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperation agreement on the basis of the criteria in Sec. 421.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 421.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 421.21.

(Authority: 20 U.S.C. 2416)



Sec. 421.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (15 points) The Secretary reviews each 
application to assess the quality and effectiveness of the applicant's 
approach to developing national standards for competencies in industries 
and trades, including the extent to which the application proposes--
    (1) To develop standards for--
    (i) The competencies required for actual jobs, including the 
increased competency requirements created by the changing workplace;
    (ii) Major divisions or specialty areas identified within the 
occupations the applicant proposes to study;
    (iii) The minimum hours of study needed to be competent in those 
divisions or specialty areas;
    (iv) Minimum tools and equipment required in those divisions or 
specialty areas;
    (v) Minimum tasks to be included in any course of study purporting 
to prepare individuals for work in those divisions or specialty areas; 
and
    (vi) Minimum qualifications for instructional staff in those 
divisions or specialty areas; and
    (2) An adequate needs assessment of the program factors described in 
paragraph (a)(1) of this section as a part of the project.
    (b) Extent of need for the project. (15 points) The Secretary 
reviews each application to determine the extent to which the project 
meets specific needs, including--
    (1) The extent of the need for national standards for competencies 
in the major division or specialty areas identified within the 
occupations that the applicant proposes to study;
    (2) How the applicant identified and documented those needs;
    (3) How the standards to be developed will meet those needs, 
including the need of business for competent entry-level workers in the 
occupations to be studied; and
    (4) The benefits to business, labor, and education that will result 
from meeting those needs.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including the extent to which--
    (1) The plan of management will be effective, will ensure proper and 
efficient administration of the program, and includes timelines that 
show starting and ending dates for all tasks;
    (2) The specific procedures proposed will accomplish the project's 
objectives, including how the procedures for selecting the business-
labor-education technical committees will ensure that the members are 
knowledgeable about

[[Page 95]]

the occupations to be studied and include representatives of business, 
labor, and education;
    (3) The applicant plans to organize and operate the business-labor-
education technical committees effectively in developing national 
standards for competencies in industries and trades;
    (4) The development of proposed competencies for major divisions or 
specialty areas within occupations will be coordinated with education 
and industrial trade associations, labor organizations, and businesses;
    (5) The methods the applicant proposes to use to select project 
participants, if applicable, will ensure that project participants who 
are otherwise eligible to participate are selected without regard to 
race, color, national origin, gender, age, or disability.
    (d) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the plan includes specific 
procedures for--
    (1) A formative evaluation to help assess and improve the accuracy 
of standards for competencies; and
    (2) A summative evaluation conducted by an independent evaluator.
    (e) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the extent of the applicant's experience in 
fields related to the objectives of the project.
    (2) The Secretary reviews each application to determine the quality 
of key personnel the applicant plans to use including--
    (i) The qualifications, in relation to project requirements, of the 
project director, if one is to be used;
    (ii) The qualifications, in relation to project requirements, of 
each of the other key personnel to be used in the project;
    (iii) The appropriateness of the time that each person referred to 
in paragraphs (e)(2) (i) and (ii) of this section will commit to the 
project; and
    (iv) The experience and training of the project director and key 
personnel in project management.
    (f) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is adequate to support the project; and
    (2) Costs are reasonable in relation to the objectives of the 
project.
    (g) Dissemination plan. (10 points) The Secretary reviews each 
application to determine the quality of the dissemination plan for the 
project, including--
    (1) A clear description of the dissemination procedures;
    (2) A description of the types of materials the applicant plans to 
make available;
    (3) Provisions for publicizing the proposed national standards for 
competencies in industries and trades; and
    (4) Provisions for encouraging the adoption and use of the proposed 
standards by education and training programs.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2416)



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 421.30  What is the cost-sharing requirement?

    (a) The Secretary pays no more than 50 percent of the cost of a 
project.
    (b) Each recipient of an award under this part shall provide at 
least 50 percent of the cost of the business-labor-education technical 
committees established under the award.

(Authority: 20 U.S.C. 2416(c))



PART 425--DEMONSTRATION PROJECTS FOR THE INTEGRATION OF VOCATIONAL AND ACADEMIC LEARNING PROGRAM--Table of Contents




                           Subpart A--General

Sec.
425.1  What is the Demonstration Projects for the Integration of 
          Vocational and Academic Learning Program?
425.2  Who is eligible for an award?
425.3  What activities may the Secretary fund?
425.4  What regulations apply?
425.5  What definitions apply?

Subpart B [Reserved]

[[Page 96]]

            Subpart C--How Does the Secretary Make an Award?

425.20  How does the Secretary evaluate an application?
425.21  What selection criteria does the Secretary use?
425.22  What additional factors does the Secretary consider?

         Subpart D--What Conditions Must Be Met After an Award?

425.30  What are the evaluation requirements?

    Authority: 20 U.S.C. 2420, unless otherwise noted.

    Source: 57 FR 36803, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 425.1  What is the Demonstration Projects for the Integration of Vocational and Academic Learning Program?

    The Demonstration Projects for the Integration of Vocational and 
Academic Learning Program provides financial assistance to projects that 
develop, implement, and operate programs using different models of 
curricula that integrate vocational and academic learning.

(Authority: 20 U.S.C. 2420(a))



Sec. 425.2  Who is eligible for an award?

    (a) The following entities are eligible for an award under the 
Demonstration Projects for the Integration of Vocational and Academic 
Learning Program:
    (1) An institution of higher education.
    (2) An area vocational education school.
    (3) A secondary school funded by the Bureau of Indian Affairs.
    (4) A State board of vocational education.
    (5) A public or private nonprofit organization.
    (6) A local educational agency.
    (b) Consortia composed of the entities described in paragraph (a) of 
this section also are eligible for awards under this program.

(Authority: 20 U.S.C. 2420(a))



Sec. 425.3  What activities may the Secretary fund?

    (a) The Secretary provides grants or cooperative agreements to 
projects that develop, implement, and operate programs using different 
models of curricula that integrate vocational and academic learning by--
    (1) Designing integrated curricula and courses;
    (2) Providing inservice training for teachers of vocational 
education students and administrators in integrated curricula; and
    (3) Disseminating information regarding effective integrative 
strategies to other school districts through the National Diffusion 
Network (NDN) under section 1562 of the Elementary and Secondary 
Education Act of 1965, as amended (20 U.S.C. 2962), or, in the case of 
projects that will be funded for less than three years, disseminating 
information about the design of a project necessary for effective 
integrative strategies to be supported, so that they may be disseminated 
through the NDN.
    (b) Each project supported under this part must serve--
    (1) Individuals who are members of special populations;
    (2) Vocational students in secondary schools;
    (3) Vocational students at postsecondary institutions;
    (4) Individuals enrolled in adult programs; or
    (5) Single parents, displaced homemakers, and single pregnant women.

(Authority: 20 U.S.C. 2420(a), (b)(3) and (4))



Sec. 425.4  What regulations apply?

    The following regulations apply to the Demonstration Projects for 
the Integration of Vocational and Academic Learning Program:
    (a) The regulations in this part 425.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2420)



Sec. 425.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2420)

Subpart B [Reserved]

[[Page 97]]



            Subpart C--How Does the Secretary Make an Award?



Sec. 425.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 425.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 425.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses.
    (d) For each competition, as announced in a notice published in the 
Federal Register, the Secretary may assign the reserved 15 points among 
the criteria in Sec. 425.21.

(Authority: 20 U.S.C. 2420)



Sec. 425.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (10 points) The Secretary reviews each 
application to assess the quality of the proposed project, including--
    (1) The extent to which the project involves creative or innovative 
methods for integrating vocational and academic learning; and
    (2) The quality of the services that the project will provide to--
    (i) Individuals who are members of special populations;
    (ii) Vocational students in secondary schools and at postsecondary 
institutions;
    (iii) Individuals enrolled in adult programs; or
    (iv) Single parents, displaced homemakers, and single pregnant 
women.
    (b) Educational significance. (10 points) The Secretary reviews each 
application to determine the extent to which the applicant--
    (1) Bases the proposed project on successful model vocational 
education programs that include components similar to the components 
required by this program, as evidenced by empirical data from those 
programs in such factors as--
    (i) Student performance and achievement;
    (ii) High school graduation;
    (iii) Placement of students in jobs, including military service; and
    (iv) Successful transfer of students to a variety of postsecondary 
education programs;
    (2) Proposes project objectives that contribute to the improvement 
of education; and
    (3) Proposes to use unique and innovative techniques that address 
the need to integrate vocational and academic learning, and produce 
benefits that are of national significance.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the project design, especially the establishment 
of measurable objectives for the project that are based on the project's 
overall goals;
    (2) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project over the 
award period;
    (3) How well the objectives of the project relate to the purpose of 
the program;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disability.
    (d) Evaluation plan. (15 points) The Secretary reviews each 
application to determine the quality of the project's evaluation plan, 
including the extent to which the plan--
    (1) Carries out the requirements in Sec. 425.30;
    (2) Is clearly explained and is appropriate to the project;
    (3) To the extent possible, is objective and will produce data that 
are quantifiable;
    (4) Includes quality measures to assess the effectiveness of the 
curricular developed by the project;
    (5) Identifies expected outcomes of the participants and how those 
outcomes will be measured;

[[Page 98]]

    (6) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results;
    (7) Will provide a comparison between intended and observed results, 
and lead to the demonstration of a clear link between the observed 
results and the specific treatment of project participants; and
    (8) Will yield results that can be summarized and submitted to the 
Secretary for review by the Department's Program Effectiveness Panel as 
defined in 34 CFR 400.4(b).
    (e) Demonstration and dissemination. (10 points) The Secretary 
reviews each application for information to determine the effectiveness 
and efficiency of the plan for demonstrating and disseminating 
information about project activities and results throughout the project 
period, including--
    (1) High quality in the design of the dissemination plan and 
procedures for evaluating the effectiveness of the dissemination plan;
    (2) Identification of the audience to which the project activities 
will be disseminated and provisions for publicizing the project at the 
local, State, and national levels by conducting, or delivering 
presentations at, conferences, workshops, and other professional 
meetings and by preparing materials for journal articles, newsletters, 
and brochures;
    (3) Provisions for demonstrating the methods and techniques used by 
the project to others interested in replicating these methods and 
techniques, such as by inviting them to observe project activities;
    (4) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (5) Provisions for assisting others to adopt and successfully 
implement the methods, approaches, and techniques developed by the 
project.
    (f) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications, in relation to project requirements, of the 
project director;
    (ii) The qualifications, in relation to project requirements, of 
each of the other key personnel to be used in the project;
    (iii) The appropriateness of the time that each person referred to 
in paragraphs (f)(1) (i) and (ii) of this section will commit to the 
project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability.
    (2) To determine personnel qualifications under paragraphs (f)(1) 
(i) and (ii) of this section, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in fields related to the objectives of the project; and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (g) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which the budget--
    (1) Is cost effective and adequate to support the project 
activities;
    (2) Contains costs that are reasonable and necessary in relation to 
the objectives of the project; and
    (3) Proposes using non-Federal resources available from appropriate 
employment, training, and education agencies in the State to provide 
project services and activities and to acquire project equipment and 
facilities, to ensure that funds awarded under this part are used to 
provide instructional services.
    (h) Adequacy of resources and commitment. (5 points) (1) The 
Secretary reviews each application to determine the extent to which the 
applicant plans to devote adequate resources to the project. The 
Secretary considers the extent to which--
    (i) The facilities that the applicant plans to use are adequate; and
    (ii) The equipment and supplies that the applicant plans to use are 
adequate.

[[Page 99]]

    (2) The Secretary reviews each application to determine the 
commitment to the project including whether the--
    (i) Uses of non-Federal resources are adequate to provide project 
services and activities, especially resources of community organizations 
and State and local educational agencies; and
    (ii) Applicant has the capacity to continue, expand, and build upon 
the project when Federal assistance under this part ends.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420)



Sec. 425.22  What additional factors does the Secretary consider?

    (a) After evaluating the applications according to the criteria in 
Sec. 425.21, the Secretary determines whether the most highly rated 
applications--
    (1) Are equitably distributed throughout the Nation;
    (2) Offer significantly different approaches to integrating 
vocational and academic curricula; and
    (3) Serve individuals described in Sec. 425.3(b).
    (b) The Secretary may select other applications for funding if doing 
so would improve the geographical distribution of, diversity of 
approaches in, or the diversity of populations to be served by projects 
funded under this program.

(Authority: 20 U.S.C. 2420(b))



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 425.30  What are the evaluation requirements?

    (a) Each grantee shall provide and budget for an independent 
evaluation of grant activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) Each grantee shall employ adequate measures to evaluate the 
effectiveness of the curriculum approaches supported by the project.
    (d) The evaluation must be based on student achievement, completion, 
and placement rates and project and product spread and transportability.
    (e) A proposed project evaluation design must be submitted to the 
Secretary for review and approval prior to the end of the first year of 
the project period.
    (f) A summary of evaluation activities and results that can be 
reviewed by the Department's Program Effectiveness Panel, as defined in 
34 CFR 400.4(b), must be submitted to the Secretary during the last year 
of the project period.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420(b)(5))



PART 426--COOPERATIVE DEMONSTRATION PROGRAM--Table of Contents




                           Subpart A--General

Sec.
426.1  What is the Cooperative Demonstration Program?
426.2  Who is eligible for an award?
426.3  What activities may the Secretary fund?
426.4  What activities does the Secretary fund under the Demonstration 
          Projects?
426.5  What activities does the Secretary fund under the Program for 
          Model Consumer and Homemaking Education Projects?
426.6  What activities does the Secretary fund under the Community-Based 
          Organization Projects?
426.7  What activities does the Secretary fund under the Agriculture 
          Action Centers?
426.8  What regulations apply?
426.9  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

426.20  How does the Secretary evaluate an application?
426.21  What selection criteria does the Secretary use for the 
          Demonstration Projects?
426.22  What selection criteria does the Secretary use for the Program 
          for Model Consumer and Homemaking Education Projects?
426.23  What selection criteria does the Secretary use for the 
          Community-Based Organization Projects?
426.24  What selection criteria does the Secretary use for Agriculture 
          Action Centers?
426.25  What additional factors may the Secretary consider?

[[Page 100]]

         Subpart D--What Conditions Must Be Met After an Award?

426.30  What is the requirement regarding cost-sharing?
426.31  What is the requirement regarding dissemination?
426.32  What are the evaluation requirements?
426.33  May the Secretary restrict the use of funds for equipment?

    Authority: 20 U.S.C. 2420a, unless otherwise noted.

    Source: 57 FR 36805, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 426.1  What is the Cooperative Demonstration Program?

    The Cooperative Demonstration Program provides financial assistance 
for--
    (a) Model projects providing improved access to quality vocational 
education programs for individuals who are members of special 
populations and for men and women seeking nontraditional occupations;
    (b) Projects that are examples of successful cooperation between the 
private sector and public agencies in vocational education;
    (c) Projects to overcome national skill shortages;
    (d) Projects that develop consumer and homemaking education 
programs, including child growth and development centers;
    (e) Projects that assist disadvantaged youths in preparing for 
technical and professional health careers; and
    (f) Model projects providing access to vocational education programs 
through agriculture action centers.

(Authority: 20 U.S.C. 2420a(a))



Sec. 426.2  Who is eligible for an award?

    (a) The following entities are eligible to apply for an award for 
activities described in Secs. 426.4, 426.5, and 426.7:
    (1) State educational agencies.
    (2) Local educational agencies.
    (3) Postsecondary educational institutions.
    (4) Institutions of higher education.
    (5) Other public and private agencies, organizations, and 
institutions.
    (b)(1) Awards for activities described in Sec. 426.6 are provided to 
partnerships between--
    (i) Community-based organizations; and
    (ii) Local schools, institutions of higher education, and 
businesses.
    (2) A partnership formed for the purpose of receiving an award under 
Sec. 426.6 shall include as partners at least one community-based 
organization and at least one entity from the groups listed in paragraph 
(b)(1)(ii) of this section, and may include more than one entity from 
each group.
    (3) The partners shall apply jointly to the Secretary for an award 
under this part.
    (4) The partners shall enter into an agreement, in the form of a 
single document signed by all partners, designating one member of the 
partnership as the applicant and the grantee. The agreement must also 
detail the role each partner plans to perform, and must bind each 
partner to every statement and assurance made in the application.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)


(Authority: 20 U.S.C. 2420a(a))



Sec. 426.3  What activities may the Secretary fund?

    (a) The Secretary supports, directly or through grants, cooperative 
agreements, or contracts, the following types of projects:
    (1) Demonstration Projects. The Secretary supports model projects 
providing improved access to high quality vocational education for 
members of special populations and men and women seeking to enter non-
traditional occupations, projects that are models of successful 
cooperation between the private sector and public agencies in vocational 
education, and projects to overcome national skill shortages, as 
described in Sec. 426.4.
    (2) Program for Model Consumer and Homemaking Education Projects. 
The Secretary supports model projects that improve instruction and 
curricula related to consumer and homemaking skills, as described in 
Sec. 426.5.

[[Page 101]]

    (3) Community-Based Organization Projects. The Secretary supports 
community-based organizations in partnerships with entities listed in 
Sec. 426.2(b)(1)(ii), to operate projects that assist disadvantaged 
youths in preparing for technical and professional health careers, as 
described in Sec. 426.6.
    (4) Agriculture Action Centers. The Secretary supports model 
projects providing improved access to vocational education programs 
through agriculture action centers, as described in Sec. 426.7.
    (b) All projects assisted under the Cooperative Demonstration 
Program must be--
    (1) Of direct service to the individuals enrolled; and
    (2) Capable of wide replication by service providers.

(Authority: 20 U.S.C. 2420a(a))



Sec. 426.4  What activities does the Secretary fund under the Demonstration Projects?

    The Secretary supports the following types of projects:
    (a) Model projects providing improved access to quality vocational 
education programs for--
    (1) Individuals with disabilities;
    (2) Educationally and economically disadvantaged individuals 
(including foster children);
    (3) Individuals of limited English proficiency;
    (4) Individuals who participate in programs designed to eliminate 
sex bias;
    (5) Individuals in correctional institutions; and
    (6) Men and women seeking to enter nontraditional occupations.
    (b)(1) Projects that are examples of successful cooperation between 
the private sector (including employers, consortia of employers, labor 
organizations, building trade councils, and private agencies, 
organizations, and institutions) and public agencies in vocational 
education (including State boards of vocational education and eligible 
recipients as defined in 34 CFR 400.4).
    (2) The projects described in paragraph (b)(1) of this section must 
be designed to demonstrate ways in which vocational education and the 
private sector of the economy can work together effectively to assist 
vocational education students to attain the advanced level of skills 
needed to make the transition from school to productive employment, 
including--
    (i) Work experience and apprenticeship projects;
    (ii) Transitional work site job training for vocational education 
students that is related to their occupational goals and closely linked 
to classroom and laboratory instruction provided by an eligible 
recipient;
    (iii) Placement services in occupations that the students are 
preparing to enter;
    (iv) If practical, projects that will benefit the public, such as 
the rehabilitation of public schools or housing in inner cities or 
economically depressed rural areas; or
    (v) Employment-based learning programs.
    (3) The projects described in paragraphs (b) (1) and (2) of this 
section may include institutional and on-the-job training, supportive 
services authorized by the Act, and other assistance as the Secretary 
determines to be necessary for the successful completion of the project.
    (c) Projects to overcome national skill shortages, as designated by 
the Secretary in cooperation with the Secretary of Labor, Secretary of 
Defense, and Secretary of Commerce.

(Authority: 20 U.S.C. 2420a(a) (1)-(3) and (b)(1))



Sec. 426.5  What activities does the Secretary fund under the Program for Model Consumer and Homemaking Education Projects?

    The Secretary supports model projects that develop programs and 
improve instruction and curricula related to--
    (a) Managing individual and family resources;
    (b) Making consumer choices;
    (c) Balancing work and family;
    (d) Improving responses to individual and family crises, including 
family violence and child abuse;
    (e) Strengthening parenting skills, especially among teenage 
parents;
    (f) Preventing teenage pregnancy;

[[Page 102]]

    (g) Assisting aged individuals with disabilities, and members of at-
risk populations, including the homeless;
    (h) Conserving limited resources;
    (i) Improving individual, child, and family nutrition and wellness;
    (j) Understanding the impact of new technology on life and work;
    (k) Applying consumer and homemaking education skills to jobs and 
careers;
    (l) Other needs to be determined by the State board of vocational 
education; and
    (m) Developing child growth and development centers.

(Authority: 20 U.S.C. 2420a(4))



Sec. 426.6  What activities does the Secretary fund under the Community-Based Organization Projects?

    (a) The Secretary supports projects that assist disadvantaged youths 
in preparing for technical and professional health careers.
    (b) The Secretary may require partnerships described in 
Sec. 426.2(b)(1) to provide in-kind contributions from participating 
schools, institutions, and businesses and to involve health 
professionals serving as instructors and counselors.

(Authority: 20 U.S.C. 2420a(5))



Sec. 426.7  What activities does the Secretary fund under the Agriculture Action Centers?

    The Secretary supports model Agriculture Action Centers that provide 
improved access to vocational education programs and that--
    (a) Assist individuals--
    (1) Who are adversely affected by farm and rural economic downturns;
    (2) Who are dislocated from farming; and
    (3) Who are dislocated from agriculturally related businesses and 
industries that are adversely affected by farm and rural economic 
downturns;
    (b) Provide services, including--
    (1) Crisis management counseling and outreach counseling that would 
include members of the family of the affected individual;
    (2) Evaluation of vocational skills and counseling on enhancement of 
these skills;
    (3) Assistance in obtaining training in basic, remedial, and 
literacy skills;
    (4) Assistance in seeking employment and training in employment-
seeking skills; and
    (5) Assistance in obtaining training related to operating a business 
or enterprise;
    (c) Provide for formal and on-the-job training to the extent 
practicable; and
    (d) Are coordinated with activities and discretionary programs under 
title III of the Job Training Partnership Act (29 U.S.C. 1651 et seq.).

(Authority: 20 U.S.C. 2420a(6))



Sec. 426.8  What regulations apply?

    The following regulations apply to the Cooperative Demonstration 
Program:
    (a) The regulations in this part 426.
    (b) The regulations in 34 CFR part 400.

(Authority: 20 U.S.C. 2420a)



Sec. 426.9  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this part.

(Authority: 20 U.S.C. 2420a)

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 426.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 426.21, Sec. 426.22, Sec. 426.23, or Sec. 426.24.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 426.21, Sec. 426.22, Sec. 426.23, 
or Sec. 426.24.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, as announced in a notice published in the 
Federal Register, the Secretary may assign the reserved 15 points among 
the

[[Page 103]]

criteria in Sec. 426.21, Sec. 426.22, Sec. 426.23, or Sec. 426.24.

(Authority: 20 U.S.C. 2420a)



Sec. 426.21  What selection criteria does the Secretary use for the Demonstration Projects?

    The Secretary uses the following criteria to evaluate an application 
for a demonstration project:
    (a) Program factors. (10 points) The Secretary reviews the 
application to assess the quality of the proposed project, including the 
extent to which the project will provide--
    (1) Vocational education to meet current and projected occupational 
needs; and
    (2) For adequate and appropriate involvement and cooperation of the 
public and private sectors in the project, including--
    (i) A clear identification of the public and private sector entities 
involved in the project;
    (ii) A description of public and private sector involvement in the 
planning of the project; and
    (iii) A description of public and private sector involvement in the 
operation of the project.
    (b) Educational significance. (10 points) The Secretary reviews each 
application to determine the extent to which the applicant--
    (1) Bases the proposed project on successfully designed, 
established, and operated model vocational education programs that 
include components similar to the components required by this program, 
as evidenced by empirical data from those programs in such factors as--
    (i) Student performance and achievement;
    (ii) High school graduation;
    (iii) Placement of students in jobs, including military service; and
    (iv) Successful transfer of students to a variety of postsecondary 
education programs;
    (2) Proposes project objectives that contribute to the improvement 
of education; and
    (3) Proposes to use unique and innovative techniques to produce 
benefits that address educational problems and needs that are of 
national significance.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the project design, especially the establishment 
of measurable objectives for the project that are based on the project's 
overall goals;
    (2) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project over the 
award period;
    (3) How well the objectives of the project relate to the purpose of 
the program;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disability.
    (d) Evaluation plan. (15 points) The Secretary reviews each 
application to determine the quality of the project's evaluation plan, 
including the extent to which the plan--
    (1) Is clearly explained and is appropriate to the project;
    (2) To the extent possible, is objective and will produce data that 
are quantifiable;
    (3) Identifies expected outcomes of the participants and how those 
outcomes will be measured;
    (4) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results;
    (5) Will provide a comparison between intended and observed results, 
and lead to the demonstration of a clear link between the observed 
results and the specific treatment of project participants; and
    (6) Will yield results that can be summarized and submitted to the 
Secretary for review by the Department's Program Effectiveness Panel as 
defined in 34 CFR 400.4(b).
    (e) Demonstration and dissemination. (10 points) The Secretary 
reviews each application for information to determine the effectiveness 
and efficiency of

[[Page 104]]

the plan for demonstrating and disseminating information about project 
activities and results throughout the project period, including--
    (1) High quality in the design of the demonstration and 
dissemination plan and procedures for evaluating the effectiveness of 
the dissemination plan;
    (2) Disseminating the results of the project in a manner that would 
meet the requirement in Sec. 426.31;
    (3) Identification of target groups and provisions for publicizing 
the project at the local, State, and national levels by conducting or 
delivering presentations at conferences, workshops, and other 
professional meetings and by preparing materials for journal articles, 
newsletters, and brochures;
    (4) Provisions for demonstrating the methods and techniques used by 
the project to others interested in replicating these methods and 
techniques, such as by inviting them to observe project activities;
    (5) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (6) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.
    (f) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications, in relation to project requirements, of the 
project director;
    (ii) The qualifications, in relation to project requirements, of 
each of the other key personnel to be used in the project. For the 
Community-Based Organization Projects, the Secretary determines the 
qualifications, in relation to project requirements, of health 
professionals serving as preceptors and counselors and of each of the 
other key personnel to be used in the project;
    (iii) The appropriateness of the time that each person referred to 
in paragraphs (f)(1) (i) and (ii) of this section will commit to the 
project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disability.
    (2) To determine personnel qualifications under paragraphs (f)(1) 
(i) and (ii) of this section, the Secretary considers--
    (i) The experience and training of key personnel in project 
management and in fields related to the objectives of the project. For 
the Program for Model Consumer and Homemaking Education Projects, the 
Secretary also considers the experience and training of key personnel in 
consumer and homemaking education; and
    (ii) Any other qualifications of key personnel that pertain to the 
quality of the project.
    (g) Budget and cost effectiveness. (10 points) The Secretary reviews 
each application to determine the extent to which the budget--
    (1) Is cost effective and adequate to support the project 
activities;
    (2) Contains costs that are reasonable and necessary in relation to 
the objectives of the project; and
    (3) Proposes using non-Federal resources available from appropriate 
employment, training, and education agencies in the State to provide 
project services and activities and to acquire project equipment and 
facilities. For the Community-Based Organization Projects, the Secretary 
also determines the extent to which the budget includes in-kind 
contributions from partnership members.
    (h) Adequacy of resources and commitment. (5 points) (1) The 
Secretary reviews each application to determine the extent to which the 
applicant plans to devote adequate resources to the project. The 
Secretary considers the extent to which the--
    (i) Facilities that the applicant plans to use are adequate; and
    (ii) Equipment and supplies that the applicant plans to use are 
adequate.
    (2) The Secretary reviews each application to determine the 
commitment to the project, including whether the--
    (i) Uses of non-Federal resources are adequate to provide project 
services and activities, especially resources of community organizations 
and State and local educational agencies; and

[[Page 105]]

    (ii) Applicant has the capacity to continue, expand, and build upon 
the project when Federal assistance under this part ends.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420a)



Sec. 426.22  What selection criteria does the Secretary use for the Program for Model Consumer and Homemaking Education Projects?

    (a) The Secretary uses the following criteria to evaluate an 
application for a model consumer and homemaking education project:
    (1) Program factors. (10 points) The Secretary reviews the quality 
of the proposed project to assess the extent to which project activities 
will improve, expand, and update programs that will--
    (i) Be conducted for residents of economically depressed areas or 
areas with high rates of unemployment;
    (ii) Encourage participation of traditionally underserved 
populations;
    (iii) Encourage the elimination of sex bias and sex stereotyping; 
and
    (iv) Address priorities and emerging concerns at the local, State, 
and national levels, such as the articulation of secondary and 
postsecondary consumer and homemaking education programs and the 
integration of basic skills in consumer and homemaking education 
programs.
    (2) Demonstration program design. (10 points) The Secretary reviews 
each application to determine the extent to which the applicant--
    (i) Bases the proposed consumer and homemaking education project on 
successful model education programs that include components similar to 
the components required by this program, as evidenced by empirical data 
from those programs in such factors as--
    (A) Student performance and achievement;
    (B) Placement of students in jobs, including the preparation of 
students for the occupation of homemaking; and
    (C) Successful transfer of students to a wide variety of 
postsecondary educational programs;
    (ii) Proposes project objectives that contribute to the improvement 
of consumer and homemaking education; and
    (iii) Proposes to use unique and innovative techniques to produce 
benefits that address educational problems and needs that are of 
national significance.
    (b) The Secretary also uses the criteria and points in Sec. 426.21 
(c) through (h) to evaluate an application.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420a)



Sec. 426.23  What selection criteria does the Secretary use for the Community-Based Organization Projects?

    The Secretary uses the following criteria to evaluate an application 
for a community-based organization project:
    (a) Program factors. (10 points) The Secretary reviews the quality 
of a proposed community-based organization project to assess the extent 
to which the proposed project--
    (1) Will assist disadvantaged youths in preparing for technical and 
professional health careers;
    (2) Provides for adequate and appropriate involvement of local 
schools, institutions of higher education, and businesses in the 
project, including--
    (i) Clear identification of partnership members;
    (ii) Involvement of partnership members in the planning of the 
project;
    (iii) Involvement of partnership members in the operation of the 
project; and
    (3) Will coordinate activities to ensure that the project will help 
meet current and projected occupational needs in the area.
    (b) Other criteria. The Secretary also uses the criteria and points 
in Sec. 426.21 (b) through (h) to evaluate an application.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420a)



Sec. 426.24  What selection criteria does the Secretary use for Agriculture Action Centers?

    The Secretary uses the following criteria to evaluate an application 
for an Agriculture Action Center:
    (a) Program factors. (10 points) The Secretary reviews each 
application for

[[Page 106]]

an Agriculture Action Center to determine the extent to which the 
proposed center will--
    (1) Provide vocational education to meet current and projected 
occupational needs; and
    (2) Be located in a service area that includes a high concentration 
of individuals who are--
    (i) Adversely affected by farm and rural economic downturns;
    (ii) Dislocated from farming; and
    (iii) Dislocated from agriculturally-related businesses and 
industries that are adversely affected by farm and rural economic 
downturns.
    (b) Other criteria. The Secretary also uses the criteria and points 
in Sec. 426.21 (b) through (h) to evaluate an application.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420a)



Sec. 426.25  What additional factors may the Secretary consider?

    After evaluating applications according to criteria in Sec. 426.21, 
Sec. 426.22, Sec. 426.23, or Sec. 426.24, the Secretary may fund other 
than the most highly rated applications if doing so would improve the 
geographical distribution of projects funded under this part.

(Authority: 20 U.S.C. 2420a)



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 426.30  What is the requirement regarding cost-sharing?

    (a) A recipient of an award under this part shall provide not less 
than 25 percent of the total cost (the sum of the Federal and non-
Federal shares) of the project it conducts under this program.
    (b) In accordance with subpart G of 34 CFR part 74, the non-Federal 
share may be in the form of cash or in-kind contributions, including the 
fair market value of facilities, overhead, personnel, and equipment.

(Authority: 20 U.S.C. 2420a(b)(2))



Sec. 426.31  What is the requirement regarding dissemination?

    Recipients must disseminate the results of projects assisted under 
this part in a manner designed to improve the training of teachers, 
other instructional personnel, counselors, and administrators who are 
needed to carry out the purposes of the Act.

(Authority: 20 U.S.C. 2420a(d))



Sec. 426.32  What are the evaluation requirements?

    (a) Each grantee shall provide and budget for an independent 
evaluation of grant activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The evaluation must be based on student achievement, completion, 
and placement rates and project and product spread and transportability.
    (d) A proposed project evaluation design must be submitted to the 
Secretary for review and approval prior to the end of the first year of 
the project period.
    (e) A summary of evaluation activities and results that can be 
reviewed by the Department's Program Effectiveness Panel, as defined in 
34 CFR 400.4(b), must be submitted to the Secretary during the last year 
of the project period.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2420a)



Sec. 426.33  May the Secretary restrict the use of funds for equipment?

    The Secretary may restrict the amount of Federal funds made 
available for equipment purchases to a certain percentage of the total 
grant for a project. The Secretary may announce through a notice 
published in the Federal Register the percentage of Federal funds that 
may be used for the purchase of equipment.

(Authority: 20 U.S.C. 2420a)



PART 427--BILINGUAL VOCATIONAL TRAINING PROGRAM--Table of Contents




                           Subpart A--General

Sec.
427.1  What is the Bilingual Vocational Training Program?
427.2  Who is eligible for an award?
427.3  What activities may the Secretary fund?
427.4  What regulations apply?

[[Page 107]]

427.5  What definitions apply?

               Subpart B--How Does One Apply for an Award?

427.10  What must an application contain?

            Subpart C--How Does the Secretary Make an Award?

427.20  How does the Secretary evaluate an application?
427.21  What selection criteria does the Secretary use?
427.22  What additional factors does the Secretary consider?

         Subpart D--What Conditions Must Be Met After an Award?

427.30  What are the evaluation requirements?

    Authority: 20 U.S.C. 2441(a), unless otherwise noted.

    Source: 57 FR 36810, Aug. 14, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 427.1  What is the Bilingual Vocational Training Program?

    The Bilingual Vocational Training Program provides financial 
assistance for bilingual vocational education and training for limited 
English proficient out-of-school youth and adults, to prepare these 
individuals for jobs in recognized occupations and new and emerging 
occupations.

(Authority: 20 U.S.C. 2441(a))



Sec. 427.2  Who is eligible for an award?

    (a) The following entities are eligible for an award under this 
program:
    (1) State agencies.
    (2) Local educational agencies (LEAs).
    (3) Postsecondary educational institutions.
    (4) Private nonprofit vocational training institutions.
    (5) Other nonprofit organizations specially created to serve or 
currently serving individuals who normally use a language other than 
English.
    (b) Private for-profit agencies and organizations are eligible only 
for contracts under this program.

(Authority: 20 U.S.C. 2441(a))



Sec. 427.3  What activities may the Secretary fund?

    (a) The Secretary provides grants, cooperative agreements, or 
contracts for--
    (1) Bilingual vocational training projects for limited English 
proficient out-of-school youth and adults who are available for training 
and employment;
    (2) Bilingual vocational education and training projects for limited 
English proficient out-of-school youth and adults who have already 
entered the labor market but who desire or need English language skills 
and job skills training or retraining to achieve employment in a 
recognized occupation or new and emerging occupations, adjust to 
changing work force needs, expand their range of skills, or advance in 
employment; and
    (3) Training stipends for participants in bilingual vocational 
training projects.
    (b) Bilingual vocational training projects must include instruction 
in the English language to ensure that participants in that training 
will be equipped to pursue occupations in an English language 
environment.
    (c) In the Commonwealth of Puerto Rico, the Bilingual Vocational 
Training Program may provide for the needs of students of limited 
Spanish proficiency.

(Authority: 20 U.S.C. 2441(a), (e)(2))



Sec. 427.4  What regulations apply?

    The following regulations apply to the Bilingual Vocational Training 
Program:
    (a) The regulations in 34 CFR part 400.
    (b) The regulations in this part 427.

(Authority: 20 U.S.C. 2441(a))



Sec. 427.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this program.

(Authority: 20 U.S.C. 2441(a))



               Subpart B--How Does One Apply for an Award?



Sec. 427.10  What must an application contain?

    (a) An application must--

[[Page 108]]

    (1) Provide an assurance that the activities and services for which 
assistance is sought will be administered by or under the supervision of 
the applicant;
    (2) Propose a project of a size, scope, and design that will make a 
substantial contribution toward carrying out the purpose of the 
Bilingual Vocational Training Program;
    (3) Contain measurable goals for the enrollment, completion, and 
placement of program participants;
    (4) Include a comparison of how the applicant's goals take into 
consideration any related standards and measures in the geographic area 
for the Job Opportunities and Basic Skills Training (JOBS) program (42 
U.S.C. 681 et seq.) and any Job Training Partnership Act (JTPA) programs 
(29 U.S.C. 1501 et seq.) and any standards set by the State Board for 
Vocational Education for the occupational and geographic area;
    (5) Describe, for each occupation for which training is to be 
provided, how successful program completion will be determined and 
reported to the Secretary in terms of the academic and vocational 
competencies to be demonstrated by enrollees prior to successful 
completion and any academic or work credentials expected to be acquired 
upon completion; and
    (6) Be submitted to the State board for vocational education (State 
board) established under section 111 of the Act for review and comment, 
including comment on the relationship of the proposed project to the 
State's vocational education program.
    (b) An applicant shall include any comments received under paragraph 
(a)(6) of this section with the application.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2441(a), (d)(1) and (2))



            Subpart C--How Does the Secretary Make an Award?



Sec. 427.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 427.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 427.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
points for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 427.21.

(Authority: 20 U.S.C. 2441(a))



Sec. 427.21  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria to evaluate an 
application:
    (a) Need. (15 points) The Secretary reviews each application for 
specific information that shows the need for the proposed bilingual 
vocational training project in the local geographic area, including--
    (1) The employment training need of limited English proficient 
individuals to be met;
    (2) The labor market need to be met; and
    (3) The relationship of the proposed project to other employment 
training programs in the community.
    (b) Plan of operation. (15 points) (1) The Secretary reviews each 
application to determine the extent to which the project proposes 
measurable goals for student enrollment, completion, and placement and 
describes how the applicant sets the goals taking into consideration the 
standards and measures for JOBS programs and JTPA programs and any 
standards set by the State Board established under section 111 of the 
Act for the occupation and geographic area.
    (2) The Secretary reviews each application to determine the extent 
to which the project defines successful program completion (or describes 
how successful program completion will be defined and reported to the 
Secretary) in a way consistent with the goals of the program for each 
occupation for which training is to be provided.

[[Page 109]]

    (3)(i) The Secretary reviews each application for specific 
information that, upon completion of their training, more than 65 
percent of the trainees will be employed in jobs (including military 
specialties) related to their training, or will be enrolled for further 
training related to their training under this program. This information 
must correspond to the information described in paragraph (a) of this 
section.
    (ii) The estimated job placement rate must be supported by past 
records, actual employer job commitments, anticipated job openings, or 
other pertinent information.
    (4) The Secretary reviews each application for an effective plan of 
management that ensures proper and efficient administration of the 
project, including--
    (i) Clearly defined project objectives that relate to the purpose of 
the Bilingual Vocational Training Program;
    (ii) For each objective, the specific tasks to be performed in order 
to achieve the specified project objective;
    (iii) How the applicant plans to use its resources and personnel to 
achieve each objective; and
    (iv) If the applicant plans to use a project advisory committee, a 
clear plan for using a project advisory committee to assist in project 
development, to review curriculum materials, and to make recommendations 
about job placements.
    (c) Program factors. (20 points) (1) The Secretary reviews each 
application to determine the quality of training to be provided, 
including--
    (i) Provision of vocational skills instruction in English and the 
trainees' native languages;
    (ii) Provision of job-related English-as-a-second language 
instruction;
    (iii) Coordination of the job-related English-as-a-second language 
instruction with the vocational skills instruction;
    (iv) Recruitment procedures that are targeted towards limited 
English proficient out-of-school youth and adults who have the greatest 
need for bilingual vocational training;
    (v) Assessment procedures that evaluate the language and vocational 
training needs of the trainees;
    (vi) Provision of counseling activities and employability skills 
instruction that prepare trainees for employment in an English language 
environment; and
    (vii) Job development and job placement procedures that provide 
opportunities for career advancement or entrepreneurship.
    (2) The Secretary reviews each application to determine the 
project's potential to have a lasting impact in the local geographic 
area, including the potential impact of the project on--
    (i) Program participants;
    (ii) The agency or agencies responsible for administering the 
bilingual vocational training program;
    (iii) Other employment training services in the local area; and
    (iv) The community.
    (d) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications of the director and other key personnel to be 
used in the project;
    (ii) The appropriateness of the time that each person referred to in 
paragraph (d)(1)(i) of this section will commit to the project; and
    (iii) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that personnel will be selected without regard to 
race, color, national origin, gender, age, or disability.
    (2) To determine personnel qualifications under paragraph (d)(1)(i) 
of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience and training in project management; and
    (iii) Any other qualifications that pertain to the quality of the 
project.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is sufficient to support the proposed project, and 
that it represents a cost effective use of Bilingual Vocational Training 
Program funds;
    (2) Costs are necessary and reasonable in relation to the objectives 
of the proposed project; and

[[Page 110]]

    (3) The facilities, equipment, and supplies that the applicant plans 
to use are adequate for the proposed project.
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the project's evaluation plan, 
including the extent to which the plan--
    (1) Is clearly explained and appropriate for the project;
    (2) Identifies at a minimum, types of data to be collected and 
reported with respect to the English-language competencies and academic 
and vocational competencies demonstrated by participants and the number 
and kinds of academic and work credentials acquired by individuals who 
complete the training;
    (3) Identifies at a minimum, types of data to be collected and 
reported with respect to enrollment, completion, and placement of 
participants by sex, racial or ethnic group, socio-economic status, and 
if appropriate, by level of English proficiency, for each occupation for 
which training is provided;
    (4) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results; and
    (5) Makes use of an external evaluator.
    (g) Demonstration and dissemination. (10 points) The Secretary 
reviews each application for information to determine the effectiveness 
and efficiency of the plan for demonstrating and disseminating 
information about project activities and results throughout the project 
period, including--
    (1) High quality in the design of the demonstration and 
dissemination plan and procedures for evaluating the effectiveness of 
the dissemination plan;
    (2) Provisions for publicizing the project at the local, State, and 
national levels by conducting or delivering presentations at 
conferences, workshops, and other professional meetings and by preparing 
materials for journal articles, newsletters, and brochures;
    (3) Provisions for making available the methods and techniques used 
by the project to others interested in replicating these methods and 
techniques, such as by inviting them to observe project activities;
    (4) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (5) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)


(Authority: 20 U.S.C. 2441(a))



Sec. 427.22  What additional factors does the Secretary consider?

    (a) After evaluating the applications according to the criteria in 
Sec. 427.21 and consulting with the appropriate State board established 
under section 111 of the Act, the Secretary determines whether the most 
highly rated applications are equitably distributed among populations of 
individuals with limited English proficiency within the affected State.
    (b) The Secretary may select other applications for funding if doing 
so would improve the--
    (1) Equitable distribution of assistance among populations of 
individuals with limited English proficiency within a State; or
    (2) Geographical distribution of projects funded under this program.

(Authority: 20 U.S.C. 2441(d)(5))



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 427.30  What are the evaluation requirements?

    (a) Each grantee shall annually provide and budget for an 
independent evaluation of its activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The annual evaluation must include descriptions and analyses of 
the accuracy of records and validity of measures by the project to 
establish and report on the English-language competencies and academic 
and vocational competencies demonstrated and

[[Page 111]]

the academic and work credentials acquired.
    (d) The annual evaluation must contain descriptions and analyses of 
the accuracy of records and validity of measures used by the project to 
establish and report on participant enrollment, completion, and 
placement by sex, racial or ethnic group, socio-economic status, and, if 
appropriate, by level of English proficiency for each occupation for 
which training has been provided.
    (e) The annual evaluation must also include--
    (1) The grantee's progress in achieving the objectives in its 
approved application, including any approved revisions of the 
application;
    (2) If applicable, actions taken by the grantee to address 
significant barriers impeding progress; and
    (3) The effectiveness of the project in promoting key elements for 
participants' job readiness, including--
    (i) Coordination of services; and
    (ii) Improved English-language, academic, and vocational skills 
competencies.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2441(a))



PART 428--BILINGUAL VOCATIONAL INSTRUCTOR TRAINING PROGRAM--Table of Contents




                           Subpart A--General

Sec.
428.1  What is the Bilingual Vocational Instructor Training Program?
428.2  Who is eligible for an award?
428.3  What activities may the Secretary fund?
428.4  What regulations apply?
428.5  What definitions apply?

               Subpart B--How Does One Apply for an Award?

428.10  What must an application contain?

            Subpart C--How Does the Secretary Make an Award?

428.20  How does the Secretary evaluate an application?
428.21  What selection criteria does the Secretary use?
428.22  What additional factors does the Secretary consider?

    Authority: 20 U.S.C. 2441(b), unless otherwise noted.

    Source: 57 FR 36812, Aug. 14, 1992, ubless otherwise noted.



                           Subpart A--General



Sec. 428.1  What is the Bilingual Vocational Instructor Training Program?

    The Bilingual Vocational Instructor Training Program provides 
financial assistance for preservice and inservice training for personnel 
participating in or preparing to participate in bilingual vocational 
education and training programs for limited English proficient 
individuals.

(Authority: 20 U.S.C. 2441(b))



Sec. 428.2  Who is eligible for an award?

    (a) The following entities are eligible for grants, contracts, or 
cooperative agreements under this program:
    (1) State agencies.
    (2) Public and private nonprofit educational institutions.
    (b) Private for-profit educational institutions are eligible only 
for contracts under this program.

(Authority: 20 U.S.C. 2441(b)(1))



Sec. 428.3  What activities may the Secretary fund?

    (a) The Secretary provides assistance through grants, contracts, or 
cooperative agreements for--
    (1) Preservice and inservice training for instructors, aides, 
counselors, or other ancillary personnel participating in or preparing 
to participate in bilingual vocational training programs; and
    (2) Fellowships and traineeships for individuals participating in 
preservice or inservice training.
    (b) The Secretary does not make an award under this program unless 
the Secretary determines that the applicant has an ongoing vocational 
education program in the field in which participants will be trained, 
and can provide instructors with adequate language capabilities in the 
language other than English to be used in the bilingual vocational 
training project.

(Authority: 20 U.S.C. 2441(b))

[[Page 112]]



Sec. 428.4  What regulations apply?

    The following regulations apply to the Bilingual Vocational Training 
Program:
    (a) The regulations in 34 CFR part 400.
    (b) The regulations in this part 428.

(Authority: 20 U.S.C. 2441(b))



Sec. 428.5  What definitions apply?

    The definitions in 34 CFR 400.4 apply to this program.

(Authority: 20 U.S.C. 2441(b))



               Subpart B--How Does One Apply for an Award?



Sec. 428.10  What must an application contain?

    An application must--
    (a) Provide an assurance that the activities and services for which 
assistance is sought will be administered by or under the supervision of 
the applicant;
    (b) Propose a project of a size, scope and design that will make a 
substantial contribution toward carrying out the purpose of the 
Bilingual Vocational Instructor Training Program;
    (c) Describe the capabilities of the applicant, including vocational 
training or education courses offered by the applicant, accreditation, 
and any certification of courses by appropriate State agencies;
    (d) Describe the qualifications of principal staff to be used in the 
bilingual vocational instructor training project;
    (e) Describe the number of participants to be served, the minimum 
qualifications for project participants, and the selection process for 
project participants;
    (f) Include the projected amount of the fellowships or traineeships, 
if any;
    (g) Contain sufficient information for the Secretary to make the 
determination required by Sec. 428.3(b); and
    (h) Provide an assurance that preservice training will be provided 
to individuals who have indicated their intent to engage as personnel in 
a vocational education program that serves limited English proficient 
individuals.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2441(d)(1), (4))



            Subpart C--How Does the Secretary Make an Award?



Sec. 428.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 428.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) or this 
section, based on the criteria in Sec. 428.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
points for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, in a notice published in the Federal 
Register, the Secretary may assign the reserved 15 points among the 
criteria in Sec. 428.21.

(Authority: 20 U.S.C. 2441(b), (d)(5))



Sec. 428.21  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria in evaluating 
each application:
    (a) Need. (15 points) (1) The Secretary reviews each application to 
determine the need for the proposed bilingual vocational instructor 
training project, including--
    (i) The need for the project in the specific geographic area or 
areas to be served by the proposed project;
    (ii) The training needs of program participants to be served by the 
proposed project;
    (iii) How these needs will be met through the proposed project; and
    (iv) The relationship of the proposed project to other ongoing 
personnel development programs in the geographic area or areas to be 
served by the proposed project.
    (2) The Secretary reviews each application to determine the extent 
to which, upon completion of their training, program participants will 
work

[[Page 113]]

with programs that provide vocational education to limited English 
proficient individuals.
    (b) Program design. (20 points) The Secretary reviews each 
application to determine the quality of the program design and the 
potential of the project to have a lasting impact on the geographic area 
or areas to be served by the proposed project, including--
    (1) Potential to increase the skill level of program participants, 
with particular regard to the following areas:
    (i) Knowledge of the needs of limited English proficient individuals 
enrolled in vocational education programs, and how those needs should 
influence teaching strategies and program design.
    (ii) Understanding of bilingual vocational training methodologies.
    (iii) Techniques for preparing limited English proficient 
individuals for employment; and
    (2) Potential to increase access to vocational education for limited 
English proficient individuals.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application for an effective plan of management that ensures proper and 
efficient administration of the project, including--
    (1) Clearly defined project objectives that relate to the purpose of 
the Bilingual Vocational Instructor Training Program;
    (2) For each objective, the specific tasks to be performed in order 
to achieve the specified project objective; and
    (3) How the applicant plans to use its resources and personnel to 
achieve each objective.
    (d) Key personnel. (10 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications of the director and other key personnel to be 
used in the project;
    (ii) The appropriateness of the time that each person referred to in 
paragraph (d)(1)(i) of this section will commit to the project; and
    (iii) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that personnel will be selected without regard to 
race, color, national origin, gender, age, or disability.
    (2) To determine personnel qualifications under paragraph (d)(1)(i) 
of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience and training in project management; and
    (iii) Any other qualifications that pertain to the quality of the 
project.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is sufficient to support the proposed project, and 
that it represents a cost effective use of Bilingual Vocational 
Instructor Training Program funds;
    (2) Costs are necessary and reasonable in relation to the objectives 
of the proposed project; and
    (3) The facilities that the applicant plans to use are adequate for 
the proposed project;
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the project's evaluation plan, 
including the extent to which the plan--
    (1) Is clearly explained and appropriate for the bilingual 
vocational instructor training project;
    (2) To the extent possible, is objective and will produce data that 
are quantifiable;
    (3) Identifies outcomes of the project in terms of enrollment, 
completion and after-training work commitments of participants by sex, 
racial or ethnic group, and by level and kinds of language proficiency;
    (4) Identifies expected learning and skills outcomes for 
participants and how those outcomes will be measured; and
    (5) Includes activities during the formative stages of the project 
to help guide and improve the project, as well as a summative evaluation 
that includes recommendations for replicating project activities and 
results.
    (g) Dissemination plan. (10 points) The Secretary reviews each 
application to

[[Page 114]]

determine the effectiveness and efficiency of the plan to disseminate 
information about the project and demonstrate project activities and 
results, including--
    (1) High quality in its design and procedures for evaluating the 
effectiveness of the dissemination plan; and
    (2) A description of the types of materials the applicant plans to 
develop and make available to help others replicate project activities, 
and the methods to be used to make the materials available.

(Approved by the Office of Management and Budget under Control No. 1830-
0013)

(Authority: 20 U.S.C. 2441(b))



Sec. 428.22  What additional factors does the Secretary consider?

    (a) After evaluating the applications according to the criteria in 
Sec. 428.21, and consulting with the appropriate State board established 
under section 111 of the Act, the Secretary determines whether the most 
highly rated applications are equitably distributed among populations of 
individuals with limited English proficiency within the affected State.
    (b) The Secretary may select other applications for funding if doing 
so would improve the--
    (1) Equitable distribution of assistance among populations of 
individuals with limited English proficiency within the affected State; 
or
    (2) Geographical distribution of projects funded under this program.

(Authority: 20 U.S.C. 2441(d)(5))



PART 429--BILINGUAL VOCATIONAL MATERIALS, METHODS, AND TECHNIQUES PROGRAM--Table of Contents




                           Subpart A--General

Sec.
429.1  What is the Bilingual Vocational Materials, Methods, and 
          Techniques Program?
429.2  Who is eligible to apply for assistance under this program?
429.3  What regulations apply to this program?
429.4  What definitions apply to this program?

Subpart B--What Kinds of Activities Does the Secretary Assist Under This 
                                Program?

429.10  What types of projects may be funded?
429.11  How does the Secretary establish priorities for this program?

               Subpart C--How Does One Apply for a Grant?

429.20  What must an application include?

             Subpart D--How Does the Secretary Make a Grant?

429.30  How does the Secretary evaluate an application?
429.31  What selection criteria does the Secretary use?

    Authority: Sec. 441(c) of the Carl D. Perkins Vocational Education 
Act, 20 U.S.C. 2441(c), as enacted by Pub. L. 98-524, unless otherwise 
noted.

    Source: 50 FR 33255, Aug. 16, 1985, unless otherwise noted. 
Redesignated at 57 FR 36771, Aug. 14, 1992.



                           Subpart A--General



Sec. 429.1  What is the Bilingual Vocational Materials, Methods, and Techniques Program?

    The Bilingual Vocational Materials, Methods, and Techniques Program 
provides financial assistance for the development of instructional and 
curriculum materials, methods, or techniques for bilingual vocational 
training for individuals with limited English proficiency.

(Authority: Sec. 441(c)(1); 20 U.S.C. 2441(c)(1))



Sec. 429.2  Who is eligible to apply for assistance under this program?

    (a) The following are eligible to apply for grants, contracts, or 
cooperative agreements under this program:
    (1) State agencies.
    (2) Educational institutions.
    (3) Nonprofit organizations.
    (b) The following are eligible for contracts under this program:
    (1) Private for-profit organizations.
    (2) Individuals.

(Authority: Sec. 441(c)(1); 20 U.S.C. 2441(c)(1))

[[Page 115]]



Sec. 429.3  What regulations apply to this program?

    The following regulations apply to the Bilingual Vocational 
Materials, Methods, and Techniques Program:
    (a) The regulations in 34 CFR part 400.
    (b) The regulations in this part.

(Authority: Sec. 441(c); 20 U.S.C. 2441(c))



Sec. 429.4  What definitions apply to this program?

    The definitions in 34 CFR 400.4 apply to this program.

(Authority: Sec. 441(c); 20 U.S.C. 2441(c))



Subpart B--What Kinds of Activities Does the Secretary Assist Under This 
                                Program?



Sec. 429.10  What types of projects may be funded?

    The Secretary provides assistance through grants, contracts, or 
cooperative agreements for--
    (a) Research in bilingual vocational training;
    (b) The development of instructional and curriculum materials, 
methods, or techniques;
    (c) Training projects to familiarize State agencies and training 
institutions with research findings and with successful pilot and 
demonstration projects in bilingual vocational education and training; 
and
    (d) Experimental, developmental, pilot, and demonstration projects.

(Authority: Sec. 441.(c)(2); 20 U.S.C. 2441(c)(2))



Sec. 429.11  How does the Secretary establish priorities for this program?

    (a) The Secretary may announce, through one or more notices 
published in the Federal Register, the priorities for this program, if 
any, from the types of projects described in Sec. 429.10.
    (b) The Secretary may establish a separate competition for one or 
more of the priorities selected. If a separate competition is 
established for one or more priorities, the Secretary may reserve all 
applications that relate to those priorities for review as part of the 
separate competition.

(Authority: Sec. 441(c)(2); 20 U.S.C. 2441(c)(2))

[50 FR 33255, Aug. 16, 1985. Redesignated at 57 FR 36771, Aug. 14, 1992, 
and amended at 59 FR 1652, Jan. 12, 1994]



               Subpart C--How Does One Apply for a Grant?



Sec. 429.20  What must an application include?

    An application under this part must--
    (a) Describe the qualifications of staff responsible for the 
project; and
    (b) Provide that the activities and services for which assistance is 
sought will be administered by or under the supervision of the 
applicant.

(Approved by the Office of Management and Budget under control number 
1830-0013)


(Authority: Sec. 441(d)(1), (3); 20 U.S.C. 2441(d)(1), (3))



             Subpart D--How Does the Secretary Make a Grant?



Sec. 429.30  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 429.31.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 429.31.
    (c) Subject to paragraph (d) of this section, the maximum possible 
points for each criterion is indicated in parentheses after the heading 
for each criterion.
    (d) For each competition, as announced in a notice published in the 
Federal Register, the Secretary may assign the reserved 15 points among 
the criteria in Sec. 429.31.

(Authority: Sec. 441(c), 20 U.S.C. 2441(c))

[50 FR 33255, Aug. 16, 1985. Redesignated at 57 FR 36771, Aug. 14, 1992, 
and amended at 59 FR 1652, Jan. 12, 1994]

[[Page 116]]



Sec. 429.31  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria in evaluating 
each application:
    (a) Need. (20 points) (1) The Secretary reviews each application for 
information that shows the need for the proposed services and activities 
for individuals with limited English proficiency.
    (2) The Secretary looks for information that shows--
    (i) Specific evidence of the need; and
    (ii) Specific information about how the need will be met.
    (b) Plan of operation. (20 points)
    (1) The Secretary reviews each application for information that 
shows the quality of the plan of operation for the project.
    (2) The Secretary looks for information that shows--
    (i) High quality in the design of the project;
    (ii) An effective plan of management that ensures proper and 
efficient administration of the project;
    (iii) A clear description of how the objectives of the project 
relate to the purpose of the program;
    (iv) The way the applicant plans to use its resources and personnel 
to achieve each objective; and
    (v) A clear description of how the applicant will provide equal 
access and treatment for eligible project participants who are members 
of groups that have been traditionally underrepresented, such as--
    (A) Members of racial or ethnic minority groups;
    (B) Women;
    (C) Handicapped persons; and
    (D) The elderly.
    (c) Quality of key personnel. (20 points)
    (1) The Secretary reviews each application for information that 
shows the qualifications of the key personnel the applicant plans to use 
on the project.
    (2) The Secretary looks for information that shows--
    (i) The qualifications of the project director (if one is to be 
used);
    (ii) The qualifications of each of the other key personnel to be 
used in the project;
    (iii) The time that each person referred to in paragraphs (c)(2) (i) 
and (ii) of this section will commit to the project; and
    (iv) The extent to which the applicant, as part of its 
nondiscriminatory employment practices, encourages applications for 
employment from persons who are members of groups that have been 
traditionally underrepresented, such as--
    (A) Members of racial or ethnic minority groups;
    (B) Women;
    (C) Handicapped persons; and
    (D) The elderly.
    (3) To determine personnel qualifications, the Secretary considers 
experience and training, in fields related to the objectives of the 
project, as well as other information that the applicant provides.
    (d) Budget and cost effectiveness. (10 points)
    (1) The Secretary reviews each application for information that 
shows that the project has an adequate budget and is cost effective.
    (2) The Secretary looks for information that shows--
    (i) The budget for the project is adequate to support the project 
activities; and
    (ii) Costs are reasonable in relation to the objectives of the 
project.
    (e) Evaluation plan. (10 points)
    (1) The Secretary reviews each application for information that 
shows the quality of the evaluation plan for the project.

    Cross-Reference: See 34 CFR 75.590 (Evaluation by the grantee).

    (2) The Secretary looks for information that shows methods of 
evaluation that are appropriate for the project and, to the extent 
possible, are objective and produce data that are quantifiable.
    (f) Adequacy of resources. (5 points)
    (1) The Secretary reviews each application for information that 
shows that the applicant plans to devote adequate resources to the 
project.
    (2) The Secretary looks for information that shows--
    (i) The facilities that the applicant plans to use are adequate; and

[[Page 117]]

    (ii) The equipment and supplies that the applicant plans to use are 
adequate.

(Approved by the Office of Management and Budget under control number 
1830-0013)

(Authority: Sec. 441(c); 20 U.S.C. 2441(c))

[50 FR 33255, Aug. 16, 1985; 50 FR 38802, Sept. 25, 1985]



PART 460--ADULT EDUCATION--GENERAL PROVISIONS--Table of Contents




Sec.
460.1  What is the purpose of the Adult Education Act?
460.2  What programs are authorized by the Adult Education Act?
460.3  What regulations apply to the adult education programs?
460.4  What definitions apply to the adult education programs?

    Authority: 20 U.S.C. 1201 et seq., unless otherwise noted.

    Source: 54 FR 34409, Aug. 18, 1989, unless otherwise noted. 
Redesignated at 57 FR 24091, June 5, 1992.



Sec. 460.1  What is the purpose of the Adult Education Act?

    The purpose of the Adult Education Act (the Act) is to assist the 
States to--
    (a) Improve educational opportunities for adults who lack the level 
of literacy skills requisite to effective citizenship and productive 
employment;
    (b) Expand and improve the current system for delivering adult 
education services, including delivery of these services to 
educationally disadvantaged adults; and
    (c) Encourage the establishment of adult education programs that 
will--
    (1) Enable adults to acquire the basic educational skills necessary 
for literate functioning;
    (2) Provide adults with sufficient basic education to enable them to 
benefit from job training and retraining programs and obtain and retain 
productive employment so that they might more fully enjoy the benefits 
and responsibilities of citizenship; and
    (3) Enable adults who so desire to continue their education to at 
least the level of completion of secondary school.

(Authority: 20 U.S.C. 1201)



Sec. 460.2  What programs are authorized by the Adult Education Act?

    The following programs are authorized by the Act:
    (a) Adult Education State-administered Basic Grant Program (34 CFR 
part 426).
    (b) State-administered Workplace Literacy Program (34 CFR part 433).
    (c) State-administered English Literacy Program (34 CFR part 434).
    (d) State Literacy Resource Centers Program (34 CFR part 464).
    (e) National Workplace Literacy Program (34 CFR part 432).
    (f) National Workforce Literacy Strategies Program (34 CFR part 
473).
    (g) National English Literacy Demonstration Program for Individuals 
of Limited English Proficiency (34 CFR part 435).
    (h) Adult Migrant Farmworker and Immigrant Education Program (34 CFR 
part 436).
    (i) National Adult Literacy Volunteer Training Program (34 CFR part 
437).
    (j) State Program Analysis Assistance and Policy Studies Program (34 
CFR part 438).
    (k) Functional Literacy for State and Local Prisoners Program (34 
CFR part 489).
    (l) Life Skills for State and Local Prisoners Program (34 CFR part 
490).

(Authority: 20 U.S.C. 1201 et seq.)

[54 FR 34409, Aug. 18, 1989. Redesignated and amended at 57 FR 24091, 
June 5, 1992]



Sec. 460.3  What regulations apply to the adult education programs?

    The following regulations apply to the adult education programs:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs) applies to parts 472, 
473, 474, 475, 476, 477, 489, and 490, except that 34 CFR 75.720(b), 
regarding the frequency of certain reports, does not apply.
    (3) 34 CFR part 76 (State-Administered Programs) applies to parts 
461, 462, 463, and 464, except that 34 CFR

[[Page 118]]

76.101 (The general State application) does not apply.
    (4) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (5) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (6) 34 CFR part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments).
    (7) 34 CFR part 81 (General Education Provisions Act--Enforcement).
    (8) 34 CFR part 82 (New Restrictions on Lobbying).
    (9) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (10) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 460.
    (c) The regulations in 34 CFR parts 461, 462, 463, 464, 472, 473, 
474, 475, 476, 477, 489, and 490.

(Authority: 20 U.S.C. 1201 et seq.)

[57 FR 24091, June 5, 1992]



Sec. 460.4  What definitions apply to the adult education programs?

