[Title 34 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2014 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]



          Title 34

Education


________________________

Parts 1 to 299

                         Revised as of July 1, 2014

          Containing a codification of documents of general
          applicability and future effect

          As of July 1, 2014
                    Published by the Office of the Federal Register
                    National Archives and Records Administration as a
                    Special Edition of the Federal Register

[[Page ii]]

          U.S. GOVERNMENT OFFICIAL EDITION NOTICE

          Legal Status and Use of Seals and Logos
          

          The seal of the National Archives and Records Administration
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              Federal Register, shall be judicially noticed. The CFR is
              prima facie evidence of the original documents published in
              the Federal Register (44 U.S.C. 1510).

          It is prohibited to use NARA's official seal and the stylized Code
              of Federal Regulations logo on any republication of this
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              Any person using NARA's official seals and logos in a manner
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[[Page iii]]




                            Table of Contents



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

  Title 34:

    SUBTITLE A--Office of the Secretary, Department of
      Education                                                      3
    SUBTITLE B--Regulations of the Offices of the Department
      of Education
          Chapter I--Office for Civil Rights, Department of
          Education                                                319
          Chapter II--Office of Elementary and Secondary
          Education, Department of Education                       425
  Finding Aids:
      Table of CFR Titles and Chapters........................     611
      Alphabetical List of Agencies Appearing in the CFR......     631
      List of CFR Sections Affected...........................     641

[[Page iv]]





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

                     Cite this Code: CFR
                     To cite the regulations in
                       this volume use title,
                       part and section number.
                       Thus, 34 CFR 3.1 refers to
                       title 34, part 3, 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, 2014), 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.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of
the revision date stated on the cover of each volume are not carried.
Code users may find the text of provisions in effect on any given date
in the past by using the appropriate List of CFR Sections Affected
(LSA). For the convenience of the reader, a ``List of CFR Sections
Affected'' is published at the end of each CFR volume. For changes to
the Code prior to the LSA listings at the end of the volume, consult
previous annual editions of the LSA. For changes to the Code prior to
2001, consult the List of CFR Sections Affected compilations, published
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of
Federal Regulations. An agency may add regulatory information at a
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used
editorially to indicate that a portion of the CFR was left vacant and
not accidentally dropped due to a printing or computer error.

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.
    What if the material incorporated by reference cannot be found? If
you have any problem locating or obtaining a copy of material listed 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, 8601 Adelphi Road, College Park, MD 20740-6001,
or call 202-741-6010.

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 Authorities
and Rules. A list of CFR titles, chapters, subchapters, and parts and an
alphabetical list of agencies publishing in the CFR are also included in
this volume.

[[Page vii]]

    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.

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 202-741-6000
or write to the Director, Office of the Federal Register, National
Archives and Records Administration, 8601 Adelphi Road, College Park, MD
20740-6001 or e-mail [email protected].

SALES

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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of
CFR Sections Affected), The United States Government Manual, the Federal
Register, Public Laws, Public Papers of the Presidents of the United
States, Compilation of Presidential Documents and the Privacy Act
Compilation are available in electronic format via www.ofr.gov. For more
information, contact the GPO Customer Contact Center, U.S. Government
Printing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-
mail, [email protected].
    The Office of the Federal Register also offers a free service on the
National Archives and Records Administration's (NARA) World Wide Web
site for public law numbers, Federal Register finding aids, and related
information. Connect to NARA's web site at www.archives.gov/federal-
register.
    The e-CFR is a regularly updated, unofficial editorial compilation
of CFR material and Federal Register amendments, produced by the Office
of the Federal Register and the Government Printing Office. It is
available at www.ecfr.gov.

    Charles A. Barth,
    Director,
    Office of the Federal Register.
    July 1, 2014.







[[Page ix]]



                               THIS TITLE

    Title 34--Education is composed of four volumes. The parts in these
volumes are arranged in the following order: Parts 1-299, parts 300-399,
parts 400-679, and part 680 to end. The contents of these volumes
represent all regulations codified under this title of the CFR as of
July 1, 2014.

    For this volume, Michele Bugenhagen was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Ann Worley.

[[Page 1]]



                           TITLE 34--EDUCATION




                   (This book contains parts 1 to 299)

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

SUBTITLE A--Office of the Secretary, Department of Education           3

  SUBTITLE B--Regulations of the Offices of the Department of Education

chapter I--Office for Civil Rights, Department of Education.         100

chapter II--Office of Elementary and Secondary Education,
  Department of Education...................................         200

[[Page 3]]

      Subtitle A--Office of the Secretary, Department of Education

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

Part                                                                Page
1-2

[Reserved]

3               Official seal...............................           5
4               Service of process..........................           6
5               Availability of information to the public...           6
5b              Privacy Act regulations.....................          16
6               Inventions and patents (general)............          27
7               Employee inventions.........................          28
8               Demands for testimony or records in legal
                    proceedings.............................          29
12              Disposal and utilization of surplus Federal
                    real property for educational purposes..          32
15              Uniform relocation assistance and real
                    property acquisition for Federal and
                    federally assisted programs.............          40
21              Equal access to justice.....................          41
30              Debt collection.............................          50
31              Salary offset for Federal employees who are
                    indebted to the United States under
                    programs administered by the Secretary
                    of Education............................          60
32              Salary offset to recover overpayments of pay
                    or allowances from Department of
                    Education employees.....................          67
33              Program Fraud Civil Remedies Act............          71
34              Administrative wage garnishment.............          88
35              Tort claims against the Government..........          96
36              Adjustment of civil monetary penalties for
                    inflation...............................          99
60              Indemnification of Department of Education
                    employees...............................         100
73              Standards of conduct........................         101

[[Page 4]]

74              Administration of grants and agreements with
                    institutions of higher education,
                    hospitals, and other non-profit
                    organizations...........................         102
75              Direct grant programs.......................         130
76              State-administered programs.................         167
77              Definitions that apply to Department
                    regulations.............................         199
79              Intergovernmental review of Department of
                    Education programs and activities.......         204
80              Uniform administrative requirements for
                    grants and cooperative agreements to
                    State and local governments.............         208
81              General Education Provisions Act--
                    enforcement.............................         237
82              New restrictions on lobbying................         251
84              Governmentwide requirements for drug-free
                    workplace (financial assistance)........         262
86              Drug and alcohol abuse prevention...........         268
97              Protection of human subjects................         276
98              Student rights in research, experimental
                    programs, and testing...................         291
99              Family educational rights and privacy.......         293

[[Page 5]]

                          PARTS 1	2 [RESERVED]



PART 3_OFFICIAL SEAL--Table of Contents



Sec.
3.1 Definitions.
3.2 Description.
3.3 Authority to affix seal.
3.4 Use of the seal.

    Authority: 20 U.S.C. 3472 and 3485, unless otherwise noted.

    Source: 45 FR 86491, Dec. 31, 1980, unless otherwise noted.



Sec. 3.1  Definitions.

    For the purposes of this part:
    (a) ED means all organizational units of the Department of
Education.
    (b) Embossing Seal means a display of the form and content of the
Official Seal made on a die so that the Seal can be embossed on paper or
other media.
    (c) Official Seal means the original(s) of the Seal showing the
exact form, content, and colors.
    (d) Replica means a copy of the Official Seal displaying the
identical form, content, and colors.
    (e) Reproduction means a copy of the Official Seal displaying the
form and content, reproduced in only one color.
    (f) Secretary means the Secretary of Education.



Sec. 3.2  Description.

    The Official Seal of the Department of Education is described as
follows: Standing upon a mound, an oak tree with black trunk and limbs
and green foliage in front of a gold rising sun, issuing gold rays on a
light blue disc, enclosed by a dark blue border with gold edges bearing
the inscription ``DEPARTMENT OF EDUCATION'' above a star at either side
of the words ``UNITED STATES OF AMERICA'' in smaller letters in the
base; letters and stars in white. The Offical Seal of the Department is
modified when used in reproductions in black and white and when
embossed. As so modified, it appears below.
[GRAPHIC] [TIFF OMITTED] TC21OC91.062



Sec. 3.3  Authority to affix seal.

    The Secretary and the Secretary's designees are authorized to affix
the Official Seal, replicas, reproductions, and embossing seals to
appropriate documents, certifications, and other material for all
purposes as authorized by this section.

(Authority: 20 U.S.C. 3474)



Sec. 3.4  Use of the seal.

    (a) Use by any person or organization outside of the Department may
be made only with the Department's prior written approval.
    (b) Requests by any person or organization outside of the Department
for permission to use the Seal must be made in writing to Director of
Public Affairs, U.S. Department of Education, 400 Maryland Avenue, SW.,
Washington, DC 20202, and must specify, in detail, the exact use to be
made. Any permission granted applies only to the specific use for which
it was granted and is not to be construed as permission for any other
use.
    (c) In regard to internal use, replicas may be used only:
    (1) For display in or adjacent to ED facilities, in Departmental
auditoriums, presentation rooms, hearing rooms, lobbies, and public
document rooms;
    (2) In offices of senior officials;
    (3) For official awards, certificates, medals, and plaques;
    (4) For electronic media, motion picture film, video tape and other
audiovisual media prepared by or for ED and attributed thereto;

[[Page 6]]

    (5) On official publications which represent the achievements or
mission of ED;
    (6) In non-ED facilities in connection with events and displays
sponsored by ED, and public appearances of the Secretary or other senior
ED officials; and
    (7) For other internal purposes as determined by the Director for
Management;
    (d) In regard to internal use, reproductions may be used only--
    (1) On ED letterhead stationery;
    (2) On official ED identification cards, security, and other
approved credentials;
    (3) On business cards for ED employees;
    (4) On official ED signs;
    (5) On official publications or graphics issued by and attributed to
ED, or joint statements of ED with one or more other Federal agencies,
State or local governments, or foreign governments;
    (6) On official awards, certificates, and medals;
    (7) On electronic media, motion picture film, video tape, and other
audiovisual media prepared by or for ED and attributed thereto; and
    (8) For other internal purposes as determined by the Director for
Management.
    (e) Embossing seals may be used only internally--
    (1) On ED legal documents, including interagency or
intergovernmental agreements, agreements with State or local
governments, foreign patent applications, certification(s) of true
copies, and similar documents;
    (2) On official awards and certificates; and
    (3) For other purposes as determined by the General Counsel or the
Director for Management.
    (f) Falsely making, forging, counterfeiting, mutilating, or altering
the Official Seal, replicas, reproductions, or embossing seals, or
knowingly using or possessing with fraudulent intent and altered
official seal, replica, reproduction or embossing seal is punishable
under 18 U.S.C. 506.
    (g) Any person using the Official Seal, replicas, reproductions, or
embossing seals in a manner inconsistent with the provisions of this
part is subject to the provisions of 18 U.S.C. 1017, which states
penalties for the wrongful use of an Official Seal, and to other
provisions of law as applicable.

[45 FR 86491, Dec. 31, 1980, as amended at 53 FR 4620, Feb. 17, 1988; 56
FR 65388, Dec. 16, 1991; 65 FR 57286, Sept. 22, 2000]



PART 4_SERVICE OF PROCESS--Table of Contents





Sec. 4.1  Service of process required to be served on or delivered to
Secretary.

    Summons, complaints, subpoenas, and other process which are required
to be served on or delivered to the Secretary of Education shall be
delivered to the General Counsel or a Deputy General Counsel, by mail at
400 Maryland Avenue SW., Washington, DC 20202 or by personal service at
that address. The persons above designated are authorized to accept
service of such process.

(Authority: 5 U.S.C. 301)

[47 FR 16780, Apr. 20, 1982]



PART 5_AVAILABILITY OF INFORMATION TO THE PUBLIC--Table of Contents



                      Subpart A_General Provisions

Sec.
5.1 Purpose.
5.2 Definitions.

                Subpart B_Records Available to the Public

5.10 Public reading room.
5.11 Business information.
5.12 Creation of records not required.
5.13 Preservation of records.

Subpart C_Procedures for Requesting Access to Records and Disclosure of
                                 Records

5.20 Requirements for making FOIA requests.
5.21 Procedure for processing FOIA requests.

                             Subpart D_Fees

5.30 Fees generally.
5.31 Fee definitions.
5.32 Assessment of fees.
5.33 Requirements for waiver or reduction of fees.

                     Subpart E_Administrative Review

5.40 Appeals of adverse determinations.


[[Page 7]]


    Authority: 5 U.S.C. 552.

    Source: 75 FR 33510, June 14, 2010, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 5.1  Purpose.

    This part contains the regulations that the United States Department
of Education follows in processing requests for records under the
Freedom of Information Act, as amended, 5 U.S.C. 552. These regulations
must be read in conjunction with the FOIA, including its exemptions to
disclosure, and, when appropriate, in conjunction with the Privacy Act
of 1974, as amended, 5 U.S.C. 552a, and its implementing regulations in
34 CFR part 5b.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



Sec. 5.2  Definitions.

    As used in this part:
    (a) Act or FOIA means the Freedom of Information Act, as amended, 5
U.S.C. 552.
    (b) Department means the United States Department of Education.
    (c) Component means each separate bureau, office, board, division,
commission, service, administration, or other organizational entity of
the Department.
    (d) FOIA request means a written request for agency records that
reasonably describes the agency records sought, made by any person,
including a member of the public (U.S. or foreign citizen/entity),
partnership, corporation, association, and foreign or domestic
governments (excluding Federal agencies).
    (e)(1) Agency records are documentary materials regardless of
physical form or characteristics that--
    (i) Are either created or obtained by the Department; and
    (ii) Are under the Department's control at the time it receives a
FOIA request.
    (2) Agency records include--
    (i) Records created, stored, and retrievable in electronic format;
    (ii) Records maintained for the Department by a private entity under
a records management contract with the Federal Government; and
    (iii) Documentary materials preserved by the Department as evidence
of the organization, functions, policies, decisions, procedures,
operations or other activities of the Department or because of the
informational value of data contained therein.
    (3) Agency records do not include tangible, evidentiary objects or
equipment; library or museum materials made or acquired and preserved
solely for reference or exhibition purposes; extra copies of documents
preserved only for convenience of reference; stocks of publications; and
personal records created for the convenience of an individual and not
used to conduct Department business or incorporated into the
Department's record keeping system or files.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



            Subpart B_Agency Records Available to the Public



Sec. 5.10  Public reading room.

    (a) General. Pursuant to 5 U.S.C. 552(a)(2), the Department
maintains a public reading room containing agency records that the FOIA
requires to be made regularly available for public inspection and
copying. Published records of the Department, whether or not available
for purchase, are made available for examination. The Department's
public reading room is located at the National Library of Education, 400
Maryland Avenue, SW., Plaza Level (Level B), Washington, DC 20202-0008.
The hours of operation are 9:00 a.m. to 5:00 p.m., Monday through Friday
(except Federal holidays).
    (b) Reading room records. Agency records maintained in the public
reading room include final opinions and orders in adjudications,
statements of policy and interpretations adopted by the Department and
not published in the Federal Register, administrative staff manuals and
instructions affecting the public, and copies of all agency records
regardless of form or format released to the public pursuant to a FOIA
request that the Department determines are likely to be the subject of
future FOIA requests.
    (c) Electronic access. The Department makes reading room records
created on

[[Page 8]]

or after November 1, 1996, available through its electronic reading
room, located on the Department's FOIA Web site at http://www2.ed.gov/
policy/gen/leg/foia/readingroom.html.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(2), 20 U.S.C. 3474)



Sec. 5.11  Business information.

    (a) General. The Department discloses business information it
obtains from a submitter under the Act in accordance with this section.
    (b) Definitions. For purposes of this section:
    (1) Business information means commercial or financial information
obtained by the Department from a submitter that may be protected from
disclosure under 5 U.S.C. 552(b)(4) (Exemption 4 of the Act).
    (2) Submitter means any person or entity (including corporations;
State, local, and tribal governments; and foreign governments) from whom
the Department obtains business information.
    (c) Designation of business information.
    (1) A submitter must use good faith efforts to designate, by
appropriate markings, either at the time of submission or at a
reasonable time thereafter, any portion of its submission that it
considers to be business information protected from disclosure under
Exemption 4 of the Act.
    (2) A submitter's designations are not binding on the Department and
will expire 10 years after the date of the submission unless the
submitter requests, and provides justification for, a longer designation
period.
    (3) A blanket designation on each page of a submission that all
information contained on the page is protected from disclosure under
Exemption 4 presumptively will not be considered a good faith effort.
    (d) Notice to submitters. Except as provided in paragraph (g) of
this section, the Department promptly notifies a submitter whenever a
FOIA request or administrative appeal is made under the Act seeking
disclosure of the information the submitter has designated in good faith
as business information protected from disclosure under paragraph (c) of
this section, or the Department otherwise has reason to believe that it
may be required to disclose information sought to be designated by the
submitter as business information protected from disclosure under
Exemption 4 of the Act. This notice includes either a description of the
business information requested or copies of the requested agency records
or portions of agency records containing the requested business
information as well as a time period, consistent with Sec. 5.21(c),
within which the submitter can object to the disclosure pursuant to
paragraph (e) of this section.
    (e) Opportunity to object to disclosure.
    (1) If a submitter objects to disclosure, it must submit to the
Department a detailed written statement specifying all grounds under
Exemption 4 of the Act for denying access to the information, or a
portion of the information sought.
    (2) A submitter's failure to object to the disclosure by the
deadline established by the Department in the notice provided under
paragraph (d) of this section constitutes a waiver of the submitter's
right to object to disclosure under paragraph (e) of this section.
    (3) A submitter's response to a notice from the Department under
paragraph (d) of this section may itself be subject to disclosure under
the Act.
    (f) Notice of intent to disclose. The Department considers a
submitter's objections and submissions made in support thereof in
deciding whether to disclose business information sought to be protected
by the submitter. Whenever the Department decides to disclose
information over a submitter's objection, the Department gives the
submitter written notice, which includes:
    (1) A statement of the reasons why the submitter's objections to
disclosure were not sustained.
    (2) A description of the information to be disclosed.
    (3) A specified disclosure date that is a reasonable time subsequent
to the notice.
    (g) Exceptions to notice requirements. The notice requirements of
paragraph (d) of this section do not apply if--
    (1) The Department does not disclose the business information of the
submitter;
    (2) The Department has previously lawfully published the
information;

[[Page 9]]

    (3) The information has been made available to the public by the
requester or by third parties;
    (4) Disclosure of the information is required by statute (other than
the Act) or regulation issued in accordance with the requirements of
Executive Order 12600 (52 FR 23781, 3 CFR, 1987 Comp., p. 235); or
    (5) The designation made by the submitter under paragraph (c) of
this section appears obviously frivolous, except that, in such case, the
Department must provide the submitter with written notice of any final
administrative disclosure determination in accordance with paragraph (f)
of this section.
    (h) Notice of FOIA lawsuit. Whenever a requester files a lawsuit
seeking to compel the disclosure of a submitter's business information,
the Department promptly notifies the submitter.
    (i) Corresponding notice to requester. The Department notifies the
requester whenever it notifies a submitter of its opportunity to object
to disclosure, of the Department's intent to disclose requested
information designated as business information by the submitter, or of
the filing of a lawsuit.
    (j) Notice of reverse FOIA lawsuit. Whenever a submitter files a
lawsuit seeking to prevent the disclosure of the submitter's
information, the Department promptly notifies the requester, and advises
the requester that its request will be held in abeyance until the
lawsuit initiated by the submitter is resolved.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



Sec. 5.12  Creation of agency records not required.

    In response to a FOIA request, the Department produces only those
agency records that are not already publicly available and that are in
existence at the time it receives a request. The Department does not
create new agency records in response to a FOIA request by, for example,
extrapolating information from existing agency records, reformatting
available information, preparing new electronic programs or databases,
or creating data through calculations of ratios, proportions,
percentages, trends, frequency distributions, correlations, or
comparisons.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



Sec. 5.13  Preservation of agency records.

    The Department does not destroy agency records that are the subject
of a pending FOIA request, appeal, or lawsuit.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



    Subpart C_Procedures for Requesting Access to Agency Records and
                      Disclosure of Agency Records



Sec. 5.20  Requirements for making FOIA requests.

    (a) Making a FOIA request. Any FOIA request for an agency record
must be in writing (via paper, facsimile, or electronic mail) and
transmitted to the Department as indicated on the Department's Web site.
See http://www.ed.gov/policy/gen/leg/foia/request_foia.html.
    (b) Description of agency records sought. A FOIA request must
reasonably describe the agency record sought, to enable Department
personnel to locate the agency record or records with a reasonable
amount of effort. Whenever possible, a FOIA request should describe the
type of agency record requested, the subject matter of the agency
record, the date, if known, or general time period when it was created,
and the person or office that created it. Requesters who have detailed
information that would assist in identifying and locating the agency
records sought are urged to provide this information to the Department
to expedite the handling of a FOIA request.
    (c) FOIA request deemed insufficient. If the Department determines
that a FOIA request does not reasonably describe the agency record or
records sought, the FOIA request will be deemed insufficient under the
Act. In that case, the Department informs the requester of the reason
the FOIA request is insufficient and, at the Department's option, either
administratively closes the FOIA request as insufficient without
determining whether to grant the FOIA request or provides the requester
an opportunity to modify the

[[Page 10]]

FOIA request to meet the requirements of this section.
    (d) Verification of identity. In compliance with the Privacy Act of
1974, as amended, 5 U.S.C. 552a, FOIA requests for agency records
pertaining to the requester, a minor, or an individual who is legally
incompetent must include verification of the requester's identity
pursuant to 34 CFR 5b.5.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



Sec. 5.21  Procedures for processing FOIA requests.

    (a) Acknowledgements of FOIA requests. The Department promptly
notifies the requester when it receives a FOIA request.
    (b) Consultation and referrals. When the Department receives a FOIA
request for a record or records created by or otherwise received from
another agency of the Federal Government, it either responds to the FOIA
request after consultation with the other agency, or refers the FOIA
request to the other agency for processing. When the Department refers a
FOIA request to another agency for processing, the Department will so
notify the requester.
    (c) Decisions on FOIA requests. The Department determines whether to
comply with a FOIA request within 20 working days after the appropriate
component of the Department first receives the request. This time period
commences on the date that the request is received by the appropriate
component of the Department, but commences no later than 10 calendar
days after the request is received by the component of the Department
designated pursuant to Sec. 5.20(a) to receive FOIA requests for agency
records. The Department's failure to comply with these time limits
constitutes exhaustion of the requester's administrative remedies for
the purposes of judicial action to compel disclosure.
    (d) Requests for additional information. The Department may make one
request for additional information from the requester and toll the 20-
day period while awaiting receipt of the additional information.
    (e) Extension of time period for processing a FOIA request. The
Department may extend the time period for processing a FOIA request only
in unusual circumstances, as described in paragraphs (e)(1) through
(e)(3) of this section, in which case the Department notifies the
requester of the extension in writing. A notice of extension affords the
requester the opportunity either to modify its FOIA request so that it
may be processed within the 20-day time limit, or to arrange with the
Department an alternative time period within which the FOIA request will
be processed. For the purposes of this section, unusual circumstances
include:
    (1) The need to search for and collect the requested agency records
from field facilities or other establishments that are separate from the
office processing the request.
    (2) The need to search for, collect, and review and process
voluminous agency records responsive to the FOIA request.
    (3) The need to consult with another agency or two or more agency
components having a substantial interest in the determination on the
FOIA request.
    (f) FOIA Public Liaison and FOIA Requester Service Center. The
Department's FOIA Public Liaison assists in the resolution of disputes
between the requester and the Department. The Department provides
information about the status of a FOIA request to the requester through
the Department's FOIA Requester Service Center. Contact information for
the Department's FOIA Public Liaison and FOIA Requester Service Center
may be found at http://www.ed.gov/policy/gen/leg/foia/contacts.html.
    (g) Notification of determination. Once the Department makes a
determination to grant a FOIA request in whole or in part, it notifies
the requester in writing of its decision.
    (h) Denials of FOIA requests.
    (1) Only Departmental officers or employees delegated the authority
to deny a FOIA request may deny a FOIA request on behalf of the
Department.
    (2)(i) The Department notifies the requester in writing of any
decision to deny a FOIA request in whole or in part. Denials under this
paragraph can include the following: A determination to deny access in
whole or in part to

[[Page 11]]

any agency record responsive to a request; a determination that a
requested agency record does not exist or cannot be located in the
Department's records; a determination that a requested agency record is
not readily retrievable or reproducible in the form or format sought by
the requester; a determination that what has been requested is not a
record subject to the FOIA; a determination on any disputed fee matter,
including a denial of a request for a fee waiver; and a denial of a
request for expedited processing.
    (ii) All determinations denying a FOIA request in whole or in part
are signed by an officer or employee designated under paragraph (h)(1)
of this section, and include:
    (A) The name and title or position of the denying officer or
employee.
    (B) A brief statement of the reason or reasons for the denial,
including any exemptions applicable under the Act.
    (C) An estimate of the volume of agency records or information
denied, by number of pages or other reasonable estimate (except where
the volume of agency records or information denied is apparent from
deletions made on agency records disclosed in part, or providing an
estimate would harm an interest protected by an applicable exemption
under the Act).
    (D) Where an agency record has been disclosed only in part, an
indication of the exemption under the Act justifying the redaction in
the agency record (unless providing this information would harm an
interest protected by an applicable exemption under the Act).
    (E) A statement of appeal rights and a list of requirements for
filing an appeal under Sec. 5.40.
    (i) Timing of responses to FOIA requests.
    (1) Multitrack processing.
    The Department may use two or more processing tracks to distinguish
between simple and more complex FOIA requests based on one or more of
the following: the time and work necessary to process the FOIA request,
the volume of agency records responsive to the FOIA request, and whether
the FOIA request qualifies for expedited processing as described in
paragraph (i)(2) of this section.
    (2) Expedited processing.
    (i) The Department gives expedited treatment to FOIA requests and
appeals whenever the Department determines that a FOIA request involves
one or more of the following:
    (A) A circumstance in which the lack of expedited treatment could
reasonably be expected to pose an imminent threat to the life or
physical safety of an individual.
    (B) The urgent need of a person primarily engaged in disseminating
information to inform the public about an actual or alleged Federal
Government activity; or
    (C) Other circumstances that the Department determines demonstrate a
compelling need for expedited processing.
    (ii) A requester may ask for expedited processing at the time of the
initial FOIA request or at any time thereafter.
    (iii) A request for expedited processing must contain a detailed
explanation of the basis for the request, and must be accompanied by a
statement certifying the truth of the circumstances alleged or other
evidence of the requester's compelling need acceptable to the
Department.
    (iv) The Department makes a determination whether to grant or deny a
request for expedited processing within 10 calendar days of its receipt
by the component of the Department designated pursuant to Sec. 5.20(a)
to receive FOIA requests for agency records, and processes FOIA requests
accepted for expedited processing as soon as practicable and on a
priority basis.

(Authority: 5 U.S.C. 552(a), 20 U.S.C. 3474)



                             Subpart D_Fees



Sec. 5.30  Fees generally.

    The Department assesses fees for processing FOIA requests in
accordance with Sec. 5.32(a), except where fees are limited under Sec.
5.32(b) or where a waiver or reduction of fees is granted under Sec.
5.33. Requesters must pay fees by check or money order made payable to
the U.S. Department of Education, and must include the FOIA request
number on the check or money order.

[[Page 12]]

The Department retains full discretion to limit or adjust fees.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(4)(A), 20 U.S.C. 3474)



Sec. 5.31  Fee definitions.

    (a) Commercial use request means a request from or on behalf of a
FOIA requester seeking information for a use or purpose that furthers
the requester's commercial, trade, or profit interests, which can
include furthering those interests through litigation. For the purpose
of assessing fees under the Act, the Department determines, whenever
reasonably possible, the use to which a requester will put the requested
agency records.
    (b) Direct costs mean those expenses that an agency actually incurs
in searching for and duplicating (and, in the case of commercial use
FOIA requests, reviewing) agency records to respond to a FOIA request.
Direct costs include, for example, the pro rata salary of the
employee(s) performing the work (i.e., basic rate of pay plus 16
percent) and the cost of operating duplication machinery. The
Department's other overhead expenses are not included in direct costs.
    (c) Duplication means making a copy of the agency record, or of the
information in it, as necessary to respond to a FOIA request. Copies can
be made in several forms and formats, including paper and electronic
records. The Department honors a requester's specified preference as to
form or format of disclosure, provided that the agency record is readily
reproducible with reasonable effort in the requested form or format.
    (d) Educational institution means a preschool, a public or private
elementary or secondary school, an institution of undergraduate higher
education, an institution of graduate higher education, an institution
of professional education, or an institution of vocational education,
that operates a program of scholarly research. To qualify as an
educational institution under this part, a requester must demonstrate
that an educational institution authorized the request and that the
agency records are not sought for individual or commercial use, but are
instead sought to further scholarly research. A request for agency
records for the purpose of affecting a requester's application for, or
prospect of obtaining, new or additional grants, contracts, or similar
funding is presumptively a commercial use request.
    (e) Noncommercial scientific institution means an institution that
is operated solely for the purpose of conducting scientific research,
the results of which are not intended to promote any particular product
or industry. A noncommercial scientific institution does not operate for
a ``commercial use'', as the term is defined in paragraph (a) of this
section. To qualify as a noncommercial scientific institution under this
part, a requester must demonstrate that a noncommercial scientific
institution authorized the request and that the agency records are
sought to further scientific research and not for a commercial use. A
request for agency records for the purpose of affecting a requester's
application for, or prospect of obtaining, new or additional grants,
contracts, or similar funding is presumptively a commercial use request.
    (f) Representative of the news media, or news media requester, means
any person or entity that gathers information of potential interest to a
segment of the public, uses its editorial skills to turn the raw
materials into a distinct work, and distributes that work to an
audience. For the purposes of this section, the term ``news'' means
information about current events or information that would be of current
interest to the public. Examples of news media entities include
television or radio stations broadcasting to the public at large and
publishers of periodicals that qualify as disseminators of news and make
their products available for purchase by, subscription by, or free
distribution to the general public. To be regarded as a representative
of the news media, a ``freelance'' journalist must demonstrate a solid
basis for expecting publication, such as a publication contract or a
past publication record. For inclusion in this category, a requester
must not be seeking the requested agency records for a commercial use.
    (g) Review means the examination of an agency record located in
response to a FOIA request to determine whether

[[Page 13]]

any portion of the record is exempt from disclosure under the Act.
Reviewing the record includes processing the agency record for
disclosure and making redactions and other preparations for disclosure.
Review costs are recoverable even if an agency record ultimately is not
disclosed. Review time includes time spent considering any formal
objection to disclosure but does not include time spent resolving
general legal or policy issues regarding the application of exemptions
under the Act.
    (h) Search means the process of looking for and retrieving agency
records or information responsive to a FOIA request. Searching includes
page-by-page or line-by-line identification of information within agency
records and reasonable efforts to locate and retrieve information from
agency records maintained in electronic form or format, provided that
such efforts do not significantly interfere with the operation of the
Department's automated information systems.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(4)(A), 20 U.S.C. 3474)



Sec. 5.32  Assessment of fees.

    (a) Fees. In responding to FOIA requests, the Department charges the
following fees (in accordance with the Office of Management and Budget's
``Uniform FOIA Fee Schedule and Guidelines,'' 52 FR 10012 (March 27,
1987)), unless it has granted a waiver or reduction of fees under Sec.
5.33 and subject to the limitations set forth in paragraph (b) of this
section:
    (1) Search. The Department charges search fees, subject to the
limitations of paragraph (b) of this section. Search time includes time
spent searching, regardless of whether the search results in the
location of responsive agency records and, if so, whether such agency
records are released to the requester under the Act. The requester will
be charged the direct costs, as defined in Sec. 5.31(b), of the search.
In the case of computer searches for agency records, the Department
charges the requester for the direct cost of conducting the search,
subject to the limitations set forth in paragraph (b) of this section.
    (2) Review. (i) The Department charges fees for initial agency
record review at the same rate as for searches, subject to the
limitations set forth in paragraph (b) of this section.
    (ii) No fees are charged for review at the administrative appeal
level except in connection with--
    (A) The review of agency records other than agency records
identified as responsive to the FOIA request in the initial decision;
and
    (B) The Department's decision regarding whether to assert that an
exemption exists under the Act that was not cited in the decision on the
initial FOIA request.
    (iii) Review fees are not assessed for FOIA requests other than
those made for a ``commercial use,'' as the term is defined in Sec.
5.31(a).
    (3) Duplication. The Department charges duplication fees at the rate
of $0.20 per page for paper photocopies of agency records, $3.00 per CD
for documents recorded on CD, and at the direct cost for duplication for
electronic copies and other forms of duplication, subject to the
limitations of paragraph (b) of this section.
    (b) Limitations on fees.
    (1) Fees are limited to charges for document duplication when agency
records are not sought for commercial use and the request is made by--
    (i) An educational or noncommercial scientific institution, whose
purpose is scholarly or scientific research; or
    (ii) A representative of the news media.
    (2) For FOIA requests other than commercial use FOIA requests, the
Department provides the first 100 pages of agency records released (or
the cost equivalent) and the first two hours of search (or the cost
equivalent) without charge, pursuant to 5 U.S.C. 552(a)(4)(A)(iv)(II).
    (3) Whenever the Department calculates that the fees assessable for
a FOIA request under paragraph (a) of this section total $25.00 or less,
the Department processes the FOIA request without charge to the
requester.
    (c) Notice of anticipated fees in excess of $25. When the Department
estimates or determines that the fees for processing a FOIA request will
total more than $25 and the requester has not stated a willingness to
pay such fees, the Department notifies the requester of

[[Page 14]]

the anticipated amount of fees before processing the FOIA request. If
the Department can readily anticipate fees for processing only a portion
of a request, the Department advises the requester that the anticipated
fee is for processing only a portion of the request. When the Department
has notified a requester of anticipated fees greater than $25, the
Department does not further process the request until the requester
agrees in writing to pay the anticipated total fee.
    (d) Charges for other services. When the Department chooses as a
matter of administrative discretion to provide a special service, such
as certification of agency records, it charges the requester the direct
cost of providing the service.
    (e) Charging interest. The Department charges interest on any unpaid
bill assessed at the rate provided in 31 U.S.C. 3717. In charging
interest, the Department follows the provisions of the Debt Collection
Act of 1982, as amended (Pub. L. 97-365), and its administrative
procedures, including the use of consumer reporting agencies, collection
agencies, and offset.
    (f) Aggregating FOIA requests. When the Department reasonably
believes that a requester, or a group of requesters acting together, is
attempting to divide a FOIA request into a series of FOIA requests for
the purpose of avoiding or reducing otherwise applicable fees, the
Department may aggregate such FOIA requests for the purpose of assessing
fees. The Department does not aggregate multiple FOIA requests involving
unrelated matters.
    (g) Advance payments.
    (1) For FOIA requests other than those described in paragraphs
(g)(2) and (g)(3) of this section, the Department does not require the
requester to pay fees in advance.
    (2) Where the Department estimates or determines that fees for
processing a FOIA request will total more than $250, it may require the
requester to pay the fees in advance, except where the Department
receives a satisfactory assurance of full payment from a requester with
a history of prompt payment of FOIA fees.
    (3) The Department may require a requester who has previously failed
to pay a properly assessed FOIA fee within 30 calendar days of the
billing date to pay in advance the full amount of estimated or actual
fees before it further processes a new or pending FOIA request from that
requester.
    (4) When the Department requires advance payment of estimated or
assessed fees, it does not consider the FOIA request received and does
not further process the FOIA request until payment is received.
    (h) Tolling. When necessary for the Department to clarify issues
regarding fee assessment with the FOIA requester, the time limit for
responding to the FOIA request is tolled until the Department resolves
such issues with the requester.
    (i) Other statutory requirements. The fee schedule of this section
does not apply to fees charged under any statute that specifically
requires an agency to set and collect fees for producing particular
types of agency records.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(4)(A), 20 U.S.C. 3474)



Sec. 5.33  Requirements for waiver or reduction of fees.

    (a) The Department processes a FOIA request for agency records
without charge or at a charge less than that established under Sec.
5.32(a) when the Department determines that--
    (1) Disclosure of the requested information is in the public
interest because it is likely to contribute significantly to public
understanding of the operations or activities of the government; and
    (2) Disclosure of the information is not primarily in the commercial
interest of the requester.
    (b) To determine whether a FOIA request is eligible for waiver or
reduction of fees pursuant to paragraph (a)(1) of this section, the
Department considers the following factors:
    (1) Whether the subject of the request specifically concerns
identifiable operations or activities of the government.
    (2) Whether the disclosable portions of the requested information
will be meaningfully informative in relation to the subject matter of
the request.
    (3) The disclosure's contribution to public understanding of
government operations, i.e., the understanding of

[[Page 15]]

the public at large, as opposed to an individual or a narrow segment of
interested persons (including whether the requester has expertise in the
subject area of the FOIA request as well as the intention and
demonstrated ability to disseminate the information to the public).
    (4) The significance of the disclosure's contribution to public
understanding of government operations or activities, i.e., the public's
understanding of the subject matter existing prior to the disclosure
must be likely to be enhanced significantly by the disclosure.
    (c) To determine whether a FOIA request is eligible for waiver or
reduction of fees pursuant to paragraph (a)(2) of this section, the
Department considers the following factors:
    (1) The existence of the requester's commercial interest, i.e.,
whether the requester has a commercial interest that would be furthered
by the requested disclosure.
    (2) If a commercial interest is identified, whether the commercial
interest of the requester is sufficiently large in comparison with the
public interest in disclosure, that disclosure is primarily in the
commercial interest of the requester.
    (d) When the fee waiver requirements are met only with respect to a
portion of a FOIA request, the Department waives or reduces fees only
for that portion of the request.
    (e) A requester seeking a waiver or reduction of fees must submit
evidence demonstrating that the FOIA request meets all the criteria
listed in paragraphs (a) through (c) of this section.
    (f) A requester must seek a fee waiver for each FOIA request for
which a waiver is sought. The Department does not grant standing fee
waivers but considers each fee waiver request independently on its
merits.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(4)(A), 20 U.S.C. 3474)



                     Subpart E_Administrative Review



Sec. 5.40  Appeals of adverse determinations.

    (a) In general. A requester may seek an administrative review of an
adverse determination on the FOIA request made by the requester by
submitting an appeal of the determination to the Department. Adverse
determinations include denials of access to agency records, in whole or
in part; ``no agency records'' responses; and adverse fee decisions,
including denials of requests for fee waivers, and all aspects of fee
assessments.
    (b) Appeal requirements. A requester must submit an appeal within 35
calendar days of the date on the adverse determination letter issued by
the Department or, where the requester has received no determination, at
any time after the due date for such determination. An appeal must be in
writing and must include a detailed statement of all legal and factual
bases for the appeal. The requester's failure to comply with time limits
set forth in this section constitutes exhaustion of the requester's
administrative remedies for the purposes of initiating judicial action
to compel disclosure.
    (c) Determination on appeal. (1) The Department makes a written
determination on an administrative appeal within 20 working days after
receiving the appeal. The time limit may be extended in accordance with
Sec. 5.21(c) through (e). The Department's failure to comply with time
limits set forth in this section constitutes exhaustion of the
requester's administrative remedies for the purposes of initiating
judicial action to compel disclosure.
    (2) The Department's determination on an appeal constitutes the
Department's final action on the FOIA request. Any Department
determination denying an appeal in whole or in part includes the reasons
for the denial, including any exemptions asserted under the Act, and
notice of the requester's right to seek judicial review of the
determination in accordance with 5 U.S.C. 552(a)(4). Where the
Department makes a determination to grant an appeal in whole or in part,
it processes the FOIA request subject to the appeal in accordance with
the determination on appeal.

(Authority: 5 U.S.C. 552(a), 5 U.S.C. 552(a)(6), 20 U.S.C. 3474)

[[Page 16]]



PART 5b_PRIVACY ACT REGULATIONS--Table of Contents



Sec.
5b.1 Definitions.
5b.2 Purpose and scope.
5b.3 Policy.
5b.4 Maintenance of records.
5b.5 Notification of or access to records.
5b.7 Procedures for correction or amendment of records.
5b.8 Appeals of refusals to correct or amend records.
5b.9 Disclosure of records.
5b.10 Parents and guardians.
5b.11 Exempt systems.
5b.12 Contractors.
5b.13 Fees.

Appendix A to Part 5b--Employee Standards of Conduct
Appendix B to Part 5b--Routine Uses Applicable to More Than One System
          of Records Maintained by ED

    Authority: 5 U.S.C. 301, 5 U.S.C. 552a.

    Source: 45 FR 30808, May 9, 1980, unless otherwise noted.



Sec. 5b.1  Definitions.

    As used in this part:
    (a) Access means availability of a record to a subject individual.
    (b) Agency means the Department of Education.
    (c) Department means the Department of Education.
    (d) Disclosure means the availability or release of a record to
anyone other than the subject individual.
    (e) Individual means a living person who is a citizen of the United
States or an alien lawfully admitted for permanent residence. It does
not include persons such as sole proprietorships, partnerships, or
corporations. A business firm which is identified by the name of one or
more persons is not an individual within the meaning of this part.
    (f) Maintain means to maintain, collect, use, or disseminate when
used in connection with the term ``record''; and, to have control over
or responsibility for a system of records when used in connection with
the term ``system of records.''
    (g) Notification means communication to an individual whether he is
a subject individual.
    (h) Record means any item, collection, or grouping of information
about an individual that is maintained by the Department, including but
not limited to the individual's education, financial transactions,
medical history, and criminal or employment history and that contains
his name, or an identifying number, symbol, or other identifying
particular assigned to the individual, such as a finger or voice print
or a photograph. When used in this part, record means only a record
which is in a system of records.
    (i) Responsible Department official means that officer who is listed
in a notice of a system of records as the system manager for a given
system of records or another individual listed in the notice of a system
of records to whom requests may be made, or the designee of either such
officer or individual.
    (j) Routine use means the disclosure of a record outside the
Department, without the consent of the subject individual, for a purpose
which is compatible with the purpose for which the record was collected.
It includes disclosures required to be made by statute other than the
Freedom of Information Act, 5 U.S.C. 552. It does not include
disclosures which are permitted to be made without the consent of the
subject individual which are not compatible with the purpose for which
it was collected such as disclosures to the Bureau of the Census, the
General Accounting Office, or to Congress.
    (k) Secretary means the Secretary of Education.
    (l) Statistical record means a record maintained for statistical
research or reporting purposes only and not maintained to make
determinations about a particular subject individual.
    (m) Subject individual means that individual to whom a record
pertains.
    (n) System of records means any group of records under the control
of the Department from which a record is retrieved by personal
identifier such as the name of the individual, number, symbol or other
unique retriever assigned to the individual. Single records or groups of
records which are not retrieved by a personal identifier are not part of
a system of records. Papers maintained by individual employees of the
Department which are prepared, maintained, or discarded at the
discretion of the employee and which are not

[[Page 17]]

subject to the Federal Records Act, 44 U.S.C. 2901, are not part of a
system of records; Provided, That such personal papers are not used by
the employee or the Department to determine any rights, benefits, or
privileges of individuals.

[45 FR 30808, May 9, 1980; 45 FR 37426, June 3, 1980]



Sec. 5b.2  Purpose and scope.

    (a) This part implements section 3 of the Privacy Act of 1974, 5
U.S.C. 552a (hereinafter referred to as the Act), by establishing agency
policies and procedures for the maintenance of records. This part also
establishes agency policies and procedures under which a subject
individual may be given notification of or access to a record pertaining
to him and policies and procedures under which a subject individual may
have his record corrected or amended if he believes that his record is
not accurate, timely, complete, or relevant or necessary to accomplish a
Department function.
    (b) All components of the Department are governed by the provisions
of this part. Also governed by the provisions of this part are advisory
committees and councils within the meaning of the Federal Advisory
Committee Act which provide advice to (1) any official or component of
the Department or (2) the President and for which the Department has
been delegated responsibility for providing services.
    (c) Employees of the Department governed by this part include all
regular and special government employees of the Department; experts and
consultants whose temporary (not in excess of 1 year) or intermittent
services have been procured by the Department by contract pursuant to
3109 of title 5, United States Code; volunteers where acceptance of
their services are authorized by law; those individuals performing
gratuitous services as permitted under conditions prescribed by the
Office of Personnel Management; and, participants in work-study or
training programs.
    (d) This part does not:
    (1) Make available to a subject individual records which are not
retrieved by that individual's name or other personal identifier.
    (2) Make available to the general public records which are retrieved
by a subject individual's name or other personal identifier or make
available to the general public records which would otherwise not be
available to the general public under the Freedom of Information Act, 5
U.S.C. 552, and part 5 of this title.
    (3) Govern the maintenance or disclosure of, notification of or
access to, records in the possession of the Department which are subject
to regulations of another agency, such as personnel records subject to
the regulations of the Office of Personnel Management.
    (4) Apply to grantees, including State and local governments or
subdivisions thereof, administering federally funded programs.
    (5) Make available records compiled by the Department in reasonable
anticipation of court litigation or formal administrative proceedings.
The availability of such records to the general public or to any subject
individual or party to such litigation or proceedings shall be governed
by applicable constitutional principles, rules of discovery, and
applicable regulations of the Department.



Sec. 5b.3  Policy.

    It is the policy of the Department to protect the privacy of
individuals to the fullest extent possible while nonetheless permitting
the exchange of records required to fulfill the administrative and
program responsibilities of the Department, and responsibilities of the
Department for disclosing records which the general public is entitled
to have under the Freedom of Information Act, 5 U.S.C. 552, and part 5
of this title.



Sec. 5b.4  Maintenance of records.

    (a) No record will be maintained by the Department unless:
    (1) It is relevant and necessary to accomplish a Department function
required to be accomplished by statute or Executive Order;
    (2) It is acquired to the greatest extent practicable from the
subject individual when maintenance of the record may result in a
determination about the subject individual's rights, benefits or
privileges under Federal programs;

[[Page 18]]

    (3) The individual providing the record is informed of the authority
for providing the record (including whether the providing of the record
is mandatory or voluntary, the principal purpose for maintaining the
record, the routine uses for the record, what effect his refusal to
provide the record may have on him), and if the record is not required
by statute or Executive Order to be provided by the individual, he
agrees to provide the record.
    (b) No record will be maintained by the Department which describes
how an individual exercises rights guaranteed by the First Amendment
unless expressly authorized (1) by statute, or (2) by the subject
individual, or (3) unless pertinent to and within the scope of an
authorized law enforcement activity.



Sec. 5b.5  Notification of or access to records.

    (a) Times, places, and manner of requesting notification of or
access to a record. (1) Any individual may request notification of a
record. He may at the same time request access to any record pertaining
to him. An individual may be accompanied by another individual of his
choice when he requests access to a record in person; Provided, That he
affirmatively authorizes the presence of such other individual during
any discussion of a record to which access is requested.
    (2) An individual making a request for notification of or access to
a record shall address his request to the responsible Department
official and shall verify his identity when required in accordance with
paragraph (b)(2) of this section. At the time the request is made, the
individual shall specify which systems of records he wishes to have
searched and the records to which he wishes to have access. He may also
request that copies be made of all or any such records. An individual
shall also provide the responsible Department official with sufficient
particulars to enable such official to distinguish between records on
subject individuals with the same name. The necessary particulars are
set forth in the notices of systems of records.
    (3) An individual who makes a request in person may leave with any
responsible Department official a request for notification of or access
to a record under the control of another responsible Department
official; Provided, That the request is addressed in writing to the
appropriate responsible Department official.
    (b) Verification of identity--(1) When required. Unless an
individual, who is making a request for notification of or access to a
record in person, is personally known to the responsible Department
official, he shall be required to verify his identity in accordance with
paragraph (b)(2) of this section if:
    (i) He makes a request for notification of a record and the
responsible Department official determines that the mere disclosure of
the existence of the record would be a clearly unwarranted invasion of
privacy if disclosed to someone other than the subject individual; or,
    (ii) He makes a request for access to a record which is not required
to be disclosed to the general public under the Freedom of Information
Act, 5 U.S.C. 552, and part 5 of this title.
    (2) Manner of verifying identity. (i) An individual who makes a
request in person shall provide to the responsible Department official
at least one piece of tangible identification such as a driver's
license, passport, alien or voter registration card, or union card to
verify his identity. If an individual does not have identification
papers to verify his identity, he shall certify in writing that he is
the individual who he claims to be and that he understands that the
knowing and willful request for or acquisition of a record pertaining to
an individual under false pretenses is a criminal offense under the Act
subject to a $5,000 fine.
    (ii) Except as provided in paragraph (b)(2)(v) of this section, an
individual who does not make a request in person shall submit a
notarized request to the responsible Department official to verify his
identity or shall certify in his request that he is the individual who
he claims to be and that he understands that the knowing and willful
request for or acquisition of a record pertaining to an individual under
false pretenses is a criminal offense under the Act subject to a $5,000
fine.

[[Page 19]]

    (iii) An individual who makes a request on behalf of a minor or
legal incompetent as authorized under Sec. 5b.10 of this part shall
verify his relationship to the minor or legal incompetent, in addition
to verifying his own identity, by providing a copy of the minor's birth
certificate, a court order, or other competent evidence of guardianship
to the responsible Department official; except that, an individual is
not required to verify his relationship to the minor or legal
incompetent when he is not required to verify his own identity or when
evidence of his relationship to the minor or legal incompetent has been
previously given to the responsible Department official.
    (iv) An individual shall further verify his identity if he is
requesting notification of or access to sensitive records. Any further
verification shall parallel the record to which notification or access
is being sought. Such further verification may include such particulars
as the individual's years of attendance at a particular educational
institution, rank attained in the uniformed services, date or place of
birth, names of parents, or an occupation.
    (v) An individual who makes a request by telephone shall verify his
identity by providing to the responsible Department official identifying
particulars which parallel the record to which notification or access is
being sought. If the responsible Department official determines that the
particulars provided by telephone are insufficient, the requester will
be required to submit the request in writing or in person. Telephone
requests will not be accepted where an individual is requesting
notification of or access to sensitive records.
    (c) Granting notification of or access to a record. (1) Subject to
the provisions governing exempt systems in Sec. 5b.11 of this part, a
responsible Department official, who receives a request for notification
of or access to a record and, if required, verification of an
individual's identity, will review the request and grant notification or
access to a record, if the individual requesting access to the record is
the subject individual.
    (2) If the responsible Department official determines that there
will be a delay in responding to a request because of the number of
requests being processed, a breakdown of equipment, shortage of
personnel, storage of records in other locations, etc., he will so
inform the individual and indicate when notification or access will be
granted.
    (3) Prior to granting notification of or access to a record, the
responsible Department official may at his discretion require an
individual making a request in person to reduce his request to writing
if the individual has not already done so at the time the request is
made.



Sec. 5b.7  Procedures for correction or amendment of records.

    (a) Any subject individual may request that his record be corrected
or amended if he believes that the record is not accurate, timely,
complete, or relevant or necessary to accomplish a Department function.
A subject individual making a request to amend or correct his record
shall address his request to the responsible Department official in
writing; except that, the request need not be in writing if the subject
individual makes his request in person and the responsible Department
official corrects or amends the record at that time. The subject
individual shall specify in each request:
    (1) The system of records from which the record is retrieved;
    (2) The particular record which he is seeking to correct or amend;
    (3) Whether he is seeking an addition to or a deletion or
substitution of the record; and,
    (4) His reasons for requesting correction or amendment of the
record.
    (b) A request for correction or amendment of a record will be
acknowledged within 10 working days of its receipt unless the request
can be processed and the subject individual informed of the responsible
Department official's decision on the request within that 10 day period.
    (c) If the responsible Department official agrees that the record is
not accurate, timely, or complete based on a preponderance of the
evidence, the record will be corrected or amended. The record will be
deleted without regard to its accuracy, if the record is

[[Page 20]]

not relevant or necessary to accomplish the Department function for
which the record was provided or is maintained. In either case, the
subject individual will be informed in writing of the correction,
amendment, or deletion and, if accounting was made of prior disclosures
of the record, all previous recipients of the record will be informed of
the corrective action taken.
    (d) If the responsible Department official does not agree that the
record should be corrected or amended, the subject individual will be
informed in writing of the refusal to correct or amend the record. He
will also be informed that he may appeal the refusal to correct or amend
his record Sec. 5b.8 of this part.
    (e) Requests to correct or amend a record governed by the regulation
of another government agency, e.g., Office of Personnel Management,
Federal Bureau of Investigation, will be forwarded to such government
agency for processing and the subject individual will be informed in
writing of the referral.



Sec. 5b.8  Appeals of refusals to correct or amend records.

    (a) Processing the appeal. (1) A subject individual who disagrees
with a refusal to correct or amend his record may appeal the refusal in
writing. All appeals shall be made to the Secretary.
    (2) An appeal will be completed within 30 working days from its
receipt by the appeal authority; except that, the appeal authority may
for good cause extend this period for an additional 30 days. Should the
appeal period be extended, the subject individual appealing the refusal
to correct or amend the record will be informed in writing of the
extension and the circumstances of the delay. The subject individual's
request to amend or correct the record, the responsible Department
official's refusal to correct or amend, and any other pertinent material
relating to the appeal will be reviewed. No hearing will be held.
    (3) If the appeal authority agrees that the record subject to the
appeal should be corrected or amended, the record will be amended and
the subject individual will be informed in writing of the correction or
amendment. Where an accounting was made of prior disclosures of the
record, all previous recipients of the record will be informed of the
corrective action taken.
    (4) If the appeal is denied, the subject individual will be informed
in writing:
    (i) Of the denial and the reasons for the denial;
    (ii) That he has a right to seek judicial review of the denial; and,
    (iii) That he may submit to the responsible Department official a
concise statement of disagreement to be associated with the disputed
record and disclosed whenever the record is disclosed.
    (b) Notation and disclosure of disputed records. Whenever a subject
individual submits a statement of disagreement to the responsible
Department official in accordance with paragraph (a)(4)(iii) of this
section, the record will be noted to indicate that it is disputed. In
any subsequent disclosure, a copy of the subject individual's statement
of disagreement, will be disclosed with the record. If the responsible
Department official deems it appropriate, a concise statement of the
appeal authority's reasons for denying the subject individual's appeal
may also be disclosed with the record. While the subject individual will
have access to this statement of reasons, such statement will not be
subject to correction or amendment. Where an accounting was made of
prior disclosures of the record, all previous recipients of the record
will be provided a copy of the subject individual's statement of
disagreement, as well as the statement, if any, of the appeal
authority's reasons for denying the subject individual's appeal.



Sec. 5b.9  Disclosure of records.

    (a) Consent to disclosure by a subject individual. (1) Except as
provided in paragraph (b) of this section authorizing disclosures of
records without consent, no disclosure of a record will be made without
the consent of the subject individual. In each case the consent, whether
obtained from the subject individual at the request of the Department or
whether provided to the Department by the subject individual on his own
initiative, shall be in writing. The consent shall specify the
individual, organizational unit or class of individuals or
organizational units to

[[Page 21]]

whom the record may be disclosed, which record may be disclosed and,
where applicable, during which time frame the record may be disclosed
(e.g., during the school year, while the subject individual is out of
the country, whenever the subject individual is receiving specific
services). A blanket consent to disclose all of a subject individual's
records to unspecified individuals or organizational units will not be
honored. The subject individual's identity and, where applicable (e.g.,
where a subject individual gives consent to disclosure of a record to a
specific individual), the identity of the individual to whom the record
is to be disclosed shall be verified.
    (2) A parent or guardian of any minor is not authorized to give
consent to a disclosure of the minor's medical record.
    (b) Disclosures without the consent of the subject individual. The
disclosures listed in this paragraph may be made without the consent of
the subject individual. Such disclosures are:
    (1) To those officers and employees of the Department who have a
need for the record in the performance of their duties. The responsible
Department official may upon request of any officer or employee, or on
his own initiative, determine what constitutes legitimate need.
    (2) Required to be disclosed under the Freedom of Information Act, 5
U.S.C. 552, and part 5 of this title.
    (3) For a routine use as defined in paragraph (j) of Sec. 5b.1.
Routine uses will be listed in any notice of a system of records.
Routine uses published in appendix B are applicable to more than one
system of records. Where applicable, notices of systems of records may
contain references to the routine uses listed in appendix B. appendix B
will be published with any compendium of notices of systems of records.
    (4) To the Bureau of the Census for purposes of planning or carrying
out a census or survey or related activity pursuant to the provisions of
title 13 U.S.C.
    (5) To a recipient who has provided the agency with advance written
assurance that the record will be used solely as a statistical research
or reporting record; Provided, That, the record is transferred in a form
that does not identify the subject individual.
    (6) To the National Archives of the United States as a record which
has sufficient historical or other value to warrant its continued
preservation by the United States Government, or for evaluation by the
Administrator of General Services or his designee to determine whether
the record has such value.
    (7) To another government agency or to an instrumentality of any
governmental jurisdiction within or under the control of the United
States for a civil or criminal law enforcement activity if the activity
is authorized by law, and if the head of such government agency or
instrumentality has submitted a written request to the Department
specifying the record desired and the law enforcement activity for which
the record is sought.
    (8) To an individual pursuant to a showing of compelling
circumstances affecting the health or safety of any individual if a
notice of the disclosure is transmitted to the last known address of the
subject individual.
    (9) To either House of Congress, or to the extent of matter within
its jurisdiction, any committee or subcommittee thereof, any joint
committee of Congress or subcommittee of any such joint committee.
    (10) To the Comptroller General, or any of the Comptroller General's
authorized representatives, in the course of the performance of the
duties of the General Accounting Office.
    (11) Pursuant to the order of a court of competent jurisdiction.
    (c) Accounting of disclosures. (1) An accounting of all disclosures
of a record will be made and maintained by the Department for 5 years or
for the life of the record, whichever is longer; except that, such an
accounting will not be made:
    (i) For disclosures under paragraphs (b) (1) and (2) of this
section; and,
    (ii) For disclosures made with the written consent of the subject
individual.
    (2) The accounting will include:
    (i) The date, nature, and purpose of each disclosure; and

[[Page 22]]

    (ii) The name and address of the person or entity to whom the
disclosure is made.
    (3) Any subject individual may request access to an accounting of
disclosures of a record. The subject individual shall make a request for
access to an accounting in accordance with the procedures in Sec. 5b.5
of this part. A subject individual will be granted access to an
accounting of the disclosures of a record in accordance with the
procedures of this part which govern access to the related record.
Access to an accounting of a disclosure of a record made under paragraph
(b)(7) of this section may be granted at the discretion of the
responsible Department official.



Sec. 5b.10  Parents and guardians.

    For the purpose of this part, a parent or guardian of any minor or
the legal guardian or any individual who has been declared incompetent
due to physical or mental incapacity or age by a court of competent
jurisdiction is authorized to act on behalf of an individual or a
subject individual. Except as provided in paragraph (b)(2) of Sec.
5b.5, of this part governing procedures for verifying an individual's
identity, an individual authorized to act on behalf of a minor or legal
incompetent will be viewed as if he were the individual or subject
individual.



Sec. 5b.11  Exempt systems.

    (a) General policy. The Act permits an agency to exempt certain
types of systems of records from some of the Act's requirements. It is
the policy of the Department to exercise authority to exempt systems of
records only in compelling cases.
    (b) Specific systems of records exempted under (j)(2). The
Department exempts the Investigative Files of the Inspector General ED/
OIG (18-10-01) and the Hotline Complaint Files of the Inspector General
ED/OIG (18-10-04) systems of records from the following provisions of 5
U.S.C. 552a and this part:
    (1) 5 U.S.C. 552a(c)(3) and Sec. 5b.9(a)(1) and (c)(3) of this
part, regarding access to an accounting of disclosures of a record.
    (2) 5 U.S.C. 552a(c)(4) and Sec. Sec. 5b.7(c) and 5b.8(b) of this
part, regarding notification to outside parties and agencies of
correction or notation of dispute made in accordance with 5 U.S.C.
552a(d).
    (3) 5 U.S.C. 552a(d) (1) through (4) and (f) and Sec. Sec.
5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification
or access to records and correction or amendment of records.
    (4) 5 U.S.C. 552a(e)(1) and Sec. 5b.4(a)(1) of this part, regarding
maintaining only relevant and necessary information.
    (5) 5 U.S.C. 552a(e)(2) and Sec. 5b.4(a)(2) of this part, regarding
collection of information from the subject individual.
    (6) 5 U.S.C. 552a(e)(3) and Sec. 5b.4(a)(3) of this part, regarding
notice to individuals asked to provide information to the Department.
    (7) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of
information in the system notice about procedures for notification,
access, correction, and source of records.
    (8) 5 U.S.C. 552a(e)(5), regarding maintaining records with
requisite accuracy, relevance, timeliness, and completeness.
    (9) 5 U.S.C. 552a(e)(8), regarding service of notice on subject
individual if a record is made available under compulsory legal process
if that process becomes a matter of public record.
    (10) 5 U.S.C. 552a(g), regarding civil remedies for violation of the
Privacy Act.
    (c) Specific systems of records exempted under (k)(2). (1) The
Department exempts the Investigative Files of the Inspector General ED/
OIG (18-10-01), the Hotline Complaint Files of the Inspector General ED/
OIG (18-10-04), and the Office of Inspector General Data Analytics
System (ODAS) (18-10-02) from the following provisions of 5 U.S.C. 552a
and this part to the extent that these systems of records consist of
investigatory material and complaints that may be included in
investigatory material compiled for law enforcement purposes:
    (i) 5 U.S.C. 552a(c)(3) and Sec. 5b.9(c)(3) of this part, regarding
access to an accounting of disclosures of records.
    (ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and Sec. Sec.
5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification
of and access to records and correction or amendment of records.
    (iii) 5 U.S.C. 552a(e)(1) and Sec. 5b.4(a)(1) of this part,
regarding the requirement

[[Page 23]]

to maintain only relevant and necessary information.
    (iv) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of
information in the system notice about procedures for notification,
access, correction, and source of records.
    (2) The Department exempts the Complaint Files and Log, Office for
Civil Rights (18-08-01) from the following provisions of 5 U.S.C. 552a
and this part:
    (i) 5 U.S.C. 552a(c)(3) and Sec. 5b.9(c)(3) of this part, regarding
access to an accounting of disclosures of records.
    (ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and Sec. Sec.
5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification
of and access to records and correction or amendment of records.
    (iii) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of
information in the system notice about procedures for notification,
access, and correction of records.
    (d) Specific systems of records exempted under (k)(5). The
Department exempts the Investigatory Material Compiled for Personnel
Security and Suitability Purposes (18-05-17) system of records from the
following provisions of 5 U.S.C. 552a and this part:
    (1) 5 U.S.C. 552a(c)(3) and Sec. 5b.9(c)(3) of this part, regarding
access to an accounting of disclosures of records.
    (2) 5 U.S.C. 552a(d) (1) through (4) and (f) and Sec. Sec.
5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification
of and access to records and correction or amendment of records.
    (3) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of
information in the system notice about procedures for notification,
access, and correction of records.
    (e) Basis for exemptions taken under (j)(2), (k)(2), and (k)(5). The
reason the Department took each exemption described in this section is
stated in the preamble for the final rulemaking document under which the
exemption was promulgated. These final rulemaking documents were
published in the Federal Register and may be obtained from the
Department of Education by mailing a request to the following address:
U.S. Department of Education, Privacy Act Officer, Office of the Chief
Information Officer, Regulatory Information Management Group,
Washington, DC 20202-4651.
    (f) Notification of or access to records in exempt systems of
records. (1) If a system of records is exempt under this section, an
individual may nonetheless request notification of or access to a record
in that system. An individual shall make requests for notification of or
access to a record in an exempt system or records in accordance with the
procedures of Sec. 5b.5 of this part.
    (2) An individual will be granted notification of or access to a
record in an exempt system but only to the extent that notification or
access would not reveal the identity of a source who furnished the
record to the Department under an express promise, and, prior to
September 27, 1975, an implied promise, that his identity would be held
in confidence if--
    (i) The record is in a system of records or that portion of a system
of records that is exempt under subsection (k)(2), but not under
subsection (j)(2), of the Act and the individual has been, as a result
of the maintenance of the record, denied a right, privilege, or benefit
to which he or she would otherwise be eligible; or
    (ii) The record is in a system of records that is exempt under
subsection (k)(5) of the Act.
    (3) If an individual is not granted notification of or access to a
record in a system of records exempt under subsections (k)(2) (but not
under subsection (j)(2)) and (k)(5) of the Act in accordance with this
paragraph, he or she will be informed that the identity of a
confidential source would be revealed if notification of or access to
the record were granted to the individual.
    (g) Discretionary actions by the responsible Department official.
Unless disclosure of a record to the general public is otherwise
prohibited by law, the responsible Department official may, in his or
her discretion, grant notification of or access to a record in a system
of records that is exempt under this section. Discretionary notification
of or access to a record in accordance with this paragraph will not be a
precedent for discretionary notification of or access to a similar or
related record and

[[Page 24]]

will not obligate the responsible Department official to exercise his or
her discretion to grant notification of or access to any other record in
a system of records that is exempt under this section.

[58 FR 44424, Aug. 20, 1993, as amended at 64 FR 31066, June 9, 1999; 69
FR 12246, Mar. 15, 2004; 73 FR 61355, Oct. 16, 2008]



Sec. 5b.12  Contractors.

    (a) All contracts entered into on or after September 27, 1975 which
require a contractor to maintain or on behalf of the Department to
maintain, a system of records to accomplish a Department function must
contain a provision requiring the contractor to comply with the Act and
this part.
    (b) All unexpired contracts entered into prior to September 27, 1975
which require the contractor to maintain or on behalf of the Department
to maintain, a system of records to accomplish a Department function
will be amended as soon as practicable to include a provision requiring
the contractor to comply with the Act and this part. All such contracts
must be so amended by July 1, 1976 unless for good cause the appeal
authority identified in Sec. 5b.8 of this part authorizes the
continuation of the contract without amendment beyond that date.
    (c) A contractor and any employee of such contractor shall be
considered employees of the Department only for the purposes of the
criminal penalties of the Act, 5 U.S.C. 552a(i), and the employee
standards of conduct listed in appendix A of this part where the
contract contains a provision requiring the contractor to comply with
the Act and this part.
    (d) This section does not apply to systems of records maintained by
a contractor as a result of his management discretion, e.g., the
contractor's personnel records.



Sec. 5b.13  Fees.

    (a) Policy. Where applicable, fees for copying records will be
charged in accordance with the schedule set forth in this section. Fees
may only be charged where an individual requests that a copy be made of
the record to which he is granted access. No fee may be charged for
making a search of the system of records whether the search is manual,
mechanical, or electronic. Where a copy of the record must be made in
order to provide access to the record (e.g., computer printout where no
screen reading is available), the copy will be made available to the
individual without cost.
    (b) Fee schedule. The fee schedule for the Department is as follows:
    (1) Copying of records susceptible to photocopying--$.10 per page.
    (2) Copying records not susceptible to photocopying (e.g., punch
cards or magnetic tapes)--at actual cost to be determined on a case-by-
case basis.
    (3) No charge will be made if the total amount of copying does not
exceed $25.



        Sec. Appendix A to Part 5b--Employee Standards of Conduct

    (a) General. All employees are required to be aware of their
responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a.
Regulations implementing the Act are set forth in 34 CFR 5b. Instruction
on the requirements of the Act and regulation shall be provided to all
new employees of the Department. In addition, supervisors shall be
responsible for assuring that employees who are working with systems of
records or who undertake new duties which require the use of systems of
records are informed of their responsibilities. Supervisors shall also
be responsible for assuring that all employees who work with such
systems of records are periodically reminded of the requirements of the
Act and are advised of any new provisions or interpretations of the Act.
    (b) Penalties. (1) All employees must guard against improper
disclosure of records which are governed by the Act. Because of the
serious consequences of improper invasions of personal privacy,
employees may be subject to disciplinary action and criminal prosecution
for knowing and willful violations of the Act and regulation. In
addition, employees may also be subject to disciplinary action for
unknowing or unwillful violations, where the employee had notice of the
provisions of the Act and regulations and failed to inform himself
sufficiently or to conduct himself in accordance with the requirements
to avoid violations.
    (2) The Department may be subjected to civil liability for the
following actions undertaken by its employees:
    (a) Making a determination under the Act and Sec. Sec. 5b.7 and
5b.8 of the regulation not to amend an individual's record in accordance
with his request, or failing to make such review in conformity with
those provisions;

[[Page 25]]

    (b) Refusing to comply with an individual's request for notification
of or access to a record pertaining to him;
    (c) Failing to maintain any record pertaining to any individual with
such accuracy, relevance, timeliness, and completeness as is necessary
to assure fairness in any determination relating to the qualifications,
character, rights, or opportunities of, or benefits to the individual
that may be made on the basis of such a record, and consequently a
determination is made which is adverse to the individual; or
    (d) Failing to comply with any other provision of the Act or any
rule promulgated thereunder, in such a way as to have an adverse effect
on an individual.
    (3) ``An employee may be personally subject to criminal liability as
set forth below and in 5 U.S.C. 552a (i):
    (a) Any officer or employee of an agency, who by virtue of his
employment or official position, has possession of, or access to, agency
records which contain individually identifiable information the
disclosure of which is prohibited by the Act or by rules or regulations
established thereunder, and who, knowing that disclosure of the specific
material is so prohibited, willfully discloses the material in any
manner to any person or agency not entitled to receive it, shall be
guilty of a misdemeanor and fined not more than $5,000.''
    (b) ``Any officer or employee of any agency who willfully maintains
a system of records without meeting the notice requirements [of the Act]
shall be guilty of a misdemeanor and fined not more than $5,000.''
    (c) Rules Governing Employees Not Working With Systems of Records.
Employees whose duties do not involve working with systems of records
will not generally disclose to any one, without specific authorization
from their supervisors, records pertaining to employees or other
individuals which by reason of their official duties are available to
them. Notwithstanding the above, the following records concerning
Federal employees are a matter of public record and no further
authorization is necessary for disclosure:
    (1) Name and title of individual.
    (2) Grade classification or equivalent and annual rate of salary.
    (3) Position description.
    (4) Location of duty station, including room number and telephone
number.

In addition, employees shall disclose records which are listed in the
Department's Freedom of Information Regulation as being available to the
public. Requests for other records will be referred to the responsible
Department official. This does not preclude employees from discussing
matters which are known to them personally, and without resort to a
record, to official investigators of Federal agencies for official
purposes such as suitability checks, Equal Employment Opportunity
investigations, adverse action proceedings, grievance proceedings, etc.
    (d) Rules governing employees whose duties require use or reference
to systems of records. Employees whose official duties require that they
refer to, maintain, service, or otherwise deal with systems of records
(hereinafter referred to as ``Systems Employees'') are governed by the
general provisions. In addition, extra precautions are required and
systems employees are held to higher standards of conduct.
    (1) Systems Employees shall:
    (a) Be informed with respect to their responsibilities under the
Act;
    (b) Be alert to possible misuses of the system and report to their
supervisors any potential or actual use of the system which they believe
is not in compliance with the Act and regulation;
    (c) Make a disclosure of records within the Department only to an
employee who has a legitimate need to know the record in the course of
his official duties;
    (d) Maintain records as accurately as practicable.
    (e) Consult with a supervisor prior to taking any action where they
are in doubt whether such action is in conformance with the Act and
regulation.
    (2) Systems Employees shall not:
    (a) Disclose in any form records from a system of records except (1)
with the consent or at the request of the subject individual; or (2)
where its disclosure is permitted under Sec. 5b.9 of the regulation.
    (b) Permit unauthorized individuals to be present in controlled
areas. Any unauthorized individuals observed in controlled areas shall
be reported to a supervisor or to the guard force.
    (c) Knowingly or willfully take action which might subject the
Department to civil liability.
    (d) Make any arrangements for the design development, or operation
of any system of records without making reasonable effort to provide
that the system can be maintained in accordance with the Act and
regulation.
    (e) Contracting officers. In addition to any applicable provisions
set forth above, those employees whose official duties involve entering
into contracts on behalf of the Department shall also be governed by the
following provisions:
    (1) Contracts for design, or development of systems and equipment.
No contract for the design or development of a system of records, or for
equipment to store, service or maintain a system of records shall be
entered into unless the contracting officer has made reasonable effort
to ensure that the product to be purchased is capable of being used
without violation of the Act or regulation. Special attention shall be
given to provision of physical safeguards.

[[Page 26]]

    (2) Contracts for the operation of systems and equipment. No
contract for the design or development of a system of whom he feels
appropriate, of all proposed contracts providing for the operation of
systems of records shall be made prior to execution of the contracts to
determine whether operation of the system of records is for the purpose
of accomplishing a Department function. If a determination is made that
the operation of the system is to accomplish a Department function, the
contracting officer shall be responsible for including in the contract
appropriate provisions to apply the provisions of the Act and regulation
to the system, including prohibitions against improper release by the
contractor, his employees, agents, or subcontractors.
    (3) Other service contracts. Contracting officers entering into
general service contracts shall be responsible for determining the
appropriateness of including provisions in the contract to prevent
potential misuse (inadvertent or otherwise) by employees, agents, or
subcontractors of the contractor.
    (f) Rules Governing Responsible Department Officials. In addition to
the requirements for Systems Employees, responsible Department officials
shall:
    (1) Respond to all requests for notification of or access,
disclosure, or amendment of records in a timely fashion in accordance
with the Act and regulation;
    (2) Make any amendment of records accurately and in a timely
fashion;
    (3) Inform all persons whom the accounting records show have
received copies of the record prior to the amendments of the correction;
and
    (4) Associate any statement of disagreement with the disputed
record, and
    (a) Transmit a copy of the statement to all persons whom the
accounting records show have received a copy of the disputed record, and
    (b) Transmit that statement with any future disclosure.



  Sec. Appendix B to Part 5b--Routine Uses Applicable to More Than One
                   System of Records Maintained by ED

    (1) In the event that a system of records maintained by this agency
to carry out its functions indicates a violation or potential violation
of law, whether civil, criminal or regulatory in nature, and whether
arising by general statute or particular program statute, or by
regulation, rule or order issued pursuant thereto, the relevant records
in the system of records may be referred, as a routine use, to the
appropriate agency, whether federal, or foreign, charged with the
responsibility of investigating or prosecuting such violation or charged
with enforcing or implementing the statute, or rule, regulation or order
issued pursuant thereto.
    (2) Referrals may be made of assignments of research investigators
and project monitors to specific research projects to the Smithsonian
Institution to contribute to the Smithsonian Science Information
Exchange, Inc.
    (3) In the event the Department deems it desirable or necessary, in
determining whether particular records are required to be disclosed
under the Freedom of Information Act, disclosure may be made to the
Department of Justice for the purpose of obtaining its advice.
    (4) A record from this system of records may be disclosed as a
``routine use'' to a federal, state or local agency maintaining civil,
criminal or other relevant enforcement records or other pertinent
records, such as current licenses, if necessary to obtain a record
relevant to an agency decision concerning the hiring or retention of an
employee, the issuance of a security clearance, the letting of a
contract, or the issuance of a license, grant or other benefit.

A record from this system of records may be disclosed to a federal
agency, in response to its request, in connection with the hiring or
retention of an employee, the issuance of a security clearance, the
reporting of an investigation of an employee, the letting of a contract,
or the issuance of a license, grant, or other benefit by the requesting
agency, to the extent that the record is relevant and necessary to the
requesting agency's decision on the matter.
    (5) In the event that a system of records maintained by this agency
to carry out its function indicates a violation or potential violation
of law, whether civil, criminal or regulatory in nature, and whether
arising by general statute or particular program statute, or by
regulation, rule or order issued pursuant thereto, the relevant records
in the system of records may be referred, as a routine use, to the
appropriate agency, whether state or local charged with the
responsibility of investigating or prosecuting such violation or charged
with enforcing or implementing the statute, or rule, regulation or order
issued pursuant thereto.
    (6) Where federal agencies having the power to subpoena other
federal agencies' records, such as the Internal Revenue Service or the
Civil Rights Commission, issue a subpoena to the Department for records
in this system of records, the Department will make such records
available.
    (7) Where a contract between a component of the Department and a
labor organization recognized under E.O. 11491 provides that the agency
will disclose personal records relevant to the organization's mission,
records in this system of records may be disclosed to such organization.

[[Page 27]]

    (8) Where the appropriate official of the Department, pursuant to
the Department's Freedom of Information Regulation determines that it is
in the public interest to disclose a record which is otherwise exempt
from mandatory disclosure, disclosure may be made from this system of
records.
    (9) The Department contemplates that it will contract with a private
firm for the purpose of collating, analyzing, aggregating or otherwise
refining records in this system. Relevant records will be disclosed to
such a contractor. The contractor shall be required to maintain Privacy
Act safeguards with respect to such records.
    (10) To individuals and organizations, deemed qualified by the
Secretary to carry out specific research solely for the purpose of
carrying out such research.
    (11) Disclosures in the course of employee discipline or competence
determination proceedings.

[45 FR 30808, May 9, 1980; 45 FR 37426, June 3, 1980]



PART 6_INVENTIONS AND PATENTS (GENERAL)--Table of Contents



Sec.
6.0 General policy.
6.1 Publication or patenting of inventions.
6.3 Licensing of Government-owned patents.
6.4 Central records; confidentiality.

    Authority: 5 U.S.C. 301.

    Source: 45 FR 30814, May 9, 1980, unless otherwise noted.



Sec. 6.0  General policy.

    Inventions developed through the resources and activities of the
Department are a potential resource of great value to the public. It is
the policy of the Department:
    (a) To safeguard the public interest in inventions developed by
Department employees, contractors and grantees with the aid of public
funds and facilities;
    (b) To encourage and recognize individual and cooperative
achievement in research and investigations; and
    (c) To establish a procedure, consistent with pertinent statutes,
Executive orders and general Government regulations, for the
determination of rights and obligations relating to the patenting of
inventions.



Sec. 6.1  Publication or patenting of inventions.

    It is the general policy of the Department that the results of
Department research should be made widely, promptly and freely available
to other research workers and to the public. This availability can
generally be adequately preserved by the dedication of a Government-
owned invention to the public. Determinations to file a domestic patent
application on inventions in which the Department has an interest will
be made where the circumstances indicate that this is desirable in the
public interest, and if it is practicable to do so. Department
determinations not to apply for a domestic patent on employee inventions
are subject to review and approval by the Commissioner of Patents.
Except where deemed necessary for protecting the patent claim, the fact
that a patent application has been or may be filed will not require any
departure from normal policy regarding the dissemination of the results
of Department research.



Sec. 6.3  Licensing of Government-owned patents.

    (a) Licenses to practice inventions covered by patents and pending
patent applications owned by the U.S. Government as represented by this
Department will generally be royalty free, revocable and nonexclusive.
They will normally be issued to all applicants and will generally
contain no limitations or standards relating to the quality or testing
of the products to be manufactured, sold, or distributed thereunder.
    (b) Where it appears however that the public interest will be served
under the circumstances of the particular case by licenses which impose
conditions, such as those relating to quality or testing of products,
requirement of payment of royalties to the Government, etc., or by the
issuance of limited exclusive licenses by the Secretary after notice and
opportunity for hearing thereon, such licenses may be issued.



Sec. 6.4  Central records; confidentiality.

    Central files and records shall be maintained of all inventions,
patents, and licenses in which the Department has an interest, together
with a record

[[Page 28]]

of all licenses issued by the Department under such patents. Invention
reports required from employees or others for the purpose of obtaining
determinations of ownership, and documents and information obtained for
the purpose of prosecuting patent applications shall be confidential and
shall be disclosed only as required for official purposes or with the
consent of the inventor.



PART 7_EMPLOYEE INVENTIONS--Table of Contents



Sec.
7.0 Who are employees.
7.1 Duty of employee to report inventions.
7.3 Determination as to domestic rights.
7.4 Option to acquire foreign rights.
7.7 Notice to employee of determination.
7.8 Employee's right of appeal.

    Authority: E.O. 10096, 15 FR 391; 3 CFR 1950 Supp.; E.O. 10930, 26
FR 2583; 3 CFR 1961 Supp.

    Source: 45 FR 30814, May 9, 1980, unless otherwise noted.



Sec. 7.0  Who are employees.

    As used in this part, the term Government employee means any officer
or employee, civilian or military, except such part-time employees or
part-time consultants as may be excluded therefrom by a determination
made in writing by the head of the employee's office or constituent
organization, pursuant to an exemption approved by the Commissioner of
Patents that to include him or them would be impracticable or
inequitable, given the reasons therefor. A person shall not be
considered to be a part-time employee or part-time consultant for this
purpose unless the terms of his employment contemplate that he shall
work for less than the minimum number of hours per day, or less than a
minimum number of days per week, or less than the minimum number of
weeks per year, regularly required of full-time employees of his class.



Sec. 7.1  Duty of employee to report inventions.

    Every Department employee is required to report to the Secretary in
accordance with the procedures established therefor, every invention
made by him (whether or not jointly with others) which bears any
relation to his official duties or which was made in whole or in any
part during working hours, or with any contribution of Government
facilities, equipment, material, funds, or information, or of time or
services of other Government employees on official duty.



Sec. 7.3  Determination as to domestic rights.

    The determination of the ownership of the domestic right, title, and
interest in and to an invention which is or may be patentable, made by a
Government employee while under the administrative jurisdiction of the
Department, will be made in writing by the Secretary in accordance with
the provisions of Executive Order 10096 and Government-wide regulations
issued thereunder by the Commissioner of Patents as follows:
    (a) The Government as represented by the Secretary shall obtain the
entire domestic right, title and interest in and to all inventions made
by any Government employee (1) during working hours, or (2) with a
contribution by the Government of facilities, equipment, materials,
funds, or information, or of time or services of other Government
employees on official duty, or (3) which bear a direct relation to or
are made in consequence of the official duties of the inventor.
    (b) In any case where the contribution of the Government, as
measured by any one or more of the criteria set forth in paragraph (a)
of this section, to the invention is insufficient equitably to justify a
requirement of assignment to the Government of the entire domestic
right, title and interest in and to such invention, or in any case where
the Government has insufficient interest in an invention to obtain the
entire domestic right, title, and interest therein (although the
Government could obtain same under paragraph (a) of this section), the
Department, subject to the approval of the Commissioner, shall leave
title to such invention in the employee, subject, however, to the
reservation to the Government of a nonexclusive, irrevocable, royalty-
free license in the invention with power to grant licenses for all
governmental purposes, such reservation to

[[Page 29]]

appear, where practicable, in any patent, domestic or foreign, which may
issue on such invention.
    (c) In applying the provisions of paragraphs (a) and (b) of this
section, to the facts and circumstances relating to the making of any
particular invention, it shall be presumed that an invention made by an
employee who is employed or assigned (1) to invent or improve or perfect
any art, machine, manufacture, or composition of matter, (2) to conduct
or perform research, development work, or both, (3) to supervise,
direct, coordinate, or review Government financed or conducted research,
development work, or both, or (4) to act in a liaison capacity among
governmental or nongovernmental agencies or individuals engaged in such
work, falls within the provisions of paragraph (a) of this section, and
it shall be presumed that any invention made by any other employee falls
within the provisions of paragraph (b) of this section. Either
presumption may be rebutted by a showing of the facts and circumstances
and shall not preclude a determination that these facts and
circumstances justify leaving the entire right, title and interest in
and to the invention in the Government employee, subject to law.
    (d) In any case wherein the Government neither (1) obtains the
entire domestic right, title and interest in and to an invention
pursuant to the provisions of paragraph (a) of this section, nor (2)
reserves a nonexclusive, irrevocable, royalty-free license in the
invention, with power to grant licenses for all governmental purposes,
pursuant to the provisions of paragraph (b) of this section, the
Government shall leave the entire right, title and interest in and to
the invention in the Government employee, subject to law.



Sec. 7.4  Option to acquire foreign rights.

    In any case where it is determined that all domestic rights should
be assigned to the Government, it shall further be determined, pursuant
to Executive Order 9865 and Government-wide regulations issued
thereunder, that the Government shall reserve an option to require the
assignment of such rights in all or in any specified foreign countries.
In case where the inventor is not required to assign the patent rights
in any foreign country or countries to the Government or the Government
fails to exercise its option within such period of time as may be
provided by regulations issued by the Commissioner of Patents, any
application for a patent which may be filed in such country or countries
by the inventor or his assignee shall nevertheless be subject to a
nonexclusive, irrevocable, royalty-free license to the Government for
all governmental purposes, including the power to issue sublicenses for
use in behalf of the Government and/or in furtherance of the foreign
policies of the Government.



Sec. 7.7  Notice to employee of determination.

    The employee-inventor shall be notified in writing of the
Department's determination of the rights to his invention and of his
right of appeal, if any. Notice need not be given if the employee stated
in writing that he would agree to the determination of ownership which
was in fact made.



Sec. 7.8  Employee's right of appeal.

    An employee who is aggrieved by a determination of the Department
may appeal to the Commissioner of Patents, pursuant to section 4(d) of
Executive Order 10096, as amended by Executive Order 10930, and
regulations issued thereunder, by filing a written appeal with the
Commissioner, in duplicate, and a copy of the appeal with the Secretary
within 30 days (or such longer period as the Commissioner may, for good
cause, fix in any case) after receiving written notice of such
determination.



PART 8_DEMANDS FOR TESTIMONY OR RECORDS IN LEGAL PROCEEDINGS--Table of
Contents



Sec.
8.1 What is the scope and applicability of this part?
8.2 What definitions apply?
8.3 What are the requirements for submitting a demand for testimony or
          records?
8.4 What procedures are followed in response to a demand for testimony?
8.5 What procedures are followed in response to a demand for records?


[[Page 30]]


    Authority: 5 U.S.C. 301; 5 U.S.C. 552; 20 U.S.C. 3474, unless
otherwise noted.

    Source: 57 FR 34646, Aug. 5, 1992, unless otherwise noted.



Sec. 8.1  What is the scope and applicability of this part?

    (a) Except as provided in paragraph (c) of this section, this part
establishes the procedures to be followed when the Department or any
employee of the Department receives a demand for--
    (1) Testimony by an employee concerning--
    (i) Records contained in the files of the Department;
    (ii) Information relating to records contained in the files of the
Department; or
    (iii) Information or records acquired or produced by the employee in
the course of his or her official duties or because of the employee's
official status; or
    (2) The production or disclosure of any information or records
referred to in paragraph (a)(1) of this section.
    (b) This part does not create any right or benefit, substantive or
procedural, enforceable by any person against the Department.
    (c) This part does not apply to--
    (1) Any proceeding in which the United States is a party before an
adjudicative authority;
    (2) A demand for testimony or records made by either House of
Congress or, to the extent of matter within its jurisdiction, any
committee or subcommittee of Congress; or
    (3) An appearance by an employee in his or her private capacity in a
legal proceeding in which the employee's testimony does not relate to
the mission or functions of the Department.

(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)

[57 FR 34646, Aug. 5, 1992, as amended at 73 FR 27748, May 14, 2008]



Sec. 8.2  What definitions apply?

    The following definitions apply to this part:
    Adjudicative authority includes, but is not limited to--
    (1) A court of law or other judicial forums; and
    (2) Mediation, arbitration, or other forums for dispute resolution.
    Demand includes a subpoena, subpoena duces tecum, request, order, or
other notice for testimony or records arising in a legal proceeding.
    Department means the U.S. Department of Education.
    Employee means a current or former employee or official of the
Department or of an advisory committee of the Department, including a
special government employee, unless specifically provided otherwise in
this part.
    Legal proceeding means--
    (1) A proceeding before an adjudicative authority;
    (2) A legislative proceeding, except for a proceeding before either
House of Congress or before any committee or subcommittee of Congress,
to the extent of matter within the committee's or subcommittee's
jurisdiction; or
    (3) An administrative proceeding.
    Secretary means the Secretary of Education or an official or
employee of the Department acting for the Secretary under a delegation
of authority.
    Testimony means statements made in connection with a legal
proceeding, including but not limited to statements in court or other
forums, depositions, declarations, affidavits, or responses to
interrogatories.
    United States means the Federal Government of the United States and
any of its agencies or instrumentalities.

(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)

[57 FR 34646, Aug. 5, 1992, as amended at 73 FR 27748, May 14, 2008]



Sec. 8.3  What are the requirements for submitting a demand for
testimony or records?

    (a) A demand for testimony of an employee or a demand for records
issued pursuant to the rules governing the legal proceeding in which the
demand arises--
    (1) Must be in writing; and
    (2) Must state the nature of the requested testimony or records, why
the information sought is unavailable by any other means, and the reason
why the release of the information would not be contrary to an interest
of the Department or the United States''.
    (b) Service of a demand for testimony of an employee must be made on
the employee whose testimony is demanded, with a copy simultaneously

[[Page 31]]

delivered to the General Counsel, U.S. Department of Education, Office
of the General Counsel, 400 Maryland Avenue, SW., room 6E300, Lyndon
Baines Johnson Building, Washington, DC 20202-2100.
    (c) Service of a demand for records, as described in Sec.
8.5(a)(1), must be made on an employee who has custody of the records,
with a copy simultaneously delivered to the General Counsel at the
address listed in paragraph (b) of this section. For assistance in
identifying the custodian of the specific records demanded, contact the
Records Officer, Information Policy and Standards Team, Regulatory
Information Management Services, Office of Management, U.S. Department
of Education, 400 Maryland Avenue, SW., room 9161, PCP, Washington, DC
20202-4753.

(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)

(Approved by the Office of Management and Budget under control number
1801-0002)

[57 FR 34646, Aug. 5, 1992, as amended at 58 FR 7860, Feb. 9, 1993; 73
FR 27748, May 14, 2008]



Sec. 8.4  What procedures are followed in response to a demand for
testimony?

    (a) After an employee receives a demand for testimony, the employee
shall immediately notify the Secretary and request instructions.
    (b) An employee may not give testimony without the prior written
authorization of the Secretary.
    (c)(1) The Secretary may allow an employee to testify if the
Secretary determines that the demand satisfies the requirements of Sec.
8.3 and that granting permission--
    (i) Would be appropriate under the rules of procedure governing the
matter in which the demand arises and other applicable laws, rules, and
regulations; and
    (ii) Would not be contrary to an interest of the United States,
which includes furthering a public interest of the Department and
protecting the human and financial resources of the United States.
    (2) The Secretary may establish conditions under which the employee
may testify.
    (d) If a response to a demand for testimony is required before the
Secretary determines whether to allow an employee to testify, the
employee or counsel for the employee shall--
    (1) Inform the court or other authority of the regulations in this
part; and
    (2) Request that the demand be stayed pending the employee's receipt
of the Secretary's instructions.
    (e) If the court or other authority declines the request for a stay,
or rules that the employee must comply with the demand regardless of the
Secretary's instructions, the employee or counsel for the employee shall
respectfully decline to comply with the demand, citing United States ex
rel. Touhy v. Ragen, 340 U.S. 462 (1951), and the regulations in this
part.

(Authority: 5 U.S.C. 301; 20 U.S.C. 3474)



Sec. 8.5  What procedures are followed in response to a demand for
records?

    (a)(1) After an employee receives a demand for records issued
pursuant to the rules governing the legal proceeding in which the demand
arises, the employee shall immediately notify the Secretary and request
instructions.
    (2) If an employee receives any other demand for records, the
Department--
    (i) Considers the demand to be a request for records under the
Freedom of Information Act; and
    (ii) Handles the demand under rules governing public disclosure, as
established in 34 CFR part 5.
    (b) An employee may not produce records in response to a demand as
described in paragraph (a)(1) of this section without the prior written
authorization of the Secretary.
    (c) The Secretary may make these records available if the Secretary
determines that the demand satisfies the requirements of Sec. 8.3 and
that disclosure--
    (1) Would be appropriate under the rules of procedure governing the
matter in which the demand arises and other applicable laws, rules, and
regulations; and
    (2) Would not be contrary to an interest of the United States, which
includes furthering a public interest of the Department and protecting
the human and financial resources of the United States.
    (d) If a response to a demand for records as described in paragraph
(a)(1)

[[Page 32]]

of this section is required before the Secretary determines whether to
allow an employee to produce those records, the employee or counsel for
the employee shall--
    (1) Inform the court or other authority of the regulations in this
part; and
    (2) Request that the demand be stayed pending the employee's receipt
of the Secretary's instructions.
    (e) If the court or other authority declines the request for a stay,
or rules that the employee must comply with the demand regardless of the
Secretary's instructions, the employee or counsel for the employee shall
respectfully decline to comply with the demand, citing United States ex
rel. Touhy v. Ragen, 340 U.S. 462 (1951), and the regulations in this
part.

(Authority: 5 U.S.C. 301; 5 U.S.C. 552; 20 U.S.C. 3474)



PART 12_DISPOSAL AND UTILIZATION OF SURPLUS FEDERAL REAL PROPERTY FOR
EDUCATIONAL PURPOSES--Table of Contents



                            Subpart A_General

Sec.
12.1 What is the scope of this part?
12.2 What definitions apply?
12.3 What other regulations apply to this program?

         Subpart B_Distribution of Surplus Federal Real Property

12.4 How does the Secretary provide notice of availability of surplus
          Federal real property?
12.5 Who may apply for surplus Federal real property?
12.6 What must an application for surplus Federal real property contain?
12.7 How is surplus Federal real property disposed of when there is more
          than one applicant?
12.8 What transfer or lease instruments does the Secretary use?
12.9 What warranties does the Secretary give?
12.10 How is a Public Benefit Allowance (PBA) calculated?

         Subpart C_Conditions Applicable to Transfers or Leases

12.11 What statutory provisions and Executive Orders apply to transfers
          of surplus Federal real property?
12.12 What are the terms and conditions of transfers or leases of
          surplus Federal real property?
12.13 When is use of the transferred surplus Federal real property by
          entities other than the transferee or lessee permissible?

                          Subpart D_Enforcement

12.14 What are the sanctions for noncompliance with a term or condition
          of a transfer or lease of surplus Federal real property?

                          Subpart E_Abrogation

12.15 What are the procedures for securing an abrogation of the
          conditions and restrictions contained in the conveyance
          instrument?

Appendix A to Part 12--Public Benefit Allowance for Transfer of Surplus
          Federal Real Property for Educational Purposes

    Authority: 40 U.S.C. 471-488; 20 U.S.C. 3401 et seq.; 42 U.S.C.
2000d (1) et seq.; 20 U.S.C. 1681 et seq.; 29 U.S.C. 794 et seq.; 42
U.S.C. 4332.

    Source: 57 FR 60394, Dec. 18, 1992, unless otherwise noted.



                            Subpart A_General



Sec. 12.1  What is the scope of this part?

    This part is applicable to surplus Federal real property located
within any State that is appropriate for assignment to, or that has been
assigned to, the Secretary by the Administrator for transfer for
educational purposes, as provided for in section 203(k) of the Federal
Property and Administrative Services Act of 1949, as amended, 63 Stat.
377 (40 U.S.C. 471 et seq.).

(Authority: 40 U.S.C. 484(k))



Sec. 12.2  What definitions apply?

    (a) Definitions in the Act. The following terms used in this part
are defined in section 472 of the Act:

Administrator
Surplus property

    (b) Definitions in the Education Department General Administrative
Regulations (EDGAR). The following terms used in this part are defined
in 34 CFR 77.1:

Department
Secretary
State

    (c) Other definitions: The following definitions also apply to this
part:

[[Page 33]]

    Abrogation means the procedure the Secretary may use to release the
transferee of surplus Federal real property from the covenants,
conditions, reservations, and restrictions contained in the conveyance
instrument before the term of the instrument expires.
    Act means the Federal Property and Administrative Services Act of
1949, as amended, 63 Stat. 377 (40 U.S.C. 471 et seq.).
    Applicant means an eligible entity as described in Sec. 12.5 that
formally applies to be a transferee or lessee of surplus Federal real
property, using a public benefit allowance (PBA) under the Act.
    Lessee, except as used in Sec. 12.14(a)(5), means an entity that is
given temporary possession, but not title, to surplus Federal real
property by the Secretary for educational purposes.
    Nonprofit institution means any institution, organization, or
association, whether incorporated or unincorporated--
    (1) The net earnings of which do not inure or may not lawfully inure
to the benefit of any private shareholder or individual; and
    (2) That has been determined by the Internal Revenue Service to be
tax-exempt under section 501(c)(3) of title 26.
    Off-site property means surplus buildings and improvements--
including any related personal property--that are capable of being
removed from the underlying land and that are transferred by the
Secretary without transferring the underlying real property.
    On-site property means surplus Federal real property, including any
related personal property--other than off-site property.
    Period of restriction means that period during which the surplus
Federal real property transferred for educational purposes must be used
by the transferee or lessee in accordance with covenants, conditions,
and any other restrictions contained in the conveyance instrument.
    Program and plan of use means the educational activities to be
conducted by the transferee or lessee using the surplus Federal real
property, as described in the application for that property.
    Public benefit allowance (``PBA'') means the credit, calculated in
accordance with appendix A to this part, given to a transferee or lessee
which is applied against the fair market value of the surplus Federal
real property at the time of the transfer or lease of such property in
exchange for the proposed educational use of the property by the
transferee or lessee.
    Related personal property means any personal property--
    (1) That is located on and is an integral part of, or incidental to
the operation of, the surplus Federal real property; or
    (2) That is determined by the Administrator to be otherwise related
to the surplus Federal real property.
    Surplus Federal real property means the property assigned or
suitable for assignment to the Secretary by the Administrator for
disposal under the Act.
    Transfer means to sell and convey title to surplus Federal real
property for educational purposes as described in this part.
    Transferee means that entity which has purchased and acquired title
to the surplus Federal real property for educational purposes pursuant
to section 203(k) of the Act.

(Authority: 40 U.S.C. 472 and 20 U.S.C. 3401 et seq.)



Sec. 12.3  What other regulations apply to this program?

    The following regulations apply to this program:
    (a) 34 CFR parts 100, 104, and 106.
    (b) 41 CFR part 101-47.
    (c) 34 CFR part 85.

(Authority: 40 U.S.C. 484(k); 42 U.S.C. 2000d-1 et seq.; 29 U.S.C. 794
et seq.; 20 U.S.C. 1681 et seq.; Executive Order 12549; and 20 U.S.C.
3474)



         Subpart B_Distribution of Surplus Federal Real Property



Sec. 12.4  How does the Secretary provide notice of availability of
surplus Federal real property?

    The Secretary notifies potential applicants of the availability of
surplus Federal real property for transfer for educational uses in
accordance with 41 CFR 101-47.308-4.

(Authority: 40 U.S.C. 484(k)(1))

[[Page 34]]



Sec. 12.5  Who may apply for surplus Federal real property?

    The following entities may apply for surplus Federal real property:
    (a) A State.
    (b) A political subdivision or instrumentality of a State.
    (c) A tax-supported institution.
    (d) A nonprofit institution.
    (e) Any combination of these entities.

(Authority: 40 U.S.C. 484(k)(1)(A))



Sec. 12.6  What must an application for surplus Federal real property
contain?