    (a) Definitions in the Act. The following terms used in regulations 
for adult education programs are defined in sections 312 and 326(b) of 
the Act:

Academic education
Adult
Adult education
Community-based organization
Community school program
Correctional institution
Criminal offender
Educationally disadvantaged adult
English literacy program
Institution of higher education
Local educational agency
Out-of-school youth
Private industry council
State
State educational agency
    (b) Definitions in EDGAR. The following terms used in regulations 
for adult education programs are defined in 34 CFR 77.1:

Applicant
Application
Award
Budget
Budget period
Contract
ED
EDGAR
Fiscal year
Grant
Grantee
Nonprofit
Private
Project
Project period
Public
Secretary
Subgrant
Subgrantee

    (c) Other definitions. The following definitions also apply to 
regulations for adult education programs:
    Act means the Adult Education Act (20 U.S.C. 1201 et seq.).
    Adult basic education means instruction designed for an adult who--
    (1) Has minimal competence in reading, writing, and computation;
    (2) Is not sufficiently competent to meet the educational 
requirements of adult life in the United States; or
    (3) Is not sufficiently competent to speak, read, or write the 
English language to allow employment commensurate with the adult's real 
ability.

If grade level measures are used, adult basic education includes grades 
0 through 8.9.

    Adult secondary education means instruction designed for an adult 
who--
    (1) Is literate and can function in everyday life, but is not 
proficient; or
    (2) Does not have a certificate of graduation (or its equivalent) 
from a school providing secondary education.

If using grade level measures, adult secondary education includes grades 
9 through 12.9.

    Adults with Limited English proficiency, persons with limited 
English proficiency, individuals of limited English proficiency, and 
limited English proficient adults mean individuals who--
    (1) Were not born in the United States or whose native language is a 
language other than English;
    (2) Come from environments where a language other than English is 
dominant; or
    (3) Are American Indian or Alaska Natives and who come from 
environments where a language other than English has had a significant 
impact on their level of English language proficiency; and
    (4) Who, by reason thereof, have sufficient difficulty speaking, 
reading, writing, or understanding the English language to deny these 
individuals the opportunity to learn successfully in

[[Page 119]]

classrooms where the language of instruction is English or to 
participate fully in our society.

(Authority: 20 U.S.C. 3283(a)(1))

    Governor includes the chief executive officer of a State that does 
not have a Governor.
    Homeless or homeless adult:
    (1) The terms mean an adult lacking a fixed, regular, and adequate 
nighttime residence as well as an individual having a primary nighttime 
residence that is--
    (i) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing for the mentally ill);
    (ii) An institution that provides a temporary residence for 
individuals intended to be institutionalized; or
    (iii) A public or private place not designed for, or ordinarily used 
as, a regular sleeping accommodation for human beings.
    (2) The terms do not include any adult imprisoned or otherwise 
detained pursuant to an Act of the Congress or a State law.

(Authority: 42 U.S.C. 11301)

    Immigrant means any refugee admitted or paroled into this country or 
any alien except one who is exempt under the provisions of the 
Immigration and Nationality Act, as amended.

(Authority: 8 U.S.C. 1101(a)(15))

    Institutionalized individual means an adult, as defined in the Act, 
who is an inmate, patient, or resident of a correctional, medical, or 
special institution.
    Literacy means an individual's ability to read, write, and speak in 
English, compute, and solve problems, at levels of proficiency necessary 
to function on the job and in society, to achieve one's goals, and to 
develop one's knowledge and potential.
    Migrant farmworker means a person who has moved within the past 12 
months from one school district to another--or, in a State that is 
comprised of a single school district, has moved from one school 
administrative area to another-- to enable him or her to obtain 
temporary or seasonal employment in any activity directly related to--
    (1) The production or processing of crops, dairy products, poultry, 
or livestock for initial commercial sale or as a principal means of 
personal subsistence;
    (2) The cultivation or harvesting of trees; or
    (3) Fish farms.
    Outreach means activities designed to--
    (1) Inform educationally disadvantaged adult populations of the 
availability and benefits of the adult education program;
    (2) Actively recruit these adults to participate in the adult 
education program; and
    (3) Assist these adults to participate in the adult education 
program by providing reasonable and convenient access and support 
services to remove barriers to their participation in the program.
    Program year means the twelve-month period during which a State 
operates its adult education program.
    State administrative costs means costs for those management and 
supervisory activities necessary for direction and control by the State 
educational agency responsible for developing the State plan and 
overseeing the implementation of the adult education program under the 
Act. The term includes those costs incurred for State advisory councils 
under section 332 of the Act, but does not include costs incurred for 
such additional activities as evaluation, teacher training, 
dissemination, technical assistance, and curriculum development.

(Authority: 20 U.S.C. 1201 et seq.)

[54 FR 34409, Aug. 18, 1989. Redesignated and amended at 57 FR 24091, 
24092, June 5, 1992]



PART 461--ADULT EDUCATION STATE-ADMINISTERED BASIC GRANT PROGRAM--Table of Contents




                           Subpart A--General

Sec.
461.1  What is the Adult Education State-administered Basic Grant 
          Program?
461.2  Who is eligible for an award?
461.3  What are the general responsibilities of the State educational 
          agency?

[[Page 120]]

461.4  What regulations apply?
461.5  What definitions apply?

             Subpart B--How Does a State Apply for a Grant?

461.10  What documents must a State submit to receive a grant?
461.11  How is the State plan developed?
461.12  What must the State plan contain?
461.13  What procedures does a State use to submit its State plan?
461.14  When are amendments to a State plan required?

       Subpart C--How Does the Secretary Make a Grant to a State?

461.20  How does the Secretary make allotments?
461.21  How does the Secretary make reallotments?
461.22  What criteria does the Secretary use in approving a State's 
          description of efforts relating to program reviews and 
          evaluations?
461.23  How does the Secretary approve State plans and amendments?

   Subpart D--How Does a State Make an Award to an Eligible Recipient?

461.30  Who is eligible for a subgrant or contract?
461.31  How does a State award funds?
461.32  What are programs for corrections education and education for 
          other institutionalized adults?
461.33  What are special experimental demonstration projects and teacher 
          training projects?

           Subpart E--What Conditions Must Be Met by a State?

461.40  What are the State and local administrative costs requirements?
461.41  What are the cost-sharing requirements?
461.42  What is the maintenance of effort requirement?
461.43  Under what circumstances may the Secretary waive the maintenance 
          of effort requirement?
461.44  How does a State request a waiver of the maintenance of effort 
          requirement?
461.45  How does the Secretary compute maintenance of effort in the 
          event of a waiver?
461.46  What requirements for program reviews and evaluations must be 
          met by a State?

   Subpart F--What Are the Administrative Responsibilities of a State?

461.50  What are a State's responsibilities regarding a State advisory 
          council on adult education and literacy?
461.51  What are the membership requirements of a State advisory 
          council?
461.52  What are the responsibilities of a State advisory council?
461.53  May a State establish an advisory body other than a State 
          advisory council?

    Authority: 20 U.S.C. 1201 et seq., unless otherwise noted.

    Source: 57 FR 24092, June 5, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 461.1  What is the Adult Education State-administered Basic Grant Program?

    The Adult Education State-administered basic Grant Program (the 
program) is a cooperative effort between the Federal Government and the 
States to provide adult education. Federal funds are granted to the 
States on a formula basis. Based on need and resources available, States 
fund local programs of adult basic education, programs of adult 
secondary education, and programs for adults with limited English 
proficiency.

(Authority: 20 U.S.C. 1203)



Sec. 461.2  Who is eligible for an award?

    State educational agencies (SEAs) are eligible for awards under this 
part.

(Authority: 20 U.S.C. 1203)



Sec. 461.3  What are the general responsibilities of the State educational agency?

    (a) A State that desires to participate in the program shall 
designate the SEA as the sole State agency responsible for the 
administration and supervision of the program under this part.
    (b) The SEA has the following general responsibilities:
    (1) Development, submission, and implementation of the State 
application and plan, and any amendments to these documents.
    (2) Evaluation of activities, as described in section 352 of the Act 
and Sec. 461.46.

[[Page 121]]

    (3) Consultation with the State advisory council, if a State 
advisory council has been established under section 332 of the Act and 
Sec. 461.50.
    (4) Consultation with other appropriate agencies, groups, and 
individuals involved in the planning, administration, evaluation, and 
coordination of programs funded under the Act.
    (5)(i) Assignment of personnel as may be necessary for State 
administration of programs under the Act.
    (ii) The SEA must ensure that--
    (A) These personnel are sufficiently qualified by education and 
experience; and
    (B) There is a sufficient number of these personnel to carry out the 
responsibilities of the State.
    (6) If the State imposes any rule or policy relating to the 
administration and operation of programs under the Act (including any 
rule or policy based on State interpretation of any Federal law, 
regulation, or guidance), the SEA shall identify the rule or policy as a 
State-imposed requirement.
    (7) By July 25, 1993, development and implementation, in 
consultation with a widely representative group of appropriate experts, 
educators, and administrators, of indicators of program quality to be 
used to evaluate programs assisted under this part, as required by 
section 352 of the Act and Sec. 461.46, to determine whether those 
programs are effective, including whether those programs are 
successfully recruiting, retaining, and improving the literacy skills of 
the individuals served under those programs.

(Authority: 20 U.S.C. 1205 (a) and (b)



Sec. 461.4  What regulations apply?

    The following regulations apply to the program:
    (a) The regulations in this part 461.
    (b) The regulations in 34 CFR part 460.

(Authority: 20 U.S.C. 1201 et seq.)



Sec. 461.5  What definitions apply?

    (a) The definitions in 34 CFR 460.4 apply to this part.
    (b) For the purposes of this part, ``State'' includes the Federated 
States of Micronesia and the Republic of the Marshall Island.

(Authority: 20 U.S.C. 1201 et seq.)



             Subpart B--How Does a State Apply for a Grant?



Sec. 461.10  What documents must a State submit to receive a grant?

    An SEA shall submit the following to the Secretary as one document:
    (a) A State plan, developed once every four years, that meets the 
requirements of the Act and contains the information required in 
Sec. 461.12.
    (b) A State application consisting of program assurances, signed by 
an authorized official of the SEA, to provide that--
    (1) The SEA will provide such methods of administration as are 
necessary for the proper and efficient administration of the Act;
    (2) Federal funds granted to the State under the Act will be used to 
supplement, and not supplant, the amount of State and local funds 
available for uses specified in the Act;
    (3) Programs, services, and activities funded in accordance with the 
uses specified in section 322 of the Act are designed to expand or 
improve the quality of adult education programs, including programs for 
educationally disadvantaged adults, to initiate new programs of high 
quality, or, if necessary, to maintain programs;
    (4) The SEA will provide such fiscal control and fund accounting 
procedures as may be necessary to ensure proper disbursement of, and 
accounting for, Federal funds paid to the State (including Federal funds 
paid by the State to eligible recipients under the Act);
    (5) The SEA has instituted policies and procedures to ensure that 
copies of the State plan and all statements of general policy, rules, 
regulations, and procedures will be made available to the public;
    (6) The SEA will comply with the maintenance of effort requirements 
in section 361(b) of the Act;

    Cross-Reference: See Sec. 461.42 What is the maintenance of effort 
requirement?

    (7) Adults enrolled in adult basic education programs, including 
programs

[[Page 122]]

for adults with limited English proficiency, will not be charged 
tuition, fees, or any other charges, or be required to purchase any 
books or any other materials that are needed for participation in the 
program;
    (8) The SEA may use not more than 20 percent of the funds granted to 
the State under the Act for programs of equivalency for a certificate of 
graduation from secondary school;
    (9) As may be required by the Secretary, the SEA will report 
information concerning special experimental demonstration projects and 
teacher training projects supported under section 353 of the Act; and
    (10) The SEA annually will report information abut the State's adult 
education students, programs, expenditures, and goals, as may be 
required by the Secretary. (Approved by the Office of Management and 
Budget under control number 1830-0026.)

(Authority: 20 U.S.C. 1203a(b)(2), 1206(a), 1206b, 1207a, 1208, and 
1209(b))



Sec. 461.11  How is the State plan developed?

    In formulating the State plan, the SEA shall--
    (a) Meet with and utilize the State advisory council, if a council 
is established under section 332 of the Act and Sec. 461.50;
    (b) After providing appropriate and sufficient notice to the public, 
conduct at least two public hearings in the State for the purpose of 
affording all segments of the public, including groups serving 
educationally disadvantaged adults, and interested organizations and 
groups, an opportunity to present their views and make recommendations 
regarding the State plan;
    (c) Make a thorough assessment of --
    (1) The needs of adults, including educationally disadvantaged 
adults, eligible to be served as well as adults proposed to be served 
and those currently served by the program; and
    (2) The capability of existing programs and institutions to meet 
those needs; and
    (d) State the changes and improvements required in adult education 
to fulfill the purposes of the Act and the options for implementing 
these changes and improvements. (Approved by the Office of Management 
and Budget under control number 1830-0026.)

(Authority: 20 U.S.C. 1206a(a)(1) and (2), (b))



Sec. 461.12  What must the State plan contain?

    (a) Consistent with the assessment described in Sec. 461.11(c), a 
State plan must, for the four-year period covered by the plan--
    (1) Describe the adult education needs of all segments of the adult 
population in the State identified in the assessment, including the 
needs of those adults who are educationally disadvantaged:
    (2) Describe and provide for the fulfillment of the literacy needs 
of individuals in the State;
    (3) Set forth measurable goals for improving literacy levels, 
retention in literacy programs, and long-term learning gains of 
individuals in the State and describe a comprehensive approach for 
achieving those goals, including the development of indicators of 
program quality as required by section 331(a)(2) of the Act and 
Sec. 461.3(b)(7).
    (4) Describe the curriculum, equipment, and instruments that are 
being used by instructional personnel in programs and indicate how 
current these elements are;
    (5) Describe the means by which the delivery of adult education 
services will be significantly expanded (including efforts to reach 
typically underserved groups such as educationally disadvantaged adults, 
individuals of limited English proficiency, and adults with 
disabilities) through coordination by agencies, institutions, and 
organizations including the public school system, businesses, labor 
unions, libraries, institutions of higher education, public health 
authorities, employment or training programs, antipoverty programs, 
organizations providing assistance to the homeless, and community and 
voluntary organizations;
    (6) Describe the means by which representatives of the public and 
private sectors were involved in the development of the State plan and 
how they will continue to be involved in the implementation of the plan, 
especially in the expansion of the delivery of adult education services 
by cooperation and

[[Page 123]]

collaboration with those public and private agencies, institutions, and 
organizations;
    (7) Describe the capability of existing programs and institutions to 
meet the needs described in paragraph (a)(1) of this section, including 
the other Federal and non-Federal resources available to meet those 
needs;
    (8) Describe the outreach activities that the State intends to carry 
out during the period covered by the plan, including specialized 
efforts--such as flexible course schedules, auxiliary aids and services, 
convenient locations, adequate transportation, and child care services--
to attract and assist meaningful participation in adult education 
programs;
    (9)(i) Describe the manner in which the SEA will provide for the 
needs of adults of limited English proficiency or no English proficiency 
by providing programs designed to teach English and, as appropriate, to 
allow these adults to progress effectively through the adult education 
program or to prepare them to enter the regular program of adult 
education as quickly as possible.
    (ii) These programs may, to the extent necessary, provide 
instruction in the native language of these adults or may provide 
instruction exclusively in English.
    (iii) These programs must be carried out in coordination with 
programs assisted under the Bilingual Education Act and with bilingual 
vocational education programs under the Carl D. Perkins Vocational and 
Applied Technology Education Act;
    (10) Describe how the particular education needs of adult 
immigrants, the incarcerated, adults with disabilities, the chronically 
unemployed, homeless adults, the disadvantaged, and minorities in the 
State will be addressed;
    (11)(i) Describe the progress the SEA has made in achieving the 
goals set forth in each State plan subsequent to the initial State plan 
filed in 1989; and
    (ii) Describe how the assessment of accomplishments and the findings 
of program reviews and evaluations required by section 352 of the Act 
and Sec. 461.46 were considered in establishing the State's goals for 
adult education in the plan being submitted;
    (12) Describe the criteria the SEA will use in approving 
applications by eligible recipients and allocating funds made available 
under the Act to those recipients;
    (13) Describe the methods proposed for joint planning and 
coordination of programs carried out under the Act with programs 
conducted under applicable Federal and State programs, including the 
Carl D. Perkins Vocational and Applied Technology Education Act, the Job 
Training Partnership Act, the Rehabilitation Act of 1973, the 
Individuals with Disabilities Education Act, the Immigration Reform and 
Control Act of 1986, the Higher Education Act of 1965, and the Domestic 
Volunteer Service Act, to ensure maximum use of funds and to avoid 
duplication of services;
    (14) Describe the steps taken to utilize volunteers, particularly 
volunteers assigned to the Literacy Corps established under the Domestic 
Volunteer Service Act and volunteers trained in programs carried out 
under section 382 of the Act and 34 CFR part 476, but only to the extent 
that those volunteers supplement and do not supplant salaried employees;
    (15) Describe the measures to be taken to ensure that adult 
education programs, services, and activities under the Act will take 
into account the findings of program reviews and evaluations required by 
section 352 of the Act and Sec. 461.46;

    Cross-Reference: See Sec. 461.22. What criteria does the Secretary 
use in approving a State's description of efforts relating to program 
reviews and evaluation?

    (16) Report the amount of administrative funds to be spent on 
program improvements;
    (17) Contain assurances that financial assistance provided under 
this part is used to assist and expand existing programs and to develop 
new programs for--
    (i) Adults whose lack of basic skills renders them unemployable;
    (ii) Adults whose lack of basic skills keeps them, whether employed 
or unemployed, from functioning independently in society; and
    (iii) Adults whose lack of basic skills severely reduces their 
ability to have a

[[Page 124]]

positive effect on the literacy of their children;
    (18) Describe the SEA's policies, procedures, and activities for 
carrying out special experimental demonstration projects and teacher 
training projects that meet the requirements of Sec. 461.33;
    (19) Describe the SEA's policies, procedures, and activities for 
carrying out corrections education and education for other 
institutionalized adults that meet the requirements of Sec. 461.32;
    (20) Describe the SEA's planned use of Federal funds for 
administrative costs under Sec. 461.40(a), including any planned 
expenditures for a State advisory council under Sec. 461.50.

    Note: An additional source of funding exists under section 356(g) of 
the Act and 34 CFR part 464, but need not be reported under this 
paragraph.

and
    (21) Include a summary of recommendations received and the SEA's 
responses to the recommendations made through the State plan development 
process required under Sec. 461.11(b).
    (b) Each State plan must provide assurance that public or private 
non-profit entities eligible under Sec. 461.30--local educational 
agencies, public or private nonprofit agencies, community-based 
organizations, correctional education agencies, postsecondary 
educational institutions, institutions that serve educationally 
disadvantaged adults, and any other institution that has the ability to 
provide literacy services to adults and families--will be provided 
direct and equitable access to all Federal funds provided under this 
part, including--
    (1) The right to submit applications directly to the SEA for those 
funds; and
    (2) Use by the SEA of a process for selecting recipients of those 
funds that gives each agency, institution, and organization a fair 
chance of receiving an award.
    (c) To be eligible to participate in the State-administered 
Workplace Literacy Program under section 371(b) of the Act, an SEA shall 
comply with the requirements in 34 CFR 462.10.
    (d) To be eligible to participate in the State-administered English 
Literacy Program under section 372(a) of the Act, an SEA shall comply 
with the requirements in 34 CFR 463.10.
    (e) In order for a State, or the local recipients within the State, 
to be eligible to apply for funds under the Adult Migrant Farmworker and 
Immigrant Education Program under section 381 of the Act and 34 CFR part 
475, an SEA shall describe the types of projects appropriate for meeting 
the educational needs of adult migrant farm workers and immigrants under 
section 381 of the Act.

(Approved by the Office of Management and Budget under control number 
1830-0026)

(Authority: 20 U.S.C. 1203a(a)(1); 1204; 1205(c); 1206a(a)(2), 
(b)(1)(B), (c), (d); 1208; 1211(b)(3)(A); 1211a(a)(2); and 1213(a))



Sec. 461.13  What procedures does a State use to submit its State plan?

    (a) An SEA shall submit its State plan to the Secretary not later 
than 90 days prior to the first program year for which the plan is in 
effect.
    (b)(1) Not less than sixty days prior to submitting the State plan 
to the Secretary, the SEA shall give the State advisory council, if one 
is established under section 332 of the Act and Sec. 461.50, an 
opportunity to review and comment on the plan.
    (2) The SEA shall respond to all timely and substantive objections 
of the State advisory council and include with the State plan a copy of 
those objections and its response.
    (c)(1) Not less than sixty days prior to submitting the State plan 
to the Secretary, the SEA shall give the following entities an 
opportunity to review and comment on the plan:
    (i) The State board or agency for vocational education.
    (ii) The State Job Training Coordinating Council under the Job 
Training Partnership Act.
    (iii) The State board or agency for postsecondary education.
    (2) Comments (to the extent those comments are received in a timely 
fashion) of entities listed in paragraph

[[Page 125]]

(c)(1) of this section and the SEA's response must be included with the 
State plan.

(Approved by the Office of Management and Budget under control number 
1830-0026)

(Authority: 20 U.S.C. 1206(b) and 1206a(a)(3) (A) and (B))



Sec. 461.14  When are amendments to a State plan required?

    (a) General. If an amendment to the State plan is necessary, the SEA 
shall submit the amendment to the Secretary not later than 90 days prior 
to the program year of operation to which the amendment applies.
    (b) Indicators of program quality. Each SEA shall amend its plan by 
July 25, 1993, to include the indicators of program quality required by 
section 331 of the Act and Sec. 461.3(b)(7). Cross-Reference: See 34 CFR 
76.140-76.142 Amendments.

(Approved by the Office of Management and Budget under control number 
1830-0026)

(Authority: 20 U.S.C. 1207(a))



       Subpart C--How Does the Secretary Make a Grant to a State?



Sec. 461.20  How does the Secretary make allotments?

    The Secretary determines the amount of each State's grant according 
to the formula in section 313(b) of the Act.

(Authority: 20 U.S.C. 1201b(b))



Sec. 461.21  How does the Secretary make reallotments?

    (a) Any amount of any State's allotment under section 313(b) of the 
Act that the Secretary determines is not required, for the period the 
allotment is available, for carrying out that State's plan, is 
reallotted to other States on dates that the Secretary may fix.
    (b) The Secretary determines any amounts to be reallotted on the 
basis of--
    (1) Reports, filed by the States, of the amounts required to carry 
out their State plans; and
    (2) Other information available to the Secretary.
    (c) Reallotments are made to other States in proportion to those 
State's original allotments for the fiscal year in which allotments 
originally were made, unless the Secretary reduces a State's 
proportionate share by the amount the Secretary estimates will exceed 
the sum the State needs and will be able to use under its plan.
    (d) The total of any reductions made under paragraph (c) of this 
section is reallotted among those States whose proportionate shares were 
not reduced.
    (e)(1) Any amount reallotted to a State during a fiscal year is 
deemed part of the State's allotment for that fiscal year.
    (2) A reallotment of funds from one State to another State does not 
extend the period of time in which the funds must be obligated.

(Authority: 20 U.S.C. 1201b(c))



Sec. 461.22  What criteria does the Secretary use in approving a State's description of efforts relating to program reviews and evaluations?

    The Secretary considers the following criteria in approving a 
State's description of efforts relating to program reviews and 
evaluations under section 342(c)(13) of the Act and Sec. 461.12(a)(15):
    (a) The extent to which the State will have effective procedures for 
using the findings of program reviews and evaluations to identify, on a 
timely basis, those programs, services, and activities under the Act 
that are not meeting the educational goals set forth in the State plan 
and approved applications of eligible recipients.
    (b) The adequacy of the State's procedures for effecting timely 
changes that will enable programs, services, and activities identified 
under paragraph (a) of this section to meet the educational goals in the 
State plan and approved applications of eligible recipients.
    (c) The extent to which the State will continue to review those 
programs, activities, and services, and affect further changes as 
necessary to meet those educational goals.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1206a(c)(13) and 1207a)

[[Page 126]]



Sec. 461.23  How does the Secretary approve State plans and amendments?

    (a) The Secretary approves, within 60 days of receipt, a State plan 
or amendment that the Secretary determines complies with the applicable 
provisions of the Act and the regulations in this part.
    (b) In approving a State plan or amendment, the Secretary considers 
any information submitted in accordance with Sec. 461.13 (b) and (c).
    (c) The Secretary notifies the SEA, in writing, of the granting or 
withholding of approval.
    (d) The Secretary does not finally disapprove a State plan or 
amendment without first affording the State reasonable notice and 
opportunity for a hearing.

(Authority: 20 U.S.C. 1206(b), 1206a(a)(3), and 1207(b))



   Subpart D--How Does a State Make an Award to an Eligible Recipient?



Sec. 461.30  Who is eligible for a subgrant or contract?

    (a) The following public or private nonprofit entities are eligible 
to apply to the SEA for an award:
    (1) A local educational agency (LEA).
    (2) A public or private nonprofit agency.
    (3) A correctional education agency.
    (4) A community-based organization.
    (5) A postsecondary educational institution.
    (6) An institution that serves educationally disadvantaged adults.
    (7) Any other institution that has the ability to provide literacy 
services to adults and families.
    (b) A public or private nonprofit entity listed in paragraph (a) of 
this section may apply on behalf of a consortium that includes a for-
profit agency, organization, or institution that can make a significant 
contribution to attaining the objectives of the Act.
    (c)(1) Each State shall also use an amount of funds provided under 
this part, as determined by the State given the State's needs and 
resources for adult education, for competitive 2-year grants to public 
housing authorities for literacy programs and related activities. Any 
public housing authority that receives a grant under this paragraph 
shall consult with local adult education providers in conducting 
programs and activities with assistance provided under the grant. Any 
grant provided under this paragraph is referred to as a ``Gateway 
Grant.''
    (2) For the purposes of this part, ``public housing authority'' 
means a public housing agency, as defined in 42 U.S.C. 1437a(b)(6), that 
participates in public housing, as defined in 42 U.S.C. 1437a(b)(1).

(Authority: 20 U.S.C. 1203a(a)(1), (2), (3)(A))



Sec. 461.31  How does a State award funds?

    (a) In selecting local recipients, an SEA shall give preference to 
those local applicants that have demonstrated or can demonstrate a 
capability to recruit and serve educationally disadvantaged adults, 
particularly in areas with a high proportion of adults who do not have a 
certificate of graduation from a school providing secondary education or 
its equivalent.
    (b) An SEA shall award funds on the basis of applications submitted 
by eligible recipients.
    (c) In reviewing a local application, an SEA shall determine that 
the application contains the following:
    (1) A description of current programs, activities, and services 
receiving assistance from Federal, State, and local sources that provide 
adult education in the geographic area proposed to be served by the 
applicant.
    (2) A description of cooperative arrangements (including 
arrangements with business, industry, and volunteer literacy 
organizations as appropriate) that have been made to deliver services to 
adults.
    (3) Assurances that the adult educational programs, services, or 
activities that the applicant proposes to provide are coordinated with 
and do not duplicate programs, services, or activities made available to 
adults under other Federal, State, and local programs, including the Job 
Training Partnership Act, the Carl D. Perkins Vocational and Applied 
Technology Education Act, the Rehabilitation Act

[[Page 127]]

of 1973, the Individuals with Disabilities Education Act, the Indian 
Education Act, the Higher Education Act of 1965, and the Domestic 
Volunteer Service Act.
    (4) The projected goals of the applicant with respect to participant 
recruitment, retention, and educational achievement and how the 
applicant will measure and report progress in meeting its goals.
    (5) Any other information the SEA considers necessary.
    (d) In determining which programs receive assistance, the SEA shall 
consider--
    (1) The past effectiveness of applicants in providing services 
(especially with respect to recruitment and retention of educationally 
disadvantaged adults and the learning gains demonstrated by those 
adults);
    (2) The degree to which the applicant will coordinate and utilize 
other literacy and social services available in the community; and
    (3) The commitment of the applicant to serve individuals in the 
community who are most in need of literacy services.
    (e) In reviewing a local application, an SEA may consider the extent 
to which the application--
    (1) Identifies the needs of the population proposed to be served by 
the applicant;
    (2) Proposes activities that are designed to reach educationally 
disadvantaged adults;
    (3) Describes a project that gives special emphasis to adult basic 
education;
    (4) Describes adequate outreach activities, such as--
    (i) Flexible schedules to accommodate the greatest number of adults 
who are educationally disadvantaged;
    (ii) Location of facilities offering programs that are convenient to 
large concentrations of the adult populations identified by the State in 
its four-year State plan or how the locations of facilities will be 
convenient to public transportation; and
    (iii) The availability of day care and transportation services to 
participants in the project;
    (5) Describes proposed programs, activities, and services that 
address the identified needs;
    (6) Describes the resources available to the applicant--other than 
Federal and State adult education funds--to meet those needs (for 
example, funds provided under the Job Training Partnership Act, the Carl 
D. Perkins Vocational and Applied Technology Education Act, the 
Rehabilitation Act of 1973, the Individuals with Disabilities Education 
Act, the Indian Education Act, the Higher Education Act of 1965, or the 
Domestic Volunteer Service Act, and local cash or in-kind 
contributions); and
    (7) Describes project objectives that can be accomplished within the 
amount of the applicant's budget request.
    (f) An SEA may not approve an application for a consortium that 
includes a for-profit agency, organization or institution unless the 
State has first determined that--
    (1) The for-profit entity can make a significant contribution to 
attaining the objectives of the Act; and
    (2) The public or private nonprofit agency, organization, or 
institution will enter into a contract with the for-profit agency, 
organization, or institution for the establishment or expansion of 
programs.
    (g) If an SEA awards funds to a consortium that includes a for-
profit agency, organization, or institution, the award must be made 
directly to the public or private nonprofit agency, organization, or 
institution that applies on behalf of the consortium.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1203a(a) and 1206a(c)(4))



Sec. 461.32  What are programs for corrections education and education for other institutionalized adults?

    (a) An SEA shall use not less than 10 percent of its grant for 
educational programs for criminal offenders in corrections institutions 
and for other institutionalized adults. Those programs may include--
    (1) Academic programs for--(i) Basic education with special emphasis 
on reading, writing, vocabulary, and arithmetic;
    (ii) Special education, as defined by State law;

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    (iii) Bilingual education or English-as-a-second-language 
instruction; and
    (iv) Secondary school credit;
    (2) Vocational training programs;
    (3) Library development and library service programs;
    (4) Corrections education programs, including training for teacher 
personnel specializing in corrections education, such as courses in 
social education, basis skills instruction, and abnormal psychology;
    (5) Guidance and counseling programs;
    (6) Supportive services for criminal offenders, with special 
emphasis on the coordination of educational services with agencies 
furnishing services to criminal offenders after their release; and
    (7) Cooperative programs with educational institutions, community-
based organizations of demonstrated effectiveness, and the private 
sector, that are designed to provide education and training.
    (b)(1) An SEA shall establish its own statewide criteria and 
priorities for administering programs for corrections education and 
education for other institutionalized adults.
    (2) The SEA shall determine that an application proposing a project 
under paragraph (a) of this section contains the information in 
Sec. 461.31(c) and any other information the SEA considers necessary.

(Authority: 20 U.S.C. 1203a(b)(1) and 1204)



Sec. 461.33  What are special experimental demonstration projects and teacher training projects?

    (a) In accordance with paragraph (b) of this section, an SEA shall 
use at least 15 percent of its grant for--
    (1) Special projects that--
    (i) Will be carried out in furtherance of the purposes of the Act;
    (ii) Will be coordinated with other programs funded under the Act; 
and
    (iii)(A) Involve the use of innovative methods (including methods 
for educating adults with disabilities, homeless adults, and adults of 
limited English proficiency), systems, materials, or programs that may 
have national significance or will be of special value in promoting 
effective programs under the Act; or
    (B) Involve programs of adult education, including education for 
adults with disabilities, homeless adults, and adults of limited English 
proficiency, that are part of community school programs, carried out in 
cooperation with other Federal, State, or local programs that have 
unusual promise in promoting a comprehensive or coordinated approach to 
the problems of adults with educational deficiencies; and
    (2)(i) Training persons engaged, or preparing to engage, as 
personnel in programs designed to carry out the purposes of the Act; and
    (ii) Training professional teachers, volunteers, and administrators, 
with particular emphasis on--
    (A) Training-- (1) Full-time professional adult educators;
    (2) Minority adult educators; and
    (3) Educators of adults with limited English proficiency; and
    (B) Training teachers to recognize and more effectively serve 
illiterate individuals with learning disabilities and individuals who 
have reading ability below the fifth grade level.
    (b) An SEA shall use at least--
    (1) 10 percent of its grant for the purposes in paragraph (a)(2) of 
this section; and
    (2) Five percent of its grant for the purposes in paragraph (a)(1) 
or (a)(2) of this section, or both.
    (c)(1) An SEA shall establish its own statewide criteria and 
priorities for providing and administering special experimental 
demonstration projects and teacher training projects.
    (2) The SEA shall determine that an application proposing a project 
under paragraph (a) of this section contains--
    (i) The information in Sec. 461.31(c); and
    (ii) Any other information the SEA considers necessary.

(Authority: 20 U.S.C. 1208)



           Subpart E--What Conditions Must be Met by a State?



Sec. 461.40  What are the State and local administrative costs requirements?

    (a)(1) Beginning with the fiscal year 1991 grant (a grant that is 
awarded on or after July 1, 1991 from funds appropriated in the fiscal 
year 1991 appropriation), an SEA may use no more than 5 percent of its 
grant or $50,000--

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whichever is greater--for necessary and reasonable State administrative 
costs.
    (2) For grants awarded from funds appropriated for fiscal years 
prior to fiscal year 1991 (grants awarded before July 1, 1991), an SEA 
may determine what percent of its grant is necessary and reasonable for 
State administrative costs.
    (b)(1) At least 95 percent of an eligible recipient's award from the 
SEA must be expended for adult education instructional activities.
    (2) The remainder may be used for local administrative costs--
noninstructional expenses, including planning, administration, 
evaluation, personnel development, and coordination--that are necessary 
and reasonable.
    (3) If the administrative cost limits under paragraph (b)(2) of this 
section are insufficient for adequate planning, administration, 
evaluation, personnel development, and coordination of programs 
supported under the Act, the SEA shall negotiate with local grant 
recipients in order to determine an adequate level of funds to be used 
for noninstructional purposes.

(Authority: 20 U.S.C. 1203b and 1205(c))



Sec. 461.41  What are the cost-sharing requirements?

    (a) The Federal share of expenditures made under a State plan for 
any of the 50 States, the District of Columbia, and the Commonwealth of 
Puerto Rico may not exceed--
    (1) 90 percent of the costs of programs carried out with the fiscal 
year 1988 grant (a grant that is awarded on or after July 1, 1988 from 
funds appropriated in the fiscal year 1988 appropriation);
    (2) 90 percent of the costs of programs carried out with the fiscal 
year 1989 (a grant that is awarded on or after July 1, 1989 from funds 
appropriated in the fiscal year 1989 appropriation);
    (3) 85 percent of the costs of programs carried out with the fiscal 
year 1990 grant (a grant that is awarded on or after July 1, 1990 from 
funds appropriated in the fiscal year 1990 appropriation);
    (4) 80 percent of the costs of programs carried out with the fiscal 
year 1991 grant (a grant that is awarded on or after July 1, 1991 from 
funds appropriated in the fiscal year 1991 appropriation); and
    (5) 75 percent of the costs of programs carried out with the fiscal 
year 1992 grant (a grant that is awarded on or after July 1, 1992 from 
funds appropriated in the fiscal year 1992 appropriation) and from each 
grant thereafter.
    (b) The Federal share for American Samoa, Guam, the Northern Mariana 
Islands, the Federated States of Micronesia, the Republic of the 
Marshall Islands, Palau, and the Virgin Islands is 100 percent.
    (c) The Secretary determines the non-Federal share of expenditures 
under the State plan by considering--
    (1) Expenditures from State, local, and other non-Federal sources 
for programs, services, and activities of adult education, as defined in 
the Act, made by public or private entities that receive from the State 
Federal funds made available under the Act or State funds for adult 
education; and
    (2) Expenditures made directly by the State for programs, services, 
and activities of adult education as defined in the Act.

(Authority: 20 U.S.C. 1209(a); 48 U.S.C. 1681)



Sec. 461.42  What is the maintenance of effort requirement?

    (a) Basic standard. (1)(i) Except as provided in Sec. 461.43, a 
State is eligible for a grant from appropriations for any fiscal year 
only if the Secretary determines that the State has expended for adult 
education from non-Federal sources during the second preceding fiscal 
year (or program year) an amount not less than the amount expended 
during the third preceding fiscal year (or program year).
    (ii) The Secretary determines maintenance of effort on a per student 
expenditure basis or on a total expenditure basis.
    (2) For purposes of determining maintenance of effort, the ``second 
preceding fiscal year (or program year)'' is the fiscal year (or program 
year) two years prior to the year of the grant for which the Secretary 
is determining the State's eligibility. The ``third preceding fiscal 
year (or program year)'' is the fiscal year (or program year) three 
years prior to the year of the grant for

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which the Secretary is determining the State's eligibility.
    Example: Computation based on fiscal year. If a State chooses to use 
the fiscal year as the basis for its maintenance of effort computations, 
the Secretary determines whether a State is eligible for the fiscal year 
1992 grant (a grant that is awarded on or after July 1, 1992 from funds 
appropriated in the fiscal year 1992 appropriation) by comparing 
expenditures from the second preceding fiscal year--fiscal year 1990 
(October 1, 1989-September 30, 1990)--with expenditures from the third 
preceding fiscal year--fiscal year 1989 (October 1, 1988-September 30, 
1989). If there has been no decrease in expenditures from fiscal year 
1989 to fiscal year 1990, the State has maintained effort and is 
eligible for its fiscal year 1992 grant.
    Computation based on program year. If a State chooses to use a 
program year running from July 1 to June 30 as the basis for its 
maintenance of effort computation, the Secretary determines whether a 
State is eligible for funds for the fiscal year 1992 grant by comparing 
expenditures from the second preceding program year--program year 1990 
(July 1, 1989-June 30, 1990)--with expenditures from the third preceding 
program year--program year 1989 (July 1, 1988-June 30, 1989). If there 
has been no decrease in expenditures from program year 1989 to program 
year 1990, the State has maintained effort and is eligible for its 
fiscal year 1992 grant.
    (b) Expenditures to be considered. In determining a State's 
compliance with the maintenance of effort requirement, the Secretary 
considers the expenditures described in Sec. 461.41(c).

(Authority: 20 U.S.C. 1209(b))



Sec. 461.43  Under what circumstances may the Secretary waive the maintenance of effort requirement?

    (a) The Secretary may waive, for one year only, the maintenance of 
effort requirement in Sec. 461.42 if the Secretary determines that a 
waiver would be equitable due to exceptional or uncontrollable 
circumstances. These circumstances include, but are not limited to, the 
following:
    (1) A natural disaster.
    (2) An unforeseen and precipitous decline in financial resources.
    (b) The Secretary does not consider a tax initiative or referendum 
to be an exceptional or uncontrollable circumstance.

(Authority: 20 U.S.C. 1209(b)(2))



Sec. 461.44  How does a State request a waiver of the maintenance of effort requirement?

    An SEA seeking a waiver of the maintenance of effort requirement in 
Sec. 461.42 shall--
    (a) Submit to the Secretary a request for a waiver; and
    (b) Include in the request--
    (1) The reason for the request; and
    (2) Any additional information the Secretary may require.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1209(b)(2))



Sec. 461.45  How does the Secretary compute maintenance of effort in the event of a waiver?

    If a State has been granted a waiver of the maintenance of effort 
requirement that allows it to receive a grant from appropriations for a 
fiscal year, the Secretary determines whether the State has meet that 
requirement for the grant to be awarded for the year after the year of 
the waiver by comparing the amount spent for adult education from non-
Federal sources in the second preceding fiscal year (or program year) 
with the amount spent in the fourth preceding fiscal year (or program 
year.)
    Example: Because exceptional or uncontrollable circumstances 
prevented a State from maintaining effort in fiscal year 1990 (October 
1, 1989-September 30, 1990) or in program year 1990 (July 1, 1989-June 
30, 1990) at the level of fiscal year 1989 (October 1, 1988-September 
30, 1989) or program year 1989 (July 1, 1988-June 30, 1989), 
respectively, the Secretary grants the State a waiver of the maintenance 
of effort requirement that permits the State to receive its fiscal year 
1992 grant (a grant that is awarded on or after July 1, 1992 from funds 
appropriated in the fiscal year 1992 appropriation). In order to 
determine whether a State has met the maintenance of effort requirement 
and therefore is eligible to receive its fiscal year 1993 grant (the 
grant to be awarded for the year after the year of the waiver), the 
Secretary compares the State's expenditures from the second preceding 
fiscal year (or program year--fiscal year 1991 (October 1, 1990-
September 30, 1991) or program year 1991 (July 1, 1990-June 30, 1991)--
with expenditures from the fourth preceding fiscal year--fiscal year 
1989 (October 1, 1988-September 30, 1989) or program year 1989 (July 1, 
1988-June 30, 1989). If

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the expenditures from fiscal year (or program year) 1991 are not less 
than the expenditures from fiscal year (or program year) 1989, the State 
has maintained effort and is eligible for its fiscal year 1993 grant.

(Authority: 20 U.S.C. 1209(b)(2))



Sec. 461.46  What requirements for program reviews and evaluations must be met by a State?

    (a) An SEA shall provide for program reviews and evaluations of all 
State-administered adult education programs, services, and activities it 
assists under the Act. The SEA shall use its program reviews and 
evaluations to assist LEAs and other recipients of funds in planning and 
operating the best possible programs of adult education and to improve 
the State's programs of adult education.
    (b) In reviewing programs, an SEA shall, during the four-year period 
of the State plan, gather and analyze data--including standardized test 
data--on the effectiveness of State-administered adult education 
programs, services, and activities to determine the extent to which--
    (1) The State's adult education programs are achieving the goals in 
the State plan, including the goal of serving educationally 
disadvantaged adults; and
    (2) Grant recipients have improved their capacity to achieve the 
purposes of the Act.
    (c)(1) An SEA shall, each year during the four-year period of the 
State plan, evaluate in qualitative and quantitative terms the 
effectiveness of programs, services, and activities conducted by at 
least 20 percent of the local recipients of funds so that at the end of 
that period 80 percent of all local recipients have been evaluated once.
    (2) An evaluation must consider the following factors:
    (i) Projected goals of the recipient as described in its application 
pursuant to section 322(a)(4) of the Act and Sec. 461.31(c)(4).
    (ii) Planning and content of the programs, services, and activities.
    (iii) Curriculum, instructional materials, and equipment.
    (iv) Adequacy and qualifications of all personnel.
    (v) Achievement of the goals set forth in the State plan.
    (vi) Extent to which educationally disadvantaged adults are being 
served.
    (vii) Extent to which local recipients of funds have improved their 
capacity to achieve the purposes of the Act.
    (viii) Success of the recipient in meeting the State's indicators of 
program quality after those indicators are developed as required by 
section 331(a)(2) of the Act and Sec. 461.3(b)(7).
    (ix) Other factors that affect program operations, as determined by 
the SEA.
    (d)(1) Within 90 days of the close of each program year, the SEA 
shall submit to the Secretary and make public within the State the 
following:
    (i) With respect to local recipients--
    (A) The number and percentage of local educational agencies, 
community-based organizations, volunteer groups, and other organizations 
that are grant recipients;
    (B) The amount of funds provided to local educational agencies, 
community-based organizations, volunteer groups, and other organizations 
that are grant recipients; and
    (C) The results of the evaluations carried out as required by 
paragraph (c)(1) of this section in the year preceding the year for 
which the data are submitted.
    (ii) The information required under Sec. 461.10(b)(10).
    (iii) A report on the SEA's activities under paragraph (b) of this 
section.
    (iv) A report on the SEA's activities under paragraph (c) of this 
section.
    (2) The reports described in paragraphs (d)(1)(ii) and (iii) of this 
section must include--
    (i) The results of any program reviews and evaluations performed 
during the program year, and a description of how the SEA used the 
program reviews and evaluation process to make necessary changes to 
improve programs; and
    (ii) The comments and recommendations of the State advisory council, 
if a council has been established under Sec. 461.50.
    (e) If an SEA has established a State advisory council, the SEA 
shall--
    (1) Obtain approval of the plan for program reviews and evaluation 
from the State advisory council; and

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    (2) Inform the State advisory council of the results of program 
reviews and evaluations so that the State advisory council may perform 
its duties under section 332(f)(7) of the Act.
    Note to Sec. 461.46: In addition to the Adult Education State-
administered Basic Grant Program in this part 461, State-administered 
adult education programs include the State-administered Workplace 
Literacy Program (See 34 CFR part 462) and the State-administered 
English Literacy Program (See 34 CFR part 463).

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1205a(f)(7) and 1207a)



   Subpart F--What are the Administrative Responsibilities of a State?



Sec. 461.50  What are a State's responsibilities regarding a State advisory council on adult education and literacy?

    (a) A State that receives funds under section 313 of the Act may--
    (1) Establish a State advisory council on adult education and 
literacy; or
    (2) Designate an existing body as the State advisory council.
    (b) If a State elects to establish or designate a State advisory 
council on adult education, the following provisions apply:
    (1) The State advisory council must comply with Secs. 461.51 and 
461.52.
    (2) Members to the State advisory council must be appointed by, and 
be responsible to, the Governor. The Governor shall appoint members in 
accordance with section 332(e) of the Act.
    (3) Costs incurred for a State advisory council that are paid for 
with funds under this part must be counted as part of the allowable 
State administrative costs under the Act.
    (4) The Governor of the State shall determine the amount of funding 
available to a State advisory council.
    (5) A State advisory council's staffing may include professional, 
technical, and clerical personnel as may be necessary to enable the 
council to carry out its functions under the Act.
    (6) Members of a State advisory council and its staff, while serving 
on the business of the council, may receive subsistence, travel 
allowances, and compensation in accordance with State law and 
regulations and State practices applicable to persons performing 
comparable duties and services.

(Authority: 20 U.S.C. 1205a(a)(1), (d)(1), (e))



Sec. 461.51  What are the membership requirements of a State advisory council?

    (a)(1) The membership of a State advisory council must be broadly 
representative of citizens and groups within the State having an 
interest in adult education and literacy. The council must consist of--
    (i) Representatives of public education;
    (ii) Representatives of private and public sector employment;
    (iii) Representatives of recognized State labor organizations;
    (iv) Representatives of private literacy organizations, voluntary 
literacy organizations, and community-based literacy organizations;
    (v) The Governor of a State, or the designee of the Governor;
    (vi) Representatives of--
    (A) The SEA;
    (B) The State job training agency;
    (C) The State human services agency;
    (D) The State public assistance agency;
    (E) The State library program; and
    (F) The State economic development agency;
    (vii) Officers of the State government whose agencies provide 
funding for literacy services or who may be designated by the Governor 
or the Chairperson of the council to serve whenever matters within the 
jurisdiction of the agency headed by such an officer are to be 
considered by the council; and
    (viii) Classroom teachers who have demonstrated outstanding results 
in teaching children or adults to read.
    (2) The State shall ensure that there is appropriate representation 
on the State advisory council of--
    (i) Urban and rural areas;
    (ii) Women;
    (iii) Persons with disabilities; and
    (iv) Racial and ethnic minorities.
    (b)(1) A State shall certify to the Secretary the establishment of, 
and membership of, its State advisory council.

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    (2) The certification must be submitted to the Secretary prior to 
the beginning of any program year in which the State desires to receive 
a grant under the Act.
    (c) Members must be appointed for fixed and staggered terms and may 
serve until their successors are appointed. Any vacancy in the 
membership of the council must be filled in the same manner as the 
original appointment. Any member of the council may be removed for cause 
in accordance with procedures established by the council.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1205a (a)(1), (b), (c), and (e))



Sec. 461.52  What are the responsibilities of a State advisory council?

    (a) Subject to paragraphs (b) and (c) of this section, the State 
advisory council shall determine its own procedures, staffing needs 
(subject to funding levels authorized by the Governor of the State), and 
the number, time, place, and conduct of meetings.
    (b) The State advisory council shall meet at least four times each 
year. At least one of those meetings must provide an opportunity for the 
genral public to express views concerning adult education in the State.
    (c) One member more than one-half of the members on the council 
constitute a quorum for the purpose of transmitting recommendations and 
proposals to the Governor of the State, but a lesser number of members 
may constitute a quorum for other purposes.
    (d) A State advisory council shall--
    (1) Meet with the State agencies responsible for literacy training 
during the planning year to advise on the development of a State plan 
for literacy and for adult education that fulfills the literacy and 
adult educations needs of the State, especially with respect to the 
needs of the labor market, economic development goals, and the needs of 
the individuals in the State;
    (2) Advise the Governor, the SEA, and other State agencies 
concerning--
    (i) The development and implementation of measurable State literacy 
and adult education goals consistent with section 342(c)(2) of the Act, 
especially with respect to--
    (A) Improving levels of literacy in the State by ensuring that all 
appropriate State agencies have specific objectives and strategies for 
those goals in a comprehensive approach;
    (B) Improving literacy programs in the State; and
    (C) Fulfilling the long-term literacy goals of the State;
    (ii) The coordination and monitoring of State literacy training 
programs in order to progress toward the long-term literacy goals of the 
State;
    (iii) The improvement of the quality of literacy programs in the 
State by supporting the integration of services, staff training, and 
technology-based learning and the integration of resources of literacy 
programs conducted by various agencies of State government; and
    (iv) Private sector initiatives that would improve adult education 
programs and literacy programs, especially through public-private 
partnerships;
    (3) Review and comment on the plan submitted pursuant to section 
356(h) of the Act and submit those comments to the Secretary;
    (4) Measure progress on meeting the goals and objectives established 
pursuant to paragraph (d)(2)(i) of this section;
    (5) Recommend model systems for implementing and coordinating State 
literacy programs for replication at the local level;
    (6) Develop reporting requirements, standards for outcomes, 
performance measures, and program effectiveness in State program that 
are consistent with those proposed by the Federal Interagency Task Force 
on Literacy; and
    (7)(i) Approve the plan for the program reviews and evaluations 
required in section 352 of the Act and Sec. 461.46 and participate in 
implementing and disseminating the program reviews and evaluations. In 
approving the plan for the program reviews and evaluations, the State 
advisory council shall ensure that persons knowledgeable of the daily 
operation of adult education programs are involved;
    (ii) Advise the Governor, the State legislature, and the general 
public of

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the State with respect to the findings of the program reviews and 
evaluations; and
    (iii) Include in any reports of the program reviews and evaluations 
the council's comments and recommendations.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1205a (d) and (f), 1206a(a)(3)(B))



Sec. 461.53  May a State establish an advisory body other than a State advisory council?

    (a) A State may establish an advisory body that is funded solely 
from non-Federal sources.
    (b) The advisory body described in paragraph (a) of this section is 
not required to comply with the requirements of section 332 of the Act 
and this part.
    (c) The non-Federal funds used to support the advisory body may not 
be included in the non-Federal share of expenditures described in 
Sec. 461.41(c).

(Authority: 20 U.S.C. 1205a and 1209)



PART 464--STATE LITERACY RESOURCE CENTERS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
464.1  What is the State Literacy Resource Centers Program?
464.2  Who is eligible for a grant?
464.3  What kinds of activities may be assisted?
464.4  What regulations apply?
464.5  What definitions apply?

             Subpart B--How Does a State Apply for a Grant?

464.10  How do States apply?
464.11  What must an application contain?
464.12  How may States agree to develop a regional center?

       Subpart C--How Does the Secretary Make a Grant to a State?

464.20  What payment does the Secretary make?
464.21  May the Secretary require a State to participate in a regional 
          center?
464.22  May a State participating in a regional center use part of its 
          allotment for a State center?

              Subpart D--How Does a State Award Contracts?

464.30  With whom must a State contract to establish a State literacy 
          resource center?
464.31  Who may not review a proposal for a contract?
464.32  How is a regional literacy resource center established and 
          operated?

      Subpart E--What Post-Award Conditions Must Be Met by a State?

464.40  May a State use funds to establish a State advisory council?
464.41  What alternative uses may be made of equipment?
464.42  What limit applies to purchasing computer hardware and software?

    Authority: 20 U.S.C. 1208aa, unless otherwise noted.

    Source: 57 FR 24100, June 5, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 464.1  What is the State Literacy Resource Centers Program?

    The State Literacy Resource Centers Program assists State and local 
public and private nonprofit efforts to eliminate illiteracy through a 
program of State literacy resource center grants to--
    (a) Stimulate the coordination of literacy services;
    (b) Enhance the capacity of State and local organizations to provide 
literacy services; and
    (c) Serve as a reciprocal link between the National Institute for 
Literacy and service providers for the purpose of sharing information, 
data, research, and expertise and literacy resources.

(Authority: 20 U.S.C. 1208aa(a))



Sec. 464.2  Who is eligible for a grant?

    States are eligible to receive grants under this part.

(Authority: 20 U.S.C. 1208aa(c))



Sec. 464.3  What kinds of activities may be assisted?

    (a) The Secretary makes grants under this part for purposes of 
establishing a network of State or regional adult literacy resource 
centers.

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    (b) Each State shall use funds provided under this part to conduct 
activities to--
    (1) Improve and promote the diffusion and adoption of state-of-the-
art teaching methods, technologies, and program evaluations;
    (2) Develop innovative approaches to the coordination of literacy 
services within and among States and with the Federal Government;
    (3) Assist public and private agencies in coordinating the delivery 
of literacy services;
    (4) Encourage government and industry partnerships, including 
partnerships with small businesses, private nonprofit organizations, and 
community-based organizations;
    (5) Encourage innovation and experimentation in literacy activities 
that will enhance the delivery of literacy services and address emerging 
problems;
    (6) Provide technical and policy assistance to State and local 
governments and service providers to improve literacy policy and 
programs and access to those programs;
    (7) Provide training and technical assistance to literacy 
instructors in reading instruction and in--
    (i) Selecting and making the most effective use of state-of-the-art 
methodologies, instructional materials, and technologies such as--
    (A) Computer-assisted instruction;
    (B) Video tapes;
    (C) Interactive systems; and
    (D) Data link systems; or
    (ii) Assessing learning style, screening for learning disabilities, 
and providing individualized remedial reading instruction; or
    (8) Encourage and facilitate the training of full-time professional 
adult educators.

(Authority: 20 U.S.C. 1208aa(b), (d))



Sec. 464.4  What regulations apply?

    The following regulations apply to the State Literacy Resource 
Centers Program:
    (a) The regulations in this part 464.
    (b) The regulations in 34 CFR part 460.

(Authority: 20 U.S.C. 1208aa)



Sec. 464.5  What definitions apply?

    The definitions in 34 CFR part 460 apply to this part.

(Authority: 20 U.S.C. 1208aa)



             Subpart B--How Does a State Apply for a Grant?



Sec. 464.10  How do States apply?

    (a) The Governor of a State may submit an application to the 
Secretary for a grant for a State adult literacy resource center.
    (b) The Governors of a group of States may submit an application to 
the Secretary for a grant for a regional adult literacy resource center.
    (c) A State may apply for and receive both a grant for a State adult 
literacy resource center and, as part of a group of States, a grant for 
a regional adult literacy resource center.
    (d) If appropriate, a State shall obtain the review and comments of 
the State council on the application.
    (e) An approved application remains in effect during the period of 
the State plan under 34 CFR part 461.
    (f) Through a notice published in the Federal Register, the 
Secretary sets an annual deadline before which a State may submit a new 
application or an amendment to its existing application.

(Authority: 20 U.S.C. 1208aa(h))



Sec. 464.11  What must an application contain?

    An application must describe how the State or group of States will--
    (a) Develop a literacy resource center or expand an existing 
literacy resource center;
    (b) Provide services and activities with the assistance provided 
under this part;
    (c) Ensure access to services of the center for the maximum 
participation of all public and private programs and organizations 
providing or seeking to provide basic skills instruction, including 
local educational agencies, agencies responsible for corrections 
education, service delivery areas under the Job Training Partnership 
Act, welfare agencies, labor organizations, businesses, volunteer 
groups, and community-based organizations;

[[Page 136]]

    (d) Address the measurable goals for improving literacy levels as 
set forth in the plan submitted under section 342 of the Act; and
    (e) Develop procedures for the coordination of literacy activities 
for statewide and local literacy efforts conducted by public and private 
organizations, and for enhancing the systems of service delivery.

(Approved by the Office of Management and Budget under control number 
1830-0501)

(Authority: 20 U.S.C. 1208aa(h))



Sec. 464.12  How may States agree to develop a regional center?

    A group of States may enter into an interstate agreement to develop 
and operate a regional adult literacy resource center for purposes of 
receiving assistance under this part if the States determine that a 
regional approach is more appropriate for their situation.

(Authority: 20 U.S.C. 1208aa(j)(1))



       Subpart C--How Does the Secretary Make a Grant to a State?



Sec. 464.20  What payment does the Secretary make?

    (a)(1) From sums available for purposes of making grants under this 
part for any fiscal year, the Secretary allots to each State, that has 
an application approved under Secs. 464.10-464.11, an amount that bears 
the same ratio to those sums as the amount allotted to the State under 
section 313(b) of the Act for the purpose of making grants under section 
321 of the Act bears to the aggregate amount allotted to all States 
under that section for that purpose.
    (2) In applying the formula in section 313(b) of the Act to 
calculate grants under this part, the Secretary counts the number of 
adults only in States that have approved applications under this part.
    (b)(1) The Secretary pays to each State the Federal share of the 
cost of activities described in the application.
    (2) For purposes of this section, the Federal share--
    (i) For each of the first two fiscal years in which the State 
receives funds under this part, may not exceed 80 percent;
    (ii) For each of the third and fourth fiscal years in which the 
State receives funds under this part, may not exceed 70 percent; and
    (iii) For the fifth and each succeeding year in which the State 
receives funds under this part, may not exceed 60 percent.
    (3) If a State receives funds under this part for participation in a 
regional center, the State is required to provide only 50 percent of the 
non-Federal share under paragraph (b)(2) of this section.
    (4) The non-Federal share of payments under this section may, in 
accordance with 34 CFR 80.24, be in cash or in kind, fairly evaluated, 
including plant, equipment, or services.

(Authority: 20 U.S.C. 1208aa(c)(1), (i), (j)(2))



Sec. 464.21  May the Secretary require a State to participate in a regional center?

    (a) If, in any fiscal year, a State's allotment under this part is 
less than $100,000, the Secretary may designate that State to receive 
the funds only as part of a regional center.
    (b) Paragraph (a) of this section does not apply to a State--
    (1) That demonstrates, in its application to the Secretary, that the 
total amount of Federal, State, local, and private funds expended to 
carry out the purposes of this part would equal or exceed $100,000; or
    (2) That will use its funds to expand an existing State literacy 
resource center that meets the purposes of the Act and the requirements 
in this part.

(Authority: 20 U.S.C. 1208aa(j)(3), (4))



Sec. 464.22  May a State participating in a regional center use part of its allotment for a State center?

    In any fiscal year in which Sec. 464.20(b)(3) applies, the Secretary 
may allow certain States that receive funds as part of a regional center 
to reserve a portion of those funds for a State adult literacy resource 
center under this part.

(Authority: 20 U.S.C. 1208aa(j)(5))

[[Page 137]]



              Subpart D--How Does a State Award Contracts?



Sec. 464.30  With whom must a State contract to establish a State literacy resource center?

    (a) To establish a new State literacy resource center, the Governor 
of each State that receives funds under this part shall contract on a 
competitive basis with--
    (1) The SEA;
    (2) One or more local educational agencies;
    (3) A State office on literacy;
    (4) A volunteer organization;
    (5) A community-based organization;
    (6) An institution of higher education; or
    (7) Another non-profit entity.
    (b) Paragraph (a) of this section does not apply to funds under this 
part that a State uses to expand an existing State literacy resource 
center.

(Authority: 20 U.S.C. 1208aa(c)(2))



Sec. 464.31  Who may not review a proposal for a contract?

    A party participating in a competition under Sec. 464.30 may not 
review its own proposal for a contract or any proposal of a competitor 
for that contract.

(Authority: 20 U.S.C. 1208aa(c)(2))



Sec. 464.32  How is a regional literacy resource center established and operated?

    (a) The States that participate in a regional literacy resource 
center shall agree on how the center is to be established and operated.
    (b) Subject to the requirements of the Act and the regulations in 
this part, the States have discretion to determine how to establish and 
operate the regional center.

(Authority: 20 U.S.C. 1208aa (h) and (j))



      Subpart E--What Post-Award Conditions Must Be Met by a State?



Sec. 464.40  May a State use funds to establish a State advisory council?

    (a) Each State receiving funds under this part may use up to five 
percent of those funds--
    (1) To establish and support a State advisory council on adult 
education and literacy under section 332 of the Act and 34 CFR 461.50-
461.52; or
    (2) To support an established State council to the extent that the 
State council meets the requirements of section 332 of the Act and 34 
CFR 461.50-461.52.
    (b) Each State receiving funds under this section to establish or 
support a State council under section 332 of the Act shall provide 
matching funds on a dollar-for-dollar basis.

(Authority: 20 U.S.C. 1208aa(g))



Sec. 464.41  What alternative uses may be made of equipment?

    Equipment purchased under this part, when not being used to carry 
out the provisions of this part, may be used for other instructional 
purposes if--
    (a) The acquisition of the equipment was reasonable and necessary 
for the purpose of conducting a properly designed project or activity 
under this part;
    (b) The equipment is used after regular program hours or on 
weekends; and
    (c) The other use is--
    (1) Incidental to the use of the equipment under this part;
    (2) Does not interfere with the use of the equipment under this 
part; and
    (3) Does not add to the cost of using the equipment under this part.

(Authority: 20 U.S.C. 1208aa(e))



Sec. 464.42  What limit applies to purchasing computer hardware and software?

    Not more than ten percent of funds received under any grant under 
this part may be used to purchase computer hardware or software.

(Authority: 20 U.S.C. 1208aa(f))



PART 472--NATIONAL WORKPLACE LITERACY PROGRAM--Table of Contents




                           Subpart A--General

Sec.
472.1  What is the National Workplace Literacy Program?
472.2  Who is eligible for an award?
472.3  What activities may the Secretary fund?

[[Page 138]]

472.4  What regulations apply?
472.5  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

472.20  What priorities may the Secretary establish?
472.21  How does the Secretary evaluate an application?
472.22  What selection criteria does the Secretary use?
472.23  What additional factor does the Secretary consider?

         Subpart D--What Conditions Must be Met After an Award?

472.30  What are the reporting requirements?
472.31  What are the evaluation requirements?
472.32  What other requirements must be met under this program?
472.33  How must projects that serve adults with limited English 
          proficiency provide for the needs of those adults?
472.34  Under what circumstances may a project continue if a partner 
          withdraws?

    Authority: 20 U.S.C. 1211(a), unless otherwise noted.

    Source: 54 FR 34418, Aug. 18, 1989, unless otherwise noted. 
Redesignated at 57 FR 24091, June 5, 1992.



                           Subpart A--General



Sec. 472.1  What is the National Workplace Literacy Program?

    The National Workplace Literacy Program provides assistance for 
demonstration projects that teach literacy skills needed in the 
workplace through exemplary education partnerships between business, 
industry, or labor organizations and educational organizations.

(Authority: 20 U.S.C. 1211(a)(1))



Sec. 472.2  Who is eligible for an award?

    (a) Awards are provided to exemplary partnerships between--
    (1) A business, industry, or labor organization, or private industry 
council; and
    (2) A State educational agency (SEA), local educational agency 
(LEA), institution of higher education, or school (including an area 
vocational school, an employment and training agency, or a community-
based organization).
    (b) A partnership shall include as partners at least one entity from 
paragraph (a)(1) of this section and at least one entity from paragraph 
(a)(2) of this section, and may include more than one entity from each 
group.
    (c)(1) The partners shall apply jointly to the Secretary for funds.
    (2) The partners shall enter into an agreement, in the form of a 
single document signed by all partners, designating one member of the 
partnership as the applicant and the grantee. The agreement must also 
detail the role each partner plans to perform, and must bind each 
partner to every statement and assurance made in the application.