    An application for surplus Federal real property must--
    (a) Contain a program and plan of use;
    (b) Contain a certification from the applicant that the proposed
program is not in conflict with State or local zoning restrictions,
building codes, or similar limitations;
    (c) Demonstrate that the proposed program and plan of use of the
surplus Federal real property is for a purpose that the applicant is
authorized to carry out;
    (d) Demonstrate that the applicant is able, willing, and authorized
to assume immediate custody, use, care, and maintenance of the surplus
Federal real property;
    (e) Demonstrate that the applicant is able, willing, and authorized
to pay the administrative expenses incident to the transfer or lease;
    (f) Demonstrate that the applicant has the necessary funds, or the
ability to obtain those funds immediately upon transfer or lease, to
carry out the proposed program and plan of use for the surplus Federal
real property;
    (g) Demonstrate that the applicant has an immediate need and ability
to use all of the surplus Federal real property for which it is
applying;
    (h) Demonstrate that the surplus Federal real property is needed for
educational purposes at the time of application and that it is so needed
for the duration of the period of restriction;
    (i) Demonstrate that the surplus Federal real property is suitable
or adaptable to the proposed program and plan of use; and
    (j) Provide information requested by the Secretary in the notice of
availability, including information of the effect of the proposed
program and plan of use on the environment.

(Approved by the Office of Management and Budget under control number
1880-0524)

(Authority: 40 U.S.C. 484(k))



Sec. 12.7  How is surplus Federal real property disposed of when there
is more than one applicant?

    (a) If there is more than one applicant for the same surplus Federal
real property, the Secretary transfers or leases the property to the
applicant whose proposed program and plan of use the Secretary
determines provides the greatest public benefit, using the criteria
contained in appendix A to this part that broadly address the weight
given to each type of entity applying and its proposed program and plan
of use. (See example in Sec. 12.10(d)).
    (b) If, after applying the criteria described in paragraph (a) of
this section, two or more applicants are rated equally, the Secretary
transfers or leases the property to one of the applicants after--
    (1) Determining the need for each applicant's proposed educational
use at the site of the surplus Federal real property;
    (2) Considering the quality of each applicant's proposed program and
plan of use; and
    (3) Considering each applicant's ability to carry out its proposed
program and plan of use.
    (c) If the Secretary determines that the surplus Federal real
property is capable of serving more than one applicant, the Secretary
may apportion it to fit the needs of as many applicants as is
practicable.
    (d)(1) The Secretary generally transfers surplus Federal real
property to a selected applicant that meets the requirements of this
part.
    (2) Alternatively, the Secretary may lease surplus Federal real
property to a selected applicant that meets the requirements of this
part if the Secretary determines that a lease will promote the most
effective use of the property consistent with the purposes of this part
or if having a lease is otherwise in

[[Page 35]]

the best interest of the United States, as determined by the Secretary.

(Authority: 40 U.S.C. 484(k))



Sec. 12.8  What transfer or lease instruments does the Secretary use?

    (a) The Secretary transfers or leases surplus Federal real property
using transfer or lease instruments that the Secretary prescribes.
    (b) The transfer or lease instrument contains the applicable terms
and conditions described in this part and any other terms and conditions
the Secretary or Administrator determines are appropriate or necessary.

(Authority: 40 U.S.C. 484(c))



Sec. 12.9  What warranties does the Secretary give?

    The Secretary transfers or leases surplus Federal real property on
an ``as is, where is,'' basis without warranty of any kind.

(Authority: 40 U.S.C. 484(k)(1))



Sec. 12.10  How is a Public Benefit Allowance (PBA) calculated?

    (a) The Secretary calculates a PBA in accordance with the provisions
of appendix A to this part taking into account the nature of the
applicant, and the need for, impact of, and type of program and plan of
use for the property, as described in that appendix.
    (b) The following are illustrative examples of how a PBA would be
calculated and applied under appendix A:
    (1) Entity A is a specialized school that has had a building
destroyed by fire, and that has existing facilities determined by the
Secretary to be between 26 and 50% inadequate. It is proposing to use
the surplus Federal real property to add a new physical education
program. Entity A would receive a basic PBA of 70%, a 10% hardship
organization allowance, a 20% allowance for inadequacy of existing
school plant facilities, and a 10% utilization allowance for
introduction of new instructional programs. Entity A would have a total
PBA of 110%. If Entity A is awarded the surplus Federal real property,
it would not be required to pay any cash for the surplus Federal real
property, since the total PBA exceeds 100%.
    (2) Entity B proposes to use the surplus Federal real property for
nature walks. Because this qualifies as an outdoor educational program,
Entity B would receive a basic PBA of 40%. If Entity B is awarded the
surplus Federal real property, it would be required to pay 60% of the
fair market value of the surplus Federal real property in cash at the
time of the transfer.
    (3) Entity C is an accredited university, has an ROTC unit, and
proposes to use the surplus Federal real property for a school health
clinic and for special education of the physically handicapped. Entity C
would receive a basic PBA of 50% (as a college or university), a 20%
accreditation organization allowance (accredited college or university),
a 10% public service training organization allowance (ROTC), a 10%
student health and welfare utilization allowance (school health clinic),
and a 10% service to the handicapped utilization allowance (education of
the physically handicapped). Entity C would have a total PBA of 100%. If
Entity C is awarded the surplus Federal real property, it would not be
required to pay any cash for the surplus Federal real property, since
the total PBA is 100%.
    (4) Entities A, B, and C all submit applications for the same
surplus Federal real property. Unless the Secretary decides to apportion
it, the Secretary transfers or leases the surplus Federal real property
to Entity A, since its proposed program and plan of use has the highest
total PBA.

(Authority: 40 U.S.C. 484(k)(1)(c))



         Subpart C_Conditions Applicable to Transfers or Leases



Sec. 12.11  What statutory provisions and Executive Orders apply to
transfers of surplus Federal real property?

    The Secretary directs the transferee or lessee to comply with
applicable provisions of the following statutes and Executive Orders
prior to, or immediately upon, transfer or lease, as applicable:
    (a) National Environmental Policy Act of 1969, 42 U.S.C. 4332.
    (b) National Historic Preservation Act of 1966, 16 U.S.C. 470.
    (c) National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq.

[[Page 36]]

    (d) Floodplain Management, Exec. Order No. 11988, 42 FR 26951 (May
25, 1977).
    (e) Protection of Wetlands, Exec. Order No. 11990, 42 FR 26961 (May
25, 1977).
    (f) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000(d)(1)
et seq.
    (g) Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 et
seq.
    (h) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 et
seq.
    (i) Age Discrimination Act of 1975, 42 U.S.C. 1601 et seq.
    (j) Any other applicable Federal or State laws and Executive Orders.

(Authority: 40 U.S.C. 484(k))

(Approved by the Office of Management and Budget under control number
1880-0524)



Sec. 12.12  What are the terms and conditions of transfers or leases
of surplus Federal real property?

    (a) General terms and conditions for transfers and leases. The
following general terms and conditions apply to transfers and leases of
surplus Federal real property under this part:
    (1) For the period provided in the transfer or lease instrument, the
transferee or lessee shall use all of the surplus Federal real property
it receives solely and continuously for its approved program and plan of
use, in accordance with the Act and these regulations, except that--
    (i) The transferee or lessee has twelve (12) months from the date of
transfer to place this surplus Federal real property into use, if the
Secretary did not, at the time of transfer, approve in writing
construction of major new facilities or major renovation of the
property;
    (ii) The transferee or lessee has thirty-six (36) months from the
date of transfer to place the surplus Federal real property into use, if
the transferee or lessee proposes construction of major new facilities
or major renovation of the property and the Secretary approves it in
writing at the time of transfer; and
    (iii) The Secretary may permit use of the surplus Federal real
property at any time during the period of restriction by an entity other
than the transferee or lessee in accordance with Sec. 12.13.
    (2) The transferee or lessee may not modify its approved program and
plan of use without the prior written consent of the Secretary.
    (3) The transferee or lessee may not sell, lease or sublease, rent,
mortgage, encumber, or otherwise dispose of all or a portion of the
surplus Federal real property or any interest therein without the prior
written consent of the Secretary.
    (4) A transferee or lessee shall pay all administrative costs
incidental to the transfer or lease including, but not limited to--
    (i) Transfer taxes;
    (ii) Surveys;
    (iii) Appraisals;
    (iv) Inventory costs;
    (v) Legal fees;
    (vi) Title search;
    (vii) Certificate or abstract expenses;
    (viii) Decontamination costs;
    (ix) Moving costs;
    (x) Recordation expenses;
    (xi) Other closing costs; and
    (xii) Service charges, if any, provided for by an agreement between
the Secretary and the applicable State agency for Federal Property
Assistance.
    (5) The transferee or lessee shall protect the residual financial
interest of the United States in the surplus Federal real property by
insurance or such other means as the Secretary directs.
    (6) The transferee or lessee shall file with the Secretary reports
on its maintenance and use of the surplus Federal real property and any
other reports required by the Secretary in accordance with the transfer
or lease instrument.
    (7) Any other term or condition that the Secretary determines
appropriate or necessary.
    (b) Additional terms and conditions for on-site transfers. The terms
and conditions in the transfer, including those in paragraph (a) of this
section, apply for a period not to exceed thirty (30) years.
    (c) Additional terms and conditions for off-site transfers. (1) The
terms and conditions in the transfer, including those in paragraph (a)
of this section, apply for a period equivalent to the estimated economic
life of the property conveyed for a transfer of off-site surplus Federal
real property.
    (2) In addition to the terms and conditions contained in paragraph
(c) of

[[Page 37]]

this section, the Secretary may also require the transferee of off-site
surplus Federal real property--
    (i) To post performance bonds;
    (ii) To post performance guarantee deposits; or
    (iii) To give such other assurances as may be required by the
Secretary or the holding agency to ensure adequate site clearance.
    (d) Additional terms and conditions for leases. In addition to the
terms and conditions contained in paragraph (a) of this section, the
Secretary requires, for leases of surplus Federal real property, that
all terms and conditions apply to the initial lease agreement, and any
renewal periods, unless specifically excluded in writing by the
Secretary.

(Authority: 40 U.S.C. 484(k)(1))

(Approved by the Office of Management and Budget under control number
1880-0524)



Sec. 12.13  When is use of the transferred surplus Federal real
property by entities other than the transferee or lessee permissible?

    (a) By eligible entities. A transferee or lessee may permit the use
of all or a portion of the surplus Federal real property by another
eligible entity as described in Sec. 12.5, only upon those terms and
conditions the Secretary determines appropriate if--
    (1) The Secretary determines that the proposed use would not
substantially limit the program and plan of use by the transferee or
lessee and that the use will not unduly burden the Department;
    (2) The Secretary's written consent is obtained by the transferee or
lessee in advance; and
    (3) The Secretary approves the use instrument in advance and in
writing.
    (b) By ineligible entities. A transferee or lessee may permit the
use of a portion of the surplus Federal real property by an ineligible
entity, one not described in Sec. 12.5, only upon those terms and
conditions the Secretary determines appropriate if--
    (1) In accordance with paragraph (a) of this section, the Secretary
makes the required determination and approves both the use and the use
instrument;
    (2) The use is confined to a portion of the surplus Federal real
property;
    (3) The use does not interfere with the approved program and plan of
use for which the surplus Federal real property was conveyed; and
    (4) Any rental fees or other compensation for use are either
remitted directly to the Secretary or are applied to purposes expressly
approved in writing in advance by the Secretary.

(Authority: 40 U.S.C. 484(k)(4))



                          Subpart D_Enforcement



Sec. 12.14  What are the sanctions for noncompliance with a term or
condition of a transfer or lease of surplus Federal real property?

    (a) General sanctions for noncompliance. The Secretary imposes any
or all of the following sanctions, as applicable, to all transfers or
leases of surplus Federal real property:
    (1) If all or a portion of, or any interest in, the transferred or
leased surplus Federal real property is not used or is sold, leased or
subleased, encumbered, disposed of, or used for purposes other than
those in the approved program and plan of use, without the prior written
consent of the Secretary, the Secretary may require that--
    (i) All revenues and the reasonable value of other benefits received
by the transferee or lessee directly or indirectly from that use, as
determined by the Secretary, be held in trust by the transferee or
lessee for the United States subject to the direction and control of the
Secretary;
    (ii) Title or possession to the transferred or leased surplus
Federal real property and the right to immediate possession revert to
the United States;
    (iii) The surplus Federal real property be transferred or leased to
another eligible entity as the Secretary directs;
    (iv) The transferee or lessee abrogate the conditions and
restrictions in the transfer or lease instrument in accordance with the
provisions of Sec. 12.15;
    (v) The transferee or lessee place the surplus Federal real property
into immediate use for an approved purpose and extend the period of
restriction in the transfer or lease instrument for a term equivalent to
the period during

[[Page 38]]

which the property was not fully and solely used for an approved use; or
    (vi) The transferee or lessee comply with any combination of the
sanctions described in paragraph (a)(1) or (a)(3) of this section.
    (2) If title or possession reverts to the United States for
noncompliance or is voluntarily reconveyed, the Secretary may require
the transferee or lessee--
    (i) To reimburse the United States for the decrease in value of the
transferred or leased surplus Federal real property not due to--
    (A) Reasonable wear and tear;
    (B) Acts of God; or
    (C) Reasonable alterations made by the transferee or lessee to adapt
the surplus Federal real property to the approved program and plan of
use for which it was transferred or leased;
    (ii) To reimburse the United States for any costs incurred in
reverting title or possession;
    (iii) To forfeit any cash payments made by the transferee or lessee
against the purchase or lease price of surplus Federal real property
transferred;
    (iv) To take any other action directed by the Secretary; or
    (v) To comply with any combination of the provisions of paragraph
(a)(3) of this section.
    (3) If the transferee or lessee does not put the surplus Federal
real property into use within the applicable time limitation in Sec.
12.12(a), the Secretary may require the transferee or lessee to make
cash payments to the Secretary equivalent to the current fair market
rental value of the surplus Federal real property for each month during
which the program and plan of use has not been implemented.

(Authority: 40 U.S.C. 484(k)(4))

    (4) If the Secretary determines that a lessee of a transferee or a
sublessee of a lessee is not complying with a term or condition of the
lease, or if the lessee voluntarily surrenders the premises, the
Secretary may require termination of the lease.

(Authority: 40 U.S.C. 484(k)(4)(A))

    (b) Additional sanction for noncompliance with off-site transfer. In
addition to the sanctions in paragraph (a) of this section, if the
Secretary determines that a transferee is not complying with a term or
condition of a transfer of off-site surplus Federal real property, the
Secretary may require that the unearned PBA become immediately due and
payable in cash to the United States.

(Authority: 40 U.S.C. 484(k)(4)(A))



                          Subpart E_Abrogation



Sec. 12.15  What are the procedures for securing an abrogation of the
conditions and restrictions contained in the conveyance instrument?

    (a) The Secretary may, in the Secretary's sole discretion, abrogate
the conditions and restrictions in the transfer or lease instrument if--
    (1) The transferee or lessee submits to the Secretary a written
request that the Secretary abrogate the conditions and restrictions in
the conveyance instrument as to all or any portion of the surplus
Federal real property;
    (2) The Secretary determines that the proposed abrogation is in the
best interests of the United States;
    (3) The Secretary determines the terms and conditions under which
the Secretary will consent to the proposed abrogation; and
    (4) The Secretary transmits the abrogation to the Administrator and
there is no disapproval by the Administrator within thirty (30) days
after notice to the Administrator.
    (b) The Secretary abrogates the conditions and restrictions in the
transfer or lease instrument upon a cash payment to the Secretary based
on the formula contained in the transfer or lease instrument and any
other terms and conditions the Secretary deems appropriate to protect
the interest of the United States.

(Authority: 40 U.S.C. 484(k)(4)(A)(iii))

[[Page 39]]



  Sec. Appendix A to Part 12--Public Benefit Allowance for Transfer of
       Surplus Federal Real Property for Educational Purposes \1\
---------------------------------------------------------------------------

    \1\ This Appendix applies to transfers of both on-site and off-site
surplus property.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Percent allowed
                                                       -----------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Organization allowances                                    Utilization allowances
                                                          Basic   --------------------------------------------------------------------------------------------------------------------  Maximum
                    Classification                        public                                                Inadequacy of existing   Introduction  Student                           public
                                                         benefit                  Federal   Public             school plant facilities      of new      health             Service to   benefit
                                                        allowance  Accreditation   impact   service  Hardship ------------------------- instructional    and    Research  handicapped  allowance
                                                                                           training            10-25%  26-50%  51-100%     programs    welfare                            \4\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Elementary or high schools............................       70    .............      10        10        10       10      20      30          10          10        10         10         100
Colleges or Universities..............................       50           20      .......       10        10       10      20      30          10          10        10         10         100
Specialized schools...................................       70    .............  .......       10        10       10      20      30          10          10        10         10         100
Public libraries or educational museums...............  \2\ 100    .............  .......  ........  ........  ......  ......  .......  .............  .......  ........  ...........  \2\ 100
School outdoor education..............................       40    .............  .......  ........  ........  ......  ......  .......         10      \3\ 10        10   ...........       70
Central administrative and/or service centers.........       80    .............  .......  ........  ........  ......  ......  .......  .............  .......  ........  ...........       80
Non-profit educational research organizations.........       50           20      .......       10   ........  ......  ......  .......         10          10   ........        10         100
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\2\ Applicable when this is the primary use to be made of the property. The public benefit allowance for the overall program is applicable when such facilities are conveyed as a minor
  component of other facilities.
\3\ This 10% may include an approvable recreation program which will be accessible to the public and entirely compatible with, but subordinate to, the educational program.
\4\ This column establishes the maximum discount from the fair market value for payment due from the transferee at the time of the transfer. This column does not apply for purposes of ranking
  applicants to determine to which applicant the property will be transferred. Competitive rankings are based on the absolute total of public benefit allowance points and are not limited to
  the 100% ceiling.

               Description of Terms Used in This Appendix

    Elementary or High School means an elementary school (including a
kindergarten), high school, junior high school, junior-senior high
school or elementary or secondary school system, that provides
elementary or secondary education as determined under State law.
However, it does not include a nursery school even though it may operate
as part of a school system.
    College or University means a non-profit or public university or
college, including a junior college, that provides postsecondary
education.
    Specialized School means a vocational school, area trade school,
school for the blind, or similar school.
    Public Library means a public library or public library service
system, not a school library or library operated by non-profit, private
organizations or institutions that may be open to the general public.
School libraries receive the public benefit allowance in the appropriate
school classification.
    Educational Museum means a museum that conducts courses on a
continuing, not ad hoc, basis for students who receive credits from
accredited postsecondary education institutions or school systems.
    School Outdoor Education means a separate facility for outdoor
education as distinguished from components of a basic school. Components
of a school such as playgrounds and athletic fields receive the basic
allowance applicable for that type of school. The outdoor education must
be located reasonably near the school system and may be open to and used
by the general public, but only if the educational program for which the
property is conveyed is given priority of use. This category does not
include components of the school such as playgrounds and athletic
fields, that are utilized during the normal school year, and are
available to all students.
    Central Administrative and/or Service Center means administrative
office space, equipment storage areas, and similar facilities.

[[Page 40]]

                        Description of Allowances

    Basic Public Benefit Allowance means an allowance that is earned by
an applicant that satisfies the requirements of Sec. 12.10 of this
part.

                         Organization Allowance

    Accreditation means an allowance that is earned by any postsecondary
educational institution, including a vocational or trade school, that is
accredited by an accrediting agency recognized by the Secretary under 34
CFR part 602.
    Federal Impact means an allowance that is earned by any local
educational agency (LEA) qualifying for Federal financial assistance as
the result of the impact of certain Federal activities upon a community,
such as the following under Public Law 81-874 and Public Law 81-815: to
any LEA charged by law with responsibility for education of children who
reside on, or whose parents are employed on, Federal property, or both;
to any LEA to which the Federal Government has caused a substantial and
continuing financial burden as the result of the acquisition of a
certain amount of Federal property since 1938; or to any LEA that
urgently needs minimum school facilities due to a substantial increase
in school membership as the result of new or increased Federal
activities.
    Public Services Training means an allowance that is earned if the
applicant has cadet or ROTC units or other personnel training contracts
for the Federal or State governments. This is given to a school system
only if the particular school receiving the property furnishes that
training.
    Hardship means an allowance earned by an applicant that has suffered
a significant facility loss because of fire, storm, flood, other
disaster, or condemnation. This allowance is also earned if unusual
conditions exist such as isolation or economic factors that require
special consideration.
    Inadequacies of Existing Facilities means an allowance that is
earned on a percentage basis depending on the degree of inadequacy
considering both public and nonpublic facilities. Overall plant
requirements are determined based on the relationship between the
maximum enrollment accommodated in the present facilities, excluding
double and night sessions and the anticipated enrollment if the
facilities are transferred. Inadequacies may be computed for a component
school unit such as a school farm, athletic field, facility for home
economics, round-out school site, cafeteria, auditorium, teacherages,
faculty housing, etc., only if the component is required to meet State
standards. In that event, the State Department of Education will be
required to provide a certification of the need. Component school unit
inadequacies may only be related to a particular school and not to the
entire school system.

                         Utilization Allowances

    Introduction of New Instructional Programs means an allowance that
is earned if the proposed use of the property indicates that new
programs will be added at a particular school. Examples of these new
programs include those for vocational education, physical education,
libraries, and similar programs.
    Student Health and Welfare means an allowance that is earned if the
proposed program and plan of use of the property provides for cafeteria,
clinic, infirmary, bus loading shelters, or other uses providing for the
well-being and health of students and eliminating safety and health
hazards.
    Research means an allowance that is earned if the proposed use of
the property will be predominantly for research by faculty or graduate
students under school auspices, or other primary educational research.
    Service to Handicapped means an allowance that is earned if the
proposed program and plan of use for the property will be for special
education for the physically or mentally handicapped.



PART 15_UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION
FOR FEDERAL AND FEDERALLY ASSISTED PROGRAMS--Table of Contents



    Authority: Section 213, Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, Pub. L. 91-646, 84 Stat. 1894
(42 U.S.C. 4601) as amended by the Surface Transportation and Uniform
Relocation Assistance Act of 1987, Title IV of Pub. L. 100-17, 101 Stat.
246-256 (42 U.S.C. 4601 note).



Sec. 15.1  Uniform relocation assistance and real property acquisition.

    Regulations and procedures for complying with the Uniform Relocation
Assistance Act of 1970 (Pub. L. 91-646, 84 Stat. 1894, 42 U.S.C. 4601)
as amended by the SUrface Transportation and Uniform Relocation
Assistance Act of 1987 (Title IV of Pub. L. 100-17, 101 Stat. 264-255,
42 U.S.C. 4601 note) are set forth in 49 CFR part 24.

[52 FR 48021, Dec. 17, 1987]

[[Page 41]]



PART 21_EQUAL ACCESS TO JUSTICE--Table of Contents



                            Subpart A_General

Sec.
21.1 Equal Access to Justice Act.
21.2 Time period when the Act applies.
21.3 Definitions.

          Subpart B_Which Adversary Adjudications Are Covered?

21.10 Adversary adjudications covered by the Act.
21.11 Effect of judicial review of adversary adjudication.

                Subpart C_How Is Eligibility Determined?

21.20 Types of eligible applicants.
21.21 Determination of net worth and number of employees.
21.22 Applicants representing others.

               Subpart D_How Does One Apply for an Award?

21.30 Time for filing application.
21.31 Contents of application.
21.32 Confidentiality of information about net worth.
21.33 Allowable fees and expenses.

     Subpart E_What Procedures Are Used in Considering Applications?

21.40 Filing and service of documents.
21.41 Answer to application.
21.42 Reply.
21.43 Comments by other parties.
21.44 Further proceedings.

                  Subpart F_How Are Awards Determined?

21.50 Standards for awards.
21.51 Initial decision in applications not subject to the CRRA.
21.52 Initial decision by an adjudicative officer in applications
          subject to CRRA jurisdiction.
21.53 Final decision of the CRRA.
21.54 Review by the Secretary.
21.55 Final decision if the Secretary does not review.
21.56 Judicial review.

                     Subpart G_How Are Awards Paid?

21.60 Payment of awards.
21.61 Release.

    Authority: 5 U.S.C. 504, unless otherwise noted.

    Source: 58 FR 47192, Sept. 7, 1993, unless otherwise noted.



                            Subpart A_General



Sec. 21.1  Equal Access to Justice Act.

    (a) The Equal Access to Justice Act (the Act) provides for the award
of fees and other expenses to applicants that--
    (1) Are prevailing parties in adversary adjudications before the
Department of Education; and
    (2) Meet all other conditions of eligibility contained in this part.
    (b) An eligible applicant, as described in paragraph (a) of this
section, is entitled to receive an award unless--
    (1) The adjudicative officer, the Civil Rights Reviewing Authority
(CRRA), or the Secretary on review, determines that--
    (i) The Department's position was substantially justified; or
    (ii) Special circumstances make an award unjust; or
    (2) The adversary adjudication is under judicial review, in which
case the applicant may receive an award only as described in Sec.
21.11.
    (c) The determination under paragraph (b)(1)(i) of this section is
based on the administrative record, as a whole, made during the
adversary adjudication for which fees and other expenses are sought.

(Authority: 5 U.S.C. 504(a)(1) and (c)(1))



Sec. 21.2  Time period when the Act applies.

    The Act applies to any adversary adjudication covered under this
part pending or commenced before the Department on or after August 5,
1985.

(Authority: 5 U.S.C. 504(note))



Sec. 21.3  Definitions.

    The following definitions apply to this part:
    Act means the Equal Access to Justice Act.
    Adjudicative officer means the Administrative Law Judge, hearing
examiner, or other deciding official who presided at the underlying
adversary adjudication.

(Authority: 5 U.S.C. 504(b)(1)(D))

    Adversary adjudication means a proceeding--
    (1) Conducted by the Department for the formulation of an order or
decision

[[Page 42]]

arising from a hearing on the record under the Administrative Procedure
Act (5 U.S.C. 554);
    (2) Listed in Sec. 21.10; and
    (3) In which the position of the Department was represented by
counsel or other representative who entered an appearance and
participated in the proceeding.

(Authority: 5 U.S.C. 504(b)(1)(C))

    Application subject to the jurisdiction of the CRRA means an
application for fees and expenses based on an underlying proceeding
conducted under 34 CFR parts 100, 101, 104, 106, or 110.

(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42
U.S.C. 2000d-1 et seq. and 6101 et seq.)

    CRRA means the Civil Rights Reviewing Authority, the reviewing
authority established by the Secretary to consider applications under 34
CFR parts 100, 101, 104, 106, and 110.

(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42
U.S.C. 2000d-1 et seq. and 6101 et seq.)

    Department means the U.S. Department of Education.
    Department's counsel means counsel for the Department of Education
or another Federal agency.
    Employee means:
    (1) A person who regularly performs services for an applicant--
    (i) For remuneration; and
    (ii) Under the applicant's direction and control.
    (2) A part-time or seasonal employee who performs services for an
applicant--
    (i) For renumeration; and
    (ii) Under the applicant's direction and control.

(Authority: 5 U.S.C. 504(c)(1))

    Fees and other expenses means an eligible applicant's reasonable
fees and expenses--
    (1) Related to the issues on which it was the prevailing party in
the adversary adjudication; and
    (2) Further described in Sec. Sec. 21.33 and 21.50.

(Authority: 5 U.S.C. 504 (a)(1), (b)(1)(A), and (c)(1))

    Party means a ``person'' or a ``party'' as those terms are defined
in the Administrative Procedure Act (5 U.S.C. 551(3)), including an
individual, partnership, corporation, association, unit of local
government, or public or private organization that meets the
requirements in Sec. 21.20. The term does not include an agency of the
Federal Government.

(Authority: 5 U.S.C. 504(b)(1)(B))

    Position of the Department means, in addition to the position taken
by the Department in the adversary adjudication, the action or failure
to act by the Department upon which the adversary adjudication is based.

(Authority: 5 U.S.C. 504 (a)(1) and (b)(1)(E))

    Secretary means the Secretary of the U.S. Department of Education or
an official or employee of the Department acting for the Secretary under
a delegation of authority.

(Authority: 5 U.S.C. 504 (b)(2) and (c)(1))



          Subpart B_Which Adversary Adjudications Are Covered?



Sec. 21.10  Adversary adjudications covered by the Act.

    The Act covers adversary adjudications under section 554 of title 5
of the United States Code. These include the following:
    (a) Compliance proceedings under title VI of the Civil Rights Act of
1964 (42 U.S.C. 2000d et seq.).
    (b) Compliance and enforcement proceedings under the Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.).
    (c) Compliance proceedings under title IX of the Education
Amendments of 1972 (20 U.S.C. 1681 et seq.).
    (d) Compliance proceedings under section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794).
    (e) Withholding proceedings under section 1001 of Pub. L. 100-297
(Hawkins-Stafford) (20 U.S.C. 2833).
    (f) Proceedings under any of the following:
    (1) Section 5(g) of Pub. L. 81-874 (Financial Assistance for Local
Educational Agencies in Areas Affected by Federal Activity) (20 U.S.C.
240(g)).
    (2) Sections 6(c) or 11(a) of Pub. L. 81-815 (an act relating to the
construction

[[Page 43]]

of school facilities in areas affected by Federal activities and for
other purposes) (20 U.S.C. 636(c) or 641(a)).
    (3) Section 6 of Pub. L. 95-563 (Contract Disputes Act of 1978) (41
U.S.C. 605).
    (4) Part E of the General Education Provisions Act (20 U.S.C. 1234
et seq.).
    (g) Other adversary adjudications that fall within the coverage of
the Act.

(Authority: 5 U.S.C. 504(c) and 554; 20 U.S.C. 1234(f)(2))



Sec. 21.11  Effect of judicial review of adversary adjudication.

    If a court reviews the underlying decision of an adversary
adjudication covered under this part, an award of fees and other
expenses may be made only under 28 U.S.C. 2412 (awards in certain
judicial proceedings).

(Authority: 5 U.S.C. 504(c)(1); 28 U.S.C. 2412(d)(3))



                Subpart C_How Is Eligibility Determined?



Sec. 21.20  Types of eligible applicants.

    The following types of parties that prevail in adversary
adjudications are eligible to apply under the Act for an award of fees
and other expenses:
    (a) An individual who has a net worth of not more than $2 million.
    (b) Any owner of an unincorporated business who has--
    (1) A net worth of not more than $7 million, including both personal
and business interests; and
    (2) Not more than 500 employees.
    (c) A charitable or other tax-exempt organization--
    (1) As described in section 501(c)(3) of the Internal Revenue Code
of 1954 (26 U.S.C. 501(c)(3)); and
    (2) Having not more than 500 employees.
    (d) A cooperative association--
    (1) As defined in section 15(a) of the Agricultural Marketing Act
(12 U.S.C. 1141(a)); and
    (2) Having not more than 500 employees.
    (e) Any other partnership, corporation, association, unit of local
government, or organization that has--
    (1) A net worth of not more than $7 million; and
    (2) Not more than 500 employees.

(Authority: 5 U.S.C. 504(b)(1)(B))



Sec. 21.21  Determination of net worth and number of employees.

    (a) The adjudicative officer shall determine an applicant's net
worth and number of employees as of the date the adversary adjudication
was initiated.
    (b) In determining eligibility, the adjudicative officer shall
include the net worth and number of employees of the applicant and all
of the affiliates of the applicant.
    (c) For the purposes of paragraph (b) of this section, the
adjudicative officer shall consider the following as an affiliate:
    (1) Any individual, corporation, or other entity that directly or
indirectly owns or controls a majority of the voting shares or other
interest of the applicant;
    (2) Any corporation or other entity of which the applicant directly
or indirectly owns or controls a majority of the voting shares or other
interest; and
    (3) Any entity with a financial relationship to the applicant that,
in the determination of the adjudicative officer, constitutes an
affiliation for the purposes of paragraph (b) of this section.
    (d) In determining the number of employees of an applicant and its
affiliates, the adjudicative officer shall count part-time employees on
a proportional basis.

(Authority: 5 U.S.C. 504(c)(1))



Sec. 21.22  Applicants representing others.

    If an applicant is a party in an adversary adjudication primarily on
behalf of one or more persons or entities that are ineligible under this
part, then the applicant is not eligible for an award.

(Authority: 5 U.S.C. 504 (b)(1)(B) and (c)(1))



               Subpart D_How Does One Apply for an Award?



Sec. 21.30  Time for filing application.

    (a) In order to be considered for an award under this part, an
applicant

[[Page 44]]

may file its application when it prevails in an adversary adjudication--
or in a significant and discrete substantive portion of an adversary
adjudication--but no later than 30 days after the Department's final
disposition of the adversary adjudication.
    (b) In the case of a review or reconsideration of a decision in
which an applicant has prevailed or believes it has prevailed, the
adjudicative officer shall stay the proceedings on the application
pending final disposition of the underlying issue.
    (c) For purposes of this part, final disposition of the adversary
adjudication means the latest of--
    (1) The date on which an initial decision or other recommended
disposition of the merits of the proceeding by an adjudicative officer
becomes administratively final;
    (2) The date of an order disposing of any petitions for
reconsideration of the final order in the adversary adjudication;
    (3) If no petition for reconsideration is filed, the last date on
which that type of petition could have been filed; or
    (4) The date of a final order or any other final resolution of a
proceeding--such as a settlement or voluntary dismissal--that is not
subject to a petition for reconsideration.

(Authority: 5 U.S.C. 504 (a)(2) and (c)(1))



Sec. 21.31  Contents of application.

    (a) In its application for an award of fees and other expenses, an
applicant shall include the following:
    (1) Information adequate to show that the applicant is a prevailing
party in an adversary adjudication or in a significant and discrete
substantive portion of an adversary adjudication.
    (2) A statement that the adversary adjudication is covered by the
Act according to Sec. 21.10.
    (3) An allegation that the position of the Department was not
substantially justified, including a description of the specific
position.
    (4) Unless the applicant is a qualified tax-exempt organization or a
qualified agricultural cooperative association, information adequate to
show that the applicant qualifies under the requirements of Sec. Sec.
21.20 and 21.21 regarding net worth. The information, if applicable,
shall include a detailed exhibit of the net worth of the applicant--and
its affiliates as described in Sec. 21.21--as of the date the
proceeding was initiated.
    (5)(i) The total amount of fees and expenses sought in the award;
and
    (ii) An itemized statement of--
    (A) Each expense; and
    (B) Each fee, including the actual time expended for this fee and
the rate at which the fee was computed.
    (6) A written verification under oath or affirmation or under
penalty of perjury from each attorney representing the applicant
stating--
    (i) The rate at which the fee submitted by the attorney was
computed; and
    (ii) The actual time expended for the fee.
    (7) A written verification under oath, affirmation, or under penalty
of perjury that the information contained in the application and any
accompanying material is true and complete to the best of the
applicant's information and belief.
    (b) The adjudicative officer may require the applicant to submit
additional information.

(Authority: 5 U.S.C. 504 (a)(2) and (c)(1))



Sec. 21.32  Confidentiality of information about net worth.

    (a) In a proceeding on an application, the public record ordinarily
includes the information showing the net worth of the applicant.
    (b) However, if an applicant objects to public disclosure of any
portion of the information and believes there are legal grounds for
withholding it from disclosure, the applicant may submit directly to the
adjudicative officer--
    (1) The information the applicant wishes withheld in a sealed
envelope labeled ``Confidential Financial Information;'' and
    (2) A motion to withhold the information from public disclosure.
    (c) The motion must--
    (1) Describe the information the applicant is requesting be
withheld; and
    (2) Explain in detail--
    (i) Why that information falls within one or more of the specific
exemptions from mandatory disclosure under the Freedom of Information
Act;

[[Page 45]]

    (ii) Why public disclosure of the information would adversely affect
the applicant; and
    (iii) Why disclosure is not required in the public interest.
    (d)(1) The applicant shall serve on Department's counsel a copy of
the material referred to in paragraph (c) of this section.
    (2) The applicant is not required to give a copy of that material to
any other party to the proceeding.
    (e)(1) If the adjudicative officer finds that the information should
not be withheld from public disclosure, the information is placed in the
public record of the proceeding.
    (2) If the adjudicative officer finds that the information should be
withheld from public disclosure, any request to inspect or copy the
information is treated in accordance with the Department's established
procedures under the Freedom of Information Act (34 CFR part 5).

(Authority: 5 U.S.C. 504(c)(1))



Sec. 21.33  Allowable fees and expenses.

    (a) A prevailing party may apply for an award of fees and other
expenses incurred by the party in connection with--
    (1) An adversary adjudication; or
    (2) A significant and discrete substantive portion of an adversary
adjudication.
    (b) If a proceeding includes issues covered by the Act and issues
excluded from coverage, the applicant may apply only for an award of
fees and other expenses related to covered issues.
    (c) Allowable fees and expenses include the following, as
applicable:
    (1) An award of fees based on rates customarily charged by
attorneys, agents, and expert witnesses.
    (2) An award for the reasonable expenses of the attorney, agent, or
expert witness as a separate item if the attorney, agent, or expert
witness ordinarily charges clients separately for those expenses.
    (3) The cost of any study, analysis, engineering report, test, or
project related to the preparation of the applicant's case in the
adversary adjudication.
    (d) The calculation of fees and expenses as provided for under
paragraph (c) of this section shall be in accordance with the standards
for awards as described in Sec. 21.50(a) through (c).

(Authority: 5 U.S.C. 504(a)(1), (b)(1)(A) and (c)(1))



     Subpart E_What Procedures Are Used in Considering Applications?



Sec. 21.40  Filing and service of documents.

    (a) Except as provided in Sec. 21.32 and in applications subject to
the jurisdiction of the CRRA, an applicant shall--
    (1) File with the adjudicative officer its application and any
related documents; and
    (2) Serve on all parties to the adversary adjudication copies of its
application and any related documents.
    (b)(1) In an application subject to the jurisdiction of the CRRA,
the applicant shall--
    (i) File with the CRRA its application and any other related
documents; and
    (ii) Serve on all parties to the adversary adjudication copies of
its application and any related documents.
    (2) In applications subject to Sec. 21.40(b)(1), the CRRA shall
direct the adjudicative officer to issue an initial decision within 30
days of the completion of the proceedings on the application. The
adjudicative officer shall conduct proceedings under the procedures of
Sec. Sec. 21.41-21.44.

(Authority: 5 U.S.C. 504(a)(2) and (c)(1); 20 U.S.C. 1681; 29 U.S.C.
794; 42 U.S.C. 2000d-1 et seq. and 6101 et seq.)



Sec. 21.41  Answer to application.

    (a)(1) Within 30 days after receiving an application for an award
under this part, the Department's counsel may file an answer to the
application.
    (2) The Department's counsel may request an extension of time for
filing the Department's answer.
    (3) The adjudicative officer shall grant the request for an
extension if the Department's counsel shows good cause for the request.
    (b)(1) The Department's answer must--

[[Page 46]]

    (i) Explain any objections to the award requested; and
    (ii) Identify the facts relied on in support of the position of the
Department.
    (2) If the answer is based on any alleged facts not in the record of
the adversary adjudication, the Department's counsel shall include with
the answer either--
    (i) Supporting affidavits; or
    (ii) A request for further proceedings under Sec. 21.44.
    (c)(1) If the Department's counsel and the applicant believe that
the issues in the application can be settled, they may jointly file a
statement of their intent to negotiate a settlement.
    (2)(i) The filing of a statement of an intent to negotiate extends
the time for filing an answer for 30 days.
    (ii) The adjudicative officer shall grant further extensions if the
Department's counsel and the applicant jointly request those extensions.

(Authority: 5 U.S.C. 504(c)(1))



Sec. 21.42  Reply.

    (a) Within 15 days after receiving an answer, an applicant may file
a reply.
    (b) If the applicant's reply is based on any alleged facts not in
the record of the adversary adjudication, the applicant shall include
with the reply either--
    (1) Supporting affidavits; or
    (2) A request for further proceedings under Sec. 21.44.

(Authority: 5 U.S.C. 504(c)(1))



Sec. 21.43  Comments by other parties.

    (a) Any party to a proceeding, other than an applicant or the
Department's counsel, may file comments on--
    (1) The application within 30 days after the applicant files the
application;
    (2) The answer within 30 days after the counsel files the answer; or
    (3) Both, if the comments are filed within the time period specified
in paragraphs (a)(1) and (a)(2) of this section.
    (b) The commenting party may not participate further in proceedings
on the application unless the adjudicative officer determines that
further participation is necessary to permit full exploration of matters
raised in the comments.

(Authority: 5 U.S.C. 504(c)(1))



Sec. 21.44  Further proceedings.

    (a) The adjudicative officer shall make the determination of an
award on the basis of the written record.
    (b)(1) However, the adjudicative officer may order further
proceedings on his or her own initiative or at the request of the
applicant or the Department's counsel.
    (2) The adjudicative officer may order further proceedings only if
he or she determines that those proceedings are necessary for full and
fair resolution of issues arising from the application.
    (3) If further proceedings are ordered, the adjudicative officer
shall determine the scope of those proceedings, which may include such
proceedings as informal conferences, oral arguments, additional written
submissions, discovery, or an evidentiary hearing.
    (4) An adjudicative officer may not order discovery or an
evidentiary hearing for the issue of whether or not the Department's
position was substantially justified.
    (c) If the applicant or the Department's counsel requests the
adjudicative officer to order further proceedings, the request must--
    (1) Specify the information sought or the disputed issues; and
    (2) Explain why the additional proceedings are necessary to obtain
that information or resolve those issues.

(Authority: 5 U.S.C. 504(a)(3) and (c)(1))



                  Subpart F_How Are Awards Determined?



Sec. 21.50  Standards for awards.

    (a) In determining the reasonableness of the amount sought as an
award of fees and expenses for an attorney, agent, or expert witness,
the adjudicative officer shall consider one or more of the following:
    (1)(i) If the attorney, agent, or expert witness is in private
practice, his or her customary fee for similar services; or

[[Page 47]]

    (ii) If the attorney, agent, or expert witness is an employee of the
applicant, the fully allocated cost of the services.
    (2) The prevailing rate for similar services in the community in
which the attorney, agent, or expert witness ordinarily performs
services.
    (3) The time the attorney, agent, or expert witness actually spent
on the applicant's behalf with respect to the adversary adjudication.
    (4) The time the attorney, agent, or expert witness reasonably spent
in light of the difficulty or complexity of the covered issues in the
adversary adjudication.
    (5) Any other factors that may bear on the value of the services
provided by the attorney, agent, or expert witness.
    (b) The adjudicative officer may not grant--
    (1) An award for the fee of an attorney or agent in excess of $75.00
per hour; or
    (2) An award to compensate an expert witness in excess of the
highest rate at which the Department pays expert witnesses.
    (c) The adjudicative officer may also determine whether--
    (1) Any study, analysis, engineering report, text, or project for
which the applicant seeks an award was necessary for the preparation of
the applicant's case in the adversary adjudication; and
    (2) The costs claimed by the applicant for this item or items are
reasonable.
    (d) The adjudicative officer may not make an award to an eligible
party if the adjudicative officer, the CRRA, or the Secretary on review
finds that, based on a review of the administrative record as a whole--
    (1) The position of the Department, as defined in Sec. 21.3, was
substantially justified; or
    (2) Special circumstances make an award unjust.
    (e) The adjudicative officer may reduce or deny an award to the
extent that the applicant engaged in conduct that unduly or unreasonably
protracted the adversary adjudication.
    (f) If an applicant is entitled to an award because the applicant
prevailed over another agency of the United States that participated in
a proceeding before the Department and that agency's position was not
substantially justified, the adjudicative officer shall determine
whether to make the award, or an appropriate portion of the award,
against that agency. For the purpose of this determination, the
requirements of this subpart apply.

(Authority: 5 U.S.C. 504(a), (b)(1)(A), and (b)(1)(E))



Sec. 21.51  Initial decision in applications not subject to the CRRA.

    (a) In applications not subject to the jurisdiction of the CRRA, the
adjudicative officer shall issue an initial decision on an application
within 30 days after completion of proceedings on the application.
    (b) The initial decision must include the following:
    (1) Written findings, including sufficient supporting explanation,
on--
    (i) The applicant's status as a prevailing party;
    (ii) The applicant's eligibility;
    (iii) Whether the position of the Department was substantially
justified;
    (iv) Whether special circumstances make an award unjust;
    (v) If applicable, whether the applicant engaged in conduct that
unduly or unreasonably protracted the adversary adjudication; and
    (vi) Other factual issues raised in the adversary adjudication.
    (2) A statement of the amount awarded, including an explanation--
with supporting information--for any difference between the amount
requested by the applicant and the amount awarded.
    (3) A statement of the applicant's right to request review by the
Secretary under Sec. 21.54.
    (4) A statement of the applicant's right under Sec. 21.56 to seek
judicial review of the final award determination.
    (c) The explanation referred to in paragraph (b)(2) of this section
may include--
    (1) Whether the amount requested was reasonable; and
    (2) The extent to which the applicant unduly or unreasonably
protracted the adversary adjudication.

(Authority: 5 U.S.C. 504 (a)(3) and (c))

[[Page 48]]



Sec. 21.52  Initial decision by an adjudicative officer in applications
subject to CRRA jurisdiction.

    (a) If the application is subject to the jurisdiction of the CRRA,
the adjudicative officer shall issue the initial decision within 30 days
after completion of the proceedings.
    (b) The initial decision must include the information required under
Sec. 21.51(b). However, instead of the information required under Sec.
21.51(b)(3), the initial decision must inform the applicant of--
    (1) Its right to request review by the CRRA; and
    (2) Its right to request review by the Secretary of the CRRA's final
decision.
    (c) If the applicant or the Department's counsel appeals the
adjudicative officer's initial decision, the appeal must be submitted to
the CRRA, in writing, within 30 days after the initial decision is
issued.
    (d) If the applicant or the Department's counsel does not appeal the
adjudicative officer's initial decision to the CRRA and the Secretary
does not decide to review the initial decision under Sec. 21.54(a), the
initial decision becomes the Department's final decision 60 days after
it is issued by the officer.

(Authority: 5 U.S.C. 504(b)(1)(C); 20 U.S.C. 1681; 29 U.S.C. 794; 42
U.S.C. 2000d-1 et seq. and 6101 et seq.)



Sec. 21.53  Final decision of the CRRA.

    (a) In an application subject to the jurisdiction of the CRRA, the
CRRA shall, within 30 days after receipt of the written appeal--
    (1) Issue a final decision on the appeal of the adjudicative
officer's initial decision; or
    (2) Remand the application to the adjudicative officer for further
proceedings.
    (b) The CRRA shall review the initial decision on the basis of the
written record of the proceedings on the application. This includes but
is not limited to--
    (1) The written request; and
    (2) The adjudicative officer's findings as described in Sec.
21.51(b).
    (c) The CRRA shall act on the review by either--
    (1) Issuing a final decision on the application; or
    (2) Remanding the application to the adjudicative officer for
further proceedings.
    (d) If the CRRA issues a final decision, the CRRA's decision must
include--
    (1) Written findings, including supporting explanation, on--
    (i) The applicant's status as a prevailing party;
    (ii) The applicant's eligibility;
    (iii) Whether the position of the Department was substantially
justified;
    (iv) Whether special circumstances make an award unjust;
    (v) Whether the applicant engaged in conduct that unduly or
unreasonably protracted the adversary adjudication; and
    (vi) Other factual issues raised in the adversary adjudication.
    (2) A statement of the amount awarded, including an explanation--
with supporting information--for any difference between the amount
requested by the applicant and the amount awarded.
    (3) A statement of the applicant's right to request review by the
Secretary under Sec. 21.54.
    (4) A statement of the applicant's right under Sec. 21.56 to seek
judicial review of the final award determination.
    (e) The explanation referred to in paragraph (d)(2) of this section
may include--
    (1) Whether the amount requested was reasonable; and
    (2) The extent to which the applicant unduly or unreasonably
protracted the adversary adjudication.

(Authority: 5 U.S.C. 301, 557 (b) and (c); 20 U.S.C. 1681 and 3401 et
seq.; 29 U.S.C. 794; 42 U.S.C. 2000d-1 et seq. and 6101 et seq.)



Sec. 21.54  Review by the Secretary.

    (a) The Secretary may decide to review--
    (1) An initial decision made by an adjudicative officer in a
proceeding not subject to CRRA review;
    (2) An initial decision made by an adjudicative officer in a
proceeding subject to CRRA review that was not appealed to the CRRA; or
    (3) A final decision made by the CRRA under Sec. 21.53.

[[Page 49]]

    (b)(1) The Secretary does not review a final decision made by an
adjudicative officer of the General Services Administration Board of
Contract Appeals.
    (2) The Secretary or a party to the proceedings may seek
reconsideration of the final decision by an adjudicative officer of the
General Services Administration Board of Contract Appeals on the fee
application in accordance with 48 CFR 6101.32.
    (c) The Secretary decides to review a decision under Sec. 21.54(a)
either--
    (1) Upon receipt of a written request for review by an applicant or
Department's counsel; or
    (2) Upon the Secretary's own motion.
    (d) If the applicant or the Department's counsel seeks a review, the
request must be submitted to the Secretary, in writing, within 30 days
of--
    (1) An initial decision in a proceeding not subject to CRRA review;
or
    (2) A final decision of the CRRA.
    (e) The Secretary decides whether to accept or reject a request for
review of an initial decision made by the adjudicative officer in a
proceeding not subject to CRRA review or a final decision of the CRRA
within 30 days after receipt of a request for review.
    (f) The Secretary may decide on his own motion to review a decision
made under Sec. 21.54(a) within 60 days of the initial decision by the
adjudicative officer or a final decision of the CRRA.
    (g) If the Secretary decides to review the adjudicative officer's
initial decision or the CRRA's final decision--
    (1) The Secretary reviews the adjudicative officer's initial
decision or the CRRA's final decision on the basis of the written record
of the proceedings on the application. This includes, but is not
restricted to--
    (i) The written request for review;
    (ii) The adjudicative officer's findings as described in Sec.
21.51(b); and
    (iii) If applicable, the final decision of the CRRA, if any; and
    (2) The Secretary either--
    (i) Issues a final decision; or
    (ii) Remands the application to the adjudicative officer or the CRRA
for further proceedings.
    (h) If the Secretary issues a final decision, the Secretary's
decision--
    (1) Is in writing;
    (2) States the reasons for the decision; and
    (3) If the decision is adverse to the applicant, advises the
applicant of its right to petition for judicial review under Sec.
21.56.

(Authority: 5 U.S.C. 557 (b) and (c))



Sec. 21.55  Final decision if the Secretary does not review.

    If the Secretary takes no action under Sec. 21.54--
    (a) The adjudicative officer's initial decision on the application
becomes the Department's final decision 60 days after it is issued by
the adjudicative officer; or
    (b) The CRRA's decision on the application becomes the Department's
final decision 60 days after it is issued by the CRRA.

(Authority: 5 U.S.C. 301)



Sec. 21.56  Judicial review.

    If the applicant is dissatisfied with the award determination in the
final decision under Sec. Sec. 21.52-21.55, the applicant may seek
judicial review of that determination under 5 U.S.C. 504(c)(2) within 30
days after that determination was made.

(Authority: 5 U.S.C. 504(c)(2))



                     Subpart G_How Are Awards Paid?



Sec. 21.60  Payment of awards.

    To receive payment, an applicant granted an award under the Act must
submit to the Financial Management Service of the Department--
    (a) A request for payment signed by the applicant or its duly
authorized agent;
    (b) A copy of the final decision granting the award; and
    (c) A statement that--
    (1) The applicant will not seek review of the decision in the United
States courts; or
    (2) The process for seeking review of the award has been completed.

(Authority: 5 U.S.C. 504(c)(1) and (d))



Sec. 21.61  Release.

    If an applicant, its agent, or its attorney accepts payment of any
award

[[Page 50]]

or settlement in conjunction with an application under this part, that
acceptance--
    (a) Is final and conclusive with respect to that application; and
    (b) Constitutes a complete release of any further claim against the
United States with respect to that application.

(Authority: 5 U.S.C. 504(c)(1))



PART 30_DEBT COLLECTION--Table of Contents



                            Subpart A_General

Sec.
30.1 What administrative actions may the Secretary take to collect a
          debt?
30.2 On what authority does the Secretary rely to collect a debt under
          this part?

Subpart B [Reserved]

        Subpart C_What Provisions Apply to Administrative Offset?

                        General Offset Procedures

30.20 To what do Sec. Sec. 30.20-30.31 apply?
30.21 When may the Secretary offset a debt?
30.22 What notice does the debtor receive before the commencement of
          offset?
30.23 How must a debtor request an opportunity to inspect and copy
          records relating to a debt?
30.24 What opportunity does the debtor receive to obtain a review of the
          existence or amount of a debt?
30.25 How may a debtor obtain an oral hearing?
30.26 What special rules apply to an oral hearing?
30.27 When does the Secretary enter into a repayment agreement rather
          than offset?
30.28 When may the Secretary offset before completing the procedures
          under Sec. Sec. 30.22-30.27?
30.29 What procedures apply when the Secretary offsets to collect a debt
          owed another agency?
30.30 What procedures apply when the Secretary requests another agency
          to offset a debt owed under a program or activity of the
          Department?
30.31 How does the Secretary apply funds recovered by offset if multiple
          debts are involved?

                    IRS Tax Refund Offset Procedures

30.33 What procedures does the Secretary follow for IRS tax refund
          offsets?

      Procedures for Reporting Debts to Consumer Reporting Agencies

30.35 What procedures does the Secretary follow to report debts to
          consumer reporting agencies?

Subpart D [Reserved]

    Subpart E_What Costs and Penalties Does the Secretary Impose on
                           Delinquent Debtors?

30.60 What costs does the Secretary impose on delinquent debtors?
30.61 What penalties does the Secretary impose on delinquent debtors?
30.62 When does the Secretary forego interest, administrative costs, or
          penalties?

  Subpart F_What Requirements Apply to the Compromise of a Debt or the
             Suspension or Termination of Collection Action?

30.70 How does the Secretary exercise discretion to compromise a debt or
          to suspend or terminate collection of a debt?

Subpart G [Reserved]

    Authority: 20 U.S.C. 1221e-3(a)(1), and 1226a-1, 31 U.S.C. 3711(e),
31 U.S.C. 3716(b) and 3720A, unless otherwise noted.

    Source: 51 FR 24099, July 1, 1986, unless otherwise noted.



                            Subpart A_General



Sec. 30.1  What administrative actions may the Secretary take to
collect a debt?

    (a) The Secretary may take one or more of the following actions to
collect a debt owed to the United States:
    (1) Collect the debt under the procedures authorized in the
regulations in this part.
    (2) Refer the debt to the General Accounting Office for collection.
    (3) Refer the debt to the Department of Justice for compromise,
collection, or litigation.
    (4) Take any other action authorized by law.
    (b) In taking any of the actions listed in paragraph (a) of this
section, the Secretary complies with the requirements of the Federal
Claims Collection Standards (FCCS) at 4 CFR parts 101-105 that are not
inconsistent with the requirements of this part.
    (c) The Secretary may--

[[Page 51]]

    (1) Collect the debt under the offset procedures in subpart C of
this part;
    (2) Report a debt to a consumer reporting agency under the
procedures in subpart C of this part;
    (3) Charge interest on the debt as provided in the FCCS;
    (4) Impose upon a debtor a charge based on the costs of collection
as determined under subpart E of this part;
    (5) Impose upon a debtor a penalty for failure to pay a debt when
due under subpart E of this part;
    (6) Compromise a debt, or suspend or terminate collection of a debt,
under subpart F of this part;
    (7) Take any other actions under the procedures of the FCCS in order
to protect the United States Government's interests; or
    (8) Use any combination of the procedures listed in this paragraph
(c) as may be appropriate in a particular case.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))

[53 FR 33425, Aug. 30, 1988]



Sec. 30.2  On what authority does the Secretary rely to collect a debt
under this part?

    (a)(1) The Secretary takes an action referred to under Sec. 30.1(a)
in accordance with--
    (i) 31 U.S.C. chapter 37, subchapters I and II;
    (ii) Other applicable statutory authority; or
    (iii) The common law.
    (2) If collection of a debt in a particular case is not authorized
under one of the authorities described in paragraph (a)(1) of this
section, the Secretary may collect the debt under any other available
authority under which collection is authorized.
    (b) The Secretary does not use a procedure listed in Sec. 30.1(c)
to collect a debt, or a certain type of debt, if--
    (1) The procedure is specifically prohibited under a Federal
statute; or
    (2) A separate procedure other than the procedure described under
Sec. 30.1(c) is specifically required under--
    (i) A contract, grant, or other agreement;
    (ii) A statute other than 31 U.S.C. 3716; or
    (iii) Other regulations.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))

[53 FR 33425, Aug. 30, 1988]

Subpart B [Reserved]



        Subpart C_What Provisions Apply to Administrative Offset?

                        General Offset Procedures



Sec. 30.20  To what do Sec. Sec. 30.20-30.31 apply?

    (a)(1)(i) Sections 30.20-30.31 establish the general procedures used
by the Secretary to collect debts by administrative offset.
    (ii) The Secretary uses the procedures established under other
regulations, including Sec. 30.33, What procedures does the Secretary
follow for IRS tax refund offsets?, 34 CFR part 31, Salary Offset for
Federal Employees Who Are Indebted to the United States Under Programs
Administrated by the Secretary of Education, and 34 CFR part 32, Salary
Offset to Recover Overpayments of Pay or Allowances from Department of
Education Employees, if the conditions requiring application of those
special procedures exists.
    (2) The word ``offset'' is used in this subpart to refer to the
collection of a debt by administrative offset.
    (b) The Secretary does not rely on 31 U.S.C. 3716 as authority for
offset if:
    (1) The debt is owed by a State or local government;
    (2) The debt, or the payment against which offset would be taken,
arises under the Social Security Act;
    (3) The debt is owed under:
    (i) The Internal Revenue Code of 1954; or
    (ii) The tariff laws of the United States; or
    (4) The right to collect the debt first accrued more than ten years
before initiation of the offset.
    (c)(1) The Secretary may rely on 31 U.S.C. 3716 as authority for
offset of a debt to which paragraph (b)(4) of this section would
otherwise apply if facts material to the Government's right to collect
the debt were not known and could not reasonably have been known

[[Page 52]]

by the official or officials of the Government who are charged with the
responsibility to discover and collect the debt.
    (2) If paragraph (c)(1) of this section applies, the Secretary may
rely on 31 U.S.C. 3716 as authority for offset up to 10 years after the
date that the official or officials described in that paragraph first
knew or reasonably should have known of the right of the United States
to collect the debt.
    (d) The Secretary determines when the right to collect a debt first
accrued under the existing law regarding accrual of debts such as 28
U.S.C. 2415.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[51 FR 24099, July 1, 1986, as amended at 51 FR 35646, Oct. 7, 1986; 53
FR 33425, Aug. 30, 1988; 54 FR 43583, Oct. 26, 1989]



Sec. 30.21  When may the Secretary offset a debt?

    (a) The Secretary may offset a debt if:
    (1) The debt is liquidated or certain in amount; and
    (2) Offset is feasible and not otherwise prohibited.
    (b)(1) Whether offset is feasible is determined by the Secretary in
the exercise of sound discretion on a case-by-case basis, either:
    (i) For each individual debt or offset; or
    (ii) For each class of similar debts or offsets.
    (2) The Secretary considers the following factors in making this
determination:
    (i) Whether offset can be practically and legally accomplished.
    (ii) Whether offset will further and protect the interests of the
United States.
    (c) The Secretary may switch advance funded grantees to a
reimbursement payment system before initiating an offset.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))



Sec. 30.22  What notice does the debtor receive before the commencement
of offset?

    (a)(1) Except as provided in Sec. Sec. 30.28 and 30.29, the
Secretary provides a debtor with written notice of the Secretary's
intent to offset before initiating the offset.
    (2) The Secretary mails the notice to the debtor at the current
address of the debtor, as determined by the Secretary from information
regarding the debt maintained by the Department.
    (b) The written notice informs the debtor regarding:
    (1) The nature and amount of the debt;
    (2) The Secretary's intent to collect the debt by offset;
    (3) The debtor's opportunity to:
    (i) Inspect and copy Department records pertaining to the debt;
    (ii) Obtain a review within the Department of the existence or
amount of the debt; and
    (iii) Enter into a written agreement with the Secretary to repay the
debt;
    (4) The date by which the debtor must request an opportunity set
forth under paragraph (b)(3) of this section; and
    (5) The Secretary's decision, in appropriate cases, to switch the
debtor from advance funding to a reimbursement payment system.
    (c)(1) In determining whether a debtor has requested an opportunity
set forth under paragraph (b)(3) of this section in a timely manner, the
Secretary relies on:
    (i) A legibly dated U.S. Postal Service postmark for the debtor's
request; or
    (ii) A legibly stamped U.S. Postal service mail receipt for debtor's
request.
    (2) The Secretary does not rely on either of the following as proof
of mailing;
    (i) A private metered postmark.
    (ii) A mail receipt that is not dated by the U.S. Postal Service.
    Note: The U.S. Postal Service does not uniformly provide a dated
postmark. Before relying on this method for proof of mailing, a debtor
should check with its local post office.
    (d) If a debtor previously has been notified of the Secretary's
intent to offset or offered an opportunity to take any of the actions
set forth in paragraph (b)(3) of this section in connection with the
same debt, the Secretary may offset without providing the debtor with

[[Page 53]]

an additional notice of intent or opportunity to take any of those
actions under these offset procedures.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))



Sec. 30.23  How must a debtor request an opportunity to inspect and
copy records relating to a debt?

    (a) If a debtor wants to inspect and copy Department documents
relating to the debt, the debtor must:
    (1) File a written request to inspect and copy the documents within
20 days after the date of the notice provided under Sec. 30.22; and
    (2) File the request at the address specified in that notice.
    (b) A request filed under paragraph (a) of this section must
contain:
    (1) All information provided to the debtor in the notice under Sec.
30.22 or Sec. 30.33(b) that identifies the debtor and the debt,
including the debtor's Social Security number and the program under
which the debt arose, together with any corrections of that identifying
information; and
    (2) A reasonably specific identification of the records the debtor
wishes to have available for inspection and copying.
    (c) The Secretary may decline to provide an opportunity to inspect
and copy records if the debtor fails to request inspection and copying
in accordance with this section.

(Approved by the Office of Management and Budget under control number
1880-0515)

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[51 FR 24099, July 1, 1986, as amended at 51 FR 35646, Oct. 7, 1986]



Sec. 30.24  What opportunity does the debtor receive to obtain a
review of the existence or amount of a debt?

    (a) If a debtor wants a review within the Department of the issues
identified in the notice under Sec. 30.22(b)(3)(ii) or Sec.
30.33(b)(3)(ii), the debtor must:
    (1) File a request for review within 20 days after the date of the
notice provided under Sec. 30.22; and
    (2) File a request at the address specified in that notice.
    (b) A request filed under paragraph (a) of this section must
contain:
    (1) All information provided to the debtor in the notice under Sec.
30.22 or Sec. 30.33(b) that identifies the debtor and the particular
debt, including the debtor's Social Security number and the program
under which the debt arose, together with any corrections of that
identifying information; and
    (2) An explanation of the reasons the debtor believes that the
notice the debtor received under Sec. 30.22 or Sec. 30.33(b)
inaccurately states any facts or conclusions relating to the debt.
    (c) The Secretary may decline to provide an opportunity for review
of a debt if the debtor fails to request the review in accordance with
this section.
    (d)(1) The debtor shall:
    (i) File copies of any documents relating to the issues identified
in the notice under Sec. 30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) that
the debtor wishes the Secretary to consider in the review;
    (ii) File the documents at the address specified in that notice, and
    (iii) File the documents no later than:
    (A) 20 days after the date of the notice provided under Sec. 30.22;
or
    (B) If the debtor has requested an opportunity to inspect and copy
records under Sec. 30.23 within the time period specified in that
section, 15 days after the date on which the Secretary makes available
to the debtor the relevant, requested records.
    (2) The Secretary may decline to consider any reasons or documents
that the debtor fails to provide in accordance with paragraphs (b) and
(d) of this section.
    (e) If the Secretary bases the review on only the documentary
evidence, the Secretary:
    (1) Reviews the documents submitted by the debtor and other relevant
evidence; and
    (2) Notifies the debtor in writing of the Secretary's decision
regarding the issues identified in the notice under Sec.
30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) and, if

[[Page 54]]

appropriate, the question of waiver of the debt.

(Approved by the Office of Management and Budget under control number
1880-0515)

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]



Sec. 30.25  How may a debtor obtain an oral hearing?

    (a) If a debtor wants the Secretary to conduct the review requested
under Sec. 30.24 as an oral hearing, the debtor must file a written
request for an oral hearing together with the request for review filed
under Sec. 30.24(a).
    (b) A request filed under paragraph (a) of this section must contain
the following in addition to the information filed under Sec. 30.24(b):
    (1) An explanation of reason(s) why the debtor believes the
Secretary cannot resolve the issues identified in the notice under Sec.
30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) through a review of the
documentary evidence.
    (2) An identification of:
    (i) The individuals that the debtor wishes to have testify at the
oral hearing;
    (ii) The specific issues identified in the notice regarding which
each individual is prepared to testify; and
    (iii) The reasons why each individual's testimony is necessary to
resolve the issue.
    (c) The Secretary grants a debtor's request for an oral hearing
regarding the issues identified in the notice under Sec.
30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) only if:
    (1)(i) A statute authorizes or requires the Secretary to consider
waiver of the indebtedness involved;
    (ii) The debtor files a request for waiver of the indebtedness with
the request for review filed under paragraph (a)(1) of this section; and
    (iii) The question of waiver of the indebtedness turns on an issue
of credibility or veracity; or
    (2) The Secretary determines that the issues identified in the
notice under Sec. 30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) cannot be
resolved by review of only the documentary evidence.
    (d) Notwithstanding paragraph (b) of this section, the Secretary may
deny oral hearings for a class of similar debts if:
    (1) The issues identified in the notice under Sec. 30.22(b)(3)(ii)
or 30.33(b)(3)(ii) for which an oral hearing was requested, or the issue
of waiver, rarely involve issues of credibility or veracity; and
    (2) The Secretary determines that review of the documentary evidence
is ordinarily an adequate means to correct mistakes.
    (e) The Secretary may decline to consider any reasons that the
debtor fails to provide in accordance with paragraph (b)(1) of this
section.

(Approved by the Office of Management and Budget under control number
1880-0515)

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]



Sec. 30.26  What special rules apply to an oral hearing?

    (a) The oral hearing under Sec. 30.25 is not a formal evidentiary
hearing subject to 5 U.S.C. 554, unless required by law.
    (b) If the Secretary grants an oral hearing, the Secretary notifies
the debtor in writing of:
    (1) The time and place for the hearing;
    (2) The debtor's right to representation; and
    (3) The debtor's right to present and cross examine witnesses.
    (c) If the Secretary grants an oral hearing, the Secretary
designates an official to:
    (1) Govern the conduct of the hearing;
    (2) Take all necessary action to avoid unreasonable delay in the
proceedings;
    (3) Review the evidence presented at the hearing, the documents
submitted by the debtor, and other relevant evidence; and
    (4) After considering the evidence, notify the debtor in writing of
the official's decision regarding the issues identified in the notice
under Sec. 30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii) and, if
appropriate, the question of waiver of the debt.

[[Page 55]]

    (d) The official designated under paragraph (c) of this section may
decline to hear any witnesses or testimony not identified by the debtor
in accordance with Sec. 30.25(b)(2).
    (e) The decision of the designated official under paragraph (c) of
this section constitutes the final decision of the Secretary.

(Authority: 20 U.S.C. 1221-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))



Sec. 30.27  When does the Secretary enter into a repayment agreement
rather than offset?

    (a) If a debtor wants an opportunity to enter into a written
agreement to repay a debt on terms acceptable to the Secretary, the
debtor must:
    (1) File a request to enter into such agreement within 20 days after
the date of the notice provided under Sec. 30.22; and
    (2) File the request at the address specified in the notice.
    (b) A request filed under paragraph (a) of this section must contain
all information provided to the debtor in the notice under Sec. 30.22
or Sec. 30.33(b) that identifies the debtor and the debt, including the
debtor's Social Security number and the program under which the debt
arose, together with any corrections of that identifying information.
    (c) If the Secretary receives a request filed in accordance with
this section, the Secretary may enter into a written agreement requiring
repayment in accordance with 4 CFR 102.11, instead of offsetting the
debt.
    (d) In deciding whether to enter into the agreement, the Secretary
may consider:
    (1) The Government's interest in collecting the debt; and
    (2) Fairness to the debtor.
    (e)(1) A debtor that enters into a repayment agreement with the
Secretary under this section waives any right to further review by the
Secretary of the issues relating to the original debt identified in the
notice under Sec. 30.22(b)(3)(ii) or Sec. 30.33(b)(3)(ii).
    (2) If a debtor breaches a repayment agreement, the Secretary may
offset, or, under Sec. 30.30, refer to another agency for offset:
    (i) The amount owing under the agreement; or
    (ii) The entire original debt, to the extent not repaid.

(Authority: 20 U.S.C. 1221-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[51 FR 24099, July 1, 1986, as amended at 51 FR 35647, Oct. 7, 1986]



Sec. 30.28  When may the Secretary offset before completing the
procedures under Sec. Sec. 30.22-30.27?

    (a) The Secretary may offset before completing the procedures
otherwise required by Sec. Sec. 30.22-30.27 if:
    (1) Failure to offset would substantially prejudice the Government's
ability to collect the debt; and
    (2) The amount of time remaining before the payment by the United
States which is subject to offset does not reasonably permit completion
of the procedures under Sec. Sec. 30.22-30.27.
    (b) If the Secretary offsets under paragraph (a) of this section,
the Secretary:
    (1) Promptly completes the procedures under Sec. Sec. 30.22-30.27
after initiating the offset; and
    (2) Refunds any amounts recovered under the offset that are later
found not to be owed to the United States.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))



Sec. 30.29  What procedures apply when the Secretary offsets to
collect a debt owed another agency?

    The Secretary may initiate offset to collect a debt owed another
Federal agency if:
    (a) An official of that agency certifies in writing:
    (1) That the debtor owes a debt to the United States;
    (2) The amount of the debt; and
    (3) That the agency has complied with 4 CFR 102.3; and
    (b) For offsets under 31 U.S.C. 3716, the Secretary makes an
independent determination that the offset meets the standards under
Sec. 30.21(a)(2).

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

[[Page 56]]



Sec. 30.30  What procedures apply when the Secretary requests another
agency to offset a debt owed under a program or activity of the

Department?

    (a) The Secretary may request another Federal agency to offset a
debt owed under a program or activity of the Department if the Secretary
certifies in writing to the other Federal agency:
    (1) That the debtor owes a debt to the United States;
    (2) The amount of the debt; and
    (3) That the Secretary has complied with 4 CFR 102.3.
    (b) Before providing the certification required under paragraph (a)
of this section, the Secretary complies with the procedures in
Sec. Sec. 30.20-30.27.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))



Sec. 30.31  How does the Secretary apply funds recovered by offset if
multiple debts are involved?

    If the Secretary collects more than one debt of a debtor by
administrative offset, the Secretary applies the recovered funds to
satisfy those debts based on the Secretary's determination of the best
interests of the United States, determined by the facts and
circumstances of the particular case.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3716(b))

                    IRS Tax Refund Offset Procedures



Sec. 30.33  What procedures does the Secretary follow for IRS tax
refund offsets?

    (a) If a named person owes a debt under a program or activity of the
Department, the Secretary may refer the debt for offset to the Secretary
of the Treasury after complying with the procedures in Sec. Sec. 30.20-
30.28, as modified by this section.
    (b) Notwithstanding Sec. 30.22(b), the notice sent to a debtor
under Sec. 30.22 informs the debtor that:
    (1) The debt is past due;
    (2) The Secretary intends to refer the debt for offset to the
Secretary of Treasury;
    (3) The debtor has an opportunity to:
    (i) Inspect and copy Department records regarding the existence,
amount, enforceability, or past-due status of the debt;
    (ii) Obtain a review within the Department of the existence, amount,
enforceability, or past-due status of the debt;
    (iii) Enter into a written agreement with the Secretary to repay the
debt; and
    (4) The debtor must take an action set forth under paragraph (b)(3)
by a date specified in the notice.
    (c) Notwithstanding Sec. 30.23(a), if a debtor wants to inspect and
copy Department records regarding the existence, amount, enforceability,
or past-due status of the debt, the debtor must:
    (1) File a written request to inspect and copy the records within 20
days after the date of the notice provided under Sec. 30.22; and
    (2) File the request at the address specified in that notice.
    (d) Notwithstanding the time frame under Sec. 30.24(a), if a debtor
wants a review under that paragraph, the debtor must file a request for
review at the address specified in the notice by the later of:
    (1) Sixty-five days after the date of the notice provided under
Sec. 30.22;
    (2) If the debtor has requested an opportunity to inspect and copy
records within the time period specified in paragraph (c) of this
section, 15 days after the date on which the Secretary makes available
to the debtor the relevant, requested records; or
    (3) If the debtor has requested a review within the appropriate time
frame under paragraph (d) (1) or (2) of this section and the Secretary
has provided an initial review by a guarantee agency, seven days after
the date of the initial determination by the guarantee agency.
    (e) Notwithstanding the time frames under Sec. 30.24(d), a debtor
shall file the documents specified under that paragraph with the request
for review.
    (f) Notwithstanding the time frame under Sec. 30.27(a), a debtor
must agree to repay the debt under terms acceptable to the Secretary and
make the first payment due under the agreement by the latest of:
    (1) The seventh day after the date of decision of the Secretary if
the debtor requested a review under Sec. 30.24;

[[Page 57]]

    (2) The sixty-fifth day after the date of the notice under Sec.
30.22(b), if the debtor did not request a review under Sec. 30.24, or
an opportunity to inspect and copy records of the Department under Sec.
30.23; or
    (3) The fifteenth day after the date on which the Secretary made
available relevant records regarding the debt, if the debtor filed a
timely request under Sec. 30.23(a).

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3720A)

      Procedures for Reporting Debts to Consumer Reporting Agencies



Sec. 30.35  What procedures does the Secretary follow to report debts
to consumer reporting agencies?

    (a)(1) The Secretary reports information regarding debts arising
under a program or activity of the Department and held by the Department
to consumer reporting agencies, in accordance with the procedures
described in this section.
    (2) The term consumer reporting agency, as used in this section, has
the same meaning as provided in 31 U.S.C. 3701(a)(3).
    (b) Before reporting information on a debt to a consumer reporting
agency, the Secretary follows the procedures set forth in Sec. 30.33.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711, Sec.
16023, 16029, Pub. L. 99-272)

Subpart D [Reserved]



    Subpart E_What Costs and Penalties Does the Secretary Impose on
                           Delinquent Debtors?

    Source: 53 FR 33425, Aug. 30, 1988, unless otherwise noted.



Sec. 30.60  What costs does the Secretary impose on delinquent debtors?

    (a) The Secretary may charge a debtor for the costs associated with
the collection of a particular debt. These costs include, but are not
limited to--
    (1) Salaries of employees performing Federal loan servicing and debt
collection activities;
    (2) Telephone and mailing costs;
    (3) Costs for reporting debts to credit bureaus;
    (4) Costs for purchase of credit bureau reports;
    (5) Costs associated with computer operations and other costs
associated with the maintenance of records;
    (6) Bank charges;
    (7) Collection agency costs;
    (8) Court costs and attorney fees; and
    (9) Costs charged by other Governmental agencies.
    (b) Notwithstanding any provision of State law, if the Secretary
uses a collection agency to collect a debt on a contingent fee basis,
the Secretary charges the debtor, and collects through the agency, an
amount sufficient to recover--
    (1) The entire amount of the debt; and
    (2) The amount that the Secretary is required to pay the agency for
its collection services.
    (c)(1) The amount recovered under paragraph (b) of this section is
the entire amount of the debt, multiplied by the following fraction:
[GRAPHIC] [TIFF OMITTED] TC15NO91.009

    (2) In paragraph (c)(1) of this section, cr equals the commission
rate the Department pays to the collection agency.
    (d) If the Secretary uses more than one collection agency to collect
similar debts, the commission rate (cr) described in paragraph (c)(2) of
this section is calculated as a weighted average of the commission rates
charged by all collection agencies collecting similar debts, computed
for each fiscal year based on the formula
[GRAPHIC] [TIFF OMITTED] TC15NO91.010


where--

    (1) Xi equals the dollar amount of similar debts placed by the
Department with an individual collection agency as of the end of the
preceding fiscal year;
    (2) Yi equals the commission rate the Department pays to that
collection agency for the collection of the similar debts;

[[Page 58]]

    (3) Z equals the dollar amount of similar debts placed by the
Department with all collection agencies as of the end of the preceding
fiscal year; and
    (4) N equals the number of collection agencies with which the
Secretary has placed similar debts as of the end of the preceding fiscal
year.
    (e) If a debtor has agreed under a repayment or settlement agreement
with the Secretary to pay costs associated with the collection of a debt
at a specified amount or rate, the Secretary collects those costs in
accordance with the agreement.
    (f) The Secretary does not impose collection costs against State or
local governments under paragraphs (a) through (d) of this section.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e),
3717(e)(1), 3718))



Sec. 30.61  What penalties does the Secretary impose on delinquent
debtors?

    (a) If a debtor does not make a payment on a debt, or portion of a
debt, within 90 days after the date specified in the first demand for
payment sent to the debtor, the Secretary imposes a penalty on the
debtor.
    (b)(1) The amount of the penalty imposed under paragraph (a) of this
section is 6 percent per year of the amount of the delinquent debt.
    (2) The penalty imposed under this section runs from the date
specified in the first demand for payment to the date the debt
(including the penalty) is paid.
    (c) If a debtor has agreed under a repayment or settlement agreement
with the Secretary to pay a penalty for failure to pay a debt when due,
or has such an agreement under a grant or contract under which the debt
arose, the Secretary collects the penalty in accordance with the
agreement, grant, or contract.
    (d) The Secretary does not impose a penalty against State or local
governments under paragraphs (a) and (b) of this section.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))



Sec. 30.62  When does the Secretary forego interest, administrative
costs, or penalties?

    (a) For a debt of any amount based on a loan, the Secretary may
refrain from collecting interest or charging administrative costs or
penalties to the extent that compromise of these amounts is appropriate
under the standards for compromise of a debt contained in 4 CFR part
103.
    (b) For a debt not based on a loan the Secretary may waive, or
partially waive, the charging of interest, or the collection of
administrative costs or penalties, if--
    (1) Compromise of these amounts is appropriate under the standards
for compromise of a debt contained in 4 CFR part 103; or
    (2) The Secretary determines that the charging of interest or the
collection of administrative costs or penalties is--
    (i) Against equity and good conscience; or
    (ii) Not in the best interests of the United States.
    (c) The Secretary may exercise waiver under paragraph (b)(1) of this
section without regard to the amount of the debt.
    (d) The Secretary may exercise waiver under paragraph (b)(2) of this
section if--
    (1) The Secretary has accepted an installment plan under 4 CFR
102.11;
    (2) There is no indication of fault or lack of good faith on the
part of the debtor; and
    (3) The amount of interest, administrative costs, and penalties is
such a large portion of the installments that the debt may never be
repaid if that amount is collected.
    (e)(1) The Secretary does not charge interest on any portion of a
debt, other than a loan, owed by a person subject to 31 U.S.C. 3717 if
the debt is paid within 30 days after the date of the first demand for
payment.
    (2) The Secretary may extend the period under paragraph (e)(1) of
this section if the Secretary determines that the extension is
appropriate.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 1226a-1, 31 U.S.C. 3711(e))

[[Page 59]]



  Subpart F_What Requirements Apply to the Compromise of a Debt or the
             Suspension or Termination of Collection Action?



Sec. 30.70  How does the Secretary exercise discretion to compromise
a debt or to suspend or terminate collection of a debt?

    (a) The Secretary uses the standards in the FCCS, 4 CFR part 103, to
determine whether compromise of a debt is appropriate if--
    (1) The debt must be referred to the Department of Justice under
this section; or
    (2) The amount of the debt is less than or equal to $20,000 and the
Secretary does not follow the procedures in paragraph (e) of this
section.
    (b) The Secretary refers a debt to the Department of Justice to
decide whether to compromise a debt if--
    (1) The debt was incurred under a program or activity subject to
section 452(f) of the General Education Provisions Act and the initial
determination of the debt was more than $50,000; or
    (2) The debt was incurred under a program or activity not subject to
section 452(f) of the General Education Provisions Act and the amount of
the debt is more than $20,000.
    (c) The Secretary may compromise the debt under the procedures in
paragraph (e) of this section if--
    (1) The debt was incurred under a program or activity subject to
section 452(f) of the General Education Provisions Act; and
    (2) The initial determination of the debt was less than or equal to
$50,000.
    (d) The Secretary may compromise a debt without following the
procedure in paragraph (e) of this section if the amount of the debt is
less than or equal to $20,000.
    (e) The Secretary may compromise the debt pursuant to paragraph (c)
of this section if--
    (1) The Secretary determines that--
    (i) Collection of any or all of the debt would not be practical or
in the public interest; and
    (ii) The practice that resulted in the debt has been corrected and
will not recur;
    (2) At least 45 days before compromising the debt, the Secretary
publishes a notice in the Federal Register stating--
    (i) The Secretary's intent to compromise the debt; and
    (ii) That interested persons may comment on the proposed compromise;
and
    (3) The Secretary considers any comments received in response to the
Federal Register notice before finally compromising the debt.
    (f)(1) The Secretary uses the standards in the FCCS, 4 CFR part 104,
to determine whether suspension or termination of collection action is
appropriate.
    (2) The Secretary--
    (i) Refers the debt to the Department of Justice to decide whether
to suspend or terminate collection action if the amount of the debt at
the time of the referral is more than $20,000; or
    (ii) May decide to suspend or terminate collection action if the
amount of the debt at the time of the Secretary's decision is less than
or equal to $20,000.
    (g) In determining the amount of a debt under paragraphs (a) through
(f) of this section, the Secretary excludes interest, penalties, and
administrative costs.
    (h) Notwithstanding paragraphs (b) through (f) of this section, the
Secretary may compromise a debt, or suspend or terminate collection of a
debt, in any amount if the debt arises under the Guaranteed Student Loan
Program authorized under title IV, part B, of the Higher Education Act
of 1965, as amended, or the Perkins Loan Program authorized under title
IV, part E, of the Higher Education Act of 1965, as amended.
    (i) The Secretary refers a debt to the General Accounting Office
(GAO) for review and approval before referring the debt to the
Department of Justice for litigation if--
    (1) The debt arose from an audit exception taken by GAO to a payment
made by the Department; and
    (2) The GAO has not granted an exception from the GAO referral
requirement.
    (j) Nothing in this section precludes--
    (1) A contracting officer from exercising his authority under
applicable

[[Page 60]]

statutes, regulations, or common law to settle disputed claims relating
to a contract; or
    (2) The Secretary from redetermining a claim.

(Authority: 20 U.S.C. 1082(a) (5) and (6), 1087hh, 1221e-3(a)(1), 1226a-
1, and 1234a(f), 31 U.S.C. 3711(e))

[53 FR 33425, Aug. 30, 1988]

Subpart G [Reserved]



PART 31_SALARY OFFSET FOR FEDERAL EMPLOYEES WHO ARE INDEBTED TO THE
UNITED STATES UNDER PROGRAMS ADMINISTERED BY THE SECRETARY OF

EDUCATION--Table of Contents



Sec.
31.1 Scope.
31.2 Definitions.
31.3 Pre-offset notice.
31.4 Request to inspect and copy documents relating to a debt.
31.5 Request for hearing on the debt or the proposed offset.
31.6 Location and timing of oral hearing.
31.7 Hearing procedures.
31.8 Rules of decision.
31.9 Decision of the hearing official.
31.10 Request for repayment agreement.
31.11 Offset process.

    Authority: 5 U.S.C. 5514; 31 U.S.C. 3716.

    Source: 54 FR 31821, Aug. 19, 1989, unless otherwise noted.



Sec. 31.1  Scope.

    (a) General. The Secretary establishes the standards and procedures
in this part that apply to the offset from disposable pay of a current
or former Federal employee or from amounts payable from the Federal
retirement account of a former Federal employee to recover a debt owed
the United States under a program adminstered by the Secretary of
Education.
    (b) Exclusions. This part does not apply to--
    (1) Offsets under 34 CFR part 32 to recover for overpayments of pay
or allowances to an employee of the Department;
    (2) Offsets under 34 CFR part 30; or
    (3) Offsets under section 124 of Pub. L. 97-276 to collect debts
owed to the United States on judgments.
    (c) Reports to consumer reporting agency. The Secretary may report a
debt to a consumer reporting agency after notifying the employee, in
accordance with 34 CFR 30.35, of the intention to report the debt, and
after providing the employee an opportunity to inspect documents,
receive a hearing, and enter into a repayment agreement under this part.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3711; 31 U.S.C. 3716)



Sec. 31.2  Definitions.

    As used in this part:
    Agency means--
    (1) An Executive agency as defined in 5 U.S.C. 105, including the
U.S. Postal Service and the U.S. Postal Rate Commission;
    (2) A military department as defined in 5 U.S.C. 102;
    (3) An agency or court in the judicial branch, including a court as
defined in 28 U.S.C. 610, the District Court for the Northern Mariana
Islands, and the Judicial Panel on Multidistrict Litigation;
    (4) An agency of the legislative branch, including the U.S. Senate
and the U.S. House of Representatives; and
    (5) Any other independent establishment that is an entity of the
Federal Government.
    Days refer to calendar days.
    Department means the Education Department.
    Disposable pay means the amount that remains from an employee's pay
after required deductions for Federal, State, and local income taxes;
Social Security taxes, including Medicare taxes; Federal retirement
programs; premiums for basic life insurance and health insurance
benefits; and such other deductions that are required by law to be
withheld.
    Employee means a current or former employee of an agency. In the
case of an offset proposed to collect a debt owed by a deceased
employee, the references in this part to the employee shall be read to
refer to the payee of benefits from the Federal retirement account or
other pay of the employee.
    Federal retirement account means an account of an employee under the
Civil Service Retirement System or the Federal Employee Retirement
System.

[[Page 61]]

    Offset means a deduction from the pay of an employee, or a payment
due from the Federal retirement account of an employee, to satisfy a
debt.
    Pay means basic pay, special pay, incentive pay, retired pay,
retainer pay, or, in the case of an individual not entitled to basic
pay, other authorized pay, including severance pay or lump sum payments
for accrued annual leave, and amounts payable from the Federal
retirement account of an employee.
    Secretary means the Secretary of the Department of Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.3  Pre-offset notice.

    (a) At least 65 days before initiating an offset against the pay of
an employee, the Secretary sends a written notice to the employee
stating--
    (1) The nature and amount of the debt;
    (2) A demand for payment of the debt;
    (3) The manner in which the Secretary charges interest,
administrative costs, and penalties on the debt;
    (4) The Secretary's intention to collect the debt by offset
against--
    (i) 15 percent of the employee's current disposable pay; and
    (ii) If the debt cannot be satisfied by offset against current
disposable pay, a specified amount of severance pay, a lump sum annual
leave payment, a final salary check, or payments from the Federal
retirement account of the employee;
    (5) The amount, frequency, approximate beginning date and duration
of the proposed offset;
    (6) The employee's opportunity to--
    (i) Inspect and copy Department records pertaining to the debt;
    (ii) Obtain a pre-offset hearing before a hearing official who is
not under the control or supervision of the Secretary regarding the
existence or amount of the debt, or the proposed offset schedule; and
    (iii) Enter into a written agreement with the Secretary to repay the
debt;
    (7) The date by which the employee must request an opportunity set
forth under paragraph (a)(6) of this section;
    (8) The grounds for objecting to collection of the debt by offset;
    (9) The applicable hearing procedures and requirements;
    (10) That the Secretary grants any request for access to records,
for a hearing, or for a satisfactory repayment agreement made by an
employee;
    (11) That the Secretary does not delay the start of the proposed
offset, or suspend an offset already commenced, unless--
    (i) An employee makes the request for access to records or for a
hearing, or enters into a repayment agreement that is acceptable to the
Secretary, before the deadlines described in this part; or
    (ii) An employee requests a hearing after the deadlines established
in Sec. 31.5(a), but submits evidence satisfactory to the Secretary
that the request was not made in a timely manner because the employee
did not have notice of the proposed offset, or was prevented from making
the request by factors beyond his or her control, until after the
deadlines had passed;
    (12) That a final decision on the hearing will be issued not later
than 60 days after the date on which the employee files a request for a
hearing under Sec. 31.5, unless a delay in the proceedings is granted
at the request of the employee;
    (13) That submission by the employee of knowingly false statements,
representations or evidence may subject the employee to applicable
disciplinary procedures, or civil or criminal penalties; and
    (14) That any amounts paid or collected by offset on a debt later
determined to be unenforceable or canceled will be refunded to the
employee.
    (b)(1) In determining whether an employee has requested an
opportunity set forth under paragraph (a)(6) of this section in a timely
manner, the Secretary relies on--
    (i) A legibly dated U.S. Postal Service postmark for the employee's
request; or
    (ii) A legibly stamped U.S. Postal Service mail receipt for the
employee's request.

[[Page 62]]

    (2) The Secretary does not rely on either of the following as proof
of mailing:
    (i) A private metered postmark.
    (ii) A mail receipt that is not dated by the U.S. Postal Service.
    (c) Payment by offset under this part of all or part of a debt does
not constitute an acknowledgment of the debt or a waiver of rights
available to the employee under this part or other applicable law if the
employee has not agreed in writing to the offset.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.4  Request to inspect and copy documents relating to a debt.

    (a) The Secretary makes available for inspection and copying before
offset under this part those Department documents that relate to the
debt, if the employee--
    (1) Files a written request to inspect and copy the documents within
20 days of the date of the pre-offset notice under Sec. 31.3, and
    (2) Files the request at the address specified in that notice.
    (b) A request filed under paragraph (a)(1) of this section must
contain--
    (1) All information provided to the employee in the pre-offset
notice under Sec. 31.3 that identifies the employee and the debt,
including the employee's Social Security number and the program under
which the debt arose, together with any corrections of that identifying
information; and
    (2) A reasonably specific identification of the documents that the
employee wishes to have available for inspection and copying.
    (c) The Secretary makes available documents for inspection and
copying upon request by the employee. However, the Secretary may
initiate an offset before making the requested documents available if
the employee fails to request inspection and copying in accordance with
this section.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.5  Request for hearing on the debt or the proposed offset.

    (a) Deadlines. (1) The Secretary provides a hearing before offset on
the existence, amount, or enforceability of the debt described in the
pre-offset notice provided under Sec. 31.3, or on the amount or
frequency of the offsets as proposed in that notice, if the employee--
    (i) Files a request for the hearing within the later of--
    (A) 65 days after the date of the pre-offset notice provided under
Sec. 31.3; or
    (B) 15 days after the date on which the Secretary makes available to
the employee the relevant, requested documents if the employee had
requested an opportunity to inspect and copy documents within 20 days of
the date of the pre-offset notice provided under Sec. 31.3; and
    (ii) Files a request at the address specified in that notice.
    (2) The Secretary provides a hearing upon request by the employee.
However, if the employee does not submit, within the deadlines in
paragraph (a)(1) of this section, a request that meets the requirements
of paragraphs (b) and (c) of this section, the Secretary does not delay
the start of an offset, or suspend an offset already commenced, unless
the employee submits evidence satisfactory to the Secretary that the
request was not made in a timely manner because the employee did not
have notice of the proposed offset, or was otherwise prevented from
making the request by factors beyond his or her control, until after the
deadlines had passed.
    (b) Contents of request for a hearing. A request for a hearing must
contain--
    (1) All information provided to the employee in the pre-offset
notice under Sec. 31.3 that identifies the employee and the particular
debt, including the employee's Social Security number and the program
under which the debt arose, together with any corrections needed with
regard to that identifying information;
    (2) An explanation of the reasons why the employee believes that--
    (i) The debt as stated in the pre-offset notice is not owing or is
not enforceable by offset; or
    (ii) The amount of the proposed offset described in the pre-offset
notice will cause extreme financial hardship to the employee;
    (3) If the employee contends that the amount of the proposed offset
will

[[Page 63]]

cause extreme financial hardship under the standards set forth in Sec.
31.8(b)--
    (i) An alternative offset proposal;
    (ii) An explanation, in writing, showing why the offset proposed in
the notice would cause an extreme financial hardship for the employee;
and
    (iii) Documents that show for the employee and for the spouse and
dependents of the employee, for the one-year period preceding the
Secretary's notice and for the repayment period proposed by the employee
in his or her offset schedule--
    (A) Income from all sources,
    (B) Assets,
    (C) Liabilities,
    (D) Number of dependents,
    (E) Expenses for food, housing, clothing, and transportation,
    (F) Medical expenses, and
    (G) Exceptional expenses, if any; and
    (4) Copies of all documents that the employee wishes to have
considered to support the objections raised by the employee regarding
the enforceability of the debt or the claim of extreme financial
hardship.
    (c) Request for oral hearing. (1) If the employee wants the hearing
to be conducted as an oral hearing, the employee must submit a request
that contains the information listed in paragraph (b) and must include
with the request--
    (i) An explanation of reasons why the employee believes that the
issues raised regarding the enforceability of the debt or a claim of
extreme financial hardship cannot be resolved adequately by a review of
the written statements and documents provided with the request for a
hearing;
    (ii) An identification of--
    (A) The individuals that the employee wishes to have testify at the
oral hearing;
    (B) The specific issues about which each individual is prepared to
testify; and
    (C) The reasons why each individual's testimony is necessary to
resolve the issue.
    (2) The Secretary grants a request for an oral hearing if--
    (i) The employee files a request for an oral hearing that meets the
requirements of paragraphs (b) and (c) of this section; and
    (ii) The Secretary determines that the issues raised by the employee
require a determination of the credibility of testimony and cannot be
adequately resolved by a review of the written statements and documents
submitted by the employee and documents contained in the Department's
records relating to the debt.
    (3) The Secretary may decline a request for an oral hearing if the
Secretary accepts the employee's proffer of testimomy made in the
request for an oral hearing under paragraph (c)(1) of this section, and
considers the facts at issue to be established as stated by the employee
in the request.
    (4) If the Secretary grants a request for an oral hearing, the
Secretary--
    (i) Notifies the employee in writing of--
    (A) The date, time, and place of the hearing;
    (B) The name and address of the hearing official;
    (C) The employee's right to be represented at the hearing by counsel
or other representatives;
    (D) The employee's right to present and cross-examine witnesses; and
    (E) The employee's right to waive the requested oral hearing and
receive a hearing in the written record; and
    (ii) Provides the hearing official with a copy of all written
statements submitted by the employee with the request for a hearing, and
all documents pertaining to the debt or the amount of the offset
contained in the Department's files on the debt or submitted with the
request for a hearing.
    (d) Employee choice of oral hearing or hearing on written
submissions. An employee who has been sent notice under paragraph (c)(4)
that an oral hearing will be provided must, within 15 days of the date
of that notice, state in writing to the hearing official and the
Secretary--
    (1) Whether the employee intends to proceed with the oral hearing,
or wishes a decision based on the written record; and
    (2) Any changes in the list of the witnesses the employee proposes
to produce for the hearing, or the facts about which a witness will
testify.
    (e) Dismissal of request for hearing. The Secretary considers the
employee to

[[Page 64]]

have waived the request for a hearing of any kind--
    (1) If an employee does not provide the hearing official in a timely
manner the written statement required under paragraph (d) of this
section; or
    (2) If the employee does not appear for a scheduled oral hearing.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.6  Location and timing of oral hearing.

    (a) If the Secretary grants a request for an oral hearing, the
Secretary selects the time, date, and location of the hearing. The
Secretary selects, to the extent feasible, the location that is most
convenient for the employee.
    (b) For a current military employee, the Secretary selects the time,
date, and location of the hearing after consultation with the Secretary
of Defense.
    (c) For a current Coast Guard employee, the Secretary selects the
time, date, and location of the hearing after consultation with the
Secretary of Transportation.
    (d) For an employee not described in paragraph (a) or (b) of this
section, the hearing will be held in Washington, DC, or in one of the
following cities: Boston, Philadelphia, New York, Atlanta, Chicago,
Dallas, Kansas City, Denver, San Francisco, or Seattle.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.7  Hearing procedures.

    (a) Independence of hearing official. A hearing provided under this
part is conducted by a hearing official who is neither an employee of
the Department nor otherwise under the supervision or control of the
Secretary.
    (b) Lack of subpoena authority or formal discovery. (1) Neither the
hearing official nor the Secretary has authority to issue subpoenas to
compel the production of documents or to compel the attendance of
witnesses at an oral hearing under this part. The Secretary will attempt
to make available during an oral hearing the testimony of a current
official of the Department if--
    (i) The employee had identified the official in the request for a
hearing under Sec. 31.5(b) and demonstrated that the testimony of the
official is necessary to resolve adequately an issue of fact raised by
the employee in the request for a hearing; and
    (ii) The Secretary determines that the responsibilities of the
official permit his or her attendance at the hearing.
    (2) If the Secretary determines that the testimony of a Department
official is necessary, but that the official cannot attend an oral
hearing to testify, the Secretary attempts to make the official
available for testimony at the hearing by means of a telephone
conference call.
    (3) No discovery is available in a proceeding under this part except
as provided in Sec. 31.4.
    (c) Hearing on written submissions. If a hearing is conducted on the
written submissions, the hearing official reviews documents and
responses submitted by the Secretary and the employee under Sec. 31.5.
    (d) Conduct of oral hearing. (1) The hearing official conducts an
oral hearing as an informal proceeding. The official--
    (i) Administers oaths to witnesses;
    (ii) Regulates the course of the hearing;
    (iii) Considers the introduction of evidence without regard to the
rules of evidence applicable to judicial proceedings; and
    (iv) May exclude evidence that is redundant, or that is not relevant
to those issues raised by the employee in the request for hearing under
Sec. 31.5 that remain in dispute.
    (2) An oral hearing is generally open to the public. However, the
hearing official may close all or any portion of the hearing if doing so
is in the best interest of the employee or the public.
    (3) The hearing official may conduct an oral hearing by telephone
conference call--
    (i) If the employee is located in a city outside the Washington, DC
Metropolitan area.
    (ii) At the request of the employee.
    (iii) At the discretion of the hearing official.
    (4) No written record is created or maintained of an oral hearing
provided under this part.
    (e) Burden of proof. In any hearing under this part--

[[Page 65]]

    (1) The Secretary bears the burden of proving, by a preponderance of
the evidence, the existence and amount of the debt, and the failure of
the employee to repay the debt, as the debt is described in the pre-
offset notice provided under Sec. 31.3; and
    (2) The employee bears the burden of proving, by a preponderance of
the evidence--
    (i) The existence of any fact that would establish that the debt
described in the pre-offset notice is not enforceable by offset; and
    (ii) The existence of any fact that would establish that the amount
of the proposed offset would cause an extreme financial hardship for the
employee.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.8  Rules of decision.