(Authority: 20 U.S.C. 1211(a)(4)(A))



Sec. 472.3  What activities may the Secretary fund?

    The Secretary provides grants or cooperative agreements to projects 
designed to improve the productivity of the workforce through 
improvement of literacy skills in the workplace by--
    (a) Providing adult literacy and other basic skills services and 
activities;
    (b) Providing adult secondary education services and activities that 
may lead to the completion of a high school diploma or its equivalent;
    (c) Meeting the literacy needs of adults with limited English 
proficiency;
    (d) Upgrading or updating basic skills of adult workers in 
accordance with changes in workplace requirements, technology, products, 
or processes;
    (e) Improving the competency of adult workers in speaking, 
listening, reasoning, and problem solving; or
    (f) Providing educational counseling, transportation, and child care 
services for adult workers during nonworking hours while the workers 
participate in the project.

(Authority: 20 U.S.C. 1211(a)(3))



Sec. 472.4  What regulations apply?

    The following regulations apply to the National Workplace Literacy 
Program:
    (a) The regulations in this part 472.

[[Page 139]]

    (b) The regulations in 34 CFR part 425.

(Authority: 20 U.S.C. 1211(a))



Sec. 472.5  What definitions apply?

    (a) The definitions in 34 CFR 460.4 apply to this part.
    (b) The following definitions also apply to this part:
    Adult worker means an individual who has attained 16 years of age or 
who is beyond the age of compulsory school attendance under State law, 
and whose receipt of project services is expected to result in new 
employment, enhanced skills related to continued employment, career 
advancement, or increased productivity.
    Area vocational school means--
    (1) A specialized high school used exclusively or principally for 
the provision of vocational education to individuals who are available 
for study in preparation for entering the labor market;
    (2) The department of a high school exclusively or principally used 
for providing vocational education in no less than five different 
occupational fields to individuals who are available for study in 
preparation for entering the labor market;
    (3) A technical institute or vocational school used exclusively or 
principally for the provision of vocational education to individuals who 
have completed or left high school and who are available for study in 
preparation for entering the labor market; or
    (4) The department or division of a junior college or community 
college or university operating under the policies of the State board 
and that provides vocational education in no less than five different 
occupational fields leading to immediate employment but not necessarily 
leading to a baccalaureate degree, if, in the case of a school, 
department, or division described in paragraphs (3) and (4) of this 
definition it admits as regular students both individuals who have 
completed high school and individuals who have left high school.

(Authority: 20 U.S.C. 2471)

    Business and industry organizations include, but are not limited 
to--
    (1) For-profit businesses or industrial concerns;
    (2) Nonprofit businesses or industrial concerns, such as hospitals 
and nursing homes;
    (3) Associations of business and industry organizations, such as 
local or State Chambers of Commerce;
    (4) Associations of private industry councils; and
    (5) Educational associations--such as the American Association for 
Adult and Continuing Education, the American Council on Education, the 
National Association for Bilingual Education, the National Association 
of Independent Colleges and Universities, or the National Association of 
Technical and Trade Schools.
    Contractor means an individual or organization other than a partner 
that provides specific and limited services, equipment, or supplies to a 
partnership under a contractual agreement.
    Employment and training agency includes any nonprofit agency that 
provides--as a substantial portion of its activity--employment and 
training services, either directly or through contract.
    Helping organization means an entity other than a partner that 
voluntarily assists a partnership by providing services, technical 
assistance, or cash or in-kind contributions to the project. Helping 
organizations may not be recipients of funds from partners or serve as 
contractors.
    Partner means an entity included in the list of entities in 
Sec. 472.2(a) (1) or (2).
    Private industry council means the private industry council 
established under section 102 of the Job Training Partnership Act (29 
U.S.C. 1512).
    Project director means the person with day-to-day operational 
responsibility for the project.
    Site means an entity other than a partner that participates in a 
project by providing adult workers to be trained and, at the site's 
option, space for this training. A site may not be a recipient of funds 
from partners or serve as a contractor.
    Small business means a business entity that--
    (1) Is organized for profit, with a place of business located in the 
United States and that makes a significant

[[Page 140]]

contribution to the U.S. economy through payment of taxes or use of 
American products, materials, or labor, or both; and
    (2) May be in the legal form of an individual proprietorship, 
partnership, corporation, joint venture, association, trust or a 
cooperative, except that if the form is a joint venture, there can be no 
more than 49 percent participation by foreign business entities in the 
joint venture; and
    (3) Meets the requirements found in 13 CFR part 121 concerning 
Standard Industrial Classification codes and size standards.

(Authority: 20 U.S.C. 1211(a))

[54 FR 34418, Aug. 18, 1989. Redesignated at 57 FR 24091, June 5, 1992, 
and amended at 59 FR 1443, Jan. 10, 1994]

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 472.20  What priorities may the Secretary establish?

    (a) The Secretary may announce through one or more notices published 
in the Federal Register the priorities for this program, if any, from 
the types of projects described in paragraph (b) of this section.
    (b) Priority may be given to projects training adult workers who 
have inadequate basic skills and who--
    (1) Are currently unable to perform their jobs effectively or are 
ineligible for career advancement due to an identified lack of basic 
skills;
    (2) Are employed in industries retooling with high technology and 
for whom training in basic skills is expected to result in continued 
employment;
    (3) Require training in English-as-a-second-language in order to 
increase productivity, to continue employment, or to be eligible for 
career advancement; or
    (4) Are employed in an industry adversely impacted by 
competitiveness in the world economy and for whom training is expected 
to result in the increased competitiveness of that industry in world 
markets.

(Authority: 20 U.S.C. 1211(a))

[54 FR 34418, Aug. 18, 1989. Redesignated and amended at 57 FR 24091, 
24102, June 5, 1992; 59 FR 1443, Jan. 10, 1994]



Sec. 472.21  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 472.22.
    (b) The Secretary may award up to 100 points, including a reserved 
10 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 472.22.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 472.22.
    (e) In addition to the points to be awarded based on the criteria in 
Sec. 472.22, the Secretary awards five points to applications from 
partnerships that include as a partner a small business that has signed 
the partnership agreement.

(Authority: 20 U.S.C. 1211(a))

[54 FR 34418, Aug. 18, 1989. Redesignated at 57 FR 24091, June 5, 1992, 
and amended at 59 FR 1443, Jan. 10, 1994]



Sec. 472.22  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (15 points) The Secretary reviews each 
application to determine the extent to which the project--
    (1) Demonstrates a strong relationship between skills taught and the 
literacy requirements of actual jobs, especially the increased skill 
requirements of the changing workplace;
    (2) Is targeted to adults with inadequate skills for whom the 
training described is expected to mean new employment, continued 
employment, career advancement, or increased productivity;

[[Page 141]]

    (3) Includes support services, based on cooperative relationships 
within the partnership and from helping organizations, necessary to 
reduce barriers to participation by adult workers. Support services 
could include educational counseling, transportation, and child care 
during non-working hours while adult workers are participating in a 
project;
    (4) Demonstrates the active commitment of all partners to 
accomplishing project goals; and
    (5) Focuses on improving performance in jobs or job functions that 
have a broad representation within the Nation's workforce so that the 
products can be adapted for use by similar workplaces across the Nation.
    (b) Extent of need for the project. (10 points) (1) The extent to 
which the project will focus on demonstrated needs for workplace 
literacy training of adult workers;
    (2) The adequacy of the applicant's documentation of the needs to be 
addressed by the project;
    (3) How those needs will be met by the project; and
    (4) The benefits to adult workers and their industries that will 
result from meeting those needs.
    (c) Quality of training. (15 points) The Secretary reviews each 
application to determine the quality of the training to be provided by 
the project, including the extent to which the project will--
    (1) Develop or use curriculum materials for adults based on literacy 
skills needed in the workplace;
    (2) Use individualized educational plans developed jointly by 
instructors and adult learners;
    (3) Take place in a readily accessible environment conducive to 
adult learning;
    (4) Provide training through the partner classified under 
Sec. 472.2(a)(2), unless transferring this activity to the partner 
classified under Sec. 472.2(a)(1) is necessary and reasonable within the 
framework of the project; and
    (5) Provide, and document for others, a program of training for 
staff including, but not limited to, techniques of curriculum 
development and special methods of teaching that are appropriate for 
workplace environments.
    (d) Plan of operation. (15 points) (1) The quality of the project 
design, especially the establishment of measurable objectives for the 
project that are based on the project's overall goals;
    (2) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project, and 
includes--
    (i) A description of the respective roles of each member of the 
partnership in carrying out the plan;
    (ii) A description of the activities to be carried out by any 
contractors under the plan;
    (iii) A description of the respective roles, including any cash or 
in-kind contributions, of helping organizations;
    (iv) A description of the respective roles of any sites; and
    (v) A realistic time table for accomplishing project objectives;
    (3) How well the objectives of the project relate to the purposes of 
the program;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective; and
    (5) How the applicant will ensure that project participants, who are 
otherwise eligible to participate, are selected without regard to race, 
color, national origin, gender, age, or handicapping condition.
    (e) Applicant's experience and quality of key personnel. (8 points) 
(1) The Secretary reviews each application to determine the extent of 
the applicant's experience in providing literacy services to working 
adults.
    (2) The Secretary reviews each application to determine the quality 
of key personnel the applicant plans to use on the project including--
    (i) The qualifications, in relation to project requirements, of the 
project director;
    (ii) The qualifications, in relation to project requirements, of 
each of the other key personnel to be used in the project;
    (iii) The time that each person referred to in paragraphs (e)(2) (i) 
and (ii) of this section will commit to the project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are

[[Page 142]]

selected for employment without regard to race, color, national origin, 
gender, age, or handicapping condition.
    (3) To determine personnel qualifications under paragraphs (e)(2) 
(i) and (ii) of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience and training in project management; and
    (iii) Any other qualifications that pertain to the quality of the 
project.
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the plan for an independent 
evaluation of the project, including the extent to which the applicant's 
methods of evaluation--
    (1) Are clearly explained and appropriate to the project;
    (2) To the extent possible, are objective and produce data that are 
quantifiable;
    (3) Identify expected outcomes of the participants and how those 
outcomes will be measured;
    (4) Include evaluation of effects on job advancement, job 
performance (including, for example, such elements as productivity, 
safety and attendance), and job retention;
    (5) Are systematic throughout the project period and provide data 
that can be used by the project on an ongoing basis for program 
improvement; and
    (6) Will yield results that can be summarized and submitted to the 
Secretary for review by the Department's Program Effectiveness Panel.
    Note to Sec. 472.22(f)(6): The Program Effectiveness Panel (PEP) is 
a mechanism the Department has developed for validating the 
effectiveness of educational programs developed by schools, 
universities, and other agencies. The PEP is composed of experts in the 
evaluation of educational programs and in other areas of education, at 
least two-thirds of whom are non-Federal employees who are appointed by 
the Secretary. Regulations governing the PEP are codified in 34 CFR 
parts 785-789. Specific criteria for PEP review are found in 34 CFR 
786.12 or 787.12.
    (g) Budget and cost-effectiveness. (7 points)
    (1) The budget is adequate to support the project;
    (2) Costs are reasonable and necessary in relation to the objectives 
of the project; and
    (3) The applicant has minimized the purchase of equipment and 
supplies in order to devote a maximum amount of resources to 
instructional services.
    (h) Demonstration. (5 points) The Secretary reviews each application 
to determine the quality of the applicant's plan, during the grant 
period, to disseminate the results of the project, including--
    (1) Demonstrating promising practices used by the project to others 
interested in implementing these techniques;
    (2) Conducting workshops or delivering papers at national 
conferences or professional meetings; and
    (3) Making available material that will help others implement 
promising practices developed in the project.
    (i) Commitment. (5 points) The Secretary reviews each application to 
determine the quality of the applicant's plan to institutionalize 
learning in the workplace based on promising practices demonstrated in 
the project. In making this determination, the Secretary considers--
    (1) The general, but realistic, forecast of literacy needs of 
members of the partnership and the capacity of the partners;
    (2) Activities that will increase, during the grant period, the 
capacity of partners to provide a coherent program of learning in the 
workplace; and
    (3) Activities that will lead to the continued provision or 
expansion of work-based literacy services built on successful outcomes 
of the project. For example, the partners could--
    (A) Integrate workplace literacy services into the long-term 
planning of partner organizations;
    (B) Create and implement policies and practices that encourage 
worker participation in workplace literacy and other education and 
training opportunities;
    (C) Provide training that will enable partners to build a capacity 
to furnish necessary workplace literacy services in the future;
    (D) Establish relationships within the partnership or with other 
entities that will continue provision of necessary workplace literacy 
services after the project ends; or

[[Page 143]]

    (E) Plan, after the project has ended, to expand services to other 
locations, divisions, or suppliers of the business or industry partners 
or labor organizations.

(Approved by the Office of Management and Budget under control numbers 
1830-0507 and 1830-0521)

(Authority: 20 U.S.C. 1211(a))

[54 FR 34418, Aug. 18, 1989. Redesignated at 57 FR 24091, June 5, 1992, 
and amended at 59 FR 1443, Jan. 10, 1994]



Sec. 472.23  What additional factor does the Secretary consider?

    In addition to the criteria in Sec. 472.22, the Secretary may 
consider whether funding a particular applicant would improve the 
geographical distribution of projects funded under this program.

(Authority: 20 U.S.C. 1211(a))



         Subpart D--What Conditions Must Be Met After an Award?



Sec. 472.30  What are the reporting requirements?

    (a) A recipient of a grant or cooperative agreement under this 
program shall submit to the Secretary performance and financial reports.
    (b) These reports must be submitted at times required by the 
Secretary and at least semi-annually.
    (c) These reports must contain information required by the 
Secretary.

(Authority: 20 U.S.C. 1211(a))

[59 FR 1444, Jan. 10, 1994]



Sec. 472.31  What are the evaluation requirements?

    (a) Each recipient of a grant or cooperative agreement under this 
program shall provide and budget for an independent evaluation of 
project activities.
    (b) The evaluation must be both formative and summative in nature.
    (c) The evaluation must be based on student learning gains and the 
effects on job advancement, job performance (including, for example, 
such elements as productivity, safety, and attendance), and project and 
product spread and transportability.
    (d) A proposed project evaluation design for the entire project 
period, expanding on the plans outlined in the application pursuant to 
Sec. 472.22(f), must be submitted to the Secretary for review and 
approval prior to the end of the first year of the project period.
    (e) A summary of evaluation activities and results that can be 
reviewed by the Department's Program Effectiveness Panel, as described 
in 34 CFR parts 785-789, must be submitted to the Secretary during the 
last year of the project period.
    (f) If a grantee cooperates in a Federal evaluation of its project, 
the Secretary may determine that the grantee fully or partially meets 
the evaluation requirements of this section and the reporting 
requirements in Sec. 472.30.

    Note to Sec. 472.31: As used in Sec. 472.31(c)--
    ``Spread'' means the degree to which--
    (1) Project activities and results are demonstrated to others;
    (2) Technical assistance is provided to others to help them 
replicate project activities and results;
    (3) Project activities and results are replicated at other sites; or
    (4) Information and material about or resulting from the project are 
disseminated; and
    ``Transportability'' means the ease by which project activities and 
results may be replicated at other sites, such as through the 
development and use of guides or manuals that provide step-by-step 
directions for others to follow in order to initiate similar efforts and 
reproduce comparable results.

(Approved by Office of Management and Budget under OMB control number 
1830-0522)

(Authority: 20 U.S.C. 1211(a))

[59 FR 1444, Jan. 10, 1994]



Sec. 472.32  What other requirements must be met under this program?

    (a) An applicant shall use funds to supplement and not supplant 
funds otherwise available for the purposes of this program.
    (b)(1) The project period may include a start-up period, not to 
exceed six months, during which the project is being established and 
prior to the time services are provided to adult workers.
    (2) Applicants shall minimize the start-up period, if any, proposed 
for their projects.
    (c) [Reserved]
    (d) An award under this program may be used to pay--

[[Page 144]]

    (1) 100 percent of the administrative costs incurred in establishing 
a project during the start-up period described in paragraph (b) of this 
section by an SEA, LEA, or other entity described in Sec. 472.2(a), that 
receives a grant under this part; and
    (2) 70 percent of the costs of a project after the start-up period.
    (e) Each recipient of an award under this program shall provide for 
a project director.

(Authority: 20 U.S.C. 1211(a)(2) and (4)(E))

[54 FR 34418, Aug. 18, 1989. Redesignated and amended at 57 FR 24091, 
24102, June 5, 1992. Redesignated and amended at 59 FR 1444, 1445, Jan. 
10, 1994]



Sec. 472.33  How must projects that serve adults with limited English proficiency provide for the needs of those adults?

    (a) Projects serving adults with limited English proficiency or no 
English proficiency shall provide for the needs of these adults by 
teaching literacy skills needed in the workplace.
    (b) Projects may teach workplace literacy skills--
    (1) To the extent necessary, in the native language of these adults; 
or
    (2) Exclusively in English.
    (c) Projects must be carried out in coordination with programs 
assisted under the Bilingual Education Act and with bilingual vocational 
education programs under the Carl D. Perkins Vocational Education Act.

(Authority: 20 U.S.C. 1206a(d) and 1211(a))

[54 FR 34418, Aug. 18, 1989. Redesignated at 59 FR 1444, Jan. 10, 1994]



Sec. 472.34  Under what circumstances may a project continue if a partner withdraws?

    (a) A project may continue despite the withdrawal of a partner that 
is unable to perform its role as outlined in the grant award document if 
all of the following conditions are met:
    (1) Written approval is given by the Secretary.
    (2) The partnership continues to meet the requirements in 
Sec. 472.2(b).
    (3) The partnership will be able to complete the remainder of the 
project.
    (4) The partner's withdrawal will not cause a change in the scope or 
objectives of the grant or cooperative agreement.
    (b) In determining that the condition in paragraph (a)(4) of this 
section is satisfied, the Secretary considers such factors as whether--
    (1) A similar new partner will sign the partnership agreement and 
agree to carry out the role of the withdrawing partner as described in 
the grant agreement;
    (2) One or more of the remaining partners will agree to carry out 
the role of the withdrawing partner as described in the grant agreement; 
or
    (3) One or more of the remaining partners will expand its activities 
as approved under the grant in order to compensate for the activities 
that would have been carried out under the grant agreement by the 
partner that is withdrawing without a change in the project's scope or 
objectives.

(Authority: 20 U.S.C. 1211(a))

[59 FR 1445, Jan. 10, 1994]



PART 477--STATE PROGRAM ANALYSIS ASSISTANCE AND POLICY STUDIES PROGRAM--Table of Contents




                           Subpart A--General

Sec.
477.1  What is the State Program Analsyis Assistance and Policy Studies 
          Program?
477.2  Who is eligible for an award?
477.3  What activities may the Secretary fund?
477.4  What regulations apply?
477.5  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

477.20  How does the Secretary evaluate an application?
477.21  What selection criteria does the Secretary use?
477.22  What additional factors does the Secretary consider?

    Authority: 20 U.S.C. 1213b(a), unless otherwise noted.

    Source: 54 FR 34428, Aug. 18, 1989, unless otherwise noted. 
Redesignated at 57 FR 24091, June 5, 1992.

[[Page 145]]



                           Subpart A--General



Sec. 477.1  What is the State Program Analysis Assistance and Policy Studies Program?

    The State Program Analysis Assistance and Policy Studies Program 
assists States in evaluating the status and progress of adult education 
in achieving the purposes of the Act.

(Authority: 20 U.S.C. 1213b(a))



Sec. 477.2  Who is eligible for an award?

    (a) Public or private nonprofit agencies, organizations, or 
institutions are eligible for a grant or cooperative agreement under 
this program.
    (b) Business concerns or public or private nonprofit agencies, 
organizations, or institutions are eligible for a contract under this 
program.

(Authority: 20 U.S.C. 1213b(a))



Sec. 477.3  What activities may the Secretary fund?

    The Secretary may support the following directly or through awards:
    (a) An analysis of State plans and of the findings of evaluations 
conducted in accordance with section 352 of the Act, with suggestions to 
State educational agencies for improvements in planning or program 
operation.
    (b) The provision of an information network (in conjunction with the 
National Diffusion Network) on the results of research in adult 
education, the operation of model or innovative programs (including 
efforts to continue activities and services under the program after 
Federal funding has been discontinued), successful experiences in the 
planning, administration, and conduct of adult education programs, 
advances in curriculum and instructional practices, and other 
information useful in the improvement of adult education.
    (c) Any other activities, including national policy studies, which 
the Secretary may designate, that assist States in evaluating the status 
and progress of adult education in achieving the purposes of the Act.

(Authority: 20 U.S.C. 1213b(a))



Sec. 477.4  What regulations apply?

    The following regulations apply to the State Program Analysis 
Assistance and Policy Studies Program:
    (a) The Federal Acquisition Regulation (FAR) in 48 CFR chapter 1 and 
the Department of Education Acquisition Regulation (EDAR) in 48 CFR 
chapter 34 (applicable to contracts).
    (b) The regulations in this part 477.
    (c) The regulations in 34 CFR part 425.

(Authority: 20 U.S.C. 1213b(a))



Sec. 477.5  What definitions apply?

    The definitions in 34 CFR 425.4 apply to this part.

(Authority: 20 U.S.C. 1213b(a))

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 477.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application for a grant or 
cooperative agreement on the basis of the criteria in Sec. 477.21.
    (b) The Secretary may award up to 100 points, including a reserved 
15 points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 477.21.
    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 477.21.

(Authority: 20 U.S.C. 1213b(a))



Sec. 477.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (10 points) The Secretary reviews each 
application to determine how well the objectives of the proposed project 
will assist States in evaluating the status and progress of their adult 
education programs.

[[Page 146]]

    (b) Extent of need for the project. (10 points) The Secretary 
reviews each application to determine the extent to which the proposed 
project meets specific needs, including consideration of--
    (1) The needs addressed by the project;
    (2) How the applicant identified those needs;
    (3) How those needs relate to project objectives; and
    (4) The benefits to be gained by meeting those needs.
    (c) Plan of operation. (20 points) The Secretary reviews each 
aplication to determine the quality of the plan of operation for the 
proposed project, including--
    (1) The quality of the design of the project;
    (2) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project;
    (3) How well the objectives of the project relate to the purpose of 
the program; and
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective.
    (d) Quality of key personnel. (15 points) (1) The Secretary reviews 
each application to determine the quality of key personnel the applicant 
plans to use on the proposed project, including--
    (i) The qualifications and experience of the project director, if 
one is to be used;
    (ii) The qualifications and experience of each of the other key 
personnel to be used on the project;
    (iii) The time that each person referred to in paragraphs (d)(1)(i) 
and (ii) of this section will commit to the project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
handicapping condition.
    (2) To determine personnel qualifications under paragraphs (d)(1)(i) 
and (ii) of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience and training in project management; and
    (iii) Any other qualifications that pertain to the quality of the 
project.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is adequate to support the proposed project 
activities; and
    (2) Costs are necessary and reasonable in relation to the objectives 
of the project.
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the applicant's methods of 
evaluation--
    (1) Are appropriate for the project; and
    (2) To the extent possible, are objective and produce data that are 
quantifiable.
    (g) Adequacy of resources. (5 points) The Secretary reviews each 
application to determine the adequacy of the resources that the 
applicant plans to devote to the project, including facilities, 
equipment, and supplies.
    (h) Dissemination plan. (10 points) The Secretary reviews each 
application to determine the quality of the dissemination plan for the 
project, including--
    (1) The extent to which the project is designed to yield outcomes 
that can be readily disseminated;
    (2) A description of the types of materials the applicant plans to 
make available and the methods for making the materials avialable; and
    (3) Provisions for publicizing the findings of the project at the 
local, State, and national levels, as appropriate.

(Approved by the Office of Management and Budget under control number 
1830-0013)

(Authority: 20 U.S.C. 1213b(a))

[54 FR 34428, Aug. 18, 1989; 54 FR 46065, Nov. 1, 1989]



Sec. 477.22  What additional factors does the Secretary consider?

    In addition to the criteria in Sec. 477.21, the Secretary may 
consider the following factors in making an award:
    (a) Geographic distribution. The Secretary may consider whether 
funding a

[[Page 147]]

particular applicant would improve the geographical distribution of 
projects funded under this program.
    (b) Variety of approaches. The Secretary may consider whether 
funding a particular applicant would contribute to the funding of a 
variety of approaches to assisting States in evaluating the status and 
progress of their adult education programs.

(Authority: 20 U.S.C. 1213b(a)).



PART 489--FUNCTIONAL LITERACY FOR STATE AND LOCAL PRISONERS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
489.1  What is the Functional Literacy for State and Local Prisoners 
          Program?
489.2  Who is eligible for a grant?
489.3  What activities may the Secretary fund?
489.4  What regulations apply?
489.5  What definitions apply?

               Subpart B--How Does One Apply for a Grant?

489.10  How does an eligible entity apply for a grant?

            Subpart C--How Does the Secretary Make an Award?

489.20  How does the Secretary evaluate an application?
489.21  What selection criteria does the Secretary use?

         Subpart D--What Conditions Must be Met after an Award?

489.30  What annual report is required?

    Authority: 20 U.S.C. 1211-2, unless otherwise noted.

    Source: 57 FR 24105, June 5, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 489.1  What is the Functional Literacy for State and Local Prisoners Program?

    (a) The Secretary makes grants to eligible entities that elect to 
establish a demonstration or system-wide functional literacy program for 
adult prisoners, as described Sec. 489.3.
    (b) Grants under this part may be used for establishing, improving, 
expanding, or carrying out a program, and for developing the plans and 
submitting the reports required by this part.

(Authority: 20 U.S.C. 1211-2(a), (d)(1))



Sec. 489.2  Who is eligible for a grant?

    A State correctional agency, a local correctional agency, a State 
correctional education agency, or a local correctional education agency 
is eligible for a grant under this part.

(Authority: 20 U.S.C. 1211-2(f)(1))



Sec. 489.3  What activities may the Secretary fund?

    (a) To qualify for funding under Sec. 489.1, a functional literacy 
program must--
    (1) To the extent possible, make use of advanced technologies, such 
as interactive video- and computer-based adult literacy learning: and
    (2) Include--
    (i) A requirement that each person incarcerated in the system, 
prison, jail, or detention center who is not functionally literate, 
except a person described in paragraph (b) of this section, shall 
participate in the program until the person--
    (A) Achieves functional literacy, or in the case of an individual 
with a disability, achieves a level of functional literacy commensurate 
with his or her ability;
    (B) Is granted parole;
    (C) Completes his or her sentence; or
    (D) Is released pursuant to court order; and
    (ii) A prohibition on granting parole to any person described in 
paragraph (a)(2)(i) of this section who refuses to participate in the 
program, unless the State parole board determines that the prohibition 
should be waived in a particular case; and
    (iii) Adequate opportunities for appropriate education services and 
the screening and testing of all inmates for functional literacy and 
disabilities affecting functional literacy, including learning 
disabilities, upon arrival in the system or at the prison, jail, or 
detention center.
    (b) The requirement of paragraph (a)(2)(i) does not apply to a 
person who--

[[Page 148]]

    (1) Is serving a life sentence without possibility of parole;
    (2) Is terminally ill; or
    (3) Is under a sentence of death.

(Authority: 20 U.S.C. 1211-2(b))



Sec. 489.4  What regulations apply?

    The following regulations apply to the Functional Literacy for State 
and Local Prisoners Program:
    (a) The regulations in this part 489.
    (b) The regulations in 34 CFR 460.3.

(Authority: 20 U.S.C. 1211-2)



Sec. 489.5  What definitions apply?

    (a) The definitions in 34 CFR 460.4 apply to this part.
    (b) As used in this part--
    Functional literacy means at least an eighth grade equivalence, or a 
functional criterion score, on a nationally recognized literacy 
assessment.
    Local correctional agency means any agency of local government that 
provides corrections services to incarcerated adults.
    Local correctional education agency means any agency of local 
government, other than a local correctional agency, that provides 
educational services to incarcerated adults.
    State correctional agency means any agency of State government that 
provides corrections services to incarcerated adults.
    State correctional education agency means any agency of State 
government, other than a State correctional agency, that provides 
educational services to incarcerated adults.

(Authority: 20 U.S.C. 1211-2(f)(2))



               Subpart B--How Does One Apply for a Grant?



Sec. 489.10  How does an eligible entity apply for a grant?

    An eligible entity may receive a grant under this part if the entity 
submits an application to the Secretary at such time, in such manner, 
and containing such information as the Secretary may require, including, 
but not limited to, the following:
    (a) An assurance that the entity will provide the Secretary such 
data as the Secretary may request concerning the cost and feasibility of 
operating the functional literacy programs authorized by Sec. 489.1(a), 
including the annual reports required by Sec. 489.30.
    (b) A detailed plan outlining the methods by which the provisions of 
Secs. 489.1 and 489.3 will be met, including specific goals and 
timetables. (Approved by the Office of Management and Budget under 
control number 1830-0512.)

(Authority: 20 U.S.C. 1211-2(d)(2))



            Subpart C--How Does the Secretary Make an Award?



Sec. 489.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 489.21.
    (b) The Secretary awards up to 100 points for these criteria, 
including 15 points that the Secretary assigns in accordance with 
paragraph (d) of this section.
    (c) The maximum possible score for each criterion is indicated in 
parentheses.
    (d) For each competition under this part, the Secretary, in a notice 
published in the Federal Register, assigns 15 points among the criteria 
in Sec. 489.21.

(Authority: 20 U.S.C. 1211-2)



Sec. 489.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (15 points) The Secretary reviews the 
application to determine the quality of the proposed project, including 
the extent to which the application includes--
    (1) A clear description of the services to be offered;
    (2) A complete description of the methodology to be used, including 
a thorough assessment of all offenders in the system and assessments 
necessary to identify offenders with disabilities affecting functional 
literacy;
    (3) Flexibility in the manner that services are offered, including 
the provision of accessible class schedules;
    (4) A strong relationship between skills taught and the literacy and 
skill

[[Page 149]]

requirements of the changing workplace; and
    (5) An innovative approach, such as interactive video curriculum or 
peer tutoring that will provide a model that is replicable in other 
correctional facilities of a similar type or size; and
    (6) Staff in-service education.
    (b) Educational significance. (15 points) The Secretary reviews each 
application to determine the extent to which the applicant proposes--
    (1) Project objectives that contribute to the improvement of 
functional literacy;
    (2) To use unique and innovative techniques to produce benefits that 
address functional literacy problems and needs that are of national 
significance; and
    (3) To demonstrate how well those national needs will be met by the 
project.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the design of the project;
    (2) The extent to which the project includes specific intended 
outcomes that--
    (i) Will accomplish the purposes of the program;
    (ii) Are attainable within the project period, given the project's 
budget and other resources;
    (iii) Are susceptible to evaluation;
    (iv) Are objective and measurable; and
    (v) For a multi-year project, include specific objectives to be met, 
during each budget period, that can be used to determine the progress of 
the project toward meeting its intended outcomes;
    (3) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective and intended outcome during the 
period of Federal funding; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disabling condition.
    (d) Evaluation plan. (15 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the applicant's methods of 
evaluation--
    (1) Are clearly explained and appropriate to the project;
    (2) Will determine how successful the project is in meeting its 
intended outcomes, including an assessment of the effectiveness of the 
project in improving functional literacy of prisoners. To the extent 
feasible, the assessment must include a one-year post-release review, 
during the grant period, to measure the success of the project with 
respect to those prisoners who received services and were released. The 
assessment must involve comparison of the project to other existing 
education and training programs or no treatment for individuals, as 
appropriate. The evaluation must be designed to produce findings that, 
if positive and significant, can be used in submission of an application 
to the Department's Program Effectiveness Panel. To assess program 
effectiveness, consideration may be given to implementing a random 
assignment evaluation design. (Review criteria for the Program 
Effectiveness Panel are provided in 34 CFR 786.12.);
    (3) Provide for an assessment of the efficiency of the program's 
replication efforts, including dissemination activities and technical 
assistance provided to other projects;
    (4) Include formative evaluation activities to help assess program 
management and improve program operations; and
    (5) To the extent possible, are objective and produce data that are 
quantifiable.
    (e) Demonstration and dissemination. (10 points) The Secretary 
reviews each application to determine the efficiency of the plan for 
demonstrating and disseminating information about project activities and 
results throughout the project period, including--
    (1) High quality in the design of the demonstration and 
dissemination plan;
    (2) Identification of target groups and provisions for publicizing 
the project at the local, State, and national levels by

[[Page 150]]

conducting or delivering presentations at conferences, workshops, and 
other professional meetings and by preparing materials for journal 
articles, newsletters, and brochures;
    (3) Provisions for demonstrating the methods and techniques used by 
the project to others interested in replicating these methods and 
techniques, such as by inviting them to observe project activities;
    (4) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (5) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.
    (f) Key personnel. (5 points)
    (1) The Secretary reviews each application to determine the quality 
of key personnel the applicant plans to use on the project, including--
    (i) The qualifications, in relation to the objectives and planned 
outcomes of the project, of the project director;
    (ii) The qualifications, in relation to the objectives and planned 
outcomes of the project, of each of the other key personnel to be used 
in the project, including any third-party evaluator;
    (iii) The time that each person referred to in paragraphs (f)(1) (i) 
and (ii) of this section will commit to the project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disabling condition.
    (2) To determine personnel qualifications under paragraphs (f)(1) 
(i) and (ii) of this section, the Secretary considers experience and 
training in project management and in fields related to the objectives 
and planned outcomes of the project.
    (g) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which the budget--
    (1) Is cost effective and adequate to support the project 
activities;
    (2) Contains costs that are reasonable and necessary in relation to 
the objectives of the project; and
    (3) Proposes using non-Federal resources available from appropriate 
employment, training, and education agencies in the State to provide 
project services and activities and to acquire project equipment and 
facilities.
    (h) Adequacy of resources and commitment. (5 points)
    (1) The Secretary reviews each application to determine the extent 
to which the applicant plans to devote adequate resources to the 
project. The Secretary considers the extent to which--
    (i) Facilities that the applicant plans to use are adequate; and
    (ii) Equipment and supplies that the applicant plans to use are 
adequate.
    (2) The Secretary reviews each application to determine the 
applicant's commitment to the project, including the extent to which--
    (i) Non-Federal resources are adequate to provide project services 
and activities, especially resources of the public and private sectors; 
and
    (ii) The applicant has the capacity to continue, expand, and build 
upon the project when Federal assistance ends.

(Approved by the Office of Management and Budget under control number 
1830-0512)

(Authority: 20 U.S.C. 1211-2)



         Subpart D--What Conditions Must be Met after an Award?



Sec. 489.30  What annual report is required?

    (a) Within 90 days after the close of the first calendar year in 
which a literacy program authorized by Sec. 489.1 is placed in 
operation, and annually for each of the 4 years thereafter, a grantee 
shall submit a report to the Secretary with respect to its literacy 
program.
    (b) A report under paragraph (a) of this section must disclose--
    (1) The number of persons who were tested for eligibility during the 
preceding year;
    (2) The number of persons who were eligible for the literacy program 
during the preceding year;
    (3) The number of persons who participated in the literacy program 
during the preceding year;

[[Page 151]]

    (4) The name and types of tests that were used to determine 
functional literacy and the names and types of tests that were used to 
determine disabilities affecting functional literacy;
    (5) The average number of hours of instruction that were provided 
per week and the average number per student during the preceding year;
    (6) Sample data on achievement of participants in the program, 
including the number of participants who achieved functional literacy;
    (7) Data on all direct and indirect costs of the program; and
    (8) Information on progress toward meeting the program's goals.

(Approved by the Office of Management and Budget under control number 
1830-0512)

(Authority: 20 U.S.C. 1211-2(c))



PART 490--LIFE SKILLS FOR STATE AND LOCAL PRISONERS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
490.1  What is the Life Skills for State and Local Prisoners Program?
490.2  Who is eligible for a grant?
490.3  What regulations apply?
490.4  What definitions apply?

               Subpart B--How Does One Apply for a Grant?

490.10  How does an eligible entity apply for a grant?

            Subpart C--How Does the Secretary Make an Award?

490.20  How does the Secretary evaluate an application?
490.21  What selection criteria does the Secretary use?
490.22  What additional factor does the Secretary consider?

    Authority: 20 U.S.C. 1211-2, unless otherwise noted.

    Source: 57 FR 24107, June 5, 1992, unless otherwise noted.



                           Subpart A--General



Sec. 490.1  What is the Life Skills for State and Local Prisoners Program?

    The Secretary may make grants to eligible entities to assist them in 
establishing and operating programs designed to reduce recidivism 
through the development and improvement of life skills necessary for 
reintegration of adult prisoners into society.

(Authority: 20 U.S.C. 1211-2(e)(1))



Sec. 490.2  Who is eligible for a grant?

    A State correctional agency, a local correctional agency, a State 
correctional education agency, or a local correctional education agency 
is eligible for a grant under this part.

(Authority: 20 U.S.C. 1211-2(f)(1))



Sec. 490.3  What regulations apply?

    The following regulations apply to the Life Skills for State and 
Local Prisoners Program:
    (a) The regulations in this part 490.
    (b) The regulations in 34 CFR 460.3.

(Authority: 20 U.S.C. 1211-2)



Sec. 490.4  What definitions apply?

    (a) The definitions in 34 CFR 460.4 apply to this part.
    (b) As used in this part--
    Life skills includes self-development, communication skills, job and 
financial skills development, education, interpersonal and family 
relationship development, and stress and anger management.
    Local correctional agency means any agency of local government that 
provides corrections services to incarcerated adults.
    Local correctional education agency means any agency of local 
government, other than a local correction agency, that provides 
educational services to incarcerated adults.
    State correctional agency means any agency of State government that 
provides corrections services to incarcerated adults.
    State correctional education agency means any agency of State 
government, other than a State correctional agency, that provides 
educational services to incarcerated adults.

(Authority: 20 U.S.C. 1211-2(f)(3))

[[Page 152]]



               Subpart B--How Does One Apply for a Grant?



Sec. 490.10  How does an eligible entity apply for a grant?

    To receive a grant under this part, an eligible entity shall submit 
an application to the Secretary at such time, in such manner, and 
containing such information as the Secretary shall require, including, 
but not limited to, an assurance that the entity will report annually to 
the Secretary on the participation rate, cost, and effectiveness of the 
program and any other aspect of the program on which the Secretary may 
request information.

(Approved by the Office of Management and Budget under control number 
1830-0512.)

(Authority: 20 U.S.C. 1211-2(e)(2))



            Subpart C--How Does the Secretary Make an Award?



Sec. 490.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the criteria in 
Sec. 490.21.
    (b) The Secretary awards up to 100 points for these criteria, 
including 15 points that the Secretary assigns in accordance with 
paragraph (d) of this section.
    (c) The maximum possible score for each criterion is indicated in 
parentheses.
    (d) For each competition under this part, the Secretary, in a notice 
published in the Federal Register, assigns 15 points among the criteria 
in Sec. 490.21.

(Authority: 20 U.S.C. 1211-2)



Sec. 490.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (15 points) The Secretary reviews the 
application to determine the quality of the proposed project, including 
the extent to which the application includes--
    (1) A clear description of the services to be offered; and
    (2) Life skills education designed to prepare adult offenders to 
reintegrate successfully into communities, schools and the workplace.
    (b) Educational significance. (15 points) The Secretary reviews each 
application to determine the extent to which the applicant proposes--
    (1) Project objectives that contribute to the improvement of life 
skills;
    (2) To use unique and innovative techniques to produce benefits that 
address life skills problems and needs that are of national 
significance; and
    (3) To demonstrate how well those national needs will be met by the 
project.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The quality of the design of the project;
    (2) The extent to which the project includes specific intended 
outcomes that--
    (i) Will accomplish the purposes of the program;
    (ii) Are attainable within the project period, given the project's 
budget and other resources;
    (iii) Are susceptible to evaluation;
    (iv) Are objective and measurable; and
    (v) For a multi-year project, include specific objectives to be met, 
during each budget period, that can be used to determine the progress of 
the project toward meeting its intended outcomes;
    (3) The extent to which the plan of management is effective and 
ensures proper and efficient administration of the project;
    (4) The quality of the applicant's plan to use its resources and 
personnel to achieve each objective and intended outcome during the 
period of Federal funding; and
    (5) How the applicant will ensure that project participants who are 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or disabling condition.
    (d) Evaluation plan. (15 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the applicant's methods of 
evaluation--

[[Page 153]]

    (1) Are clearly explained and appropriate to the project;
    (2) Will determine how successful the project is in meeting its 
intended outcomes, including an assessment of the effectiveness of the 
project in improving life skills of prisoners. To the extent feasible, 
the assessment must include a one-year post-release review, during the 
grant period, to measure the success of the project with respect to 
those prisoners who received services and were released. The assessment 
must involve comparison of the project to other existing education and 
training programs or no treatment for individuals, as appropriate. The 
evaluation must be designed to produce findings that, if positive and 
significant, can be used in submission of an application to the 
Department's Program Effectiveness Panel. To assess program 
effectiveness, consideration may be given to implementing a random 
assignment evaluation design. (Review criteria for the Progam 
Effectiveness Panel are provided in 34 CFR 786.12.);
    (3) Provide for an assessment of the efficiency of the program's 
replication efforts, including dissemination activities and technical 
assistance provided to other projects;
    (4) Include formative evaluation activities to help assess program 
management and improve program operations; and
    (5) To the extent possible, are objective and produce data that are 
quantifiable.
    (e) Demonstration and dissemination. (10 points) The Secretary 
reviews each application to determine the efficiency of the plan for 
demonstrating and disseminating information about project activities and 
results throughout the project period, including--
    (1) High quality in the design of the demonstration and 
dissemination plan;
    (2) Identification of target groups and provisions for publicizing 
the project at the local, State, and national levels by conducting or 
delivering presentations at conferences, workshops, and other 
professional meetings and by preparing materials for journal articles, 
newsletters, and brochures;
    (3) Provisions for demonstrating the methods and techniques used by 
the project to others interested in replicating these methods and 
techniques, such as by inviting them to observe project activities;
    (4) A description of the types of materials the applicant plans to 
make available to help others replicate project activities and the 
methods for making the materials available; and
    (5) Provisions for assisting others to adopt and successfully 
implement the project or methods and techniques used by the project.
    (f) Key personnel. (5 points) (1) The Secretary reviews each 
application to determine the quality of key personnel the applicant 
plans to use on the project, including--
    (i) The qualifications, in relation to the objectives and planned 
outcomes of the project, of the project director;
    (ii) The qualifications, in relation to the objectives and planned 
outcomes of the project, of each of the other key personnel to be used 
in the project, including any third-party evaluator;
    (iii) The time that each person referred to in paragraphs (f)(1) (i) 
and (ii) of this section will commit to the project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
disabling condition.
    (2) To determine personnel qualifications under paragraphs (f)(1) 
(i) and (ii) of this section, the Secretary considers experience and 
training in project management and in fields related to the objectives 
and planned outcomes of the project.
    (g) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which the budget--
    (1) Is cost effective and adequate to support the project 
activities;
    (2) Contains costs that are reasonable and necessary in relation to 
the objectives of the project; and
    (3) Proposes using non-Federal resources available from appropriate 
employment, training, and education agencies in the State to provide 
project services and activities and to acquire project equipment and 
facilities.
    (h) Adequacy of resources and commitment. (5 points)

[[Page 154]]

    (1) The Secretary reviews each application to determine the extent 
to which the applicant plans to devote adequate resources to the 
project. The Secretary considers the extent to which--
    (i) Facilities that the applicant plans to use are adequate; and
    (ii) Equipment and supplies that the applicant plans to use are 
adequate.
    (2) The Secretary reviews each application to determine the 
applicant's commitment to the project, including the extent to which--
    (i) Non-Federal resources are adequate to provide project services 
and activities, especially resources of the public and private sectors; 
and
    (ii) The applicant has the capacity to continue, expand, and build 
upon the project when Federal assistance ends.

(Approved by the Office of Management and Budget under control number 
1830-0512)

(Authority: 20 U.S.C. 1211-2)



Sec. 490.22  What additional factor does the Secretary consider?

    In addition to the points awarded under the selection criteria in 
Sec. 490.21, the Secretary awards up to 5 points to applications for 
projects that have the greatest potential for innovation, effectiveness, 
and replication in other systems, jails, and detention centers.

(Authority: 20 U.S.C. 1211-2(e)(3))



PART 491--ADULT EDUCATION FOR THE HOMELESS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
491.1  What is the Adult Education for the Homeless Program?
491.2  Who may apply for an award?
491.3  What activities may the Secretary fund?
491.4  What regulations apply?
491.5  What definitions apply?

Subpart B [Reserved]

            Subpart C--How Does the Secretary Make an Award?

491.20  How does the Secretary evaluate an application?
491.21  What selection criteria does the Secretary use?
491.22  What additional factor does the Secretary consider?

         Subpart D--What Conditions Must Be Met After an Award?

491.30  How may an SEA operate the program?

    Authority: 42 U.S.C. 11421, unless otherwise noted.

    Source: 54 FR 34430, Aug. 18, 1989, unless otherwise noted. 
Redesignated at 57 FR 24091, June 5, 1992.



                           Subpart A--General



Sec. 491.1  What is the Adult Education for the Homeless Program?

    The Adult Education for the Homeless Program provides financial 
assistance to State educational agencies (SEAs) to enable them to 
implement, either directly or through contracts or subgrants, a program 
of literacy training and basic skills remediation for adult homeless 
individuals within their State.

(Authority: 42 U.S.C. 11421(a))



Sec. 491.2  Who may apply for an award?

    State educational agencies in the 50 States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
American Samoa, and the Commonwealth of the Northern Mariana Islands may 
apply for an award under this program.

(Authority: 42 U.S.C. 11421(d))



Sec. 491.3  What activities may the Secretary fund?

    The Secretary provides grants or cooperative agreements for projects 
that implement a program of literacy training and basic skills 
remediation for adult homeless individuals. Projects must--
    (a) Include a program of outreach activities; and
    (b) Coordinate with existing resources such as community-based 
organizations, VISTA recipients, the adult basic education program and 
its recipients, and nonprofit literacy-action organizations.

(Authority: 42 U.S.C. 11421(a))



Sec. 491.4  What regulations apply?

    The following regulations apply to the Adult Education for the 
Homeless Program:

[[Page 155]]

    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, Nonprofit Organizations) for grants, 
including cooperative agreements, to institutions of higher education, 
hospitals, and nonprofit organizations.
    (2) 34 CFR part 75 (Direct Grant Programs).
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments) for grants, 
including cooperative agreements, to State and local governments, 
including Indian tribal governments.
    (6) 34 CFR part 81 (General Education Provisions Act--Enforcement).
    (7) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (b) The regulations in this part 491.

(Authority: 42 U.S.C. 11421)



Sec. 491.5  What definitions apply?

    (a) Definitions in the Act. The following terms used in this part 
are defined in sections 103 and 702(d), respectively, of the Steward B. 
McKinney Homeless Assistance Act (Pub. L. 100-77, 42 U.S.C. 11301 et 
seq.):
    Homeless or homeless individual.
    State.
    (b) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR 77.1:

Applicant
Application
Award
Contract
EDGAR
Grant
Grantee
Local educational
  agency
Nonprofit
Private
Project
Public
Secretary
State educational
  agency

    (c) Other definitions. The following definitions also apply to this 
part:
    Act means the Stewart B. McKinney Homeless Assistance Act (Pub. L. 
100-77, 42 U.S.C. 11301 et seq.).
    Adult means an individual who has attained 16 years of age or who is 
beyond the age of compulsory school attendance under the applicable 
State law.
    Basic skills remediation and literacy training mean adult education 
for homeless adults whose inability to speak, read, or write the English 
language constitutes a substantial impairment of their ability to get or 
retain employment commensurate with their real ability, that is designed 
to help eliminate this inability and raise the level of education of 
those individuals with a view to making them less likely to become 
dependent on others, to improving their ability to benefit from 
occupational training and otherwise increasing their opportunities for 
more productive and profitable employment, and to making them better 
able to meet their adult responsibilities.
    Eligible recipients means public or private agencies, institutions, 
or organizations, including religious or charitable organizations, 
eligible to apply for a contract from a State educational agency to 
operate projects, services, or activities.
    Outreach means activities designed to--
    (1) Identify and inform adult homeless individuals of the 
availability and benefits of the Adult Education for the Homeless 
Program; and
    (2) Assist those homeless adults, by providing active recruitment 
and reasonable and convenient access, to participate in the program.

(Authority: 42 U.S.C. 11421)

Subpart B [Reserved]



            Subpart C--How Does the Secretary Make an Award?



Sec. 491.20  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the 
criteria in Sec. 491.21.
    (b) The Secretary awards up to 100 points, including a reserved 15 
points to be distributed in accordance with paragraph (d) of this 
section, based on the criteria in Sec. 491.21.

[[Page 156]]

    (c) Subject to paragraph (d) of this section, the maximum possible 
score for each criterion is indicated in parentheses.
    (d) For each competition as announced through a notice published in 
the Federal Register, the Secretary may assign the reserved points among 
the criteria in Sec. 491.21.

(Authority: 42 U.S.C. 11421)



Sec. 491.21  What selection criteria does the Secretary use?

    The Secretary uses the following criteria to evaluate an 
application:
    (a) Program factors. (25 points) The Secretary reviews each 
application to determine the extent to which--
    (1) The program design is tailored to the literacy and basic skills 
needs of the specific homeless population being served (for example, 
designs to address the particular needs of single parent heads of 
households, substance abusers, or the chronically mentally ill);
    (2) Cooperative relationships with other service agencies will 
provide an integrated package of support services to address the most 
pressing needs of the target group at, or through, the project site. 
Support services must be designed to bring members of the target group 
to a state of readiness for instructional services or to enhance the 
effectiveness of instructional services. Examples of appropriate support 
services to be provided and funded through cooperative relationships 
include, but are not limited to--
    (i) Assistance with food and shelter;
    (ii) Alcohol and drug abuse counseling;
    (iii) Individual and group mental health counseling;
    (iv) Health care;
    (v) Child care;
    (vi) Case management;
    (vii) Job skills training;
    (viii) Employment training and work experience programs; and
    (ix) Job placement;
    (3) The SEA's application provides for individualized instruction, 
especially the use of individualized instructional plans or individual 
education plans that are developed jointly by the student and the 
teacher and reflect student goals;
    (4) The program's activities include outreach services, especially 
interpersonal contacts at locations where homeless persons are known to 
gather, and outreach efforts through cooperative relations with local 
agencies that provide services to the homeless; and
    (5) Instructional services will be readily accessible to students, 
especially the provision of instructional services at a shelter or 
transitional housing site.
    (b) Extent of need for the project. (15 points) The Secretary 
reviews each application to determine the extent to which the project 
meets specific needs in section 702 of the Act, including consideration 
of--
    (1)(i) An estimate of the number of homeless persons expected to be 
served.
    (ii) For the purposes of the count in paragraph (b)(1)(i) of this 
section, an eligible homeless adult is an individual who has attained 16 
years of age or who is beyond the age of compulsory attendance under the 
applicable State law; who does not have a high school diploma, a GED, or 
the basic education skills to obtain full-time meaningful employment; 
and who meets the definition of ``homeless or homeless individual'' in 
section 103 of the Act;
    (2) How the numbers in paragraph (b)(1) of this section were 
determined;
    (3) The extent to which the target population of homeless to be 
served in the project needs and can benefit from literacy training and 
basic skills remediation;
    (4) The need of that population for educational services, including 
their readiness for instructional services and how readiness was 
assessed; and
    (5) How the project would meet the literacy and basic skills needs 
of the specific target group to be served.
    (c) Plan of operation. (15 points) The Secretary reviews each 
application to determine the quality of the plan of operation for the 
project, including--
    (1) The establishment of written, measurable goals and objectives 
for the project that are based on the project's overall mission;
    (2) The extent to which the program is coordinated with existing 
resources such as community-based organizations, VISTA recipients, adult 
basic

[[Page 157]]

education program recipients, nonprofit literacy action organizations, 
and existing organizations providing shelters to the homeless;
    (3) The extent to which the management plan is effective and ensures 
proper and efficient administration of the project;
    (4) How the applicant will ensure that project participants 
otherwise eligible to participate are selected without regard to race, 
color, national origin, gender, age, or handicapping condition; and
    (5) If applicable, the plan for the local application process and 
the criteria for evaluating local applications submitted by eligible 
applicants for contracts or subgrants.
    (d) Quality of key personnel. (15 points) (1) The Secretary reviews 
each application to determine the quality of key personnel the State 
plans to use on the project, including--
    (i) The qualifications of the State coordinator/project director;
    (ii) The qualifications of each of the other key personnel to be 
used by the SEA in the project;
    (iii) The time that each person referred to in paragraphs (d) (1) 
(i) and (ii) of this section will commit to the project; and
    (iv) How the applicant, as part of its nondiscriminatory employment 
practices, will ensure that its personnel are selected for employment 
without regard to race, color, national origin, gender, age, or 
handicapping condition.
    (2) To determine personnel qualifications under paragraphs (d)(1) 
(i) and (ii) of this section, the Secretary considers--
    (i) Experience and training in fields related to the objectives of 
the project;
    (ii) Experience in providing services to homeless populations;
    (iii) Experience and training in project management; and
    (iv) Any other qualifications that pertain to the quality of the 
project.
    (e) Budget and cost effectiveness. (5 points) The Secretary reviews 
each application to determine the extent to which--
    (1) The budget is adequate to support the project;
    (2) Costs are reasonable in relation to the objectives of the 
project; and
    (3) The budget is presented in enough detail for determining 
paragraphs (e) (1) and (2) of this section.
    (f) Evaluation plan. (10 points) The Secretary reviews each 
application to determine the quality of the evaluation plan for the 
project, including the extent to which the applicant's methods of 
evaluation--
    (1) Objectively, and to the extent possible, quantifiably measure 
the success, both of the program and of the participants, in achieving 
established goals and objectives;
    (2) Contain provisions that allow for frequent feedback from 
evaluation data provided by participants, teachers, and community groups 
in order to improve the effectiveness of the program; and
    (3) Include a description of the types of instructional materials 
the applicant plans to make available and the methods for making the 
materials available.

(Approved by the Office of Management and Budget under control number 
1830-0506)

(Authority: 42 U.S.C. 11421)

[54 FR 34430, Aug. 8, 1989, as amended at 56 FR 13522, Apr. 2, 1991]



Sec. 491.22  What additional factor does the Secretary consider?

    In addition to the criteria in Sec. 491.21, the Secretary may 
consider whether funding a particular applicant would improve the 
geographical distribution of projects funded under this program.

(Authority: 42 U.S.C. 11421)



         Subpart D--What Conditions Must be Met After an Award?



Sec. 491.30  How may an SEA operate the program?

    An SEA may operate the program directly, award subgrants, or award 
contracts to eligible recipients. If an SEA awards contracts, the SEA 
shall distribute funds on the basis of the State-approved contracting 
process.

(Authority: 42 U.S.C. 11421(a)).

[[Page 159]]



CHAPTER V--OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS, 
                         DEPARTMENT OF EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
535             Bilingual Education: Graduate Fellowship 
                    Program.................................         161

[[Page 161]]



PART 535--BILINGUAL EDUCATION: GRADUATE FELLOWSHIP PROGRAM--Table of Contents




                           Subpart A--General

Sec.
535.1  What is the Bilingual Education: Graduate Fellowship Program?
535.2  Who is eligible to participate in this program?
535.3  What financial assistance is available for fellowship recipients?
535.4  What regulations apply?
535.5  What definitions apply?

     Subpart B--How Does an IHE Apply To Participate in the Program?

535.10  How does an IHE apply to participate in the program?
535.11  What assurance must an application contain?
535.12  In what circumstances may an IHE waive the training practicum 
          requirement?

    Subpart C--How Does the Secretary Approve an IHE's Participation?

535.20  How does the Secretary evaluate an application to participate in 
          this program for master's and doctoral level fellowships?
535.21  What selection criteria does the Secretary use?
535.22  How does the Secretary evaluate an application to participate in 
          this program for post-doctoral study fellowships?
535.23  What selection criteria does the Secretary use?

        Subpart D--How Does an Individual Apply for a Fellowship?

535.30  How does an individual apply for a fellowship?

                  Subpart E--How Are Fellows Selected?

535.40  How does the Secretary select Fellows?
535.41  Who may an IHE nominate for fellowships?
535.42  What is the period of a fellowship?

           Subpart F--What Conditions Must Be Met by Fellows?

535.50  What is the service requirement for a fellowship?
535.51  What are the requirements for repayment of the fellowship?
535.52  What is the repayment schedule?
535.53  What is the rule regarding interest?
535.54  Under what circumstances is repayment deferred?
535.55  What is the length of the deferment of repayment?
535.56  Under what circumstances is repayment waived?
535.57  How shall the fellowship recipient account for the obligation?

    Authority: 20 U.S.C. 7475, unless otherwise noted.

    Source: 61 FR 31352, June 19, 1996, unless otherwise noted.



                           Subpart A--General



Sec. 535.1  What is the Bilingual Education: Graduate Fellowship Program?

    The Bilingual Education: Graduate Fellowship Program provides 
financial assistance, through institutions of higher education (IHEs), 
to individuals who are pursuing master's, doctoral, or post-doctoral 
study related to instruction of limited English proficient (LEP) 
children and youth in areas such as teacher training, program 
administration, research and evaluation, and curriculum development and 
for the support of dissertation research related to this study.

(Authority: 20 U.S.C. 7475(a)(1))



Sec. 535.2  Who is eligible to participate in this program?

    (a) An IHE is eligible to participate in this program.
    (b) An individual who meets the eligibility requirements under 
Sec. 535.41 may apply for a fellowship through an IHE participating in 
this program.

(Authority: 20 U.S.C. 7475)



Sec. 535.3  What financial assistance is available for fellowship recipients?

    (a) The Secretary may authorize the following financial assistance 
on an annual basis to master's and doctoral program fellowship 
recipients:
    (1) Tuition and fees--the usual costs associated with the course of 
study.
    (2) Books--up to $300.
    (3) Travel--up to $250 for travel directly related to the program of 
study.
    (4) A stipend of up to $500 per month, including allowances for 
subsistence and other expenses, for a participant and his or her 
dependents, if the participant is--

[[Page 162]]

    (i) A full-time student in a program of study that was in the 
approved application; and
    (ii) Gainfully employed no more than 20 hours a week or the annual 
equivalent of 1040 hours.
    (b) The Secretary may authorize the following financial assistance 
on an annual basis to post-doctoral fellowship recipients:
    (1) A stipend of up to $40,000.
    (2) Publications, research and scholarly materials, research-related 
travel, and fees--up to $5,000.
    (c) In authorizing assistance to fellowship recipients under 
paragraphs (a) and (b) of this section, the Secretary considers the 
amount of other financial compensation that the fellowship recipients 
receive during the training period.

(Authority: 20 U.S.C. 7478)



Sec. 535.4  What regulations apply?

    The following regulations apply to this program:
    (a) 34 CFR 75.51 and 75.60 through 62.
    (b) 34 CFR part 77.
    (c) 34 CFR part 79.
    (d) 34 CFR part 85.
    (e) The regulations in this part 535.

(Authority: 20 U.S.C. 7475)



Sec. 535.5  What definitions apply?

    (a) Definitions in the Act. (1) The following terms used in this 
part are defined in section 7501 of the Act:

Bilingual education program
Children and youth
Limited English proficiency
Native Hawaiian or Native American Pacific Islander Native language 
educational organization
Office
Other programs for persons of limited-English proficiency

    (2) The following terms used in this part are defined in section 
7104 of the Act:

Indian tribe
Tribally sanctioned educational authority

    (3) The following terms used in this part are defined in section 
14101 of the Act:

Institution of higher education
Local educational agency (LEA)

    (b) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR 77.1:

Applicant
Application
Award
Department
EDGAR
Fiscal year
Project
Recipient
Secretary
State
State educational agency (SEA)

    (c) Other definition. The following definition also applies to this 
part:
    Act means the Elementary and Secondary Education Act of 1965, as 
amended.

(Authority: 20 U.S.C. 7475-7480)



     Subpart B--How Does an IHE Apply To Participate in the Program?



Sec. 535.10  How does an IHE apply to participate in the program?

    To apply for participation under this part, an IHE shall submit an 
application to the Secretary that--
    (a) Responds to the appropriate selection criteria in Secs. 535.21 
and 535.23; and
    (b) Requests a specific number of fellowships to be awarded in each 
proposed language or other curriculum group for the fellowship period 
specified in Sec. 535.42.

(Authority: 20 U.S.C. 7475)



Sec. 535.11  What assurance must an application contain?

    An application that proposes to train master's or doctoral level 
students with funds received under this part must provide an assurance 
that the program will include a training practicum in a local school 
program serving LEP students.

(Authority: 20 U.S.C. 7476(a)(3)(A))



Sec. 535.12  In what circumstances may an IHE waive the training practicum requirement?

    An IHE participating under this program may waive the requirement in 
Sec. 535.11 for a training practicum for a master's or doctoral degree 
candidate who has had at least one academic year of experience in a 
local school program serving LEP students.

(Authority: 20 U.S.C. 7476(a)(3)(B))

[[Page 163]]



    Subpart C--How Does the Secretary Approve an IHE's Participation?



Sec. 535.20  How does the Secretary evaluate an application to participate in this program for master's and doctoral level fellowships?

    (a) The Secretary evaluates an application to participate in this 
program for master's and doctoral level fellowships on the basis of the 
criteria in Sec. 535.21.
    (b) The Secretary awards up to 100 points for these criteria.
    (c) The maximum possible score for each criterion is indicated in 
parentheses.
    (d) After all the applications have been evaluated under 
Sec. 535.21, the Secretary rank-orders the applications.
    (e) The Secretary then determines the maximum number of fellowships 
by language or other curriculum group that may be awarded at each IHE--
    (1) Based on the IHE's capacity to provide graduate training in the 
areas proposed for fellowship recipients; and
    (2) To the extent feasible, in proportion to the need for 
individuals with master's and doctoral degrees in the areas of training 
proposed by the IHE.

(Authority: 20 U.S.C. 7475)



Sec. 535.21  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria to evaluate an 
application for participation in this program for master's and doctoral 
level fellowships:
    (a) Institutional commitment. (25 points) The Secretary reviews each 
application to determine the quality of the institution's graduate 
program of study, including consideration of--
    (1) The extent to which the program has been adopted as a permanent 
graduate program of study;
    (2) The organizational placement of the program of study;
    (3) The staff and resources that the IHE has committed to the 
program;
    (4) The IHE's demonstrated competence and experience in programs and 
activities such as those authorized under the Act;
    (5) The IHE's demonstrated experience in assisting fellowship 
recipients to find employment in the field of bilingual education; and
    (6) If the IHE has carried out a previous project with funds under 
title VII of the Act, the applicant's record of accomplishments under 
that previous project.
    (b) Quality of the graduate academic program. (20 points) The 
Secretary reviews each application to determine the quality of the 
graduate program of study for which approval is sought, including--
    (1) The course offerings and academic requirements for the graduate 
program;
    (2) The availability of related course offerings through other 
schools or departments within the IHE;
    (3) The IHE's focus and capacity for research;
    (4) The quality of the standards used to determine satisfactory 
progress in, and completion of, the program;
    (5) The extent to which the program of study prepares Fellows to 
improve the academic achievement of LEP children and youth; and
    (6) In the case of a program designed to prepare trainers of 
educational personnel for programs of bilingual instruction, the extent 
to which the program incorporates the use of English and another 
language to develop the Fellows' competencies as trainers of bilingual 
educational personnel.
    (c) Quality of key faculty members. (20 points) The Secretary 
reviews each application to determine the qualifications of the key 
faculty to be used in the program of study, including the extent to 
which their background, education, research interests, and relevant 
experience qualify them to plan and implement a successful program of 
high academic quality related to instruction of LEP children and youth.
    (d) Field-based experience. (15 points) The Secretary reviews each 
application to determine the extent to which the program of study 
provides field-based experience through arrangements with LEAs, SEAs, or 
persons or organizations with expertise in programs for LEP children and 
youth.
    (e) Evidence of local or national need. (10 points) The Secretary 
reviews each application to determine the need for

[[Page 164]]

more individuals trained, at the graduate level, in the area of study 
proposed by the applicant.
    (f) Recruitment plan. (10 points) The Secretary reviews each 
application to determine the quality of the applicant's plan for 
recruitment and nomination of students.

(Approved by the Office of Management and Budget under control number 
1885-0001.)

(Authority: 20 U.S.C. 7475 and 7547)



Sec. 535.22  How does the Secretary evaluate an application to participate in this program for post-doctoral study fellowships?

    (a) The Secretary evaluates an application to participate in this 
program for post-doctoral study fellowships on the basis of the criteria 
in Sec. 535.23.
    (b) The Secretary awards up to 100 points for these criteria.
    (c) The maximum possible score for each criterion is indicated in 
parentheses.
    (d) After all the applications have been evaluated according to the 
selection criteria, the Secretary rank-orders the applications.
    (e) The Secretary designates the maximum number of fellowships that 
may be awarded at each IHE based on the factors in Sec. 535.23 (a), (c), 
and (d).

(Authority: 20 U.S.C. 7475)



Sec. 535.23  What selection criteria does the Secretary use?

    The Secretary uses the following selection criteria to evaluate an 
application for participation in this program for post-doctoral level 
fellowships:
    (a) Institutional commitment. (35 points) The Secretary reviews each 
application to determine the overall strength of the applicant's 
commitment to meeting the educational needs of LEP children and youth, 
including consideration of--
    (1) The IHE's demonstrated competence and experience in programs and 
research activities such as those authorized under subpart 2 of part A 
of title VII of the Act;
    (2) The extent to which the IHE's research environment is supportive 
of the success of post-doctoral Fellows in their research;
    (3) The IHE's demonstrated experience in assisting fellowship 
recipients to find employment in the field of bilingual education;
    (4) The IHE's procedures for the dissemination and use of research 
findings; and
    (5) If the IHE has carried out a previous project with funds under 
title VII of the Act, the applicant's record of accomplishments under 
that previous project.
    (b) Proposed areas of research. (35 points) The Secretary reviews 
each application to determine to what extent--
    (1) There is a clear description of the areas of research proposed 
to be undertaken by the post-doctoral Fellows;
    (2) The research to be undertaken by the post-doctoral Fellows is 
likely to produce new and useful information;
    (3) The areas of proposed research relate to the educational needs 
of LEP children and youth and of the educational personnel that serve 
that population;
    (4) The outcomes of the research and study are likely to benefit the 
defined target population by improving the academic achievement of LEP 
children and youth;
    (5) The data collection and data analysis plans or research plans 
and designs are reasonable and sound; and
    (6) A project period for completion of the study, consistent with 
period of availability of post-doctoral fellowships in Sec. 535.42, is 
specified.
    (c) Quality of key faculty members. (20 points) The Secretary 
reviews each application to determine the qualifications of the key 
faculty likely to assist, guide, or mentor post-doctoral Fellows, 
including the extent to which the faculty's background, education, 
research interests, and relevant experiences qualify them to support 
high-quality research and study performed by post-doctoral Fellows.
    (d) Adequacy of resources. (10 points) The Secretary reviews each 
application to determine to what extent--
    (1) The facilities planned for use are adequate;
    (2) The equipment and supplies planned for use are adequate; and

[[Page 165]]

    (3) The commitment of the applicant to provide administrative and 
other necessary support is evident.

(Approved by the Office of Management and Budget under control number 
1885-0001.)

(Authority: 20 U.S.C. 7475)



        Subpart D--How Does an Individual Apply for a Fellowship?



Sec. 535.30  How does an individual apply for a fellowship?

    (a) An individual shall submit an application for a fellowship to an 
IHE that has been approved for participation under Sec. 535.20 or 
Sec. 535.22.
    (b) Each participating IHE may establish procedures for receipt of 
applications from individuals.

(Authority: 20 U.S.C. 7475)



                  Subpart E--How Are Fellows Selected?



Sec. 535.40  How does the Secretary select Fellows?

    (a)(1) A participating IHE shall submit names of nominees to the 
Secretary.
    (2) If the IHE has more than one nominee, the IHE shall rank the 
nominees in order of preference to receive a fellowship.
    (b) The Secretary selects new Fellows according to the rank order 
prepared by the IHE, subject to the maximum number of fellowships 
designated for that IHE under Secs. 535.20 and 535.22.

(Approved by the Office of Management and Budget under control number 
1885-0001.)

(Authority: 20 U.S.C. 7475)



Sec. 535.41  Who may an IHE nominate for fellowships?

    (a) In nominating individuals to receive master's and doctoral level 
fellowships, an IHE shall nominate only individuals who--
    (1) Have been accepted for enrollment as full-time students in an 
approved course of study offered by the IHE;
    (2) Have an excellent academic record;
    (3) Are proficient in English and, if applicable, another language;
    (4) Have experience in providing services to, teaching in, or 
administering programs for LEP children and youth;
    (5) Are planning to enter or return to a career in service to LEP 
children and youth after completion of their studies;
    (6) Are eligible to receive assistance under 34 CFR 75.60 and 75.61; 
and
    (7)(i) Are citizens, nationals, or permanent residents of the United 
States;
    (ii) Are in the United States for other than temporary purposes and 
can provide evidence from the Immigration and Naturalization Service of 
their intent to become permanent residents; or
    (iii) Are permanent residents of the Commonwealth of Puerto Rico, 
Guam, American Samoa, the Virgin Islands, the Commonwealth of the 
Northern Mariana Islands, the Republic of the Marshall Islands, the 
Federated States of Micronesia, or the Republic of Palau.
    (b) In nominating individuals to receive post-doctoral fellowships, 
an IHE shall nominate only individuals who--
    (1) Have doctoral degrees in relevant disciplines that qualify those 
individuals to conduct independent research on educational programs and 
policies for LEP children and youth; and
    (2) Meet the criteria in paragraphs (a)(3) through (7) of this 
section.

(Authority: 20 U.S.C. 7475)



Sec. 535.42  What is the period of a fellowship?

    (a) Except as provided in paragraph (b) of this section, the 
Secretary may award a fellowship--
    (1) For a maximum of two one-year periods to an individual who 
maintains satisfactory progress in a master's or post-doctoral program 
of study; and
    (2) For a maximum of three one-year periods to an individual who 
maintains satisfactory progress in a doctoral program of study.
    (b) Subject to the availability of funds, and if an IHE provides 
adequate justification, the Secretary may extend a fellowship beyond the 
maximum period to a master's or doctoral Fellow who, for circumstances 
beyond the Fellow's control, is unable to complete the program of study 
in that period.
    (c) A fellowship recipient who seeks assistance beyond the initial 
one-year

[[Page 166]]

period must be renominated by the participating IHE.
    (d) Prior to approving nominations of new Fellows, the Secretary may 
give preference to fellowship recipients in their second or third year 
who maintain satisfactory progress in the program of study.

(Authority: 20 U.S.C. 7475)



           Subpart F--What Conditions Must Be Met by Fellows?



Sec. 535.50  What is the service requirement for a fellowship?

    (a) Upon selection for a fellowship, a Fellow shall sign an 
agreement, provided by the Secretary, to work for a period equivalent to 
the period of time that the Fellow receives assistance under the 
fellowship in an activity--
    (1) (i) Related to the program; or
    (ii) Authorized under part A of title VII of the Act; and
    (2) Approved by the Secretary.
    (b) A fellowship recipient shall begin working in an activity 
specified in paragraph (a) of this section within six months of the date 
from which--
    (1) The master's or doctoral recipient ceases to be enrolled at an 
IHE as a full-time student; or
    (2) The post-doctoral recipient completes the project period in the 
approved program of study.

(Approved by the Office of Management and Budget under control number 
1885-0001.)

(Authority: 20 U.S.C. 7475(b))



Sec. 535.51  What are the requirements for repayment of the fellowship?

    (a) A fellowship recipient who does not work in an activity 
described in Sec. 535.50 shall repay the full amount of the fellowship.
    (b) The Secretary prorates the amount a fellowship recipient is 
required to repay based on the length of time the fellowship recipient 
worked in an authorized activity compared with the length of time the 
fellowship recipient received assistance.

(Authority: 20 U.S.C. 7475(b))



Sec. 535.52  What is the repayment schedule?

    (a) A fellowship recipient required to repay all or part of the 
amount of the fellowship shall begin repayments--
    (1) Within six months of the date the fellowship recipient meets the 
criteria in Sec. 535.50(b)(1) or (2); or
    (2) On a date and in a manner established by the Secretary, if the 
fellowship recipient ceases to work in an authorized activity.
    (b) A fellowship recipient must repay the required amount, including 
interest, in a lump sum or installment payments approved by the 
Secretary.
    (c) The repayment period may be extended if the Secretary grants a 
deferment under Sec. 535.54.

(Authority: 20 U.S.C. 7475(b))



Sec. 535.53  What is the rule regarding interest?

    (a) In accordance with 31 U.S.C. 3717, the Secretary charges a 
fellowship recipient interest on the unpaid balance that the fellowship 
recipient owes.
    (b) No interest is charged for the period of time--
    (1) That precedes the date on which the fellowship recipient is 
required to begin repayment; or
    (2) During which repayment has been deferred under Sec. 535.54.

(Authority: 20 U.S.C. 7475(b))



Sec. 535.54  Under what circumstances is repayment deferred?

    The Secretary may defer repayment if the fellowship recipient--
    (a) Suffers from a serious physical or mental disability that 
prevents or substantially impairs the fellowship recipient's 
employability in an activity described in Sec. 535.50;
    (b) Demonstrates to the Secretary's satisfaction that the fellowship 
recipient is conscientiously seeking but is unable to secure employment 
in an activity described in Sec. 535.50;
    (c) In the case of a master's or doctoral fellowship recipient, re-
enrolls as a full-time student at an IHE;
    (d) Is a member of the Armed Forces of the United States on active 
duty;
    (e) Is in service as a volunteer under the Peace Corps Act; or

[[Page 167]]

    (f) Demonstrates to the Secretary's satisfaction that the existence 
of extraordinary circumstances prevents the fellowship recipient from 
making a scheduled payment.

(Authority: 20 U.S.C. 7475(b))



Sec. 535.55  What is the length of the deferment of repayment?

    (a) Unless the Secretary determines otherwise, a fellowship 
recipient shall apply to renew a deferment on a yearly basis.
    (b) Deferments for military or Peace Corps service may not exceed 
three years.

(Authority: 20 U.S.C. 7475(b))



Sec. 535.56  Under what circumstances is repayment waived?

    The Secretary may waive repayment if the fellowship recipient 
demonstrates the existence of extraordinary circumstances that justify a 
waiver.

(Authority: 20 U.S.C. 7475(b)(2))



Sec. 535.57  How shall the fellowship recipient account for the obligation?

    (a) Within six months of the date a fellowship recipient meets the 
criteria in Sec. 535.50(b)(1) or (2), the fellowship recipient shall 
submit to the Secretary one of the following items:
    (1) A description of the activity in which the fellowship recipient 
is employed.
    (2) Repayment required under Secs. 535.51 and 535.52.
    (3) A request to repay the obligation in installments.
    (4) A request for a deferment or waiver as described in Secs. 535.54 
and 535.56 accompanied by a statetment of justification.
    (b) A fellowship recipient who submits a description of employment 
under paragraph (a)(1) of this section shall notify the Secretary on a 
yearly basis of the period of time during the preceding year that the 
fellowship recipient was employed in the activity.
    (c) A fellowship recipient shall inform the Secretary of any change 
in employment status.
    (d) A fellowship recipient shall inform the Secretary of any change 
of address.
    (e)(1) A fellowship recipient's failure to timely satisfy the 
requirements in paragraphs (b) through (d) of this section results in 
the fellowship recipient being in non-compliance or default status 
subject to collection action.
    (2) Interest and costs of collection may be collected in accordance 
with 31 U.S.C. 3717 and 34 CFR part 30.

(Approved by the Office of Management and Budget under control number 
1885-0001.)

(Authority: 20 U.S.C. 7475(b))

[[Page 169]]



             CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION,
                         DEPARTMENT OF EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
600             Institutional eligibility under the Higher 
                    Education Act of 1965, as amended.......         171
601

[Reserved]

602             The Secretary's recognition of accrediting 
                    agencies................................         195
603             Secretary's recognition procedures for State 
                    agencies................................         212
604             Federal-State relationship agreements.......         215
606             Developing Hispanic-serving institutions 
                    program.................................         216
607             Strengthening institutions program..........         228
608             Strengthening historically Black colleges 
                    and universities program................         241
609             Strengthening historically Black graduate 
                    institutions program....................         249
611             Teacher quality enhancement grants program..         253
614             Preparing tomorrow's teachers to use 
                    technology..............................         268
628             Endowment challenge grant program...........         270
636             Urban community service program.............         278
637             Minority science and engineering improvement 
                    program.................................         283
642             Training program for Federal TRIO programs..         288
643             Talent search...............................         293
644             Educational opportunity centers.............         299
645             Upward bound program........................         305
646             Student support services program............         315
647             Ronald E. McNair Postbaccalaureate 
                    Achievement Program.....................         321
648             Graduate assistance in areas of national 
                    need....................................         327
649             Patricia Roberts Harris fellowship program..         338
650             Jacob K. Javits fellowship program..........         351
654             Robert C. Byrd honors scholarship program...         357
655             International education programs--general 
                    provisions..............................         362

[[Page 170]]

656             National resource centers program for 
                    foreign language and area studies or 
                    foreign language and international 
                    studies.................................         364
657             Foreign language and area studies 
                    fellowships program.....................         372
658             Undergraduate international studies and 
                    foreign language program................         377
660             The international research and studies 
                    program.................................         381
661             Business and international education program         385
662             Fulbright-Hays doctoral dissertation 
                    research abroad fellowship program......         388
663             Fulbright-Hays faculty research abroad 
                    fellowship program......................         392
664             Fulbright-Hays group projects abroad program         396
668             Student assistance general provisions.......         401
669             Language resource centers program...........         562
673             General provisions for the Federal Perkins 
                    loan program, Federal work-study 
                    program, and Federal supplemental 
                    educational opportunity grant program...         564
674             Federal Perkins loan program................         569
675             Federal work-study programs.................         620
676             Federal supplemental educational opportunity 
                    grant program...........................         633
682             Federal family education loan (FFEL) program         636
685             William D. Ford Federal direct loan program.         823
690             Federal Pell grant program..................         873
692             Leveraging educational assistance 
                    partnership program.....................         888
693             National early intervention scholarship and 
                    partnership program.....................         894
694             Gaining Early Awareness and Readiness for 
                    Undergraduate Programs (GEAR UP)........         910

Cross-Reference: Regulations for State Grants for Strengthening the 
  Skills of Teachers and Instruction in Mathematics, Science, Foreign 
  Languages, and Computer Learning and for Increasing the Access of all 
  Students to That Instruction, 34 CFR part 208.

[[Page 171]]



PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT OF 1965, AS AMENDED--Table of Contents




                           Subpart A--General

Sec.
600.1  Scope.
600.2  Definitions.
600.3  [Reserved]
600.4  Institution of higher education.
600.5  Proprietary institution of higher education.
600.6  Postsecondary vocational institution.
600.7  Conditions of institutional ineligibility.
600.8  Treatment of a branch campus.
600.9  [Reserved]
600.10  Date, extent, duration, and consequence of eligibility.
600.11  Special rules regarding institutional accreditation or 
          preaccreditation.

           Subpart B--Procedures for Establishing Eligibility

600.20  Application procedures for establishing, reestablishing, 
          maintaining, or expanding institutional eligibility and 
          certification.
600.21  Updating application information.

                   Subpart C--Maintaining Eligibility

600.30  [Reserved]
600.31  Change in ownership resulting in a change in control for private 
          nonprofit, private for-profit and public institutions.
600.32  Eligibility of additional locations.

                     Subpart D--Loss of Eligibility

600.40  Loss of eligibility.
600.41  Termination and emergency action proceedings.

 Subpart E--Eligibility of Foreign Institutions To Apply To Participate 
          in the Federal Family Education Loan (FFEL) Programs

600.51  Purpose and scope.
600.52  Definitions.
600.53  Requesting an eligibility determination.
600.54  Criteria for determining whether a foreign institution is 
          eligible to apply to participate in the FFEL programs.
600.55  Additional criteria for determining whether a foreign graduate 
          medical school is eligible to apply to participate in the FFEL 
          programs.
600.56  Additional criteria for determining whether a foreign veterinary 
          school is eligible to apply to participate in the FFEL 
          programs.
600.57  Duration of eligibility determination.

    Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b, and 
1099(c), unless otherwise noted.

    Source: 53 FR 11210, Apr. 5, 1988, unless otherwise noted.



                           Subpart A--General

    Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.



Sec. 600.1  Scope.

    This part establishes the rules and procedures that the Secretary 
uses to determine whether an educational institution qualifies in whole 
or in part as an eligible institution of higher education under the 
Higher Education Act of 1965, as amended (HEA). An eligible institution 
of higher education may apply to participate in programs authorized by 
the HEA (HEA programs).

(Authority: 20 U.S.C. 1088, 1094, 1099b, 1099c, and 1141)



Sec. 600.2  Definitions.

    The following definitions apply to terms used in this part:
    Accredited: The status of public recognition that a nationally 
recognized accrediting agency grants to an institution or educational 
program that meets the agency's established requirements.
    Award year: The period of time from July 1 of one year through June 
30 of the following year.
    Branch Campus: A location of an institution that is geographically 
apart and independent of the main campus of the institution. The 
Secretary considers a location of an institution to be independent of 
the main campus if the location--
    (1) Is permanent in nature;
    (2) Offers courses in educational programs leading to a degree, 
certificate, or other recognized educational credential;
    (3) Has its own faculty and administrative or supervisory 
organization; and
    (4) Has its own budgetary and hiring authority.
    Clock hour: A period of time consisting of--

[[Page 172]]

    (1) A 50- to 60-minute class, lecture, or recitation in a 60-minute 
period;
    (2) A 50- to 60-minute faculty-supervised laboratory, shop training, 
or internship in a 60-minute period; or
    (3) Sixty minutes of preparation in a correspondence course.
    Correspondence course: (1) A ``home study'' course provided by an 
institution under which the institution provides instructional 
materials, including examinations on the materials, to students who are 
not physically attending classes at the institution. When students 
complete a portion of the instructional materials, the students take the 
examinations that relate to that portion of the materials, and return 
the examinations to the institution for grading.
    (2) A home study course that provides instruction in whole or in 
part through the use of video cassettes or video discs in an award year 
is a correspondence course unless the institution also delivers the 
instruction on the cassette or disc to students physically attending 
classes at the institution during the same award year.
    (3) A course at an institution that may otherwise satisfy the 
definition of a ``telecommunications course'' is a correspondence course 
if the sum of telecommunications and other correspondence courses 
offered by that institution equals or exceeds 50 percent of the total 
courses offered at that institution.
    (4) If a course is part correspondence and part residential 
training, the Secretary considers the course to be a correspondence 
course.
    Educational program: A legally authorized postsecondary program of 
organized instruction or study that leads to an academic, professional, 
or vocational degree, or certificate, or other recognized educational 
credential. However, the Secretary does not consider that an institution 
provides an educational program if the institution does not provide 
instruction itself (including a course of independent study), but merely 
gives credit for one or more of the following: instruction provided by 
other institutions or schools; examinations provided by agencies or 
organizations; or other accomplishments such as ``life experience.''
    Eligible institution: An institution that--
    (1) Qualifies as--
    (i) An institution of higher education, as defined in Sec. 600.4;
    (ii) A proprietary institution of higher education, as defined in 
Sec. 600.5; or
    (iii) A postsecondary vocational institution, as defined in 
Sec. 600.6; and
    (2) Meets all the other applicable provisions of this part.
    Federal Family Education Loan (FFEL) Programs: The loan programs 
(formerly called the Guaranteed Student Loan (GSL) programs) authorized 
by title IV-B of the HEA, including the Federal Stafford Loan, Federal 
PLUS, Federal Supplemental Loans for Students (Federal SLS), and Federal 
Consolidation Loan programs, in which lenders use their own funds to 
make loans to enable students or their parents to pay the costs of the 
students' attendance at eligible institutions. The Federal Stafford 
Loan, Federal PLUS, Federal SLS, and Federal Consolidation Loan programs 
are defined in 34 CFR part 668.
    Incarcerated student: A student who is serving a criminal sentence 
in a Federal, State, or local penitentiary, prison, jail, reformatory, 
work farm, or other similar correctional institution. A student is not 
considered incarcerated if that student is in a half-way house or home 
detention or is sentenced to serve only weekends.
    Legally authorized: The legal status granted to an institution 
through a charter, license, or other written document issued by the 
appropriate agency or official of the State in which the institution is 
physically located.
    Nationally recognized accrediting agency: An agency or association 
that the Secretary recognizes as a reliable authority to determine the 
quality of education or training offered by an institution or a program 
offered by an institution. The Secretary recognizes these agencies and 
associations under the provisions of 34 CFR part 602 and publishes a 
list of the recognized agencies in the Federal Register.
    Nonprofit institution: An institution that--
    (1) Is owned and operated by one or more nonprofit corporations or 
associations, no part of the net earnings of

[[Page 173]]

which benefits any private shareholder or individual;
    (2) Is legally authorized to operate as a nonprofit organization by 
each State in which it is physically located; and
    (3) Is determined by the U.S. Internal Revenue Service to be an 
organization to which contributions are tax-deductible in accordance 
with section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 
501(c)(3)).
    One-academic-year training program: An educational program that is 
at least one academic year as defined under 34 CFR 668.2.
    Preaccredited: A status that a nationally recognized accrediting 
agency, recognized by the Secretary to grant that status, has accorded 
an unaccredited public or private nonprofit institution that is 
progressing toward accreditation within a reasonable period of time.
    Recognized equivalent of a high school diploma: The following are 
the equivalent of a high school diploma--
    (1) A General Education Development Certificate (GED);
    (2) A State certificate received by a student after the student has 
passed a State-authorized examination that the State recognizes as the 
equivalent of a high school diploma;
    (3) An academic transcript of a student who has successfully 
completed at least a two-year program that is acceptable for full credit 
toward a bachelor's degree; or
    (4) For a person who is seeking enrollment in an educational program 
that leads to at least an associate degree or its equivalent and who has 
not completed high school but who excelled academically in high school, 
documentation that the student excelled academically in high school and 
has met the formalized, written policies of the institution for 
admitting such students.
    Recognized occupation: An occupation that is--
    (1) Listed in an ``occupational division'' of the latest edition of 
the Dictionary of Occupational Titles, published by the U.S. Department 
of Labor; or
    (2) Determined by the Secretary in consultation with the Secretary 
of Labor to be a recognized occupation.
    Regular student: A person who is enrolled or accepted for enrollment 
at an institution for the purpose of obtaining a degree, certificate, or 
other recognized educational credential offered by that institution.
    Secretary: The Secretary of the Department of Education or an 
official or employee of the Department of Education acting for the 
Secretary under a delegation of authority.
    State: A State of the Union, American Samoa, the Commonwealth of 
Puerto Rico, the District of Columbia, Guam, the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, the Republic of the 
Marshall Islands, the Federated States of Micronesia, and the Republic 
of Palau. The latter three are also known as the Freely Associated 
States.
    Telecommunications course: A course offered in an award year 
principally through the use of television, audio, or computer 
transmission, including open broadcast, closed circuit, cable, 
microwave, or satellite, audio conferencing, computer conferencing, or 
video cassettes or discs. The term does not include a course that is 
delivered using video cassettes or disc recordings unless that course is 
delivered to students physically attending classes at an institution 
providing the course during the same award year. If the course does not 
qualify as a telecommunications course it is considered to be a 
correspondence course, as provided for in paragraph (c) of the 
definition of correspondence course in this section.
    Title IV, HEA program: Any of the student financial assistance 
programs listed in 34 CFR 668.1(c).

(Authority: 20 U.S.C. 1071 et seq., 1078-2, 1088, 1099b, 1099c, and 1141 
and 26 U.S.C. 501(c).)

[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40622, July 29, 1998; 
64 FR 58615, Oct. 29, 1999]



Sec. 600.3  [Reserved]



Sec. 600.4  Institution of higher education.

    (a) An institution of higher education is a public or private 
nonprofit educational institution that--
    (1) Is in a State, or for purposes of the Federal Pell Grant, 
Federal Supplemental Educational Opportunity

[[Page 174]]

Grant, Federal Work-Study, and Federal TRIO programs may also be located 
in the Federated States of Micronesia or the Marshall Islands;
    (2) Admits as regular students only persons who--
    (i) Have a high school diploma;
    (ii) Have the recognized equivalent of a high school diploma; or
    (iii) Are beyond the age of compulsory school attendance in the 
State in which the institution is physically located;
    (3) Is legally authorized to provide an educational program beyond 
secondary education in the State in which the institution is physically 
located;
    (4) Provides an educational program--
    (i) For which it awards an associate, baccalaureate, graduate, or 
professional degree;
    (ii) That is at least a two-academic-year program acceptable for 
full credit toward a baccalaureate degree; or
    (iii) That is at least a one-academic-year training program that 
leads to a certificate, degree, or other recognized educational 
credential and prepares students for gainful employment in a recognized 
occupation; and
    (5) Is--
    (i) Accredited or preaccredited; or
    (ii) Approved by a State agency listed in the Federal Register in 
accordance with 34 CFR part 603, if the institution is a public 
postsecondary vocational educational institution that seeks to 
participate only in Federal student assistance programs.
    (b) An institution is physically located in a State if it has a 
campus or other instructional site in that State.
    (c) The Secretary does not recognize the accreditation or 
preaccreditation of an institution unless the institution agrees to 
submit any dispute involving the final denial, withdrawal, or 
termination of accreditation to initial arbitration before initiating 
any other legal action.

(Authority: 20 U.S.C. 1094, 1099b, and 1141(a))

[59 FR 22336, Apr. 29, 1994, as amended at 64 FR 58615, Oct. 29, 1999



Sec. 600.5  Proprietary institution of higher education.

    (a) A proprietary institution of higher education is an educational 
institution that--
    (1) Is not a public or private nonprofit educational institution;
    (2) Is in a State;
    (3) Admits as regular students only persons who--
    (i) Have a high school diploma;
    (ii) Have the recognized equivalent of a high school diploma; or
    (iii) Are beyond the age of compulsory school attendance in the 
State in which the institution is physically located;
    (4) Is legally authorized to provide an educational program beyond 
secondary education in the State in which the institution is physically 
located;
    (5) Provides an eligible program of training, as defined in 34 CFR 
668.8, to prepare students for gainful employment in a recognized 
occupation;
    (6) Is accredited;
    (7) Has been in existence for at least two years; and
    (8) Has no more than 90 percent of its revenues derived from title 
IV, HEA program funds, as determined under paragraph (d) of this 
section.
    (b)(1) The Secretary considers an institution to have been in 
existence for two years only if--
    (i) The institution has been legally authorized to provide, and has 
provided, a continuous educational program to prepare students for 
gainful employment in a recognized occupation during the 24 months 
preceding the date of its eligibility application; and
    (ii) The educational program that the institution provides on the 
date of its eligibility application is substantially the same in length 
and subject matter as the program that the institution provided during 
the 24 months preceding the date of its eligibility application.
    (2)(i) The Secretary considers an institution to have provided a 
continuous educational program during the 24 months preceding the date 
of its eligibility application even if the institution did not provide 
that program during normal vacation periods, or periods

[[Page 175]]

when the institution temporarily closed due to a natural disaster that 
directly affected the institution or the institution's students.
    (ii) The Secretary considers an institution to have satisfied the 
provisions of paragraph (b)(1)(ii) of this section if the institution 
substantially changed the subject matter of the educational program it 
provided during that 24-month period because of new technology or the 
requirements of other Federal agencies.
    (3) In determining whether an applicant institution satisfies the 
requirement contained in paragraph (b)(1) of this section, the 
Secretary--
    (i) Counts any period during which the applicant institution has 
been certified as a branch campus; and
    (ii) Except as provided in paragraph (b)(3)(i) of this section, does 
not count any period during which the applicant institution was a part 
of another eligible proprietary institution of higher education, 
postsecondary vocational institution, or vocational school.
    (c) An institution is physically located in a State if it has a 
campus or other instructional site in that State.
    (d)(1) An institution satisfies the requirement contained in 
paragraph (a)(8) of this section by examining its revenues under the 
following formula for its latest complete fiscal year:

Title IV, HEA program funds the institution used to satisfy its 
    students' tuition, fees, and other institutional charges to students
The sum of revenues including title IV, HEA program funds generated by 
    the institution from: tuition, fees, and other institutional charges 
    for students enrolled in eligible programs as defined in 34 CFR 
    668.8; and activities conducted by the institution, to the extent 
    not included in tuition, fees, and other institutional charges, that 
    are necessary for the education or training of its students who are 
    enrolled in those eligible programs.

    (2) An institution must use the cash basis of accounting when 
calculating the amount of title IV, HEA program funds in the numerator 
and the total amount of revenue generated by the institution in the 
denominator of the fraction contained in paragraph (d)(1) of this 
section.
    (3) Under the cash basis of accounting--
    (i) In calculating the amount of revenue generated by the 
institution from institutional loans, the institution must include only 
the amount of loan repayments received by the institution during the 
fiscal year; and
    (ii) In calculating the amount of revenue generated by the 
institution from institutional scholarships, the institution must 
include only the amount of funds it disbursed during the fiscal year 
from an established restricted account and only to the extent that the 
funds in that account represent designated funds from an outside source 
or income earned on those funds.
    (e) With regard to the formula contained in paragraph(d)(1) of this 
section--
    (1) The institution may not include as title IV, HEA program funds 
in the numerator nor as revenue generated by the institution in the 
denominator--
    (i) The amount of funds it received under the Federal Work-Study 
(FWS) Program, unless the institution used those funds to pay a 
student's institutional charges in which case the FWS program funds used 
to pay those charges would be included in the numerator and denominator.
    (ii) The amount of funds it received under the Leveraging 
Educational Assistance Partnership (LEAP) Program. (The LEAP Program was 
formerly called the State Student Incentive Grant or SSIG Program.);
    (iii) The amount of institutional funds it used to match title IV, 
HEA program funds;
    (iv) The amount of title IV, HEA program funds that must be refunded 
or returned under Sec. 668.22; or
    (v) The amount charged for books, supplies, and equipment unless the 
institution includes that amount as tuition, fees, or other 
institutional charges.
    (2) In determining the amount of title IV, HEA program funds 
received by the institution under the cash basis of accounting, except 
as provided in paragraph (e)(3) of this section, the institution must 
presume that any title IV, HEA program funds disbursed or delivered to 
or on behalf of a student

[[Page 176]]

will be used to pay the student's tuition, fees, or other institutional 
charges, regardless of whether the institution credits those funds to 
the student's account or pays those funds directly to the student, and 
therefore must include those funds in the numerator and denominator.
    (3) In paragraph (e)(2) of this section, the institution may not 
presume that title IV, HEA program funds were used to pay tuition, fees, 
and other institutional charges to the extent that those charges were 
satisfied by--
    (i) Grant funds provided by non-Federal public agencies, or private 
sources independent of the institution;
    (ii) Funds provided under a contractual arrangement described in 
Sec. 600.7(d), or
    (iii) Funds provided by State prepaid tuition plans.
    (4) With regard to the denominator, revenue generated by the 
institution from activities it conducts, that are necessary for its 
students' education or training, includes only revenue from those 
activities that--
    (i) Are conducted on campus or at a facility under the control of 
the institution;
    (ii) Are performed under the supervision of a member of the 
institution's faculty; and
    (iii) Are required to be performed by all students in a specific 
educational program at the institution.
    (f) An institution must notify the Secretary within 90 days 
following the end of the fiscal year used in paragraph (d)(1) of this 
section if it fails to satisfy the requirement contained in paragraph 
(a)(8) of this section.
    (g) If an institution loses its eligibility because it failed to 
satisfy the requirement contained in paragraph (a)(8) of this section, 
to regain its eligibility it must demonstrate compliance with all 
eligibility requirements for at least the fiscal year following the 
fiscal year used in paragraph (d)(1) of this section.
    (h) The Secretary does not recognize the accreditation of an 
institution unless the institution agrees to submit any dispute 
involving the final denial, withdrawal, or termination of accreditation 
to initial arbitration before initiating any other legal action.

(Approved by the Office of Management and Budget under control number 
1840-0098)

(Authority: 20 U.S.C. 1088)

[59 FR 22336, Apr. 29, 1994; 59 FR 32082, June 22, 1994, as amended at 
59 FR 47801, Sept. 19, 1994; 59 FR 61177, Nov. 29, 1994; 61 FR 29901, 
June 12, 1996; 61 FR 60569, Nov. 29, 1996; 64 FR 58615, Oct. 29, 1999]



Sec. 600.6  Postsecondary vocational institution.

    (a) A postsecondary vocational institution is a public or private 
nonprofit educational institution that--
    (1) Is in a State;
    (2) Admits as regular students only persons who--
    (i) Have a high school diploma;
    (ii) Have the recognized equivalent of a high school diploma; or
    (iii) Are beyond the age of compulsory school attendance in the 
State in which the institution is physically located;
    (3) Is legally authorized to provide an educational program beyond 
secondary education in the State in which the institution is physically 
located;
    (4) Provides an eligible program of training, as defined in 34 CFR 
668.8, to prepare students for gainful employment in a recognized 
occupation;
    (5) Is--
    (i) Accredited or preaccredited; or
    (ii) Approved by a State agency listed in the Federal Register in 
accordance with 34 CFR part 603, if the institution is a public 
postsecondary vocational educational institution that seeks to 
participate only in Federal assistance programs; and
    (6) Has been in existence for at least two years.
    (b)(1) The Secretary considers an institution to have been in 
existence for two years only if--
    (i) The institution has been legally authorized to provide, and has 
provided, a continuous education or training program to prepare students 
for gainful employment in a recognized occupation during the 24 months 
preceding the date of its eligibility application; and
    (ii) The education or training program it provides on the date of 
its eligibility application is substantially the

[[Page 177]]

same in length and subject matter as the program it provided during the 
24 months preceding the date of its eligibility application.
    (2)(i) The Secretary considers an institution to have provided a 
continuous education or training program during the 24 months preceding 
the date of its eligibility application even if the institution did not 
provide that program during normal vacation periods, or periods when the 
institution temporarily closed due to a natural disaster that affected 
the institution or the institution's students.
    (ii) The Secretary considers an institution to have satisfied the 
provisions of paragraph (b)(1)(ii) of this section if the institution 
substantially changed the subject matter of the educational program it 
provided during that 24-month period because of new technology or the 
requirements of other Federal agencies.
    (3) In determining whether an applicant institution satisfies the 
requirement contained in paragraph (b)(1) of this section, the 
Secretary--
    (i) Counts any period during which the applicant institution 
qualified as an eligible institution of higher education;
    (ii) Counts any period during which the applicant institution was 
part of another eligible institution of higher education, provided that 
the applicant institution continues to be part of an eligible 
institution of higher education;
    (iii) Counts any period during which the applicant institution has 
been certified as a branch campus; and
    (iv) Except as provided in paragraph (b)(3)(iii) of this section, 
does not count any period during which the applicant institution was a 
part of another eligible proprietary institution of higher education or 
postsecondary vocational institution.
    (c) An institution is physically located in a State or other 
instructional site if it has a campus or instructional site in that 
State.
    (d) The Secretary does not recognize the accreditation or 
preaccreditation of an institution unless the institution agrees to 
submit any dispute involving the final denial, withdrawal, or 
termination of accreditation to initial arbitration before initiating 
any other legal action.

(Authority: 20 U.S.C. 1088 and 1094(c)(3))

[59 FR 22336, Apr. 29, 1994, as amended at 64 FR 58616, Oct. 29, 1999]



Sec. 600.7  Conditions of institutional ineligibility.

    (a) General rule. For purposes of title IV of the HEA, an 
educational institution that otherwise satisfies the requirements 
contained in Secs. 600.4, 600.5, or 600.6 nevertheless does not qualify 
as an eligible institution under this part if--
    (1) For its latest complete award year--
    (i) More than 50 percent of the institution's courses were 
correspondence courses as calculated under paragraph (b) of this 
section;
    (ii) Fifty percent or more of the institution's regular enrolled 
students were enrolled in correspondence courses;
    (iii) More than twenty-five percent of the institution's regular 
enrolled students were incarcerated;
    (iv) More than fifty percent of its regular enrolled students had 
neither a high school diploma nor the recognized equivalent of a high 
school diploma, and the institution does not provide a four-year or two-
year educational program for which it awards a bachelor's degree or an 
associate degree, respectively;
    (2) The institution, or an affiliate of the institution that has the 
power, by contract or ownership interest, to direct or cause the 
direction of the management of policies of the institution--
    (A) Files for relief in bankruptcy, or
    (B) Has entered against it an order for relief in bankruptcy; or
    (3) The institution, its owner, or its chief executive officer--
    (i) Has pled guilty to, has pled nolo contendere to, or is found 
guilty of, a crime involving the acquisition, use, or expenditure of 
title IV, HEA program funds; or
    (ii) Has been judicially determined to have committed fraud 
involving title IV, HEA program funds.
    (b) Special provisions regarding correspondence courses and 
students--(1) Treatment of telecommunications courses. For purposes of 
paragraphs (a)(1) (i) and (ii) of this section, the Secretary

[[Page 178]]

considers a telecommunications course to be a correspondence course if 
the sum of telecommunications courses and other correspondence courses 
the institution provided during that award year equaled or exceeded 50 
percent of the total number of courses it provided during that year.
    (2) Calculating the number of courses. For purposes of paragraphs 
(a)(1) (i) and (ii) of this section--
    (i) A correspondence course may be a complete educational program 
offered by correspondence, or one course provided by correspondence in 
an on-campus (residential) educational program;
    (ii) A course must be considered as being offered once during an 
award year regardless of the number of times it is offered during that 
year; and
    (iii) A course that is offered both on campus and by correspondence 
must be considered two courses for the purpose of determining the total 
number of courses the institution provided during an award year.
    (3) Exceptions. (i) The provisions contained in paragraphs (a)(1) 
(i) and (ii) of this section do not apply to an institution that 
qualifies as a ``technical institute or vocational school used 
exclusively or principally for the provision of vocational education to 
individuals who have completed or left high school and who are available 
for study in preparation for entering the labor market'' under section 
521(4)(C) of the Carl D. Perkins Vocational and Applied Technology 
Education Act.
    (ii) The Secretary waives the limitation contained in paragraph 
(a)(1)(ii) of this section for an institution that offers a 2-year 
associate-degree or a 4-year bachelor's-degree program if the students 
enrolled in the institution's correspondence courses receive no more 
than 5 percent of the title IV, HEA program funds received by students 
at that institution.
    (c) Special provisions regarding incarcerated students--(1) 
Exception. The Secretary may waive the prohibition contained in 
paragraph (a)(1)(iii) of this section, upon the application of an 
institution, if the institution is a nonprofit institution that provides 
four-year or two-year educational programs for which it awards a 
bachelor's degree, an associate degree, or a postsecondary diploma.
    (2) Waiver for entire institution. If the nonprofit institution that 
applies for a waiver consists solely of four-year or two-year 
educational programs for which it awards a bachelor's degree, an 
associate degree, or a postsecondary diploma, the Secretary waives the 
prohibition contained in paragraph (a)(1)(iii) of this section for the 
entire institution.
    (3) Other waivers. If the nonprofit institution that applies for a 
waiver does not consist solely of four-year or two-year educational 
programs for which it awards a bachelor's degree, an associate degree, 
or a postsecondary diploma, the Secretary waives the prohibition 
contained in paragraph (a)(1)(iii) of this section--
    (i) For the four-year and two-year programs for which it awards a 
bachelor's degree, an associate degree or a postsecondary diploma; and
    (ii) For the other programs the institution provides, if the 
incarcerated regular students enrolled in those other programs have a 
completion rate of 50 percent or greater.
    (d) Special provision for a nonprofit institution if more than 50 
percent of its enrollment consists of students who do not have a high 
school diploma or its equivalent. (1) Subject to the provisions 
contained in paragraphs (d)(2) and (d)(3) of this section, the Secretary 
waives the limitation contained in paragraph (a)(1)(iv) of this section 
for a nonprofit institution if that institution demonstrates to the 
Secretary's satisfaction that it exceeds that limitation because it 
serves, through contracts with Federal, State, or local government 
agencies, significant numbers of students who do not have a high school 
diploma or its recognized equivalent.
    (2) Number of critical students. The Secretary grants a waiver under 
paragraph (d)(1) of this section only if no more than 40 percent of the 
institution's enrollment of regular students consists of students who--
    (i) Do not have a high school diploma or its equivalent; and
    (ii) Are not served through contracts described in paragraph (d)(3) 
of this section.

[[Page 179]]

    (3) Contracts with Federal, State, or local government agencies. For 
purposes of granting a waiver under paragraph (d)(1) of this section, 
the contracts referred to must be with Federal, State, or local 
government agencies for the purpose of providing job training to low-
income individuals who are in need of that training. An example of such 
a contract is a job training contract under the Job Training Partnership 
Act (JPTA).
    (e) Special provisions. (1) For purposes of paragraph (a)(1)of this 
section, when counting regular students, the institution shall--
    (i) Count each regular student without regard to the full-time or 
part-time nature of the student's attendance (i.e., ``head count'' 
rather than ``full-time equivalent'');
    (ii) Count a regular student once regardless of the number of times 
the student enrolls during an award year; and
    (iii) Determine the number of regular students who enrolled in the 
institution during the relevant award year by--
    (A) Calculating the number of regular students who enrolled during 
that award year; and
    (B) Excluding from the number of students in paragraph 
(e)(1)(iii)(A) of this section, the number of regular students who 
enrolled but subsequently withdrew or were expelled from the institution 
and were entitled to receive a 100 percent refund of their tuition and 
fees less any administrative fee that the institution is permitted to 
keep under its fair and equitable refund policy.
    (2) For the purpose of calculating a completion rate under paragraph 
(c)(3)(ii) of this section, the institution shall--
    (i) Determine the number of regular incarcerated students who 
enrolled in the other programs during the last completed award year;
    (ii) Exclude from the number of regular incarcerated students 
determined in paragraph (e)(2)(i) of this section, the number of those 
students who enrolled but subsequently withdrew or were expelled from 
the institution and were entitled to receive a 100 percent refund of 
their tuition and fees, less any administrative fee the institution is 
permitted to keep under the institution's fair and equitable refund 
policy;
    (iii) Exclude from the total obtained in paragraph (e)(2)(ii) of 
this section, the number of those regular incarcerated students who 
remained enrolled in the programs at the end of the applicable award 
year;
    (iv) From the total obtained in paragraph (e)(2)(iii) of this 
section, determine the number of regular incarcerated students who 
received a degree, certificate, or other recognized educational 
credential awarded for successfully completing the program during the 
applicable award year; and
    (v) Divide the total obtained in paragraph (e)(2)(iv) of this 
section by the total obtained in paragraph (e)(2)(iii) of this section 
and multiply by 100.
    (f)(1) If the Secretary grants a waiver to an institution under this 
section, the waiver extends indefinitely provided that the institution 
satisfies the waiver requirements in each award year.
    (2) If an institution fails to satisfy the waiver requirements for 
an award year, the institution becomes ineligible on June 30 of that 
award year.
    (g)(1) For purposes of paragraph (a)(1) of this section, and any 
applicable waiver or exception under this section, the institution shall 
substantiate the required calculations by having the certified public 
accountant who prepares its audited financial statement under 34 CFR 
668.15 or its title IV, HEA program compliance audit under 34 CFR 668.23 
report on the accuracy of those determinations.
    (2) The certified public accountant's report must be based on 
performing an ``attestation engagement'' in accordance with the American 
Institute of Certified Public Accountants (AICPA's) Statement on 
Standards for Attestation Engagements. The certified public accountant 
shall include that attestation report with or as part of the audit 
report referenced in paragraph (g)(1) of this section.
    (3) The certified public accountant's attestation report must 
indicate whether the institution's determinations regarding paragraph 
(a)(1) of this section and any relevant waiver or exception under 
paragraphs (b), (c), and

[[Page 180]]

(d) of this section are accurate; i.e., fairly presented in all material 
respects.
    (h) Notice to the Secretary. An institution shall notify the 
Secretary--
    (1) By July 31 following the end of an award year if it falls within 
one of the prohibitions contained in paragraph (a)(1)of this section, or 
fails to continue to satisfy a waiver or exception granted under this 
section; or
    (2) Within 10 days if it falls within one of the prohibitions 
contained in paragraphs (a)(2) or (a)(3) of this section.
    (i) Regaining eligibility. (1) If an institution loses its 
eligibility because of one of the prohibitions contained in paragraph 
(a)(1) of this section, to regain its eligibility, it must demonstrate--
    (i) Compliance with all eligibility requirements;
    (ii) That it did not fall within any of the prohibitions contained 
in paragraph (a)(1) of this section for at least one award year; and
    (iii) That it changed its administrative policies and practices to 
ensure that it will not fall within any of the prohibitions contained in 
paragraph (a)(1) of this section.
    (2) If an institution loses its eligibility because of one of the 
prohibitions contained in paragraphs (a)(2) and (a)(3) of this section, 
this loss is permanent. The institution's eligibility cannot be 
reinstated.

(Approved by the Office of Management and Budget under control number 
1840-0098)

(Authority: 20 U.S.C. 1088)

[59 FR 22336, Apr. 29, 1994; 59 FR 32082, June 22, 1994, as amended at 
59 FR 47801, Sept. 19, 1994; 60 FR 34430, June 30, 1995; 64 FR 58616, 
Oct. 29, 1999]



Sec. 600.8  Treatment of a branch campus.

    A branch campus of an eligible institution must be in existence for 
at least two years as a branch campus after the branch is certified as a 
branch campus before seeking to be designated as a main campus or a 
free-standing institution.

(Authority: 20 U.S.C. 1099c)

[64 FR 58616, Oct. 29, 1999]



Sec. 600.9  [Reserved]



Sec. 600.10  Date, extent, duration, and consequence of eligibility.

    (a) Date of eligibility. (1) If the Secretary determines that an 
applicant institution satisfies all the statutory and regulatory 
eligibility requirements, the Secretary considers the institution to be 
an eligible institution as of the date--
    (i) The Secretary signs the institution's program participation 
agreement described in 34 CFR part 668, subpart B, for purposes of 
participating in any title IV, HEA program; and
    (ii) The Secretary receives all the information necessary to make 
that determination for purposes other than participating in any title 
IV, HEA program.
    (2) [Reserved]
    (b) Extent of eligibility. (1) If the Secretary determines that the 
entire applicant institution, including all its locations and all its 
educational programs, satisfies the applicable requirements of this 
part, the Secretary extends eligibility to all educational programs and 
locations identified on the institution's application for eligibility.
    (2) If the Secretary determines that only certain educational 
programs or certain locations of an applicant institution satisfy the 
applicable requirements of this part, the Secretary extends eligibility 
only to those educational programs and locations that meet those 
requirements and identifies the eligible educational programs and 
locations in the eligibility notice sent to the institution under 
Sec. 600.21.
    (3) Eligibility does not extend to any location that an institution 
establishes after it receives its eligibility designation if the 
institution provides at least 50 percent of an educational program at 
that location, unless--
    (i) The Secretary approves that location under Sec. 600.20(e)(4); or
    (ii) The location is licensed and accredited, the institution does 
not have to apply to the Secretary for approval of that location under 
Sec. 600.20(c), and the institution has reported to the Secretary that 
location under Sec. 600.21.
    (c) Subsequent additions of educational programs. (1) Except as 
provided in

[[Page 181]]

paragraph (c)(2) of this section, if an eligible institution adds an 
educational program after it has been designated as an eligible 
institution by the Secretary, the institution must apply to the 
Secretary to have that additional program designated as an eligible 
program of that institution.
    (2) An eligible institution that adds an educational program after 
it has been designated as an eligible institution by the Secretary does 
not have to apply to the Secretary to have that additional program 
designated as an eligible program of that institution if the additional 
program--
    (i) Leads to an associate, baccalaureate, professional, or graduate 
degree; or
    (ii)(A) Prepares students for gainful employment in the same or 
related recognized occupation as an educational program that has 
previously been designated as an eligible program at that institution by 
the Secretary; and
    (B) Is at least 8 semester hours, 12 quarter hours, or 600 clock 
hours.
    (3) If an institution incorrectly determines under paragraph (c)(2) 
of this section that an educational program satisfies the applicable 
statutory and regulatory eligibility provisions without applying to the 
Secretary for approval, the institution is liable to repay to the 
Secretary all HEA program funds received by the institution for that 
educational program, and all the title IV, HEA program funds received by 
or on behalf of students who were enrolled in that educational program.
    (d) Duration of eligibility. (1) If an institution participates in 
the title IV, HEA programs, the Secretary's designation of the 
institution as an eligible institution under the title IV, HEA programs 
expires when the institution's program participation agreement, as 
described in 34 CFR part 668, subpart B, expires.
    (2) If an institution participates in an HEA program other than a 
title IV, HEA program, the Secretary's designation of the institution as 
an eligible institution, for purposes of that non-title IV, HEA program, 
does not expire as long as the institution continues to satisfy the 
statutory and regulatory requirements governing its eligibility.
    (e) Consequence of eligibility. (1) If, as a part of its 
institutional eligibility application, an institution indicates that it 
wishes to participate in a title IV, HEA program and the Secretary 
determines that the institution satisfies the applicable statutory and 
regulatory requirements governing institutional eligibility, the 
Secretary will determine whether the institution satisfies the standards 
of administrative capability and financial responsibility contained in 
34 CFR part 668, subpart B.
    (2) If, as part of its institutional eligibility application, an 
institution indicates that it does not wish to participate in any title 
IV, HEA program and the Secretary determines that the institution 
satisfies the applicable statutory and regulatory requirements governing 
institutional eligibility, the institution is eligible to apply to 
participate in any HEA program listed by the Secretary in the 
eligibility notice it receives under Sec. 600.21. However, the 
institution is not eligible to participate in those programs, or receive 
funds under those programs, merely by virtue of its designation as an 
eligible institution under this part.

(Approved by the Office of Management and Budget under control number 
1845-0098)

(Authority: 20 U.S.C. 1088 and 1141)

[59 FR 22336, Apr. 29, 1994, as amended at 59 FR 47801, Sept. 19, 1994; 
65 FR 65671, Nov. 1, 2000]



Sec. 600.11  Special rules regarding institutional accreditation or preaccreditation.

    (a) Change of accrediting agencies. For purposes of 
Secs. 600.4(a)(5)(i), 600.5(a)(6), and 600.6(a)(5)(i), the Secretary 
does not recognize the accreditation or preaccreditation of an otherwise 
eligible institution if that institution is in the process of changing 
its accrediting agency, unless the institution provides to the 
Secretary--
    (1) All materials related to its prior accreditation or 
preaccreditation; and
    (2) Materials demonstrating reasonable cause for changing its 
accrediting agency.

[[Page 182]]

    (b) Multiple accreditation. The Secretary does not recognize the 
accreditation or preaccreditation of an otherwise eligible institution 
if that institution is accredited or preaccredited as an institution by 
more than one accrediting agency, unless the institution--
    (1) Provides to each such accrediting agency and the Secretary the 
reasons for that multiple accreditation or preaccreditation;
    (2) Demonstrates to the Secretary reasonable cause for that multiple 
accreditation or preaccreditation; and
    (3) Designates to the Secretary which agency's accreditation or 
preaccreditation the institution uses to establish its eligibility under 
this part.
    (c) Loss of accreditation or preaccreditation. (1) An institution 
may not be considered eligible for 24 months after it has had its 
accreditation or preaccreditation withdrawn, revoked, or otherwise 
terminated for cause, unless the accrediting agency that took that 
action rescinds that action.
    (2) An institution may not be considered eligible for 24 months 
after it has withdrawn voluntarily from its accreditation or 
preaccreditation status under a show-cause or suspension order issued by 
an accrediting agency, unless that agency rescinds its order.
    (d) Religious exception. (1) If an otherwise eligible institution 
loses its accreditation or preaccreditation, the Secretary considers the 
institution to be accredited or preaccredited for purposes of complying 
with the provisions of Secs. 600.4, 600.5, and 600.6 if the Secretary 
determines that its loss of accreditation or preaccreditation--
    (i) Is related to the religious mission or affiliation of the 
institution; and
    (ii) Is not related to its failure to satisfy the accrediting 
agency's standards.
    (2) If the Secretary considers an unaccredited institution to be 
accredited or preaccredited under the provisions of paragraph (d)(1) of 
this section, the Secretary will consider that unaccredited institution 
to be accredited or preaccredited for a period sufficient to allow the 
institution to obtain alternative accreditation or preaccreditation, 
except that period may not exceed 18 months.

(Authority: 20 U.S.C. 1099b)



           Subpart B--Procedures for Establishing Eligibility

    Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.



Sec. 600.20  Application procedures for establishing, reestablishing, maintaining, or expanding institutional eligibility and certification.

    (a) Initial eligibility application. An institution that wishes to 
establish its eligibility to participate in any HEA program must submit 
an application to the Secretary for a determination that it qualifies as 
an eligible institution under this part. If the institution also wishes 
to be certified to participate in the title IV, HEA programs, it must 
indicate that intent on the application, and submit all the 
documentation indicated on the application to enable the Secretary to 
determine that it satisfies the relevant certification requirements 
contained in 34 CFR part 668, subparts B and L.
    (b) Reapplication. (1) A currently designated eligible institution 
that is not participating in the title IV, HEA programs must apply to 
the Secretary for a determination that the institution continues to meet 
the requirements in this part if the Secretary requests the institution 
to reapply. If the institution wishes to be certified to participate in 
the title IV, HEA programs, it must submit an application to the 
Secretary and must submit all the supporting documentation indicated on 
the application to enable the Secretary to determine that it satisfies 
the relevant certification requirements contained in subparts B and L of 
34 CFR part 668.
    (2) A currently designated eligible institution that participates in 
the title IV, HEA programs must apply to the Secretary for a 
determination that the institution continues to meet the requirements in 
this part and in 34 CFR part 668 if the institution wishes to--
    (i) Continue to participate in the title IV, HEA programs beyond the 
scheduled expiration of the institution's current eligibility and 
certification designation;
    (ii) Reestablish eligibility and certification as a private 
nonprofit, private

[[Page 183]]

for-profit, or public institution following a change in ownership that 
results in a change in control as described in Sec. 600.31; or
    (iii) Reestablish eligibility and certification after the 
institution changes its status as a proprietary, nonprofit, or public 
institution.
    (c) Application to expand eligibility. A currently designated 
eligible institution that wishes to expand the scope of its eligibility 
and certification and disburse title IV, HEA Program funds to students 
enrolled in that expanded scope must apply to the Secretary and wait for 
approval to--
    (1) Add a location at which the institution offers or will offer 50 
percent or more of an educational program if one of the following 
conditions applies, otherwise it must report to the Secretary under 
Sec. 600.21:
    (i) The institution participates in the title IV, HEA programs under 
a provisional certification, as provided in 34 CFR 668.13.
    (ii) The institution receives title IV, HEA program funds under the 
reimbursement or cash monitoring payment method, as provided in 34 CFR 
part 668, subpart K.
    (iii) The institution acquires the assets of another institution 
that provided educational programs at that location during the preceding 
year and participated in the title IV, HEA programs during that year.
    (iv) The institution would be subject to a loss of eligibility under 
34 CFR 668.188 if it adds that location.
    (v) The Secretary previously notified the institution that it must 
apply for approval of an additional location.
    (2) Increase its level of program offering (e.g., adding graduate 
degree programs when it previously offered only baccalaureate degree 
programs);
    (3) Add an educational program if the institution is required to 
apply to the Secretary for approval under Sec. 600.10(c);
    (4) Add a branch campus at a location that is not currently included 
in the institution's eligibility and certification designation; or
    (5) Convert an eligible location to a branch campus.
    (d) Application format. To satisfy the requirements of paragraphs 
(a), (b), and (c) of this section, an institution must apply in a format 
prescribed by the Secretary for that purpose and provide all the 
information and documentation requested by the Secretary to make a 
determination of its eligibility and certification.
    (e) Secretary's response to applications. (1) If the Secretary 
receives an application under paragraph (a) or (b)(1) of this section, 
the Secretary notifies the institution--
    (i) Whether the applicant institution qualifies in whole or in part 
as an eligible institution under the appropriate provisions in 
Secs. 600.4 through 600.7; and
    (ii) Of the locations and educational programs that qualify as the 
eligible institution if only a portion of the applicant qualifies as an 
eligible institution;
    (2) If the Secretary receives an application under paragraphs (a) or 
(b) of this section and that institution applies to participate in the 
title IV, HEA programs, the Secretary notifies the institution--
    (i) Whether the institution is certified to participate in those 
programs;
    (ii) Of the title IV, HEA programs in which it is eligible to 
participate;
    (iii) Of the title IV, HEA programs in which it is eligible to apply 
for funds;
    (iv) Of the effective date of its eligibility to participate in 
those programs; and
    (v) Of the conditions under which it may participate in those 
programs;
    (3) If the Secretary receives an application under paragraph (b)(2) 
of this section, the Secretary notifies the institution whether it 
continues to be certified, or whether it reestablished its eligibility 
and certification to participate in the title IV, HEA programs and the 
scope of such approval.
    (4) If the Secretary receives an application under paragraph (c)(1) 
of this section for an additional location, the Secretary notifies the 
institution whether the location is eligible or ineligible to 
participate in the title IV, HEA programs, and the date of eligibility 
if the location is determined eligible;
    (5) If the Secretary receives an application under paragraph (c)(2) 
of this section for an increase in the level of program offering, or for 
an additional educational program under paragraph

[[Page 184]]

(c)(3) of this section, the Secretary notifies the institution whether 
the program qualifies as an eligible program, and if the program 
qualifies, the date of eligibility; and
    (6) If the Secretary receives an application under paragraphs (c)(4) 
or (c)(5) of this section to have a branch campus certified to 
participate in the title IV, HEA programs as a branch campus, the 
Secretary notifies the institution whether that branch campus is 
certified to participate and the date that the branch campus is eligible 
to begin participation.
    (f) Disbursement rules related to applications. (1)(i) Except as 
provided under paragraph (f)(1)(ii) of this section and 34 CFR 668.26, 
if an institution submits an application under paragraph (b)(2)(i) of 
this section because its participation period is scheduled to expire, 
after that expiration date the institution may not disburse title IV, 
HEA program funds to students attending that institution until the 
institution receives the Secretary's notification that the institution 
is again eligible to participate in those programs.
    (ii) An institution described in paragraph (f)(1)(i) of this section 
may disburse title IV, HEA program funds to its students if the 
institution submits to the Secretary a materially complete renewal 
application in accordance with the provisions of 34 CFR 668.13(b)(2), 
and has not received a final decision from the Department on that 
application.
    (2)(i) Except as provided under paragraph (f)(2)(ii) of this section 
and 34 CFR 668.26, if a private nonprofit, private for-profit, or public 
institution submits an application under paragraph (b)(2)(ii) or 
(b)(2)(iii) of this section because it has undergone or will undergo a 
change in ownership that results in a change of control or a change in 
status, the institution may not disburse title IV, HEA program funds to 
students attending that institution after the change of ownership or 
status until the institution receives the Secretary's notification that 
the institution is eligible to participate in those programs.
    (ii) An institution described in paragraph (f)(2)(i) of this section 
may disburse title IV, HEA program funds to its students if the 
Secretary issues a provisional extension of certification under 
paragraph (g) of this section.
    (3) If an institution must apply to the Secretary under paragraphs 
(c)(1) through (c)(4) of this section, the institution may not disburse 
title IV, HEA program funds to students attending the subject location, 
program, or branch until the institution receives the Secretary's 
notification that the location, program, or branch is eligible to 
participate in the title IV, HEA programs.
    (4) If an institution applies to the Secretary under paragraph 
(c)(5) of this section to convert an eligible location to a branch 
campus, the institution may continue to disburse title IV, HEA program 
funds to students attending that eligible location.
    (5) If an institution does not apply to the Secretary to obtain the 
Secretary's approval of a new location, program, increased level of 
program offering, or branch, and the location, program, or branch does 
not qualify as an eligible location, program, or branch of that 
institution under this part and 34 CFR part 668, the institution is 
liable for all title IV, HEA program funds it disburses to students 
enrolled at that location or branch or in that program.
    (g) Application for provisional extension of certification. (1) If a 
private nonprofit institution, a private for-profit institution, or a 
public institution participating in the title IV, HEA programs undergoes 
a change in ownership that results in a change of control as described 
in 34 CFR 600.31, the Secretary may continue the institution's 
participation in those programs on a provisional basis, if the 
institution under the new ownership submits a ``materially complete 
application'' that is received by the Secretary no later than 10 
business days after the day the change occurs.
    (2) For purposes of this section, a private nonprofit institution, a 
private for-profit institution, or a public institution submits a 
materially complete application if it submits a fully completed 
application form designated by the Secretary supported by--
    (i) A copy of the institution's State license or equivalent document 
that--

[[Page 185]]

as of the day before the change in ownership--authorized or will 
authorize the institution to provide a program of postsecondary 
education in the State in which it is physically located;
    (ii) A copy of the document from the institution's accrediting 
association that--as of the day before the change in ownership--granted 
or will grant the institution accreditation status, including approval 
of any non-degree programs it offers;
    (iii) Audited financial statements of the institution's two most 
recently completed fiscal years that are prepared and audited in 
accordance with the requirements of 34 CFR 668.23; and
    (iv) Audited financial statements of the institution's new owner's 
two most recently completed fiscal years that are prepared and audited 
in accordance with the requirements of 34 CFR 668.23, or equivalent 
information for that owner that is acceptable to the Secretary.
    (h) Terms of the extension. (1) If the Secretary approves the 
institution's materially complete application, the Secretary provides 
the institution with a provisional Program Participation Agreement 
(PPA). The provisional PPA extends the terms and conditions of the 
program participation agreement that were in effect for the institution 
before its change of ownership.
    (2) The provisional PPA expires on the earlier of--
    (i) The date on which the Secretary signs a new program 
participation agreement;
    (ii) The date on which the Secretary notifies the institution that 
its application is denied; or
    (iii) The last day of the month following the month in which the 
change of ownership occurred, unless the provisions of paragraph (h)(3) 
of this section apply.
    (3) If the provisional PPA will expire under the provisions of 
paragraph (h)(2)(iii) of this section, the Secretary extends the 
provisional PPA on a month-to-month basis after the expiration date 
described in paragraph (h)(2)(iii) of this section if, prior to that 
expiration date, the institution provides the Secretary with--
    (i) A ``same day'' balance sheet showing the financial position of 
the institution, as of the date of the ownership change, that is 
prepared in accordance with Generally Accepted Accounting Principles 
(GAAP) published by the Financial Accounting Standards Board and audited 
in accordance with Generally Accepted Government Auditing Standards 
(GAGAS) published by the U.S. General Accounting Office;
    (ii) If not already provided, approval of the change of ownership 
from the State in which the institution is located by the agency that 
authorizes the institution to legally provide postsecondary education in 
that State;
    (iii) If not already provided, approval of the change of ownership 
from the institution's accrediting agency; and
    (iv) A default management plan unless the institution is exempt from 
providing that plan under 34 CFR 668.14(b)(15).

(Approved by the Office of Management and Budget under control number 
1845-0098)

(Authority: 20 U.S.C. 1001, 1002, 1088, and 1099c)

[65 FR 65671, Nov. 1, 2000]



Sec. 600.21  Updating application information.