    (a) Enforceability of debt by offset. In deciding whether the
Secretary has established that the debt described in the pre-offset
under Sec. 31.3 is owed by the employee, or whether the employee has
established that the debt is not enforceable by offset, the hearing
official shall apply the principles in this paragraph.
    (1) The statutes and Department regulations authorizing and
implementing the program under which the debt arose must be applied in
accordance with official written interpretations by the Department.
    (2) The principles of res judicata and collateral estoppel apply to
resolution of disputed facts in those instances in which the debt or
material facts in dispute have been the subject of prior judicial
decision.
    (3) The act or omission of an institution of higher education at
which the employee was enrolled does not constitute a defense to
repayment of an obligation with regard to a grant or loan under a
program authorized under Title IV of the Higher Education Act or similar
authority, except to the extent that--
    (i) The act or omission constitutes a defense to the debt under
applicable Federal or State law;
    (ii) The institution owed the employee a refund under its refund
policy and failed to pay that refund to the employee or to a lender
holding a loan made to the employee; or
    (iii) The institution ceased teaching activity while the employee
was in attendance and during the academic period for which the grant or
loan was made, and failed to refund to the employee or holder of a loan
to the employee a proportionate amount of the grant or loan funds used
to pay tuition and other institutional charges for that academic period.
    (4)(i) A debt otherwise established as owed by the employee is
enforceable by offset under this part if the Secretary sends the pre-
offset notice for the debt within the ten year period following the
later of--
    (A) The date on which the Secretary acquired the debt by assignment
or referral, or
    (B) The date of a subsequent partial payment reaffirming the debt.
    (ii) Periods during which the statute of limitations applicable to a
lawsuit to collect the debt has been tolled under 11 U.S.C. 108, 28
U.S.C. 2416, 50 U.S.C. App. 525, or other authority are excluded from
the calculation of the ten year period described in paragraph (a)(4)(i)
of this section.
    (b) Extreme financial hardship. (1) In deciding whether an employee
has established that the amount of the proposed offset would cause
extreme financial hardship to the employee, the hearing official shall
determine whether the credible, relevant evidence submitted demonstrates
that the proposed offset would prevent the employee from meeting the
costs necessarily incurred for essential subsistence expenses of the
employee and his or her spouse and dependents.
    (2) For purposes of this determination, essential subsistence
expenses include costs incurred only for food, housing, clothing,
essential transportation and medical care.
    (3) In making this determination, the hearing official shall
consider--
    (i) The income from all sources of the employee, and his or her
spouse and dependents;
    (ii) The extent to which the assets of the employee and his or her
spouse and dependents are available to meet the offset and the essential
subsistence expenses;

[[Page 66]]

    (iii) Whether these essential subsistence expenses have been
minimized to the greatest extent possible;
    (iv) The extent to which the employee and his or her spouse and
dependents can borrow to satisfy the debt to be collected by offset or
to meet essential expenses; and
    (v) The extent to which the employee and his or her spouse and
dependents have other exceptional expenses that should be taken into
account, and whether these expenses have been minimized.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.9  Decision of the hearing official.

    (a) The hearing official issues a written opinion within sixty days
of the date on which the employee filed a request for a hearing under
Sec. 31.5, unless a delay in the proceedings has been granted at the
request of the employee. In the opinion, the hearing official states his
or her decision and the findings of fact and conclusions of law on which
the decision is based.
    (b) If the hearing official finds that a portion of the debt
described in the pre-offset notice under Sec. 31.3 is not enforceable
by offset, the official shall state in the opinion that portion which is
enforceable by offset.
    (c) If the hearing official finds that the amount of the offset
proposed in the pre-offset notice will cause an extreme financial
hardship for the employee, the hearing official shall establish an
offset schedule that will result in the repayment of the debt in the
shortest period of time without producing an extreme financial hardship
for the employee.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.10  Request for repayment agreement.

    (a) The Secretary does not initiate an offset under this part if the
employee agrees in writing to repay the debt under terms acceptable to
the Secretary and makes the first payment due under the agreement on or
before the latest of--
    (1) The seventh day after the date of the decision of the hearing
official, if the employee timely requested a hearing under Sec. 31.5
(a) and (d);
    (2) The sixty-fifth day after the date of the pre-offset notice
under Sec. 31.3 if the employee did not timely request either a hearing
in accordance with Sec. 31.5 (a) and (d) or an opportunity to inspect
and copy documents related to the debt under Sec. 31.4; or
    (3) The fifteenth day after the date on which the Secretary made
available documents related to the debt, if the employee filed a timely
request for documents under Sec. 31.4.
    (b) In the agreement, the Secretary and the employee may agree to
satisfaction of the debt from sources other than an offset under this
part, or may modify the amount proposed to be offset in the pre-offset
notice or estimated in the decision of the hearing official.
    (c) If the employee does not enter into a repayment agreement
acceptable to the Secretary within the deadlines in this section, the
Secretary may initiate an offset under this part. The Secretary
continues to collect by offset until an employee enters in a
satisfactory repayment agreement for the debt. The Secretary suspends an
offset already commenced under circumstances described in Sec.
31.5(a)(2).

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 31.11  Offset process.

    (a) The Secretary attempts to collect debts under this part within
the shortest time authorized under--
    (1) The offset schedule proposed in the pre-offset notice, unless
modified by agreement or by the decision of a hearing official;
    (2) A written repayment agreement with the employee; or
    (3) The offset schedule established in the decision of the hearing
official.
    (b) In proposing an offset schedule under Sec. 31.3 or establishing
a repayment agreement under Sec. 31.10, the Secretary also considers
the expected period of Federal employment of the employee.
    (c) Unless the Secretary determines, in his discretion, to delay or
suspend collection, the Secretary effects an offset under this part--
    (1) According to the terms agreed to by the employee pursuant to a
timely request under Sec. 31.10 to enter into a repayment agreement;
or,

[[Page 67]]

    (2) After the deadlines in Sec. 31.10(b) for requesting a repayment
agreement with the Secretary.
    (d) If the employee retires, resigns, or leaves Federal employment
before the debt is satisfied, the Secretary collects the amount
necessary to satisfy the debt by offset from subsequent payments of any
kind, including a final salary payment or a lump sum annual leave
payment, due the employee on the date of separation. If the debt cannot
be satisfied by offset from any such final payment due the employee on
the date of separation, the Secretary collects the debt from later
payments of any kind due the employee in accordance with the provisions
of 4 CFR 102.4.
    (e) The Secretary effects an offset under this part against payments
owing to an employee of another Federal agency after completion of the
requirements of this part, in accordance with the provisions of 5 CFR
550.1108.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



PART 32_SALARY OFFSET TO RECOVER OVERPAYMENTS OF PAY OR ALLOWANCES
FROM DEPARTMENT OF EDUCATION EMPLOYEES--Table of Contents



Sec.
32.1 Scope.
32.2 Definitions.
32.3 Pre-offset notice.
32.4 Employee response.
32.5 Pre-offset hearing--general.
32.6 Request for a pre-offset hearing.
32.7 Pre-offset oral hearing.
32.8 Pre-offset hearing on the written submissions.
32.9 Written decision.
32.10 Deductions process.

    Authority: 5 U.S.C. 5514; 31 U.S.C. 3716.

    Source: 52 FR 24957, July 1, 1987, unless otherwise noted.



Sec. 32.1  Scope.

    (a) The Secretary establishes the standards and procedures in this
part that apply to the deductions through offset from disposable pay of
a current or former employee of the Department of Education to recover
overpayments of pay or allowances.
    (b) This part does not apply to--
    (1) Recovery through offset of an indebtedness to the United States
by an employee of the Department under a program administered by the
Secretary of Education covered under 34 CFR part 31;
    (2) The offset of an indebtedness to the United States by a Federal
employee to satisfy a judgment obtained by the United States against
that employee in a court of the United States;
    (3) The offset of any payment to an employee of the Department of
Education which is expressly allowed under statutes other than 5 U.S.C.
5514, except as to offsets of severance pay and/or lump sum annual leave
payments as authorized under 31 U.S.C. 3716;
    (4) Offsets under 34 CFR part 30; or
    (5) An employee election of coverage or of a change of coverage
under a Federal benefits program which requires periodic deductions from
pay if the amount to be recovered was accumulated over four pay periods
or less.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.2  Definitions.

    The following definitions apply to this part:
    Department means the Department of Education.
    Disposable pay means the amount that remains from an employee's pay
after required deductions for Federal, State, and local income taxes;
Social Security taxes, including Medicare taxes; Federal retirement
programs; premiums for health and basic life insurance benefits; and
such other deductions that are required by law to be withheld.
    Employee means a current or former employee of the Department.
    Former employee means a former employee of the Department who is
entitled to pay from the Department or another agency.
    Pay means basic pay, special pay, incentive pay, retired pay,
retainer pay, or, in the case of an individual not entitled to basic
pay, other authorized pay, including severance pay and/or lump sum
payments for accrued annual leave.
    Paying agency means a Federal agency currently employing an
individual and authorizing the payment of his or her current pay.
    Secretary means the Secretary of the Department of Education or an
official

[[Page 68]]

or employee of the Department acting for the Secretary under a
delegation of authority.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.3  Pre-offset notice.

    At least 30 days before initiating a deduction from the disposable
pay of an employee to recover an overpayment of pay or allowances, the
Secretary sends a written notice to the employee stating--
    (a) The origin, nature and amount of the overpayment;
    (b) How interest is charged and administrative costs and penalties
will be assessed, unless excused under 31 U.S.C. 3716;
    (c) A demand for repayment, providing for an opportunity for the
employee to enter into a written repayment agreement with the
Department;
    (d) Where a waiver of repayment is authorized by law, the employee's
right to request a waiver;
    (e) The Department's intention to deduct 15 percent of the
employee's disposable pay, or a specified amount if the disposable pay
is severance pay and/or a lump sum annual leave payment, to recover the
overpayment if a waiver is not granted by the Secretary and the employee
fails to repay the overpayment or enter into a written repayment
agreement;
    (f) The amount, frequency, approximate beginning date and duration
of the intended deduction;
    (g) If Government records on which the determination of overpayment
are not attached, how those records will be made available to the
employee for inspection and copying;
    (h) The employee's right to request a pre-offset hearing concerning
the existence or amount of the overpayment or an involuntary repayment
schedule;
    (i) The applicable hearing procedures and requirements, including a
statement that a timely petition for hearing will stay commencement of
collection proceedings and that a final decision on the hearing will be
issued not later than 60 days after the hearing petition is filed,
unless a delay is requested and granted;
    (j) That any knowingly false or frivolous statements,
representations or evidence may subject the employee to applicable
disciplinary procedures, civil or criminal penalties; and
    (k) That where amounts paid or deducted are later waived or found
not owed, unless otherwise provided by law, they will be promptly
refunded to the employee.

(Authority: 5 U.S.C. 5514, 31 U.S.C. 3716)



Sec. 32.4  Employee response.

    (a) Voluntary repayment agreement. Within 7 days of receipt of the
written notice under Sec. 32.3, the employee may submit a request to
the Secretary to arrange for a voluntary repayment schedule. To arrange
for a voluntary repayment schedule, the employee shall submit a
financial statement and sign a written repayment agreement approved by
the Secretary. An employee who arranges for a voluntary repayment
schedule may nonetheless request a waiver of the overpayment under
paragraph (b) of this section.
    (b) Waiver. An employee seeking a waiver of collection of the debt
that is authorized by law must request the waiver in writing to the
Secretary within 10 days of receipt of the written notice under Sec.
32.3. The employee must state why he or she believes a waiver should be
granted.
    (c) Involuntary repayment schedule. If the employee claims that the
amount of the involuntary deduction will cause extreme financial
hardship and should be reduced, he or she must submit a written
explanation and a financial statement signed under oath or affirmation
to the Secretary within 10 days of receipt of the written notice under
Sec. 32.3. An employee who fails to submit this financial information
in a timely manner waives the right to object to the involuntary
repayment schedule at a hearing under Sec. 32.5. The Secretary notifies
the employee, in writing, whether the Secretary will reduce the rate of
the involuntary deduction.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.5  Pre-offset hearing--general.

    (a) An employee who wishes a review of the existence or amount of
the overpayment or an involuntary repayment schedule may request a pre-
offset hearing. The pre-offset hearing does not review:

[[Page 69]]

    (1) The denial of a waiver of repayment under 5 U.S.C. 5584;
    (2) The involuntary repayment schedule or financial hardship caused
by the amount of the involuntary deduction from the employee's
disposable pay, unless the employee has submitted the financial
statement and written explanation required under Sec. 32.4(c); and
    (3) The determination under paragraph (b) of this section that the
pre-offset hearing is on the written submissions.
    (b) Unless the Secretary determines that a matter reviewable under
paragraph (a) of this section turns on an issue of credibility or
veracity or cannot be resolved by a review of the documentary evidence,
the pre-offset hearing is on the written submissions.
    (c) A pre-offset hearing is based on the written submissions for
overpayments arising from:
    (1) A termination of a temporary promotion;
    (2) A cash award;
    (3) An erroneous salary rate;
    (4) Premature granting of a within-grade increase;
    (5) A lump sum payment for annual leave;
    (6) Unauthorized appointment to a position;
    (7) An error on time and attendance records; or
    (8) Other circumstances where the Secretary determines that an oral
hearing is not required.
    (d) The hearing is conducted by a hearing official who is not an
employee of the Department or under the supervision or control of the
Secretary.
    (e) Formal discovery between the parties is not provided.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.6  Request for a pre-offset hearing.

    (a) Except for an employee who has requested a waiver of collection
of the debt under Sec. 32.4(b), an employee who wishes a pre-offset
hearing must request the hearing within 15 days of receipt of the
written notice given under Sec. 32.3. The Secretary waives the 15-day
requirement if the employee shows that the delay was because of
circumstances beyond his or her control or because of failure to receive
notice and lack of knowledge of the time limit.
    (b) An employee who has requested a waiver under Sec. 32.4(b) may
request a hearing within 10 days of receipt of a determination by the
Secretary denying a waiver.
    (c) The request for a hearing must:
    (1) Be in writing;
    (2) State why the employee:
    (i) Contests the existence or amount of the overpayment; or
    (ii) Claims that the involuntary repayment schedule will cause
extreme financial hardship;
    (3) Include all documents on which the employee is relying, other
than those provided by the Secretary under Sec. 32.3; any document
which is a statement of an individual must be in the form of an
affidavit; and
    (4) Be submitted to the designated hearing official with a copy to
the Secretary.
    (d) If the employee timely requests a pre-offset hearing or the
timelines are waived under paragraph (a) of this section, the Secretary:
    (1) Notifies the employee whether the employee may elect an oral
hearing; and
    (2) Provides the hearing official with a copy of all records on
which the determination of the overpayment and any involuntary repayment
schedule are based.
    (e) An employee who has been given the opportunity to elect an oral
hearing and who does elect an oral hearing must notify the hearing
official and the Secretary of his or her election in writing within 7
days of receipt of the notice under paragraph (d)(1) of this section and
must identify all proposed witnesses and all facts and evidence about
which they will testify.
    (f) Where an employee requests an oral hearing, the hearing official
notifies the Secretary and the employee of the date, time, and location
of the hearing. However:
    (1) The employee subsequently may elect to have the hearing based
only on the written submissions by notifying the hearing official and
the Secretary at least 3 calendar days before the date of the oral
hearing. The hearing official may waive the 3-day requirement

[[Page 70]]

for good cause when the employee notifies the hearing official before
the date of the hearing; and
    (2) The request for a hearing of an employee who fails to appear at
the oral hearing must be dismissed and the Secretary's decision
affirmed.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.7  Pre-offset oral hearing.

    (a) Oral hearings are informal in nature. The Secretary and the
employee, through their representatives, and by reference to the
documentation submitted, explain their case. The employee may testify on
his or her own behalf, subject to cross examination. Other witnesses may
be called to testify only where the hearing official determines that
their testimony is relevant and not redundant.
    (b) The hearing official shall:
    (1) Conduct a fair and impartial hearing; and
    (2) Preside over the course of the hearing, maintain decorum, and
avoid delay in the disposition of the hearing.
    (c) The employee may represent himself or herself or may be
represented by another person at the hearing. The employee may not be
represented by a person whose representation creates an actual or
apparent conflict of interest.
    (d) Oral hearings are open to the public. However, the hearing
official may close all or any portion of the hearing where to do so is
in the best interests of the employee or the public.
    (e) Oral hearings may be conducted by conference call--
    (1) If the employee is located in a city outside the Washington, DC
Metropolitan area;
    (2) At the request of the employee; or
    (3) At the discretion of the hearing official.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.8  Pre-offset hearing on the written submissions.

    If a hearing is to be held on the written submissions, the hearing
official reviews the records and responses submitted by the Secretary
and the employee under Sec. 32.6.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.9  Written decision.

    (a) The hearing official issues a written decision stating the facts
supporting the nature and origin of the debt and the hearing official's
analysis, findings and conclusions as to the amount of the debt and the
repayment schedule within 60 days of filing of the employee's request
for a pre-offset hearing, unless the employee requests, and the hearing
official grants, a delay in the proceedings.
    (b) The hearing official decides whether the Secretary's
determination of the existence and the amount of the overpayment or the
extreme financial hardship caused by the involuntary repayment schedule
is clearly erroneous. A determination is clearly erroneous if although
there is evidence to support the determination, the hearing official,
considering the record as a whole, is left with a definite and firm
conviction that a mistake was made.
    (c) In making the decision, the hearing official is governed by
applicable Federal statutes, rules and regulations.
    (d) The hearing official decides the issue of extreme financial
hardship caused by the involuntary repayment schedule only where the
employee has submitted the financial statement and written explanation
required under Sec. 32.4(c). Where the hearing official determines that
the involuntary repayment schedule creates extreme financial hardship,
he or she must establish a schedule that alleviates the financial
hardship but may not reduce the involuntary repayment schedule to a
deduction of zero percent.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



Sec. 32.10  Deductions process.

    (a) Debts must be collected in one lump sum where possible. If the
employee does not agree to a lump sum that exceeds 15 percent of
disposable pay, the debt must be collected in installment deductions at
officially established pay intervals in the amount established under:
    (1) A voluntary repayment agreement;
    (2) An involuntary repayment schedule where no hearing is requested;
or
    (3) The schedule established under the written hearing decision.

[[Page 71]]

    (b) Installment deductions must be made over a period not greater
than the anticipated period of employment, except as provided under
paragraph (d) of this section. If possible, the installment payment must
be sufficient in size and frequency to liquidate the debt in, at most,
three years. Installment payments of less than $25 may be accepted only
in the most unusual circumstances.
    (c) Deductions must begin:
    (1) After the employee has entered a voluntary repayment schedule;
    (2) If a waiver is requested under Sec. 32.4(b), after the employee
has been denied a waiver by the Secretary; or
    (3) If a hearing is requested under Sec. 32.5, after a written
decision.
    (d) If the employee retires or resigns or his or her employment ends
before collection of the debt is completed, the amount necessary to
liquidate the debt must be offset from subsequent payments of any nature
(for example, final salary payment and/or lump sum annual leave payment)
due the employee on the date of separation. If the debt cannot be
liquidated by offset from any such final payment due the employee on the
date of separation, the debt must be liquidated by administrative offset
pursuant to 31 U.S.C. 3716 from later payments of any kind due the
employee, where appropriate. After the Secretary has complied with the
procedures in this part, the Secretary may refer the debt to a paying
agency for collection by offset under 5 CFR 550.1108.
    (e) Interest, penalties and administrative costs on debts collected
under this part must be assessed, in accordance with the provisions of 4
CFR 102.13.
    (f) An employee's payment, whether voluntary or involuntary, of all
or any portion of an alleged debt collected pursuant to this part may
not be construed as a waiver of any rights which the employee may have
under this part or any other provision of law, except as otherwise
provided by law.
    (g) Amounts paid or deducted pursuant to this part by an employee
for a debt that is waived or otherwise found not owing to the United
States or which the Secretary is ordered to refund must be promptly
refunded to the employee.

(Authority: 5 U.S.C. 5514; 31 U.S.C. 3716)



PART 33_PROGRAM FRAUD CIVIL REMEDIES ACT--Table of Contents



Sec.
33.1 Basis and purpose.
33.2 Definitions.
33.3 Basis for civil penalties and assessments.
33.4 Investigation.
33.5 Review by the reviewing official.
33.6 Prerequisites for issuing a complaint.
33.7 Complaint.
33.8 Service of complaint.
33.9 Answer.
33.10 Default upon failure to file an answer.
33.11 Referral of complaint and answer to the ALJ.
33.12 Notice of hearing.
33.13 Parties to the hearing.
33.14 Separation of functions.
33.15 Ex parte contacts.
33.16 Disqualification of reviewing official or ALJ.
33.17 Rights of parties.
33.18 Authority of the ALJ.
33.19 Prehearing conferences.
33.20 Disclosure of documents.
33.21 Discovery.
33.22 Exchange of witness lists, statements and exhibits.
33.23 Subpoenas for attendance at hearing.
33.24 Protective order.
33.25 Fees.
33.26 Form, filing and service of papers.
33.27 Computation of time.
33.28 Motions.
33.29 Sanctions.
33.30 The hearing and burden of proof.
33.31 Determining the amount of penalties and assessments.
33.32 Location of hearing.
33.33 Witnesses.
33.34 Evidence.
33.35 The record.
33.36 Post-hearing briefs.
33.37 Initial decision.
33.38 Reconsideration of initial decision.
33.39 Appeal to Department head.
33.40 Stays ordered by the Department of Justice.
33.41 Stay pending appeal.
33.42 Judicial review.
33.43 Collection of civil penalties and assessments.
33.44 Right to administrative offset.
33.45 Deposit in Treasury of United States.
33.46 Compromise or settlement.
33.47 Limitations.

    Authority: 31 U.S.C. 3801-3812.

[[Page 72]]


    Source: 53 FR 15675, May 3, 1988, unless otherwise noted.



Sec. 33.1  Basis and purpose.

    (a) Basis. This part implements the Program Fraud Civil Remedies Act
of 1986, Pub. L. No. 99-509, 6101 through 6104, 100 Stat. 16674 (October
21, 1986), to be codified at 31 U.S.C. 3801 through 3812. This law (31
U.S.C. 3809) requires each Federal department head to promulgate
regulations necessary to implement the provisions of the statute.

(Authority: 31 U.S.C. 3809)

    (b) Purpose. This part:
    (1) Establishes administrative procedures for imposing civil
penalties and assessments against persons who make, submit, or present,
or cause to be made, submitted, or presented, false, fictitious, or
fraudulent claims or written statements to the Department or to its
agents; and
    (2) Specifies the hearing and appeal rights of persons subject to
allegations of liability for those penalties and assessments.

(Authority: 31 U.S.C. 3809)



Sec. 33.2  Definitions.

    As used in this part:
    ALJ means an Administrative Law Judge in the Department appointed
pursuant to 5 U.S.C. 3105 or detailed to the Department pursuant to 5
U.S.C. 3344.

(Authority: 31 U.S.C. 3801(a)(7)(A))

    Benefits, as used in the definition of ``statement,'' means anything
of value, including but no limited to any advantage, preference,
privilege, license, permit, favorable decision, ruling, status, or loan
guarantee.

(Authority: 31 U.S.C. 3809)

    Claim means any request, demand, or submission:
    (a) Made to the Department for property, services, or money
(including money representing grants, cooperative agreements, loans,
insurance, or benefits);
    (b) Made to a recipient of property, services, or money from the
Department or to a party to a contract or agreement with the Department:
    (1) For property or services if the United States:
    (i) Provided the property or services;
    (ii) Provided any portion of the funds for the purchase of the
property or services; or
    (iii) Will reimburse the recipient or party for the purchase of the
property or services; or
    (2) For the payment of money (including money representing grants,
cooperative agreements, loans, insurance, or benefits) if the United
States:
    (i) Provided any portion of the money requested or demanded;
    (ii) Will reimburse the recipient or party for any portion of the
money paid on that request or demand; or
    (iii) Will guarantee or reinsure any portion of a loan made by the
party; or
    (c) Made to the Department which has the effect of decreasing an
obligation to pay or account for property, services, or money.

(Authority: 31 U.S.C. 3801(a)(3))

    Complaint means the administrative complaint served by the reviewing
official on the defendant under Sec. 33.7.

(Authority: 31 U.S.C. 3809)

    Defendant means any person alleged in a complaint under Sec. 33.7
to be liable for a civil penalty or assessment under Sec. 33.3.

(Authority: 31 U.S.C. 3809)

    Department means the United States Department of Education.

(Authority: 31 U.S.C. 3809)

    Department head means the Secretary or Under Secretary of the United
States Department of Education.

(Authority: 31 U.S.C. 3801(a)(2))

    Government means the United States Government.

(Authority: 31 U.S.C. 3809)

    Individual means a natural person.

(Authority: 31 U.S.C. 3809)

    Initial decision means the written decision of the ALJ required by
Sec. 33.10 or Sec. 33.37, and includes a revised initial decision
issued following a remand or a motion for reconsideration.

(Authority: 31 U.S.C. 3803(h))


[[Page 73]]


    Investigating official means the Inspector General of the Department
or an officer or employee of the Office of the Inspector General
designated by the Inspector General and serving in a position for which
the rate of basic pay is not less than the minimum rate of basic pay for
grade GS-16 under the General Schedule.

(Authority: 31 U.S.C. 3801(4)(A)(i))

    Knows or has reason to know, means that a person, with respect to a
claim or statement:
    (a) Has actual knowledge that the claim or statement is false,
fictitious, or fraudulent;
    (b) Acts in deliberate ignorance of the truth or falsity of the
claim or statement; or
    (c) Acts in reckless disregard of the truth or falsity of the claim
or statement.

(Authority: 31 U.S.C. 3801(5))

    Makes includes the terms presents, submits, and causes to be made,
presented, or submitted.

(Authority: 31 U.S.C. 3802(a))

    Person means any individual, partnership, corporation, association,
or private organization.

(Authority: 31 U.S.C. 3801(a)(6))

    Representative means:
    (a) An attorney who is a member in good standing of the bar of any
State, territory, possession of the United States, the District of
Columbia, or the Commonwealth of Puerto Rico; or
    (b) Any other person designated by a party in writing, provided that
the designation includes a certification that the party understands the
nature and consequences of an administrative enforcement action under
this part, and that he or she has the right to representation by counsel
or to self-representation.

(Authority: 31 U.S.C. 3803(g)(2)(F))

    Reviewing official means the General Counsel of the Department or
his or her designee who is:
    (a) Not subject to supervision by, or required to report to, the
investigating official; and
    (b) Not employed in the organizational unit of the Department in
which the investigating official is employed; and
    (c) Serving in a position for which the rate of basic pay is not
less than the minimum rate of basic pay for grade GS-16 under the
General Schedule.

(Authority: 31 U.S.C. 3801(8))

    Statement means any representation, certification, affirmation,
document, record, or accounting or bookkeeping entry made:
    (a) With respect to a claim or to obtain the approval or payment of
a claim (including relating to eligibility to make a claim); or
    (b) With respect to (including relating to eligibility for):
    (1) A contract with, or a bid or proposal for a contract with; or
    (2) A grant, cooperative agreement, loan, or benefit from;

The Department, or any State, political subdivision of a State, or other
party, if the United States Government provides any portion of the money
or property under the contract or for the grant, loan, cooperative
agreement, or benefit, or if the Government will reimburse or reinsure
the State, political subdivision, or party for any portion of the money
or property under the contract or for the grant, cooperative agreement,
loan, or benefit.

(Authority: 31 U.S.C. 3801(9))



Sec. 33.3  Basis for civil penalties and assessments.

    (a) Claims. (1) Any person who makes a claim that the person knows
or has reason to know:
    (i) Is false, fictitious, or fraudulent;
    (ii) Includes or is supported by any written statement which asserts
a material fact which is false, fictitious, or fraudulent;
    (iii) Includes or is supported by any written statement that:
    (A) Omits a material fact;
    (B) Is false, fictitious, or fraudulent as a result of such
omission; and
    (C) Is a statement in which the person making such statement has a
duty to include such material fact; or
    (iv) Is for payment for the provision of property or services which
the person has not provided as claimed;

[[Page 74]]


shall be subject, in addition to any other remedy that may be prescribed
by law, to a civil penalty of not more than $5,000 for each claim.
    (2) Each voucher, invoice, claim form, or other individual request
or demand for property, services, or money constitutes a separate claim.
    (3) A claim is considered made to the Department, a recipient, or
party when that claim is actually made to an agent, fiscal intermediary,
or other entity, including any State or political subdivision thereof,
acting for or on behalf of the Department, a recipient, or party.
    (4) Each claim for property, services, or money is subject to a
civil penalty regardless of whether the property, services, or money is
actually delivered or paid.
    (5) If the Government has made any payment (including transferred
property or provided services) on a claim, a person subject to a civil
penalty under paragraph (a)(1) of this section is also subject to an
assessment of not more than twice the amount of that claim or that
portion thereof that is determined to be in violation of paragraph
(a)(1) of this section. The assessment is in lieu of damages sustained
by the Government because of that claim.

(Authority: 31 U.S.C. 3802(a)(1))

    (b) Statements. (1) Any person who makes a written statement that:
    (i) The person knows or has reason to know:
    (A) Asserts a material fact which is false, fictitious, or
fraudulent; or
    (B) Is false, fictitious, or fraudulent because it omits a material
fact that the person making the statement has a duty to include in the
statement; and
    (ii) Contains or is accompanied by an express certification or
affirmation of the truthfulness and accuracy of the contents of the
statement;

shall be subject, in addition to any other remedy that may be prescribed
by law, to a civil penalty of not more than $5,000 for each statement.
    (2) Each written representation, certification, or affirmation
constitutes a separate statement.
    (3) A statement is considered made to the Department when the
statement is actually made to an agent, fiscal intermediary, or other
entity, including any State or political subdivision thereof, acting for
or on behalf of the Department.

(Authority: 31 U.S.C. 3802(a)(2))

    (c) No proof of specific intent to defraud is required to establish
liability under this section.

(Authority: 31 U.S.C. 3801(5))

    (d) In any case in which it is determined that more than one person
is liable for making a claim or statement under this section, each of
those persons may be held liable for a civil penalty under this section.

(Authority: 31 U.S.C. 3802(a))

    (e) In any case in which it is determined that more than one person
is liable for making a claim under this section of which the Government
has made payment (including transferred property or provided services),
an assessment may be imposed against any of those persons or jointly and
severally against any combination of those persons.

(Authority: 31 U.S.C. 3802(a)(1); 3809)



Sec. 33.4  Investigation.

    (a) If an investigating official concludes that a subpoena pursuant
to the authority conferred by 31 U.S.C. 3604(a) is warranted:
    (1) The subpoena so issued must notify the person to whom it is
addressed of the authority under which the subpoena is issued and must
identify the records or documents sought;
    (2) The investigating official may designate a person to act on his
or her behalf to receive the documents sought; and
    (3) The person receiving the subpoena is required to tender to the
investigating official or the person designated to receive the documents
a certification that the documents sought have been produced, or that
the documents are not available and the reasons therefore, or that the
documents, suitably identified, have been withheld based upon the
assertion of an identified privilege.

(Authority: 31 U.S.C. 3804(a))


[[Page 75]]


    (b) If the investigating official concludes that an action under the
Program Fraud Civil Remedies Act may be warranted, the investigating
official shall submit a report containing the findings and conclusions
of the investigation to the reviewing official.

(Authority: 31 U.S.C. 3803(a)(1))

    (c) Nothing in this section precludes or limits an investigating
official's discretion to refer allegations directly to the Department of
Justice for suit under the False Claims Act or other civil relief, or to
defer or postpone a report or referral to the reviewing official to
avoid interference with a criminal investigation or prosecution.

(Authority: 31 U.S.C. 3809)

    (d) Nothing in this section modifies any responsibility of an
investigating official to report violations of criminal law to the
Attorney General.

(Authority: 31 U.S.C. 3803(a)(1))



Sec. 33.5  Review by the reviewing official.

    (a) If, based on the report of the investigating official under
Sec. 33.4(b), the reviewing official determines that there is adequate
evidence to believe that a person is liable under Sec. 33.3 of this
part, the reviewing official transmits to the Attorney General a written
notice of the reviewing official's intention to issue a complaint under
Sec. 33.7.
    (b) The notice must include--
    (1) A statement of the reviewing official's reasons for issuing a
complaint;
    (2) A statement specifying the evidence that supports the
allegations of liability;
    (3) A description of the claims or statements upon which the
allegations of liability are based;
    (4) An estimate of the amount of money or the value of property,
services, or other benefits requested or demanded in violation of Sec.
33.3;
    (5) A statement of any exculpatory or mitigating circumstances that
may relate to the claims or statements known by the reviewing official
or the investigating official; and
    (6) A statement that there is a reasonable prospect of collecting an
appropriate amount of penalties and assessments. Such a statement may be
based upon information then known or an absence of any information
indicating that the person may be unable to pay such an amount.

(Authority: 31 U.S.C. 3803(a)(2); 3809(2))



Sec. 33.6  Prerequisites for issuing a complaint.

    (a) The reviewing official may issue a complaint under Sec. 33.7
only if--
    (1) The Department of Justice approves the issuance of a complaint
in a written statement described in 31 U.S.C. 3803(b)(1); and
    (2) In the case of allegations of liability under Sec. 33.3(a) with
respect to a claim, the reviewing official determines that, with respect
to that claim or a group of related claims submitted at the same time
the claim is submitted (as defined in paragraph (b) of this section),
the amount of money or the value of property or services demanded or
requested in violation of Sec. 33.3(a) does not exceed $150,000.
    (b) For the purposes of this section, a related group of claims
submitted at the same time includes only those claims arising from the
same transaction (e.g., grant, cooperative agreement, loan, application,
or contract) that are submitted simultaneously as part of a single
request, demand, or submission.
    (c) Nothing in this section may be construed to limit the reviewing
official's authority to join in a single complaint against a person
claims that are unrelated or were not submitted simultaneously,
regardless of the amount of money, or the value of property or services,
demanded or requested.

(Authority: 31 U.S.C. 3803(b), (c))



Sec. 33.7  Complaint.

    (a) On or after the date the Department of Justice approves the
issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the
reviewing official may serve a complaint on the defendant, as provided
in Sec. 33.8.
    (b) The complaint must state:
    (1) The allegations of liability against the defendant, including
the statutory basis for liability, an identification of the claims or
statements

[[Page 76]]

that are the basis for the alleged liability, and the reasons why
liability allegedly arises from those claims or statements;
    (2) The maximum amount of penalties and assessments for which the
defendant may be held liable;
    (3) Instructions for filing an answer to request a hearing,
including a specific statement of the defendant's right to request a
hearing by filing an answer and to be represented by a representative;
and
    (4) That failure to file an answer within 30 days of service of the
complaint will result in the imposition of the maximum amount of
penalties and assessments without right to appeal, as provided in Sec.
33.10.
    (c) At the same time the reviewing official serves the complaint, he
or she shall serve the defendant with a copy of the regulations in this
part.

(Authority: 31 U.S.C. 3803(a))



Sec. 33.8  Service of complaint.

    (a) Service of a complaint must be made by certified or registered
mail or by delivery in any manner authorized by Rule 4(d) of the Federal
Rules of Civil Procedure. Service is complete upon receipt.
    (b) Proof of service, stating the name and address of the person on
whom the complaint was served, and the manner and date of service, may
be made by:
    (1) Affidavit of the individual serving the complaint by delivery;
    (2) An acknowledged United States Postal Service return receipt
card; or
    (3) Written acknowledgment of receipt by the defendant or his
representative.

(Authority: 31 U.S.C. 3802(d))



Sec. 33.9  Answer.

    (a) The defendant may request a hearing by filing an answer with the
reviewing official within 30 days of service of the complaint. An answer
is deemed to be a request for hearing.
    (b) In the answer, the defendant:
    (1) Shall admit or deny each of the allegations of liability made in
the complaint;
    (2) Shall state any defense on which the defendant intends to rely;
    (3) May state any reasons why the defendant contends that the
penalties and assessments should be less than the statutory maximum; and
    (4) Shall state the name, address, and telephone number of the
person authorized by the defendant to act as defendant's representative,
if any.
    (c) If the defendant is unable to file an answer meeting the
requirements of paragraph (b) of this section within the time provided,
the defendant may, before the expiration of 30 days from service of the
complaint, file with the reviewing official a general answer denying
liability and requesting a hearing, and a request for an extension of
time within which to file an answer meeting the requirements of
paragraph (b) of this section. The reviewing official shall file
promptly with the ALJ the complaint, the general answer denying
liability, and the request for an extension of time as provided in Sec.
33.11 for good cause shown, the ALJ may grant the defendant up to 30
additional days within which to file an answer meeting the requirements
of paragraph (b) of this section.

(Authority: 31 U.S.C. 3803(d)(2), 3809)



Sec. 33.10  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time
prescribed in Sec. 33.9(a), the reviewing official may refer the
complaint to the ALJ.
    (b) Upon the referral of the complaint, the ALJ shall promptly serve
on defendant in the manner prescribed in Sec. 33.8, a notice that an
initial decision will be issued under this section.
    (c) The ALJ shall assume the facts alleged in the complaint to be
true and, if those facts establish liability under Sec. 33.3, the ALJ
shall issue an initial decision imposing the maximum amount of penalties
and assessments allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to file
a timely answer the defendant waives any right to further review of the
penalties and assessments imposed under paragraph (c) of this section,
and the initial decision becomes final and binding upon the parties 30
days after it is issued.
    (e) If, before such an initial decision becomes final, the defendant
files a

[[Page 77]]

motion with the ALJ seeking to reopen on the grounds that extraordinary
circumstances prevented the defendant from filing an answer, the initial
decision must be stayed pending the ALJ's decision on the motion.
    (f) If, on such a motion, the defendant can demonstrate
extraordinary circumstances excusing the failure to file a timely
answer, the ALJ shall withdraw the initial decision under paragraph (c)
of this section, if such a decision has been issued, and shall grant the
defendant an opportunity to answer the complaint.
    (g) A decision of the ALJ denying a defendant's motion under
paragraph (e) of this section is not subject to reconsideration under
Sec. 33.38.
    (h) The defendant may appeal to the Department head the decision
denying a motion to reopen by filing a notice of appeal with the
Department head within 15 days after the ALJ denies the motion. The
timely filing of a notice of appeal stays the initial decision until the
Department head decides the issue.
    (i) If the defendant files a timely notice of appeal with the
Department head, the ALJ shall forward the record of the proceeding to
the Department head.
    (j) The Department head decides expeditiously whether extraordinary
circumstances excuse the defendant's failure to file a timely answer
based solely on the record before the ALJ.
    (k) If the Department head decides that extraordinary circumstances
excuse the defendant's failure to file a timely answer, the Department
head remands the case to the ALJ with instructions to grant the
defendant an opportunity to answer.
    (l) If the Department head decides that the defendant's failure to
file a timely answer is not excused, the Department head reinstates the
initial decision of the ALJ, which becomes final and binding upon the
parties 30 days after the Department head issues that decision.

(Authority: 31 U.S.C. 3809)



Sec. 33.11  Referral of complaint and answer to the ALJ.

    Upon receipt of an answer, the reviewing official shall file the
complaint and answer with the ALJ.

(Authority: 31 U.S.C. 3803(d)(2); 3809)



Sec. 33.12  Notice of hearing.

    (a) When the ALJ receives the complaint and answer, the ALJ shall
promptly serve a notice of hearing upon the defendant in the manner
prescribed by Sec. 33.8. At the same time, the ALJ shall send a copy of
the notice to the representative for the Government.
    (b) The notice must include:
    (1) The tentative time and place, and the nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is
to be held;
    (3) The matters of fact and law to be asserted;
    (4) A description of the procedures for the conduct of the hearing;
    (5) The name, address, and telephone number of the representative of
the Government and of the defendant, if any; and
    (6) Such other matters as the ALJ deems appropriate.

(Authority: 31 U.S.C. 3803(g)(2)(A))



Sec. 33.13  Parties to the hearing.

    (a) The parties to the hearing are the defendant and the Department.
    (b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the
False Claims Act may participate in these proceedings to the extent
authorized by the provisions of that Act.

(Authority: 31 U.S.C. 3803(g)(2))



Sec. 33.14  Separation of functions.

    (a) The investigating official, the reviewing official, and any
employee or agent of the Department who takes part in investigating,
preparing, or presenting a particular case may not, in that case or a
factually related case:
    (1) Participate in the hearing as the ALJ;
    (2) Participate or advise in the initial decision or the review of
the initial decision by the Department head, except as a witness or a
representative in public proceedings; or

[[Page 78]]

    (3) Make the collection of penalties and assessments under 31 U.S.C.
3806.
    (b) The ALJ may not be responsible to, or subject to the supervision
or direction of, the investigating official or the reviewing official.
    (c) Except as provided in paragraph (a) of this section, the
representative for the Government may be employed anywhere in the
Department, including in the offices of either the investigating
official or the reviewing official.

(Authority: 31 U.S.C. 3809(l)(2))



Sec. 33.15  Ex parte contacts.

    No party or person (except employees of the ALJ's office) may
communicate in any way with the ALJ on any matter at issue in a case,
unless on notice and opportunity for all parties to participate. This
provision does not prohibit a person or party from inquiring about the
status of a case or asking routine questions concerning administrative
functions or procedures.

(Authority: 31 U.S.C. 3803(g)(1)(A))



Sec. 33.16  Disqualification of reviewing official or ALJ.

    (a) A reviewing official or ALJ in a particular case may disqualify
himself or herself at any time.
    (b) A party may file with the ALJ a motion for disqualification of a
reviewing official or an ALJ. That motion must be accompanied by an
affidavit alleging personal bias or other reason for disqualification.
    (c) The motion and affidavit must be filed promptly upon the party's
discovery of reasons requiring disqualification, or the objections are
deemed waived.
    (d) The affidavit must state specific facts that support the party's
belief that personal bias or other reason for disqualification exists
and the time and circumstances of the party's discovery of those facts.
It must be accompanied by a certificate of the representative of record
that it is made in good faith.
    (e) Upon the filing of the motion and affidavit, the ALJ shall not
proceed further in the case until he or she resolves the matter of
disqualification in accordance with paragraph (f) of this section.
    (f)(1) If the ALJ determines that a reviewing official is
disqualified, the ALJ shall dismiss the complaint without prejudice.
    (2) If the ALJ disqualifies himself or herself, the case must be
reassigned promptly to another ALJ.
    (3) If the ALJ denies a motion to disqualify, the Department head
may determine the matter only as part of his or her review of the
initial decision upon appeal, if any.

(Authority: 31 U.S.C. 3803(g)(2)(G))



Sec. 33.17  Rights of parties.

    Except as otherwise limited by this part, all parties may:
    (a) Be accompanied, represented, and advised by a representative (as
defined in Sec. 33.2);
    (b) Participate in any conference held by the ALJ:
    (c) Conduct discovery under Sec. 33.21;
    (d) Agree to stipulations of fact or law, which must be made part of
the record;
    (e) Present evidence relevant to the issues at the hearing;
    (f) Present and cross-examine witnesses;
    (g) Present oral arguments at the hearing as permitted by the ALJ;
and
    (h) Submit written briefs and proposed findings of fact and
conclusions of law after the hearing.

(Authority: 31 U.S.C. 3803(g) (2) (E), (F), (3)(B)(ii))



Sec. 33.18  Authority of the ALJ.

    (a) The ALJ shall conduct a fair and impartial hearing, avoid delay,
maintain order, and assure that a record of the proceeding is made.
    (b) The ALJ has the authority to:
    (1) Set and change the date, time, and place of the hearing upon
reasonable notice to the parties;
    (2) Disqualify a non-attorney representative (designated as
described in the Sec. 33.2 definitions of ``representative'') if the
ALJ determines that the representative is incapable of rendering
reasonably effective assistance;
    (3) Continue or recess the hearing in whole or in part for a
reasonable period of time;

[[Page 79]]

    (4) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding;
    (5) Administer oaths and affirmations;
    (6) Issue subpoenas requiring the attendance of witnesses and the
production of documents at depositions or at hearings;
    (7) Rule on motions and other procedural matters;
    (8) Regulate the scope and timing of discovery;
    (9) Regulate the course of the hearing and the conduct of
representatives and parties;
    (10) Examine witnesses;
    (11) Receive, rule on, exclude, or limit evidence;
    (12) Upon motion of a party, take official notice of facts;
    (13) Upon motion of a party, decide cases, in whole or in part, by
summary judgment if there is no disputed issue of material fact;
    (14) Conduct any conference, argument, or hearing on motions in
person or by telephone; and
    (15) Exercise such other authority as is necessary to carry out the
responsibilities of the ALJ under this part.
    (c) The ALJ does not have the authority to find Federal statutes or
regulations invalid.

(Authority: 31 U.S.C. 3803(g))



Sec. 33.19  Prehearing conferences.

    (a) The ALJ may schedule perhearing conferences as appropriate.
    (b) Upon the motion of any party, the ALJ shall schedule at least
one perhearing conference at a reasonable time in advance of the
hearing.
    (c) The ALJ may use prehearing conferences to discuss the following:
    (1) Simplification of the issues.
    (2) The necessity or desirability of amendments to the pleadings,
including the need for a more definite statement.
    (3) Stipulations, admissions of fact or as to the contents and
authenticity of documents.
    (4) Whether the parties can agree to submission of the case on a
stipulated record.
    (5) Whether a party chooses to waive appearance at an oral hearing
and to submit only documentary evidence (subject to the objection of
other parties) and written argument.
    (6) Limitation of the number of witnesses.
    (7) Scheduling dates for the exchange of witness lists and of
proposed exhibits.
    (8) Discovery.
    (9) The time and place for the hearing.
    (10) Such other matters as may tend to expedite the fair and just
disposition of the proceedings.
    (d) The ALJ may issue an order containing all matters agreed upon by
the parties or ordered by the ALJ at a prehearing conference.

(Authority: 31 U.S.C. 3803(g))



Sec. 33.20  Disclosure of documents.

    (a) Upon written request to the reviewing official, the defendant
may review any relevant and material documents, transcripts, records,
and other materials that relate to the allegations set out in the
complaint and upon which the findings and conclusions of the
investigating official under Sec. 33.4(b) are based, unless those
documents are subject to a privilege under Federal law. Upon payment of
fees for duplication, the defendant may obtain copies of the documents.
    (b) Upon written request to the reviewing official, the defendant
also may obtain a copy of all exculpatory information in the possession
of the reviewing official or investigating official relating to the
allegations in the complaint, even if it is contained in a document that
would otherwise be privileged. If the document would otherwise be
privileged, only that portion containing exculpatory information must be
disclosed.
    (c) The notice sent to the Attorney General from the reviewing
official as described in Sec. 33.5 is not discoverable under any
circumstances.
    (d) The defendant may file a motion to compel disclosure of the
documents subject to the provisions of this section. Such a motion may
only be filed with the ALJ following the filing of an answer pursuant to
Sec. 33.9.

(Authority: 31 U.S.C. 3803(g)(3)(B)(ii), 3803(e))

[[Page 80]]



Sec. 33.21  Discovery.

    (a) The following types of discovery are authorized:
    (1) Requests for production of documents for inspection and copying.
    (2) Requests for admissions of the authenticity of any relevant
document or of the truth of any relevant fact.
    (3) Written interrogatories.
    (4) Depositions.
    (b) For the purpose of this section and Sec. Sec. 33.22 and 33.23,
the term ``documents'' includes information, documents, reports,
answers, records, accounts, papers, and other data and documentary
evidence. Nothing contained in this part may be interpreted to require
the creation of a document.
    (c) Unless mutually agreed to by the parties, discovery is available
only as ordered by the ALJ. The ALJ shall regulate the timing of
discovery.
    (d) Motions for discovery. (1) A party seeking discovery may file a
motion with the ALJ. Such a motion shall be accompanied by a copy of the
requested discovery, or in the case of depositions, a summary of the
scope of the proposed deposition.
    (2) Within ten days of service, a party may file an opposition to
the motion or a motion for protective order, or both, as provided in
Sec. 33.24.
    (3) The ALJ may grant a motion for discovery only if he finds that
the discovery sought:
    (i) Is necessary for the expeditious, fair, and reasonable
determination of the issues;
    (ii) Is not unduly costly or burdensome;
    (iii) Will not unduly delay the proceeding; and
    (iv) Does not seek privileged information.
    (4) The burden of showing that discovery should be allowed is on the
party seeking discovery.
    (5) The ALJ may grant discovery subject to a protective order under
Sec. 33.24.

(Authority: 31 U.S.C. 3803(a)(3)(B)(ii))

    (e) Depositions. (1) If a motion for deposition is granted, the ALJ
shall issue a subpoena for the deponent, which may require the deponent
to produce documents. The subpoena must specify the time and place at
which the deposition will be held.
    (2) The party seeking to depose shall serve the subpoena in the
manner prescribed in Sec. 33.8.
    (3) The deponent may file with the ALJ a motion to quash the
subpoena or a motion for a protective order within ten days of service.
    (4) The party seeking to depose shall provide for the taking a
verbatim transcript of the deposition, which the party shall make
available to all other parties for inspection and copying.
    (f) Each party shall bear its own costs of discovery.

(Authority: 31 U.S.C. 3803(g)(3)(B)(ii))



Sec. 33.22  Exchange of witness lists, statements and exhibits.