    (a) Reporting requirements. Except as provided in paragraph (b) of 
this section, an eligible institution must report to the Secretary in a 
manner prescribed by the Secretary no later than 10 days after the 
change occurs, of any change in the following:
    (1) Its name, the name of a branch, or the name of a previously 
reported location.
    (2) Its address, the address of a branch, or the address of a 
previously reported location.
    (3) Its establishment of an accredited and licensed additional 
location at which it offers or will offer 50 percent or more of an 
educational program if the institution wants to disburse title IV, HEA 
program funds to students enrolled at that location, under the 
provisions in paragraph (d) of this section.
    (4) The way it measures program length (e.g., from clock hours to 
credit hours, or from semester hours to quarter hours).
    (5) A decrease in the level of program offering (e.g. the 
institution drops its graduate programs).

[[Page 186]]

    (6) A person's ability to affect substantially the actions of the 
institution if that person did not previously have this ability. The 
Secretary considers a person to have this ability if the person--
    (i) Holds alone or together with another member or members of his or 
her family, at least a 25 percent ``ownership interest'' in the 
institution as defined in Sec. 600.31(b);
    (ii) Represents or holds, either alone or together with other 
persons, under a voting trust, power of attorney, proxy, or similar 
agreement at least a 25 percent ``ownership interest'' in the 
institution, as defined in Sec. 600.31(b); or
    (iii) Is a general partner, the chief executive officer, or chief 
financial officer of the institution.
    (7) The individual the institution designates under 34 CFR 
668.16(b)(1) as its title IV, HEA Program administrator.
    (8) The closure of a branch campus or additional location that the 
institution was required to report to the Secretary.
    (9) The governance of a public institution.
    (b) Additional reporting from institutions owned by publicly-traded 
corporations. An institution that is owned by a publicly-traded 
corporation must report to the Secretary any change in the information 
described in paragraph (a)(6) of this section when it notifies its 
accrediting agency, but no later than 10 days after the institution 
learns of the change.
    (c) Secretary's response to reporting. The Secretary notifies an 
institution if any reported changes affects the institution's 
eligibility, and the effective date of that change.
    (d) Disbursement rules related to additional locations. When an 
institution must report to the Secretary about an additional location 
under paragraph (a)(3) of this section, the institution may not disburse 
title IV, HEA funds to students at that location before it reports to 
the Secretary about that location. Unless it is an institution that must 
apply to the Secretary under Sec. 600.20(c)(1), once it reports to the 
Secretary about that location, the institution may disburse those funds 
to those students if that location is licensed and accredited.
    (e) Consequence of failure to report. An institution's failure to 
inform the Secretary of a change described in paragraph (a) of this 
section within the time period stated in that paragraph may result in 
adverse action against the institution.
    (f) Definition. The Secretary considers a member of a person's 
family to be his or her--
    (1) Parent, sibling, spouse or child;
    (2) Spouse's parent or sibling;
    (3) Child's spouse; and
    (4) Sibling's spouse.

(Approved by the Office of Management and Budget under control number 
1845.0098)

(Authority: 20 U.S.C. 1001, 1002, 1088, and 1099c)

[65 FR 65673, Nov. 1, 2000]



                   Subpart C--Maintaining Eligibility

    Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.



Sec. 600.30  [Reserved]



Sec. 600.31  Change in ownership resulting in a change in control for private nonprofit, private for-profit and public institutions.

    (a)(1) Except as provided in paragraph (a)(2) of this section, a 
private nonprofit, private for-profit, or public institution that 
undergoes a change in ownership that results in a change in control 
ceases to qualify as an eligible institution upon the change in 
ownership and control. A change in ownership that results in a change in 
control includes any change by which a person who has or thereby 
acquires an ownership interest in the entity that owns the institution 
or the parent corporation of that entity, acquires or loses the ability 
to control the institution.
    (2) If a private nonprofit, private for-profit, or public 
institution has undergone a change in ownership that results in a change 
in control, the Secretary may, under the provisions of Sec. 600.20(g) 
and (h), continue the institution's participation in the title IV, HEA 
programs on a provisional basis, provided that the institution submits, 
under the provisions of Sec. 600.20(g), a materially complete 
application--

[[Page 187]]

    (i) No later than 10 business days after the change occurs; or
    (ii) For an institution owned by a publicly-traded corporation, no 
later than 10 business days after the institution knew, or should have 
known of the change based upon SEC filings, that the change occurred.
    (3) In order to reestablish eligibility and to resume participation 
in the title IV, HEA programs, the institution must demonstrate to the 
Secretary that after the change in ownership and control--
    (i) The institution satisfies all the applicable requirements 
contained in Secs. 600.4, 600.5, and 600.6, except that if the 
institution is a proprietary institution of higher education or 
postsecondary vocational institution, it need not have been in existence 
for two years before seeking eligibility; and
    (ii) The institution qualifies to be certified to participate under 
34 CFR part 668, subpart B.
    (b) Definitions. The following definitions apply to terms used in 
this section:
    Closely-held corporation. Closely-held corporation (including the 
term close corporation) means--
    (1) A corporation that qualifies under the law of the State of its 
incorporation as a closely-held corporation; or
    (2) If the State of incorporation has no definition of closely-held 
corporation, a corporation the stock of which--
    (i) Is held by no more than 30 persons; and
    (ii) Has not been and is not planned to be publicly offered.
    Control. Control (including the terms controlling, controlled by and 
under common control with) means the possession, direct or indirect, of 
the power to direct or cause the direction of the management and 
policies of a person, whether through the ownership of voting 
securities, by contract, or otherwise.
    Ownership or ownership interest. (1) Ownership or ownership interest 
means a legal or beneficial interest in an institution or its corporate 
parent, or a right to share in the profits derived from the operation of 
an institution or its corporate parent.
    (2) Ownership or ownership interest does not include an ownership 
interest held by--
    (i) A mutual fund that is regularly and publicly traded;
    (ii) A U.S. institutional investor, as defined in 17 CFR 240.15a-
6(b)(7);
    (iii) A profit-sharing plan of the institution or its corporate 
parent, provided that all full-time permanent employees of the 
institution or corporate parent are included in the plan; or
    (iv) An Employee Stock Ownership Plan (ESOP).
    Parent. The parent or parent corporation of a specified corporation 
is the corporation or partnership that controls the specified 
corporation directly or indirectly through one or more intermediaries.
    Person. Person includes a legal person (corporation or partnership) 
or an individual.
    Wholly-owned subsidiary. A wholly-owned subsidiary is one 
substantially all of whose outstanding voting securities are owned by 
its parent together with the parent's other wholly-owned subsidiaries.
    (c) Standards for identifying changes of ownership and control--(1) 
Closely-held corporation. A change in ownership and control occurs 
when--
    (i) A person acquires more than 50 percent of the total outstanding 
voting stock of the corporation;
    (ii) A person who holds an ownership interest in the corporation 
acquires control of more than 50 percent of the outstanding voting stock 
of the corporation; or
    (iii) A person who holds or controls 50 percent or more of the total 
outstanding stock of the corporation ceases to hold or control that 
proportion of the stock of the corporation.
    (2) Publicly traded corporations required to be registered with the 
Securities and Exchange Commission (SEC). A change in ownership and 
control occurs when--
    (i) A person acquires such ownership and control of the corporation 
so that the corporation is required to file a Form 8K with the SEC 
notifying that agency of the change in control; or
    (ii) (A) A person who is a controlling shareholder of the 
corporation ceases

[[Page 188]]

to be a controlling shareholder. A controlling shareholder is a 
shareholder who holds or controls through agreement both 25 percent or 
more of the total outstanding voting stock of the corporation and more 
shares of voting stock than any other shareholder. A controlling 
shareholder for this purpose does not include a shareholder whose sole 
stock ownership is held as a U.S. institutional investor, as defined in 
17 CFR 240.15a-6(b)(7), held in mutual funds, held through a profit-
sharing plan, or held in an Employee Stock Ownership Plan (ESOP).
    (B) When a change of ownership occurs as a result of paragraph 
(c)(2)(ii)(A) of this section, the institution may submit its most 
recent quarterly financial statement as filed with the SEC, along with 
copies of all other SEC filings made after the close of the fiscal year 
for which a compliance audit has been submitted to the Department of 
Education, instead of the ``same day'' balance sheet.
    (C) If a publicly-traded institution is provisionally certified due 
to a change in ownership under paragraph (c)(2)(ii) of this section, and 
that institution experiences another change of ownership under paragraph 
(c)(2)(ii) of this section, an approval of the subsequent change in 
ownership does not extend the original expiration date for the 
provisional certification provided that any current controlling 
shareholder was listed on the change of ownership application for which 
the original provisional approval was granted.
    (3) Other corporations. A change in ownership and control of a 
corporation that is neither closely-held nor required to be registered 
with the SEC occurs when--
    (i) A person who has or acquires an ownership interest acquires both 
control of at least 25 percent of the total outstanding voting stock of 
the corporation and control of the corporation;
    (ii) A person who holds both ownership or control of at least 25 
percent of the total outstanding voting stock of the corporation and 
control of the corporation, ceases to own or control that proportion of 
the stock of the corporation, or to control the corporation; or
    (iii) For a membership corporation, a person who is or becomes a 
member acquires or loses control of 25 percent of the voting interests 
of the corporation and control of the corporation.
    (4) Partnership or sole proprietorship. A change in ownership and 
control occurs when a person who has or acquires an ownership interest 
acquires or loses control as described in this section.
    (5) Parent corporation. An institution that is a wholly-owned 
subsidiary changes ownership and control when the parent corporation 
changes ownership and control as described in this section.
    (6) Nonprofit institution. A nonprofit institution changes ownership 
and control when a change takes place that is described in paragraph (d) 
of this section.
    (7) Public institution. The Secretary does not consider that a 
public institution undergoes a change in ownership that results in a 
change of control if there is a change in governance and the institution 
after the change remains a public institution, provided--
    (i) The new governing authority is in the same State as included in 
the institution's program participation agreement; and
    (ii) The new governing authority has acknowledged the public 
institution's continued responsibilities under its program participation 
agreement.
    (d) Covered transactions. For the purposes of this section, a change 
in ownership of an institution that results in a change of control may 
include, but is not limited to--
    (1) The sale of the institution;
    (2) The transfer of the controlling interest of stock of the 
institution or its parent corporation;
    (3) The merger of two or more eligible institutions;
    (4) The division of one institution into two or more institutions;
    (5) The transfer of the liabilities of an institution to its parent 
corporation;
    (6) A transfer of assets that comprise a substantial portion of the 
educational business of the institution, except where the transfer 
consists exclusively in the granting of a security interest in those 
assets; or

[[Page 189]]

    (7) A change in status as a for-profit, nonprofit, or public 
institution.
    (e) Excluded transactions. A change in ownership and control 
otherwise subject to this section does not include a transfer of 
ownership and control upon the retirement or death of the owner, to--
    (1) A member of the owner's family, as described in Sec. 600.30(f);
    (2) A person with an ownership interest in the institution who has 
been involved in management of the institution for at least two years 
preceding the transfer.

(Approved by the Office of Management and Budget under control number 
1845-0098)

(Authority: 20 U.S.C. 1099c)

[59 FR 22336, Apr. 29, 1994, as amended at 59 FR 47801, Sept. 19, 1994; 
60 FR 33430, June 30, 1995; 64 FR 58616, Oct. 29, 1999; 65 FR 65673, 
Nov. 1, 2000]



Sec. 600.32  Eligibility of additional locations.

    (a) Except as provided in paragraphs (b) and (c) of this section, to 
qualify as an eligible location, an additional location of an eligible 
institution must satisfy the applicable requirements of this section and 
Secs. 600.4, 600.5, 600.6, 600.8, and 600.10.
    (b) To qualify as an eligible location, an additional location is 
not required to satisfy the two-year requirement of Secs. 600.5(a)(7) or 
600.6(a)(6), unless--
    (1) The location was a facility of another institution that has 
closed or ceased to provide educational programs for a reason other than 
a normal vacation period or a natural disaster that directly affects the 
institution or the institution's students;
    (2) The applicant institution acquired, either directly from the 
institution that closed or ceased to provide educational programs, or 
through an intermediary, the assets at the location; and
    (3) The institution from which the applicant institution acquired 
the assets of the location--
    (i) Owes a liability for a violation of an HEA program requirement; 
and
    (ii) Is not making payments in accordance with an agreement to repay 
that liability.
    (c) Notwithstanding paragraph (b) of this section, an additional 
location is not required to satisfy the two-year requirement of 
Sec. 600.5(a)(7) or Sec. 600.6(a)(6) if the applicant institution 
agrees--
    (1) To be liable for all improperly expended or unspent title IV, 
HEA program funds received by the institution that has closed or ceased 
to provide educational programs;
    (2) To be liable for all unpaid refunds owed to students who 
received title IV, HEA program funds; and
    (3) To abide by the policy of the institution that has closed or 
ceased to provide educational programs regarding refunds of 
institutional charges to students in effect before the date of the 
acquisition of the assets of the additional location for the students 
who were enrolled before that date.
    (d) For purposes of this section, an ``additional location'' is a 
location of an institution that was not designated as an eligible 
location in the eligibility notification provided to an institution 
under Sec. 600.21.

(Authority: 20 U.S.C. 1088 and 1141)



                     Subpart D--Loss of Eligibility

    Source: 59 FR 22336, Apr. 29, 1994, unless otherwise noted.



Sec. 600.40  Loss of eligibility.

    (a)(1) Except as provided in paragraphs (a) (2) and (3) of this 
section, an institution, or a location or educational program of an 
institution, loses its eligibility on the date that--
    (i) The institution, location, or educational program fails to meet 
any of the eligibility requirements of this part;
    (ii) The institution or location permanently closes;
    (iii) The institution or location ceases to provide educational 
programs for a reason other than a normal vacation period or a natural 
disaster that directly affects the institution, particular location, or 
the students of the institution or location; or
    (iv) For purposes of the title IV, HEA programs--
    (A) The institution's period of participation as specified under 34 
CFR 668.13 expires; or

[[Page 190]]

    (B) The institution's provisional certification is revoked under 34 
CFR 668.13.
    (2) If an institution loses its eligibility because it violated the 
requirements of Sec. 600.5(a)(8), as evidenced by the determination 
under provisions contained in Sec. 600.5(d), it loses its eligibility on 
the last day of the fiscal year used in Sec. 600.5(d), except that if an 
institution's latest fiscal year was described in Sec. 600.7(h)(1), it 
loses its eligibility as of June 30, 1994.
    (3) If an institution loses its eligibility under the provisions of 
Sec. 600.7(a)(1), it loses its eligibility on the last day of the award 
year being evaluated under that provision.
    (b) If the Secretary undertakes to terminate the eligibility of an 
institution because it violated the provisions of Sec. 600.5(a)(8) or 
Sec. 600.7(a), and the institution requests a hearing, the presiding 
official must terminate the institution's eligibility if it violated 
those provisions, notwithstanding its status at the time of the hearing.
    (c)(1) If the Secretary designates an institution or any of its 
educational programs or locations as eligible on the basis of inaccurate 
information or documentation, the Secretary's designation is void from 
the date the Secretary made the designation, and the institution or 
program or location, as applicable, never qualified as eligible.
    (2) If an institution closes its main campus or stops providing any 
educational programs on its main campus, it loses its eligibility as an 
institution, and that loss of eligibility includes all its locations and 
all its programs. Its loss of eligibility is effective on the date it 
closes that campus or stops providing any educational program at that 
campus.
    (d) Except as otherwise provided in this part, if an institution 
ceases to satisfy any of the requirements for eligibility under this 
part--
    (1) It must notify the Secretary within 30 days of the date that it 
ceases to satisfy that requirement; and
    (2) It becomes ineligible to continue to participate in any HEA 
program as of the date it ceases to satisfy any of the requirements.

(Authority: 20 U.S.C. 1088, 1099a-3, and 1141)

[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40622, July 29, 1998]



Sec. 600.41  Termination and emergency action proceedings.

    (a) If the Secretary believes that a previously designated eligible 
institution as a whole, or at one or more of its locations, does not 
satisfy the statutory or regulatory requirements that define that 
institution as an eligible institution, the Secretary may--
    (1) Terminate the institution's eligibility designation in whole or 
as to a particular location--
    (i) Under the procedural provisions applicable to terminations 
contained in 34 CFR 668.81, 668.83, 668.86, 668.87, 668.88, 668.89, 
668.90 (a)(1), (a)(4), and (c) through (f), and 668.91; or
    (ii) Under a show-cause hearing, if the institution's loss of 
eligibility results from--
    (A) Its previously qualifying as an eligible vocational school;
    (B) Its previously qualifying as an eligible institution, 
notwithstanding its unaccredited status, under the transfer-of-credit 
alternative to accreditation (as that alternative existed in 20 U.S.C. 
1085, 1088, and 1141(a)(5)(B) and Sec. 600.8 until July 23, 1992);
    (C) Its loss of accreditation or preaccreditation;
    (D) Its loss of legal authority to provide postsecondary education 
in the State in which it is physically located;
    (E) Its violations of the provisions contained in Sec. 600.5(a)(8) 
or Sec. 600.7(a);
    (F) Its permanently closing; or
    (G) Its ceasing to provide educational programs for a reason other 
than a normal vacation period or a natural disaster that directly 
affects the institution, a particular location, or the students of the 
institution or location;
    (2) Limit, under the provisions of 34 CFR 668.86, the authority of 
the institution to disburse, deliver, or cause the disbursement or 
delivery of funds under one or more title IV, HEA programs as otherwise 
provided under 34 CFR 668.26 for the benefit of students enrolled at the 
ineligible institution or

[[Page 191]]

location prior to the loss of eligibility of that institution or 
location; and
    (3) Initiate an emergency action under the provisions contained in 
34 CFR 668.83 with regard to the institution's participation in one or 
more title IV, HEA programs.
    (b) If the Secretary believes that an educational program offered by 
an institution that was previously designated by the Secretary as an 
eligible institution under the HEA does not satisfy relevant statutory 
or regulatory requirements that define that educational program as part 
of an eligible institution, the Secretary may in accordance with the 
procedural provisions described in paragraph (a) of this section--
    (1) Undertake to terminate that educational program's eligibility 
under one or more of the title IV, HEA programs under the procedural 
provisions applicable to terminations described in paragraph (a) of this 
section;
    (2) Limit the institution's authority to deliver, disburse, or cause 
the delivery or disbursement of funds provided under that title IV, HEA 
program to students enrolled in that educational program, as otherwise 
provided in 34 CFR 668.26; and
    (3) Initiate an emergency action under the provisions contained in 
34 CFR 668.83 with regard to the institution's participation in one or 
more title IV, HEA programs with respect to students enrolled in that 
educational program.
    (c)(1) An action to terminate and limit the eligibility of an 
institution as a whole or as to any of its locations or educational 
programs is initiated in accordance with 34 CFR 668.86(b) and becomes 
final 20 days after the Secretary notifies the institution of the 
proposed action, unless the designated department official receives by 
that date a request for a hearing or written material that demonstrates 
that the termination and limitation should not take place.
    (2) Once a termination under this section becomes final, the 
termination is effective with respect to any commitment, delivery, or 
disbursement of funds provided under an applicable title IV, HEA program 
by the institution--
    (i) Made to students enrolled in the ineligible institution, 
location, or educational program; and
    (ii) Made on or after the date of the act or omission that caused 
the loss of eligibility as to the institution, location, or educational 
program.
    (3) Once a limitation under this section becomes final, the 
limitation is effective with regard to any commitment, delivery, or 
disbursement of funds under the applicable title IV, HEA program by the 
institution--
    (i) Made after the date on which the limitation became final; and
    (ii) Made to students enrolled in the ineligible institution, 
location, or educational program.
    (d) After a termination under this section of the eligibility of an 
institution as a whole or as to a location or educational program 
becomes final, the institution may not certify applications for, make 
awards of or commitments for, deliver, or disburse funds under the 
applicable title IV, HEA program, except--
    (1) In accordance with the requirements of 34 CFR 668.26(c) with 
respect to students enrolled in the ineligible institution, location, or 
educational program; and
    (2) After satisfaction of any additional requirements, imposed 
pursuant to a limitation under paragraph (a)(2) of this section, which 
may include the following:
    (i) Completion of the actions required by 34 CFR 668.26(a) and (b).
    (ii) Demonstration that the institution has made satisfactory 
arrangements for the completion of actions required by 34 CFR 668.26(a) 
and (b).
    (iii) Securing the confirmation of a third party selected by the 
Secretary that the proposed disbursements or delivery of title IV, HEA 
program funds meet the requirements of the applicable program.
    (iv) Using institutional funds to make disbursements permitted under 
this paragraph and seeking reimbursement from the Secretary for those 
disbursements.
    (e) If the Secretary undertakes to terminate the eligibility of an 
institution, location, or program under paragraphs (a) and (b) of this 
section:

[[Page 192]]

    (1) If the basis for the loss of eligibility is the loss of 
accreditation or preaccreditation, the sole issue is whether the 
institution, location, or program has the requisite accreditation or 
preaccreditation. The presiding official has no authority to consider 
challenges to the action of the accrediting agency.
    (2) If the basis for the loss of eligibility is the loss of legal 
authorization, the sole issue is whether the institution, location, or 
program has the requisite legal authorization. The presiding official 
has no authority to consider challenges to the action of a State agency 
in removing the legal authorization.

(Authority: 20 U.S.C. 1088, 1091, 1094, 1099a-3, and 1141)

[59 FR 22336, Apr. 29, 1994, as amended at 63 FR 40623, July 29, 1998]



 Subpart E--Eligibility of Foreign Institutions To Apply To Participate 
          in the Federal Family Education Loan (FFEL) Programs

    Source: 59 FR 22063, Apr. 28, 1994, unless otherwise noted.



Sec. 600.51  Purpose and scope.

    (a) A foreign institution is eligible to apply to participate in the 
Federal Family Education Loan (FFEL) programs if it is comparable to an 
eligible institution of higher education located in the United States 
and has been approved by the Secretary in accordance with the provisions 
of this subpart.
    (b) This subpart E contains the procedures and criteria under which 
a foreign institution may be deemed eligible to apply to participate in 
the FFEL programs.
    (c) This subpart E does not include the procedures and criteria by 
which a foreign institution that is deemed eligible to apply to 
participate in the FFEL programs actually applies for that 
participation. Those procedures and criteria are contained in the 
regulations for the FFEL programs, 34 CFR part 682, subpart F.

(Authority: 20 U.S.C. 1082, 1088)



Sec. 600.52  Definitions.

    The following definitions apply to this subpart E:
    Foreign graduate medical school: A foreign institution that 
qualifies to be listed in, and is listed as a medical school in, the 
most current edition of the World Directory of Medical Schools published 
by the World Health Organization (WHO).
    Foreign institution: An institution that is not located in a State.
    Passing score: The minimum passing score as defined by the 
Educational Commission for Foreign Medical Graduates (ECFMG).
    Secondary school: A school that provides secondary education as 
determined under the laws of the country in which the school is located.

(Authority: 20 U.S.C. 1082, 1088)



Sec. 600.53  Requesting an eligibility determination.

    (a) To be designated as eligible to apply to participate in the FFEL 
programs or to continue to be eligible beyond the scheduled expiration 
of the institution's current period of eligibility, a foreign 
institution must--
    (1) Apply on the form prescribed by the Secretary; and
    (2) Provide all the information and documentation requested by the 
Secretary to make a determination of that eligibility.
    (b) If a foreign institution fails to provide, release, or authorize 
release to the Secretary of information that is required in this subpart 
E, the institution is ineligible to apply to participate in the FFEL 
programs.

(Approved by the Office of Management and Budget under control number 
1840-0673)

(Authority: 20 U.S.C. 1082, 1088)



Sec. 600.54  Criteria for determining whether a foreign institution is eligible to apply to participate in the FFEL programs.

    The Secretary considers a foreign institution to be comparable to an 
eligible institution of higher education in the United States and 
eligible to apply to participate in the FFEL programs if the foreign 
institution is a public or private nonprofit educational institution 
that--

[[Page 193]]

    (a) Admits as regular students only persons who--
    (1) Have a secondary school completion credential; or
    (2) Have the recognized equivalent of a secondary school completion 
credential;
    (b) Is legally authorized by an appropriate authority to provide an 
eligible educational program beyond the secondary school level in the 
country in which the institution is located; and
    (c) Provides an eligible education program--
    (1) For which the institution is legally authorized to award a 
degree that is equivalent to an associate, baccalaureate, graduate, or 
professional degree awarded in the United States;
    (2) That is at least a two-academic-year program acceptable for full 
credit toward the equivalent of a baccalaureate degree awarded in the 
United States; or
    (3) That is equivalent to at least a one-academic-year training 
program in the United States that leads to a certificate, degree, or 
other recognized educational credential and prepares students for 
gainful employment in a recognized occupation.

(Authority: 20 U.S.C. 1082, 1088)



Sec. 600.55  Additional criteria for determining whether a foreign graduate medical school is eligible to apply to participate in the FFEL programs.

    (a) The Secretary considers a foreign graduate medical school to be 
eligible to apply to participate in the FFEL programs if, in addition to 
satisfying the criteria in Sec. 600.54 (except the criterion that the 
institution be public or private nonprofit), the school satisfies all of 
the following criteria:
    (1) The school provides, and in the normal course requires its 
students to complete, a program of clinical and classroom medical 
instruction of not less that 32 months in length, that is supervised 
closely by members of the school's faculty and that is provided either--
    (i) Outside the United States, in facilities adequately equipped and 
staffed to afford students comprehensive clinical and classroom medical 
instruction; or
    (ii) In the United States, through a training program for foreign 
medical students that has been approved by all medical licensing boards 
and evaluating bodies whose views are considered relevant by the 
Secretary.
    (2) The school has graduated classes during each of the two twelve-
month periods immediately preceding the date the Secretary receives the 
school's request for an eligibility determination.
    (3) The school employs for the program described in paragraph (a)(1) 
of this section only those faculty members whose academic credentials 
are the equivalent of credentials required of faculty members teaching 
the same or similar courses at medical schools in the United States.
    (4)(i) The school has been approved by an accrediting body--
    (A) That is legally authorized to evaluate the quality of graduate 
medical school educational programs and facilities in the country where 
the school is located; and
    (B) Whose standards of accreditation of graduate medical schools--
    (1) Have been evaluated by the advisory panel of medical experts 
established by the Secretary; and
    (2) Have been determined to be comparable to standards of 
accreditation applied to medical schools in the United States; or
    (ii) The school is a public or private nonprofit educational 
institution that satisfies the requirements in Sec. 600.4(a)(5)(i).
    (5)(i)(A) During the academic year preceding the year for which any 
of the school's students seeks an FFEL program loan, at least 60 percent 
of those enrolled as full-time regular students in the school and at 
least 60 percent of the school's most recent graduating class were 
persons who did not meet the citizenship and residency criteria 
contained in section 484(a)(5) of the HEA, 20 U.S.C. 1091(a)(5); and
    (B) At least 60 percent of the school's students and graduates who 
took any step of the examinations administered by the Educational 
Commission for Foreign Medical Graduates (ECFMG) (including the ECFMG 
English test) in the year preceding the year for which any of the 
school's students seeks an

[[Page 194]]

FFEL program loan received passing scores on the exams; or
    (ii) The school's clinical training program was approved by a State 
as of January 1, 1992, and is currently approved by that State.
    (b) In performing the calculation required in paragraph (a)(5)(i)(B) 
of this section, a foreign graduate medical school shall count as a 
graduate each person who graduated from the school during the three 
years preceding the year for which the calculation is performed.

(Authority: 20 U.S.C. 1082, 1088)

[59 FR 22063, Apr. 28, 1994; 59 FR 33681, June 30, 1994, as amended at 
63 FR 40623, July 29, 1998; 64 FR 58616, Oct. 29, 1999]



Sec. 600.56  Additional criteria for determining whether a foreign veterinary school is eligible to apply to participate in the FFEL programs.

    (a) The Secretary considers a foreign veterinary school to be 
eligible to apply to participate in the FFEL programs if, in addition to 
satisfying the criteria in Sec. 600.54 (except the criterion that the 
institution be public or private nonprofit), the school satisfies all of 
the following criteria:
    (1) The school provides, and in the normal course requires its 
students to complete, a program of clinical and classroom veterinary 
instruction that is supervised closely by members of the school's 
faculty, and that is provided either--
    (i) Outside the United States, in facilities adequately equipped and 
staffed to afford students comprehensive clinical and classroom 
veterinary instruction; or
    (ii) In the United States, through a training program for foreign 
veterinary students that has been approved by all veterinary licensing 
boards and evaluating bodies whose views are considered relevant by the 
Secretary.
    (2) The school has graduated classes during each of the two twelve-
month periods immediately preceding the date the Secretary receives the 
school's request for an eligibility determination.
    (3) The school employs for the program described in paragraph (a)(1) 
of this section only those faculty members whose academic credentials 
are the equivalent of credentials required of faculty members teaching 
the same or similar courses at veterinary schools in the United States.
    (4) Either--
    (i) The veterinary school's clinical training program was approved 
by a State as of January 1, 1992, and is currently approved by that 
State; or
    (ii) The veterinary school's students complete their clinical 
training at an approved veterinary school located in the United States.
    (b) [Reserved]

(Authority: 20 U.S.C. 1082 and 1088)

[64 FR 58616, Oct. 29, 1999]



Sec. 600.57  Duration of eligibility determination.

    (a) The eligibility of a foreign institution under this subpart 
expires four years after the date of the Secretary's determination that 
the institution is eligible to apply for participation, except that the 
Secretary may specify a shorter period of eligibility. In the case of a 
foreign graduate medical school, continued eligibility is dependent upon 
annual submission of the data and information required under 
Sec. 600.55(a)(5)(i), subject to the terms described in Sec. 600.53(b).
    (b) A foreign institution that has been determined eligible loses 
its eligibility on the date that the institution no longer meets any of 
the criteria in this subpart E.
    (c) Notwithstanding the provisions of 34 CFR 668.26, if a foreign 
institution loses its eligibility under this subpart E, an otherwise 
eligible student, continuously enrolled at the institution before the 
loss of eligibility, may receive an FFEL program loan for attendance at 
that institution for the academic year succeeding the academic year in 
which that institution lost its eligibility, if the student actually 
received an FFEL program loan for attendance at the institution for a 
period during which the institution was eligible under this subpart E.

(Authority: 20 U.S.C. 1082, 1088, 1099c)

[59 FR 22063, Apr. 28, 1994. Redesignated at 64 FR 58616, Oct. 29, 1999]

                          PART 601  [RESERVED]

[[Page 195]]



PART 602--THE SECRETARY'S RECOGNITION OF ACCREDITING AGENCIES--Table of Contents




                           Subpart A--General

Sec.
602.1  Why does the Secretary recognize accrediting agencies?
602.2  How do I know which agencies the Secretary recognizes?
602.3  What definitions apply to this part?

                 Subpart B--The Criteria for Recognition

                     Basic Eligibility Requirements

602.10  Link to Federal programs.
602.11  Geographic scope of accrediting activities.
602.12  Accrediting experience.
602.13  Acceptance of the agency by others.

             Organizational and Administrative Requirements

602.14  Purpose and organization.
602.15  Administrative and fiscal responsibilities.

                Required Standards and Their Application

602.16  Accreditation and preaccreditation standards.
602.17  Application of standards in reaching an accrediting decision.
602.18  Ensuring consistency in decision-making.
602.19  Monitoring and reevaluation of accredited institutions and 
          programs.
602.20  Enforcement of standards.
602.21  Review of standards.

               Required Operating Policies and Procedures

602.22  Substantive change.
602.23  Operating procedures all agencies must have.
602.24  Additional procedures certain institutional accreditors must 
          have.
602.25  Due process.
602.26  Notification of accrediting decisions.
602.27  Other information an agency must provide the Department.
602.28  Regard for decisions of States and other accrediting agencies.

                   Subpart C--The Recognition Process

               Application and Review by Department Staff

602.30  How does an agency apply for recognition?
602.31  How does Department staff review an agency's application?

 Review by the National Advisory Committee on Institutional Quality and 
                                Integrity

602.32  What is the role of the Advisory Committee and the senior 
          Department official in the review of an agency's application?
602.33  How may an agency appeal a recommendation of the Advisory 
          Committee?

                  Review and Decision by the Secretary

602.34  What does the Secretary consider when making a recognition 
          decision?
602.35  What information does the Secretary's recognition decision 
          include?
602.36  May an agency appeal the Secretary's final recognition decision?

    Subpart D--Limitation, Suspension, or Termination of Recognition

           Limitation, Suspension, and Termination Procedures

602.40  How may the Secretary limit, suspend, or terminate an agency's 
          recognition?
602.41  What are the notice procedures?
602.42  What are the response and hearing procedures?
602.43  How is a decision on limitation, suspension, or termination of 
          recognition reached?

                      Appeal Rights and Procedures

602.44  How may an agency appeal the subcommittee's recommendation?
602.45  May an agency appeal the Secretary's final decision to limit, 
          suspend, or terminate its recognition?

                 Subpart E--Department Responsibilities

602.50  What information does the Department share with a recognized 
          agency about its accredited institutions and programs?

    Authority: 20 U.S.C. 1099b, unless otherwise noted.

    Source: 64 FR 56617, Oct. 20, 1999, unless otherwise noted.



                           Subpart A--General



Sec. 602.1  Why does the Secretary recognize accrediting agencies?

    (a) The Secretary recognizes accrediting agencies to ensure that 
these agencies are, for the purposes of the Higher Education Act of 
1965, as amended (HEA), or for other Federal purposes, reliable 
authorities regarding

[[Page 196]]

the quality of education or training offered by the institutions or 
programs they accredit.
    (b) The Secretary lists an agency as a nationally recognized 
accrediting agency if the agency meets the criteria for recognition 
listed in subpart B of this part.

(Authority: 20 U.S.C. 1099b)



Sec. 602.2  How do I know which agencies the Secretary recognizes?

    (a) Periodically, the Secretary publishes a list of recognized 
agencies in the Federal Register, together with each agency's scope of 
recognition. You may obtain a copy of the list from the Department at 
any time. The list is also available on the Department's web site.
    (b) If the Secretary denies continued recognition to a previously 
recognized agency, or if the Secretary limits, suspends, or terminates 
the agency's recognition before the end of its recognition period, the 
Secretary publishes a notice of that action in the Federal Register. The 
Secretary also makes the reasons for the action available to the public, 
on request.

(Authority: 20 U.S.C. 1099b)



Sec. 602.3  What definitions apply to this part?

    The following definitions apply to this part:
    Accreditation means the status of public recognition that an 
accrediting agency grants to an educational institution or program that 
meets the agency's standards and requirements.
    Accrediting agency or agency means a legal entity, or that part of a 
legal entity, that conducts accrediting activities through voluntary, 
non-Federal peer review and makes decisions concerning the accreditation 
or preaccreditation status of institutions, programs, or both.
    Act means the Higher Education Act of 1965, as amended.
    Adverse accrediting action or adverse action means the denial, 
withdrawal, suspension, revocation, or termination of accreditation or 
preaccreditation, or any comparable accrediting action an agency may 
take against an institution or program.
    Advisory Committee means the National Advisory Committee on 
Institutional Quality and Integrity.
    Branch campus means a location of an institution that meets the 
definition of branch campus in 34 CFR 600.2.
    Distance education means an educational process that is 
characterized by the separation, in time or place, between instructor 
and student. The term includes courses offered principally through the 
use of--
    (1) Television, audio, or computer transmission, such as open 
broadcast, closed circuit, cable, microwave, or satellite transmission;
    (2) Audio or computer conferencing;
    (3) Video cassettes or disks; or
    (4) Correspondence.
    Final accrediting action means a final determination by an 
accrediting agency regarding the accreditation or preaccreditation 
status of an institution or program. A final accrediting action is not 
appealable within the agency.
    Institution of higher education or institution means an educational 
institution that qualifies, or may qualify, as an eligible institution 
under 34 CFR part 600.
    Institutional accrediting agency means an agency that accredits 
institutions of higher education.
    Nationally recognized accrediting agency, nationally recognized 
agency, or recognized agency means an accrediting agency that the 
Secretary recognizes under this part.
    Preaccreditation means the status of public recognition that an 
accrediting agency grants to an institution or program for a limited 
period of time that signifies the agency has determined that the 
institution or program is progressing towards accreditation and is 
likely to attain accreditation before the expiration of that limited 
period of time.
    Program means a postsecondary educational program offered by an 
institution of higher education that leads to an academic or 
professional degree, certificate, or other recognized educational 
credential.

[[Page 197]]

    Programmatic accrediting agency means an agency that accredits 
specific educational programs that prepare students for entry into a 
profession, occupation, or vocation.
    Representative of the public means a person who is not--
    (1) An employee, member of the governing board, owner, or 
shareholder of, or consultant to, an institution or program that either 
is accredited or preaccredited by the agency or has applied for 
accreditation or preaccreditation;
    (2) A member of any trade association or membership organization 
related to, affiliated with, or associated with the agency; or
    (3) A spouse, parent, child, or sibling of an individual identified 
in paragraph (1) or (2) of this definition.
    Scope of recognition or scope means the range of accrediting 
activities for which the Secretary recognizes an agency. The Secretary 
may place a limitation on the scope of an agency's recognition for Title 
IV, HEA purposes. The Secretary's designation of scope defines the 
recognition granted according to--
    (1) Geographic area of accrediting activities;
    (2) Types of degrees and certificates covered;
    (3) Types of institutions and programs covered;
    (4) Types of preaccreditation status covered, if any; and
    (5) Coverage of accrediting activities related to distance 
education, if any.
    Secretary means the Secretary of the U.S. Department of Education or 
any official or employee of the Department acting for the Secretary 
under a delegation of authority.
    Senior Department official means the senior official in the U.S. 
Department of Education who reports directly to the Secretary regarding 
accrediting agency recognition.
    State means a State of the Union, American Samoa, the Commonwealth 
of Puerto Rico, the District of Columbia, Guam, the United States Virgin 
Islands, the Commonwealth of the Northern Mariana Islands, the Republic 
of the Marshall Islands, the Federated States of Micronesia, and the 
Republic of Palau. The latter three are also known as the Freely 
Associated States.
    Teach-out agreement means a written agreement between institutions 
that provides for the equitable treatment of students if one of those 
institutions stops offering an educational program before all students 
enrolled in that program have completed the program.

(Authority: 20 U.S.C. 1099b)



                 Subpart B--The Criteria for Recognition

                     Basic Eligibility Requirements



Sec. 602.10  Link to Federal programs.

    The agency must demonstrate that--
    (a) If the agency accredits institutions of higher education, its 
accreditation is a required element in enabling at least one of those 
institutions to establish eligibility to participate in HEA programs; or
    (b) If the agency accredits institutions of higher education or 
higher education programs, or both, its accreditation is a required 
element in enabling at least one of those entities to establish 
eligibility to participate in non-HEA Federal programs.

(Authority: 20 U.S.C. 1099b)



Sec. 602.11  Geographic scope of accrediting activities.

    The agency must demonstrate that its accrediting activities cover--
    (a) A State, if the agency is part of a State government;
    (b) A region of the United States that includes at least three 
States that are reasonably close to one another; or
    (c) The United States.

(Authority: 20 U.S.C. 1099b)



Sec. 602.12  Accrediting experience.

    (a) An agency seeking initial recognition must demonstrate that it 
has--
    (1) Granted accreditation or preaccreditation--
    (i) To one or more institutions if it is requesting recognition as 
an institutional accrediting agency and to one or more programs if it is 
requesting recognition as a programmatic accrediting agency;
    (ii) That covers the range of the specific degrees, certificates, 
institutions,

[[Page 198]]

and programs for which it seeks recognition; and
    (iii) In the geographic area for which it seeks recognition; and
    (2) Conducted accrediting activities, including deciding whether to 
grant or deny accreditation or preaccreditation, for at least two years 
prior to seeking recognition.
    (b) A recognized agency seeking an expansion of its scope of 
recognition must demonstrate that it has granted accreditation or 
preaccreditation covering the range of the specific degrees, 
certificates, institutions, and programs for which it seeks the 
expansion of scope.


(Authority: 20 U.S.C. 1099b)



Sec. 602.13  Acceptance of the agency by others.

    The agency must demonstrate that its standards, policies, 
procedures, and decisions to grant or deny accreditation are widely 
accepted in the United States by--
    (a) Educators and educational institutions; and
    (b) Licensing bodies, practitioners, and employers in the 
professional or vocational fields for which the educational institutions 
or programs within the agency's jurisdiction prepare their students.

(Authority: 20 U.S.C. 1099b)

             Organizational and Administrative Requirements



Sec. 602.14  Purpose and organization.

    (a) The Secretary recognizes only the following four categories of 
agencies:

------------------------------------------------------------------------
 The Secretary recognizes . .
              .                                that . . .
------------------------------------------------------------------------
(1) An accrediting agency....  (i) Has a voluntary membership of
                                institutions of higher education;
                               (ii) Has as a principal purpose the
                                accrediting of institutions of higher
                                education and that accreditation is a
                                required element in enabling those
                                institutions to participate in HEA
                                programs; and
                               (iii) Satisfies the ``separate and
                                independent'' requirements in paragraph
                                (b) of this section.
(2) An accrediting agency....  (i) Has a voluntary membership; and
                               (ii) Has as its principal purpose the
                                accrediting of higher education
                                programs, or higher education programs
                                and institutions of higher education,
                                and that accreditation is a required
                                element in enabling those entities to
                                participate in non-HEA Federal programs.
(3) An accrediting agency....  for purposes of determining eligibility
                                for Title IV, HEA programs--
                               (i) Either has a voluntary membership of
                                individuals participating in a
                                profession or has as its principal
                                purpose the accrediting of programs
                                within institutions that are accredited
                                by a nationally recognized accrediting
                                agency; and
                               (ii) Either satisfies the ``separate and
                                independent'' requirements in paragraph
                                (b) of this section or obtains a waiver
                                of those requirements under paragraphs
                                (d) and (e) of this section.
(4) A State agency...........  (i) Has as a principal purpose the
                                accrediting of institutions of higher
                                education, higher education programs, or
                                both; and
                               (ii) The Secretary listed as a nationally
                                recognized accrediting agency on or
                                before October 1, 1991 and has
                                recognized continuously since that date.
------------------------------------------------------------------------

    (b) For purposes of this section, the term separate and independent 
means that--
    (1) The members of the agency's decision-making body--who decide the 
accreditation or preaccreditation status of institutions or programs, 
establish the agency's accreditation policies, or both--are not elected 
or selected by the board or chief executive officer of any related, 
associated, or affiliated trade association or membership organization;
    (2) At least one member of the agency's decision-making body is a 
representative of the public, and at least one-seventh of that body 
consists of representatives of the public;
    (3) The agency has established and implemented guide lines for each 
member of the decision-making body to avoid conflicts of interest in 
making decisions;

[[Page 199]]

    (4) The agency's dues are paid separately from any dues paid to any 
related, associated, or affiliated trade association or membership 
organization; and
    (5) The agency develops and determines its own budget, with no 
review by or consultation with any other entity or organization.
    (c) The Secretary considers that any joint use of personnel, 
services, equipment, or facilities by an agency and a related, 
associated, or affiliated trade association or membership organization 
does not violate the ``separate and independent'' requirements in 
paragraph (b) of this section if--
    (1) The agency pays the fair market value for its proportionate 
share of the joint use; and
    (2) The joint use does not compromise the independence and 
confidentiality of the accreditation process.
    (d) For purposes of paragraph (a)(3) of this section, the Secretary 
may waive the ``separate and independent'' requirements in paragraph (b) 
of this section if the agency demonstrates that--
    (1) The Secretary listed the agency as a nationally recognized 
agency on or before October 1, 1991 and has recognized it continuously 
since that date;
    (2) The related, associated, or affiliated trade association or 
membership organization plays no role in making or ratifying either the 
accrediting or policy decisions of the agency;
    (3) The agency has sufficient budgetary and administrative autonomy 
to carry out its accrediting functions independently; and
    (4) The agency provides to the related, associated, or affiliated 
trade association or membership organization only information it makes 
available to the public.
    (e) An agency seeking a waiver of the ``separate and independent'' 
requirements under paragraph (d) of this section must apply for the 
waiver each time the agency seeks recognition or continued recognition.

(Authority: 20 U.S.C. 1099b)



Sec. 602.15  Administrative and fiscal responsibilities.

    The agency must have the administrative and fiscal capability to 
carry out its accreditation activities in light of its requested scope 
of recognition. The agency meets this requirement if the agency 
demonstrates that--
    (a) The agency has--
    (1) Adequate administrative staff and financial resources to carry 
out its accrediting responsibilities;
    (2) Competent and knowledgeable individuals, qualified by education 
and experience in their own right and trained by the agency on its 
standards, policies, and procedures, to conduct its on-site evaluations, 
establish its policies, and make its accrediting and preaccrediting 
decisions;
    (3) Academic and administrative personnel on its evaluation, policy, 
and decision-making bodies, if the agency accredits institutions;
    (4) Educators and practitioners on its evaluation, policy, and 
decision-making bodies, if the agency accredits programs or single-
purpose institutions that prepare students for a specific profession;
    (5) Representatives of the public on all decision-making bodies; and
    (6) Clear and effective controls against conflicts of interest, or 
the appearance of conflicts of interest, by the agency's--
    (i) Board members;
    (ii) Commissioners;
    (iii) Evaluation team members;
    (iv) Consultants;
    (v) Administrative staff; and
    (vi) Other agency representatives; and
    (b) The agency maintains complete and accurate records of--
    (1) Its last two full accreditation or preaccreditation reviews of 
each institution or program, including on-site evaluation team reports, 
the institution's or program's responses to on-site reports, periodic 
review reports, any reports of special reviews conducted by the agency 
between regular reviews, and a copy of the institution's or program's 
most recent self-study; and
    (2) All decisions regarding the accreditation and preaccreditation 
of any institution or program, including all correspondence that is 
significantly related to those decisions.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)

[[Page 200]]

                Required Standards and Their Application



Sec. 602.16  Accreditation and preaccreditation standards.

    (a) The agency must demonstrate that it has standards for 
accreditation, and preaccreditation, if offered, that are sufficiently 
rigorous to ensure that the agency is a reliable authority regarding the 
quality of the education or training provided by the institutions or 
programs it accredits. The agency meets this requirement if--
    (1) The agency's accreditation standards effectively address the 
quality of the institution or program in the following areas:
    (i) Success with respect to student achievement in relation to the 
institution's mission, including, as appropriate, consideration of 
course completion, State licensing examination, and job placement rates.
    (ii) Curricula.
    (iii) Faculty.
    (iv) Facilities, equipment, and supplies.
    (v) Fiscal and administrative capacity as appropriate to the 
specified scale of operations.
    (vi) Student support services.
    (vii) Recruiting and admissions practices, academic calendars, 
catalogs, publications, grading, and advertising.
    (viii) Measures of program length and the objectives of the degrees 
or credentials offered.
    (ix) Record of student complaints received by, or available to, the 
agency.
    (x) Record of compliance with the institution's program 
responsibilities under Title IV of the Act, based on the most recent 
student loan default rate data provided by the Secretary, the results of 
financial or compliance audits, program reviews, and any other 
information that the Secretary may provide to the agency; and
    (2) The agency's preaccreditation standards, if offered, are 
appropriately related to the agency's accreditation standards and do not 
permit the institution or program to hold preaccreditation status for 
more than five years.
    (b) If the agency only accredits programs and does not serve as an 
institutional accrediting agency for any of those programs, its 
accreditation standards must address the areas in paragraph (a)(1) of 
this section in terms of the type and level of the program rather than 
in terms of the institution.
    (c) If none of the institutions an agency accredits participates in 
any Title IV, HEA program, or if the agency only accredits programs 
within institutions that are accredited by a nationally recognized 
institutional accrediting agency, the agency is not required to have the 
accreditation standards described in paragraphs (a)(1)(viii) and 
(a)(1)(x) of this section.
    (d) An agency that has established and applies the standards in 
paragraph (a) of this section may establish any additional accreditation 
standards it deems appropriate.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.17  Application of standards in reaching an accrediting decision.

    The agency must have effective mechanisms for evaluating an 
institution's or program's compliance with the agency's standards before 
reaching a decision to accredit or preaccredit the institution or 
program. The agency meets this requirement if the agency demonstrates 
that it--
    (a) Evaluates whether an institution or program--
    (1) Maintains clearly specified educational objectives that are 
consistent with its mission and appropriate in light of the degrees or 
certificates awarded;
    (2) Is successful in achieving its stated objectives; and
    (3) Maintains degree and certificate requirements that at least 
conform to commonly accepted standards;
    (b) Requires the institution or program to prepare, following 
guidance provided by the agency, an in-depth self-study that includes 
the assessment of educational quality and the institution's or program's 
continuing efforts to improve educational quality;
    (c) Conducts at least one on-site review of the institution or 
program during which it obtains sufficient information to determine if 
the institution or

[[Page 201]]

program complies with the agency's standards;
    (d) Allows the institution or program the opportunity to respond in 
writing to the report of the on-site review;
    (e) Conducts its own analysis of the self-study and supporting 
documentation furnished by the institution or program, the report of the 
on-site review, the institution's or program's response to the report, 
and any other appropriate information from other sources to determine 
whether the institution or program complies with the agency's standards; 
and
    (f) Provides the institution or program with a detailed written 
report that assesses--
    (1) The institution's or program's compliance with the agency's 
standards, including areas needing improvement; and
    (2) The institution's or program's performance with respect to 
student achievement.

(Authority: 20 U.S.C. 1099b)



Sec. 602.18  Ensuring consistency in decision-making.

    The agency must consistently apply and enforce its standards to 
ensure that the education or training offered by an institution or 
program, including any offered through distance education, is of 
sufficient quality to achieve its stated objective for the duration of 
any accreditation or preaccreditation period granted by the agency. The 
agency meets this requirement if the agency--
    (a) Has effective controls against the inconsistent application of 
the agency's standards;
    (b) Bases decisions regarding accreditation and preaccreditation on 
the agency's published standards; and
    (c) Has a reasonable basis for determining that the information the 
agency relies on for making accrediting decisions is accurate.

(Authority: 20 U.S.C. 1099b)



Sec. 602.19  Monitoring and reevaluation of accredited institutions and programs.

    (a) The agency must reevaluate, at regularly established intervals, 
the institutions or programs it has accredited or preaccredited.
    (b) The agency must monitor institutions or programs throughout 
their accreditation or preaccreditation period to ensure that they 
remain in compliance with the agency's standards. This includes 
conducting special evaluations or site visits, as necessary.

(Authority: 20 U.S.C. 1099b)



Sec. 602.20  Enforcement of standards.

    (a) If the agency's review of an institution or program under any 
standard indicates that the institution or program is not in compliance 
with that standard, the agency must--
    (1) Immediately initiate adverse action against the institution or 
program; or
    (2) Require the institution or program to take appropriate action to 
bring itself into compliance with the agency's standards within a time 
period that must not exceed--
    (i) Twelve months, if the program, or the longest program offered by 
the institution, is less than one year in length;
    (ii) Eighteen months, if the program, or the longest program offered 
by the institution, is at least one year, but less than two years, in 
length; or
    (iii) Two years, if the program, or the longest program offered by 
the institution, is at least two years in length.
    (b) If the institution or program does not bring itself into 
compliance within the specified period, the agency must take immediate 
adverse action unless the agency, for good cause, extends the period for 
achieving compliance.

(Authority: 20 U.S.C. 1099b)



Sec. 602.21  Review of standards.

    (a) The agency must maintain a systematic program of review that 
demonstrates that its standards are adequate to evaluate the quality of 
the education or training provided by the institutions and programs it 
accredits and relevant to the educational or training needs of students.
    (b) The agency determines the specific procedures it follows in 
evaluating its standards, but the agency must ensure that its program of 
review--
    (1) Is comprehensive;

[[Page 202]]

    (2) Occurs at regular, yet reasonable, intervals or on an ongoing 
basis;
    (3) Examines each of the agency's standards and the standards as a 
whole; and
    (4) Involves all of the agency's relevant constituencies in the 
review and affords them a meaningful opportunity to provide input into 
the review.
    (c) If the agency determines, at any point during its systematic 
program of review, that it needs to make changes to its standards, the 
agency must initiate action within 12 months to make the changes and 
must complete that action within a reasonable period of time. Before 
finalizing any changes to its standards, the agency must--
    (1) Provide notice to all of the agency's relevant constituencies, 
and other parties who have made their interest known to the agency, of 
the changes the agency proposes to make;
    (2) Give the constituencies and other interested parties adequate 
opportunity to comment on the proposed changes; and
    (3) Take into account any comments on the proposed changes submitted 
timely by the relevant constituencies and by other interested parties.

(Authority: 20 U.S.C. 1099b)

               Required Operating Policies and Procedures



Sec. 602.22  Substantive change.

    (a) If the agency accredits institutions, it must maintain adequate 
substantive change policies that ensure that any substantive change to 
the educational mission, program, or programs of an institution after 
the agency has accredited or preaccredited the institution does not 
adversely affect the capacity of the institution to continue to meet the 
agency's standards. The agency meets this requirement if--
    (1) The agency requires the institution to obtain the agency's 
approval of the substantive change before the agency includes the change 
in the scope of accreditation or preaccreditation it previously granted 
to the institution; and
    (2) The agency's definition of substantive change includes at least 
the following types of change:
    (i) Any change in the established mission or objectives of the 
institution.
    (ii) Any change in the legal status, form of control, or ownership 
of the institution.
    (iii) The addition of courses or programs that represent a 
significant departure, in either content or method of delivery, from 
those that were offered when the agency last evaluated the institution.
    (iv) The addition of courses or programs at a degree or credential 
level above that which is included in the institution's current 
accreditation or preaccreditation.
    (v) A change from clock hours to credit hours.
    (vi) A substantial increase in the number of clock or credit hours 
awarded for successful completion of a program.
    (vii) The establishment of an additional location geographically 
apart from the main campus at which the institution offers at least 50 
percent of an educational program.
    (b) The agency may determine the procedures it uses to grant prior 
approval of the substantive change. Except as provided in paragraph (c) 
of this section, these may, but need not, require a visit by the agency.
    (c) If the agency's accreditation of an institution enables the 
institution to seek eligibility to participate in Title IV, HEA 
programs, the agency's procedures for the approval of an additional 
location described in paragraph (a)(2)(vii) of this section must 
determine if the institution has the fiscal and administrative capacity 
to operate the additional location. In addition, the agency's procedures 
must include--
    (1) A visit, within six months, to each additional location the 
institution establishes, if the institution--
    (i) Has a total of three or fewer additional locations;
    (ii) Has not demonstrated, to the agency's satisfaction, that it has 
a proven record of effective educational oversight of additional 
locations; or
    (iii) Has been placed on warning, probation, or show cause by the 
agency or is subject to some limitation by the agency on its 
accreditation or preaccreditation status;

[[Page 203]]

    (2) An effective mechanism for conducting, at reasonable intervals, 
visits to additional locations of institutions that operate more than 
three additional locations; and
    (3) An effective mechanism, which may, at the agency's discretion, 
include visits to additional locations, for ensuring that accredited and 
preaccredited institutions that experience rapid growth in the number of 
additional locations maintain educational quality.
    (d) The purpose of the visits described in paragraph (c) of this 
section is to verify that the additional location has the personnel, 
facilities, and resources it claimed to have in its application to the 
agency for approval of the additional location.

(Authority: 20 U.S.C. 1099b)



Sec. 602.23  Operating procedures all agencies must have.

    (a) The agency must maintain and make available to the public, upon 
request, written materials describing--
    (1) Each type of accreditation and preaccreditation it grants;
    (2) The procedures that institutions or programs must follow in 
applying for accreditation or preaccreditation;
    (3) The standards and procedures it uses to determine whether to 
grant, reaffirm, reinstate, restrict, deny, revoke, terminate, or take 
any other action related to each type of accreditation and 
preaccreditation that the agency grants;
    (4) The institutions and programs that the agency currently 
accredits or preaccredits and, for each institution and program, the 
year the agency will next review or reconsider it for accreditation or 
preaccreditation; and
    (5) The names, academic and professional qualifications, and 
relevant employment and organizational affiliations of--
    (i) The members of the agency's policy and decision-making bodies; 
and
    (ii) The agency's principal administrative staff.
    (b) In providing public notice that an institution or program 
subject to its jurisdiction is being considered for accreditation or 
preaccreditation, the agency must provide an opportunity for third-party 
comment concerning the institution's or program's qualifications for 
accreditation or preaccreditation. At the agency's discretion, third-
party comment may be received either in writing or at a public hearing, 
or both.
    (c) The accrediting agency must--
    (1) Review in a timely, fair, and equitable manner any complaint it 
receives against an accredited institution or program that is related to 
the agency's standards or procedures;
    (2) Take follow-up action, as necessary, including enforcement 
action, if necessary, based on the results of its review; and
    (3) Review in a timely, fair, and equitable manner, and apply 
unbiased judgment to, any complaints against itself and take follow-up 
action, as appropriate, based on the results of its review.
    (d) If an institution or program elects to make a public disclosure 
of its accreditation or preaccreditation status, the agency must ensure 
that the institution or program discloses that status accurately, 
including the specific academic or instructional programs covered by 
that status and the name, address, and telephone number of the agency.
    (e) The accrediting agency must provide for the public correction of 
incorrect or misleading information an accredited or preaccredited 
institution or program releases about--
    (1) The accreditation or preaccreditation status of the institution 
or program;
    (2) The contents of reports of on-site reviews; and
    (3) The agency's accrediting or preaccrediting actions with respect 
to the institution or program.
    (f) The agency may establish any additional operating procedures it 
deems appropriate. At the agency's discretion, these may include 
unannounced inspections.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.24  Additional procedures certain institutional accreditors must have.

    If the agency is an institutional accrediting agency and its 
accreditation

[[Page 204]]

or preaccreditation enables those institutions to obtain eligibility to 
participate in Title IV, HEA programs, the agency must demonstrate that 
it has established and uses all of the following procedures:
    (a) Branch campus. (1) The agency must require the institution to 
notify the agency if it plans to establish a branch campus and to submit 
a business plan for the branch campus that describes--
    (i) The educational program to be offered at the branch campus;
    (ii) The projected revenues and expenditures and cash flow at the 
branch campus; and
    (iii) The operation, management, and physical resources at the 
branch campus.
    (2) The agency may extend accreditation to the branch campus only 
after it evaluates the business plan and takes whatever other actions it 
deems necessary to determine that the branch campus has sufficient 
educational, financial, operational, management, and physical resources 
to meet the agency's standards.
    (3) The agency must undertake a site visit to the branch campus as 
soon as practicable, but no later than six months after the 
establishment of that campus.
    (b) Change in ownership. The agency must undertake a site visit to 
an institution that has undergone a change of ownership that resulted in 
a change of control as soon as practicable, but no later than six months 
after the change of ownership.
    (c) Teach-out agreements. (1) The agency must require an institution 
it accredits or preaccredits that enters into a teach-out agreement with 
another institution to submit that teach-out agreement to the agency for 
approval.
    (2) The agency may approve the teach-out agreement only if the 
agreement is between institutions that are accredited or preaccredited 
by a nationally recognized accrediting agency, is consistent with 
applicable standards and regulations, and provides for the equitable 
treatment of students by ensuring that--
    (i) The teach-out institution has the necessary experience, 
resources, and support services to provide an educational program that 
is of acceptable quality and reasonably similar in content, structure, 
and scheduling to that provided by the closed institution; and
    (ii) The teach-out institution demonstrates that it can provide 
students access to the program and services without requiring them to 
move or travel substantial distances.
    (3) If an institution the agency accredits or preaccredits closes, 
the agency must work with the Department and the appropriate State 
agency, to the extent feasible, to ensure that students are given 
reasonable opportunities to complete their education without additional 
charge.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.25  Due process.

    The agency must demonstrate that the procedures it uses throughout 
the accrediting process satisfy due process. The agency meets this 
requirement if the agency does the following:
    (a) The agency uses procedures that afford an institution or program 
a reasonable period of time to comply with the agency's requests for 
information and documents.
    (b) The agency notifies the institution or program in writing of any 
adverse accrediting action or an action to place the institution or 
program on probation or show cause. The notice describes the basis for 
the action.
    (c) The agency permits the institution or program the opportunity to 
appeal an adverse action and the right to be represented by counsel 
during that appeal. If the agency allows institutions or programs the 
right to appeal other types of actions, the agency has the discretion to 
limit the appeal to a written appeal.
    (d) The agency notifies the institution or program in writing of the 
result of its appeal and the basis for that result.

(Authority: 20 U.S.C. 1099b)



Sec. 602.26  Notification of accrediting decisions.

    The agency must demonstrate that it has established and follows 
written

[[Page 205]]

procedures requiring it to provide written notice of its accrediting 
decisions to the Secretary, the appropriate State licensing or 
authorizing agency, the appropriate accrediting agencies, and the 
public. The agency meets this requirement if the agency, following its 
written procedures--
    (a) Provides written notice of the following types of decisions to 
the Secretary, the appropriate State licensing or authorizing agency, 
the appropriate accrediting agencies, and the public no later than 30 
days after it makes the decision:
    (1) A decision to award initial accreditation or preaccreditation to 
an institution or program.
    (2) A decision to renew an institution's or program's accreditation 
or preaccreditation;
    (b) Provides written notice of the following types of decisions to 
the Secretary, the appropriate State licensing or authorizing agency, 
and the appropriate accrediting agencies at the same time it notifies 
the institution or program of the decision, but no later than 30 days 
after it reaches the decision:
    (1) A final decision to place an institution or program on probation 
or an equivalent status.
    (2) A final decision to deny, withdraw, suspend, revoke, or 
terminate the accreditation or preaccreditation of an institution or 
program;
    (c) Provides written notice to the public of the decisions listed in 
paragraphs (b)(1) and (b)(2) of this section within 24 hours of its 
notice to the institution or program;
    (d) For any decision listed in paragraph (b)(2) of this section, 
makes available to the Secretary, the appropriate State licensing or 
authorizing agency, and the public upon request, no later than 60 days 
after the decision, a brief statement summarizing the reasons for the 
agency's decision and the comments, if any, that the affected 
institution or program may wish to make with regard to that decision; 
and
    (e) Notifies the Secretary, the appropriate State licensing or 
authorizing agency, the appropriate accrediting agencies, and, upon 
request, the public if an accredited or preaccredited institution or 
program--
    (1) Decides to withdraw voluntarily from accreditation or 
preaccreditation, within 30 days of receiving notification from the 
institution or program that it is withdrawing voluntarily from 
accreditation or preaccreditation; or
    (2) Lets its accreditation or preaccreditation lapse, within 30 days 
of the date on which accreditation or preaccreditation lapses.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.27  Other information an agency must provide the Department.

    The agency must submit to the Department--
    (a) A copy of any annual report it prepares;
    (b) A copy, updated annually, of its directory of accredited and 
preaccredited institutions and programs;
    (c) A summary of the agency's major accrediting activities during 
the previous year (an annual data summary), if requested by the 
Secretary to carry out the Secretary's responsibilities related to this 
part;
    (d) Any proposed change in the agency's policies, procedures, or 
accreditation or preaccreditation standards that might alter its--
    (1) Scope of recognition; or
    (2) Compliance with the criteria for recognition;
    (e) The name of any institution or program it accredits that the 
agency has reason to believe is failing to meet its Title IV, HEA 
program responsibilities or is engaged in fraud or abuse, along with the 
agency's reasons for concern about the institution or program; and
    (f) If the Secretary requests, information that may bear upon an 
accredited or preaccredited institution's compliance with its Title IV, 
HEA program responsibilities, including the eligibility of the 
institution or program to participate in Title IV, HEA programs. The 
Secretary may ask for this information to assist the Department in 
resolving problems with the institution's

[[Page 206]]

participation in the Title IV, HEA programs.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.28  Regard for decisions of States and other accrediting agencies.