    (a) At least 15 days before the hearing or at such other time as may
be ordered by the ALJ, the parties shall exchange witness lists, copies
of prior statements of proposed witnesses, and copies of proposed
hearing exhibits, including copies of any written statements that the
party intends to offer in lieu of live testimony in accordance with
Sec. 33.33(b). At the time these documents are exchanged, any party
that is permitted by the ALJ to rely on the transcript of deposition
testimony in lieu of live testimony at the hearing, shall provide each
other party with a copy of the specific pages of the transcript it
intends to introduce.
    (b) If a party objects, the ALJ shall not admit into evidence the
testimony of any witness whose name does not appear on the witness list
or any exhibit not provided to the opposing party as provided in
paragraph (a) of this Section unless the ALJ finds good cause for the
failure or that there is no prejudice to the objecting party.
    (c) Unless another party objects within the time set by the ALJ,
documents exchanged in accordance with paragraph (a) of this section are
deemed to be authentic for the purpose of admissibility at the hearing.

(Authority: 31 U.S.C. 3803(g)(2))



Sec. 33.23  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any
individual at the hearing may request that the ALJ issue a subpoena.

[[Page 81]]

    (b) A subpoena requiring the attendance and testimony of an
individual may also require the individual to produce documents at the
hearing.
    (c) A party seeking a subpoena shall file a written request therefor
not less than 15 days before the date fixed for the hearing unless
otherwise allowed by the ALJ for good cause shown. The request must
specify any documents to be produced and must designate the witnesses
and describe their address and location with sufficient particularity to
permit the witnesses to be found.
    (d) The subpoena must specify the time and place at which a witness
is to appear and any documents the witness is to produce.
    (e) The party seeking the subpoena shall serve it in the manner
prescribed in Sec. 33.8. A subpoena on a party or upon an individual
under the control of a party may be served by first class mail.
    (f) A party or the individual to whom the subpoena is directed may
file with the ALJ a motion to quash the subpoena within ten days after
service or on or before the time specified in the subpoena for
compliance if is is less then ten days after service.

(Authority: 31 U.S.C. 3804(b))



Sec. 33.24  Protective order.

    (a) A party or a prospective witness or deponent may file a motion
for a protective order with respect to discovery sought by an opposing
party or with respect to the hearing, seeking to limit the availability
or disclosure of evidence.
    (b) In issuing a protective order, the ALJ may take any order which
justice requires to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including one or
more of the following:
    (1) That the discovery not be had.
    (2) That the discovery may be had only on specified terms and
conditions, including a designation of the time or place.
    (3) That the discovery may be had only through a method of discovery
other than that requested.
    (4) That certain matters not be inquired into, or that the scope of
discovery be limited to certain matters.
    (5) That the discovery be conducted with no one present except
persons designated by the ALJ.
    (6) That the contents of discovery or evidence be sealed.
    (7) That a deposition after being sealed be opened only by order of
the ALJ.
    (8) That a trade secret or other confidential research, development,
commercial information, or facts pertaining to any criminal
investigation, proceeding, or other administrative investigation not be
disclosed or be disclosed only in a designated way.
    (9) That the parties simultaneously file specified documents or
information enclosed in sealed envelopes to be opened as directed by the
ALJ.

(Authority: 31 U.S.C. 3803(g)(3)(B)(ii))



Sec. 33.25  Fees.

    The party requesting a subpoena shall pay the cost of the fees and
mileage of any witness subpoenaed in the amounts that would be payable
to a witness in a proceeding in United States District Court. A check
for witness fees and mileage must accompany the subpoena when served,
except that if a subpoena is issued on behalf of the authority, a check
for witness fees and mileage need not accompany the subpoena.

(Authority: 31 U.S.C. 3804(b))



Sec. 33.26  Form, filing and service of papers.

    (a) Form. (1) Documents filed with the ALJ must include an original
and two copies.
    (2) Every pleading and paper filed in the proceeding must contain a
caption setting for the title of the action, the case number assigned by
the ALJ, and a designation of the paper (e.g., motion to quash
subpoena).
    (3) Every pleading and paper must be signed by, and must contain the
address and telephone number of the party or the person on whose behalf
the paper was filed, or his or her representative.
    (4) Papers are considered filed when they are mailed. Date of
mailing may be established by a certificate from the party or its
representative or by proof

[[Page 82]]

that the document was sent by certified or registered mail.
    (b) Service. A party filing a document with the ALJ shall, at the
time of filing, serve a copy of the document on every other party.
Service upon any party of any document other than those required to be
served as prescribed in Sec. 33.8 shall be made by delivering a copy,
or by placing a copy of the document in the United States mail, postage
prepaid and addressed, to the party's last known address. If a party is
represented by a representative, service must be made upon the
representative in lieu of the actual party.
    (c) Proof of service. A certificate of the individual serving the
document by personal delivery or by mail, setting forth the manner of
service, is proof of service.

(Authority: 31 U.S.C. 3803(b)(3)(A))



Sec. 33.27  Computation of time.

    (a) In computing any period of time under this part or in an order
issued under this part, the time begins with the day following the act,
event, or default, and includes the last day of the period, unless it is
a Saturday, Sunday, or legal holiday observed by the Federal Government,
in which event it includes the next business day.
    (b) If the period of time allowed is less than seven days,
intermediate Saturdays, Sundays, and legal holidays observed by the
Federal Government are excluded from the computation.
    (c) If a document has been served or issued by placing it in the
mail, an additional five days is added to the time permitted for any
response.

(Authority: 31 U.S.C. 3809)



Sec. 33.28  Motions.

    (a) Any application to the ALJ for an order or ruling must be by
motion. Motions must state the relief sought, the authority relied upon,
and the facts alleged, and must be filed with the ALJ and served on all
other parties.
    (b) Except for motions made during a prehearing conference or at the
hearing, all motions must be in writing. The ALJ may require that oral
motions be reduced to writing.
    (c) Within 15 days after a written motion is served, or such other
time as may be fixed by the ALJ, any party may file a response to the
motion.
    (d) The ALJ may not grant a written motion before the time for
filing responses to the motion has expired, except upon consent of the
parties or following a hearing on the motion, but may overrule or deny
the motion without awaiting a response.
    (e) The ALJ shall make a reasonable effort to dispose of all
outstanding motions prior to the beginning of the hearing.

(Authority: 31 U.S.C. 3803(g)(3)(A))



Sec. 33.29  Sanctions.

    (a) The ALJ may sanction a person, including any party or
representative for--
    (1) Failing to comply with an order, rule, or procedure governing
the proceeding;
    (2) Failing to prosecute or defend an action; or
    (3) Engaging in other misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing.
    (b) Any sanction, including but not limited to those listed in
paragraphs (c), (d), and (e) of this section must reasonably relate to
the severity and nature of the failure or misconduct.
    (c) If a party fails to comply with an order, including an order for
taking a deposition, the production of evidence within the party's
control, or a request for admission, the ALJ may--
    (1) Draw an inference in favor of the requesting party with regard
to the information sought;
    (2) In the case of requests for admission, deem each matter of which
an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with the order from
introducing evidence concerning, or otherwise relying upon testimony
relating to, the information sought; and
    (4) Strike any part of the pleadings or other submissions of the
party failing to comply with the request.
    (d) If a party fails to prosecute or defend an action under this
part commenced by service of a notice of hearing, the ALJ may dismiss
the action or may issue an initial decision imposing penalties and
assessments.

[[Page 83]]

    (e) The ALJ may refuse to consider any motion, request, response,
brief, or other document that is not filed in a timely fashion.

(Authority: 31 U.S.C. 3803(g)(2))



Sec. 33.30  The hearing and burden of proof.

    (a) The ALJ shall conduct a hearing on the record in order to
determine whether the defendant is liable for a civil penalty or
assessment under Sec. 33.3 and, if so, the appropriate amount of the
civil penalty or assessment considering any aggravating or mitigating
factors.
    (b) The Department shall prove a defendant's liability and any
aggravating factors by a preponderance of the evidence.
    (c) The defendant shall prove any affirmative defenses and any
mitigating factors by a preponderance of the evidence.
    (d) The hearing must be open to the public unless otherwise ordered
by the ALJ for good cause shown.

(Authority: 31 U.S.C. 3803 (f), (g)(2))



Sec. 33.31  Determining the amount of penalties and assessments.

    (a) In determining an appropriate amount of civil penalties and
assessments, the ALJ and the Department head, upon appeal, evaluate any
circumstances that mitigate or aggravate the violation and articulate in
their opinions the reasons that support the penalties and assessments
they impose. Because of the intangible costs of fraud, the expense of
investigating fraudulent conduct, and the need to deter others who might
be similarly tempted, ordinarily double damages and a significant civil
penalty is imposed.
    (b) Although not exhaustive, the following factors are among those
that may influence the ALJ and the Department head in determining the
amount of penalties and assessments to impose with respect to the
misconduct (i.e., the false, fictitious, or fraudulent claims or
statements) charged in the complaint:
    (1) The number of false, fictitious, or fraudulent claims or
statements.
    (2) The time period over which such claims or statements were made.
    (3) The degree of the defendent's culpability with respect to the
misconduct.
    (4) The amount of money or the value of the property, services, or
benefit falsely claimed.
    (5) The value of the Government's actual loss as a result of the
misconduct, including foreseeable consequential damages and the costs of
investigation.
    (6) The relationship of the amount imposed as civil penalties to the
amount of the Government's loss.
    (7) The potential or actual impact of the misconduct upon national
defense, public health or safety, or public confidence in the management
of Government programs and operations, including particularly the impact
on the intended beneficiaries of such programs.
    (8) Whether the defendant has engaged in a pattern of the same or
similar misconduct.
    (9) Whether the defendant attempted to conceal the misconduct.
    (10) The degree to which the defendant has involved others in the
misconduct or in concealing it.
    (11) If the misconduct of employees or agents is imputed to the
defendant, the extent to which the defendant's practices fostered or
attempted to preclude the misconduct.
    (12) Whether the defendant cooperated in or obstructed an
investigation of the misconduct.
    (13) Whether the defendant assisted in identifying and prosecuting
other wrongdoers.
    (14) The complexity of the program or transaction, and the degree of
the defendant's sophistication with respect to it, including the extent
of the defendant's prior participation in the program or in similar
transactions.
    (15) Whether the defendant has been found, in any criminal, civil,
or administrative proceeding to have engaged in similar misconduct or to
have dealt dishonestly with the Government of the United States or of a
State, directly or indirectly.
    (16) The need to deter the defendant and others from engaging in the
same or similar misconduct.

[[Page 84]]

    (c) Nothing in this section may be construed to limit the ALJ or the
Department head from considering any other factors that in any given
case may mitigate or aggravate the offense for which penalties and
assessments are imposed.

(Authority: 31 U.S.C. 3803(a)(2) (e), (f))



Sec. 33.32  Location of hearing.

    (a) The hearing may be held:
    (1) In any judicial district of the United States in which the
defendant resides or transacts business;
    (2) In any judicial district of the United States in which the claim
or statement in issue was made; or
    (3) In such other place as may be agreed upon by the defendant and
the ALJ.
    (b) Each party must have the opportunity to present argument with
respect to the location of the hearing.
    (c) The hearing must be held at the place and at the time ordered by
the ALJ.

(Authority: 31 U.S.C. 3803(g)(4))



Sec. 33.33  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony
at the hearing must be given orally by witnesses under oath or
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the
form of a written statement or deposition. Any such written statement
must be provided to all other parties along with the last known address
of the witness, in a manner that allows sufficient time for other
parties to subpoena the witness for cross-examination at the hearing.
Prior written statements of witnesses proposed to testify at the hearing
and deposition transcripts must be exchanged as provided in Sec.
33.22(a).
    (c) The ALJ shall exercise reasonable control over the mode and
order of interrogating witnesses and presenting evidence so as to:
    (1) Make the interrogation and presentation effective for the
ascertainment of the truth;
    (2) Avoid needless consumption of time; and
    (3) Protect witnesses from harassment or undue embarrassment.
    (d) The ALJ shall permit the parties to conduct such cross-
examination as may be required for a full and true disclosure of the
facts.
    (e) At the discretion of the ALJ, a witness may be cross-examined on
matters relevant to the proceeding without regard to the scope of his or
her direct examination. To the extent permitted by the ALJ, cross-
examination on matters outside the scope of direct examination must be
conducted in the manner of direct examination and may proceed by leading
questions only if the witness is a hostile witness, an adverse party, or
a witness identified with an adverse party.
    (f) Upon motion of any party, the ALJ shall order witnesses excluded
so that they cannot hear the testimony of other witnesses. This rule
does not authorize exclusion of--
    (1) A party who is an individual;
    (2) In the case of a party that is not an individual, an officer or
employee of the party appearing for the party pro se or designated by
the party's representative; or
    (3) An individual whose presence is shown by a party to be essential
to the presentation of its case, including an individual employed by the
Government engaged in assisting the representative for the Government.

(Authority: 31 U.S.C. 3803(g)(2)(E); 3809))



Sec. 33.34  Evidence.

    (a) The ALJ shall determine the admissibility of evidence.
    (b) Except as provided in this part, the ALJ is not bound by the
Federal Rules of Evidence. However, the ALJ may apply the Federal Rules
of Evidence if appropriate, e.g., to exclude unreliable evidence.
    (c) The ALJ shall exclude irrelevant and immaterial evidence.
    (d) Although relevant, evidence may be excluded if its probative
value is substantially outweighted by the danger of unfair prejudice,
confusion of the issues, or by considerations of undue delay or needless
presentation of cumulative evidence.
    (e) Although relevant, evidence may be excluded if it is privileged
under Federal law.
    (f) Evidence concerning offers of compromise or settlement are
inadmissible

[[Page 85]]

to the extend provided in Rule 408 of the Federal Rules of Evidence.
    (g) The ALJ shall permit the parties to introduce rebuttal witnesses
and evidence.
    (h) All Documents and other evidence offered or taken for the record
must be open to examination by all parties, unless otherwise ordered by
the ALJ pursuant to Sec. 33.24.

(Authority: 31 U.S.C. 3803(f)(g)(2)(E))



Sec. 33.35  The record.

    (a) The hearing must be recorded and transcribed. Transcripts may be
obtained following the hearing from the ALJ at a cost not to exceed the
actual cost of duplication.

(Authority: 31 U.S.C. 3803 (f))

    (b) The transcript of testimony, exhibits and other evidence
admitted at the hearing, and all papers and requests filed in the
proceeding constitute the record for the decision by the ALJ and the
Department head.
    (c) The record may be inspected and copied (upon payment of a
reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant
to Sec. 33.24.

(Authority: 5 U.S.C. App. 2, section 11)



Sec. 33.36  Post-hearing briefs.

    The ALJ may require the parties to file post-hearing briefs. In any
event, any party may file a post-hearing brief. The ALJ shall fix the
time for filing these briefs, not to exceed 60 days from the date the
parties receive the transcript of the hearing or, if applicable, the
stipulated record. The briefs may be accompanied by proposed findings of
fact and conclusions of law. The ALJ may permit the parties to file
reply briefs.

(Authority: 31 U.S.C. 3803 (g)(1)(2)(E))



Sec. 33.37  Initial decision.

    (a) The ALJ shall issue an initial decision, based only on the
record, that contains findings of fact, conclusions of law, and the
amount of any penalties and assessments imposed.
    (b) The findings of fact must include a finding on each of the
following issues:
    (1) Whether the claims or statements identified in the complaint, or
any portions of the complaint, violate Sec. 33.3.
    (2) If the person is liable for penalties or assessments, the
appropriate amount of any such penalties or assessments considering any
mitigating or aggravating factors that the ALJ finds in the case, such
as those described in Sec. 33.31.
    (c) The ALJ shall promptly serve the initial decision on all parties
within 90 days after the time for submission of post-hearing briefs and
reply briefs (if permitted) has expired. The ALJ shall at the same time
serve all parties with a statement describing the right of any defendant
determined to be liable for a civil penalty or assessment to file a
motion for reconsideration with the ALJ or a notice of appeal with the
Department head. If the ALJ fails to meet the deadline contained in this
paragraph, he or she shall notify the parties of the reasons for the
delay and shall set a new deadline.
    (d) Unless the initial decision of the ALJ is timely appealed to the
Department head, or a motion for reconsideration of the initial decision
is timely filed, the initial decision shall constitute the final
decision of the Department head and shall be final and binding on the
parties 30 days after it is issued by the ALJ.

(Authority: 31 U.S.C. 3803(h)(i))



Sec. 33.38  Reconsideration of initial decision.

    (a) Except as provided in paragraph (d) of this section, any party
may file a motion for reconsideration of the initial decision within 20
days of receipt of the initial decision. If service was made by mail,
receipt is presumed to be five days from the date of mailing in the
absence of contrary proof.
    (b) Every motion under paragraph (a) of this section must set forth
the matters claimed to have been erroneously decided and the nature of
the alleged errors. The motion must be accompanied by a supporting
brief.
    (c) Responses to the motion are allowed only upon request to the
ALJ.
    (d) No party may file a motion for reconsideration of an initial
decision that has been revised in response to a previous motion for
reconsideration.

[[Page 86]]

    (e) The ALJ may dispose of a motion for reconsideration by denying
it or by issuing a revised initial decision.
    (f) If the ALJ denies a motion for reconsideration, the initial
decision shall constitute the final decision of the Department head and
shall be final and binding on the parties 30 days after the ALJ denies
the motion, unless the initial decision is timely appealed to the
Department head in accordance with Sec. 33.39.
    (g) If the ALJ issues a revised initial decision, that decision
shall constitute the final decision of the Department head and shall be
final and binding on the parties 30 days after it is issued, unless it
is timely appealed to the Department head in accordance with Sec.
33.39.

(Authority: 31 U.S.C. 3809)



Sec. 33.39  Appeal to Department head.

    (a) Any defendant who has filed a timely answer and who is
determined in an initial decision to be liable for a civil penalty or
assessment may appeal the decision to the Department head by filing a
notice of appeal with the Department head in accordance with this
section.
    (b)(1) A notice of appeal may be filed at any time within 30 days
after the ALJ issues a final decision. However, if another party files a
motion for reconsideration under Sec. 33.38, consideration of the
appeal shall be stayed automatically pending resolution of the motion
for reconsideration.
    (2) If a motion for reconsideration is timely filed, a notice of
appeal may be filed within 30 days after the ALJ denies the motion or
issues a revised initial decision, whichever applies.
    (3) The Department head may extend the initial 30-day period for an
additional 30 days if the defendant files with the Department head a
request for an extension within the initial 30-day period and shows good
cause.
    (c) If the defendant files a timely notice of appeal with the
Department head, and the time for filing motions for reconsideration
under Sec. 33.38 has expired, the ALJ shall forward the record of the
proceeding to the Department head.
    (d) A notice of appeal must be accompanied by a written brief
specifying exceptions to the initial decision and reasons supporting the
exceptions.
    (e) The representative for the Government may file a brief in
opposition to exceptions within 30 days of receiving the notice of
appeal and accompanying brief.
    (f) There is no right to appear personally before the Department
head.
    (g) There is no right to appeal any interlocutory ruling by the ALJ.
    (h) In reviewing the initial decision, the Department head does not
consider any objection that was not raised before the ALJ unless a
demonstration is made of extraordinary circumstances causing the failure
to raise the objection.
    (i) If any party demonstrates to the satisfaction of the Department
head that additional evidence not presented at such hearing is material
and that there were reasonable grounds for the failure to present that
evidence at the hearing, the Department head shall remand the matter to
the ALJ for consideration of the additional evidence.
    (j) The Department head affirms, reduces, reverses, compromises,
remands, or settles any penalty or assessment, determined by the ALJ in
any initial decision.

(Authority: 31 U.S.C. 3803(i))

    (k) The Department head promptly serves each party to the appeal
with a copy of the decision of the Department head and a statement
describing the right of any person determined to be liable for a penalty
or assessment to seek judicial review.

(Authority: 31 U.S.C. 3803(i)(2))

    (l) Unless a petition for review is filed as provided in 31 U.S.C.
3805, after a defendant has exhausted all administrative remedies under
this part and within 60 days after the date on which the Department head
serves the defendant with a copy of the Department head's decision, a
determination that a defendant is liable under Sec. 33.3 is final and
is not subject to judicial review.

(Authority: 31 U.S.C. 3805(a)(2))

[[Page 87]]



Sec. 33.40  Stays ordered by the Department of Justice.

    If at any time the Attorney General or an Assistant Attorney General
designated by the Attorney General transmits to the Department head a
written finding that continuation of the administrative process
described in this part with respect to a claim or statement may
adversely affect any pending or potential criminal or civil action
related to such claim or statement, the Department head stays the
process immediately. The Department head orders the process resumed only
upon receipt of the written authorization of the Attorney General.

(Authority: 31 U.S.C. 3803(b)(3))



Sec. 33.41  Stay pending appeal.

    (a) An initial decision is stayed automatically pending disposition
of a motion for reconsideration or of an appeal to the Department head.
    (b) No administrative stay is available following a final decision
of the Department head.

(Authority: 31 U.S.C. 3809)



Sec. 33.42  Judicial review.

    Section 3805 of title 31, United States Code, authorizes judicial
review by an appropriate United States District Court of a final
decision of the Department head imposing penalties or assessments under
this part and specifies the procedures for the review.

(Authority: 31 U.S.C. 3805)



Sec. 33.43  Collection of civil penalties and assessments.

    Section 3806 and 3808(b) of title 31, United States Code, authorize
actions for collection of civil penalties and assessments imposed under
this part and specify the procedures for those actions.

(Authority: 31 U.S.C. 3808(b))



Sec. 33.44  Right to administrative offset.

    The amount of any penalty or assessment that has become final, or
for which a judgment has been entered under Sec. 33.42 or Sec. 33.43,
or any amount agreed upon in a compromise or settlement under Sec.
33.46, may be collected by administrative offset under 31 U.S.C. 3716,
except that an administrative offset may not be under this section
against a refund of an overpayment of Federal taxes, then or later owing
by the United States to the defendant.

(Authority: 31 U.S.C. 3806)



Sec. 33.45  Deposit in Treasury of United States.

    All amounts collected pursuant to this part are deposited as
miscellaneous receipts in the Treasury of the United States, except as
provided in 31 U.S.C. 3806(g).

(Authority: 31 U.S.C. 3807(b))



Sec. 33.46  Compromise or settlement.

    (a) Parties may make offers of compromise or settlement at any time.

(Authority: 31 U.S.C. 3809)

    (b) The reviewing official has the exclusive authority to compromise
or settle a case under this part at any time after the date on which the
reviewing official is permitted to issue a complaint and before the date
on which the ALJ issues an initial decision.

(Authority: 31 U.S.C. 3803(j))

    (c) The Department head has exclusive authority to compromise or
settle a case under this part at any time after the date on which the
ALJ issues an initial decision, except during the pendency of any review
under Sec. 33.42 or during the pendency of any action to collect
penalties and assessments under Sec. 33.43.

(Authority: 31 U.S.C. 3803(i)(2)(C))

    (d) The Attorney General has exclusive authority to compromise or
settle a case under this part during the pendency of any review under
Sec. 33.42 or of any action to recover penalties and assessments under
31 U.S.C. 3806.

(Authority: 31 U.S.C. 3806(f))

    (e) The investigating official may recommend settlement terms to the
reviewing official, the Department head, or the Attorney General, as
appropriate. The reviewing official may recommend settlement terms to
the Department head, or the Attorney General, as appropriate.

(Authority: 31 U.S.C. 3809)


[[Page 88]]


    (f) Any compromise or settlement must be in writing.

(Authority: 31 U.S.C. 3809)



Sec. 33.47  Limitations.

    (a) The notice of hearing with respect to a claim or statement must
be served in the manner specified in Sec. 33.8 within six years after
the date on which the claim or statement is made.
    (b) If the defendant fails to file a timely answer, service of a
notice under Sec. 33.10(b) is deemed a notice of hearing for purposes
of this section.
    (c) The statute of limitations may be extended by agreement of the
parties.

(Authority: 31 U.S.C. 3808)



PART 34_ADMINISTRATIVE WAGE GARNISHMENT--Table of Contents



Sec.
34.1 Purpose of this part.
34.2 Scope of this part.
34.3 Definitions.
34.4 Notice of proposed garnishment.
34.5 Contents of a notice of proposed garnishment.
34.6 Rights in connection with garnishment.
34.7 Consideration of objection to the rate or amount of withholding.
34.8 Providing a hearing.
34.9 Conditions for an oral hearing.
34.10 Conditions for a paper hearing.
34.11 Timely request for a hearing.
34.12 Request for reconsideration.
34.13 Conduct of a hearing.
34.14 Burden of proof.
34.15 Consequences of failure to appear for an oral hearing.
34.16 Issuance of the hearing decision.
34.17 Content of decision.
34.18 Issuance of the wage garnishment order.
34.19 Amounts to be withheld under a garnishment order.
34.20 Amount to be withheld under multiple garnishment orders.
34.21 Employer certification.
34.22 Employer responsibilities.
34.23 Exclusions from garnishment.
34.24 Claim of financial hardship by debtor subject to garnishment.
34.25 Determination of financial hardship.
34.26 Ending garnishment.
34.27 Actions by employer prohibited by law.
34.28 Refunds of amounts collected in error.
34.29 Enforcement action against employer for noncompliance with
          garnishment order.
34.30 Application of payments and accrual of interest.

    Authority: 31 U.S.C. 3720D, unless otherwise noted.

    Source: 68 FR 8142, Feb, 19, 2003, unless otherwise noted.



Sec. 34.1  Purpose of this part.

    This part establishes procedures the Department of Education uses to
collect money from a debtor's disposable pay by means of administrative
wage garnishment to satisfy delinquent debt owed to the United States.

(Authority: 31 U.S.C. 3720D)



Sec. 34.2  Scope of this part.

    (a) This part applies to collection of any financial obligation owed
to the United States that arises under a program we administer.
    (b) This part applies notwithstanding any provision of State law.
    (c) We may compromise or suspend collection by garnishment of a debt
in accordance with applicable law.
    (d) We may use other debt collection remedies separately or in
conjunction with administrative wage garnishment to collect a debt.
    (e) To collect by offset from the salary of a Federal employee, we
use the procedures in 34 CFR part 31, not those in this part.

(Authority: 31 U.S.C. 3720D)



Sec. 34.3  Definitions.

    As used in this part, the following definitions apply:
    Administrative debt means a debt that does not arise from an
individual's obligation to repay a loan or an overpayment of a grant
received under a student financial assistance program authorized under
Title IV of the Higher Education Act.
    Business day means a day Monday through Friday, unless that day is a
Federal holiday.
    Certificate of service means a certificate signed by an authorized
official of the U.S. Department of Education (the Department) that
indicates the nature of the document to which it pertains, the date we
mail the document, and to whom we are sending the document.
    Day means calendar day. For purposes of computation, the last day of
a period will be included unless that day is a Saturday, a Sunday, or a
Federal

[[Page 89]]

legal holiday; in that case, the last day of the period is the next
business day after the end of the period.
    Debt or claim means any amount of money, funds, or property that an
appropriate official of the Department has determined an individual owes
to the United States under a program we administer.
    Debtor means an individual who owes a delinquent nontax debt to the
United States under a program we administer.
    Disposable pay. This term--
    (a)(1) Means that part of a debtor's compensation for personal
services, whether or not denominated as wages, from an employer that
remains after the deduction of health insurance premiums and any amounts
required by law to be withheld.
    (2) For purposes of this part, ``amounts required by law to be
withheld'' include amounts for deductions such as social security taxes
and withholding taxes, but do not include any amount withheld under a
court order; and
    (b) Includes, but is not limited to, salary, bonuses, commissions,
or vacation pay.
    Employer. This term--
    (a) Means a person or entity that employs the services of another
and that pays the latter's wages or salary;
    (b) Includes, but is not limited to, State and local governments;
and
    (c) Does not include an agency of the Federal Government.
    Financial hardship means an inability to meet basic living expenses
for goods and services necessary for the survival of the debtor and his
or her spouse and dependents.
    Garnishment means the process of withholding amounts from an
employee's disposable pay and paying those amounts to a creditor in
satisfaction of a withholding order.
    We means the United States Department of Education.
    Withholding order. (a) This term means any order for withholding or
garnishment of pay issued by this Department, another Federal agency, a
State or private non-profit guaranty agency, or a judicial or
administrative body.
    (b) For purposes of this part, the terms ``wage garnishment order''
and ``garnishment order'' have the same meaning as ``withholding
order.''
    You means the debtor.

(Authority: 31 U.S.C. 3720D)



Sec. 34.4  Notice of proposed garnishment.

    (a) We may start proceedings to garnish your wages whenever we
determine that you are delinquent in paying a debt owed to the United
States under a program we administer.
    (b) We start garnishment proceedings by sending you a written notice
of the proposed garnishment.
    (c) At least 30 days before we start garnishment proceedings, we
mail the notice by first class mail to your last known address.
    (d)(1) We keep a copy of a certificate of service indicating the
date of mailing of the notice.
    (2) We may retain this certificate of service in electronic form.

(Authority: 31 U.S.C. 3720D)



Sec. 34.5  Contents of a notice of proposed garnishment.

    In a notice of proposed garnishment, we inform you of--
    (a) The nature and amount of the debt;
    (b) Our intention to collect the debt through deductions from pay
until the debt and all accumulated interest, penalties, and collection
costs are paid in full; and
    (c) An explanation of your rights, including those in Sec. 34.6,
and the time frame within which you may exercise your rights.

(Authority: 31 U.S.C. 3720D)



Sec. 34.6  Rights in connection with garnishment.

    Before starting garnishment, we provide you the opportunity--
    (a) To inspect and copy our records related to the debt;
    (b) To enter into a written repayment agreement with us to repay the
debt under terms we consider acceptable;
    (c) For a hearing in accordance with Sec. 34.8 concerning--
    (1) The existence, amount, or current enforceability of the debt;

[[Page 90]]

    (2) The rate at which the garnishment order will require your
employer to withhold pay; and
    (3) Whether you have been continuously employed less than 12 months
after you were involuntarily separated from employment.

(Authority: 31 U.S.C. 3720D)



Sec. 34.7  Consideration of objection to the rate or amount of withholding.

    (a) We consider objections to the rate or amount of withholding only
if the objection rests on a claim that withholding at the proposed rate
or amount would cause financial hardship to you and your dependents.
    (b) We do not provide a hearing on an objection to the rate or
amount of withholding if the rate or amount we propose to be withheld
does not exceed the rate or amount agreed to under a repayment agreement
reached within the preceding six months after a previous notice of
proposed garnishment.
    (c) We do not consider an objection to the rate or amount of
withholding based on a claim that by virtue of 15 U.S.C. 1673, no amount
of wages are available for withholding by the employer.

(Authority: 31 U.S.C. 3720D)



Sec. 34.8  Providing a hearing.

    (a) We provide a hearing if you submit a written request for a
hearing concerning the existence, amount, or enforceability of the debt
or the rate of wage withholding.
    (b) At our option the hearing may be an oral hearing under Sec.
34.9 or a paper hearing under Sec. 34.10.

(Authority: 31 U.S.C. 3720D)



Sec. 34.9  Conditions for an oral hearing.

    (a) We provide an oral hearing if you--
    (1) Request an oral hearing; and
    (2) Show in the request a good reason to believe that we cannot
resolve the issues in dispute by review of the documentary evidence, by
demonstrating that the validity of the claim turns on the credibility or
veracity of witness testimony.
    (b) If we determine that an oral hearing is appropriate, we notify
you how to receive the oral hearing.
    (c)(1) At your option, an oral hearing may be conducted either in-
person or by telephone conference.
    (2) We provide an in-person oral hearing with regard to
administrative debts only in Washington D.C.
    (3) We provide an in-person oral hearing with regard to debts based
on student loan or grant obligations only at our regional service
centers in Atlanta, Chicago, or San Francisco.
    (4) You must bear all travel expenses you incur in connection with
an in-person hearing.
    (5) We bear the cost of any telephone calls we place in order to
conduct an oral hearing by telephone.
    (d)(1) To arrange the time and location of the oral hearing, we
ordinarily attempt to contact you first by telephone call to the number
you provided to us.
    (2) If we are unable to contact you by telephone, we leave a message
directing you to contact us within 5 business days to arrange the time
and place of the hearing.
    (3) If we can neither contact you directly nor leave a message with
you by telephone--
    (i) We notify you in writing to contact us to arrange the time and
place of the hearing; or
    (ii) We select a time and place for the hearing, and notify you in
writing of the time and place set for the hearing.
    (e) We consider you to have withdrawn the request for an oral
hearing if--
    (1) Within 15 days of the date of a written notice to contact us, we
receive no response to that notice; or
    (2) Within five business days of the date of a telephone message to
contact us, we receive no response to that message.

(Authority: 31 U.S.C. 3720D)



Sec. 34.10  Conditions for a paper hearing.

    We provide a paper hearing--
    (a) If you request a paper hearing;
    (b) If you requested an oral hearing, but we determine under Sec.
34.9(e) that you have withdrawn that request;
    (c) If you fail to appear for a scheduled oral hearing, as provided
in Sec. 34.15; or
    (d) If we deny a request for an oral hearing because we conclude
that, by a

[[Page 91]]

review of the written record, we can resolve the issues raised by your
objections.

(Authority: 31 U.S.C. 3720D)



Sec. 34.11  Timely request for a hearing.

    (a) A hearing request is timely if--
    (1) You mail the request to the office designated in the garnishment
notice and the request is postmarked not later than the 30th day
following the date of the notice; or
    (2) The designated office receives the request not later than the
30th day following the date of the garnishment notice.
    (b) If we receive a timely written request from you for a hearing,
we will not issue a garnishment order before we--
    (1) Provide the requested hearing; and
    (2) Issue a written decision on the objections you raised.
    (c) If your written request for a hearing is not timely--
    (1) We provide you a hearing; and
    (2) We do not delay issuance of a garnishment order unless--
    (i) We determine from credible representations in the request that
the delay in filing the request for hearing was caused by factors over
which you had no control; or
    (ii) We have other good reason to delay issuing a garnishment order.
    (d) If we do not complete a hearing within 60 days of an untimely
request, we suspend any garnishment order until we have issued a
decision.

(Authority: 31 U.S.C. 3720D)



Sec. 34.12  Request for reconsideration.

    (a) If you have received a decision on an objection to garnishment
you may file a request for reconsideration of that decision.
    (b) We do not suspend garnishment merely because you have filed a
request for reconsideration.
    (c) We consider your request for reconsideration if we determine
that--
    (1) You base your request on grounds of financial hardship, and your
financial circumstances, as shown by evidence submitted with the
request, have materially changed since we issued the decision so that we
should reduce the amount to be garnished under the order; or
    (2)(i) You submitted with the request evidence that you did not
previously submit; and
    (ii) This evidence demonstrates that we should reconsider your
objection to the existence, amount, or enforceability of the debt.
    (d)(1) If we agree to reconsider the decision, we notify you.
    (2)(i) We may reconsider based on the request and supporting
evidence you have presented with the request; or
    (ii) We may offer you an opportunity for a hearing to present
evidence.

(Authority: 31 U.S.C. 3720D)



Sec. 34.13  Conduct of a hearing.

    (a)(1) A hearing official conducts any hearing under this part.
    (2) The hearing official may be any qualified employee of the
Department whom the Department designates to conduct the hearing.
    (b)(1) The hearing official conducts any hearing as an informal
proceeding.
    (2) A witness in an oral hearing must testify under oath or
affirmation.
    (3) The hearing official maintains a summary record of any hearing.
    (c) Before the hearing official considers evidence we obtain that
was not included in the debt records available for inspection when we
sent notice of proposed garnishment, we notify you that additional
evidence has become available, may be considered by the hearing
official, and is available for inspection or copying.
    (d) The hearing official considers any objection you raise and
evidence you submit--
    (1) In or with the request for a hearing;
    (2) During an oral hearing;
    (3) By the date that we consider, under Sec. 34.9(e), that a
request for an oral hearing has been withdrawn; or
    (4) Within a period we set, ordinarily not to exceed seven business
days, after--
    (i) We provide you access to our records regarding the debt, if you
requested access to records within 20 days after the date of the notice
under Sec. 34.4;

[[Page 92]]

    (ii) We notify you that we have obtained and intend to consider
additional evidence;
    (iii) You request an extension of time in order to submit specific
relevant evidence that you identify to us in the request; or
    (iv) We notify you that we deny your request for an oral hearing.

(Authority: 31 U.S.C. 3720D)



Sec. 34.14  Burden of proof.

    (a)(1) We have the burden of proving the existence and amount of a
debt.
    (2) We meet this burden by including in the record and making
available to the debtor on request records that show that--
    (i) The debt exists in the amount stated in the garnishment notice;
and
    (ii) The debt is currently delinquent.
    (b) If you dispute the existence or amount of the debt, you must
prove by a preponderance of the credible evidence that--
    (1) No debt exists;
    (2) The amount we claim to be owed on the debt is incorrect, or
    (3) You are not delinquent with respect to the debt.
    (c)(1) If you object that the proposed garnishment rate would cause
financial hardship, you bear the burden of proving by a preponderance of
the credible evidence that withholding the amount of wages proposed in
the notice would leave you unable to meet the basic living expenses of
you and your dependents.
    (2) The standards for proving financial hardship are those in Sec.
34.24.
    (d)(1) If you object on the ground that applicable law bars us from
collecting the debt by garnishment at this time, you bear the burden of
proving the facts that would establish that claim.
    (2) Examples of applicable law that may prevent collection by
garnishment include the automatic stay in bankruptcy (11 U.S.C. 362(a)),
and the preclusion of garnishment action against a debtor who was
involuntarily separated from employment and has been reemployed for less
than a continuous period of 12 months (31 U.S.C. 3720D(b)(6)).
    (e) The fact that applicable law may limit the amount that an
employer may withhold from your pay to less than the amount or rate we
state in the garnishment order does not bar us from issuing the order.

(Authority: 31 U.S.C. 3720D)



Sec. 34.15  Consequences of failure to appear for an oral hearing.

    (a) If you do not appear for an in-person hearing you requested, or
you do not answer a telephone call convening a telephone hearing, at the
time set for the hearing, we consider you to have withdrawn your request
for an oral hearing.
    (b) If you do not appear for an oral hearing but you demonstrate
that there was good cause for not appearing, we may reschedule the oral
hearing.
    (c) If you do not appear for an oral hearing you requested and we do
not reschedule the hearing, we provide a paper hearing to review your
objections, based on the evidence in your file and any evidence you have
already provided.

(Authority: 31 U.S.C. 3720D)



Sec. 34.16  Issuance of the hearing decision.

    (a) Date of decision. The hearing official issues a written opinion
stating his or her decision, as soon as practicable, but not later than
60 days after the date on which we received the request for hearing.
    (b) If we do not provide you with a hearing and render a decision
within 60 days after we receive your request for a hearing--
    (1) We do not issue a garnishment order until the hearing is held
and a decision rendered; or
    (2) If we have already issued a garnishment order to your employer,
we suspend the garnishment order beginning on the 61st day after we
receive the hearing request until we provide a hearing and issue a
decision.

(Authority: 31 U.S.C. 3720D)



Sec. 34.17  Content of decision.

    (a) The written decision is based on the evidence contained in the
hearing record. The decision includes--
    (1) A description of the evidence considered by the hearing
official;

[[Page 93]]

    (2) The hearing official's findings, analysis, and conclusions
regarding objections raised to the existence or amount of the debt;
    (3) The rate of wage withholding under the order, if you objected
that withholding the amount proposed in the garnishment notice would
cause an extreme financial hardship; and
    (4) An explanation of your rights under this part for
reconsideration of the decision.
    (b) The hearing official's decision is the final action of the
Secretary for the purposes of judicial review under the Administrative
Procedure Act (5 U.S.C. 701 et seq.).

(Authority: 31 U.S.C. 3720D)



Sec. 34.18  Issuance of the wage garnishment order.

    (a)(1) If you fail to make a timely request for a hearing, we issue
a garnishment order to your employer within 30 days after the deadline
for timely requesting a hearing.
    (2) If you make a timely request for a hearing, we issue a
withholding order within 30 days after the hearing official issues a
decision to proceed with garnishment.
    (b)(1) The garnishment order we issue to your employer is signed by
an official of the Department designated by the Secretary.
    (2) The designated official's signature may be a computer-generated
facsimile.
    (c)(1) The garnishment order contains only the information we
consider necessary for your employer to comply with the order and for us
to ensure proper credit for payments received from your employer.
    (2) The order includes your name, address, and social security
number, as well as instructions for withholding and information as to
where your employer must send the payments.
    (d)(1) We keep a copy of a certificate of service indicating the
date of mailing of the order.
    (2) We may create and maintain the certificate of service as an
electronic record.

(Authority: 31 U.S.C. 3720D)



Sec. 34.19  Amounts to be withheld under a garnishment order.

    (a)(1) After an employer receives a garnishment order we issue, the
employer must deduct from all disposable pay of the debtor during each
pay period the amount directed in the garnishment order unless this
section or Sec. 34.20 requires a smaller amount to be withheld.
    (2) The amount specified in the garnishment order does not apply if
other law, including this section, requires the employer to withhold a
smaller amount.
    (b) The employer must comply with our garnishment order by
withholding the lesser of--
    (1) The amount directed in the garnishment order; or--
    (2) The amount specified in 15 U.S.C. 1673(a)(2) (Restriction on
Garnishment); that is, the amount by which a debtor's disposable pay
exceeds an amount equal to 30 times the minimum wage. (See 29 CFR
870.10.)

(Authority: 31 U.S.C. 3720D)



Sec. 34.20  Amount to be withheld under multiple garnishment orders.

    If a debtor's pay is subject to several garnishment orders, the
employer must comply with our garnishment order as follows:
    (a) Unless other Federal law requires a different priority, the
employer must pay us the amount calculated under Sec. 34.19(b) before
the employer complies with any later garnishment orders, except a family
support withholding order.
    (b) If an employer is withholding from a debtor's pay based on a
garnishment order served on the employer before our order, or if a
withholding order for family support is served on an employer at any
time, the employer must comply with our garnishment order by withholding
an amount that is the smaller of--
    (1) The amount calculated under Sec. 34.19(b); or
    (2) An amount equal to 25 percent of the debtor's disposable pay
less the amount or amounts withheld under the garnishment order or
orders with priority over our order.

[[Page 94]]

    (c)(1) If a debtor owes more than one debt arising from a program we
administer, we may issue multiple garnishment orders.
    (2) The total amount withheld from the debtor's pay for orders we
issue under paragraph (c)(1) of this section does not exceed the amounts
specified in the orders, the amount specified in Sec. 34.19(b)(2), or
15 percent of the debtor's disposable pay, whichever is smallest.
    (d) An employer may withhold and pay an amount greater than that
amount in paragraphs (b) and (c) of this section if the debtor gives the
employer written consent.

(Authority: 31 U.S.C. 3720D)



Sec. 34.21  Employer certification.

    (a) Along with a garnishment order, we send to an employer a
certification in a form prescribed by the Secretary of the Treasury.
    (b) The employer must complete and return the certification to us
within the time stated in the instructions for the form.
    (c) The employer must include in the certification information about
the debtor's employment status, payment frequency, and disposable pay
available for withholding.

(Authority: 31 U.S.C. 3720D)



Sec. 34.22  Employer responsibilities.

    (a)(1) Our garnishment order indicates a reasonable period of time
within which an employer must start withholding under the order.
    (2) The employer must promptly pay to the Department all amounts the
employer withholds according to the order.
    (b) The employer may follow its normal pay and disbursement cycles
in complying with the garnishment order.
    (c) The employer must withhold the appropriate amount from the
debtor's wages for each pay period until the employer receives our
notification to discontinue wage garnishment.
    (d) The employer must disregard any assignment or allotment by an
employee that would interfere with or prohibit the employer from
complying with our garnishment order, unless that assignment or
allotment was made for a family support judgment or order.

(Authority: 31 U.S.C. 3720D)



Sec. 34.23  Exclusions from garnishment.

    (a) We do not garnish your wages if we have credible evidence that
you--
    (1) Were involuntarily separated from employment; and
    (2) Have not yet been reemployed continuously for at least 12
months.
    (b) You have the burden of informing us of the circumstances
surrounding an involuntary separation from employment.

(Authority: 31 U.S.C. 3720D)



Sec. 34.24  Claim of financial hardship by debtor subject to garnishment.

    (a) You may object to a proposed garnishment on the ground that
withholding the amount or at the rate stated in the notice of
garnishment would cause financial hardship to you and your dependents.
(See Sec. 34.7)
    (b) You may, at any time, object that the amount or the rate of
withholding which our order specifies your employer must withhold causes
financial hardship.
    (c)(1) We consider an objection to an outstanding garnishment order
and provide you an opportunity for a hearing on your objection only
after the order has been outstanding for at least six months.
    (2) We may provide a hearing in extraordinary circumstances earlier
than six months if you show in your request for review that your
financial circumstances have substantially changed after the notice of
proposed garnishment because of an event such as injury, divorce, or
catastrophic illness.
    (d)(1) You bear the burden of proving a claim of financial hardship
by a preponderance of the credible evidence.
    (2) You must prove by credible documentation--
    (i) The amount of the costs incurred by you, your spouse, and any
dependents, for basic living expenses; and
    (ii) The income available from any source to meet those expenses.
    (e)(1) We consider your claim of financial hardship by comparing--

[[Page 95]]

    (i) The amounts that you prove are being incurred for basic living
expenses; against
    (ii) The amounts spent for basic living expenses by families of the
same size and similar income to yours.
    (2) We regard the standards published by the Internal Revenue
Service under 26 U.S.C. 7122(c)(2) (the ``National Standards'') as
establishing the average amounts spent for basic living expenses for
families of the same size as, and with family incomes comparable to,
your family.
    (3) We accept as reasonable the amount that you prove you incur for
a type of basic living expense to the extent that the amount does not
exceed the amount spent for that expense by families of the same size
and similar income according to the National Standards.
    (4) If you claim for any basic living expense an amount that exceeds
the amount in the National Standards, you must prove that the amount you
claim is reasonable and necessary.

(Authority: 31 U.S.C. 3720D)



Sec. 34.25  Determination of financial hardship.

    (a)(1) If we conclude that garnishment at the amount or rate
proposed in a notice would cause you financial hardship, we reduce the
amount of the proposed garnishment to an amount that we determine will
allow you to meet proven basic living expenses.
    (2) If a garnishment order is already in effect, we notify your
employer of any change in the amount the employer must withhold or the
rate of withholding under the order.
    (b) If we determine that financial hardship would result from
garnishment based on a finding by a hearing official or under a
repayment agreement we reached with you, this determination is effective
for a period not longer than six months after the date of the finding or
agreement.
    (c)(1) After the effective period referred to in paragraph (b) of
this section, we may require you to submit current information regarding
your family income and living expenses.
    (2) If we conclude from a review of that evidence that we should
increase the rate of withholding or payment, we--
    (i) Notify you; and
    (ii) Provide you with an opportunity to contest the determination
and obtain a hearing on the objection under the procedures in Sec.
34.24.

(Authority: 31 U.S.C. 3720D)



Sec. 34.26  Ending garnishment.

    (a)(1) A garnishment order we issue is effective until we rescind
the order.
    (2) If an employer is unable to honor a garnishment order because
the amount available for garnishment is insufficient to pay any portion
of the amount stated in the order, the employer must--
    (i) Notify us; and
    (ii) Comply with the order when sufficient disposable pay is
available.
    (b) After we have fully recovered the amounts owed by the debtor,
including interest, penalties, and collection costs, we send the
debtor's employer notification to stop wage withholding.

(Authority: 31 U.S.C. 3720D)



Sec. 34.27  Actions by employer prohibited by law.

    An employer may not discharge, refuse to employ, or take
disciplinary action against a debtor due to the issuance of a
garnishment order under this part.

(Authority: 31 U.S.C. 3720D)



Sec. 34.28  Refunds of amounts collected in error.

    (a) If a hearing official determines under Sec. Sec. 34.16 and
34.17 that a person does not owe the debt described in our notice or
that an administrative wage garnishment under this part was barred by
law at the time of the collection action, we promptly refund any amount
collected by means of this garnishment.
    (b) Unless required by Federal law or contract, we do not pay
interest on a refund.

(Authority: 31 U.S.C. 3720D)



Sec. 34.29  Enforcement action against employer for noncompliance
with garnishment order.

    (a) If an employer fails to comply with Sec. 34.22 to withhold an
appropriate

[[Page 96]]

amount from wages owed and payable to an employee, we may sue the
employer for that amount.
    (b)(1) We do not file suit under paragraph (a) of this section
before we terminate action to enforce the debt as a personal liability
of the debtor.
    (2) However, the provision of paragraph (b)(1) of this section may
not apply if earlier filing of a suit is necessary to avoid expiration
of any applicable statute of limitations.
    (c)(1) For purposes of this section, termination of an action to
enforce a debt occurs when we terminate collection action in accordance
with the FCCS, other applicable standards, or paragraph (c)(2) of this
section.
    (2) We regard termination of the collection action to have occurred
if we have not received for one year any payments to satisfy the debt,
in whole or in part, from the particular debtor whose wages were subject
to garnishment.

(Authority: 31 U.S.C. 3720D)



Sec. 34.30  Application of payments and accrual of interest.

    We apply payments received through a garnishment in the following
order--
    (a) To costs incurred to collect the debt;
    (b) To interest accrued on the debt at the rate established by--
    (1) The terms of the obligation under which it arises; or
    (2) Applicable law; and
    (c) To outstanding principal of the debt.