    (a) If the agency is an institutional accrediting agency, it may not 
accredit or preaccredit institutions that lack legal authorization under 
applicable State law to provide a program of education beyond the 
secondary level.
    (b) Except as provided in paragraph (c) of this section, the agency 
may not grant initial or renewed accreditation or preaccreditation to an 
institution, or a program offered by an institution, if the agency 
knows, or has reasonable cause to know, that the institution is the 
subject of--
    (1) A pending or final action brought by a State agency to suspend, 
revoke, withdraw, or terminate the institution's legal authority to 
provide postsecondary education in the State;
    (2) A decision by a recognized agency to deny accreditation or 
preaccreditation;
    (3) A pending or final action brought by a recognized accrediting 
agency to suspend, revoke, withdraw, or terminate the institution's 
accreditation or preaccreditation; or
    (4) Probation or an equivalent status imposed by a recognized 
agency.
    (c) The agency may grant accreditation or preaccreditation to an 
institution or program described in paragraph (b) of this section only 
if it provides to the Secretary, within 30 days of its action, a 
thorough and reasonable explanation, consistent with its standards, why 
the action of the other body does not preclude the agency's grant of 
accreditation or preaccreditation.
    (d) If the agency learns that an institution it accredits or 
preaccredits, or an institution that offers a program it accredits or 
preaccredits, is the subject of an adverse action by another recognized 
accrediting agency or has been placed on probation or an equivalent 
status by another recognized agency, the agency must promptly review its 
accreditation or preaccreditation of the institution or program to 
determine if it should also take adverse action or place the institution 
or program on probation or show cause.
    (e) The agency must, upon request, share with other appropriate 
recognized accrediting agencies and recognized State approval agencies 
information about the accreditation or preaccreditation status of an 
institution or program and any adverse actions it has taken against an 
accredited or preaccredited institution or program.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



                   Subpart C--The Recognition Process

               Application and Review by Department Staff



Sec. 602.30  How does an agency apply for recognition?

    (a) An accrediting agency seeking initial or continued recognition 
must submit a written application to the Secretary. The application must 
consist of--
    (1) A statement of the agency's requested scope of recognition;
    (2) Evidence that the agency complies with the criteria for 
recognition listed in subpart B of this part; and
    (3) Supporting documentation.
    (b) By submitting an application for recognition, the agency 
authorizes Department staff to observe its site visits and decision 
meetings and to gain access to agency records, personnel, and facilities 
on an announced or unannounced basis.
    (c) The Secretary does not make available to the public any 
confidential agency materials a Department employee reviews during the 
evaluation of either the agency's application for recognition or the 
agency's compliance with the criteria for recognition.

(Approved by the Office of Management and Budget under control number 
1845-0003)

(Authority: 20 U.S.C. 1099b)



Sec. 602.31  How does Department staff review an agency's application?

    (a) Upon receipt of an agency's application for either initial or 
continued recognition, Department staff--

[[Page 207]]

    (1) Establishes a schedule for the review of the agency by 
Department staff, the National Advisory Committee on Institutional 
Quality and Integrity, and the Secretary;
    (2) Publishes a notice of the agency's application in the Federal 
Register, inviting the public to comment on the agency's compliance with 
the criteria for recognition and establishing a deadline for receipt of 
public comment; and
    (3) Provides State licensing or authorizing agencies, all currently 
recognized accrediting agencies, and other appropriate organizations 
with copies of the Federal Register notice.
    (b) Department staff analyzes the agency's application to determine 
whether the agency satisfies the criteria for recognition, taking into 
account all available relevant information concerning the compliance of 
the agency with those criteria and any deficiencies in the agency's 
performance with respect to the criteria. The analysis includes--
    (1) Site visits, on an announced or unannounced basis, to the agency 
and, at the Secretary's discretion, to some of the institutions or 
programs it accredits or preaccredits;
    (2) Review of the public comments and other third-party information 
the Department staff receives by the established deadline, as well as 
any other information Department staff assembles for purposes of 
evaluating the agency under this part; and
    (3) Review of complaints or legal actions involving the agency.
    (c) Department staff's evaluation may also include a review of 
information directly related to institutions or programs accredited or 
preaccredited by the agency relative to their compliance with the 
agency's standards, the effectiveness of the standards, and the agency's 
application of those standards.
    (d) If, at any point in its evaluation of an agency seeking initial 
recognition, Department staff determines that the agency fails to 
demonstrate substantial compliance with the basic eligibility 
requirements in Secs. 602.10 through 602.13, the staff--
    (1) Returns the agency's application and provides the agency with an 
explanation of the deficiencies that caused staff to take that action; 
and
    (2) Recommends that the agency withdraw its application and reapply 
when the agency can demonstrate compliance.
    (e) Except with respect to an application that is withdrawn under 
paragraph (d) of this section, when Department staff completes its 
evaluation of the agency, the staff--
    (1) Prepares a written analysis of the agency, which includes a 
recognition recommendation;
    (2) Sends the analysis and all supporting documentation, including 
all third-party comments the Department received by the established 
deadline, to the agency no later than 45 days before the Advisory 
Committee meeting; and
    (3) Invites the agency to provide a written response to the staff 
analysis and third-party comments, specifying a deadline for the 
response that is at least two weeks before the Advisory Committee 
meeting.
    (f) If Department staff fails to provide the agency with the 
materials described in paragraph (e)(2) of this section at least 45 days 
before the Advisory Committee meeting, the agency may request that the 
Advisory Committee defer acting on the application at that meeting. If 
Department staff's failure to send the materials at least 45 days before 
the Advisory Committee meeting is due to the failure of the agency to 
submit reports or other information the Secretary requested by the 
deadline the Secretary established, the agency forfeits its right to 
request a deferral.
    (g) Department staff reviews any response to the staff analysis that 
the agency submits. If necessary, Department staff prepares an addendum 
to the staff analysis and provides the agency with a copy.
    (h) Before the Advisory Committee meeting, Department staff provides 
the Advisory Committee with the following information:
    (1) The agency's application for recognition and supporting 
documentation.
    (2) The Department staff analysis of the agency.
    (3) Any written third-party comments the Department received about

[[Page 208]]

the agency on or before the established deadline.
    (4) Any agency response to either the Department staff analysis or 
third-party comments.
    (5) Any addendum to the Department staff analysis.
    (6) Any other information Department staff relied on in developing 
its analysis.
    (i) At least 30 days before the Advisory Committee meeting, the 
Department publishes a notice of the meeting in the Federal Register 
inviting interested parties, including those who submitted third-party 
comments concerning the agency's compliance with the criteria for 
recognition, to make oral presentations before the Advisory Committee.

(Authority: 20 U.S.C. 1099b)

 Review by the National Advisory Committee on Institutional Quality and 
                                Integrity



Sec. 602.32  What is the role of the Advisory Committee and the senior Department official in the review of an agency's application?

    (a) The Advisory Committee considers an agency's application for 
recognition at a public meeting and invites Department staff, the 
agency, and other interested parties to make oral presentations at the 
meeting. A transcript is made of each Advisory Committee meeting.
    (b) When it concludes its review, the Advisory Committee recommends 
that the Secretary either approve or deny recognition or that the 
Secretary defer a decision on the agency's application for recognition.
    (1)(i) The Advisory Committee recommends approval of recognition if 
the agency complies with the criteria for recognition listed in subpart 
B of this part and if the agency is effective in its performance with 
respect to those criteria.
    (ii) If the Advisory Committee recommends approval, the Advisory 
Committee also recommends a recognition period and a scope of 
recognition.
    (iii) If the recommended scope or period of recognition is less than 
that requested by the agency, the Advisory Committee explains its 
reasons for recommending the lesser scope or recognition period.
    (2)(i) If the agency fails to comply with the criteria for 
recognition in subpart B of this part, or if the agency is not effective 
in its performance with respect to those criteria, the Advisory 
Committee recommends denial of recognition, unless the Advisory 
Committee concludes that a deferral under paragraph (b)(3) of this 
section is warranted.
    (ii) If the Advisory Committee recommends denial, the Advisory 
Committee specifies the reasons for its recommendation, including all 
criteria the agency fails to meet and all areas in which the agency 
fails to perform effectively.
    (3)(i) The Advisory Committee may recommend deferral of a decision 
on recognition if it concludes that the agency's deficiencies do not 
warrant immediate loss of recognition and if it concludes that the 
agency will demonstrate or achieve compliance with the criteria for 
recognition and effective performance with respect to those criteria 
before the expiration of the deferral period.
    (ii) In its deferral recommendation, the Advisory Committee states 
the bases for its conclusions, specifies any criteria for recognition 
the agency fails to meet, and identifies any areas in which the agency 
fails to perform effectively with respect to the criteria.
    (iii) The Advisory Committee also recommends a deferral period, 
which may not exceed 12 months, either as a single deferral period or in 
combination with any expiring deferral period in which similar 
deficiencies in compliance or performance were cited by the Secretary.
    (c) At the conclusion of its meeting, the Advisory Committee 
forwards its recommendations to the Secretary through the senior 
Department official.
    (d) For any Advisory Committee recommendation not appealed under 
Sec. 602.33, the senior Department official includes with the Advisory 
Committee materials forwarded to the Secretary a memorandum containing 
the senior Department official's recommendations regarding the actions 
proposed by the Advisory Committee.

(Authority: 20 U.S.C. 1099b and 1145)

[[Page 209]]



Sec. 602.33  How may an agency appeal a recommendation of the Advisory Committee?

    (a) Either the agency or the senior Department official may appeal 
the Advisory Committee's recommendation. If a party wishes to appeal, 
that party must--
    (1) Notify the Secretary and the other party in writing of its 
intent to appeal the recommendation no later than 10 days after the 
Advisory Committee meeting;
    (2) Submit its appeal in writing to the Secretary no later than 30 
days after the Advisory Committee meeting; and
    (3) Provide the other party with a copy of the appeal at the same 
time it submits the appeal to the Secretary.
    (b) The non-appealing party may file a written response to the 
appeal. If that party wishes to do so, it must--
    (1) Submit its response to the Secretary no later than 30 days after 
receiving its copy of the appeal; and
    (2) Provide the appealing party with a copy of its response at the 
same time it submits its response to the Secretary.
    (c) Neither the agency nor the senior Department official may 
include any new evidence in its submission; i.e., evidence it did not 
previously submit to the Advisory Committee.

(Authority: 20 U.S.C. 1099b and 1145)

                  Review and Decision by the Secretary



Sec. 602.34  What does the Secretary consider when making a recognition decision?

    The Secretary makes the decision regarding recognition of an agency 
based on the entire record of the agency's application, including the 
following:
    (a) The Advisory Committee's recommendation.
    (b) The senior Department official's recommendation, if any.
    (c) The agency's application and supporting documentation.
    (d) The Department staff analysis of the agency.
    (e) All written third-party comments forwarded by Department staff 
to the Advisory Committee for consideration at the meeting.
    (f) Any agency response to the Department staff analysis and third-
party comments.
    (g) Any addendum to the Department staff analysis.
    (h) All oral presentations at the Advisory Committee meeting.
    (i) Any materials submitted by the parties, within the established 
timeframes, in an appeal taken in accordance with Sec. 602.33.

(Authority: 20 U.S.C. 1099b)



Sec. 602.35  What information does the Secretary's recognition decision include?

    (a) The Secretary notifies the agency in writing of the Secretary's 
decision regarding the agency's application for recognition.
    (b) The Secretary either approves or denies recognition or defers a 
decision on the agency's application for recognition.
    (1)(i) The Secretary approves recognition if the agency complies 
with the criteria for recognition listed in subpart B of this part and 
if the agency is effective in its performance with respect to those 
criteria.
    (ii) If the Secretary approves recognition, the Secretary's 
recognition decision defines the scope of recognition and the 
recognition period.
    (iii) If the scope or period of recognition is less than that 
requested by the agency, the Secretary explains the reasons for 
approving a lesser scope or recognition period.
    (2)(i) If the agency fails to comply with the criteria for 
recognition in subpart B of this part, or if the agency is not effective 
in its performance with respect to those criteria, the Secretary denies 
recognition, unless the Secretary concludes that a deferral under 
paragraph (b)(3) of this section is warranted.
    (ii) If the Secretary denies recognition, the Secretary specifies 
the reasons for this decision, including all criteria the agency fails 
to meet and all areas in which the agency fails to perform effectively.
    (3)(i) The Secretary may defer a decision on recognition if the 
Secretary concludes that the agency's deficiencies do not warrant 
immediate loss

[[Page 210]]

of recognition and if the Secretary concludes that the agency will 
demonstrate or achieve compliance with the criteria for recognition and 
effective performance with respect to those criteria before the 
expiration of the deferral period.
    (ii) In the deferral decision, the Secretary states the bases for 
the Secretary's conclusions, specifies any criteria for recognition the 
agency fails to meet, and identifies any areas in which the agency fails 
to perform effectively with respect to the criteria.
    (iii) The Secretary also establishes a deferral period, which begins 
on the date of the Secretary's decision.
    (iv) The deferral period may not exceed 12 months, either as a 
single deferral period or in combination with any expiring deferral 
period in which similar deficiencies in compliance or performance were 
cited by the Secretary, except that the Secretary may grant an extension 
of an expiring deferral period at the request of the agency for good 
cause shown.
    (c) The recognition period may not exceed five years.
    (d) If the Secretary does not reach a final decision to approve or 
deny an agency's application for continued recognition before the 
expiration of its recognition period, the Secretary automatically 
extends the recognition period until the final decision is reached.

(Authority: 20 U.S.C. 1099b)



Sec. 602.36  May an agency appeal the Secretary's final recognition decision?

    An agency may appeal the Secretary's decision under this part in the 
Federal courts as a final decision in accordance with applicable Federal 
law.

(Authority: 20 U.S.C. 1099b)



    Subpart D--Limitation, Suspension, or Termination of Recognition 
           Limitation, Suspension, and Termination Procedures



Sec. 602.40  How may the Secretary limit, suspend, or terminate an agency's recognition?

    (a) If the Secretary determines, after notice and an opportunity for 
a hearing, that a recognized agency does not comply with the criteria 
for recognition in subpart B of this part or that the agency is not 
effective in its performance with respect to those criteria, the 
Secretary--
    (1) Limits, suspends, or terminates the agency's recognition; or
    (2) Requires the agency to take appropriate action to bring itself 
into compliance with the criteria and achieve effectiveness within a 
timeframe that may not exceed 12 months.
    (b) If, at the conclusion of the timeframe specified in paragraph 
(a)(2) of this section, the Secretary determines, after notice and an 
opportunity for a hearing, that the agency has failed to bring itself 
into compliance or has failed to achieve effectiveness, the Secretary 
limits, suspends, or terminates recognition, unless the Secretary 
extends the timeframe, on request by the agency for good cause shown.

(Authority: 20 U.S.C. 1099b).



Sec. 602.41  What are the notice procedures?

    (a) Department staff initiates an action to limit, suspend, or 
terminate an agency's recognition by notifying the agency in writing of 
the Secretary's intent to limit, suspend, or terminate recognition. The 
notice--
    (1) Describes the specific action the Secretary seeks to take 
against the agency and the reasons for that action, including the 
criteria with which the agency has failed to comply;
    (2) Specifies the effective date of the action; and
    (3) Informs the agency of its right to respond to the notice and 
request a hearing.
    (b) Department staff may send the notice described in paragraph (a) 
of this section at any time the staff concludes that the agency fails to 
comply with the criteria for recognition in subpart B of this part or is 
not effective in its performance with respect to those criteria.

(Authority: 20 U.S.C. 1099b)



Sec. 602.42  What are the response and hearing procedures?

    (a) If the agency wishes either to respond to the notice or request 
a hearing, or both, it must do so in writing no later than 30 days after 
it receives the

[[Page 211]]

notice of the Secretary's intent to limit, suspend, or terminate 
recognition.
    (1) The agency's submission must identify the issues and facts in 
dispute and the agency's position on them.
    (2) If neither a response nor a request for a hearing is filed by 
the deadline, the notice of intent becomes a final decision by the 
Secretary.
    (b)(1) After receiving the agency's response and hearing request, if 
any, the Secretary chooses a subcommittee composed of five members of 
the Advisory Committee to adjudicate the matter and notifies the agency 
of the subcommittee's membership.
    (2) The agency may challenge membership of the subcommittee on 
grounds of conflict of interest on the part of one or more members and, 
if the agency's challenge is successful, the Secretary will replace the 
member or members challenged.
    (c) After the subcommittee has been selected, Department staff sends 
the members of the subcommittee copies of the notice to limit, suspend, 
or terminate recognition, along with the agency's response, if any.
    (d)(1) If a hearing is requested, it is held in Washington, DC, at a 
date and time set by Department staff.
    (2) A transcript is made of the hearing.
    (3) Except as provided in paragraph (e) of this section, the 
subcommittee allows Department staff, the agency, and any interested 
party to make an oral or written presentation, which may include the 
introduction of written and oral evidence.
    (e) On agreement by Department staff and the agency, the 
subcommittee review may be based solely on the written materials 
submitted.

(Authority: 20 U.S.C. 1099b)



Sec. 602.43  How is a decision on limitation, suspension, or termination of recognition reached?

    (a) After consideration of the notice of intent to limit, suspend, 
or terminate recognition, the agency's response, if any, and all 
submissions and presentations made at the hearing, if any, the 
subcommittee issues a written opinion and sends it to the Secretary, 
with copies to the agency and the senior Department official. The 
opinion includes--
    (1) Findings of fact, based on consideration of all the evidence, 
presentations, and submissions before the subcommittee;
    (2) A recommendation as to whether a limitation, suspension, or 
termination of the agency's recognition is warranted; and
    (3) The reasons supporting the subcommittee's recommendation.
    (b) Unless the subcommittee's recommendation is appealed under 
Sec. 602.44, the Secretary issues a final decision on whether to limit, 
suspend, or terminate the agency's recognition. The Secretary bases the 
decision on consideration of the full record before the subcommittee and 
the subcommittee's opinion.

(Authority: 20 U.S.C. 1099b)

                      Appeal Rights and Procedures



Sec. 602.44  How may an agency appeal the subcommittee's recommendation?

    (a) Either the agency or the senior Department official may appeal 
the subcommittee's recommendation. If a party wishes to appeal, that 
party must--
    (1) Notify the Secretary and the other party in writing of its 
intent to appeal the recommendation no later than 10 days after receipt 
of the recommendation;
    (2) Submit its appeal to the Secretary in writing no later than 30 
days after receipt of the recommendation; and
    (3) Provide the other party with a copy of the appeal at the same 
time it submits the appeal to the Secretary.
    (b) The non-appealing party may file a written response to the 
appeal. If that party wishes to do so, it must--
    (1) Submit its response to the Secretary no later than 30 days after 
receiving its copy of the appeal; and
    (2) Provide the appealing party with a copy of its response at the 
same time it submits its response to the Secretary.
    (c) Neither the agency nor the senior Department official may 
include any new evidence in its submission, i.e.,

[[Page 212]]

evidence it did not previously submit to the subcommittee.
    (d) If the subcommittee's recommendation is appealed, the Secretary 
renders a final decision after taking into account that recommendation 
and the parties' written submissions on appeal, as well as the entire 
record before the subcommittee and the subcommittee's opinion.

(Authority: 20 U.S.C. 1099b)



Sec. 602.45  May an agency appeal the Secretary's final decision to limit, suspend, or terminate its recognition?

    An agency may appeal the Secretary's final decision limiting, 
suspending, or terminating its recognition to the Federal courts as a 
final decision in accordance with applicable Federal law.

(Authority: 20 U.S.C. 1099b)



                 Subpart E--Department Responsibilities



Sec. 602.50  What information does the Department share with a recognized agency about its accredited institutions and programs?

    (a) If the Department takes an action against an institution or 
program accredited by the agency, it notifies the agency no later than 
10 days after taking that action.
    (b) If another Federal agency or a State agency notifies the 
Department that it has taken an action against an institution or program 
accredited by the agency, the Department notifies the agency as soon as 
possible but no later than 10 days after receiving the written notice 
from the other Government agency.

(Authority: 20 U.S.C. 1099b)



PART 603--SECRETARY'S RECOGNITION PROCEDURES FOR STATE AGENCIES--Table of Contents




Subpart A [Reserved]

                 Subpart B--Criteria for State Agencies

Sec.
603.20  Scope.
603.21  Publication of list.
603.22  Inclusion on list.
603.23  Initial recognition, and reevaluation.
603.24  Criteria for State agencies.

    Authority: 20 U.S.C. 403(b), 1085(b), 1141(a), 1248(11); 42 U.S.C. 
293a(b), 295f-3(b), 295h-4(1)(D), 298b(f); 38 U.S.C. 1775(a), unless 
otherwise noted.

Subpart A [Reserved]



                 Subpart B--Criteria for State Agencies

    Authority: Sec. 438(b) of the Higher Education Act of 1965, Pub. L. 
89-329 as amended by Pub. L. 92-318, 86 Stat. 235, 264 (20 U.S.C. 1087-
1(b)), unless otherwise noted.

    Source: 39 FR 30042, Aug. 20, 1974, unless otherwise noted. 
Redesignated at 45 FR 77369, Nov. 21, 1980.



Sec. 603.20  Scope.

    (a) Pursuant to section 438(b) of the Higher Education Act of 1965 
as amended by Pub. L. 92-318, the Secretary is required to publish a 
list of State agencies which he determines to be reliable authorities as 
to the quality of public postsecondary vocational education in their 
respective States for the purpose of determining eligibility for Federal 
student assistance programs administered by the Department.
    (b) Approval by a State agency included on the list will provide an 
alternative means of satisfying statutory standards as to the quality of 
public postsecondary vocational education to be undertaken by students 
receiving assistance under such programs.

(Authority: 20 U.S.C. 1087-1(b))



Sec. 603.21  Publication of list.

    Periodically the Secretary will publish a list in the Federal 
Register of the State agencies which he determines to be reliable 
authorities as to the quality of public postsecondary vocational 
education in their respective States.

(Authority: 20 U.S.C. 1087-1(b))



Sec. 603.22  Inclusion on list.

    Any State agency which desires to be listed by the Secretary as 
meeting the criteria set forth in Sec. 603.24 should

[[Page 213]]

apply in writing to the Director, Division of Eligibility and Agency 
Evaluation, Office of Postsecondary Education, Department of Education, 
Washington, DC 20202.

(Authority: 20 U.S.C. 1087-1(b))

[45 FR 86300, Dec. 30, 1980]



Sec. 603.23  Initial recognition, and reevaluation.

    For initial recognition and for renewal of recognition, the State 
agency will furnish information establishing its compliance with the 
criteria set forth in Sec. 603.24. This information may be supplemented 
by personal interviews or by review of the agency's facilities, records, 
personnel qualifications, and administrative management. Each agency 
listed will be reevaluated by the Secretary at his discretion, but at 
least once every four years. No adverse decision will become final 
without affording an opportunity for a hearing.

(Authority: 20 U.S.C. 1087-1(b))



Sec. 603.24  Criteria for State agencies.

    The following are the criteria which the Secretary will utilize in 
designating a State agency as a reliable authority to assess the quality 
of public postsecondary vocational education in its respective State.
    (a) Functional aspects. The functional aspects of the State agency 
must be shown by:
    (1) Its scope of operations. The agency:
    (i) Is statewide in the scope of its operations and is legally 
authorized to approve public postsecondary vocational institutions or 
programs;
    (ii) Clearly sets forth the scope of its objectives and activities, 
both as to kinds and levels of public postsecondary vocational 
institutions or programs covered, and the kinds of operations performed;
    (iii) Delineates the process by which it differentiates among and 
approves programs of varying levels.
    (2) Its organization. The State agency:
    (i) Employs qualified personnel and uses sound procedures to carry 
out its operations in a timely and effective manner;
    (ii) Receives adequate and timely financial support, as shown by its 
appropriations, to carry out its operations;
    (iii) Selects competent and knowledgeable persons, qualified by 
experience and training, and selects such persons in accordance with 
nondiscriminatory practices, (A) to participate on visiting teams, (B) 
to engage in consultative services for the evaluation and approval 
process, and (C) to serve on decision-making bodies.
    (3) Its procedures. The State agency:
    (i) Maintains clear definitions of approval status and has developed 
written procedures for granting, reaffirming, revoking, denying, and 
reinstating approval status;
    (ii) Requires, as an integral part of the approval and reapproval 
process, institutional or program self-analysis and onsite reviews by 
visiting teams, and provides written and consultative guidance to 
institutions or programs and visiting teams.
    (A) Self-analysis shall be a qualitative assessment of the strengths 
and limitations of the instructional program, including the achievement 
of institutional or program objectives, and should involve a 
representative portion of the institution's administrative staff, 
teaching faculty, students, governing body, and other appropriate 
constituencies.
    (B) The visiting team, which includes qualified examiners other than 
agency staff, reviews instructional content, methods and resources, 
administrative management, student services, and facilities. It prepares 
written reports and recommendations for use by the State agency.
    (iii) Reevaluates at reasonable and regularly scheduled intervals 
institutions or programs which it has approved.
    (b) Responsibility and reliability. The responsibility and 
reliability of the State agency will be demonstrated by:
    (1) Its responsiveness to the public interest. The State agency:
    (i) Has an advisory body which provides for representation from 
public employment services and employers, employees, postsecondary 
vocational educators, students, and the general public, including 
minority groups. Among its functions, this structure

[[Page 214]]

provides counsel to the State agency relating to the development of 
standards, operating procedures and policy, and interprets the 
educational needs and manpower projections of the State's public 
postsecondary vocational education system;
    (ii) Demonstrates that the advisory body makes a real and meaningful 
contribution to the approval process;
    (iii) Provides advance public notice of proposed or revised 
standards or regulations through its regular channels of communications, 
supplemented, if necessary, with direct communication to inform 
interested members of the affected community. In addition, it provides 
such persons the opportunity to comment on the standards or regulations 
prior to their adoption;
    (iv) Secures sufficient qualitative information regarding the 
applicant institution or program to enable the institution or program to 
demonstrate that it has an ongoing program of evaluation of outputs 
consistent with its educational goals;
    (v) Encourages experimental and innovative programs to the extent 
that these are conceived and implemented in a manner which ensures the 
quality and integrity of the institution or program;
    (vi) Demonstrates that it approves only those institutions or 
programs which meet its published standards; that its standards, 
policies, and procedures are fairly applied; and that its evaluations 
are conducted and decisions are rendered under conditions that assure an 
impartial and objective judgment;
    (vii) Regularly reviews its standards, policies and procedures in 
order that the evaluative process shall support constructive analysis, 
emphasize factors of critical importance, and reflect the educational 
and training needs of the student;
    (viii) Performs no function that would be inconsistent with the 
formation of an independent judgment of the quality of an educational 
institution or program;
    (ix) Has written procedures for the review of complaints pertaining 
to institutional or program quality as these relate to the agency's 
standards, and demonstrates that such procedures are adequate to provide 
timely treatment of such complaints in a manner fair and equitable to 
the complainant and to the institution or program;
    (x) Annually makes available to the public (A) its policies for 
approval, (B) reports of its operations, and (C) list of institutions or 
programs which it has approved;
    (xi) Requires each approved school or program to report on changes 
instituted to determine continued compliance with standards or 
regulations;
    (xii) Confers regularly with counterpart agencies that have similar 
responsibilities in other and neighboring States about methods and 
techniques that may be used to meet those responsibilities.
    (2) Its assurances that due process is accorded to institutions or 
programs seeking approval. The State agency:
    (i) Provides for adequate discussion during the on-site visit 
between the visiting team and the faculty, administrative staff, 
students, and other appropriate persons;
    (ii) Furnishes as a result of the evaluation visit, a written report 
to the institution or program commenting on areas of strength, areas 
needing improvement, and, when appropriate, suggesting means of 
improvement and including specific areas, if any, where the institution 
or program may not be in compliance with the agency's standards;
    (iii) Provides the chief executive officer of the institution or 
program with opportunity to comment upon the written report and to file 
supplemental materials pertinent to the facts and conclusions in the 
written report of the visiting team before the agency takes action on 
the report;
    (iv) Provides the chief executive officer of the institution with a 
specific statement of reasons for any adverse action, and notice of the 
right to appeal such action before an appeal body designated for that 
purpose;
    (v) Publishes rules of procedure regarding appeals;
    (vi) Continues the approval status of the institution or program 
pending disposition of an appeal;
    (vii) Furnishes the chief executive officer of the institution or 
program with a written decision of the appeal body,

[[Page 215]]

including a statement of its reasons therefor.
    (c) Capacity to foster ethical practices. The State agency must 
demonstrate its capability and willingness to foster ethical practices 
by showing that it:
    (i) Promotes a well-defined set of ethical standards governing 
institutional or programmatic practices, including recruitment, 
advertising, transcripts, fair and equitable student tuition refunds, 
and student placement services;
    (ii) Maintains appropriate review in relation to the ethical 
practices of each approved institution or program.

(Authority: 20 U.S.C. 1087-1(b))



PART 604--FEDERAL-STATE RELATIONSHIP AGREEMENTS--Table of Contents




                           Subpart A--General

Sec.
604.1  Federal-State relationship agreements.
604.2  Regulations that apply to Federal-State relationship agreements.
604.3  Definitions that apply to Federal-State relationship agreements.

            Subpart B--Federal-State Relationship Agreements

604.10  Administrative requirements.
604.11  Planning requirements.
604.12  Changes in the agreement.
604.13  Denial of eligibility.

    Authority: Sec. 1203 of the Higher Education Act of 1965, as amended 
by Pub. L. 96-374 (20 U.S.C. 1143), unless otherwise noted.

    Source: 45 FR 83221, Dec. 18, 1980, unless otherwise noted.



                           Subpart A--General



Sec. 604.1  Federal-State relationship agreements.

    (a) A State shall enter into an agreement with the Secretary if it 
wishes to participate in the following programs authorized by the Higher 
Education Act of 1965, as amended: The Continuing Education Outreach 
program, title I-B, with the exception of sections 116 and 117 of the 
Act; the State Student Incentive Grant program, subpart 3 of title IV-A 
of the Act; and the Undergraduate Academic Facilities Grant program, 
title VII-A of the Act. The agreement must contain assurances relating 
to administration, financial management, treatment of applicants for 
subgrants and contracts, supplement, not supplant requirements, and 
planning. These assurances are listed in subpart B of this part. The 
means by which these assurances will be met must also be described.
    (b) The provisions of the agreement replace comparable provisions in 
annual plans previously required by each applicable program.

(Authority: 20 U.S.C. 1143)



Sec. 604.2  Regulations that apply to Federal-State relationship agreements.

    The following regulations apply to Federal-State relationship 
agreements:
    (a) The Education Department General Administrative Regulations 
(EDGAR) in 34 CFR part 76 (State Administered Programs) and 34 CFR part 
77 (Definitions).
    (b) The regulations in this part 604.

(Authority: 20 U.S.C. 1232(a))



Sec. 604.3  Definitions that apply to Federal-State relationship agreements.

    (a) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR part 77:

Applicant
Application
Contract
Private
Public
Secretary
State
Subgrant

    (b) Definitions that apply to this part. The following definitions 
apply to this part:
    Act means the Higher Education Act of 1965, as amended.
    Applicable programs means the Continuing Education Outreach program, 
the State Student Incentive Grant program, and the Undergraduate 
Academic Facilities Grant program.

(Authority: 20 U.S.C. 1143)



            Subpart B--Federal-State Relationship Agreements



Sec. 604.10  Administrative requirements.

    The agreement shall contain the following assurances and a 
description of the means by which they will be met:
    (a) Management practices and procedures will assure proper and 
efficient

[[Page 216]]

administration of each applicable program. The description of these 
methods shall include the identification of the State entity or entities 
designated to administer each applicable program as well as the name of 
the responsible official.
    (b) Appropriate fiscal control and fund accounting procedures will 
be provided for Federal funds received under all titles of the Act.
    (c) Federal funds under the applicable programs will not supplant 
non-Federal funds.
    (d) Equitable and appropriate criteria will be used in evaluating 
applications for subgrants or proposals for contracts under each 
applicable program.

(Authority: 20 U.S.C. 1143)



Sec. 604.11  Planning requirements.

    (a) The agreement shall contain an assurance by the State that it 
has a comprehensive planning or policy formulation process which:
    (1) Considers the relationship between State administration of each 
applicable program and administration of similar State programs or 
processes;
    (2) Encourages State policies that consider the effects of declining 
enrollments on all sectors of postsecondary education within the State;
    (3) Considers the postsecondary educational needs of unserved and 
underserved individuals within the State, including individuals beyond 
traditional college age;
    (4) Considers the resources of public and private institutions, 
organizations, and agencies within the State that are capable of 
providing postsecondary educational opportunities; and
    (5) Provides for direct, equitable, and active participation in the 
comprehensive planning or policy formulation processes by 
representatives of institutions of higher education--including community 
colleges, proprietary institutions, and independent colleges and 
universities--other providers of postsecondary education services, 
students, and the general public in the State.
    (i) Participation shall be achieved through membership on State 
planning commissions, State advisory councils, or other State entities 
established by the State to conduct federally assisted comprehensive 
planning or policy formulation.
    (ii) Participation shall be consistent with State law.
    (b) The agreement shall include a description of the planning or 
policy formulation process through which these assurances will be 
fulfilled.

(Authority: 20 U.S.C. 1143)



Sec. 604.12  Changes in the agreement.

    (a) The agreement shall remain in effect until substantial changes 
in administrative practices or planning processes would require its 
modification.
    (b) Routine organizational or personnel changes are not subject to 
prior modification of the agreement, but information concerning these 
changes shall be promptly communicated to the Secretary.

(Authority: 20 U.S.C. 1143)



Sec. 604.13  Denial of eligibility.

    (a) If the Secretary finds that there is a failure to comply 
substantially with the assurances of Sec. 604.10 then the Secretary, 
after giving a State reasonable notice and the opportunity for a 
hearing, shall notify the State that it is ineligible to participate in 
any applicable program.
    (b) To regain eligibility, a State must satisfy the Secretary that 
the failure to comply has been remedied.

(Authority: 20 U.S.C. 1143)



PART 606--DEVELOPING HISPANIC-SERVING INSTITUTIONS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
606.1  What is the Developing Hispanic-Serving Institutions Program?
606.2  What institutions are eligible to receive a grant under the 
          Developing Hispanic-Serving Institutions Program?
606.3  What is an enrollment of needy students?
606.4  What are low educational and general expenditures?
606.5  How does an institution apply to be designated an eligible 
          institution?
606.6  What regulations apply?
606.7  What definitions apply?
606.8  What is a comprehensive development plan and what must it 
          contain?

[[Page 217]]

606.9  What are the type, duration, and limitations in the awarding of 
          grants under this part?
606.10  What activities may and may not be carried out under a grant?

          Subpart B--How Does an Institution Apply for a Grant?

606.11  What must be included in individual development grant 
          applications?
606.12  What must be included in cooperative arrangement grant 
          applications?
606.13  How many applications for a development grant may an institution 
          submit?

            Subpart C--How Does the Secretary Make an Award?

606.20  How does the Secretary choose applications for funding?
606.21  What are the selection criteria for planning grants?
606.22  What are the selection criteria for development grants?
606.23  What special funding consideration does the Secretary provide?
606.24  How does the Secretary use an applicant's performance under a 
          previous development grant when awarding a development grant?
606.25  What priority does the Secretary use in awarding cooperative 
          arrangement grants?

             Subpart D--What Conditions Must a Grantee Meet?

606.30  What are allowable costs and what are the limitations on 
          allowable costs?
606.31  How does a grantee maintain its eligibility?

    Authority: 20 U.S.C. 1101 et seq., unless otherwise noted.

    Source: 64 FR 70147, Dec. 15, 1999, unless otherwise noted.



                           Subpart A--General



Sec. 606.1  What is the Developing Hispanic-Serving Institutions Program?

    The purpose of the Developing Hispanic-Serving Institutions Program 
is to provide grants to eligible institutions of higher education to--
    (a) Expand educational opportunities for, and improve the academic 
attainment of, Hispanic students; and
    (b) Expand and enhance the academic offerings, program quality, and 
institutional stability of colleges and universities that are educating 
the majority of Hispanic college students and helping large numbers of 
Hispanic students and other low-income individuals complete 
postsecondary degrees.

(Authority: 20 U.S.C. 1101)



Sec. 606.2  What institutions are eligible to receive a grant under the Developing Hispanic-Serving Institutions Program?

    (a) An institution of higher education is eligible to receive a 
grant under this part if--
    (1) At the time of application, it has an enrollment of 
undergraduate full-time equivalent students that is at least 25 percent 
Hispanic students;
    (2) It provides assurances that not less than 50 percent of its 
Hispanic students are low-income individuals;
    (3) It has an enrollment of needy students as described in 
Sec. 606.3(a), unless the Secretary waives this requirement under 
Sec. 606.3(b);
    (4) It has low average educational and general expenditures per 
full-time equivalent undergraduate student as described in 
Sec. 606.4(a), unless the Secretary waives this requirement under 
Sec. 606.4(c);
    (5) It is legally authorized by the State in which it is located to 
be a junior college or to provide an educational program for which it 
awards a bachelor's degree; and
    (6) It is accredited or preaccredited by a nationally recognized 
accrediting agency or association that the Secretary has determined to 
be a reliable authority as to the quality of education or training 
offered.
    (b) A branch campus of a Hispanic-Serving institution is eligible to 
receive a grant under this part if--
    (1) The institution as a whole meets the requirements of paragraphs 
(a)(3) through (a)(6) of this section; and
    (2) The branch campus satisfies the requirements of paragraphs 
(a)(1) through (a)(4) of this section.
    (c)(1) An institution that receives a grant under the Strengthening 
Institutions Program (34 CFR part 607) or the Strengthening Historically 
Black Colleges and Universities Program (34 CFR part 608) for a 
particular fiscal year is not eligible to receive a grant under this 
part for that same fiscal year, and may not relinquish its grant under

[[Page 218]]

those programs to secure a grant under this part.
    (2) A Hispanic-Serving institution under this part may not 
concurrently receive grant funds under the Strengthening Institutions 
Program, Strengthening Historically Black Colleges and Universities 
Program, or Strengthening Historically Black Graduate Institutions 
Program.

(Authority: 20 U.S.C. 1101a and 1101d)

[64 FR 70147, Dec. 15, 1999, as amended at 66 FR 1263, Jan. 8, 2001]



Sec. 606.3  What is an enrollment of needy students?

    (a) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 606.2(a)(3), an applicant institution has an enrollment 
of needy students if in the base year--
    (1) At least 50 percent of its degree students received student 
financial assistance under one or more of the following programs: 
Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, 
Federal Work-Study, and Federal Perkins Loan; or
    (2) The percentage of its undergraduate degree students who were 
enrolled on at least a half-time basis and received Federal Pell Grants 
exceeded the median percentage of undergraduate degree students who were 
enrolled on at least a half-time basis and received Federal Pell Grants 
at comparable institutions that offer similar instruction.
    (b) The Secretary may waive the requirement contained in paragraph 
(a) of this section if the institution demonstrates that--
    (1) The State provides more than 30 percent of the institution's 
budget and the institution charges not more than $99.00 for tuition and 
fees for an academic year;
    (2) At least 30 percent of the students served by the institution in 
the base year were students from low-income families;
    (3) The institution substantially increases the higher education 
opportunities for low-income students who are also educationally 
disadvantaged, underrepresented in postsecondary education, or minority 
students;
    (4) The institution substantially increases the higher education 
opportunities for individuals who reside in an area that is not included 
in a ``metropolitan statistical area'' as defined by the Office of 
Management and Budget and who are unserved by other postsecondary 
institutions; or
    (5) The institution will, if granted the waiver, substantially 
increase the higher education opportunities for Hispanic Americans.
    (c) For the purpose of paragraph (b) of this section, the Secretary 
considers ``low-income'' to be an amount which does not exceed 150 
percent of the amount equal to the poverty level as established by the 
United States Bureau of the Census.
    (d) Each year, the Secretary notifies prospective applicants of the 
low-income figures through a notice published in the Federal Register.

(Authority: 20 U.S.C. 1101a and 1103a)



Sec. 606.4  What are low educational and general expenditures?

    (a)(1) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 606.2(a)(2), an applicant institution's average 
educational and general expenditures per full-time equivalent 
undergraduate student in the base year must be less than the average 
educational and general expenditures per full-time equivalent 
undergraduate student in that year of comparable institutions that offer 
similar instruction.
    (2) For the purpose of paragraph (a)(1) of this section, the 
Secretary determines the average educational and general expenditure per 
full-time equivalent undergraduate student for institutions with 
graduate students that do not differentiate between graduate and 
undergraduate educational and general expenditures by discounting the 
graduate enrollment using a factor of 2.5 times the number of graduate 
students.
    (b) Each year, the Secretary notifies prospective applicants through 
a notice in the Federal Register of the average educational and general 
expenditures per full-time equivalent undergraduate student at 
comparable institutions that offer similar instruction.
    (c) The Secretary may waive the requirement contained in paragraph 
(a)

[[Page 219]]

of this section, if the Secretary determines, based upon persuasive 
evidence provided by the institution, that--
    (1) The institution's failure to satisfy the criteria in paragraph 
(a) of this section was due to factors which, if used in determining 
compliance with those criteria, distorted that determination; and
    (2) The institution's designation as an eligible institution under 
this part is otherwise consistent with the purposes of this part.
    (d) For the purpose of paragraph (c)(1) of this section, the 
Secretary considers that the following factors may distort an 
institution's educational and general expenditures per full-time 
equivalent undergraduate student--
    (1) Low student enrollment;
    (2) Location of the institution in an unusually high cost-of-living 
area;
    (3) High energy costs;
    (4) An increase in State funding that was part of a desegregation 
plan for higher education; or
    (5) Operation of high cost professional schools such as medical or 
dental schools.

(Authority: 20 U.S.C. 1101a and 1103a)



Sec. 606.5  How does an institution apply to be designated an eligible institution?

    (a) An institution applies to the Secretary to be designated an 
eligible institution under this part by first submitting an application 
to the Secretary in the form, manner, and time established by the 
Secretary. The application must contain--
    (1) The information necessary for the Secretary to determine whether 
the institution satisfies the requirements of Secs. 606.2, 606.3(a), and 
606.4(a);
    (2) Any waiver request under Secs. 606.3(b) and 606.4(c); and
    (3) Information or explanations justifying any requested waiver.
    (b) An institution that wishes to receive a grant under this part 
must submit, as part of its application for that grant, an assurance 
that when it submits its application--
    (1) Its enrollment of undergraduate full-time equivalent students is 
at least 25 percent Hispanic students; and
    (2) Not less than 50 percent of its Hispanic students are low-income 
individuals.

(Authority: 20 U.S.C. 1101a and 1103)



Sec. 606.6  What regulations apply?

    The following regulations apply to the Developing Hispanic-Serving 
Institutions Program:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 
75.128(a)(2) and 75.129(a) in the case of applications for cooperative 
arrangements.
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 82 (New Restrictions on Lobbying).
    (6) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (7) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 606.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.7  What definitions apply?

    (a) Definitions in EDGAR. The terms used in this part are defined in 
34 CFR 77.1:

EDGAR
Fiscal year
Grant
Grantee
Grant period
Nonprofit
Private
Project period
Public
Secretary
State

    (b) The following definitions also apply to this part:
    Accredited means the status of public recognition which a nationally 
recognized accrediting agency or association grants to an institution 
which meets

[[Page 220]]

certain established qualifications and educational standards.
    Activity means an action that is incorporated into an implementation 
plan designed to meet one or more objectives. An activity is a part of a 
project and has its own budget that is approved to carry out the 
objectives of that subpart.
    Base year means the second fiscal year preceding the fiscal year for 
which an institution seeks a grant under this part.
    Branch campus means a unit of a college or university that is 
geographically apart from the main campus of the college or university 
and independent of that main campus. The Secretary considers a unit of a 
college or university to be independent of the main campus if the unit--
    (1) Is permanent in nature;
    (2) Offers courses for credit and programs leading to an associate 
or bachelor's degree; and
    (3) Is autonomous to the extent that it has--
    (i) Its own faculty and administrative or supervisory organization; 
and
    (ii) Its own budgetary and hiring authority.
    Comparable institutions that offer similar instruction means 
institutions that are being compared with an applicant institution and 
that fall within one of the following four categories--
    (1) Public junior or community colleges;
    (2) Private nonprofit junior or community colleges;
    (3) Public institutions that offer an educational program for which 
they offer a bachelor's degree; or
    (4) Private nonprofit institutions that offer an educational program 
for which they offer a bachelor's degree.
    Cooperative arrangement means an arrangement to carry out allowable 
grant activities between an institution eligible to receive a grant 
under this part and another eligible or ineligible institution of higher 
education, under which the resources of the cooperating institutions are 
combined and shared to better achieve the purposes of this part and 
avoid costly duplication of effort.
    Degree student means a student who enrolls at an institution for the 
purpose of obtaining the degree, certificate, or other recognized 
educational credential offered by that institution.
    Developmental program and services means new or improved programs 
and services, beyond those regularly budgeted, specifically designed to 
improve the self sufficiency of the school.
    Educational and general expenditures means the total amount expended 
by an institution of higher education for instruction, research, public 
service, academic support (including library expenditures), student 
services, institutional support, scholarships and fellowships, operation 
and maintenance expenditures for the physical plant, and any mandatory 
transfers which the institution is required to pay by law.
    Educationally disadvantaged means a college student who requires 
special services and assistance to enable them to succeed in higher 
education. The phrase includes, but is not limited to, students who come 
from--
    (1) Economically disadvantaged families;
    (2) Limited English proficiency families;
    (3) Migrant worker families; or
    (4) Families in which one or both of their parents have dropped out 
of secondary school.
    Federal Pell Grant Program means the grant program authorized by 
title IV-A-1 of the HEA.
    Federal Perkins Loan Program, formerly called the National Direct 
Student Loan Program, means the loan program authorized by title IV-E of 
the HEA.
    Federal Supplemental Education Opportunity Grant Program means the 
grant program authorized by title IV-A-3 of the HEA.
    Federal Work-Study Program means the part-time employment program 
authorized under title IV-C of the HEA.
    Full-time equivalent students means the sum of the number of 
students enrolled full-time at an institution, plus the full-time 
equivalent of the number of students enrolled part time (determined on 
the basis of the quotient of the sum of the credit hours of all part-
time students divided by 12) at such institution.
    HEA means the Higher Education Act of 1965, as amended.

[[Page 221]]

    Hispanic student means a person of Mexican, Puerto Rican, Cuban, 
Central or South American, or other Spanish culture or origin, 
regardless of race.
    Institution of higher education means an educational institution 
defined in section 101 of the HEA.
    Junior or community college means an institution of higher 
education--
    (1) That admits as regular students persons who are beyond the age 
of compulsory school attendance in the State in which the institution is 
located and who have the ability to benefit from the training offered by 
the institution;
    (2) That does not provide an educational program for which it awards 
a bachelor's degree (or an equivalent degree); and
    (3) That--
    (i) Provides an educational program of not less than 2 years that is 
acceptable for full credit toward such a degree; or
    (ii) Offers a 2-year program in engineering, mathematics, or the 
physical or biological sciences, designed to prepare a student to work 
as a technician or at the semiprofessional level in engineering, 
scientific, or other technological fields requiring the understanding 
and application of basic engineering, scientific, or mathematical 
principles of knowledge.
    Low-income individual means an individual from a family whose 
taxable income for the preceding year did not exceed 150 percent of an 
amount equal to the poverty level determined by using criteria of 
poverty established by the Bureau of the Census.
    Minority student means a student who is an Alaska Native, American 
Indian, Asian-American, Black (African-American), Hispanic American, 
Native Hawaiian, or Pacific Islander.
    Nationally recognized accrediting agency or association means an 
accrediting agency or association that the Secretary has recognized to 
accredit or preaccredit a particular category of institution in 
accordance with the provisions contained in 34 CFR part 603. The 
Secretary periodically publishes a list of those nationally recognized 
accrediting agencies and associations in the Federal Register.
    Operational programs and services means the regular, ongoing 
budgeted programs and services at an institution.
    Preaccredited means a status that a nationally recognized 
accrediting agency or association, recognized by the Secretary to grant 
that status, has accorded an unaccredited institution that is 
progressing toward accreditation within a reasonable period of time.
    Project means all the funded activities under a grant.
    Self-sufficiency means the point at which an institution is able to 
survive without continued funding under the Developing Hispanic-Serving 
Institutions Program.
    Underrepresented means proportionate representation as measured by 
degree recipients, that is less than the proportionate representation in 
the general population--
    (1) As indicated by--
    (i) The most current edition of the Department's Digest of 
Educational Statistics;
    (ii) The National Research Council's Doctorate Recipients from 
United States Universities; or
    (iii) Other standard statistical references, as announced annually 
in the Federal Register notice inviting applications for new awards 
under this program; or
    (2) As documented by national survey data submitted to and accepted 
by the Secretary on a case-by-case basis.

(Authority: 20 U.S.C. 1101 et seq.; OMB Directive No. 15)



Sec. 606.8  What is a comprehensive development plan and what must it contain?

    (a) A comprehensive development plan is an institution's strategy 
for achieving growth and self-sufficiency by strengthening its--
    (1) Academic programs;
    (2) Institutional management; and
    (3) Fiscal stability.
    (b) The comprehensive development plan must include the following:
    (1) An analysis of the strengths, weaknesses, and significant 
problems of the institution's academic programs, institutional 
management, and fiscal stability.

[[Page 222]]

    (2) A delineation of the institution's goals for its academic 
programs, institutional management, and fiscal stability, based on the 
outcomes of the analysis described in paragraph (b)(1) of this section.
    (3) Measurable objectives related to reaching each goal and 
timeframes for achieving the objectives.
    (4) Methods and resources that will be used to institutionalize 
practices and improvements developed under the proposed project.
    (5) Its five year plan to improve its services to Hispanic and other 
low-income students.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.9  What are the type, duration, and limitations in the awarding of grants under this part?

    (a)(1) Under this part, the Secretary may award planning grants and 
two types of development grants, individual development grants and 
cooperative arrangement development grants.
    (2) Planning grants may be awarded for a period not to exceed one 
year.
    (3) Either type of development grant may be awarded for a period of 
five years.
    (b)(1) An institution that received an individual development grant 
of five years may not subsequently receive another individual 
development grant for a period of two years from the date on which the 
five-year grant terminates.
    (2) A cooperative arrangement grant is not considered to be an 
individual development grant under paragraph (b)(1) of this section.

(Authority: 20 U.S.C. 1101c and 1103c)



Sec. 606.10  What activities may and may not be carried out under a grant?

    (a) Planning grants. Under a planning grant, a grantee shall 
formulate--
    (1) A comprehensive development plan described in Sec. 606.8; and
    (2) An application for a development grant.
    (b) Development grants--allowable activities. Under a development 
grant, except as provided in paragraph (c) of this section, a grantee 
shall carry out activities that implement its comprehensive development 
plan and hold promise for strengthening the institution. Activities that 
may be carried out include, but are not limited to--
    (1) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional and research purposes.
    (2) Construction, maintenance, renovation, and improvement in 
classrooms, libraries, laboratories, and other instructional facilities.
    (3) Support of faculty exchanges, faculty development, curriculum 
development, academic instruction, and faculty fellowships to assist in 
attaining advanced degrees in the fellow's field of instruction.
    (4) Purchase of library books, periodicals, and other educational 
materials, including telecommunications program material.
    (5) Tutoring, counseling, and student service programs designed to 
improve academic success.
    (6) Funds management, administrative management, and acquisition of 
equipment for use in strengthening funds management.
    (7) Joint use of facilities, such as laboratories and libraries.
    (8) Establishing or improving a development office to strengthen or 
improve contributions from alumni and the private sector.
    (9) Establishing or improving an endowment fund, provided the 
grantee uses no more than 20 percent of its grant funds for this purpose 
and at least matches those grant funds with non-Federal funds.
    (10) Creating or improving facilities for Internet or other distance 
learning academic instruction capabilities, including purchase or rental 
of telecommunications technology equipment or services.
    (11) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in public elementary or secondary 
schools.
    (12) Establishing community outreach programs that will encourage 
elementary school and secondary school students to develop the academic 
skills and the interest to pursue postsecondary education.
    (13) Expanding the number of Hispanic and other underrepresented 
graduate and professional students that can

[[Page 223]]

be served by the institution by expanding courses and institutional 
resources.
    (14) Other activities that contribute to carrying out the purposes 
of this program.
    (c) Development grants--unallowable activities. A grantee may not 
carry out the following activities or pay the following costs under a 
development grant:
    (1) Activities that are not included in the grantee's approved 
application.
    (2) Activities that are inconsistent with any State plan for higher 
education that is applicable to the institution, including, but not 
limited to, a State plan for desegregation of higher education.
    (3) Activities or services that relate to sectarian instruction or 
religious worship.
    (4) Activities provided by a school or department of divinity. For 
the purpose of this provision, a ``school or department of divinity'' 
means an institution, or a department of an institution, whose program 
is specifically for the education of students to prepare them to become 
ministers of religion or to enter into some other religious vocation or 
to prepare them to teach theological subjects.
    (5) Developing or improving non-degree or non-credit courses other 
than basic skills development courses.
    (6) Developing or improving community-based or community services 
programs, unless the program provides academic-related experiences or 
academic credit toward a degree for degree students, or, unless it is a 
program or services to encourage elementary and secondary school 
students to develop the academic skills and the interest to pursue 
postsecondary education.
    (7) Purchase of standard office equipment, such as furniture, file 
cabinets, bookcases, typewriters, or word processors.
    (8) Payment of any portion of the salary of a president, vice 
president, or equivalent officer who has college-wide administrative 
authority and responsibility at an institution to fill a position under 
the grant such as project coordinator or activity director.
    (9) Costs of organized fund-raising, including financial campaigns, 
endowment drives, solicitation of gifts and bequests, and similar 
expenses incurred solely to raise capital or obtain contributions.
    (10) Costs of student recruitment such as advertisements, 
literature, and college fairs.
    (11) Services to high school students, unless they are services to 
encourage such students to develop the skills and the interest to pursue 
postsecondary education.
    (12) Instruction in the institution's standard courses as indicated 
in the institution's catalog.
    (13) Costs for health and fitness programs, transportation, and day 
care services.
    (14) Student activities such as entertainment, cultural, or social 
enrichment programs, publications, social clubs, or associations.
    (15) Activities that are operational in nature rather than 
developmental in nature.
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund, it must comply with the 
provisions of Secs. 628.3, 628.6, 628.10, and 628.41 through 628.47 of 
this chapter with regard to the use of those funds, except--
    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For the purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus;
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use any of 
its grant funds for endowment purposes, it must match those grant funds 
immediately with non-Federal funds when it places those funds into its 
endowment fund.

(Authority: 20 U.S.C. 1101 et seq.)

[64 FR 70147, Dec. 15, 1999, as amended at 65 FR 79310, Dec. 19, 2000]

[[Page 224]]



          Subpart B--How Does an Institution Apply for a Grant?



Sec. 606.11  What must be included in individual development grant applications?

    In addition to the information needed by the Secretary to determine 
whether the institution should be awarded a grant under the funding 
criteria contained in subpart C, an application for a development grant 
must include--
    (a) The institution's comprehensive development plan;
    (b) A description of the relationship of each activity for which 
grant funds are requested to the relevant goals and objectives of its 
plan;
    (c) A description of any activities that were funded under previous 
development grants awarded under the Developing Hispanic-Serving 
Institutions Program that expired within five years of when the 
development grant will begin and the institution's justification for not 
completing the activities under the previous grant, if applicable;
    (d) If the applicant is applying to carry out more than one 
activity--
    (1) A description of those activities that would be a sound 
investment of Federal funds if funded separately;
    (2) A description of those activities that would be a sound 
investment of Federal funds only if funded with the other activities; 
and
    (3) A ranking of the activities in preferred funding order.

(Approved by the Office of Management and Budget under control number 
1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.12  What must be included in cooperative arrangement grant applications?

    (a)(1) Institutions applying for a cooperative arrangement grant 
shall submit only one application for that grant regardless of the 
number of institutions participating in the cooperative arrangement.
    (2) The application must include the names of each participating 
institution, the role of each institution, and the rationale for each 
eligible participating institution's decision to request grant funds as 
part of a cooperative arrangement rather than as an individual grantee.
    (b) If the application is for a development grant, the application 
must contain--
    (1) Each participating institution's comprehensive development plan;
    (2) The information required under Sec. 606.11; and
    (3) An explanation from each eligible participating institution of 
why participation in a cooperative arrangement grant rather than 
performance under an individual grant will better enable it to meet the 
goals and objectives of its comprehensive development plan at a lower 
cost.
    (4) The name of the applicant for the group that is legally 
responsible for--
    (i) The use of all grant funds; and
    (ii) Ensuring that the project is carried out by the group in 
accordance with Federal requirements. (Approved by the Office of 
Management and Budget under control number 1840-0114)

(Authority: 20 U.S.C. 1103 and 1103e)



Sec. 606.13  How many applications for a development grant may an institution submit?

    In any fiscal year, an institution of higher education may--
    (a) Submit an application for an individual development grant; and
    (b) Be part of a cooperative arrangement application.

(Authority: 20 U.S.C. 1101 et seq.)



            Subpart C--How Does the Secretary Make an Award?



Sec. 606.20  How does the Secretary choose applications for funding?

    (a) The Secretary evaluates an application on the basis of the 
criteria in--
    (1) Sections 606.21 and 606.23 for a planning grant; and
    (2) Sections 606.22, 606.23, 600.24, and 606.25 for a development 
grant.
    (b)(1) The Secretary awards up to 100 points for the criteria in 
Sec. 606.21 and up to 100 points for the criteria in Sec. 606.22.
    (2) The maximum possible score for each complete criterion is in 
parentheses.
    (c)(1) The Secretary considers funding an application for a planning 
grant that scores at least 50 points under Sec. 606.21.

[[Page 225]]

    (2) The Secretary considers funding an application for a development 
grant that--
    (i) Scores at least 50 points under Sec. 606.22;
    (ii) Is submitted with a comprehensive development plan that 
satisfies all the elements required of such a plan under Sec. 606.8; and
    (iii) In the case of an application for a cooperative arrangement 
grant, demonstrates that the grant will enable each eligible participant 
to meet the goals and objectives of its comprehensive development plan 
better and at a lower cost than if each eligible participant were funded 
individually.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.21  What are the selection criteria for planning grants?

    The Secretary uses the following criteria to evaluate an application 
to determine whether the applicant will produce a good comprehensive 
development plan and a fundable application:
    (a) Design of the planning process. (Total: 60 points) The Secretary 
reviews each application to determine the quality of the planning 
process that the applicant will use to develop a comprehensive 
development plan and an application for a development grant based on the 
extent to which--
    (1) The planning process is clearly and comprehensively described 
and based on sound planning practice (15 points);
    (2) The president or chief executive officer, administrators and 
other institutional personnel, students, and governing board members 
systematically and consistently will be involved in the planning process 
(15 points);
    (3) The applicant will use its own resources to help implement the 
project (10 points); and
    (4) The planning process is likely to achieve its intended results 
(20 points).
    (b) Key personnel. (Total: 20 points) The Secretary reviews each 
application to determine the quality of key personnel to be involved in 
the project based on the extent to which--
    (1) The past experience and training of key personnel such as the 
project coordinator and persons who have key roles in the planning 
process are suitable to the tasks to be performed (10 points); and
    (2) The time commitments of key personnel are adequate (10 points).
    (c) Project Management. (Total: 15 points) The Secretary reviews 
each application to determine the quality of the plan to manage the 
project effectively based on the extent to which--
    (1) The procedures for managing the project are likely to ensure 
effective and efficient project implementation (10 points); and
    (2) The project coordinator has sufficient authority, including 
access to the president or chief executive officer, to conduct the 
project effectively (5 points).
    (d) Budget. (Total: 5 points) The Secretary reviews each application 
to determine the extent to which the proposed project costs are 
necessary and reasonable. (Approved by the Office of Management and 
Budget under control number 1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.22  What are the selection criteria for development grants?

    The Secretary uses the following criteria to evaluate applications 
for development grants:
    (a) Quality of the applicant's comprehensive development plan. 
(Total: 30 points) The extent to which--
    (1) The strengths, weaknesses, and significant problems of the 
institution's academic programs, institutional management, and fiscal 
stability are clearly and comprehensively analyzed and result from a 
process that involved major constituencies of the institution. (12 
points);
    (2) The goals for the institution's academic programs, institutional 
management, and fiscal stability are realistic and based on 
comprehensive analysis. (5 points);
    (3) The objectives stated in the plan are measurable, related to 
institutional goals, and, if achieved, will contribute to the growth and 
self-sufficiency of the institution (5 points);
    (4) The plan clearly and comprehensively describes the methods and 
resources the institution will use to institutionalize practice and 
improvements developed under the proposed project, including, in 
particular, how

[[Page 226]]

operational costs for personnel, maintenance, and upgrades of equipment 
will be paid with institutional resources (8 points).
    (b) Quality of activity objectives. (Total: 10 points) The extent to 
which the objectives for each activity are--
    (1) Realistic and defined in terms of measurable results (5 points); 
and
    (2) Directly related to the problems to be solved and to the goals 
of the comprehensive development plan (5 points).
    (c) Quality of implementation strategy. (Total: 25 points) The 
extent to which--
    (1) The implementation strategy for each activity is comprehensive 
(10 points);
    (2) The rationale for the implementation strategy for each activity 
is clearly described and is supported by the results of relevant studies 
or projects (10 points); and
    (3) The timetable for each activity is realistic and likely to be 
attained (5 points).
    (d) Quality of key personnel. (Total: 10 points) The extent to 
which--
    (1) The past experience and training of key professional personnel 
are directly related to the stated activity objectives (7 points); and
    (2) The time commitment of key personnel is realistic (3 points).
    (e) Quality of project management plan. (Total: 10 points) The 
extent to which--
    (1) Procedures for managing the project are likely to ensure 
efficient and effective project implementation (5 points); and
    (2) The project coordinator and activity directors have sufficient 
authority to conduct the project effectively, including access to the 
president or chief executive officer (5 points).
    (f) Quality of evaluation plan. (Total: 10 points) The extent to 
which--
    (1) The data elements and the data collection procedures are clearly 
described and appropriate to measure the attainment of activity 
objectives and to measure the success of the project in achieving the 
goals of the comprehensive development plan (5 points); and
    (2) The data analysis procedures are clearly described and are 
likely to produce formative and summative results on attaining activity 
objectives and measuring the success of the project on achieving the 
goals of the comprehensive development plan (5 points).
    (g) Budget. (Total: 5 points) The extent to which the proposed costs 
are necessary and reasonable in relation to the project's objectives and 
scope. (Approved by the Office of Management and Budget under control 
number 1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.23  What special funding consideration does the Secretary provide?

    (a) If funds are available to fund only one additional planning 
grant and each of the next fundable applications has received the same 
number of points under Sec. 606.21, the Secretary awards additional 
points, up to a maximum of two points, to any of those applicants that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at similar type institutions; (one point) or
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student which are less than the average expenditure for library 
materials per full-time equivalent enrolled student at similar type 
institutions. (one point)
    (b) If funds are available to fund only one additional development 
grant and each of the next fundable applications has received the same 
number of points under Sec. 606.22, the Secretary will award additional 
points, up to a maximum of three points, to any of those applicants 
that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at comparable institutions that offer similar instruction; (one 
point)
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student that are less than the average expenditures for library 
materials per full-time equivalent enrolled student at comparable 
institutions that offer similar instruction (one point); or

[[Page 227]]

    (3) Propose to carry out one or more of the following activities--
    (i) Faculty development;
    (ii) Funds and administrative management;
    (iii) Development and improvement of academic programs;
    (iv) Acquisition of equipment for use in strengthening management 
and academic programs;
    (v) Joint use of facilities; and
    (vi) Student services. (one point)
    (c) As used in this section, an ``endowment fund'' does not include 
any fund established or supported under 34 CFR part 628.
    (d) Each year, the Secretary provides prospective applicants with 
the average market value of endowment funds and the average expenditure 
of library materials per full-time equivalent student.
    (e) The Secretary gives priority to each application that contains 
satisfactory evidence that the applicant has entered into or will enter 
into a collaborative arrangement with at least one local educational 
agency or community-based organization to provide that agency or 
organization with assistance (from funds other than funds provided under 
this part) in--
    (1) Reducing the dropout rates of Hispanic students;
    (2) Improving rates of academic achievement of Hispanic students; 
and
    (3) Increasing the rates at which Hispanic high school graduates 
enroll in higher education.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.24  How does the Secretary use an applicant's performance under a previous development grant when awarding a development grant?