(Authority: 31 U.S.C. 3720D)



PART 35_TORT CLAIMS AGAINST THE GOVERNMENT--Table of Contents



                            Subpart A_General

Sec.
35.1 Scope of regulations.

                          Subpart B_Procedures

35.2 Administrative claim; when presented; place of filing.
35.3 Administrative claim; who may file.
35.4 Administrative claim; evidence and information to be submitted.
35.5 Investigation of claims.
35.6 Final denial of claim.
35.7 Payment of approved claims.
35.8 Release.
35.9 Penalties.
35.10 Limitation on Department's authority.

    Authority: Sec. 1(a), 80 Stat. 306; 28 U.S.C. 2672; 28 CFR, part 14.

    Source: 45 FR 30834, May 9, 1980, unless otherwise noted.



                            Subpart A_General



Sec. 35.1  Scope of regulations.

    The regulations in this part shall apply only to claims asserted
under the Federal Tort Claims Act, as amended, 28 U.S.C. 2671-2680, for
money damages against the United States for damage to or loss of
property or personal injury or death caused by the negligent or wrongful
act or omission of any employee of the Department of Education while
acting within the scope of his office or employment.



                          Subpart B_Procedures



Sec. 35.2  Administrative claim; when presented; place of filing.

    (a) For purposes of the regulations in this part, a claim shall be
deemed to have been presented when the Department of Education receives,
at a place designated in paragraph (b) of this section, an executed
Standard Form 95 or other written notification of an incident
accompanied by a claim for money damages in a sum certain for damage to
or loss of property, for personal injury, or for death, alleged to have
occurred by reason of the incident. A claim which should have been
presented to the Department but which was mistakenly addressed to or
filed with another Federal agency, shall be deemed to be presented to
the Department as of the date that the claim is received by the
Department. A claim mistakenly addressed to or filed with the Department
shall forthwith be transferred to the appropriate Federal agency, if
ascertainable, or returned to the claimant.
    (b) A claim presented in compliance with paragraph (a) of this
section may be amended by the claimant at any time prior to final action
by the Secretary or prior to the exercise of the claimant's option to
bring suit under 28 U.S.C. 2675(a). Amendments shall be

[[Page 97]]

submitted in writing and signed by the claimant or his duly authorized
agent or legal representative. Upon the timely filing of an amendment to
a pending claim, the Department shall have 6 months in which to make a
final disposition of the claim as amended and the claimant's option
under 28 U.S.C. 2675(a) shall not accrue until 6 months after the filing
of an amendment.
    (c) Forms may be obtained and claims may be filed, with the
Department of Education Claims Officer, Washington, DC 20202.



Sec. 35.3  Administrative claim; who may file.

    (a) A claim for injury to or loss of property may be presented by
the owner of the property interest which is the subject of the claim,
his duly authorized agent, or his legal representative.
    (b) A claim for personal injury may be presented by the injured
person, his duly authorized agent, or his legal representative.
    (c) A claim based on death may be presented by the executor or
administrator of the decedent's estate or by any other person legally
entitled to assert such a claim under applicable state law.
    (d) A claim for loss wholly compensated by an insurer with the
rights of a subrogee may be presented by the insurer. A claim for loss
partially compensated by an insurer with the rights of a subrogee may be
presented by the insurer or the insured individually, as their
respective interests appear, or jointly. Whenever an insurer presents a
claim asserting the rights of a subrogee, he shall present with his
claim appropriate evidence that he has the rights of a subrogee.
    (e) A claim presented by an agent or legal representative shall be
presented in the name of the claimant, be signed by the agent or legal
representative, show the title or legal capacity of the person signing,
and be accompanied by evidence of his authority to present a claim on
behalf of the claimant as agent, executor, administrator, parent,
guardian, or other representative.



Sec. 35.4  Administrative claim; evidence and information to be submitted.

    (a) Death. In support of a claim based on death, the claimant may be
required to submit the following evidence or information:
    (1) An authenticated death certificate or other competent evidence
showing cause of death, date of death, and age of the decedent.
    (2) Decedent's employment or occupation at time of death, including
his monthly or yearly salary or earnings (if any), and the duration of
his last employment or occupation.
    (3) Full names, addresses, birth dates, kinship, and marital status
of the decedent's survivors, including identification of those survivors
who were dependent for support upon the decedent at the time of his
death.
    (4) Degree of support afforded by the decedent to each survivor
dependent upon him for support at the time of his death.
    (5) Decedent's general physical and mental condition before death.
    (6) Itemized bills for medical and burial expenses incurred by
reason of the incident causing death, or itemized receipts of payments
for such expenses.
    (7) If damages for pain and suffering prior to death are claimed, a
physician's detailed statement specifying the injuries suffered,
duration of pain and suffering, any drugs administered for pain and the
decedent's physical condition in the interval between injury and death.
    (8) Any other evidence or information which may have a bearing on
either the responsibility of the United States for the death or the
damages claimed.
    (b) Personal injury. In support of a claim for personal injury,
including pain and suffering, the claimant may be required to submit the
following evidence or information:
    (1) A written report by his attending physician or dentist setting
forth the nature and extent of the injury, nature and extent of
treatment, any degree of temporary or permanent disability, the
prognosis, period of hospitalization, and any diminished earning
capacity.

[[Page 98]]

In addition, the claimant may be required to submit to a physical or
mental examination by a physician employed or designated by the
Department. A copy of the report of the examining physician shall be
made available to the claimant upon the claimant's written request
provided that claimant has, upon request, furnished the report referred
to in the first sentence of this paragraph and has made or agrees to
make available to the Department any other physician's reports
previously or thereafter made of the physical or mental condition which
is the subject matter of his claim.
    (2) Itemized bills for medical, dental, and hospital expenses
incurred, or itemized receipts of payment for such expenses.
    (3) If the prognosis reveals the necessity for future treatment, a
statement of expected duration of and expenses for such treatment.
    (4) If a claim is made for loss of time from employment, a written
statement from his employer showing actual time lost from employment,
whether he is a full or part-time employee, and wages or salary actually
lost.
    (5) If a claim is made for loss of income and the claimant is self-
employed, documentary evidence showing the amount of earnings actually
lost.
    (6) Any other evidence or information which may have a bearing on
either the responsibility of the United States for the personal injury
or the damages claimed.
    (c) Property damage. In support of a claim for damage to or loss of
property, real or personal, the claimant may be required to submit the
following evidence or information:
    (1) Proof of ownership.
    (2) A detailed statement of the amount claimed with respect to each
item of property.
    (3) An itemized receipt of payment for necessary repairs or itemized
written estimates of the cost of such repairs.
    (4) A statement listing date of purchase, purchase price, market
value of the property as of date of damage, and salvage value, where
repair is not economical.
    (5) Any other evidence or information which may have a bearing
either on the responsibility of the United States for the injury to or
loss of property or the damages claimed.
    (d) Time limit. All evidence required to be submitted by this
section shall be furnished by the claimant within a reasonable time.
Failure of a claimant to furnish evidence necessary to a determination
of his claim within three months after a request therefor has been
mailed to his last known address may be deemed an abandonment of the
claim. The claim may be thereupon disallowed.



Sec. 35.5  Investigation of claims.

    When a claim is received, the Department will make such
investigation as may be necessary or appropriate for a determination of
the validity of the claim.



Sec. 35.6  Final denial of claim.

    (a) Final denial of an administrative claim shall be in writing and
sent to the claimant, his attorney, or legal representative by certified
or registered mail. The notification of final denial may include a
statement of the reasons for the denial and shall include a statement
that, if the claimant is dissatisfied with the Department's action, he
may file suit in an appropriate U.S. District Court not later than 6
months after the date of mailing of the notification.
    (b) Prior to the commencement of suit and prior to the expiration of
the 6-month period after the date of mailing, by certified or registered
mail of notice of final denial of the claim as provided in 28 U.S.C.
2401(b), a claimant, his duly authorized agent, or legal representative,
may file a written request with the Department for reconsideration of a
final denial of a claim under paragraph (a) of this section. Upon the
timely filing of a request for reconsideration the Department shall have
6 months from the date of filing in which to make a final disposition of
the claim and the claimant's option under 28 U.S.C. 2675(a) to bring
suit shall not accrue until 6 months after the filing of a request for
reconsideration. Final Department action on a request for
reconsideration shall be effected in accordance with the provisions of
paragraph (a) of this section.

[[Page 99]]



Sec. 35.7  Payment of approved claims.

    (a) Upon allowance of his claim, claimant or his duly authorized
agent shall sign the voucher for payment, Standard Form 1145, before
payment is made.
    (b) When the claimant is represented by an attorney, the voucher for
payment (SF 1145) shall designate both the claimant and his attorney as
``payees.'' The check shall be delivered to the attorney whose address
shall appear on the voucher.



Sec. 35.8  Release.

    Acceptance by the claimant, his agent or legal representative, of
any award, compromise or settlement made hereunder, shall be final and
conclusive on the claimant, his agent or legal representative and any
other person on whose behalf or for whose benefit the claim has been
presented, and shall constitute a complete release of any claim against
the United States and against any employee of the Government whose act
or omission gave rise to the claim, by reason of the same subject
matter.



Sec. 35.9  Penalties.

    A person who files a false claim or makes a false or fraudulent
statement in a claim against the United States may be liable to a fine
of not more than $10,000 or to imprisonment of not more than 5 years, or
both (18 U.S.C. 287.1001), and, in addition, to a forfeiture of $2,000
and a penalty of double the loss or damage sustained by the United
States (31 U.S.C. 231).



Sec. 35.10  Limitation on Department's authority.

    (a) An award, compromise or settlement of a claim hereunder in
excess of $25,000 shall be effected only with the prior written approval
of the Attorney General or his designee. For the purposes of this
paragraph, a principal claim and any derivative or subrogated claim
shall be treated as a single claim.
    (b) An administrative claim may be adjusted, determined, compromised
or settled hereunder only after consultation with the Department of
Justice when, in the opinion of the Department:
    (1) A new precedent or a new point of law is involved; or
    (2) A question of policy is or may be involved; or
    (3) The United States is or may be entitled to indemnity or
contribution from a third party and the Department is unable to adjust
the third party claim; or
    (4) The compromise of a particular claim, as a practical matter,
will or may control the disposition of a related claim in which the
amount to be paid may exceed $25,000.
    (c) An administrative claim may be adjusted, determined, compromised
or settled only after consultation with the Department of Justice when
it is learned that the United States or an employee, agent or cost plus
contractor of the United States is involved in litigation based on a
claim arising out of the same incident or transaction.



PART 36_ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION--Table
of Contents



Sec.
36.1 Purpose.
36.2 Penalty adjustment.

    Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, unless
otherwise noted.

    Source: 67 FR 69655, Nov. 18, 2002, unless otherwise noted.



Sec. 36.1  Purpose.

    The purpose of this part is to make inflation adjustments to the
civil monetary penalties within the jurisdiction of the Department of
Education. These penalties are subject to review and adjustment as
necessary at least once every 4 years in accordance with the Federal
Civil Penalties Inflation Adjustment Act of 1990, as amended.

(Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, unless
otherwise noted)

[67 FR 69655, Nov. 18, 2002, as amended at 77 FR 60049, Oct. 2, 2012]



Sec. 36.2  Penalty adjustment.

    The citations for the adjusted penalty provisions, a brief
description of the penalty, and the adjusted maximum (and minimum, if
applicable) penalty amounts are listed in Table I.

[[Page 100]]



   Table I, Section 36.2--Civil Monetary Penalty Inflation Adjustments
------------------------------------------------------------------------
                                                      New maximum (and
                                                        minimum, if
           Statute                 Description      applicable)  penalty
                                                           amount
------------------------------------------------------------------------
20 U.S.C. 1015(c)(5) (Section  Provides for a      $30,000.
 131(c)(5) of the Higher        fine, as last
 Education Act of 1965 (HEA)).  adjusted, of up
                                to $27,500 for
                                failure by an
                                institute of
                                higher education
                                to provide
                                information on
                                the cost of
                                higher education
                                to the
                                Commissioner of
                                Education
                                Statistics.
20 U.S.C. 1022d(a)(3)          Provides for a      $30,000.
 (Section 205(a)(3) of the      fine, as set by
 HEA).                          Congress in 2008,
                                of up to $27,500
                                for failure by an
                                IHE to provide
                                information to
                                the State and the
                                public regarding
                                its teacher-
                                preparation
                                programs.
20 U.S.C. 1082(g) (Section     Provides for a      $35,000.
 432(g) of the HEA).            civil penalty, as
                                last adjusted, of
                                up to $27,500 for
                                violations by
                                lenders and
                                guaranty agencies
                                of Title IV of
                                the HEA, which
                                authorizes the
                                Federal Family
                                Education Loan
                                Program.
20 U.S.C. 1094(c)(3)(B)        Provides for a      $35,000.
 (Section 487(c)(3)(B) of the   civil penalty, as
 HEA).                          last adjusted, of
                                up to $27,500 for
                                an IHE's
                                violation of
                                Title IV of the
                                HEA, which
                                authorizes
                                various programs
                                of student
                                financial
                                assistance.
20 U.S.C. 1228c(c)(2)(E)       Provides for a      $1,100.
 (Section 429 of the General    civil penalty of
 Education Provisions Act).     up to $1,000 for
                                an educational
                                organization's
                                failure to
                                disclose certain
                                information to
                                minor students
                                and their parents.
31 U.S.C. 1352(c)(1) and       Provides for a      $15,000 to $140,000.
 (c)(2)(A).                     civil penalty, as
                                last adjusted, of
                                $11,000 to
                                $110,000 for
                                recipients of
                                Government
                                grants,
                                contracts, etc.
                                that improperly
                                lobby Congress or
                                the Executive
                                Branch with
                                respect to the
                                award of
                                Government grants
                                and contracts.
31 U.S.C. 3802(a)(1) and       Provides for a      $7,000.
 (a)(2).                        civil penalty, as
                                last adjusted, of
                                up to $5,500 for
                                false claims and
                                statements made
                                to the Government.
------------------------------------------------------------------------


(Authority: 20 U.S.C. 1221e-3 and 3474; 28 U.S.C. 2461 note, unless
otherwise noted)

[67 FR 69655, Nov. 18, 2002, as amended at 70 FR 298, Jan. 4, 2005; 77
FR 60049, Oct. 2, 2012]



PART 60_INDEMNIFICATION OF DEPARTMENT OF EDUCATION EMPLOYEES--Table of
Contents



Sec.
60.1 What are the policies of the Department regarding indemnification?
60.2 What procedures apply to requests for indemnification?

    Authority: 20 U.S.C. 3411, 3461, 3471, and 3474.

    Source: 54 FR 7148, Feb. 16, 1989, unless otherwise noted.



Sec. 60.1  What are the policies of the Department regarding
indemnification?

    (a)(1) The Department of Education may indemnify, in whole or in
part, an employee for any verdict, judgment, or other monetary award
rendered against the employee if--
    (i) The conduct giving rise to the verdict, judgment, or award
occurred within the scope of his or her employment with the Department;
and
    (ii) The indemnification is in the interest of the United States, as
determined by the Secretary.
    (2) The regulations in this part apply to an action pending against
an ED employee as of March 30, 1989, as well as to any action commenced
after that date.
    (3) As used in this part, the term employee includes--
    (i) A present or former officer or employee of the Department or of
an advisory committee to the Department, including a special Government
employee;
    (ii) An employee of another Federal agency on detail to the
Department; or
    (iii) A student volunteer under 5 U.S.C. 3111.
    (4) As used in this part the term Secretary means the Secretary of
the Department of Education or an official or employee of the Department
acting for the Secretary under a delegation of authority.
    (b)(1) The Department may pay, in whole or in part, to settle or
compromise a personal damage claim against an employee if--
    (i) The alleged conduct giving rise to the personal damage claim
occurred within the scope of employment; and

[[Page 101]]

    (ii) The settlement or compromise is in the interest of the United
States, as determined by the Secretary.
    (2) Payment under paragraph (b)(1) of this section may include
reimbursement, in whole or in part, of an employee for prior payment
made by the employee under a settlement or compromise that meets the
requirements of this section.
    (c) The Department does not indemnify or settle a personal damage
claim before entry of an adverse verdict, judgment, or monetary award
unless the Secretary determines that exceptional circumstances justify
the earlier indemnification or settlement.
    (d) Any payment under this part, either to indemnify a Department of
Education employee or to settle a personal damage claim, is contingent
upon the availability of appropriated funds.

(Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)



Sec. 60.2  What procedures apply to requests for indemnification?

    (a) When an employee of the Department of Education becomes aware
that an action has been filed against the employee in his or her
individual capacity as a result of conduct taken within the scope of his
or her employment, the employee shall immediately notify the head of his
or her principal operating component and shall cooperate with
appropriate officials of the Department in the defense of the action.
    (b) As part of the notification in paragraph (a) of this section or
at a later time, the employee may request--
    (1) Indemnification to satisfy a verdict, judgment, or award entered
against the employee; or
    (2) Payment to satisfy the requirements of a settlement proposal.
    (c)(1) The employee's request must be in writing to the head of his
or her principal operating component and must be accompanied by copies
of the complaint and other documents filed in the action, including the
verdict, judgment, award, settlement, or settlement proposal, as
appropriate.
    (2)(i) As used in this section, the term principal operating
component means an office in the Department headed by an Assistant
Secretary, a Deputy Under Secretary, or an equivalent departmental
officer who reports directly to the Secretary.
    (ii) The term also includes the Office of the Secretary and the
Office of the Under Secretary.
    (d) The head of the employee's principal operating component submits
to the General Counsel, in a timely manner, the request, together with a
recommended disposition of the request.
    (e) The General Counsel forwards to the Secretary for decision--
    (1) The employee's request;
    (2) The recommendation of the head of the employee's principal
operating component; and
    (3) The General Counsel's recommendation.

(Authority: 20 U.S.C. 3411, 3461, 3471, and 3474)



PART 73_STANDARDS OF CONDUCT--Table of Contents



Sec.
73.1 Cross-reference to employee ethical conduct standards and financial
          disclosure regulations.
73.2 Conflict of interest waiver.

Appendix to Part 73--Code of Ethics for Government Service

    Authority: 5 U.S.C. 301, 7301; 18 U.S.C. 208; and E.O. 12674, 3 CFR,
1989 Comp., p. 215, as modified by E.O. 12731, 3 CFR, 1990 Comp., p.
306.

    Source: 60 FR 5818, Jan. 30, 1995, unless otherwise noted.



Sec. 73.1  Cross-reference to employee ethical conduct standards and
financial disclosure regulations.

    Employees of the Department of Education are subject to the
executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635
and to the Department of Education regulation at 5 CFR part 6301 which
supplements the executive branch-wide standards with a requirement for
employees to obtain prior approval to participate in certain outside
activities. In addition, employees are subject to the executive branch-
wide financial disclosure regulations at 5 CFR part 2634.



Sec. 73.2  Conflict of interest waiver.

    If a financial interest arises from ownership by an employee--or
other person or enterprise referred to in 5 CFR 2635.402(b)(2)--of stock
in a widely

[[Page 102]]

diversified mutual fund or other regulated investment company that in
turn owns stock in another enterprise, that financial interest is exempt
from the prohibition in 5 CFR 2635.402(a).



     Sec. Appendix to Part 73--Code of Ethics for Government Service

    Any person in Government service should:
    Put loyalty to the highest moral principles and to country above
loyalty to persons, party, or Government department.
    Uphold the Constitution, laws, and regulations of the United States
and of all governments therein and never be a party to their evasion.
    Give a full day's labor for a full day's pay; giving earnest effort
and best thought to the performance of duties.
    Seek to find and employ more efficient and economical ways of
getting tasks accomplished.
    Never discriminate unfairly by the dispensing of special favors or
privileges to anyone, whether for remuneration or not; and never accept,
for himself or herself or for family members, favors or benefits under
circumstances which might be construed by reasonable persons as
influencing the performance of governmental duties.
    Make no private promises of any kind binding upon the duties of
office, since a Government employee has no private word which can be
binding on public duty.
    Engage in no business with the Government, either directly or
indirectly, which is inconsistent with the conscientious performance of
governmental duties.
    Never use any information gained confidentially in the performance
of governmental duties as a means of making private profit.
    Expose corruption wherever discovered.
    Uphold these principles, ever conscious that public office is a
public trust.

(This Code of Ethics was unanimously passed by the United States
Congress on June 27, 1980, and signed into law as Public Law 96-303 by
the President on July 3, 1980.)



PART 74_ADMINISTRATION OF GRANTS AND AGREEMENTS WITH INSTITUTIONS OF
HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS--Table

of Contents



                            Subpart A_General

Sec.
74.1 Purpose.
74.2 Definitions.
74.3 Effect on other issuances.
74.4 Deviations.
74.5 Subawards.

                    Subpart B_Pre-Award Requirements

74.10 Purpose.
74.11 Pre-award policies.
74.12 Forms for applying for Federal assistance.
74.13 Debarment and suspension.
74.14 Special award conditions.
74.15 Metric system of measurement.
74.16 Resource Conservation and Recovery Act.
74.17 Certifications and representations.

                    Subpart C_Post-Award Requirements

                    Financial and Program Management

74.20 Purpose of financial and program management.
74.21 Standards for financial management systems.
74.22 Payment.
74.23 Cost sharing or matching.
74.24 Program income.
74.25 Revision of budget and program plans.
74.26 Non-Federal audits.
74.27 Allowable costs.
74.28 Period of availability of funds.

                           Property Standards

74.30 Purpose of property standards.
74.31 Insurance coverage.
74.32 Real property.
74.33 Federally-owned and exempt property.
74.34 Equipment.
74.35 Supplies and other expendable property.
74.36 Intangible property.
74.37 Property trust relationship.

                          Procurement Standards

74.40 Purpose of procurement standards.
74.41 Recipient responsibilities.
74.42 Codes of conduct.
74.43 Competition.
74.44 Procurement procedures.
74.45 Cost and price analysis.
74.46 Procurement records.
74.47 Contract administration.
74.48 Contract provisions.

                           Reports and Records

74.50 Purpose of reports and records.
74.51 Monitoring and reporting program performance.
74.52 Financial reporting.
74.53 Retention and access requirements for records.

                       Termination and Enforcement

74.60 Purpose of termination and enforcement.
74.61 Termination.
74.62 Enforcement.

[[Page 103]]

                 Subpart D_After-the-Award Requirements

74.70 Purpose.
74.71 Closeout procedures.
74.72 Subsequent adjustments and continuing responsibilities.
74.73 Collection of amounts due.

Appendix A to Part 74--Contract Provisions

    Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-110, unless
otherwise noted.

    Source: 59 FR 34724, July 6, 1994, unless otherwise noted.



                            Subpart A_General



Sec. 74.1  Purpose.

    (a) This part establishes uniform administrative requirements for
Federal grants and agreements awarded to institutions of higher
education, hospitals, and other non-profit organizations.
    (b) The Secretary does not impose additional or inconsistent
requirements, except as provided in Sec. Sec. 74.4 and 74.14 or unless
specifically required by Federal statute or executive order.
    (c) This part applies to all recipients other than State and local
governments and Indian tribal organizations. Uniform requirements for
State and local governments and tribal organizations are in 34 CFR Part
80--Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments.
    (d) Non-profit organizations that implement Federal programs for the
States are also subject to State requirements.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.2  Definitions.

    The following definitions apply to this part:
    Accrued expenditures means the charges incurred by the recipient
during a given period requiring the provision of funds for--
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, and
other payees; and
    (3) Other amounts becoming owed under programs for which no current
services or performance is required.
    Accrued income means the sum of--
    (1) Earnings during a given period from--
    (i) Services performed by the recipient; and
    (ii) Goods and other tangible property delivered to purchasers; and
    (2) Amounts becoming owed to the recipient for which no current
services or performance is required by the recipient.
    Acquisition cost of equipment means the net invoice price of the
equipment, including the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary to make the property
usable for the purpose for which it was acquired. Other charges, such as
the cost of installation, transportation, taxes, duty, or protective in-
transit insurance, shall be included or excluded from the unit
acquisition cost in accordance with the recipient's regular accounting
practices.
    Advance means a payment made by Treasury check or other appropriate
payment mechanism to a recipient upon its request either before outlays
are made by the recipient or through the use of predetermined payment
schedules.
    Award means financial assistance that provides support or
stimulation to accomplish a public purpose. Awards include grants and
other agreements in the form of money or property, in lieu of money, by
the Federal Government to an eligible recipient. The term does not
include--
    (1) Technical assistance, which provides services instead of money;
    (2) Other assistance in the form of loans, loan guarantees, interest
subsidies, or insurance;
    (3) Direct payments of any kind to individuals; and
    (4) Contracts which are required to be entered into and administered
under procurement laws and regulations.
    Cash contributions means the recipient's cash outlay, including the
outlay of money contributed to the recipient by third parties.
    Closeout means the process by which the Secretary determines that
all applicable administrative actions and all required work of the award
have been completed by the recipient and Department of Education (ED).

[[Page 104]]

    Contract means a procurement contract under an award or subaward,
and a procurement subcontract under a recipient's or subrecipient's
contract.
    Cost sharing or matching means that portion of project or program
costs not borne by the Federal Government.
    Date of completion means the date on which all work under an award
is completed or the date on the award document, or any supplement or
amendment thereto, on which Federal sponsorship ends.
    Disallowed costs means those charges to an award that the Secretary
determines to be unallowable, in accordance with the applicable Federal
cost principles or other terms and conditions contained in the award.
    Equipment means tangible nonexpendable personal property including
exempt property charged directly to the award having a useful life of
more than one year and an acquisition cost of $5,000 or more per unit.
However, consistent with recipient policy, lower limits may be
established.
    Excess property means property under the control of ED that is no
longer required for its needs or the discharge of its responsibilities.
    Exempt property means tangible personal property acquired in whole
or in part with Federal funds, where the Secretary has statutory
authority to vest title in the recipient without further obligation to
the Federal Government. An example of exempt property authority is
contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C.
6306) for property acquired under an award to conduct basic or applied
research by a non-profit institution of higher education or non-profit
organization whose principal purpose is conducting scientific research.
    Federal awarding agency means the Federal agency that provides an
award to the recipient.
    Federal funds authorized means the total amount of Federal funds
obligated by the Federal Government for use by the recipient. This
amount may include any authorized carryover of unobligated funds from
prior funding periods when permitted by ED regulations or ED
implementing instructions.
    Federal share of real property, equipment, or supplies means that
percentage of the property's acquisition costs and any improvement
expenditures paid with Federal funds.
    Funding period means the period of time when Federal funding is
available for obligation by the recipient.
    Intangible property and debt instruments means, but is not limited
to, trademarks, copyrights, patents and patent applications and such
property as loans, notes and other debt instruments, lease agreements,
stock, and other instruments of property ownership, whether considered
tangible or intangible.
    Obligations means the amounts of orders placed, contracts and grants
awarded, services received, and similar transactions during a given
period that require payment by the recipient during the same or a future
period.
    Outlays or expenditures means charges made to the project or
program. They may be reported on a cash or accrual basis. For reports
prepared on a cash basis, outlays are the sum of cash disbursements for
direct charges for goods and services, the amount of indirect expense
charged, the value of third party in-kind contributions applied, and the
amount of cash advances and payments made to subrecipients. For reports
prepared on an accrual basis, outlays are the sum of cash disbursements
for direct charges for goods and services, the amount of indirect
expense incurred, the value of in-kind contributions applied, and the
net increase (or decrease) in the amounts owed by the recipient for
goods and other property received, for services performed by employees,
contractors, subrecipients and other payees, and other amounts becoming
owed under programs for which no current services or performance are
required.
    Personal property means property of any kind except real property.
It may be tangible, having physical existence, or intangible, having no
physical existence, such as copyrights, patents, or securities.
    Prior approval means written approval by an authorized official
evidencing prior consent.
    Program income means gross income earned by the recipient that is
directly generated by a supported activity or

[[Page 105]]

earned as a result of the award (see exclusions in Sec. 74.24(e) and
(h)). Program income includes, but is not limited to, income from fees
for services performed, the use or rental of real or personal property
acquired under federally-funded projects, the sale of commodities or
items fabricated under an award, license fees and royalties on patents
and copyrights, and interest on loans made with award funds. Interest
earned on advances of Federal funds is not program income. Except as
otherwise provided in ED regulations or the terms and conditions of the
award, program income does not include the receipt of principal on
loans, rebates, credits, discounts, etc., or interest earned on any of
them.
    Project costs means all allowable costs, as established in the
applicable Federal cost principles, incurred by a recipient and the
value of the contributions made by third parties in accomplishing the
objectives of the award during the project period.
    Project period means the period established in the award document
during which Federal sponsorship begins and ends.
    Property means, unless otherwise stated, real property, equipment,
intangible property and debt instruments.
    Real property means land, including land improvements, structures
and appurtenances thereto, but excludes movable machinery and equipment.
    Recipient means an organization receiving financial assistance
directly from ED to carry out a project or program. The term includes
public and private institutions of higher education, public and private
hospitals, and other quasi-public and private non-profit organizations
such as, but not limited to, community action agencies, research
institutes, educational associations, and health centers. The term may
include commercial organizations, foreign or international organizations
(such as agencies of the United Nations) which are recipients,
subrecipients, or contractors or subcontractors of recipients or
subrecipients at the discretion of the Secretary. The term does not
include government-owned contractor-operated facilities or research
centers providing continued support for mission-oriented, large-scale
programs that are government-owned or controlled, or are designated as
federally-funded research and development centers.
    Research and development means all research activities, both basic
and applied, and all development activities that are supported at
universities, colleges, and other non-profit institutions. ``Research''
is defined as a systematic study directed toward fuller scientific
knowledge or understanding of the subject studied. ``Development'' is
the systematic use of knowledge and understanding gained from research
directed toward the production of useful materials, devices, systems, or
methods, including design and development of prototypes and processes.
The term ``research'' also includes activities involving the training of
individuals in research techniques where these activities utilize the
same facilities as other pesearch and development activities and where
these activities are not included in the instruction function.
    Small awards means a grant or cooperative agreement not exceeding
the small purchase threshold fixed at 41 U.S.C. 403(11) (currently
$25,000).
    Subaward means an award of financial assistance in the form of
money, or property in lieu of money, made under an award by a recipient
to an eligible subrecipient or by a subrecipient to a lower tier
subrecipient. The term includes financial assistance when provided by
any legal agreement, even if the agreement is called a contract, but
does not include procurement of goods and services nor does it include
any form of assistance which is excluded from the definition of
``award'' as defined in this section.
    Subrecipient means the legal entity to which a subaward is made and
which is accountable to the recipient for the use of the funds provided.
The term may include foreign or international organizations (such as
agencies of the United Nations) at the discretion of the Secretary.
    Supplies means all personal property excluding equipment, intangible
property, and debt instruments as defined in this section, and
inventions of a contractor conceived or first actually reduced to
practice in the performance of

[[Page 106]]

work under a funding agreement (``subject inventions''), as defined in
37 CFR Part 401--Rights to Inventions Made by Nonprofit Organizations
and Small Business Firms Under Government Grants, Contracts, and
Cooperative Agreements.
    Suspension means an action by the Secretary that temporarily
withdraws Federal sponsorship under an award, pending corrective action
by the recipient or pending a decision to terminate the award by the
Secretary. Suspension of an award is a separate action from suspension
under 34 CFR Part 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace
(Grants).
    Termination means the cancellation of Federal sponsorship, in whole
or in part, under an agreement at any time prior to the date of
completion.
    Third party in-kind contributions means the value of non-cash
contributions provided by non-Federal third parties. Third party in-kind
contributions may be in the form of real property, equipment, supplies
and other expendable property, and the value of goods and services
directly benefiting and specifically identifiable to the project or
program.
    Unliquidated obligations, for financial reports prepared on a cash
basis, means the amount of obligations incurred by the recipient that
have not been paid. For reports prepared on an accrued expenditure
basis, they represent the amount of obligations incurred by the
recipient for which an outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the
Secretary that has not been obligated by the recipient and is determined
by deducting the cumulative obligations from the cumulative funds
authorized.
    Unrecovered indirect cost means the difference between the amount
awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
    Working capital advance means a procedure whereby funds are advanced
to the recipient to cover its estimated disbursement needs for a given
initial period.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.3  Effect on other issuances.

    For awards subject to this part, all administrative requirements of
codified program regulations, program manuals, handbooks, and other
nonregulatory materials which are inconsistent with the requirements of
this part are superseded, except to the extent they are required by
statute, or authorized in accordance with the deviations provision in
Sec. 74.4.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.4  Deviations.

    The Secretary, after consultation with the Office of Management and
Budget (OMB), may grant exceptions for classes of grants or recipients
subject to the requirements of this part when exceptions are not
prohibited by statute. However, in the interest of maximum uniformity,
exceptions from the requirements of this part are permitted only in
unusual circumstances. The Secretary may apply more restrictive
requirements to a class of recipients when approved by OMB. The
Secretary may apply less restrictive requirements when awarding small
awards, except for those requirements which are statutory. Exceptions on
a case-by-case basis may also be made by the Secretary.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.5  Subawards.

    Unless sections of this part specifically exclude subrecipients from
coverage, the provisions of this part shall be applied to subrecipients
performing work under awards if the subrecipients are institutions of
higher education, hospitals, or other non-profit organizations. State
and local government subrecipients are subject to the provisions of 34
CFR Part 80--Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[[Page 107]]



                    Subpart B_Pre-Award Requirements



Sec. 74.10  Purpose.

    Sections 74.11 through 74.17 prescribes forms and instructions and
other pre-award matters to be used in applying for awards.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.11  Pre-award policies.

    (a) Use of grants and cooperative agreements, and contracts. In each
instance, the Secretary decides on the appropriate award instrument
(i.e., grant, cooperative agreement, or contract). The Federal Grant and
Cooperative Agreement Act (31 U.S.C. 6301-08) governs the use of grants,
cooperative agreements, and contracts. A grant or cooperative agreement
shall be used only when the principal purpose of a transaction is to
accomplish a public purpose of support or stimulation authorized by
Federal statute. The statutory criterion for choosing between grants and
cooperative agreements is that for the latter, substantial involvement
is expected between ED and the recipient when carrying out the activity
contemplated in the agreement. Contracts shall be used when the
principal purpose is acquisition of property or services for the direct
benefit or use of the Federal Government.
    (b) Public notice and priority setting. The Secretary notifies the
public of intended funding priorities for discretionary grant programs,
unless funding priorities are established by Federal statute.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.12  Forms for applying for Federal assistance.

    (a) The Secretary complies with the applicable report clearance
requirements of 5 CFR Part 1320--Controlling Paperwork Burdens on the
Public--with regard to all forms used by ED in place of or as a
supplement to the Standard Form 424 (SF-424) series.
    (b) Applicants shall use the SF-424 series or those forms and
instructions prescribed by the Secretary.
    (c) For Federal programs covered by E.O. 12372--Intergovernmental
Review of Federal Programs (implemented by the Secretary in 34 CFR Part
79--Intergovernmental Review of Department of Education Programs and
Activities)--the applicant shall complete the appropriate sections of
the SF-424 (Application for Federal Assistance) indicating whether the
application was subject to review by the State Single Point of Contact
(SPOC). The name and address of the SPOC for a particular State can be
obtained from the Secretary or the Catalog of Federal Domestic
Assistance (available from the Superintendent of Documents, Government
Printing Office). The SPOC shall advise the applicant whether the
program for which application is made has been selected by that State
for review.
    (d) If ED does not use the SF-424 form, the Secretary may indicate
whether the application is subject to review by the State under E.O.
12372.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.13  Debarment and suspension.

    The Secretary and recipients shall comply with the nonprocurement
debarment and suspension common rule (implemented by the Secretary in 34
CFR part 85). This common rule restricts subawards and contracts with
certain parties that are debarred, suspended, or otherwise excluded from
or ineligible for participation in Federal assistance programs or
activities.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.14  Special award conditions.

    (a) The Secretary may impose special award conditions, if an
applicant or recipient--
    (1) Has a history of poor performance;
    (2) Is not financially stable;
    (3) Has a management system that does not meet the standards
prescribed in this part;
    (4) Has not conformed to the terms and conditions of a previous
award; or
    (5) Is not otherwise responsible.

[[Page 108]]

    (b) If special award conditions are established under paragraph (a)
of this section, the Secretary notifies the applicant or recipient of--
    (1) The nature of the additional requirements;
    (2) The reason why the additional requirements are being imposed;
    (3) The nature of the corrective action needed;
    (4) The time allowed for completing the corrective actions; and
    (5) The method for requesting reconsideration of the additional
requirements imposed.
    (c) Any special conditions are promptly removed once the conditions
that prompted them have been corrected.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.15  Metric system of measurement.

    The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce. The Act
requires each Federal agency to establish a date or dates in
consultation with the Secretary of Commerce, when the metric system of
measurement will be used in the agency's procurements, grants, and other
business-related activities. Metric implementation may take longer where
the use of the system is initially impractical or likely to cause
significant inefficiencies in the accomplishment of federally-funded
activities. The Secretary follows the provisions of E.O. 12770--Metric
Usage in Federal Government Programs.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.16  Resource Conservation and Recovery Act.

    Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 94-
580 codified at 42 U.S.C. 6962), any State agency or agency of a
political subdivision of a State which is using appropriated Federal
funds must comply with section 6002 of the RCRA. Section 6002 requires
that preference be given in procurement programs to the purchase of
specific products containing recycled materials identified in guidelines
developed by the Environmental Protection Agency (EPA) (40 CFR parts
247-254). Accordingly, recipients that receive direct Federal awards or
other Federal funds shall give preference in their procurement programs
funded with Federal funds to the purchase of recycled products pursuant
to the EPA guidelines.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.17  Certifications and representations.

    Unless prohibited by statute or codified regulation, the Secretary
allows recipients to submit certifications and representations required
by statute, executive order, or regulation on an annual basis, if the
recipients have ongoing and continuing relationships with ED. Annual
certifications and representations shall be signed by responsible
officials with the authority to ensure recipients' compliance with the
pertinent requirements.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



                    Subpart C_Post-Award Requirements

                    Financial and Program Management



Sec. 74.20  Purpose of financial and program management.

    Sections 74.21 through 74.28 prescribe standards for financial
management systems, methods for making payments and rules for--
    (a) Satisfying cost sharing and matching requirements;
    (b) Accounting for program income;
    (c) Approving budget revisions;
    (d) Making audits;
    (e) Determining allowability of cost; and
    (f) Establishing fund availability.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.21  Standards for financial management systems.

    (a) Recipients shall relate financial data to performance data and
develop unit cost information whenever practical.

[[Page 109]]

    (b) Recipients' financial management systems shall provide for the
following:
    (1) Accurate, current, and complete disclosure of the financial
results of each federally-sponsored project in accordance with the
reporting requirements established in Sec. 74.52. If the Secretary
requires reporting on an accrual basis from a recipient that maintains
its records on other than an accrual basis, the recipient shall not be
required to establish an accrual accounting system. These recipients may
develop accrual data for its reports on the basis of an analysis of the
documentation on hand.
    (2) Records that identify adequately the source and application of
funds for federally-sponsored activities. These records shall contain
information pertaining to awards, authorizations, obligations,
unobligated balances, assets, outlays, income, and interest.
    (3) Effective control over and accountability for all funds,
property, and other assets. Recipients shall adequately safeguard all
assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award.
Whenever appropriate, financial information should be related to
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the
transfer of funds to the recipient from the U.S. Treasury and the
issuance or redemption of checks, warrants or payments by other means
for program purposes by the recipient. To the extent that the provisions
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern,
payment methods of State agencies, instrumentalities, and fiscal agents
shall be consistent with CMIA Treasury-State Agreements or the CMIA
default procedures codified at 31 CFR Part 205--Withdrawal of Cash from
the Treasury for Advances under Federal Grant and Other Programs.
    (6) Written procedures for determining the reasonableness,
allocability, and allowability of costs in accordance with the
provisions of the applicable Federal cost principles and the terms and
conditions of the award.
    (7) Accounting records including cost accounting records that are
supported by source documentation.
    (c) Where the Federal Government guarantees or insures the repayment
of money borrowed by the recipient, the Secretary may require adequate
bonding and insurance if the bonding and insurance requirements of the
recipient are not deemed adequate to protect the interest of the Federal
Government.
    (d) The Secretary may require adequate fidelity bond coverage where
the recipient lacks sufficient coverage to protect the Federal
Government's interest.
    (e) Where bonds are required under paragraphs (a) and (b) of this
section, the bonds shall be obtained from companies holding certificates
of authority as acceptable sureties, as prescribed in 31 CFR Part 223--
Surety Companies Doing Business with the United States.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the
transfer of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payment by other means by the
recipients. Payment methods of State agencies or instrumentalities shall
be consistent with Treasury-State CMIA agreements or default procedures
codified at 31 CFR part 205.
    (b)(1) Recipients are paid in advance, provided they maintain or
demonstrate the willingness to maintain--
    (i) Written procedures that minimize the time elapsing between the
transfer of funds and disbursement by the recipient; and
    (ii) Financial management systems that meet the standards for fund
control and accountability as established in Sec. 74.21.
    (2) Cash advances to a recipient organization are limited to the
minimum amounts needed and be timed to be in accordance with the actual,
immediate

[[Page 110]]

cash requirements of the recipient organization in carrying out the
purpose of the approved program or project.
    (3) The timing and amount of cash advances are as close as is
administratively feasible to the actual disbursements by the recipient
organization for direct program or project costs and the proportionate
share of any allowable indirect costs.
    (c) Whenever possible, advances are consolidated to cover
anticipated cash needs for all awards made by the Secretary.
    (1) Advance payment mechanisms include, but are not limited to,
Treasury check, and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients are authorized to submit requests for advances and
reimbursements at least monthly when electronic fund transfers are not
used.
    (d) Requests for Treasury check advance payment shall be submitted
on SF-270--Request for Advance or Reimbursement--or other forms as may
be authorized by OMB. This form is not to be used when Treasury check
advance payments are made to the recipient automatically through the use
of a predetermined payment schedule or if precluded by ED instructions
for electronic funds transfer.
    (e) Reimbursement is the preferred method when the requirements in
paragraph (b) of this section cannot be met. The Secretary may also use
this method on any construction agreement, or if the major portion of
the construction project is accomplished through private market
financing or Federal loans, and the Federal assistance constitutes a
minor portion of the project.
    (1) When the reimbursement method is used, the Secretary makes
payment within 30 days after receipt of the billing, unless the billing
is improper.
    (2) Recipients are authorized to submit request for reimbursement at
least monthly when electronic funds transfers are not used.
    (f) If a recipient cannot meet the criteria for advance payments and
the Secretary has determined that reimbursement is not feasible because
the recipient lacks sufficient working capital, the Secretary may
provide cash on a working capital advance basis. Under this procedure,
the Secretary advances cash to the recipient to cover its estimated
disbursement needs for an initial period generally geared to the
awardee's disbursing cycle. Thereafter, the Secretary reimburses the
recipient for its actual cash disbursements. The working capital advance
method of payment is not used for recipients unwilling or unable to
provide timely advances to their subrecipient to meet the subrecipient's
actual cash disbursements.
    (g) To the extent available, recipients shall disburse funds
available from repayments to and interest earned on a revolving fund,
program income, rebates, refunds, contract settlements, audit
recoveries, and interest earned on these funds before requesting
additional cash payments.
    (h) Unless otherwise required by statute, the Secretary does not
withhold payments for proper charges made by recipients at any time
during the project period unless--
    (1) A recipient has failed to comply with the project objectives,
the terms and conditions of the award, or Federal reporting
requirements; or
    (2) The recipient or subrecipient is delinquent in a debt to the
United States as defined in OMB Circular A-129--Managing Federal Credit
Programs. Under these conditions, the Secretary may, upon reasonable
notice, inform the recipient that ED does not make payments for
obligations incurred after a specified date until the conditions are
corrected or the indebtedness to the Federal Government is liquidated.
    (i) The standards governing the use of banks and other institutions
as depositories of funds advanced under awards are as follows:
    (1) Except for situations described in paragraph (i)(2) of this
section, the Secretary does not require separate depository accounts for
funds provided to a recipient or establish any eligibility requirements
for depositories for funds provided to a recipient. However, recipients
must be able to account for the receipt, obligation, and expenditure of
funds.
    (2) Advances of Federal funds shall be deposited and maintained in
insured accounts whenever possible.

[[Page 111]]

    (j) Consistent with the national goal of expanding the opportunities
for women-owned and minority-owned business enterprises, recipients
shall be encouraged to use women-owned and minority-owned banks (a bank
which is owned at least 50 percent by women or minority group members).
    (k) Recipients shall maintain advances of Federal funds in interest
bearing accounts, unless--
    (1) The recipient receives less than $120,000 in Federal awards per
year;
    (2) The best reasonably available interest bearing account would not
be expected to earn interest in excess of $250 per year on Federal cash
balances; or
    (3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
    (l) For those entities where CMIA and its implementing regulations
do not apply, interest earned on Federal advances deposited in interest
bearing accounts shall be remitted annually to Department of Health and
Human Services, Payment Management System, Rockville, MD 20852. Interest
amounts up to $250 per year may be retained by the recipient for
administrative expense. State universities and hospitals shall comply
with CMIA, as it pertains to interest. If an entity subject to CMIA uses
its own funds to pay pre-award costs for discretionary awards without
prior written approval from the Secretary, it waives its right to
recover the interest under CMIA.
    (m) Except as noted elsewhere in this part, only the following forms
are authorized for the recipients in requesting advances and
reimbursements. The Secretary does not require more than an original and
two copies of the following:
    (1) SF-270--Request for Advance or Reimbursement. The Secretary
adopts the SF-270 as a standard form for all nonconstruction programs
when electronic funds transfer or predetermined advance methods are not
used. The Secretary may, however, use this form for construction
programs in lieu of the SF-271--Outlay Report and Request for
Reimbursement for Construction Programs.
    (2) SF-271--Outlay Report and Request for Reimbursement for
Construction Programs. The Secretary adopts the SF-271 as the standard
form to be used for requesting reimbursement for construction programs.
However, the Secretary may substitute the SF-270 when the Secretary
determines that it provides adequate information to meet Federal needs.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.23  Cost sharing or matching.

    (a) All contributions, including cash and third party in-kind, are
accepted as part of the recipient's cost sharing or matching when
contributions meet the following criteria:
    (1) Are verifiable from the recipient's records.
    (2) Are not included as contributions for any other federally-
assisted project or program.
    (3) Are necessary and reasonable for proper and efficient
accomplishment of project or program objectives.
    (4) Are allowable under the applicable cost principles.
    (5) Are not paid by the Federal Government under another award,
except where authorized by Federal statute to be used for cost sharing
or matching.
    (6) Are provided for in the approved budget when required by the
Secretary.
    (7) Conform to other provisions of this part, as applicable.
    (b) Unrecovered indirect costs may be included as part of cost
sharing or matching only with the prior approval of the Secretary.
    (c) Values for recipient contributions of services and property
shall be established in accordance with the applicable cost principles.
If the Secretary authorizes recipients to donate buildings or land for
construction/facilities acquisition projects or long-term use, the value
of the donated property for cost sharing or matching shall be the lesser
of--
    (1) The certified value of the remaining life of the property
recorded in the recipient's accounting records at the time of donation;
or
    (2) The current fair market value. However, if there is sufficient
justification, the Secretary may approve the use of the current fair
market value of

[[Page 112]]

the donated property, even if it exceeds the certified value at the time
of donation to the project.
    (d) Volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor may be
counted as cost sharing or matching if the service is an integral and
necessary part of an approved project or program. Rates for volunteer
services must be consistent with those paid for similar work in the
recipient's organization. In those instances in which the required
skills are not found in the recipient organization, rates must be
consistent with those paid for similar work in the labor market in which
the recipient competes for the kind of services involved. In either
case, paid fringe benefits that are reasonable, allowable, and allocable
may be included in the valuation.
    (e) When an employer other than the recipient furnishes the services
of an employee, these services shall be valued at the employee's regular
rate of pay (plus an amount of fringe benefits that are reasonable,
allowable, and allocable, but exclusive of overhead costs), provided
these services are in the same skill for which the employee is normally
paid.
    (f) Donated supplies may include such items as expendable equipment,
office supplies, laboratory supplies, or workshop and classroom
supplies. Value assessed to donated supplies included in the cost
sharing or matching share shall be reasonable and shall not exceed the
fair market value of the property at the time of the donation.
    (g) The method used for determining cost sharing or matching for
donated equipment, buildings, and land for which title passes to the
recipient may differ according to the purpose of the award.
    (1) If the purpose of the award is to assist the recipient in the
acquisition of equipment, buildings or land, the total value of the
donated property may be claimed as cost sharing or matching.
    (2) If the purpose of the award is to support activities that
require the use of equipment, buildings or land, normally only
depreciation or use charges for equipment and buildings may be made.
However, the full value of equipment or other capital assets and fair
rental charges for land may be allowed, provided that the Secretary has
approved the charges.
    (h) The value of donated property must be determined in accordance
with the usual accounting policies of the recipient, with the following
qualifications:
    (1) The value of donated land and buildings may not exceed its fair
market value at the time of donation to the recipient as established by
an independent appraiser (e.g., certified real property appraiser or
General Services Administration representative) and certified by a
responsible official of the recipient.
    (2) The value of donated equipment may not exceed the fair market
value of equipment of the same age and condition at the time of
donation.
    (3) The value of donated space may not exceed the fair rental value
of comparable space as established by an independent appraisal of
comparable space and facilities in a privately-owned building in the
same locality.
    (4) The value of loaned equipment shall not exceed its fair rental
value.
    (5) The following requirements pertain to the recipient's supporting
records for in-kind contributions from third parties:
    (i) Volunteer services must be documented and, to the extent
feasible, supported by the same methods used by the recipient for its
own employees.
    (ii) The basis for determining the valuation for personal service,
material, equipment, buildings, and land must be documented.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.24  Program income.