    (a)(1) In addition to evaluating an application under the selection 
criteria in Sec. 606.22, the Secretary evaluates an applicant's 
performance under any previous development grant awarded under the 
Developing Hispanic-Serving Institutions Program that expired within 
five years of the year when the development grant will begin.
    (2) The Secretary evaluates whether the applicant fulfilled, or is 
making substantial progress toward fulfilling, the goals and objectives 
of the previous grant, including, but not limited to, the applicant's 
success in institutionalizing practices developed and improvements made 
under the grant.
    (3) The Secretary bases the evaluation of the applicant's 
performance on information contained in--
    (i) Performance and evaluation reports submitted by the applicant;
    (ii) Audit reports submitted on behalf of the applicant; and
    (iii) Other information obtained by the Secretary, including reports 
prepared by the Department.
    (b) If the Secretary initially determines that the applicant did not 
fulfill the goals and objectives of a previous grant or is not making 
substantial progress towards fulfilling those goals and objectives, the 
Secretary affords the applicant the opportunity to respond to that 
initial determination.
    (c) If the Secretary determines that the applicant did not fulfill 
the goals and objectives of a previous grant or is not making 
substantial progress towards fulfilling those goals and objectives, the 
Secretary may--
    (1) Decide not to fund the applicant; or
    (2) Fund the applicant but impose special grant terms and 
conditions, such as specific reporting and monitoring requirements.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.25  What priority does the Secretary use in awarding cooperative arrangement grants?

    Among applications for cooperative arrangement grants, the Secretary 
gives priority to proposed cooperative arrangements that are 
geographically and economically sound, or will benefit the institutions 
applying for the grant.

(Authority: 20 U.S.C. 1101 et seq.)



             Subpart D--What Conditions Must a Grantee Meet?



Sec. 606.30  What are allowable costs and what are the limitations on allowable costs?

    (a) Allowable costs. Except as provided in paragraphs (b) and (c) of 
this section, a grantee may expend grant funds for activities that are 
related to carrying out the allowable activities included in its 
approved application.

[[Page 228]]

    (b) Supplement and not supplant. Grant funds shall be used so that 
they supplement and, to the extent practical, increase the funds that 
would otherwise be available for the activities to be carried out under 
the grant and in no case supplant those funds.
    (c) Limitations on allowable costs. A grantee may not use an 
indirect cost rate to determine allowable costs under its grant.

(Authority: 20 U.S.C. 1101 et seq.)



Sec. 606.31  How does a grantee maintain its eligibility?

    (a) A grantee shall maintain its eligibility under the requirements 
in Sec. 606.2, except for Sec. 606.2(a)(3) and (4), for the duration of 
the grant period.
    (b) The Secretary reviews an institution's application for a 
continuation award to ensure that--
    (1) The institution continues to meet the eligibility requirements 
described in paragraph (a) of this section; and
    (2) The institution is making substantial progress toward achieving 
the objectives described in its grant application including, if 
applicable, the institution's success in institutionalizing practices 
and improvements developed under the grant.

(Authority: 20 U.S.C. 1101 et seq.)



PART 607--STRENGTHENING INSTITUTIONS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
607.1  What is the Strengthening Institutions Program?
607.2  What institutions are eligible to receive a grant under the 
          Strengthening Institutions Program?
607.3  What is an enrollment of needy students?
607.4  What are low educational and general expenditures?
607.5  How does an institution apply to be designated an eligible 
          institution?
607.6  What regulations apply?
607.7  What definitions apply?
607.8  What is a comprehensive development plan and what must it 
          contain?
607.9  What are the type, duration and limitations in the awarding of 
          grants under this part?
607.10  What activities may and may not be carried out under a grant?

          Subpart B--How Does an Institution Apply for a Grant?

607.11  What must be included in individual development grant 
          applications?
607.12  What must be included in cooperative arrangement grant 
          applications?
607.13  How many applications for a development grant may an institution 
          submit?

            Subpart C--How Does the Secretary Make an Award?

607.20  How does the Secretary choose applications for funding?
607.21  What are the selection criteria for planning grants?
607.22  What are the selection criteria for development grants?
607.23  What special funding consideration does the Secretary provide?
607.24  How does the Secretary use an applicant's performance under a 
          previous development grant when awarding a development grant?
607.25  What priority does the Secretary use in awarding cooperative 
          arrangement grants?

             Subpart D--What Conditions Must a Grantee Meet?

607.30  What are allowable costs and what are the limitations on 
          allowable costs?
607.31  How does a grantee maintain its eligibility?

    Authority: 20 U.S.C. 1057-1059c, 1066-1069f, unless otherwise noted.

    Source: 52 FR 30529, Aug. 14, 1987, unless otherwise noted.



                           Subpart A--General



Sec. 607.1  What is the Strengthening Institutions Program?

    The purpose of the Strengthening Institutions Program is to provide 
grants to eligible institutions of higher education to improve their 
academic programs, institutional management, and fiscal stability in 
order to increase their self-sufficiency and strengthen their capacity 
to make a substantial contribution to the higher education resources of 
the Nation.

(Authority: 20 U.S.C. 1057)

[59 FR 41921, Aug. 15, 1994]

[[Page 229]]



Sec. 607.2  What institutions are eligible to receive a grant under the Strengthening Institutions Program?

    (a) Except as provided in paragraphs (b) and (c) of this section, an 
institution of higher education is eligible to receive a grant under the 
Strengthening Institutions Program if--
    (1) It has an enrollment of needy students as described in 
Sec. 607.3(a), unless the Secretary waives this requirement under 
Sec. 607.3(b);
    (2) It has low average educational and general expenditures per 
full-time equivalent undergraduate student as described in 
Sec. 607.4(a), unless the Secretary waives this requirement under 
Sec. 607.4(c).
    (3) It is legally authorized by the State in which it is located to 
be a junior college or to provide an educational program for which it 
awards a bachelor's degree; and
    (4) It is accredited or preaccredited by a nationally recognized 
accrediting agency or association that the Secretary has determined to 
be a reliable authority as to the quality of education or training 
offered.
    (b) A branch campus of an institution of higher education, if the 
institution as a whole meets the requirements of paragraphs (a)(1) 
through (4) of this section, is eligible to receive a grant under the 
Strengthening Institutions Program even if, by itself, it does not 
satisfy the requirements of paragraphs (a)(3) and (a)(4) of this 
section, although the branch must meet the requirements of paragraphs 
(a)(1) and (a)(2) of this section.
    (c) For the purpose of paragraphs (e)(2) and (f)(2) of this section, 
an institution's enrollment consists of a head count of its entire 
student body.
    (d) A tribal college or university may receive a grant authorized 
under section 316 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section, 
other than Sec. 607.2(a)(3), and
    (2)(i) It meets the definition of the term ``tribally controlled 
college or university'' in section 2 of the Tribally Controlled College 
or University Assistance Act of 1978; or
    (ii) It is listed in the Equity in Educational Land Grant Status Act 
of 1994.
    (e) An Alaska Native-serving institution may receive a grant under 
section 317 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section; 
and
    (2) It has, at the time of application, an enrollment of 
undergraduate students that is at least 20 percent Alaska Native 
students.
    (f) A Native Hawaiian-serving institution may receive a grant 
authorized under section 317 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section; 
and
    (2) It has, at the time of application, an enrollment of 
undergraduate students that is at least 10 percent Native Hawaiian 
students.
    (g)(1) An institution that qualifies for a grant under the 
Strengthening Historically Black Colleges and Universities Program (34 
CFR part 608) or the Developing Hispanic-Serving Institutions Program 
(34 CFR part 606) and receives a grant under either of these programs 
for a particular fiscal year is not eligible to receive a grant under 
this part for the same fiscal year.
    (2) A tribal college or university that receives a grant under 
section 316 of the HEA or an Alaska Native or Native Hawaiian-serving 
institution that receives a grant under section 317 of the HEA may not 
concurrently receive other grant funds under the Strengthening 
Institutions Program, Strengthening Historically Black Colleges and 
Universities Program, or Strengthening Historically Black Graduate 
Institutions Program.

(Authority: 20 U.S.C. 1057 et seq.)

[59 FR 41922, Aug. 15, 1994, as amended at 60 FR 15447, Mar. 23, 1995; 
64 FR 70153, Dec. 15, 1999]



Sec. 607.3  What is an enrollment of needy students?

    (a) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 607.2(a)(1), an applicant institution has an enrollment 
of needy students if in the base year--
    (1) At least 50 percent of its degree students received student 
financial assistance under one or more of the following programs: Pell 
Grant, Supplemental Educational Opportunity Grant, College Work-Study, 
and Perkins Loan; or

[[Page 230]]

    (2) The percentage of its undergraduate degree students who were 
enrolled on at least a half-time basis and received Pell Grants exceeded 
the median percentage of undergraduate degree students who were enrolled 
on at least a half-time basis and received Pell Grants at comparable 
institutions that offer similar instruction.
    (b) The Secretary may waive the requirement contained in paragraph 
(a) of this section if the institution demonstrates that--
    (1) The State provides more than 30 percent of the institution's 
budget and the institution charges not more than $99.00 for tuition and 
fees for an academic year;
    (2) At least 30 percent of the students served by the institution in 
the base year were students from low-income families;
    (3) The institution substantially increases the higher education 
opportunities for low-income students who are also educationally 
disadvantaged, underrepresented in postsecondary education, or minority 
students;
    (4) The institution substantially increases the higher education 
opportunities for individuals who reside in an area that is not included 
in a ``metropolitan statistical area'' as defined by the Office of 
Management and Budget and who are unserved by other postsecondary 
institutions;
    (5) The institution is located on or within 50 miles of an Indian 
reservation, or a substantial population of Indians and the institution 
will, if granted the waiver, substantially increase higher education 
opportunities for American Indians;
    (6) It is a tribal college or university; or
    (7) The institution will, if granted the waiver, substantially 
increase the higher education opportunities for Black Americans, 
Hispanic Americans, Native Americans, Asian Americans or Pacific 
Islanders, including Native Hawaiians.
    (c) For the purpose of paragraph (b) of this section, the Secretary 
considers ``low-income'' to be an amount which does not exceed 150 
percent of the amount equal to the poverty level as established by the 
United States Bureau of the Census.
    (d) Each year, the Secretary notifies prospective applicants through 
a notice in the Federal Register of the low-income figures.

(Authority: 20 U.S.C. 1058 and 1067)

[52 FR 30529, Aug. 14, 1987, as amended at 60 FR 15447, Mar. 23, 1995; 
64 FR 70153, Dec. 15, 1999]



Sec. 607.4  What are low educational and general expenditures?

    (a)(1) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 6072(a)(2), an applicant institution's average 
educational and general expenditures per full-time equivalent 
undergraduate student in the base year must be less than the average 
educational and general expenditures per full-time equivalent 
undergraduate student of comparable institutions that offer similar 
institution in that year.
    (2) For the purpose of paragraph (a)(1) of this section, the 
Secretary determines the average educational and general expenditure per 
FTE undergraduate student for institutions with graduate students that 
do not differentiate between graduate and undergraduate E&G expenditures 
by discounting the graduate enrollment using a factor of 2.5 times the 
number of graduate students.
    (b) Each year, the Secretary notifies prospective applicants through 
a notice in the Federal Register of the average educational and general 
expenditures per full-time equivalent undergraduate student at 
comparable institutions that offer similar instruction.
    (c) The Secretary may waive the requirement contained in paragraph 
(a) of this section, if the Secretary determines, based upon persuasive 
evidence provided by the institution, that--
    (1) The institution's failure to satisfy the criteria in paragraph 
(a) of this section was due to factors which, if used in determining 
compliance with those criteria, distorted that determination; and
    (2) The institution's designation as an eligible institution under 
this part is otherwise consistent with the purposes of this part.
    (d) For the purpose of paragraph (c)(1) of this section, the 
Secretary considers that the following factors

[[Page 231]]

may distort an institution's educational and general expenditures per 
full-time equivalent undergraduate student--
    (1) Low student enrollment;
    (2) Location of the institution in an unusually high cost-of-living 
area;
    (3) High energy costs;
    (4) An increase in State funding that was part of a desegregation 
plan for higher education; or
    (5) Operation of high cost professional schools such as medical or 
dental schools.

(Authority: 20 U.S.C. 1058 and 1067)

[59 FR 41922, Aug. 15, 1994]



Sec. 607.5  How does an institution apply to be designated an eligible institution?

    An institution shall apply to the Secretary to be designated an 
eligible institution under the Strengthening Institutions Program by 
submitting an application to the Secretary in the form, manner and time 
established by the Secretary. The application must contain--
    (a) The information necessary for the Secretary to determine whether 
the institution satisfies the requirements of Secs. 607.2, 607.3(a) and 
607.4(a);
    (b) Any waiver request under Secs. 607.3(b) and 607.4(c); and
    (c) Information or explanations justifying any requested waiver.

(Authority: 20 U.S.C. 1058 and 1067)



Sec. 607.6  What regulations apply?

    The following regulations apply to the Strengthening Institutions 
Program:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 
75.128(a)(2) and 75.129(a) in the case of applications for cooperative 
arrangements.
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 82 (New Restrictions on Lobbying).
    (6) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (7) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 607.

(Authority: 20 U.S.C. 1057)

[59 FR 41922, Aug. 15, 1994]



Sec. 607.7  What definitions apply?

    (a) Definitions in EDGAR. The following terms that apply to the 
Institutional Aid Programs are defined in 34 CFR 77.1:

EDGAR
Fiscal year
Grant
Grantee
Grant period
Nonprofit
Private
Project period
Public
Secretary
State

    (b) The following term used in this part is defined in section 312 
of the HEA:

Endowment fund

    (c) The following terms used in this part are defined in section 316 
of the HEA:

Indian
Indian tribe
Tribal college or university

    (d) The following terms used in this part are defined in section 317 
of the HEA:

Alaska Native
Alaska Native-serving institution
Native Hawaiian
Native Hawaiian-serving institution

    (e) The following definitions also apply to this part:
    Accredited means the status of public recognition which a nationally 
recognized accrediting agency or association grants to an institution 
which meets certain established qualifications and educational 
standards.
    Activity means an action that is incorporated into an implementation 
plan designed to meet one or more objectives. An activity is a part of a 
project and has its own budget that is approved to carry out the 
objectives of that subpart.

[[Page 232]]

    Base year means the second fiscal year preceding the fiscal year for 
which an institution seeks a grant under this part.
    Branch campus means a unit of a college or university that is 
geographically apart from the main campus of the college or university 
and independent of that main campus. The Secretary considers a unit of a 
college or university to be independent of the main campus if the unit--
    (1) Is permanent in nature;
    (2) Offers courses for credit and programs leading to an associate 
or bachelor's degree; and
    (3) Is autonomous to the extent that it has--
    (i) Its own faculty and administrative or supervisory organization; 
and
    (ii) Its own budgetary and hiring authority.
    Comparable institutions that offer similar instruction means 
institutions that are being compared with an applicant institution and 
that fall within one of the following four categories--
    (1) Public junior or community colleges;
    (2) Private nonprofit junior or community colleges;
    (3) Public institutions that offer an educational program for which 
they offer a bachelor's degree; or
    (4) Private nonprofit institutions that offer an educational program 
for which they offer a bachelor's degree.
    Cooperative arrangement means an arrangement to carry out allowable 
grant activities between an institution eligible to receive a grant 
under this part and another eligible or ineligible institution of higher 
education, under which the resources of the cooperating institutions are 
combined and shared to better achieve the purposes of this part and 
avoid costly duplication of effort.
    Degree student means a student who enrolls at an institution for the 
purpose of obtaining the degree, certificate, or other recognized 
educational credential offered by that institution.
    Developmental program and services means new or improved programs 
and services, beyond those regularly budgeted, specifically designed to 
improve the self sufficiency of the school.
    Educational and general expenditures means the total amount expended 
by an institution of higher education for instruction, research, public 
service, academic support (including library expenditures), student 
services, institutional support, scholarships and fellowships, operation 
and maintenance expenditures for the physical plant, and any mandatory 
transfers which the institution is required to pay by law.
    Educationally disadvantaged means a college student who requires 
special services and assistance to enable them to succeed in higher 
education. The phrase includes, but is not limited to, students who come 
from--
    (1) Economically disadvantaged families;
    (2) Limited English proficiency families;
    (3) Migrant worker families; or
    (4) Families in which one or both of their parents have dropped out 
of secondary school.
    Federal Pell Grant Program means the grant program authorized by 
title IV-A-1 of the HEA.
    Federal Perkins Loan Program, formerly called the National Direct 
Student Loan Program, means the loan program authorized by title IV-E of 
the HEA.
    Federal Supplemental Education Opportunity Grant Program means the 
grant program authorized by title IV-A-3 of the HEA.
    Federal Work-Study Program means the part-time employment program 
authorized under title IV-C of the HEA.
    Full-time equivalent students means the sum of the number of 
students enrolled full-time at an institution, plus the full-time 
equivalent of the number of students enrolled part time (determined on 
the basis of the quotient of the sum of the credit hours of all part-
time students divided by 12) at such institution.
    HEA means the Higher Education Act of 1965, as amended.
    Hispanic student means a person of Mexican, Puerto Rican, Cuban, 
Central or South American, or other Spanish culture or origin, 
regardless of race.
    Institution of higher education means an educational institution 
defined in section 101 of the HEA.

[[Page 233]]

    Junior or community college means an institution of higher 
education--
    (1) That admits as regular students persons who are beyond the age 
of compulsory school attendance in the State in which the institution is 
located and who have the ability to benefit from the training offered by 
the institution;
    (2) That does not provide an educational program for which it awards 
a bachelor's degree (or an equivalent degree); and
    (3) That--
    (i) Provides an educational program of not less than 2 years that is 
acceptable for full credit toward such a degree, or
    (ii) Offers a 2-year program in engineering, mathematics, or the 
physical or biological sciences, designed to prepare a student to work 
as a technician or at the semiprofessional level in engineering, 
scientific, or other technological fields requiring the understanding 
and application of basic engineering, scientific, or mathematical 
principles of knowledge.
    Low-income individual means an individual from a family whose 
taxable income for the preceding year did not exceed 150 percent of an 
amount equal to the poverty level determined by using criteria of 
poverty established by the Bureau of Census.
    Minority student means a student who is Alaskan Native, American 
Indian, Asian-American, Black (African-American), Hispanic American, 
Native Hawaiian, or Pacific Islander.
    Nationally recognized accrediting agency or association means an 
accrediting agency or association that the Secretary has recognized to 
accredit or preaccredit a particular category of institution in 
accordance with the provisions contained in 34 CFR part 603. The 
Secretary periodically publishes a list of those nationally recognized 
accrediting agencies and associations in the Federal Register.
    Operational programs and services means the regular, ongoing 
budgeted programs and services at an institution.
    Preaccredited means a status that a nationally recognized 
accrediting agency or association, recognized by the Secretary to grant 
that status, has accorded an unaccredited institution that is 
progressing toward accreditation within a reasonable period of time.
    Project means all the funded activities under a grant.
    Self-sufficiency means the point at which an institution is able to 
survive without continued funding under the Strengthening Institutions 
Program.
    Underrepresented means proportionate representation as measured by 
degree recipients, that is less than the proportionate representation in 
the general population--
    (1) As indicated by--
    (i) The most current edition of the Department's Digest of 
Educational Statistics;
    (ii) The National Research Council's Doctorate Recipients from 
United States Universities; or
    (iii) Other standard statistical references, as announced annually 
in the Federal Register notice inviting applications for new awards 
under this program; or
    (2) As documented by national survey data submitted to and accepted 
by the Secretary on a case-by-case basis.

(Authority: 20 U.S.C. 1051, 1057-1059 and 1066-1069f; OMB Directive No. 
15)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41922, Aug. 15, 1994; 
60 FR 15447, Mar. 23, 1995; 64 FR 70153, Dec. 15, 1999]



Sec. 607.8  What is a comprehensive development plan and what must it contain?

    (a) A comprehensive development plan is an institution's strategy 
for achieving growth and self-sufficiency by strengthening its--
    (1) Academic programs;
    (2) Institutional management; and
    (3) Fiscal stability.
    (b) The comprehensive development plan must include the following:
    (1) An analysis of the strengths, weaknesses, and significant 
problems of the institution's academic programs, institutional 
management, and fiscal stability.
    (2) A delineation of the institution's goals for its academic 
programs, institutional management, and fiscal stability, based on the 
outcomes of the analysis described in paragraph (b)(1) of this section.

[[Page 234]]

    (3) Measurable objectives related to reaching each goal and 
timeframes for achieving the objectives.
    (4) Methods and resources that will be used to institutionalize 
practices and improvements developed under the proposed project.
    (5) For a grant under section 316 of the HEA to a tribal college or 
university, its five-year plan for improving its services to Indian 
students, increasing the rates at which Indian secondary school students 
enroll in higher education, and increasing overall postsecondary 
retention rates for Indian students.
    (6) For a grant under section 317 of the HEA to an Alaska Native-
serving institution or to a Native Hawaiian-serving institution, its 
five-year plan for improving its services to Alaska Native or Native 
Hawaiian students, respectively.

(Authority: 20 U.S.C. 1066)

[59 FR 41923, Aug. 15, 1994, as amended at 64 FR 70154, Dec. 15, 1999]



Sec. 607.9  What are the type, duration and limitations in the awarding of grants under this part?

    (a)(1) Under this part, the Secretary may award planning grants and 
two types of development grants, individual development grants and 
cooperative arrangement development grants.
    (2) Planning grants may be awarded for a period not to exceed one 
year.
    (3) Either type of development grant may be awarded for a period of 
five years.
    (b)(1) An institution that received an individual development grant 
of five years may not subsequently receive another individual 
development grant for a period of two years from the date on which the 
five-year grant period terminates.
    (2) A cooperative arrangement grant is not considered to be an 
individual development grant under paragraph (b)(1) of this section.

(Authority: 20 U.S.C. 1059)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41923, Aug. 15, 1994; 
64 FR 70154, Dec. 15, 1999]



Sec. 607.10  What activities may and may not be carried out under a grant?

    (a) Planning grants. Under a planning grant, a grantee shall 
formulate--
    (1) A comprehensive development plan described in Sec. 607.8; and
    (2) An application for a development grant.
    (b) Development grants--allowable activities. Under a development 
grant, except as provided in paragraph (c) of this section, a grantee 
shall carry out activities that implement its comprehensive development 
plan and hold promise for strengthening the institution. Activities that 
may be carried out include, but are not limited to--
    (1) Faculty exchanges, faculty fellowships, and faculty development 
that provide faculty with the skills and knowledge needed to--
    (i) Develop academic support services, including advising and 
mentoring students;
    (ii) Develop academic programs or methodology, including computer-
assisted instruction, that strengthen the academic quality of the 
institution; or
    (iii) Acquire terminal degrees that are required to obtain or retain 
accreditation of an academic program or department;
    (2) Funds and administrative management that will improve the 
institution's ability to--
    (i) Manage financial resources in an efficient and effective manner; 
and
    (ii) Collect, access, and use information about the institution's 
operations for improved decisionmaking;
    (3) Developing and improving academic programs that enable the 
institution to--
    (i) Develop new academic programs or new program options that show 
promise for increased student enrollment;
    (ii) Provide new technology or methodology to increase student 
success and retention or to retain accreditation; or
    (iii) Improve curriculum or methodology for existing academic 
programs to stabilize or increase student enrollment;
    (4) Acquiring equipment for use in strengthening management and 
academic programs to achieve objectives

[[Page 235]]

such as those described in paragraphs (b)(2) and (b)(3) of this section;
    (5) Establishing or increasing the joint use of facilities such as 
libraries and laboratories to--
    (i) Eliminate the distance and high cost associated with providing 
academic programs and academic support; or
    (ii) Provide clinical experience that is part of an approved 
academic program at off-campus locations;
    (6) Developing or improving student services to provide--
    (i) New or improved methods to deliver student services, including 
counseling, tutoring, and instruction in basic skills; or
    (ii) Improved strategies to train student services personnel;
    (7) Payment of any portion of the salary of a dean, with proper 
justification, to fill a position under the project such as project 
coordinator or activity director. For purposes of this paragraph, proper 
justification includes evidence that the position entitled ``Dean'' is 
not one that has college-wide administrative authority and 
responsibility;
    (8) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional and research purposes;
    (9) Construction, maintenance, renovation, and improvement in 
classrooms, libraries, laboratories, and other instructional facilities, 
including the integration of computer technology into institutional 
facilities to create smart buildings;
    (10) Establishing or improving a development office to strengthen or 
improve contributions from alumni and the private sector;
    (11) Establishing or improving an endowment fund, provided a grantee 
uses no more than 20 percent of its grant funds for this purpose and at 
least matches those grant funds with non-Federal funds;
    (12) Creating or improving facilities for Internet or other distance 
learning academic instruction capabilities, including purchase or rental 
of telecommunications technology equipment or services;
    (13) For grants authorized under section 316 of the HEA to tribal 
colleges or universities--
    (i) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional and research purposes;
    (ii) Construction, maintenance, renovation, and improvement in 
classroom, library, laboratory, and other instructional facilities, 
including purchase or rental of telecommunications technology equipment 
or services;
    (iii) Support of faculty exchanges, faculty development, and faculty 
fellowships to assist in attaining advanced degrees in their field of 
instruction;
    (iv) Curriculum development and academic instruction;
    (v) Purchase of library books, periodicals, microfilm, and other 
educational materials, including telecommunications program materials;
    (vi) Funds and administrative management, and acquisition of 
equipment for use in strengthening funds management;
    (vii) Joint use of facilities such as laboratories and libraries; 
and
    (viii) Academic tutoring and counseling programs and student support 
services designed to improve academic services;
    (ix) Academic instruction in disciplines in which Indians are 
underrepresented;
    (x) Establishing or improving a development office to strengthen or 
improve contributions from the alumni and the private sector;
    (xi) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in elementary schools or secondary 
schools, with a particular emphasis on teaching Indian children and 
youth, that shall include, as part of such program, preparation for 
teacher certification;
    (xii) Establishing community outreach programs that encourage Indian 
elementary school and secondary school students to develop the academic 
skills and the interest to pursue postsecondary education; and
    (xiii) Establishing or improving an endowment fund, provided a 
grantee uses no more than 20 percent of its grant funds for this purpose 
and at least matches those grant funds with non-Federal funds; or

[[Page 236]]

    (14) For grants authorized under section 317 of the HEA to Alaska 
Native-serving institutions and Native Hawaiian-serving institutions--
    (i) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional and research purposes;
    (ii) Renovation and improvement in classroom, library, laboratory, 
and other instructional facilities;
    (iii) Support of faculty exchanges, faculty development, and faculty 
fellowships to assist in attaining advanced degrees in the faculty's 
field of instruction;
    (iv) Curriculum development and academic instruction;
    (v) Purchase of library books, periodicals, microfilm, and other 
educational materials;
    (vi) Funds and administrative management, and acquisition of 
equipment for use in strengthening funds management;
    (vii) Joint use of facilities such as laboratories and libraries;
    (viii) Academic tutoring and counseling programs and student support 
services.
    (c) Development grants--unallowable activities. A grantee may not 
carry out the following activities or pay the following costs under a 
development grant:
    (1) Activities that are not included in the grantee's approved 
application.
    (2) Activities that are inconsistent with any State plan for higher 
education that is applicable to the institution, including, but not 
limited to, a State plan for desegregation of higher education.
    (3) Activities or services that relate to sectarian instruction or 
religious worship.
    (4) Activities provided by a school or department of divinity. For 
the purpose of this provision, a ``school or department of divinity'' 
means an institution, or a department of an institution, whose program 
is specifically for the education of students to prepare them to become 
ministers of religion or to enter into some other religious vocation or 
to prepare them to teach theological subjects.
    (5) Developing or improving non-degree or non-credit courses other 
than basic skills development courses.
    (6) Developing or improving community-based or community services 
programs, unless the program provides academic-related experiences or 
academic credit toward a degree for degree students, or unless it is an 
outreach program that encourages Indian elementary school and secondary 
school students to develop the academic skills and the interest to 
pursue postsecondary education.
    (7) Purchase of standard office equipment, such as furniture, file 
cabinets, bookcases, typewriters, or word processors.
    (8) Payment of any portion of the salary of a president, vice 
president, or equivalent officer who has college-wide administrative 
authority and responsibility at an institution to fill a position under 
the grant such as project coordinator or activity director.
    (9) Costs of organized fund-raising, including financial campaigns, 
endowment drives, solicitation of gifts and bequests, and similar 
expenses incurred solely to raise capital or obtain contributions.
    (10) Costs of student recruitment such as advertisements, 
literature, and college fairs.
    (11) Services to high school students, unless they are part of a 
program to encourage Indian students to develop the academic skills and 
the interest to pursue postsecondary education.
    (12) Instruction in the institution's standard courses as indicated 
in the institution's catalog.
    (13) Costs for health and fitness programs, transportation, and day 
care services.
    (14) Student activities such as entertainment, cultural, or social 
enrichment programs, publications, social clubs, or associations.
    (15) Activities that are operational in nature rather than 
developmental in nature.
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund under paragraphs (b)(11) or 
(b)(13)(xiii) of this section, it must comply with the provisions of 
Secs. 628.3, 628.6, 628.10 and 628.41

[[Page 237]]

through 628.47 of this chapter with regard to the use of those funds, 
except--
    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For the purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus.
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use any of 
its grant funds for endowment purposes, it must match those grant funds 
immediately with non-Federal funds when it places those funds into its 
endowment fund.

(Authority: 20 U.S.C. 1057 et seq.)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41923, Aug. 15, 1994; 
60 FR 15447, Mar. 23, 1995; 64 FR 70154, Dec. 15, 1999; 65 FR 79310, 
Dec. 19, 2000]



          Subpart B--How Does an Institution Apply for a Grant?



Sec. 607.11  What must be included in individual development grant applications?

    In addition to the information needed by the Secretary to determine 
whether the institution should be awarded a grant under the funding 
criteria contained in subpart C, an application for a development grant 
must include--
    (a) The institution's comprehensive development plan;
    (b) A description of the relationship of each activity for which 
grant funds are requested to the relevant goals and objectives of its 
plan;
    (c) A description of any activities that were funded under previous 
development grants awarded under the Strengthening Institutions Program 
that expired within five years of when the development grant will begin 
and the institution's justification for not completing the activities 
under the previous grant, if applicable; and
    (d) If the applicant is applying to carry out more than one 
activity--
    (1) A description of those activities that would be a sound 
investment of Federal funds if funded separately;
    (2) A description of those activities that would be a sound 
investment of Federal funds only if funded with the other activities; 
and
    (3) A ranking of the activities in preferred funding order.

(Approved by the Office of Management and Budget under control number 
1840-0114)

(Authority: 20 U.S.C. 1057 et seq.)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41924, Aug. 15, 1994; 
60 FR 15447, Mar. 23, 1995; 64 FR 70155, Dec. 15, 1999]



Sec. 607.12  What must be included in cooperative arrangement grant applications?

    (a)(1) Institutions applying for a cooperative arrangement grant 
shall submit only one application for that grant regardless of the 
number of institutions participating in the cooperative arrangement.
    (2) The application must include the names of each participating 
institution, the role of each institution, and the rationale for each 
eligible participating institution's decision to request grant funds as 
part of a cooperative arrangement rather than as an individual grantee.
    (b) If the application is for a development grant, the application 
must contain--
    (1) Each participating institution's comprehensive development plan;
    (2) The information required under Sec. 607.11; and
    (3) An explanation from each eligible participating institution of 
why participation in a cooperative arrangement grant rather than 
performance under an individual grant will better enable it to meet the 
goals and objectives of its comprehensive development plan at a lower 
cost.
    (4) The name of the applicant for the group that is legally 
responsible for--
    (i) The use of all grant funds; and

[[Page 238]]

    (ii) Ensuring that the project is carried out by the group in 
accordance with Federal requirements.

(Approved by the Office of Management and Budget under control number 
1840-0114)

(Authority: 20 U.S.C. 1066 and 1069)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41924, Aug. 15, 1994]



Sec. 607.13  How many applications for a development grant may an institution submit?

    In any fiscal year, an institution of higher education that meets 
the eligibility requirements under sections 311, 316, and 317 of the HEA 
may--
    (a) Submit an application for a development grant authorized under 
sections 311, 316, and 317 of the HEA; and
    (b) Be part of a cooperative arrangement application.

(Authority: 20 U.S.C. 1057, 1069)

[59 FR 41924, Aug. 15, 1994, as amended at 64 FR 70155, Dec. 15, 1999]



            Subpart C--How Does the Secretary Make an Award?



Sec. 607.20  How does the Secretary choose applications for funding?

    (a) The Secretary evaluates an application on the basis of the 
criteria in--
    (1) Sections 607.21 and 607.23 for a planning grant; and
    (2) Sections 607.22, 607.23, 607.24, and 607.25 for a development 
grant.
    (b)(1) With regard to applicants that satisfy the requirements of 
paragraph (d) of this section, for each fiscal year, the Secretary 
awards individual development grants to applicants that are not 
individual development grantees under this part, before the Secretary 
awards an individual development grant to any applicant that is an 
individual grantee under this part.
    (2) For purposes of paragraph (b)(1) of this section, an institution 
that is a recipient of a cooperative arrangement grant is not an 
individual grantee under this part.
    (c)(1) The Secretary awards up to 100 points for the criteria in 
Sec. 607.21 and up to 100 points for the criteria in Sec. 607.22.
    (2) The maximum possible score for each complete criterion is in 
parentheses.
    (d)(1) The Secretary considers funding an application for a planning 
grant that scores at least 50 points under Sec. 607.21.
    (2) The Secretary considers funding an application for a development 
grant that--
    (i) Scores at least 50 points under Sec. 607.22;
    (ii) Is submitted with a comprehensive development plan that 
satisfies all the elements required of such a plan under Sec. 607.8; and
    (iii) In the case of an application for a cooperative arrangement 
grant, demonstrates that the grant will enable each eligible participant 
to meet the goals and objectives of its comprehensive development plan 
better and at a lower cost than if each eligible participant were funded 
individually.

(Authority: 20 U.S.C. 1057-1059, 1066-1069f)

[59 FR 41924, Aug. 15, 1994, as amended at 60 FR 15447, Mar. 23, 1995; 
64 FR 70155, Dec. 15, 1999]



Sec. 607.21  What are the selection criteria for planning grants?

    The Secretary uses the following criteria to evaluate an application 
to determine whether the applicant will produce a good comprehensive 
development plan and a fundable Strengthening Institutions Program 
application:
    (a) Design of the planning process. (Total: 60 points) The Secretary 
reviews each application to determine the quality of the planning 
process that the applicant will use to develop a comprehensive 
development plan and an application for a development grant based on the 
extent to which--
    (1) The planning process is clearly and comprehensively described 
and based on sound planning practice (15 points);
    (2) The president or chief executive officer, administrators and 
other institutional personnel, students, and governing board members 
systematically and consistently will be involved in the planning process 
(15 points);
    (3) The applicant will use its own resources to help implement the 
project (10 points); and
    (4) The planning process is likely to achieve its intended results 
(20 points).

[[Page 239]]

    (b) Key personnel. (Total: 20 points) The Secretary reviews each 
application to determine the quality of key personnel to be involved in 
the project based on the extent to which--
    (1) The past experience and training of key personnel such as the 
project coordinator and persons who have key roles in the planning 
process are suitable to the tasks to be performed (10 points); and
    (2) The time commitments of key personnel are adequate (10 points).
    (c) Project Management. (Total: 15 points) The Secretary reviews 
each application to determine the quality of the plan to manage the 
project effectively based on the extent to which--
    (1) The procedures for managing the project are likely to ensure 
effective and efficient project implementation (10 points); and
    (2) The project coordinator has sufficient authority, including 
access to the president or chief executive officer, to conduct the 
project effectively (5 points).
    (d) Budget. (Total: 5 points) The Secretary reviews each application 
to determine the extent to which the proposed project costs are 
necessary and reasonable.

(Approved by the Office of Management and Budget under control number 
1840-0114)

(Authority: 20 U.S.C. 1057-1059, 1066-1069)



Sec. 607.22  What are the selection criteria for development grants?

    The Secretary uses the following criteria to evaluate applications 
for development grants:
    (a) Quality of the applicant's comprehensive development plan. 
(Total: 30 points) The extent to which--
    (1) The strengths, weaknesses, and significant problems of the 
institution's academic programs, institutional management, and fiscal 
stability are clearly and comprehensively analyzed and result from a 
process that involved major constituencies of the institution. (12 
points);
    (2) The goals for the institution's academic programs, institutional 
management, and fiscal stability are realistic and based on 
comprehensive analysis. (5 points);
    (3) The objectives stated in the plan are measurable, related to 
institutional goals, and, if achieved, will contribute to the growth and 
self-sufficiency of the institution (5 points);
    (4) The plan clearly and comprehensively describes the methods and 
resources the institution will use to institutionalize practice and 
improvements developed under the proposed project, including, in 
particular, how operational costs for personnel, maintenance, and 
upgrades of equipment will be paid with institutional resources (8 
points).
    (b) Quality of activity objectives. (Total: 10 points) The extent to 
which the objectives for each activity are--
    (1) Realistic and defined in terms of measurable results (5 points); 
and
    (2) Directly related to the problems to be solved and to the goals 
of the comprehensive development plan (5 points).
    (c) Quality of implementation strategy. (Total: 25 points) The 
extent to which--
    (1) The implementation strategy for each activity is comprehensive 
(10 points);
    (2) The rationale for the implementation strategy for each activity 
is clearly described and is supported by the results of relevant studies 
or projects (10 points); and
    (3) The timetable for each activity is realistic and likely to be 
attained (5 points).
    (d) Quality of key personnel. (Total: 10 points) The extent to 
which--
    (1) The past experience and training of key professional personnel 
are directly related to the stated activity objectives (7 points); and
    (2) The time commitment of key personnel is realistic (3 points).
    (e) Quality of project management plan. (Total: 10 points) The 
extent to which--
    (1) Procedures for managing the project are likely to ensure 
efficient and effective project implementation (5 points); and
    (2) The project coordinator and activity directors have sufficient 
authority to conduct the project effectively, including access to the 
president or chief executive officer (5 points).
    (f) Quality of evaluation plan. (Total: 10 points) The extent to 
which--
    (1) The data elements and the data collection procedures are clearly 
described and appropriate to measure the

[[Page 240]]

attainment of activity objectives and to measure the success of the 
project in achieving the goals of the comprehensive development plan (5 
points); and
    (2) The data analysis procedures are clearly described and are 
likely to produce formative and summative results on attaining activity 
objectives and measuring the success of the project on achieving the 
goals of the comprehensive development plan (5 points).
    (g) Budget. (Total: 5 points) The extent to which the proposed costs 
are necessary and reasonable in relation to the project's objectives and 
scope.

(Approved by the Office of Management and Budget under control number 
1840-0114)

(Authority: 20 U.S.C. 1057-1059, 1066-1069f)

[59 FR 41924, Aug. 15, 1994]



Sec. 607.23  What special funding consideration does the Secretary provide?

    (a) If funds are available to fund only one additional planning 
grant and each of the next fundable applications has received the same 
number of points under Sec. 607.21, the Secretary awards additional 
points, up to a maximum of two points, to any of those applicants that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at similar type institutions; (one point) or
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student which is less than the average expenditure for library 
materials per full-time equivalent enrolled student at similar type 
institutions. (one point)
    (b) If funds are available to fund only one additional development 
grant and each of the next fundable applications has received the same 
number of points under Sec. 607.22, the Secretary will award additional 
points, up to a maximum of three points, to any of those applicants 
that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at comparable institutions that offer similar instruction; (one 
point)
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student which are less than the average expenditures for 
library materials per full-time equivalent enrolled student at 
comparable institutions that offer similar instruction (one point); or
    (3) Propose to carry out one or more of the following activities--
    (i) Faculty development;
    (ii) Funds and administrative management;
    (iii) Development and improvement of academic programs;
    (iv) Acquisition of equipment for use in strengthening management 
and academic programs;
    (v) Joint use of facilities; and
    (vi) Student services. (one point)
    (c) As used in this section, an endowment fund does not include any 
fund established or supported under 34 CFR part 628.
    (d) Each year, the Secretary provides prospective applicants with 
the average expenditure of endowment funds and library materials per 
full-time equivalent student.

(Authority: 20 U.S.C. 1057 et seq.)

[52 FR 30529, Aug. 14, 1987, as amended at 59 FR 41925, Aug. 15, 1994; 
60 FR 15447, Mar. 23, 1995; 64 FR 70155, Dec. 15, 1999]



Sec. 607.24  How does the Secretary use an applicant's performance under a previous development grant when awarding a development grant?

    (a)(1) In addition to evaluating an application under the selection 
criteria in Sec. 607.22, the Secretary evaluates an applicant's 
performance under any previous development grant awarded under the 
Strengthening Institutions Program that expired within five years of the 
year when the development grant will begin.
    (2) The Secretary evaluates whether the applicant fulfilled, or is 
making substantial progress toward fulfilling, the goals and objectives 
of the previous grant, including, but not limited to, the applicant's 
success in institutionalizing practices developed and improvements made 
under the grant.
    (3) The Secretary bases the evaluation of the applicant's 
performance on information contained in--

[[Page 241]]

    (i) Performance and evaluation reports submitted by the applicant;
    (ii) Audit reports submitted on behalf of the applicant; and
    (iii) Other information obtained by the Secretary, including reports 
prepared by the Department.
    (b) If the Secretary initially determines that the applicant did not 
fulfill the goals and objectives of a previous grant or is not making 
substantial progress towards fulfilling those goals and objectives, the 
Secretary affords the applicant the opportunity to respond to that 
initial determination.
    (c) If the Secretary determines that the applicant did not fulfill 
the goals and objectives of a previous grant or is not making 
substantial progress towards fulfilling those goals and objectives, the 
Secretary may--
    (1) Decide not to fund the applicant; or
    (2) Fund the applicant but impose special grant terms and 
conditions, such as specific reporting and monitoring requirements.

(Authority: 20 U.S.C. 1066)

[59 FR 41925, Aug. 15, 1994, as amended at 64 FR 70155, Dec. 15, 1999]



Sec. 607.25  What priority does the Secretary use in awarding cooperative arrangement grants?

    Among applications for cooperative arrangement grants, the Secretary 
gives priority to proposed cooperative arrangements that are 
geographically and economically sound, or will benefit the institutions 
applying for the grant.

(Authority: 20 U.S.C. 1057, 1069)

[59 FR 41925, Aug. 15, 1994]



             Subpart D--What Conditions Must a Grantee Meet?



Sec. 607.30  What are allowable costs and what are the limitations on allowable costs?

    (a) Allowable costs. Except as provided in paragraphs (b) and (c) of 
this section, a grantee may expend grant funds for activities that are 
related to carrying out the allowable activities included in its 
approved application.
    (b) Supplement and not supplant. Grant funds shall be used so that 
they supplement and, to the extent practical, increase the funds that 
would otherwise be available for the activities to be carried out under 
the grant and in no case supplant those funds.
    (c) Limitations on allowable costs. A grantee may not use an 
indirect cost rate to determine allowable costs under its grant.

(Authority: 20 U.S.C. 1057-1059 and 1066)



Sec. 607.31  How does a grantee maintain its eligibility?

    (a) A grantee shall maintain its eligibility under the requirements 
in Sec. 607.2, except for Sec. 607.2(a) (1) and (2), for the duration of 
the grant period.
    (b) The Secretary reviews an institution's application for a 
continuation award to ensure that--
    (1) The institution continues to meet the eligibility requirements 
described in paragraph (a) of this section; and
    (2) The institution is making substantial progress toward achieving 
the objectives set forth in its grant application including, if 
applicable, the institution's success in institutionalizing practices 
and improvements developed under the grant.

(Authority: 20 U.S.C. 1057-1059b, 1066-1069f)

[59 FR 41925, Aug. 15, 1994]



PART 608--STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES PROGRAM--Table of Contents




                           Subpart A--General

Sec.
608.1  What is the Strengthening Historically Black Colleges and 
          Universities (HBCU) Program?
608.2  What institutions are eligible to receive a grant under the HBCU 
          Program?
608.3  What regulations apply?
608.4  What definitions apply?

        Subpart B--What Kind of Projects Does the Secretary Fund?

608.10  What activities may be carried out under a grant?
608.11  What is the duration of a grant?

     Subpart C--How Does an Eligible Institution Apply for a Grant?

608.20  What are the application requirements for a grant under this 
          part?
608.21  What is a comprehensive development plan and what must it 
          contain?

[[Page 242]]

             Subpart D--How Does the Secretary Make a Grant?

608.30  What is the procedure for approving and disapproving grant 
          applications?
608.31  How does the Secretary determine the amount of a grant?

             Subpart E--What Conditions Must a Grantee Meet?

608.40  What are allowable costs and what are the limitations on 
          allowable costs?
608.41  What are the audit and repayment requirements?
608.42  Under what conditions does the Secretary terminate a grant?

    Authority: 20 U.S.C. 1060 through 1063a, 1063c, 1066, 1068, 1069c, 
1069d, and 1069f, unless otherwise noted.

    Source: 58 FR 38713, July 20, 1993, unless otherwise noted.



                           Subpart A--General



Sec. 608.1  What is the Strengthening Historically Black Colleges and Universities (HBCU) Program?

    The Strengthening Historically Black Colleges and Universities 
Program, hereafter called the HBCU Program, provides grants to 
Historically Black Colleges and Universities (HBCUs) to assist these 
institutions in establishing and strengthening their physical plants, 
academic resources and student services so that they may continue to 
participate in fulfilling the goal of equality of educational 
opportunity.

(Authority: 20 U.S.C. 1060)



Sec. 608.2  What institutions are eligible to receive a grant under the HBCU Program?

    (a) To be eligible to receive a grant under this part, an 
institution must--
    (1) Satisfy section 322(2) of the Higher Education Act of 1965, as 
amended (HEA);
    (2) Be legally authorized by the State in which it is located--
    (i) To be a junior or community college; or
    (ii) To provide an educational program for which it awards a 
bachelor's degree; and
    (3) Be accredited or preaccredited by a nationally recognized 
accrediting agency or association.
    (b) The Secretary has determined that the following institutions 
satisfy section 322(2) of the HEA.

                                 Alabama

Alabama A&M University-Huntsville
Alabama State University--Montgomery
Carver State Technical College--Mobile
Concordia College--Selma
Fredd State Technical College--Tuscaloosa
J.F. Drake State Technical College--Huntsville
S.D. Bishop State Junior College--Mobile
Lawson State College--Birmingham
Miles College--Birmingham
Oakwood College--Huntsville
Selma University--Selma
Stillman College--Tuscaloosa
Talladega University--Talladega
Trenholm State Technical College--Montgomery
Tuskegee University--Tuskegee

                                Arkansas

Arkansas Baptist College--Little Rock
Philander Smith College--Little Rock
Shorter College--Little Rock
University of Arkansas at Pine Bluff--Pine Bluff

                                Delaware

Delaware State College--Dover

                          District of Columbia

Howard University
University of the District of Columbia

                                 Florida

Bethune Cookman College--Daytona Beach
Edward Waters College--Jacksonville
Florida A&M University--Tallahassee
Florida Memorial College--Miami

                                 Georgia

Albany State College--Albany
Atlanta University--Atlanta
Clark College--Atlanta
Fort Valley State College--Fort Valley
Interdenominational Theological Center--Atlanta
Morehouse College--Atlanta
Morris Brown College--Atlanta
Paine College--Augusta
Savannah State College--Savannah
Spelman College--Atlanta

                                Kentucky

Kentucky State University--Frankfurt

                                Louisiana

Dillard University--New Orleans
Grambling State University--Grambling
Southern University A&M College--Baton Rouge

[[Page 243]]

Southern University at New Orleans--New Orleans
Southern University at Shreveport--Shreveport
Xavier University of Louisiana--New Orleans

                                Maryland

Bowie State College--Bowie
Coppin State College--Baltimore
Morgan State University--Baltimore
University of Maryland-Eastern Shore--Princess Anne

                                Michigan

Lewis College of Business--Detroit

                               Mississippi

Alcorn State University--Lorman
Coahoma Junior College--Clarksdale
Jackson State University--Jackson
Mary Holmes College--West Point
Mississippi Valley State University--Itta Bena
Prentiss Normal and Industrial Institute--Prentiss
Rust College--Holly Springs
Tougaloo College--Tougaloo
Hinds Junior College (Utica Jr Coll)--Raymond

                                Missouri

Lincoln University--Jefferson City
Harris-Stowe State College--St. Louis

                             North Carolina

Barber-Scotia College--Concord
Bennett College--Greensboro
Elizabeth City State University--Elizabeth City
Fayetteville State University--Fayetteville
Johnson C. Smith University--Charlotte
Livingstone College--Salisbury
North Carolina A&T State University--Greensboro
North Carolina Central University--Durham
Saint Augustine's College--Raleigh
Shaw University--Raleigh
Winston-Salem State University--Winston Salem

                                  Ohio

Central State University--Wilberforce
Wilberforce University--Wilberforce

                                Oklahoma

Langston University--Langston

                              Pennsylvania

Cheyney State University--Cheyney
Lincoln University--Lincoln

                             South Carolina

Allen University--Columbia
Benedict College--Columbia
Claflin College--Orangeburg
Clinton Junior College--Rock Hill
Denmark Technical College--Denmark
Morris College--Sumter
South Carolina State College--Orangeburg
Voorhees College--Denmark

                                Tennessee

Fisk University--Nashville
Knoxville College--Knoxville
Lane College--Jackson
LeMoyne-Owen College--Memphis
Meharry Medical College--Nashville
Morristown College--Morristown
Tennessee State University--Nashville

                                  Texas

Huston-Tillotson College--Austin
Jarvis Christian College--Hawkins
Paul Quinn College--Waco
Prairie View A&M University--Prairie View
Saint Philip's College--San Antonio
Southwestern Christian College--Terrell
Texas College--Tyler
Texas Southern University--Houston
Wiley College--Marshall

                           U.S. Virgin Islands

College of the Virgin Islands--St. Thomas

                                Virginia

Hampton University--Hampton
Norfolk State University--Norfolk
Saint Paul's College--Lawrenceville
Virginia State University--Petersburg
Virginia Union University--Richmond

                              West Virginia

Bluefield State College--Bluefield
West Virginia State College--Institute

    (c) If an institution identified in paragraph (b) of this section 
has merged with another institution, and, as a result of the merger, 
would not otherwise qualify to receive a grant under this part, that 
institution may nevertheless qualify to receive a grant under this part 
if--
    (1) The institution would have qualified to receive a grant before 
the merger; and
    (2) The institution was eligible to receive a grant under the 
Special Needs Program in any fiscal year prior to fiscal year 1986. (The 
Special Needs Program was authorized under Title III, Part B, of the HEA 
before 1986.)
    (d) For the purpose of paragraph (a)(3) of this section, the 
Secretary publishes a list in the Federal Register of nationally 
recognized accrediting agencies and associations.

[[Page 244]]

    (e) Notwithstanding any other provision of this section, for each 
fiscal year--
    (1) The University of the District of Columbia is eligible to 
receive a grant under this part only if the amount of the grant it is 
scheduled to receive under Sec. 608.31 exceeds the amount it is 
scheduled to receive in the same fiscal year under the District of 
Columbia Self-Government and Governmental Reorganization Act; and
    (2) Howard University is eligible to receive a grant under this part 
only if the amount of the grant it is scheduled to receive under 
Sec. 608.31 exceeds the amount it is scheduled to receive in the same 
fiscal year under the Act of March 2, 1867, 20 U.S.C. 123.

(Authority: 20 U.S.C. 1061, 1063, and 1063a; House Report 99-861, 99th 
Cong., 2d Sess. p. 367, September 22, 1986; Senate Report 99-296, 99th 
Cong., 2d Sess. p. 23, May 12, 1986; Cong. Rec. of June 3, 1986, pp. 
6588-6589)



Sec. 608.3  What regulations apply?

    The following regulations apply to this part:
    (a) The Department of Education General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) The following sections of 34 CFR part 75 (Direct Grant 
Programs): Secs. 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-
75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.910;
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 82 (New Restrictions on Lobbying).
    (6) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (7) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 608.

(Authority: 20 U.S.C. 1060-1063a, 1063c)



Sec. 608.4  What definitions apply?

    (a) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR 77.1:

Applicant
Application
Award
Budget
EDGAR
Equipment
Fiscal year
Grant period
Private
Project period
Public
Secretary

    (b) Other definitions. The following definitions also apply to this 
part:
    Accredited means the status of public recognition which a nationally 
recognized accrediting agency or association grants to an institution 
which meets certain established qualifications and educational 
standards.
    Graduate means a student who has attended an institution for at 
least three semesters and fulfilled academic requirements for 
undergraduate studies in not more than five consecutive school years.
    Junior or community college means an institution of higher education 
that--
    (i) Admits as regular students persons who are beyond the age of 
compulsory school attendance in the State in which the institution is 
located and who have the ability to benefit from the training offered by 
the institution;
    (ii) Does not provide an educational program for which it awards a 
bachelor's degree or an equivalent degree; and
    (iii) Provides an educational program of not less than 2 years that 
is acceptable for full credit toward such a degree; or offers a 2-year 
program in engineering, mathematics, or the physical or biological 
sciences, designed to prepare a student to work as a technician or at 
the semiprofessional level in engineering, scientific, or other 
technological fields requiring the understanding and application of 
basic engineering, scientific, or mathematical principles of knowledge.
    Pell Grant means the grant program authorized by Title IV-A-1 of the 
Higher Education Act of 1965, as amended.
    Preaccredited means a status, also called candidacy status, that a 
nationally recognized accrediting agency or association, recognized by 
the Secretary to grant that status, has accorded an unaccredited 
institution that

[[Page 245]]

is making reasonable progress toward accreditation.
    School year means the period of time from July 1 of one calendar 
year through June 30 of the subsequent calendar year. (A ``school year'' 
is equivalent to an ``award year'' under the Pell Grant Program.)

(Authority: 20 U.S.C. 1060-1063)



        Subpart B--What Kind of Projects Does the Secretary Fund?



Sec. 608.10  What activities may be carried out under a grant?

    (a) Allowable activities. Except as provided in paragraph (b) of 
this section, a grantee may carry out the following activities under 
this part--
    (1) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional or research purposes;
    (2) Construction, maintenance, renovation, and improvement in 
classroom, library, laboratory, and other instructional facilities, 
including purchase or rental of telecommunications technology equipment 
or services;
    (3) Support of faculty exchanges, faculty development and faculty 
fellowships to assist these faculty members in attaining advanced 
degrees in their fields of instruction;
    (4) Academic instruction in disciplines in which Black Americans are 
underrepresented;
    (5) Purchase of library books, periodicals, microfilm, and other 
educational materials, including telecommunications program materials;
    (6) Tutoring, counseling, and student service programs designed to 
improve academic success;
    (7) Funds and administrative management, and acquisition of 
equipment for use in strengthening funds management;
    (8) Joint use of facilities, such as laboratories and libraries;
    (9) Establishing or improving a development office to strengthen or 
improve contributions from alumni and the private sector;
    (10) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in a public elementary or 
secondary school in the State that shall include, as part of the 
program, preparation for teacher certification;
    (11) Establishing community outreach programs that will encourage 
elementary and secondary students to develop the academic skills and the 
interest to pursue postsecondary education; and
    (12) Other activities that it proposes in its application that 
contribute to carrying out the purpose of this part and are approved by 
the Secretary as part of the review and acceptance of the application.
    (b) Unallowable activities. A grantee may not carry out the 
following activities under this part--
    (1) Activities that are not included in the grantee's approved 
application;
    (2) Activities described in paragraph (a)(12) of this section that 
are not approved by the Secretary;
    (3) Activities that are inconsistent with any State plan of higher 
education that is applicable to the institution;
    (4) Activities that are inconsistent with a State plan for 
desegregation of higher education that is applicable to the institution;
    (5) Activities or services that relate to sectarian instruction or 
religious worship; and
    (6) Activities provided by a school or department of divinity. For 
the purpose of this section, a ``school or department of divinity'' 
means an institution, or a department of an institution, whose program 
is specifically for the education of students to prepare them to become 
ministers of religion or to enter upon some other religious vocation, or 
to prepare them to teach theological subjects.
    (c) No award under this part may be used for telecommunications 
technology equipment, facilities or services, if such equipment, 
facilities or services are available pursuant to section 396(k) of the 
Communications Act of 1934.
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund, it is subject to the provisions 
of Secs. 628.3, 628.6, 628.10 and 628.41 through 628.47 of this chapter 
with regard to the use of those funds, except--

[[Page 246]]

    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For the purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus;
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use any of 
its grant funds for endowment purposes, it must match those grant funds 
immediately with non-Federal funds when it places those funds into its 
endowment fund.

(Authority: 20 U.S.C. 1062, 1063a, and 1069c)

[58 FR 38713, July 20, 1993, as amended at 65 FR 79311, Dec. 19, 2000]



Sec. 608.11  What is the duration of a grant?

    The Secretary may award a grant under this part for a period of up 
to five academic years.

(Authority: 20 U.S.C. 1063b(b))



     Subpart C--How Does an Eligible Institution Apply for a Grant?



Sec. 608.20  What are the application requirements for a grant under this part?

    In order to receive a grant under this part, an institution must 
submit an application to the Secretary at such time and in such manner 
as the Secretary may prescribe. The application must contain--
    (a) A description of the activities to be carried out with grant 
funds;
    (b) A description of how the grant funds will be used so that they 
will supplement and, to the extent practical, increase the funds that 
would otherwise be made available for the activities to be carried out 
under the grant and in no case supplant those funds;
    (c) (1) A comprehensive development plan as described in 
Sec. 608.21; or
    (2) If an applicant has already submitted a comprehensive 
development plan as described in Sec. 608.21, a description of the 
progress the applicant has made in carrying out the goals of its plan;
    (d) An assurance that the institution will provide the Secretary 
with an annual report on the activities carried out under the grant;
    (e) An assurance that the institution will provide for, and submit 
to the Secretary, the compliance and financial audit described in 
Sec. 608.41;
    (f) An assurance that the proposed activities in the application are 
in accordance with any State plan that is applicable to the institution;
    (g) The number of graduates of the applicant institution during the 
school year immediately preceding the fiscal year for which grant funds 
are requested; and
    (h) The number of graduates of the applicant institution--
    (1) Who, within five years of graduating with baccalaureate degrees, 
attended graduate or professional schools and enrolled in degree 
programs in disciplines in which Blacks are underrepresented during the 
school year immediately preceding the fiscal year for which funds are 
requested; and
    (2) Who graduated with baccalaureate degrees during any one of the 
five school years immediately preceding the school year described in 
paragraph (h)(1) of this section.

(Approved by the Office of Management and Budget under control number 
1840-0113)

(Authority: 20 U.S.C. 1063, 1063a and 1066(b)(2))



Sec. 608.21  What is a comprehensive development plan and what must it contain?

    (a) A comprehensive development plan must describe an institution's 
strategy for achieving growth and self-sufficiency by strengthening 
its--
    (1) Financial management;
    (2) Academic programs; and
    (b) The comprehensive development plan must include the following:

[[Page 247]]

    (1) An assessment of the strengths and weaknesses of the 
institution's financial management and academic programs.
    (2) A delineation of the institution's goals for its financial 
management and academic programs, based on the outcomes of the 
assessment described in paragraph (b)(1) of this section.
    (3) A listing of measurable objectives designed to assist the 
institution to reach each goal with accompanying timeframes for 
achieving the objectives.
    (4) A description of methods, processes, and procedures that will be 
used by the college or university to institutionalize financial 
management and academic program practices and improvements developed 
under the proposed funded activities.

(Approved by the Office of Management and Budget under control number 
1840-0113)

(Authority: 20 U.S.C. 1063a)



             Subpart D--How Does the Secretary Make a Grant?



Sec. 608.30  What is the procedure for approving and disapproving grant applications?

    The Secretary--
    (a) Approves any application that satisfies the requirements of 
Sec. 608.10 and Sec. 608.20; and
    (b) Does not disapprove any application, or any modification of an 
application, without affording the applicant reasonable notice and 
opportunity for a hearing.

(Authority: 20 U.S.C. 1063a)



Sec. 608.31  How does the Secretary determine the amount of a grant?

    (a) Except as provided in paragraph (c) of this section, for each 
fiscal year, the Secretary determines the amount of a grant under this 
part by-
    (1) Multiplying fifty percent of the amount appropriated for the 
HBCU Program by the following fraction:

Number of Pell Grant recipients at the applicant institution during the 
school year immediately preceding that fiscal year.
_______________________________________________________________________
Number of Pell Grant recipients at all applicant institutions during the 
school year immediately preceding that fiscal year.

    (2) Multiplying twenty-five percent of the amount appropriated for 
the HBCU Program by the following fraction:

Number of graduates of the applicant institution during the school year 
immediately preceding that fiscal year.
_______________________________________________________________________
Number of graduates of all applicant institutions during the school year 
immediately preceding that fiscal year.

    (3) Multiplying twenty-five percent of the amount appropriated for 
the HBCU Program by the following fraction:

The percentage of graduates of an applicant institution who, within five 
years of graduating with baccalaureate degrees, are in attendance at 
graduate or professional schools and enrolled in degree programs in 
disciplines in which Blacks are underrepresented
_______________________________________________________________________
The sum of the percentages of those graduates of all applicant 
institutions.

    (4) Adding the amounts obtained in paragraphs (a)(1), (a)(2), and 
(a)(3) of this section.
    (b)(1) For each fiscal year, the numerator in paragraph (a)(3) of 
this section is calculated by--
    (i) Determining the number of graduates of an applicant institution 
who, within five years of graduating with baccalaureate degrees, 
attended graduate or professional schools and enrolled in degree 
programs in disciplines in which Blacks are underrepresented during the 
school year immediately preceding that fiscal year; and
    (ii) Dividing the number obtained in paragraph (b)(1)(i) of this 
section by the number of graduates of an applicant institution who 
graduated with baccalaureate degrees during the five school years 
immediately preceding the school year described in paragraph (b)(1)(i) 
of this section.
    (2) For purposes of this section, the Secretary--
    (i) Considers that Blacks are underrepresented in a professional or 
academic discipline if the percentage of Blacks in that discipline is 
less than the percentage of Blacks in the general population of the 
United States; and

[[Page 248]]

    (ii) Notifies applicants of the disciplines in which Blacks are 
underrepresented through a notice in the Federal Register, after 
consulting with the Commissioner of the Bureau of Labor Statistics.
    (c) Notwithstanding the formula in paragraph (a) of this section--
    (1) For each fiscal year, each eligible institution with an approved 
application must receive at least $500,000; and
    (2) If the amount appropriated for a fiscal year for the HBCU 
Program is insufficient to provide $500,000 to each eligible institution 
with an approved application, each grant is ratably reduced. If 
additional funds become available for the HBCU Program during a fiscal 
year, each grant is increased on the same basis as it was decreased 
until the grant amount reaches $500,000.
    (d) The amount of any grant that the Secretary determines will not 
be required by a grantee for the period for which the grant was made is 
available for reallotment by the Secretary during that period to other 
eligible institutions under the formula contained in paragraph (a) of 
this section.

(Authority: 20 U.S.C. 1063)



             Subpart E--What Conditions Must a Grantee Meet?



Sec. 608.40  What are allowable costs and what are the limitations on allowable costs?

    (a) Allowable costs. Except as provided in paragraphs (b) and (c) of 
this section, a grantee may expend grant funds for activities that are 
related to carrying out the allowable activities included in its 
approved application.
    (b) Supplement and not supplant. Grant funds shall be used so that 
they supplement, and to the extent practical, increase the funds that 
would otherwise be available for the activities to be carried out under 
the grant, and in no case supplant those funds.
    (c) Limitations on allowable costs. A grantee may not--
    (1) Spend more than fifty percent of its grant award in each fiscal 
year for costs relating to constructing or maintaining a classroom, 
library, laboratory, or other instructional facility; or
    (2) Use an indirect cost rate to determine allowable costs under its 
grant.

(Authority: 20 U.S.C. 1062 and 1066)



Sec. 608.41  What are the audit and repayment requirements?

    (a) (1) A grantee shall provide for the conduct of a compliance and 
financial audit of any funds it receives under this part of a qualified, 
independent organization or person in accordance with the Standards for 
Audit of Governmental Organizations, Programs, Activities, and 
Functions, 1981 revision, established by the Comptroller General of the 
United States. This publication is available from the Superintendent of 
Documents, U.S. Government Printing Office.
    (2) The grantee shall have an audit conducted at least once every 
two years, covering the period since the previous audit, and the grantee 
shall submit the audit to the Secretary.
    (3) If a grantee is audited under Chapter 75 of Title 31 of the 
United States Code, the Secretary considers that audit to satisfy the 
requirements of paragraph (a)(1) of this section.
    (b) An institution awarded a grant under this part must submit to 
the Department of Education Inspector General three copies of the audit 
required in paragraph (a) of this section within six months after 
completion of the audit.
    (c) Any individual or firm conducting an audit described in this 
section shall give the Department of Education's Inspector General 
access to records or other documents necessary to review the results of 
the audit.
    (d) A grantee shall repay to the Treasury of the United States any 
grant funds it received that it did not expend or use to carry out the 
allowable activities included in its approved application within ten 
years following the date of the initial grant it received under this 
part.

(Authority: 20 U.S.C. 1063a and 1063c)



Sec. 608.42  Under what conditions does the Secretary terminate a grant?

    The Secretary terminates any grant under which funds were not 
expended if an institution loses--
    (a) Its accredited status; or

[[Page 249]]

    (b) Its legal authority in the State in which it is located--
    (1) To be a junior or community college; or
    (2) To provide an educational program for which it awards a 
bachelor's degree.

(Authority: 20 U.S.C. 1063a)



PART 609--STRENGTHENING HISTORICALLY BLACK GRADUATE INSTITUTIONS PROGRAM--Table of Contents




                           Subpart A--General

Sec.
609.1  What is the Strengthening Historically Black Graduate 
          Institutions Program?
609.2  What institutions are eligible to receive a grant under this 
          part?
609.3  What regulations apply?
609.4  What definitions apply?

        Subpart B--What Kind of Project Does the Secretary Fund?

609.10  What activities may be carried out under a grant?
609.11  What is the duration of a grant?

     Subpart C--How Does an Eligible Institution Apply for a Grant?

609.20  What are the application requirements for a grant under this 
          part?
609.21  What is a comprehensive development plan and what must it 
          contain?

             Subpart D--How Does the Secretary Make a Grant?

609.30  What is the procedure for approving and disapproving grant 
          applications?
609.31  How does the Secretary determine the amount of a grant?

             Subpart E--What Conditions Must a Grantee Meet?

609.40  What are the matching requirements?
609.41  What are allowable costs and what are the limitations on 
          allowable costs?
609.42  What are the audit and repayment requirements?
609.43  Under what conditions does the Secretary terminate a grant?

    Authority: 20 U.S.C. 1063b and 1063c, unless otherwise noted.

    Source: 59 FR 38717, July 20, 1993, unless otherwise noted.



                           Subpart A--General



Sec. 609.1  What is the Strengthening Historically Black Graduate Institutions Program?

    The Strengthening Historically Black Graduate Institutions Program 
provides grants to the institutions listed in Sec. 609.2 to assist these 
institutions in establishing and strengthening their physical plants, 
development offices, endowment funds, academic resources and student 
services so that they may continue to participate in fulfilling the goal 
of equality of educational opportunity in graduate education.

(Authority: 20 U.S.C. 1060 and 1063b)



Sec. 609.2  What institutions are eligible to receive a grant under this part?

    (a) An institution or an institution's qualified graduate program 
listed in paragraph (b) of this section is eligible to receive a grant 
under this part if the Secretary determines that the institution is 
making a substantial contribution to legal, medical, dental, veterinary 
or other graduate education opportunities for Black Americans.
    (b) The institutions and programs referred to in paragraph (a) of 
this section are--
    (1) Morehouse School of Medicine;
    (2) Meharry Medical School;
    (3) Charles R. Drew Postgraduate Medical School;
    (4) Clark Atlanta University;
    (5) Tuskegee Institute School of Veterinary Medicine;
    (6) Xavier University School of Pharmacy;
    (7) Southern University School of Law;
    (8) Texas Southern University School of Law and School of Pharmacy;
    (9) Florida A&M University School of Pharmaceutical Sciences;
    (10) North Carolina Central University School of Law;
    (11) Morgan State University's qualified graduate program;
    (12) Hampton University's qualified graduate program;
    (13) Alabama A&M's qualified graduate program;
    (14) North Carolina A&T State University's qualified graduate 
program;

[[Page 250]]

    (15) University of Maryland Eastern Shore's qualified graduate 
program; and
    (16) Jackson State University's qualified graduate program.
    (c) An institution that was awarded a grant prior to October 1, 1992 
may continue to receive grant payments, regardless of the eligibility of 
the graduate institutions described in paragraphs (b)(6) through (16) of 
this section, until the institution's grant period has expired or 
September 30, 1993, whichever is later.
    (d) No institution of higher education or university system may 
receive more than one grant under this section in any fiscal year.

(Authority: 20 U.S.C. 1063b(e))



Sec. 609.3  What regulations apply?

    The following regulations apply to this part:
    (a) The Department of Education General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) The following sections of 34 CFR part 75 (Direct Grant 
Programs): Secs. 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-
75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.901;
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 82 (New Restrictions on Lobbying).
    (6) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants))
    (7) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 609.

(Authority: 20 U.S.C. 1063b)



Sec. 609.4  What definitions apply?

    (a) Definitions in EDGAR. The following terms used in this part are 
defined in 34 CFR 77.1:

Applicant
Application
Award
Budget
EDGAR
Equipment
Fiscal year
Grant period
Private
Project period
Public
Secretary

    (b) The following definition applies to a term used in this part:
    Qualified graduate program means a graduate or professional program 
that--
    (i) Provides a program of instruction in the physical or natural 
sciences, engineering, mathematics, or other scientific disciplines in 
which African Americans are underrepresented;
    (ii) Has been accredited or approved by a nationally recognized 
accrediting agency or association. (The Secretary publishes a list in 
the Federal Register of nationally recognized accrediting agencies and 
associations.); and
    (iii) Has students enrolled in that program when the institution 
offering the program applies for a grant under this part.

(Authority: 20 U.S.C. 1063b and 1069c)



        Subpart B--What Kind of Projects Does the Secretary Fund?



Sec. 609.10  What activities may be carried out under a grant?

    (a) Allowable activities. Except as provided in paragraph (b) of 
this section, a grantee may carry out the following activities under 
this part--
    (1) Purchase, rental, or lease of scientific or laboratory equipment 
for educational purposes, including instructional or research purposes;
    (2) Construction, maintenance, renovation, and improvement in 
classroom, library, laboratory, and other instructional facilities, 
including purchase or rental of telecommunications technology equipment 
or services;
    (3) Support of faculty exchanges, faculty development and faculty 
fellowships to assist these faculty members in attaining advanced 
degrees in their fields of instruction;
    (4) Academic instruction in disciplines in which Black Americans are 
underrepresented;
    (5) Purchase of library books, periodicals, microfilm, and other 
educational materials, including telecommunications program materials;

[[Page 251]]

    (6) Tutoring, counseling, and student service programs designed to 
improve academic success;
    (7) Funds and administrative management, and acquisition of 
equipment for use in strengthening funds management;
    (8) Joint use of facilities, such as laboratories and libraries;
    (9) Establishing or improving a development office to strengthen or 
improve contributions from alumni and the private sector;
    (10) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in a public elementary or 
secondary school in the State that shall include, as part of such 
program preparation for teacher certification;
    (11) Establishing community outreach programs that will encourage 
elementary and secondary students to develop the academic skills and the 
interest to pursue postsecondary education;
    (12) Other activities that it proposes in its application that 
contribute to carrying out the purpose of this part and are approved by 
the Secretary;
    (13) Establishing or improving a development office to strengthen 
and increase contributions from alumni and the private sector; and
    (14) Establishing and maintaining an institutional endowment under 
34 CFR part 628 to facilitate financial independence.
    (b) Unallowable activities. A grantee may not carry out the 
following activities under this part--
    (1) Activities that are not included in the grantee's approved 
application;
    (2) Activities described in paragraph (a)(12) of this section that 
are not approved by the Secretary;
    (3) Activities that are inconsistent with any State plan of higher 
education that is applicable to the institution;
    (4) Activities that are inconsistent with a State plan for 
desegregation of higher education that is applicable to the institution;
    (5) Activities or services that relate to sectarian instruction or 
religious worship; and
    (6) Activities provided by a school or department of divinity. For 
the purpose of this section, a ``school or department of divinity'' 
means an institution, or a department of an institution, whose program 
is specifically for the education of students to prepare them to become 
ministers of religion or to enter upon some other religious vocation, or 
to prepare them to teach theological subjects.
    (c) No award under this part may be used for telecommunications 
technology equipment, facilities or services, if such equipment, 
facilities or services are available pursuant to section 396(k) of the 
Communications Act of 1934.

(Authority: 20 U.S.C. 1062, 1063a, and 1069c)



Sec. 609.11  What is the duration of a grant?

    The Secretary may award a grant under this part for a period of up 
to five academic years.

(Authority: 20 U.S.C. 1063b(b))



     Subpart C--How Does an Eligible Institution Apply for a Grant?



Sec. 609.20  What are the application requirements for a grant under this part?

    In order to receive a grant under this part, an institution must 
submit an application to the Secretary at such time and in such manner 
as the Secretary may prescribe. The application must contain--
    (a) A description of the activities to be carried out with grant 
funds and how those activities will improve graduate educational 
opportunities for Black and low-income students and lead to greater 
financial independence for the applicant;
    (b) A description of how the applicant is making a substantial 
contribution to the legal, medical, dental, veterinary or other graduate 
education opportunities for Black Americans;
    (c) An assurance from each applicant requesting in excess of 
$500,000 that 50 percent of the costs of all the activities to be 
carried out under the grant will come from non-Federal sources;
    (d) A description of how the grant funds will be used so that they 
will supplement, and to the extent practical, increase the funds that 
would

[[Page 252]]

otherwise be made available for the activities to be carried out under 
the grant and in no case supplant those funds, for the activities 
described in Sec. 609.10(a)(1) through Sec. 609.10(a)(14);
    (e) An assurance that the proposed activities in the application are 
in accordance with any State plan that is applicable to the institution; 
and
    (f)(1) A comprehensive development plan as described in Sec. 609.21; 
or
    (2) If an applicant has already submitted a comprehensive 
development plan as described in Sec. 609.21, a description of the 
progress the applicant has made in carrying out the goals of its plan.

(Approved by the Office of Management and Budget under control number 
1840-0113)

(Authority: 20 U.S.C. 1063d and 1066(b)(2))



Sec. 609.21  What is a comprehensive development plan and what must it contain?

    (a) A comprehensive development plan must describe an institution's 
strategy for achieving growth and self-sufficiency by strengthening 
its--
    (1) Financial management;
    (2) Academic programs; and
    (b) The comprehensive development plan must include the following:
    (1) An assessment of the strengths and weaknesses of the 
institution's financial management and academic programs.
    (2) A delineation of the institution's goals for its financial 
management and academic programs, based on the outcomes of the 
assessment described in paragraph (b)(1) of this section.
    (3) A listing of measurable objectives designed to assist the 
institution to reach each goal with accompanying timeframes for 
achieving the objectives.
    (4) A description of methods, processes and procedures that will be 
used by the college or university to institutionalize financial 
management and academic program practices and improvements developed 
under the proposed funded activities.

(Approved by the Office of Management and Budget under control number 
1840-0113)

(Authority: 20 U.S.C. 1063a)



             Subpart D--How Does the Secretary Make a Grant?



Sec. 609.30  What is the procedure for approving and disapproving grant applications?

    The Secretary approves any application that satisfies the 
requirements of Secs. 609.10 and 609.20.

(Authority: 20 U.S.C. 1063a)



Sec. 609.31  How does the Secretary determine the amount of a grant?

    Of the amount appropriated for any fiscal year--
    (a)(1) The first $12,000,000 (or any lesser amount appropriated) 
shall be available only for the purpose of making grants to institutions 
or programs described in Sec. 609.2(b)(1) through Sec. 609.2(b)(5);
    (2) If the sum of the approved applications does not exceed the 
amount appropriated, the Secretary awards grants in the amounts 
requested and approved;
    (3) If the sum of the approved requests exceeds the sum 
appropriated, and Morehouse School of Medicine submits an approved 
request for at least $3,000,000, and the amount appropriated exceeds 
$3,000,000, the Secretary awards no less than $3,000,000 to Morehouse 
School of Medicine and reduces the grants to the institutions described 
in Sec. 609.2(b)(1) through Sec. 609.2(b)(5) as the Secretary considers 
appropriate, so that the sum of the approved grants equals the amount 
appropriated; and
    (4) If Morehouse School of Medicine submits an approved request for 
at least $3,000,000 and the amount appropriated does not exceed 
$3,000,000, Morehouse School of Medicine receives all the appropriated 
funds; and
    (b)(1) Any amount appropriated in excess of $12,000,000 shall be 
available for the purpose of making grants, in equal amounts not to 
exceed $500,000, to institutions or programs described in 
Sec. 609.2(b)(6) through Sec. 609.2(b)(16); and
    (2) If any funds remain, the Secretary makes grants to institutions 
or programs described in Sec. 609.2(b)(1) through Sec. 609.2(b)(16).

(Authority: 20 U.S.C. 1063b)

[[Page 253]]



             Subpart E--What Conditions Must a Grantee Meet?



Sec. 609.40  What are the matching requirements?

    If an institution receives a grant in excess of $500,000, it must 
spend non-Federal funds to meet the cost of at least 50 percent of the 
activities approved in its application.

(Authority: 20 U.S.C. 1063b)



Sec. 609.41  What are allowable costs and what are the limitations on allowable costs?

    (a) Allowable costs. Except as provided in paragraphs (b) and (c) of 
this section, a grantee may expend grant funds for activities that are 
reasonably related to carrying out the allowable activities included in 
its approved application.
    (b) Supplement and not supplant. A grantee shall use grant funds so 
that they supplement, and to the extent practical, increase the funds 
that would otherwise be available for the activities to be carried out 
under the grant, and in no case supplant those funds.
    (c) Limitations on allowable costs. A grantee may not--
    (1) Spend more than fifty percent of its grant award in each fiscal 
year for costs relating to constructing or maintaining a classroom, 
library, laboratory, or other instructional facility; and
    (2) Use an indirect cost rate to determine allowable costs under its 
grant.

(Authority: 20 U.S.C. 1062, 1063b, and 1066)



Sec. 609.42  What are the audit and repayment requirements?

    (a)(1) A grantee shall provide for the conduct of a compliance and 
financial audit of any funds it receives under this part by a qualified, 
independent organization or person in accordance with the Standards for 
Audit of Governmental Organizations, Programs, Activities, and 
Functions, 1981 revision, established by the Comptroller General of the 
United States. This publication is available from the Superintendent of 
Documents, U.S. Government Printing Office.
    (2) The grantee shall have an audit conducted at least once every 
two years, covering the period since the previous audit, and the grantee 
shall submit the audit to the Secretary.
    (3) If a grantee is audited under chapter 75 of title 31 of the 
United States Code, the Secretary considers that audit to satisfy the 
requirements of paragraph (a)(1) of this section.
    (b) An institution awarded a grant under this part must submit to 
the Department of Education Inspector General three copies of the audit 
required in paragraph (a) of this section within six months after 
completion of the audit.
    (c) Any individual or firm conducting an audit described in this 
section shall give the Department of Education's Inspector General 
access to records or other documents necessary to review the results of 
the audit.
    (d) A grantee shall repay to the Treasury of the United States any 
grant funds it received that it did not expend or use to carry out the 
allowable activities included in its approved application within ten 
years following the date of the initial grant it received under this 
part.

(Authority: 20 U.S.C. 1063a)



Sec. 609.43  Under what conditions does the Secretary terminate a grant?

    The Secretary terminates any grant under which funds were not 
expended if an institution loses--
    (a) Its accredited status; or
    (b) Its legal authority in the State in which it is located.

(Authority: 20 U.S.C. 1063a)



PART 611--TEACHER QUALITY ENHANCEMENT GRANTS PROGRAM--Table of Contents




                      Subpart A--General Provisions

Sec.
611.1  What definitions apply to the Teacher Quality Enhancement Grants 
          Program?
611.2  What management plan must be included in a Teacher Quality 
          Enhancement Grants Program application?
611.3  What procedures does the Secretary use to award a grant?

[[Page 254]]

                     Subpart B--State Grants Program

611.11  What are the program's general selection criteria?
611.12  What additional selection criteria are used for an application 
          proposing teacher recruitment activities?
611.13  What competitive preference doe the Secretary provide?

                  Subpart C--Partnership Grants Program

611.21  What are the program's selection criteria for pre-applications?
611.22  What additional selection criteria are used for pre-application 
          that proposes teacher recruitment activities?
611.23  What are the program's general selection criteria for full 
          applications?
611.24  What additional selection criteria are used for a full 
          application that proposes teacher recruitment activities?
611.25  What competitive preference does the Secretary provide?

              Subpart D--Teacher Recruitment Grants Program

611.31  What are the program's selection criteria for pre-applications?
611.32  What are the program's general selection criteria?

                         Subpart E--Scholarships

611.41  Under what circumstances may an individual receive a scholarship 
          of program funds to attend a teacher training program?
611.42  How does the Secretary calculate the period of the scholarship 
          recipient's service obligation?
611.43  What are the consequences of a scholarship recipient's failure 
          to meet the service obligation?
611.44  Under what circumstances may the Secretary defer a scholarship 
          recipient's service obligation?
611.45  Under what circumstances does the Secretary discharge a 
          scholarship recipient's obligation to repay for failure to 
          meet the service obligation?
611.46  What are a scholarship recipient's reporting responsibilities 
          upon graduation from the teacher preparation program?
611.47  What are a scholarship recipient's reporting responsibilities 
          upon the close of the LEA's academic year?
611.48  What are a scholarship recipient's reporting responsibilities 
          upon failure to graduate or withdrawal of scholarship support?
611.49  What are a grantee's responsibilities for implementing the 
          scholarship requirements before awarding a scholarship?
611.50  What are a grantee's reporting responsibilities?
611.51  How does a grantee ensure that a scholarship recipient 
          understands the terms and conditions of the scholarship before 
          the recipient leaves the teacher preparation program?
611.52  What are a grantee's programmatic responsibilities for ensuring 
          that scholarship recipients become successful teachers in 
          high-need schools?

                    Subpart F--Other Grant Conditions

611.61  What is the maximum indirect cost rate that applies to a 
          recipient's use of program funds?
611.62  What are a grantee's matching requirements?

    Authority: 20 U.S.C. 1021 et seq. and 1024(e), unless otherwise 
noted.

    Source: 65 FR 1782, Jan. 12, 2000, unless otherwise noted.



                      Subpart A--General Provisions



Sec. 611.1  What definitions apply to the Teacher Quality Enhancement Grants Program?

    The following definitions apply to this part:
    High-need local educational agency (LEA) means an LEA that meets one 
of the following definitions:
    (1) An LEA with at least one school--
    (i) In which 50 percent or more of the enrolled students are 
eligible for free and reduced lunch subsidies; or
    (ii) That otherwise is eligible, without receipt of a waiver, to 
operate as a schoolwide program under Title I of the Elementary and 
Secondary Education Act.
    (2) An LEA that has one school where--
    (i) More than 34 percent of academic classroom teachers overall 
(across all academic subjects) do not have a major, minor, or 
significant course work in their main assignment field; or
    (ii) More than 34 percent of the main assignment faculty in two of 
the core-subject departments do not have a major, minor, or significant 
work in their main assigned field.
    (3) An LEA that serves a school whose attrition rate among classroom 
teachers was 15 percent or more over the last three school years.
    High-need school means an elementary, middle, or secondary school 
operated by a high-need LEA in which the school's students or teaching 
staff

[[Page 255]]

meet the elements in paragraphs (1), (2), or (3) of the definition of a 
high-need LEA.
    Main assignment field means the academic field in which teachers 
have the largest percentage of their classes.
    Significant course work means four or more college-or graduate-level 
courses in the content area.

(Authority: 20 U.S.C. 1024(e))



Sec. 611.2  What management plan must be included in a Teacher Quality Enhancement Grants Program application?

    (a) In addition to a description of the proposed multiyear project, 
timeline, and budget information required by 34 CFR 75.112 and 75.117 
and other applicable law, an applicant for a grant under this part must 
submit with its application under paragraphs (a)(1), (a)(2)(iii), or 
(a)(3)(iii) of Sec. 611.3, as appropriate, a management plan that 
includes a proposed multiyear workplan.
    (b) At a minimum, this workplan must identify, for each year of the 
project--
    (1) The project's overall objectives;
    (2) Activities that the applicant proposes to implement to promote 
each project objective;
    (3) Benchmarks and timelines for conducting project activities and 
achieving the project's objectives;
    (4) The individual who will conduct and coordinate these activities;
    (5) Measurable outcomes that are tied to each project objective, and 
the evidence by which success in achieving these objectives will be 
measured; and
    (6) Any other information that the Secretary may require.
    (c)(1) In any application for a grant that is submitted on behalf of 
a partnership, the workplan also must identify which partner will be 
responsible for which activities.
    (2) In any application for a grant that is submitted on behalf of a 
State, the workplan must identify which entities in the State will be 
responsible for which activities.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)

[65 FR 19609, Apr. 11, 2000]



Sec. 611.3  What procedures does the Secretary use to award a grant?

    The Secretary uses the selection procedures in 34 CFR 75.200 through 
75.222 except that--
    (a) Application procedures for each program. (1) For the State 
Grants Program, the Secretary evaluates applications for new grants on 
the basis of the selection criteria and competitive preference contained 
in Secs. 611.11 through 611.13.
    (2) For the Partnership Grants Program, the Secretary--
    (i) Uses a two-stage application process to determine which 
applications to fund;
    (ii) Uses the selection criteria in Secs. 611.21 through 611.22 to 
evaluate pre-applications submitted for new grants, and to determine 
those applicants to invite to submit full program applications; and
    (iii) For those applicants invited to submit full applications, uses 
the selection criteria and competitive preference in Secs. 611.23-611.25 
to evaluate the full program applications.
    (3) For the Teacher Recruitment Grants Program, the Secretary--
    (i) Uses a two-stage application process to determine which 
applications to fund;
    (ii) Uses the selection criteria in Sec. 611.31 to evaluate pre-
applications submitted for new grants, and to determine those applicants 
to invite to submit full program applications; and
    (iii) For those applicants invited to submit full applications, uses 
the selection criteria in Sec. 611.32 to evaluate the full program 
applications.
    (b) Required budgets in pre-applications. An applicant that submits 
a pre-application for a Partnership Program or Teacher Recruitment 
Program grant under paragraphs (b)(2)(ii) and (b)(3)(ii) must also 
submit any budgetary information that the Secretary may require in the 
program application package.
    (c) Tie-breaking procedures. In the event that two or more 
applicants are ranked equally for the last available award under any 
program, the Secretary selects the applicant whose activities will focus 
(or have most impact) on LEAs and schools located in

[[Page 256]]

one (or more) of the Nation's Empowerment Zones and Enterprise 
Communities.


(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)

[65 FR 19609, Apr. 11, 2000]



                     Subpart B--State Grants Program

    Source: 65 FR 19610, Apr. 11, 2000, unless otherwise noted.



Sec. 611.11  What are the program's general selection criteria?

    In evaluating the quality of applications, the Secretary uses the 
following selection criteria.
    (a) Quality of project design. (1) The Secretary considers the 
quality of the project design.
    (2) In determining the quality of the project design, the Secretary 
considers the extent to which--
    (i) The project design will result in systemic change in the way 
that all new teachers are prepared, and includes partners from all 
levels of the education system;
    (ii) The Governor and other relevant executive and legislative 
branch officials, the K-16 education system or systems, and the business 
community are directly involved in and committed to supporting the 
proposed activities;
    (iii) Project goals and performance objectives are clear, measurable 
outcomes are specified, and a feasible plan is presented for meeting 
them;
    (iv) The project is likely to initiate or enhance and supplement 
systemic State reforms in one or more of the following areas: teacher 
recruitment, preparation, licensing, and certification;
    (v) The applicant will ensure that a diversity of perspectives is 
incorporated into operation of the project, including those of parents, 
teachers, employers, academic and professional groups, and other 
appropriate entities; and
    (vi) The project design is based on up-to-date knowledge from 
research and effective practice.
    (b) Significance. (1) The Secretary considers the significance of 
the project.
    (2) In determining the significance of the project, the Secretary 
considers the extent to which--
    (i) The project involves the development or demonstration of 
promising new strategies or exceptional approaches in the way new 
teachers are recruited, prepared, certified, and licensed;
    (ii) Project outcomes lead directly to improvements in teaching 
quality and student achievement as measured against rigorous academic 
standards;
    (iii) The State is committed to institutionalize the project after 
federal funding ends; and
    (iv) Project strategies, methods, and accomplishments are 
replicable, thereby permitting other States to benefit from them.
    (c) Quality of resources. (1) The Secretary considers the quality of 
the project's resources.
    (2) In determining the quality of the project resources, the 
Secretary considers the extent to which--
    (i) Support available to the project, including personnel, 
equipment, supplies, and other resources, is sufficient to ensure a 
successful project;
    (ii) Budgeted costs are reasonable and justified in relation to the 
design, outcomes, and potential significance of the project; and
    (iii) The applicant's matching share of the budgeted costs 
demonstrates a significant commitment to successful completion of the 
project and to project continuation after federal funding ends.
    (d) Quality of management plan. (1) The Secretary considers the 
quality of the project's management plan.
    (2) In determining the quality of the management plan, the Secretary 
considers the following factors:
    (i) The extent to which the management plan, including the workplan, 
is designed to achieve goals and objectives of the project, and includes 
clearly defined activities, responsibilities, timelines, milestones, and 
measurable outcomes for accomplishing project tasks.
    (ii) The adequacy of procedures to ensure feedback and continuous 
improvements in the operation of the project.

[[Page 257]]

    (iii) The qualifications, including training and experience, of key 
personnel charged with implementing the project successfully.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.12  What additional selection criteria are used for an application proposing teacher recruitment activities?

    In reviewing applications that propose to undertake teacher 
recruitment activities, the Secretary also considers the following 
selection criteria:
    (a) In addition to the elements contained in Sec. 611.11(a) (Quality 
of project design), the Secretary considers the extent to which the 
project addresses--
    (1) Systemic changes in the ways that new teachers are to be 
recruited, supported and prepared; and
    (2) Systemic efforts to recruit, support, and prepare prospective 
teachers from disadvantaged and other underrepresented backgrounds.
    (b) In addition to the elements contained in Sec. 611.11(b) 
(Significance), the Secretary considers the applicant's commitment to 
continue recruitment activities, scholarship assistance, and preparation 
and support of additional cohorts of new teachers after funding under 
this part ends.
    (c) In addition to the elements contained in Sec. 611.11(c) (Quality 
of resources), the Secretary considers the impact of the project on 
high-need LEAs and high-need schools based upon--
    (1) The amount of scholarship assistance the project will provide 
students from federal and non-federal funds;
    (2) The number of students who will receive scholarships; and
    (3) How those students receiving scholarships will benefit from 
high-quality teacher preparation and an effective support system during 
their first three years of teaching.


(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.13  What competitive preference does the Secretary provide?

    The Secretary provides a competitive preference on the basis of how 
well the State's proposed activities in any one or more of the following 
statutory priorities are likely to yield successful and sustained 
results:
    (a) Initiatives to reform State teacher licensure and certification 
requirements so that current and future teachers possess strong teaching 
skills and academic content knowledge in the subject areas in which they 
will be certified or licensed to teach.
    (b) Innovative reforms to hold higher education institutions with 
teacher preparation programs accountable for preparing teachers who are 
highly competent in the academic content areas and have strong teaching 
skills.
    (c) Innovative efforts to reduce the shortage (including the high 
turnover) of highly competent teachers in high-poverty urban and rural 
areas.


(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



                  Subpart C--Partnership Grants Program

    Source: 65 FR 19611, Apr. 11, 2000, unless otherwise noted.



Sec. 611.21  What are the program's selection criteria for pre-applications?

    In evaluating the quality of pre-applications, the Secretary uses 
the following selection criteria.
    (a) Project goals and objectives. (1) The Secretary considers the 
goals and objectives of the project design.
    (2) In determining the quality of the project goals and objectives, 
the Secretary considers the following factors:
    (i) The extent to which the partnership's vision will produce 
significant and sustainable improvements in teacher education.
    (ii) The needs the partnership will address.
    (iii) How the partnership and its activities would be sustained once 
federal support ends.

[[Page 258]]

    (b) Partnering commitment. (1) The Secretary considers the 
partnering commitment embodied in the project.
    (2) In determining the quality of the partnering commitment, the 
Secretary considers the following factors:
    (i) Evidence of how well the partnership would be able to accomplish 
objectives working together that its individual members could not 
accomplish working separately.
    (ii) The significance of the roles given to each principal partner 
in implementing project activities.
    (c) Quality and comprehensiveness of key project components. (1) The 
Secretary considers the quality and comprehensiveness of key project 
components in the process of preparing new teachers.
    (2) In determining the quality and comprehensiveness of key project 
components in the process of preparing new teachers, the Secretary 
considers the extent to which--
    (i) Specific activities are designed and would be implemented to 
ensure that students preparing to be teachers are adequately prepared, 
including activities designed to ensure that they have improved content 
knowledge, are able to use technology effectively to promote 
instruction, and participate in extensive, supervised clinical 
experiences;
    (ii) Specific activities are designed and would be implemented to 
ensure adequate support for those who have completed the teacher 
preparation program during their first years as teachers; and
    (iii) The project design reflects up-to-date knowledge from research 
and effective practice.
    (d) Specific project outcomes. (1) The Secretary considers the 
specific outcomes the project would produce in the preparation of new 
teachers.
    (2) In determining the specific outcomes the project would produce 
in the preparation of new teachers, the Secretary considers the 
following factors:
    (i) The extent to which important aspects of the partnership's 
existing teacher preparation system would change.
    (ii) The way in which the project would demonstrate success using 
high-quality performance measures.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.22  What additional selection criteria are used for a pre-application that proposes teacher recruitment activities?

    In reviewing pre-applications that propose to undertake teacher 
recruitment activities, the Secretary also considers the following 
selection criteria:
    (a) In addition to the elements contained in Sec. 611.21(a) (Project 
goals and objectives), the Secretary considers the extent to which--
    (1) The partnership's vision responds to LEA needs for a diverse and 
high quality teaching force, and will lead to reduced teacher shortages 
in these high-need LEAs; and
    (2) The partnership will sustain its work after federal funding has 
ended by recruiting, providing scholarship assistance, training and 
supporting additional cohorts of new teachers.
    (b) In addition to the elements contained in Sec. 611.21(c) (Quality 
and comprehensiveness of key project components), the Secretary 
considers the extent to which the project will--
    (1) Significantly improve recruitment of new students, including 
those from disadvantaged and other underrepresented backgrounds; and
    (2) Provide scholarship assistance and adequate training to 
preservice students, as well as induction support for those who become 
teachers after graduating from the teacher preparation program.
    (c) In addition to the elements contained in Sec. 611.21(d) 
(Specific project outcomes), the Secretary considers the extent to which 
the project addresses the number of new teachers to be produced and 
their ability to teach effectively in high-need schools.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)

[[Page 259]]



Sec. 611.23  What are the program's general selection criteria for full applications?

    In evaluating the quality of applications, the Secretary uses the 
following selection criteria.
    (a) Quality of project design. (1) The Secretary considers the 
quality of the project design.
    (2) In determining the quality of the project design, the Secretary 
considers the following factors:
    (i) The extent of evidence of institution-wide commitment to high 
quality teacher preparation that includes significant policy and 
practice changes supported by key leaders, and which result in permanent 
changes to ensure that preparing teachers is a central mission of the 
entire university.
    (ii) The extent to which the partnership creates and sustains 
collaborative mechanisms to integrate professional teaching skills, 
including skills in the use of technology in the classroom, with strong 
academic content from the arts and sciences.
    (iii) The extent of well-designed and extensive preservice clinical 
experiences for students, including mentoring and other forms of 
support, implemented through collaboration between the K-12 and higher 
education partners.
    (iv) Whether a well-planned, systematic induction program is 
established for new teachers to increase their chances of being 
successful in high-need schools.
    (v) The strength of linkages within the partnership between higher 
education and high-need schools or school districts so that all partners 
have important roles in project design, implementation, governance and 
evaluation.
    (vi) Whether the project design is based on up-to-date knowledge 
from research and effective practice, especially on how students learn.
    (b) Significance of project activities. (1) The Secretary considers 
the significance of project activities.
    (2) In determining the significance of the project activities, the 
Secretary considers the following factors:
    (i) How well the project involves promising new strategies or 
exceptional approaches in the way new teachers are recruited, prepared 
and inducted into the teaching profession.
    (ii) The extent to which project outcomes include preparing teachers 
to teach to their State's highest K-12 standards, and are likely to 
result in improved K-12 student achievement.
    (iii) The extent to which the partnership has specific plans to 
institutionalize the project after federal funding ends.
    (iv) The extent to which the partnership is committed to 
disseminating effective practices to others and is willing to provide 
technical assistance about ways to improve teacher education.
    (v) How well the partnership will integrate its activities with 
other education reform efforts underway in the State or communities 
where the partners are located, and will coordinate its work with local, 
State or federal teacher training, teacher recruitment, or professional 
development programs.
    (c) Quality of resources. (1) The Secretary considers the quality of 
resources of project activities.
    (2) In determining the quality of resources, the Secretary considers 
the extent to which--
    (i) Support available to the project, including personnel, 
equipment, supplies, and other resources, is sufficient to ensure a 
successful project;
    (ii) Budgeted costs are reasonable and justified in relation to the 
design, outcomes, and potential significance of the project; and
    (iii) The applicant's matching share of the budgeted costs 
demonstrates a significant commitment to successful completion of the 
project and to project continuation after federal funding ends.
    (d) Quality of management plan. (1) The Secretary considers the 
quality of the management plan.
    (2) In determining the quality of the management plan, the Secretary 
considers the following factors:
    (i) The extent to which the management plan, including the work 
plan, is designed to achieve goals and objectives of the project, and 
includes clearly defined activities, responsibilities, timelines, 
milestones, and measurable outcomes for accomplishing project tasks.

[[Page 260]]

    (ii) The extent to which the project has an effective, inclusive, 
and responsive governance and decision-making structure that will permit 
all partners to participate in and benefit from project activities, and 
to use evaluation results to ensure continuous improvements in the 
operations of the project.
    (iii) The qualifications, including training and experience, of key 
personnel charged with implementing the project successfully.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.24  What additional selection criteria are used for a full application that proposes teacher recruitment activities?

    In reviewing full applications that propose to undertake teacher 
recruitment activities, the Secretary also considers the following 
selection criteria:
    (a) In addition to the elements contained in Sec. 611.23(a) (Quality 
of project design), the Secretary considers the extent to which the 
project reflects--
    (1) A commitment to recruit, support and prepare additional well-
qualified new teachers for high-need schools;
    (2) Appropriate academic and student support services; and
    (3) A comprehensive strategy for addressing shortages of well-
qualified and well-trained teachers in high-need LEAs, especially 
teachers from disadvantaged and other underrepresented backgrounds.
    (b) In addition to the elements contained in Sec. 611.23(b) 
(Significance of project activities), the Secretary considers the extent 
to which the project promotes the recruitment, scholarship assistance, 
preparation, and support of additional cohorts of new teachers.
    (c) In addition to the elements contained in Sec. 611.23(c) (Quality 
of resources), the Secretary considers the impact of the project on 
high-need LEAs and high-need schools based upon--
    (1) The amount of scholarship assistance the project will provide 
students from federal and non-federal funds;
    (2) The number of students who will receive scholarships; and
    (3) How those students receiving scholarships will benefit from 
high-quality teacher preparation and an effective support system during 
their first three years of teaching.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.25  What competitive preference does the Secretary provide?

    The Secretary provides a competitive preference on the basis of how 
well the project includes a significant role for private business in the 
design and implementation of the project.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



              Subpart D--Teacher Recruitment Grants Program

    Source: 65 FR 19612, Apr. 11, 2000, unless otherwise noted.



Sec. 611.31  What are the program's selection criteria for pre-applications?

    In evaluating pre-applications, the Secretary considers the 
following criteria:
    (a) Project goals and objectives. (1) The Secretary considers the 
goals and objectives of the project design.
    (2) In determining the quality of the project goals and objectives, 
the Secretary considers how the partnership or State applicant intends 
to--
    (i) Produce significant and sustainable improvements in teacher 
recruitment, preparation, and support; and
    (ii) Reduce teacher shortages in high-need LEAs and schools, and 
improve student achievement in the schools in which teachers who 
participate in its project will teach.
    (b) Partnership commitment. (1) The Secretary considers the 
partnering commitment embodied in the project.
    (2) In determining the quality of the partnering commitment, the 
Secretary considers the following factors:
    (i) What the partnership, or the State and its cooperating entities, 
can accomplish by working together that could not be achieved by working 
separately.

[[Page 261]]

    (ii) How the project proposed by the partnership or State is driven 
by the needs of LEA partners.
    (c) Quality of key project components. (1) The Secretary considers 
the quality of key project components.
    (2) In determining the quality of key project components, the 
Secretary considers the following factors:
    (i) The extent to which the project would make significant and 
lasting systemic changes in how the applicant recruits, trains, and 
supports new teachers, and reflects knowledge gained from research and 
practice.
    (ii) The extent to which the project would be implemented in ways 
that significantly improve recruitment, scholarship assistance to 
preservice students, training, and induction support for new entrants 
into teaching.
    (d) Specific project outcomes. (1) The Secretary considers the 
specific outcomes the project would produce in the recruitment, 
preparation, and placement of new teachers.
    (2) In determining the specific outcomes the project would produce 
in the recruitment, preparation, and placement of new teachers, the 
Secretary considers the following factors:
    (i) The number of teachers to be produced and the quality of their 
preparation.
    (ii) The partnership's or State's commitment to sustaining the work 
of the project after federal funding has ended by recruiting, providing 
scholarship assistance, training, and supporting additional cohorts of 
new teachers.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.32  What are the program's general selection criteria?

    In evaluating the quality of full applications, the Secretary uses 
the following selection criteria.
    (a) Quality of the project design. (1) The Secretary considers the 
quality of the project design for ensuring that activities to recruit 
and prepare new teachers are a central mission of the project.
    (2) In considering the quality of the project design for ensuring 
that activities to recruit and prepare new teachers are a central 
mission of the project, the Secretary considers the extent to which the 
project design--
    (i) Shows evidence of institutional or (in the case of a State 
applicant) State-level commitment both to recruitment of additional new 
teachers, and to high-quality teacher preparation that includes 
significant policy and practice changes supported by key leaders and 
that result in permanent changes to current institutional practices;
    (ii) Creates and sustains collaborative mechanisms to integrate 
professional teaching skills, including skills in the use of technology 
in the classroom, with academic content provided by the school of arts 
and sciences;
    (iii) Includes well-designed academic and student support services 
as well as carefully planned and extensive preservice clinical 
experiences for students, including mentoring and other forms of 
support, that are implemented through collaboration between the K-12 and 
higher education partners;
    (iv) Includes establishment of a well-planned, systematic induction 
program for new teachers that increases their chances of being 
successful in high-need schools;
    (v) Includes strong linkages among the partner institutions of 
higher education and high-need schools and school districts (or, in the 
case of a State applicant, between the State and these entities in its 
project), so that all those who would implement the project have 
important roles in project design, implementation, governance, and 
evaluation;
    (vi) Responds to the shortages of well-qualified and well-trained 
teachers in high-need school districts, especially from disadvantaged 
and other underrepresented backgrounds; and
    (vii) Is based on up-to-date knowledge from research and effective 
practice.
    (b) Significance. (1) The Secretary considers the significance of 
the project.
    (2) In determining the significance of the project, the Secretary 
considers the extent to which--
    (i) The project involves promising new strategies or exceptional 
approaches in the way new teachers are recruited, prepared, and inducted 
into the teaching profession;

[[Page 262]]

    (ii) Project outcomes include measurable improvements in teacher 
quality and in the number of well-prepared new teachers, that are likely 
to result in improved K-12 student achievement;
    (iii) The project will be institutionalized after federal funding 
ends, including recruitment, scholarship assistance, preparation, and 
support of additional cohorts of new teachers;
    (iv) The project will disseminate effective practices to others, and 
provide technical assistance about ways to improve teacher recruitment 
and preparation; and
    (v) The project will integrate its activities with other education 
reform activities underway in the State or communities in which the 
project is based, and will coordinate its work with local, State, and 
federal teacher recruitment, training, and professional development 
programs.
    (c) Quality of resources. (1) The Secretary considers the quality of 
the project's resources.
    (2) In determining the quality of the project's resources, the 
Secretary considers the extent to which--
    (i) The amount of support available to the project, including 
personnel, equipment, supplies, student scholarship assistance, and 
other resources is sufficient to ensure a successful project.
    (ii) Budgeted costs are reasonable and justified in relation to the 
design, outcomes, and potential significance of the project.
    (iii) The applicant's matching share of budgeted costs demonstrates 
a significant commitment to successful completion of the project, and to 
project continuation after federal funding ends.
    (d) Quality of management plan. (1) The Secretary considers the 
quality of the project's management plan.
    (2) In determining the quality of the management plan, the Secretary 
considers the following factors:
    (i) The extent to which the management plan, including the workplan, 
is designed to achieve goals and objectives of the project, and includes 
clearly defined activities, responsibilities, timelines, milestones, and 
measurable outcomes for accomplishing project tasks.
    (ii) The extent to which the project has an effective, inclusive, 
and responsive governance and decisionmaking structure that will permit 
all partners to participate in and benefit from project activities, and 
to use evaluation results to continuously improve project operations.
    (iii) The qualifications, including training and experience, of key 
personnel charged with implementing the project successfully.

(Approved by the Office of Management and Budget under control number 
1840-0007)

(Authority: 20 U.S.C. 1021 et seq.)



                         Subpart E--Scholarships



Sec. 611.41  Under what circumstances may an individual receive a scholarship of program funds to attend a teacher training program?

    (a) General: The service obligation. An individual, whom a grantee 
finds eligible to receive a scholarship funded under this part to attend 
a teacher preparation program, may receive the scholarship only after 
executing a binding agreement with the institution of higher education 
(IHE) offering the scholarship that, after completing the program, the 
individual will either--
    (1) Teach in a high-need school of a high-need LEA for a period of 
time equivalent to the period for which the individual receives the 
scholarship; or
    (2) Repay, as set forth in Sec. 611.43, the Teacher Quality 
Enhancement Grant Program funds provided as a scholarship.
    (b) Content of the scholarship agreement. To implement the service-
obligation requirement, the scholarship agreement must include terms, 
conditions, and other information consistent with Secs. 611.42-611.49 
that the Secretary determines to be necessary.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.42  How does the Secretary calculate the period of the scholarship recipient's service obligation?

    (a) Calculation of period of scholarship assistance. (1) The 
Secretary calculates the period of time for which a student received 
scholarship assistance on the

[[Page 263]]

basis of information provided by the grantee under Sec. 611.50.
    (2) The period for which the recipient received scholarship 
assistance is the period during which an individual enrolled in the 
teacher preparation program on a full-time basis, excluding the summer 
period, would have completed the same course of study.
    (b) Calculation of period needed to teach to meet the service 
obligation. (1) The period of the scholarship recipient's service 
obligation is the period of the individual's receipt of scholarship 
assistance as provided in paragraph (a) of this section.
    (2) The Secretary calculates the period that a scholarship recipient 
must teach in a high-need school of a high-need LEA in order to fulfill 
his or her service obligation by--
    (i) Comparing the period in which the recipient received a 
scholarship as provided in paragraph (a) of this section with the 
information provided by the high-need LEA under Secs. 611.46 and 611.47 
on the period the recipient has taught in one of its high-need schools; 
and
    (ii) Adjusting the period in which the recipient has taught in a 
high-need school to reflect the individual's employment, if any, as a 
teacher on a part-time basis relative to classroom teachers the LEA 
employs on a full-time basis under the LEA's standard yearly contract 
(excluding any summer or intersession period).
    (c) The Secretary adjusts the period of a scholarship recipient's 
service obligation as provided in paragraph (b) of this section to 
reflect information the high-need LEA provides under Secs. 611.46 and 
611.47 that the scholarship recipient also has taught in a high-need 
school in a summer or intersession period.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.43  What are the consequences of a scholarship recipient's failure to meet the service obligation?

    (a) Obligation to repay: General. (1) A scholarship recipient who 
does not fulfill his or her service obligation must--
    (i) Repay the Department the full amount of the scholarship, 
including the principal balance, accrued interest, and any collection 
costs charged under paragraphs (c) and (d) of this section; or
    (ii) Be discharged of any repayment obligation as provided in 
Sec. 611.45.
    (2) Unless the service obligation is deferred as provided in 
Sec. 611.44 or the repayment requirement is discharged, the obligation 
to repay the amount provided in paragraph (a)(1) of this section begins 
six months after the date the recipient--
    (i) Completes the teacher training program without beginning to 
teach in a high-need school of a high-need LEA; or
    (ii) Is no longer enrolled in the teacher training program.
    (3) The Secretary determines whether a scholarship recipient has 
fulfilled the service obligation on the basis of information that the 
Department receives as provided in Secs. 611.46 and 611.47.
    (b) Obligation to Repay: Partial performance of the service 
obligation. (1) A scholarship recipient who teaches in a high-need 
school of a high-need school district for less than the period of his or 
her service obligation must repay--
    (i) The amount of the scholarship that is proportional to the unmet 
portion of the service obligation;
    (ii) Interest that accrues on this portion of the scholarship 
beginning six months after the recipient's graduation from the teacher 
preparation program; and
    (iii) Costs of collection, if any.
    (2) Unless the service obligation is deferred or the repayment 
requirement is discharged, the obligation to repay the amount provided 
in paragraph (b)(1) of this section begins six months after the date the 
recipient is no longer employed as a teacher in a high-need school of a 
high-need LEA.
    (c) Availability of payment schedule. (1) Upon request to the 
Secretary, the scholarship recipient may repay the scholarship and 
accrued interest according to a payment schedule that the Secretary 
establishes.
    (2) A payment schedule must permit the full amount of the 
scholarship and accrued interest to be repaid within ten years. The 
minimum monthly payment is $50 unless a larger monthly payment is needed 
to enable the full

[[Page 264]]

amount that is due to be paid within this timeframe.
    (d) Interest. In accordance with 31 U.S.C. 3717 and 34 CFR part 30, 
the Secretary charges interest on the unpaid balance that the 
scholarship recipient owes. However, except as provided in 
Sec. 611.44(d), the Secretary does not charge interest for the period of 
time that precedes the date on which the scholarship recipient is 
required to begin repayment.
    (e) Failure to meet requirements. A scholarship recipient's failure 
to satisfy the requirements of Secs. 611.42-611.48 in a timely manner 
results in the recipient being--
    (1) In non-compliance with the terms of the scholarship;
    (2) Liable for repayment of the scholarship and accrued interest; 
and
    (3) Subject to collection action.
    (f) Action by reason of default. The Secretary may take any action 
authorized by law to collect the amount of scholarship, accrued interest 
and collection costs, if any, on which a scholarship recipient obligated 
to repay under this section has defaulted. This action includes, but is 
not limited to, filing a lawsuit against the recipient, reporting the 
default to national credit bureaus, and requesting the Internal Revenue 
Service to offset the recipient's Federal income tax refund.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))

[64 FR 42839, Aug. 6, 1999, as amended at 65 FR 19613, Apr. 11, 2000]



Sec. 611.44  Under what circumstances may the Secretary defer a scholarship recipient's service obligation?

    (a) Upon written request, the Secretary may defer a service 
obligation for a scholarship recipient who--
    (1) Has not begun teaching in a high-need school of a high-need LEA 
as required by Sec. 611.41(a); or
    (2) Has begun teaching in a high-need school of a high-need LEA, and 
who requests the deferment within six months of the date he or she no 
longer teaches in this school.
    (b) To obtain a deferment of the service obligation, the recipient 
must provide the Secretary satisfactory information of one or more of 
the following circumstances:
    (1) Serious physical or mental disability that prevents or 
substantially impairs the scholarship recipient's employability as a 
teacher.
    (2) The scholarship recipient's inability, despite due diligence 
(for reasons that may include the failure to pass a required teacher 
certification or licensure examination), to secure employment as a 
teacher in a high-need school of a high-need school LEA.
    (3) Membership in the armed forces of the United States on active 
duty for a period not to exceed three years.
    (4) Other extraordinary circumstances that the Secretary accepts.
    (c) Unless the Secretary determines otherwise--
    (1) A scholarship recipient must apply to renew a deferment of the 
service obligation on a yearly basis; and
    (2) The recipient has 60 days from the end of the deferment period 
to begin teaching in a high-need school of a high-need LEA or become 
liable for repayment of the scholarship, any accrued interest, and any 
costs of collection.
    (d)(1) As provided in Sec. 611.43(a)(2), during periods for which 
the Secretary defers a scholarship recipient's service obligation, the 
scholarship recipient does not have an obligation to repay the 
scholarship. However, interest continues to accrue on the amount of the 
scholarship.
    (2) If the scholarship recipient fulfills his or her service 
obligation after the end of the deferment, the Secretary waives the 
obligation to repay accrued interest.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.45  Under what circumstances does the Secretary discharge a scholarship recipient's obligation to repay for failure to meet the service obligation?

    (a) The Secretary discharges the obligation of a scholarship 
recipient to repay the scholarship, interest, and any costs for failure 
to meet the service obligation based on information acceptable to the 
Secretary of--
    (1) The recipient's death; or

[[Page 265]]

    (2) The total and permanent physical or mental disability of the 
recipient that prevents the individual from being employable as a 
classroom teacher.
    (b) Upon receipt of acceptable documentation and approval of the 
discharge request, the Secretary returns to the scholarship recipient, 
or for a discharge based on death to the recipient's estate, those 
payments received after the date the eligibility requirements for 
discharge were met. The Secretary returns these payments whether they 
are received before or after the date the discharge was approved.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.46  What are a scholarship recipient's reporting responsibilities upon graduation from the teacher preparation program?

    (a) Within six months of graduating from a teacher preparation 
program, a scholarship recipient must either--
    (1) Have the LEA in which the recipient is employed as a teacher 
provide the Department information, which the Secretary may require, to 
confirm--
    (i) The home address, phone number, social security number, and 
other identifying information about the recipient;
    (ii) That he or she is teaching in a high-need school of a high-need 
LEA; and
    (iii) Whether the individual is teaching full- or part-time and, if 
part-time, the full-time equivalency of this teaching compared to the 
LEA's full-time teachers;
    (2) Provide the Department--
    (i) A notarized statement that the scholarship recipient has asked 
the LEA to provide the Department the information identified in 
paragraph (a)(1) of this section, including the name and telephone 
number of the LEA official to whom the request was made; and
    (ii) A copy of the information identified in paragraph (a)(1) of 
this section that the recipient has asked the LEA to provide to the 
Department; or
    (3) Provide the Department a current home address and telephone 
number, a work address and telephone number, the recipient's social 
security number, and one of the following:
    (i) The required repayment of the scholarship.
    (ii) A request that the Secretary permit the recipient to repay the 
scholarship and accrued interest in installments as permitted by 
Sec. 611.43(c).
    (iii) A request that the Secretary defer the service obligation as 
permitted by Sec. 611.44.
    (b) If the recipient provides the Department the information 
identified in paragraph (a)(1) of this section, the Department accepts 
the information provisionally, but the recipient retains responsibility 
for working to have the LEA submit the information.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.47  What are a scholarship recipient's reporting responsibilities upon the close of the LEA's academic year?

    (a) At the close of the LEA's academic year, a scholarship recipient 
whose LEA reports under Sec. 611.46(a) that he or she is teaching in a 
high-need school of a high-need LEA must--
    (1) Have the LEA provide information to the Department, as the 
Secretary may require, that confirms the recipient's actual employment 
status for the preceding period; or
    (2) Provide the Department--
    (i) A notarized statement that the scholarship recipient has asked 
the LEA to provide the Department the information identified in 
paragraph (a)(1) of this section, including the name and telephone 
number of the LEA official to whom the request was made; and
    (ii) A copy of the information identified in paragraph (a)(1) of 
this section that the recipient has asked the LEA to provide to the 
Department.
    (b) If the recipient provides the Department the notarized statement 
and accompanying information identified in paragraph (a)(2) of this 
section, the Department accepts the information provisionally, but the 
recipient retains an ongoing responsibility for working to have the LEA 
submit the information directly to the Department.
    (c) In subsequent school years, the recipient must have the LEA 
continue to provide information to the Department on the recipient's 
employment as

[[Page 266]]

the Secretary may require, until the Department notifies the recipient 
that the service obligation has been fulfilled. The alternative 
procedures in paragraph (a)(2) of this section also apply in subsequent 
years.
    (d)(1) The Secretary provides a scholarship recipient with credit 
toward the service obligation for teaching in a high-need school of a 
high-need LEA during a summer or intersession period (for LEAs that 
operate year-round programs).
    (2) To receive this credit, the recipient must have the LEA at the 
end of the summer or intersession period provide information to the 
Department, as the Secretary may require, that confirms that the 
recipient has taught during this period in a high-need school.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.48  What are a scholarship recipient's reporting responsibilities upon failure to graduate or withdrawal of scholarship support?

    (a)(1) Within six months of the date the scholarship recipient is no 
longer enrolled in the teacher training program, or within six months of 
the IHE's withdrawal of scholarship support for failure to maintain good 
academic standing, the recipient must submit to the Department--
    (i) The required repayment of the scholarship;
    (ii) A request that the Secretary establish a binding schedule under 
which the recipient is obligated to repay the scholarship, accrued 
interest, and any costs of collection; or
    (iii) A request that the Secretary defer the service obligation as 
permitted by Sec. 611.44.
    (2) Upon review of the repayment or information provided under 
paragraph (a)(1) of this section, the Department notifies the recipient 
of the status of the recipient's obligations and of any schedule under 
which the recipient must repay the scholarship.
    (b) Until the Secretary determines that the individual either has 
satisfied his or her service obligation or has repaid the full amount of 
the scholarship, accrued interest, and any costs, the recipient also 
remains responsible for providing the Department--
    (1) The information identified in this part; and
    (2) A current home address and telephone number, and a current work 
address and work telephone number.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.49  What are a grantee's responsibilities for implementing the scholarship requirements before awarding a scholarship?

    Before awarding scholarship assistance with funds provided under 
this part to any student attending a teacher preparation program, a 
grantee must--
    (a) Ensure that the student understands the terms and conditions 
that the Secretary has determined must be included in the scholarship 
agreement;
    (b) Have the student and the institution awarding the scholarship 
execute a scholarship agreement that contains these terms and 
conditions; and
    (c) Establish policies for--
    (1) The withdrawal of scholarship support for any student who does 
not remain in good academic standing; and
    (2) Determining when and if re-negotiation of a student's 
scholarship package over an extended period of time is appropriate.

(Approved by the Office of Management and Budget under control number 
1840-0753)

(Authority: 20 U.S.C. 1024(e))



Sec. 611.50  What are a grantee's reporting responsibilities?

    (a) Within 30 days of the beginning of the teacher preparation 
program's academic term or within 30 days of the execution of any 
scholarship agreement, whichever is later, the grantee must provide to 
the Department the following information:
    (1) The identity of each scholarship recipient.
    (2) The amount of the scholarship provided with program funds to 
each recipient.
    (3) The full-time equivalency, over each academic year, of each 
recipient's

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enrollment in the teacher training program for which he or she receives 
scholarship assistance.
    (4) Other information as the Secretary may require.
    (b) Within 30 days of a scholarship recipient's graduation or 
withdrawal from the teacher preparation program, the grantee must 
provide to the Department the following information:
    (1) The date of the recipient's graduation or withdrawal.
    (2) The total amount of program funds the grantee awarded as a 
scholarship to the recipient.
    (3) The original of any scholarship agreement executed by the 
scholarship recipient and the grantee (or its partnering IHE if the 
grantee is not an IHE) before the recipient was awarded a scholarship 
with program funds.
    (4) A statement of whether the institution has withdrawn scholarship 
support because of the recipient's failure to maintain good academic 
standing.
    (5) Other information as the Secretary may require.

(Approved by the Office of Management and Budget under control number 
1840-0753)


(Authority: 20 U.S.C. 1024(e))



Sec. 611.51  How does a grantee ensure that a scholarship recipient understands the terms and conditions of the scholarship before the recipient leaves the teacher preparation program?

    (a) An institution that provides a scholarship with funds provided 
under this part must conduct an exit conference with each scholarship 
recipient before that individual leaves the institution. During the exit 
conference the institution must give the recipient a copy of any 
scholarship agreement the recipient has executed.
    (b) The institution also must review with the recipient the terms 
and conditions of the scholarship, including--
    (1) The recipient's service obligation;
    (2) How the recipient can confirm whether a school and LEA in which 
he or she would teach will satisfy the service obligation;
    (3) Information that the recipient will need to have the LEA provide 
to the Department to enable the Secretary to confirm that the recipient 
is meeting the service obligation;
    (4) How the recipient may request a deferment of the service 
obligation, and information that the recipient should provide the 
Department in any deferment request;
    (5) The consequences of failing to meet the service obligation 
including, at a minimum, the amount of the recipient's potential 
indebtedness; the possible referral of the indebtedness to a collection 
firm, reporting it to a credit bureau, and litigation; and the 
availability of a monthly payment schedule;
    (6) The amount of scholarship assistance and interest charges that 
the recipient must repay for failing to meet the service obligation; and
    (7) The recipient's responsibility to ensure that the Department has 
a home address and telephone number, and a work address and telephone 
number until the Secretary has determined that the recipient has 
fulfilled the service obligation or the recipient's debt has been paid 
or discharged; and
    (8) The follow-up services that the institution will provide the 
student during his or her first three years of teaching in a high-need 
school of a high-need LEA.

(Authority: 20 U.S.C. 1024(e))



Sec. 611.52  What are a grantee's programmatic responsibilities for ensuring that scholarship recipients become successful teachers in high-need schools?

    In implementing its approved project, the grantee must--
    (a) Provide scholarship recipients both before and after graduation 
with appropriate support services, including academic assistance, job 
counseling, placement assistance, and teaching support that will help to 
ensure that--
    (1) Upon graduation, scholarship recipients are able to secure 
teaching positions in high-need schools of high-need LEAs; and
    (2) After beginning to teach in a high-need school of a high-need 
LEA, former scholarship recipients have appropriate follow-up services 
and assistance during their first three years of teaching;
    (b) Provide LEAs with which the grantees collaborate in teacher 
recruitment activities with information and

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other assistance they need to recruit highly-qualified teachers 
effectively; and
    (c) Work with the high-need LEAs participating in its project to 
ensure that scholarship recipients are placed, to the extent possible, 
in highest-need schools of those LEAs.

(Authority: 20 U.S.C. 1024(e))



                    Subpart F--Other Grant Conditions

    Source: 65 FR 19614, Apr. 11, 2000, unless otherwise noted.



Sec. 611.61  What is the maximum indirect cost rate that applies to a recipient's use of program funds?

    Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum 
indirect cost rate that any recipient of funds under the Teacher Quality 
Enhancement Grants Program may use to charge indirect costs to these 
funds is the lesser of--
    (a) The rate established by the negotiated indirect cost agreement; 
or
    (b) Eight percent.

(Authority: 20 U.S.C. 1021 et seq.)



Sec. 611.62  What are a grantee's matching requirements?

    (a)(1) Each State receiving a grant under the State Grants Program 
or Teacher Recruitment Grants Program must provide, from non-federal 
sources, an amount equal to 50 percent of the amount of the grant to 
carry out the activities supported by the grant.
    (2) The 50 percent match required by paragraph (a)(1) of this 
section must be made annually during the project period, with respect to 
each grant award the State receives.
    (b) Each partnership receiving a grant under the Partnership Grant 
Program or the Teacher Recruitment Grant Program must provide, from non-
federal sources, an amount equal to--
    (1) 25 percent of the grant award for the first year of the grant;
    (2) 35 percent of the grant award for the second year of the grant; 
and
    (3) 50 percent of the grant award for each succeeding year of the 
grant.
    (c) The match from non-federal sources required by paragraphs (a) 
and (b) of this section may be made in cash or in kind.

(Authority: 20 U.S.C. 1021 et seq.)



PART 614--PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY--Table of Contents




Sec.
614.1  What is the purpose of the Preparing Tomorrow's Teachers to Use 
          Technology program?
614.2  Who is eligible for an award?
614.3  What regulations apply to this program?
614.4  Which member of the consortium must act as the lead applicant and 
          fiscal agent?
614.5  What are the matching requirements for the consortia?
614.6  What is the maximum indirect cost rate for all consortium members 
          and any cost-type contract?
614.7  What prohibitions apply to the use of grant funds under this 
          program?
614.8  What is the significance of the deadline date for applications?

    Authority: 20 U.S.C. 6832, unless otherwise noted.

    Source: 64 FR 72803, Dec. 28, 1999, unless otherwise noted.



Sec. 614.1  What is the purpose of the Preparing Tomorrow's Teachers to Use Technology program?

    (a) This program provides grants to help future teachers become 
proficient in the use of modern learning technologies and to support 
training for pre-service teachers.
    (b) A grantee may not use funds under this program for in-service 
training or continuing education for currently certified teachers.

(Authority: 20 U.S.C. 6832)



Sec. 614.2  Who is eligible for an award?

    (a) Except as provided in paragraph (b) of this section, an eligible 
applicant is a consortium that includes at least two or more of the 
following: institutions of higher education, schools of education, 
community colleges, State educational agencies, local educational 
agencies, private elementary or secondary schools, professional 
associations, foundations, museums, libraries, private sector 
businesses, public or private nonprofit organizations, community based 
organizations, or any other

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entities able to contribute to teacher preparation program reforms that 
produce technology-proficient teachers.
    (b) At least one member of the consortium must be a nonprofit 
entity.

(Authority: 20 U.S.C. 6832)



Sec. 614.3  What regulations apply to this program?

    The following regulations apply to Preparing Tomorrow's Teachers to 
Use Technology:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants and Agreements with 
Institutions of Higher Education, Hospitals, and Other Nonprofit 
Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs), except for Sec. 75.102.
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 80 (Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments).
    (6) 34 CFR part 81 (General Education Provisions Act--Enforcement).
    (7) 34 CFR part 82 (New Restrictions on Lobbying).
    (8) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace 
(Grants)).
    (9) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (10) 34 CFR part 97 (Protection of Human Subjects).
    (11) 34 CFR part 98 (Student Rights in Research, Experimental 
Programs and Testing).
    (12) 34 CFR part 99 (Family Educational Rights and Privacy).
    (b) The regulations in this part 614.

(Authority: 20 U.S.C. 6832)



Sec. 614.4  Which member of the consortium must act as the lead applicant and fiscal agent?

    (a) For purposes of 34 CFR 75.127, the lead applicant for the 
consortium must be a nonprofit member of the consortium.
    (b) The lead applicant must serve as the fiscal agent.

(Authority: 20 U.S.C. 6832)



Sec. 614.5  What are the matching requirements for the consortia?

    A consortium must provide at least 50 percent of the total project 
cost per budget period of the project using non-Federal funds.

(Authority: 20 U.S.C. 6832)



Sec. 614.6  What is the maximum indirect cost rate for all consortium members and any cost-type contract?

    (a) The maximum indirect cost rate for all consortium partners and 
any cost-type contract made