    (a) The Secretary applies the standards contained in this section in
requiring recipient organizations to account for program income related
to projects financed in whole or in part with Federal funds.
    (b) Except as provided in paragraph (h) of this section, program
income earned during the project period must be retained by the
recipient and, in accordance with ED regulations or the terms and
conditions of the award,

[[Page 113]]

must be used in one or more of the following ways:
    (1) Added to funds committed to the project by the Secretary and
recipient and used to further eligible project or program objectives.
    (2) Used to finance the non-Federal share of the project or program.
    (3) Deducted from the total project or program allowable cost in
determining the net allowable costs on which the Federal share of costs
is based.
    (c) When the Secretary authorizes the disposition of program income
as described in paragraphs (b)(1) or (b)(2) of this section, program
income in excess of any limits stipulated shall be used in accordance
with paragraph (b)(3) of this section.
    (d) In the event that the Secretary does not specify in program
regulations or the terms and conditions of the award how program income
is to be used, paragraph (b)(3) of this section applies automatically to
all projects or programs except research. For awards that support
research, paragraph (b)(1) of this section applies automatically unless
the Secretary indicates in the terms and conditions another alternative
on the award or the recipient is subject to special award conditions, as
indicated in Sec. 74.14.
    (e) Unless ED regulations or the terms and conditions of the award
provide otherwise, recipients have no obligation to the Federal
Government regarding program income earned after the end of the project
period.
    (f) If authorized by ED or the terms and conditions of the award,
costs incident to the generation of program income may be deducted from
gross income to determine program income, provided these costs have not
been charged to the award.
    (g) Proceeds from the sale of property shall be handled in
accordance with the requirements of the Property Standards (See
Sec. Sec. 74.30 through 74.37).
    (h) Unless ED regulations or the terms and condition of the award
provide otherwise, recipients have no obligation to the Federal
Government with respect to program income earned from license fees and
royalties for copyrighted material, patents, patent applications,
trademarks, and inventions produced under an award. However, Patent and
Trademark Amendments (35 U.S.C. 18) apply to inventions made under an
experimental, developmental, or research award.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.25  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or
program as approved during the award process. It may include either the
Federal and non-Federal share, or only the Federal share, depending upon
ED requirements. It shall be related to performance for program
evaluation purposes whenever appropriate.
    (b) Recipients are required to report deviations from budget and
program plans, and request prior approvals for budget and program plan
revisions, in accordance with this section.
    (c) For nonconstruction awards, recipients shall request prior
approvals from ED for one or more of the following program or budget
related reasons:
    (1) Change in the scope or the objective of the project or program
(even if there is no associated budget revision requiring prior written
approval).
    (2) Change in a key person specified in the application or award
document.
    (3) The absence for more than three months, or a 25 percent
reduction in time devoted to the project, by the approved project
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) The transfer of amounts budgeted for indirect costs to absorb
increases in direct costs, or vice versa, if approval is required by the
Secretary.
    (6) The inclusion, unless waived by the Secretary, of costs that
require prior approval in accordance with OMB Circular A-21--Cost
Principles for Institutions of Higher Education, OMB Circular A-122--
Cost Principles for Non-Profit Organizations, or 45 CFR part 74,
appendix E--Principles for Determining Costs Applicable to Research and
Development under Grants and Contracts with Hospitals, or 48 CFR part
31--Contract Cost Principles and Procedures, as applicable.

[[Page 114]]

    (7) The transfer of funds allotted for training allowances (direct
payment to trainees) to other categories of expense.
    (8) Unless described in the application and funded in the approved
awards, the subaward, transfer or contracting out of any work under an
award. This provision does not apply to the purchase of supplies,
material, equipment, or general support services.
    (d) No other prior approval requirements for specific items are
imposed unless a deviation has been approved by OMB.
    (e) Except for requirements listed in paragraphs (c)(1) and (c)(4)
of this section, the Secretary may waive cost-related and administrative
prior written approvals required by this part and OMB Circulars A-21 and
A-122. These waivers may authorize recipients to do any one or more of
the following:
    (1) Incur pre-award costs 90 calendar days prior to award or more
than 90 calendar days with the prior approval of the Secretary. All pre-
award costs are incurred at the recipient's risk (i.e., the Secretary is
under no obligation to reimburse these costs if for any reason the
recipient does not receive an award or if the award is less than
anticipated and inadequate to cover these costs).
    (2)(i) Initiate a one-time extension of the expiration date of the
award of up to 12 months unless one or more of the following conditions
apply:
    (A) The terms and conditions of award prohibit the extension.
    (B) The extension requires additional Federal funds.
    (C) The extension involves any change in the approved objectives or
scope of the project.
    (ii) For one-time extensions, the recipient shall notify the
Secretary in writing with the supporting reasons and revised expiration
date at least 10 days before the expiration date specified in the award.
This one-time extension may not be exercised merely for the purpose of
using unobligated balances.
    (3) Carry forward unobligated balances to subsequent funding
periods.
    (4) For awards that support research, unless the Secretary provides
otherwise in the award or in ED's regulations, the prior approval
requirements described in paragraph (e) of this section are
automatically waived (i.e., recipients need not obtain prior approvals)
unless one of the conditions included in paragraph (e)(2)(i) of this
section applies.
    (f) The Secretary may restrict the transfer of funds among direct
cost categories or programs, functions and activities for awards in
which the Federal share of the project exceeds $100,000 and the
cumulative amount of the transfers exceeds or is expected to exceed 10
percent of the total budget as last approved by the Secretary. The
Secretary does not permit a transfer that would cause any Federal
appropriation or part thereof to be used for purposes other than those
consistent with the original intent of the appropriation.
    (g) All other changes to nonconstruction budgets, except for the
changes described in paragraph (j) of this section, do not require prior
approval.
    (h) For construction awards, recipients shall request prior written
approval promptly from the Secretary for budget revisions whenever--
    (1) The revision results from changes in the scope or the objective
of the project or program;
    (2) The need arises for additional Federal funds to complete the
project; or
    (3) A revision is desired which involves specific costs for which
prior written approval requirements may be imposed consistent with
applicable OMB cost principles listed in Sec. 74.27.
    (i) No other prior approval requirements for specific items may be
imposed unless a deviation has been approved by OMB.
    (j) When the Secretary makes an award that provides support for both
construction and nonconstruction work, the Secretary may require the
recipient to request prior approval from the Secretary before making any
fund or budget transfers between the two types of work supported.
    (k) For both construction and nonconstruction awards, recipients
shall notify the Secretary in writing promptly whenever the amount of
Federal authorized funds is expected to exceed the needs of the
recipient for the

[[Page 115]]

project period by more than $5,000 or five percent of the Federal award,
whichever is greater. This notification shall not be required if an
application for additional funding is submitted for a continuation
award.
    (l) When requesting approval for budget revisions, recipients shall
use the budget forms that were used in the application unless the
Secretary indicates a letter of request suffices.
    (m) Within 30 calendar days from the date of receipt of the request
for budget revisions, the Secretary shall review the request and notify
the recipient whether the budget revisions have been approved. If the
revision is still under consideration at the end of 30 calendar days,
the Secretary informs the recipient in writing of the date when the
recipient may expect the decision.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.26  Non-Federal audits.

    (a) Recipients and subrecipients that are institutions of higher
education or other non-profit organizations (including hospitals) shall
be subject to the audit requirements contained in the Single Audit Act
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations.''
    (b) State and local governments shall be subject to the audit
requirements contained in the Single Audit Act Amendments of 1996 (31
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States,
Local Governments, and Non-Profit Organizations.''
    (c) For-profit hospitals not covered by the audit provisions of
revised OMB Circular A-133 shall be subject to the audit requirements of
the Federal awarding agencies.
    (d) Commercial organizations are subject to the audit requirements
established by the Secretary or the prime recipient as incorporated into
the award document.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 62 FR 45939, 45943, Aug. 29,
1997]



Sec. 74.27  Allowable costs.

    (a) For each kind of recipient, there is a set of cost principles
for determining allowable costs. Allowability of costs are determined in
accordance with the cost principles applicable to the entity incurring
the costs, as specified in the following chart.

    Note: OMB circulars are available from the Office of Management and
Budget, Publication Office, Room 2200, New Executive Office Building,
Washington, DC 20503 (202) 395-7332.)

------------------------------------------------------------------------
        For the cost of a--                Use the principles in--
------------------------------------------------------------------------
Private nonprofit organization      OMB Circular A-122.
 other than (1) An institution of
 higher education; (2) a hospital;
 or (3) an organization named in
 OMB Circular A-122 as not subject
 to that circular.
Educational institution...........  OMB Circular A-21.
Hospital..........................  Appendix E to 45 CFR part 74.
Commercial for-profit organization  48 CFR part 31 Contract Cost
 other than a hospital and an        Principles and Procedures or
 educational institution.            uniform cost accounting standards
                                     that comply with cost principles
                                     acceptable to ED.
------------------------------------------------------------------------

    (b) The cost principles applicable to a State, a local government,
or Federally recognized Indian tribal government are specified at 34 CFR
Sec. 80.22.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.28  Period of availability of funds.

    Where a funding period is specified, a recipient may charge to the
grant only allowable costs resulting from obligations incurred during
the funding period and any pre-award costs authorized by the Secretary.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[[Page 116]]

                           Property Standards



Sec. 74.30  Purpose of property standards.

    Sections 74.31 through 74.37 establish uniform standards governing
management and disposition of property furnished by ED whose cost was
charged to a project supported by a Federal award. Recipients shall
observe these standards under awards. The Secretary does not impose
additional requirements, unless specifically required by Federal
statute. The recipient may use its own property management standards and
procedures provided it observes the provisions of Sec. Sec. 74.31
through 74.37.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.31  Insurance coverage.

    Recipients shall, at a minimum, provide the equivalent insurance
coverage for real property and equipment acquired with Federal funds as
provided to property owned by the recipient. Federally-owned property
need not be insured unless required by the terms and conditions of the
award.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.32  Real property.

    The Secretary prescribes requirements for recipients concerning the
use and disposition of real property acquired in whole or in part under
awards. Unless otherwise provided by statute, the minimum requirements
provide the following:
    (a) Title to real property must vest in the recipient subject to the
condition that the recipient shall use the real property for the
authorized purpose of the project as long as it is needed and shall not
encumber the property without approval of the Secretary.
    (b) The recipient shall obtain written approval by the Secretary for
the use of real property in other federally-sponsored projects when the
recipient determines that the property is no longer needed for the
purpose of the original project. Use in other projects shall be limited
to those under federally-sponsored projects (i.e., awards) that have
purposes consistent with those authorized for support by the Secretary.
    (c) When the real property is no longer needed as provided in
paragraphs (a) and (b) of this section, the recipient shall request
disposition instructions from ED or its successor Federal awarding
agency. The Secretary observes one or more of the following disposition
instructions:
    (1) The recipient may be permitted to retain title without further
obligation to the Federal Government after it compensates the Federal
Government for that percentage of the current fair market value of the
property attributable to the Federal participation in the project.
    (2) The recipient may be directed to sell the property under
guidelines provided by the Secretary and pay the Federal Government for
that percentage of the current fair market value of the property
attributable to the Federal participation in the project (after
deducting actual and reasonable selling and fix-up expenses, if any,
from the sales proceeds). When the recipient is authorized or required
to sell the property, proper sales procedures must be established that
provide for competition to the extent practicable and result in the
highest possible return.
    (3) The recipient may be directed to transfer title to the property
to the Federal Government or to an eligible third party. The recipient
is entitled to compensation for its attributable percentage of the
current fair market value of the property.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.33  Federally-owned and exempt property.

    (a) Federally-owned property. (1) Title to federally-owned property
remains vested in the Federal Government. Recipients shall submit
annually an inventory listing of federally-owned property in their
custody to the Secretary. Upon completion of the award or when the
property is no longer needed, the recipient shall report the property to
the Secretary for further ED utilization.
    (2) If ED has no further need for the property, it shall be declared
excess and reported to the General Services

[[Page 117]]

Administration, unless the Secretary has statutory authority to dispose
of the property by alternative methods (e.g., the authority provided by
the Federal Technology Transfer Act (15 U.S.C. 3710 (I)) to donate
research equipment to educational and non-profit organizations in
accordance with E.O. 12821--Improving Mathematics and Science Education
in Support of the National Education Goals. Appropriate instructions
shall be issued to the recipient by the Secretary.
    (b) Exempt property. When statutory authority exists, the Secretary
may vest title to property acquired with Federal funds in the recipient
without further obligation to the Federal Government and under
conditions the Secretary considers appropriate. This property is
``exempt property.'' Should the Secretary not establish conditions,
title to exempt property upon acquisition vests in the recipient without
further obligation to the Federal Government.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds
shall vest in the recipient, subject to conditions of this section.
    (b) The recipient may not use equipment acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute, for as long as the Federal
Government retains an interest in the equipment.
    (c) The recipient shall use the equipment in the project or program
for which it was acquired as long as needed, whether or not the project
or program continues to be supported by Federal funds and may not
encumber the property without approval of the Secretary. When no longer
needed for the original project or program, the recipient shall use the
equipment in connection with its other federally-sponsored activities,
in the following order of priority:
    (1) Activities sponsored by the Federal awarding agency which funded
the original project; and then
    (2) Activities sponsored by other Federal awarding agencies.
    (d) During the time that equipment is used on the project or program
for which it was acquired, the recipient shall make it available for use
on other projects or programs if other use will not interfere with the
work on the project or program for which the equipment was originally
acquired. First preference for other use shall be given to other
projects or programs sponsored by the Federal awarding agency that
financed the equipment; second preference shall be given to projects or
programs sponsored by other Federal awarding agencies. If the equipment
is owned by the Federal Government, use on other activities not
sponsored by the Federal Government shall be permissible if authorized
by the Federal awarding agency. User charges shall be treated as program
income.
    (e) When acquiring replacement equipment, the recipient may use the
equipment to be replaced as trade-in or sell the equipment and use the
proceeds to offset the costs of the replacement equipment subject to the
approval of the Secretary.
    (f) The recipient's property management standards for equipment
acquired with Federal funds and federally-owned equipment shall include
all of the following:
    (1) Equipment records shall be maintained accurately and shall
include the following information:
    (i) A description of the equipment.
    (ii) Manufacturer's serial number, model number, Federal stock
number, national stock number, or other identification number.
    (iii) Source of the equipment, including the award number.
    (iv) Whether title vests in the recipient or the Federal Government.
    (v) Acquisition date (or date received, if the equipment was
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of
Federal participation in the cost of the equipment (not applicable to
equipment furnished by the Federal Government).
    (vii) Location and condition of the equipment and the date the
information was reported.
    (viii) Unit acquisition cost.

[[Page 118]]

    (ix) Ultimate disposition data, including date of disposal and sales
price or the method used to determine current fair market value where a
recipient compensates ED for its share.
    (2) Equipment owned by the Federal Government must be identified to
indicate Federal ownership.
    (3) A physical inventory of equipment must be taken and the results
reconciled with the equipment records at least once every two years. Any
differences between quantities determined by the physical inspection and
those shown in the accounting records must be investigated to determine
the causes of the difference. The recipient shall, in connection with
the inventory, verify the existence, current utilization, and continued
need for the equipment.
    (4) A control system must be in effect to insure adequate safeguards
to prevent loss, damage, or theft of the equipment. Any loss, damage, or
theft of equipment shall be investigated and fully documented; if the
equipment was owned by the Federal Government, the recipient shall
promptly notify the Secretary.
    (5) Adequate maintenance procedures must be implemented to keep the
equipment in good condition.
    (6) Where the recipient is authorized or required to sell the
equipment, proper sales procedures must be established which provide for
competition to the extent practicable and result in the highest possible
return.
    (g) When the recipient no longer needs the equipment, the equipment
may be used for other activities in accordance with the following
standards:
    (1) For equipment with a current per unit fair market value of $5000
or more, the recipient may retain the equipment for other uses provided
that compensation is made to ED or its successor. The amount of
compensation shall be computed by applying the percentage of Federal
participation in the cost of the original project or program to the
current fair market value of the equipment.
    (2) If the recipient has no need for the equipment, the recipient
shall request disposition instructions from the Secretary. The Secretary
shall determine whether the equipment can be used to meet ED
requirements. If no requirement exists within ED, the availability of
the equipment shall be reported to the General Services Administration
by the Secretary to determine whether a requirement for the equipment
exists in other Federal agencies. The Secretary issues instructions to
the recipient no later than 120 calendar days after the recipient's
request and the following procedures govern:
    (i) If so instructed or if disposition instructions are not issued
within 120 calendar days after the recipient's request, the recipient
shall sell the equipment and reimburse ED an amount computed by applying
to the sales proceeds the percentage of Federal participation in the
cost of the original project or program. However, the recipient shall be
permitted to deduct and retain from the Federal share $500 or ten
percent of the proceeds, whichever is less, for the recipient's selling
and handling expenses.
    (ii) If the recipient is instructed to ship the equipment elsewhere,
the recipient is reimbursed by ED by an amount which is computed by
applying the percentage of the recipient's participation in the cost of
the original project or program to the current fair market value of the
equipment, plus any reasonable shipping or interim storage costs
incurred.
    (iii) If the recipient is instructed to otherwise dispose of the
equipment, the recipient is reimbursed by ED for costs incurred in its
disposition.
    (iv) The Secretary may reserve the right to transfer the title to
the Federal Government or to a third party named by the Federal
Government when the third party is otherwise eligible under existing
statutes. This transfer shall be subject to the following standards:
    (A) The equipment must be appropriately identified in the award or
otherwise made known to the recipient in writing.
    (B) The Secretary issues disposition instructions within 120
calendar days after receipt of a final inventory. The final inventory
must list all equipment acquired with grant funds and federally-owned
equipment. If the Secretary does not issue disposition instructions
within the 120 calendar day period, the

[[Page 119]]

recipient shall apply the standards of this section, as appropriate.
    (C) When the Secretary exercises the right to take title, the
equipment is subject to the provisions for federally-owned equipment.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.35  Supplies and other expendable property.

    (a) Title to supplies and other expendable property shall vest in
the recipient upon acquisition. If there is a residual inventory of
unused supplies exceeding $5,000 in total aggregate value upon
termination or completion of the project or program and the supplies are
not needed for any other federally-sponsored project or program, the
recipient shall retain the supplies for use on non-Federal sponsored
activities or sell them, but shall, in either case, compensate the
Federal Government for its share. The amount of compensation shall be
computed in the same manner as for equipment.
    (b) The recipient may not use supplies acquired with Federal funds
to provide services to non-Federal outside organizations for a fee that
is less than private companies charge for equivalent services, unless
specifically authorized by Federal statute as long as the Federal
Government retains an interest in the supplies.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.36  Intangible property.

    (a) The recipient may copyright any work that is subject to
copyright and was developed, or for which ownership was purchased, under
an award. ED and any other Federal awarding agency reserve a royalty-
free, nonexclusive, and irrevocable right to reproduce, publish, or
otherwise use the work for Federal purposes, and to authorize others to
do so.
    (b) Recipients are subject to applicable regulations governing
patents and inventions, including government-wide regulations issued by
the Department of Commerce at 37 CFR Part 401--Rights to Inventions Made
by Nonprofit Organizations and Small Business Firms Under Government
Grants, Contracts and Cooperative Agreements.
    (c) The Federal Government has the right to:
    (1) Obtain, reproduce, publish or otherwise use the data first
produced under an award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise
use such data for Federal purposes.
    (d)(1) In addition, in response to a Freedom of Information Act
(FOIA) request for research data relating to published research findings
produced under an award that were used by the Federal Government in
developing an agency action that has the force and effect of law, ED
shall request, and the recipient shall provide, within a reasonable
time, the research data so that they can be made available to the public
through the procedures established under the FOIA. If ED obtains the
research data solely in response to a FOIA request, the agency may
charge the requester a reasonable fee equaling the full incremental cost
of obtaining the research data. This fee should reflect costs incurred
by the agency, the recipient, and applicable subrecipients. This fee is
in addition to any fees the agency may assess under the FOIA (5 U.S.C.
552(a)(4)(A)).
    (2) The following definitions apply for purposes of this paragraph
(d):
    (i) Research data is defined as the recorded factual material
commonly accepted in the scientific community as necessary to validate
research findings, but not any of the following: preliminary analyses,
drafts of scientific papers, plans for future research, peer reviews, or
communications with colleagues. This ``recorded'' material excludes
physical objects (e.g., laboratory samples). Research data also do not
include:
    (A) Trade secrets, commercial information, materials necessary to be
held confidential by a researcher until they are published, or similar
information which is protected under law; and
    (B) Personnel and medical information and similar information the
disclosure of which would constitute a

[[Page 120]]

clearly unwarranted invasion of personal privacy, such as information
that could be used to identify a particular person in a research study.
    (ii) Published is defined as either when:
    (A) Research findings are published in a peer-reviewed scientific or
technical journal; or
    (B) A Federal agency publicly and officially cites the research
findings in support of an agency action that has the force and effect of
law.
    (iii) Used by the Federal Government in developing an agency action
that has the force and effect of law is defined as when an agency
publicly and officially cites the research findings in support of an
agency action that has the force and effect of law.
    (e) Title to intangible property and debt instruments acquired under
an award or subaward vests upon acquisition in the recipient. The
recipient shall use that property for the originally-authorized purpose,
and the recipient shall not encumber the property without approval of
the Secretary. When no longer needed for the originally authorized
purpose, disposition of the intangible property shall occur in
accordance with the provisions of Sec. 74.34(g).

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 65 FR 14407, 14416, Mar. 16,
2000]



Sec. 74.37  Property trust relationship.

    Real property, equipment, intangible property, and debt instruments
that are acquired or improved with Federal funds must be held in trust
by the recipient as trustee for the beneficiaries of the project or
program under which the property was acquired or improved. The Secretary
may require recipients to record liens or other appropriate notices of
record to indicate that personal or real property has been acquired or
improved with Federal funds and that use and disposition conditions
apply to the property.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

                          Procurement Standards



Sec. 74.40  Purpose of procurement standards.

    Sections 74.41 through 74.48 contain standards for use by recipients
in establishing procedures for the procurement of supplies and other
expendable property, equipment, real property, and other services with
Federal funds. These standards are designed to ensure that these
materials and services are obtained in an effective manner and in
compliance with the provisions of applicable Federal statutes and
executive orders. The Secretary does not impose additional procurement
standards or requirements upon recipients, unless specifically required
by Federal statute or executive order or as authorized in Sec. 74.4 or
Sec. 74.14.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.41  Recipient responsibilities.

    The standards contained in this section do not relieve the recipient
of the contractual responsibilities arising under its contract(s). The
recipient is the responsible authority, without recourse to the
Secretary, regarding the settlement and satisfaction of all contractual
and administrative issues arising out of procurements entered into in
support of an award or other agreement. This includes disputes, claims,
protests of award, source evaluation, or other matters of a contractual
nature. Matters concerning violation of statute are to be referred to
Federal, State or local authority that may have proper jurisdiction.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.42  Codes of conduct.

    The recipient shall maintain written standards of conduct governing
the performance of its employees engaged in the award and administration
of contracts. No employee, officer, or agent shall participate in the
selection, award, or administration of a contract supported by Federal
funds if a real or apparent conflict of interest would be involved. A
conflict would arise when the employee, officer, or agent, any

[[Page 121]]

member of his or her immediate family, his or her partner, or an
organization which employs or is about to employ any of the parties
indicated herein, has a financial or other interest in the firm selected
for an award. The officers, employees, and agents of the recipient shall
neither solicit nor accept gratuities, favors, or anything of monetary
value from contractors, or parties to subagreements. However, recipients
may set standards for situations in which the financial interest is not
substantial or the gift is an unsolicited item of nominal value. The
standards of conduct shall provide for disciplinary actions to be
applied for violations of these standards by officers, employees, or
agents of the recipient.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.43  Competition.

    All procurement transactions shall be conducted in a manner to
provide, to the maximum extent practical, open and free competition. The
recipient shall be alert to organizational conflicts of interest as well
as noncompetitive practices among contractors that may restrict or
eliminate competition or otherwise restrain trade. In order to ensure
objective contractor performance and eliminate unfair competitive
advantage, contractors that develop or draft specifications,
requirements, statements of work, invitations for bids or requests for
proposals shall be excluded from competing for procurements. Awards must
be made to the bidder or offeror whose bid or offer is responsive to the
solicitation and is most advantageous to the recipient, price, quality
and other factors considered. Solicitations shall clearly establish all
requirements that the bidder or offeror shall fulfill in order for the
bid or offer to be evaluated by the recipient. Any and all bids or
offers may be rejected when it is in the recipient's interest to do so.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.44  Procurement procedures.

    (a) All recipients shall establish written procurement procedures.
These procedures must provide for, at a minimum, that--
    (1) Recipients avoid purchasing unnecessary items;
    (2) Where appropriate, an analysis is made of lease and purchase
alternatives to determine which would be the most economical and
practical procurement for the Federal Government; or
    (3) Solicitations for goods and services provide for all of the
following:
    (i) A clear and accurate description of the technical requirements
for the material, product, or service to be procured. In competitive
procurements, a description shall not contain features which unduly
restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical requirements
in terms of functions to be performed or performance required, including
the range of acceptable characteristics or minimum acceptable standards.
    (iv) The specific features of brand name or equal descriptions that
bidders are required to meet when these items are included in the
solicitation.
    (v) The acceptance, to the extent practicable and economically
feasible, of products and services dimensioned in the metric system of
measurement.
    (vi) Preference, to the extent practicable and economically
feasible, for products and services that conserve natural resources and
protect the environment, and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small
businesses, minority-owned firms, and women's business enterprises,
whenever possible. Recipients of Federal awards shall take all of the
following steps to further this goal:
    (1) Ensure that small businesses, minority-owned firms, and women's
business enterprises are used to the fullest extent practicable.
    (2) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises.

[[Page 122]]

    (3) Consider in the contract process whether firms competing for
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
    (4) Encourage contracting with consortiums of small businesses,
minority-owned firms and women's business enterprises when a contract is
too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of
organizations such as the Small Business Administration and the
Department of Commerce's Minority Business Development Agency in the
solicitation and utilization of small businesses, minority-owned firms
and women's business enterprises.
    (c) The type of procuring instruments used (e.g., fixed price
contracts, cost reimbursable contracts, purchase orders, and incentive
contracts) shall be determined by the recipient but must be appropriate
for the particular procurement and for promoting the best interest of
the program or project involved. The ``cost-plus-a-percentage-of-cost''
or ``percentage of construction cost'' methods of contracting must not
be used.
    (d) Contracts are made only with responsible contractors who possess
the potential ability to perform successfully under the terms and
conditions of the proposed procurement. Consideration is given to
matters as contractor integrity, record of past performance, financial
and technical resources or accessibility to other necessary resources.
In certain circumstances, contracts with certain parties are restricted
by E.O. 12549 (implemented by the Secretary in 34 CFR Part 85) and E.O.
12689--Debarment and Suspension.
    (e) Recipients shall, on request, make available for the Secretary,
pre-award review and procurement documents, such as request for
proposals or invitations for bids, independent cost estimates, etc.,
when any of the following conditions apply:
    (1) A recipient's procurement procedures or operation fails to
comply with the procurement standards in this part.
    (2) The procurement is expected to exceed the small purchase
threshold fixed at 41 U.S.C. 403 (11) (currently $25,000) and is to be
awarded without competition or only one bid or offer is received in
response to a solicitation.
    (3) The procurement, which is expected to exceed the small purchase
threshold, specifies a ``brand name'' product.
    (4) The proposed award over the small purchase threshold is to be
awarded to other than the apparent low bidder under a sealed bid
procurement.
    (5) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the amount of the small
purchase threshold.
    (f)(1)(i) A faith-based organization is eligible to contract with
recipients on the same basis as any other private organization, with
respect to contracts for which such other organizations are eligible.
    (ii) In the selection of goods and services providers, recipients
shall not discriminate for or against a private organization on the
basis of the organization's religious character or affiliation.
    (2) The provisions of Sec. Sec. 75.532 and 76.532 applicable to
grantees and subgrantees apply to a faith-based organization that
contracts with a recipient, unless the faith-based organization is
selected as a result of the genuine and independent private choices of
individual beneficiaries of the program and provided the organization
otherwise satisfies the requirements of the program.
    (3) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a contract with a recipient, and
participation in any such inherently religious activities by
beneficiaries of the programs supported by the contract must be
voluntary, unless the organization is selected as a result of the
genuine and independent private choices of individual beneficiaries of
the program and provided the organization otherwise satisfies the
requirements of the program.
    (4)(i) A faith-based organization that contracts with a recipient
may retain its independence, autonomy, right of

[[Page 123]]

expression, religious character, and authority over its governance.
    (ii) A faith-based organization may, among other things--
    (A) Retain religious terms in its name;
    (B) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
    (C) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
    (D) Select its board members and otherwise govern itself on a
religious basis; and
    (E) Include religious references in its mission statement and other
chartering or governing documents.
    (5) A private organization that contracts with a recipient shall not
discriminate against a beneficiary or prospective beneficiary in the
provision of program services on the basis of religion or religious
belief.
    (6) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization contracts with a recipient.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995; 69
FR 31710, June 4, 2004]



Sec. 74.45  Cost and price analysis.

    Some form of cost or price analysis must be made and documented in
the procurement files in connection with every procurement action. Price
analysis may be accomplished in various ways, including the comparison
of price quotations submitted, market prices and similar indicia,
together with discounts. Cost analysis is the review and evaluation of
each element of cost to determine reasonableness, allocability, and
allowability.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.46  Procurement records.

    Procurement records and files for purchases in excess of the small
purchase threshold must include the following at a minimum--
    (a) Basis for contractor selection;
    (b) Justification for lack of competition when competitive bids or
offers are not obtained;
    (c) Basis for award cost or price.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.47  Contract administration.

    A system for contract administration must be maintained to ensure
contractor conformance with the terms, conditions and specifications of
the contract, and to ensure adequate and timely follow up of all
purchases. Recipients shall evaluate contractor performance and
document, as appropriate, whether contractors have met the terms,
conditions, and specifications of the contract.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a
sound and complete agreement, the following provisions in all contracts.
The following provisions must also be applied to subcontracts:
    (a) Contracts in excess of the small purchase threshold shall
contain contractual provisions or conditions that allow for
administrative, contractual, or legal remedies in instances in which

[[Page 124]]

a contractor violates or breaches the contract terms, and provide for
remedial actions as may be appropriate.
    (b) All contracts in excess of the small purchase threshold shall
contain suitable provisions for termination by the recipient, including
the manner by which termination shall be effected and the basis for
settlement. In addition, contracts must describe conditions under which
the contract may be terminated for default, as well as conditions where
the contract may be terminated because of circumstances beyond the
control of the contractor.
    (c) Except as otherwise required by statute, an award that requires
the contracting (or subcontracting) for construction or facility
improvements must provide for the recipient to follow its own
requirements relating to bid guarantees, performance bonds, and payment
bonds unless the construction contract or subcontract exceeds $100,000.
For those contracts or subcontracts exceeding $100,000, the Secretary
may accept the bonding policy and requirements of the recipient,
provided the Secretary has made a determination that the Federal
Government's interest is adequately protected. If a determination has
not been made, the minimum requirements are as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' must consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder shall, upon acceptance
of his bid, execute contractual documents as may be required within the
time specified.
    (2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under a contract.
    (3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by statute of all persons
supplying labor and material in the execution of the work provided for
in the contract.
    (4) Where bonds are required, the bonds must be obtained from
companies holding certificates of authority as acceptable sureties
pursuant to 31 CFR Part 223--Surety Companies Doing Business with the
United States.
    (d) All negotiated contracts (except those for less than the small
purchase threshold) awarded by recipients must include a provision to
the effect that the recipient, ED, the Comptroller General of the United
States, or any of their duly authorized representatives, must have
access to any books, documents, papers and records of the contractor
which are directly pertinent to a specific program for the purpose of
making audits, examinations, excerpts and transcriptions.
    (e) All contracts, including small purchases, awarded by recipients
and their contractors must contain the procurement provisions of
appendix A to this part, as applicable.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

                           Reports and Records



Sec. 74.50  Purpose of reports and records.

    Sections 74.51 through 74.53 establish the procedures for monitoring
and reporting on the recipient's financial and program performance and
the necessary standard reporting forms. They also establish record
retention requirements.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.51  Monitoring and reporting program performance.

    (a) Recipients are responsible for managing and monitoring each
project, program, subaward, function, or activity supported by the
award. Recipients shall monitor subawards to ensure subrecipients have
met the audit requirements in Sec. 74.26.
    (b) The Secretary prescribes the frequency with which the
performance reports shall be submitted. Except as provided in Sec.
74.51(f), performance reports are not required more frequently than
quarterly or, less frequently than annually. Annual reports are due 90
calendar days after the grant year; quarterly or semi-annual reports are
due 30 days after the reporting period.

[[Page 125]]

The Secretary may require annual reports before the anniversary dates of
multiple year awards in lieu of these requirements. The final
performance reports are due 90 calendar days after the expiration or
termination of the award.
    (c) If inappropriate, a final technical or performance report is not
required after completion of the project.
    (d) When required, performance reports must generally contain, for
each award, brief information on each of the following:
    (1) A comparison of actual accomplishments with the goals and
objectives established for the period, the findings of the investigator,
or both. Whenever appropriate and the output of programs or projects can
be readily quantified, this quantitative data should be related to cost
data for computation of unit costs.
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate,
analysis, and explanation of cost overruns or high unit costs.
    (e) Recipients are not required to submit more than the original and
two copies of performance reports.
    (f) Recipients shall immediately notify the Secretary of
developments that have a significant impact on the award-supported
activities. Also, notification must be given in the case of problems,
delays, or adverse conditions which materially impair the ability to
meet the objectives of the award. This notification must include a
statement of the action taken or contemplated, and any assistance needed
to resolve the situation.
    (g) The Secretary may make site visits, as needed.
    (h) The Secretary complies with the clearance requirements of 5 CFR
part 1320 when requesting performance data from recipients.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.52  Financial reporting.

    (a) The following forms or other forms as may be approved by OMB are
authorized for obtaining financial information from recipients.
    (1) SF-269 or SF-269A--Financial Status Report. (i) Recipients are
required to use the SF-269 or SF-269A to report the status of funds for
all nonconstruction projects or programs. The Secretary may not require
the SF-269 or SF-269A when, the Secretary determines that SF-270--
Request for Advance or Reimbursement, or SF-272--Report of Federal Cash
Transactions--provides adequate information to meet the Department's
needs, except that a final SF-269 or SF-269A is required at the
completion of the project when the SF-270 is used only for advances.
    (ii) The Secretary prescribes whether the report is on a cash or
accrual basis. If the Secretary requires accrual information and the
recipient's accounting records are not normally kept on the accrual
basis, the recipient is not required to convert its accounting system,
but shall develop accrual information through best estimates based on an
analysis of the documentation on hand.
    (iii) The Secretary determines the frequency of the Financial Status
Report for each project or program, considering the size and complexity
of the particular project or program. However, the report is not
required more frequently than quarterly or less frequently than
annually. A final report is required at the completion of the agreement.
    (iv) The Secretary requires recipients to submit the SF-269 or SF-
269A (an original and no more than two copies) no later than 30 days
after the end of each specified reporting period for quarterly and semi-
annual reports, and 90 calendar days for annual and final reports.
Extensions of reporting due dates may be approved by the Secretary upon
request of the recipient.
    (2) SF-272--Report of Federal Cash Transactions. (i) When funds are
advanced to recipients the Secretary requires each recipient to submit
the SF-272 and, when necessary, its continuation sheet, SF-272a. The
Secretary

[[Page 126]]

uses this report to monitor cash advanced to recipients and to obtain
disbursement information for each agreement with the recipients.
    (ii) The Secretary may require forecasts of Federal cash
requirements in the ``Remarks'' section of the report.
    (iii) When practical and deemed necessary, the Secretary may require
recipients to report in the ``Remarks'' section the amount of cash
advances received in excess of three days. Recipients shall provide
short narrative explanations of actions taken to reduce the excess
balances.
    (iv) Recipients shall be required to submit not more than the
original and two copies of the SF-272 15 calendar days following the end
of each quarter. The Secretary may require a monthly report from those
recipients receiving advances totaling $1 million or more per year.
    (v) The Secretary may waive the requirement for submission of the
SF-272 for any one of the following reasons:
    (A) When monthly advances do not exceed $25,000 per recipient,
provided that advances are monitored through other forms contained in
this section;
    (B) If, in the Secretary's opinion, the recipient's accounting
controls are adequate to minimize excessive Federal advances; or
    (C) When the electronic payment mechanisms provide adequate data.
    (b) When the Secretary needs additional information or more frequent
reports, the following shall be observed:
    (1) When additional information is needed to comply with legislative
requirements, the Secretary shall issue instructions to require
recipients to submit information under the ``Remarks'' section of the
reports.
    (2) When the Secretary determines that a recipient's accounting
system does not meet the standards in Sec. 74.21, additional pertinent
information to further monitor awards may be obtained upon written
notice to the recipient until the system is brought up to standard. The
Secretary, in obtaining this information, complies with the report
clearance requirements of 5 CFR part 1320.
    (3) The Secretary may shade out any line item on any report if not
necessary.
    (4) The Secretary may accept the identical information from the
recipients in machine readable format or computer printouts or
electronic outputs in lieu of prescribed formats.
    (5) The Secretary may provide computer or electronic outputs to
recipients when these outputs expedite or contribute to the accuracy of
reporting.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.53  Retention and access requirements for records.

    (a) This section establishes requirements for record retention and
access to records for awards to recipients. The Secretary does not
impose any other record retention or access requirements upon
recipients.
    (b) Financial records, supporting documents, statistical records,
and all other records pertinent to an award shall be retained for a
period of three years from the date of submission of the final
expenditure report or, for awards that are renewed quarterly or
annually, from the date of the submission of the quarterly or annual
financial report, as authorized by the Secretary. The only exceptions
are the following:
    (1) If any litigation, claim, or audit is started before the
expiration of the 3-year period, the records shall be retained until all
litigation, claims, or audit findings involving the records have been
resolved and final action taken.
    (2) Records for real property and equipment acquired with Federal
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by the Secretary,
the 3-year retention requirement is not applicable to the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, etc. as
specified in Sec. 74.53(g).
    (c) Copies of original records may be substituted for the original
records if authorized by the Secretary.

[[Page 127]]

    (d) The Secretary requests transfer of certain records to its
custody from recipients when it determines that the records possess long
term retention value. However, in order to avoid duplicate
recordkeeping, the Secretary may make arrangements for recipients to
retain any records that are continuously needed for joint use.
    (e) The Secretary, the Inspector General, Comptroller General of the
United States, or any of their duly authorized representatives, have the
right of timely and unrestricted access to any books, documents, papers,
or other records of recipients that are pertinent to the awards, in
order to make audits, examinations, excerpts, transcripts, and copies of
documents. This right also includes timely and reasonable access to a
recipient's personnel for the purpose of interview and discussion
related to these documents. The rights of access in this paragraph are
not limited to the required retention period, but shall last as long as
records are retained.
    (f) Unless required by statute, the Secretary does not place
restrictions on recipients that limit public access to the records of
recipients that are pertinent to an award, except when the Secretary can
demonstrate that the records must be kept confidential and would have
been exempted from disclosure pursuant to the Freedom of Information Act
(5 U.S.C. 552) if the records had belonged to ED.
    (g) The starting date for retention of the following types of
documents (including supporting records) is specified in paragraphs
(g)(1) and (2) of this section: indirect cost rate computations or
proposals; cost allocation plans; and any similar accounting
computations of the rate at which a particular group of costs is
chargeable (such as computer usage chargeback rates or composite fringe
benefit rates).
    (1) If submitted for negotiation. If the recipient submits to the
Secretary or the subrecipient submits to the recipient the proposal,
plan, or other computation to form the basis for negotiation of the
rate, then the 3-year retention period for its supporting records starts
on the date of submission.
    (2) If not submitted for negotiation. If the recipient is not
required to submit to the Secretary or the subrecipient is not required
to submit to the recipient the proposal, plan, or other computation for
negotiation purposes, then the 3-year retention period for the proposal,
plan, or other computation and its supporting records starts at the end
of the fiscal year (or other accounting period) covered by the proposal,
plan, or other computation.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995; 60
FR 46493, Sept. 6, 1995]

                       Termination and Enforcement



Sec. 74.60  Purpose of termination and enforcement.

    Sections 74.61 and 74.62 establish uniform suspension, termination,
and enforcement procedures.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.61  Termination.

    (a) Awards may be terminated in whole or in part only--
    (1) By the Secretary, if a recipient materially fails to comply with
the terms and conditions of an award;
    (2) By the Secretary with the consent of the recipient, in which
case the two parties shall agree upon the termination conditions,
including the effective date and, in the case of partial termination,
the portion to be terminated.
    (3) By the recipient, upon sending to the Secretary written
notification containing the reasons for the termination, the effective
date, and, in the case of partial termination, the portion to be
terminated. However, if the Secretary determines in the case of partial
termination that the reduced or modified portion of the grant will not
accomplish the purposes for which the grant was made, it may terminate
the grant in its entirety under either paragraph (a)(1) or (2) of this
section.
    (b) If costs are allowed under an award, the responsibilities of the
recipient referred to in Sec. 74.71(a), including those for property
management as

[[Page 128]]

applicable, shall be considered in the termination of the award, and
provision shall be made for continuing responsibilities of the recipient
after termination, as appropriate.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.62  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to
comply with the terms and conditions of an award, whether stated in a
Federal statute, regulation, assurance, application, or notice of award,
the Secretary may, in addition to imposing any of the special conditions
outlined in Sec. 74.14, take one or more of the following actions, as
appropriate in the circumstances:
    (1) Temporarily withhold cash payments pending correction of the
deficiency by the recipient or more severe enforcement action by the
Secretary.
    (2) Disallow (that is, deny both use of funds and any applicable
matching credit for) all or part of the cost of the activity or action
not in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, the
Secretary provides the recipient an opportunity for hearing, appeal, or
other administrative proceeding to which the recipient is entitled under
any statute or regulation applicable to the action involved.
    (c) Effects of suspension and termination. Costs of a recipient
resulting from obligations incurred by the recipient during a suspension
or after termination of an award are not allowable unless the Secretary
expressly authorizes them in the notice of suspension or termination or
subsequently. Other recipient costs during suspension or after
termination which are necessary and not reasonably avoidable are
allowable if--
    (1) The costs result from obligations which were properly incurred
by the recipient before the effective date of suspension or termination,
are not in anticipation of it, and in the case of a termination, are
noncancellable; and
    (2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude ED from initiating a debarment or
suspension action against a recipient under 34 CFR part 85 (see Sec.
74.13).

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



                 Subpart D_After-the-Award Requirements



Sec. 74.70  Purpose.

    Sections 74.71 through 74.73 contain closeout procedures and other
procedures for subsequent disallowances and adjustments.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



Sec. 74.71  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date
of completion of the award, all financial, performance, and other
reports as required by the terms and conditions of the award. The
Secretary may approve extensions when requested by the recipient.
    (b) Unless the Secretary authorizes an extension, a recipient shall
liquidate all obligations incurred under the award not later than 90
calendar days after the funding period or the date of completion as
specified in the terms and conditions of the award or in ED implementing
instructions.
    (c) The Secretary makes prompt payments to a recipient for allowable
reimbursable costs under the award being closed out.
    (d) The recipient shall promptly refund any balances of unobligated
cash that the Secretary has advanced or paid and that is not authorized
to be retained by the recipient for use in other projects. OMB Circular
A-129 governs unreturned amounts that become delinquent debts.
    (e) When authorized by the terms and conditions of the award, the
Secretary

[[Page 129]]

makes a settlement for any upward or downward adjustments to the Federal
share of costs after closeout reports are received.
    (f) The recipient shall account for any real and personal property
acquired with Federal funds or received from the Federal Government in
accordance with Sec. Sec. 74.31 through 74.37.
    (g) In the event a final audit has not been performed prior to the
closeout of an award, the Secretary shall retain the right to recover an
appropriate amount after fully considering the recommendations on
disallowed costs resulting from the final audit.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.72  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following:
    (1) The right of the Secretary to disallow costs and recover funds
on the basis of a later audit or other review.
    (2) The obligation of the recipient to return any funds due as a
result of later refunds, corrections, or other transactions.
    (3) Audit requirements in Sec. 74.26.
    (4) Property management requirements in Sec. Sec. 74.31 through
74.37.
    (5) Records retention as required in Sec. 74.53.
    (b) After closeout of an award, a relationship created under an
award may be modified or ended in whole or in part with the consent of
the Secretary and the recipient, provided the responsibilities of the
recipient referred to in Sec. 74.73(a), including those for property
management as applicable, are considered and provisions made for
continuing responsibilities of the recipient, as appropriate.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)

[59 FR 34724, July 6, 1994, as amended at 60 FR 6660, Feb. 3, 1995]



Sec. 74.73  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which
the recipient is finally determined to be entitled under the terms and
conditions of the award constitute a debt to the Federal Government. If
not paid within a reasonable period after the demand for payment, the
Secretary may reduce the debt by--
    (1) Making an administrative offset against other requests for
reimbursements;
    (2) Withholding advance payments otherwise due to the recipient; or
    (3) Taking other action permitted by statute.
    (b) Except as otherwise provided by law, the Secretary charges
interest on an overdue debt in accordance with 4 CFR Chapter II--Federal
Claims Collection Standards.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



             Sec. Appendix A to Part 74--Contract Provisions

    All contracts, awarded by a recipient including small purchases,
shall contain the following provisions as applicable:
    1. Equal Employment Opportunity--All contracts must contain a
provision requiring compliance with E.O. 11246--Equal Employment
Opportunity, as amended by E.O. 11375--Amending Executive Order 11246
Relating to Equal Employment Opportunity, and as supplemented by
regulations at 41 CFR Part 60--Office of Federal Contract Compliance
Programs, Equal Employment Opportunity, Department of Labor.
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C.
276c)--All contracts and subgrants in excess of $2,000 for construction
or repair awarded by recipients and subrecipients must include a
provision for compliance with the Copeland ``Anti-Kickback'' Act (18
U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR
Part 3--Contractors and Subcontractors on Public Building or Public Work
Financed in Whole or in Part by Loans or Grants from the United States).
The Act provides that each contractor or subrecipient shall be
prohibited from inducing, by any means, any person employed in the
construction, completion, or repair of public work, to give up any part
of the compensation to which he is otherwise entitled. The recipient
shall report all suspected or reported violations to the Federal
awarding agency.

[[Page 130]]

    3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When
required by Federal program legislation, all construction contracts
awarded by the recipients and subrecipients of more than $2,000 shall
include a provision for compliance with the Davis-Bacon Act (40 U.S.C.
276a to a-7) and as supplemented by Department of Labor regulations (29
CFR Part 5--Labor Standards Provisions Applicable to Contracts Governing
Federally Financed and Assisted Construction). Under this Act,
contractors shall be required to pay wages to laborers and mechanics at
a rate not less than the minimum wages specified in a wage determination
made by the Secretary of Labor. In addition, contractors shall be
required to pay wages not less than once a week. The recipient shall
place a copy of the current prevailing wage determination issued by the
Department of Labor in each solicitation and the award of a contract
shall be conditioned upon the acceptance of the wage determination. The
recipient shall report all suspected or reported violations to the
Federal awarding agency.
    4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in excess of
$2,000 for construction contracts and in excess of $2500 for other
contracts that involve the employment of mechanics or laborers must
include a provision for compliance with Sections 102 and 107 of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as
supplemented by Department of Labor regulations (29 CFR Part 5). Under
Section 102 of the Act, each contractor shall be required to compute the
wages of every mechanic and laborer on the basis of a standard work week
of 40 hours. Work in excess of the standard work week is permissible
provided that the worker is compensated at a rate of not less than 1\1/
2\ times the basic rate of pay for all hours worked in excess of 40
hours in the work week. Section 107 of the Act is applicable to
construction work and provides that no laborer or mechanic shall be
required to work in surroundings or under working conditions which are
unsanitary, hazardous, or dangerous. These requirements do not apply to
the purchases of supplies or materials or articles ordinarily available
on the open market, or contracts for transportation or transmission of
intelligence.
    5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental,
developmental, or research work must provide for the rights of the
Federal Government and the recipient in any resulting invention in
accordance with 37 CFR Part 401--Rights to Inventions Made by Nonprofit
Organizations and Small Business Firms Under Government Grants,
Contracts and Cooperative Agreements, and any implementing regulations
issued by the awarding agency.
    6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts
and subgrants of amounts in excess of $100,000 shall contain a provision
that requires the recipient to agree to comply with all applicable
standards, orders, or regulations issued pursuant to the Clean Air Act
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to ED and
the Regional Office of the Environmental Protection Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who
apply or bid for an award of $100,000 or more shall file the required
certification. Each tier certifies to the tier above that it will not
and has not used Federal appropriated funds to pay any person or
organization for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, officer or employee of
Congress, or an employee of a member of Congress in connection with
obtaining any Federal contract, grant, or any other award covered by 31
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal
funds that takes place in connection with obtaining any Federal award.
The disclosures are forwarded from tier to tier up to the recipient.
    8. Debarment and Suspension (E.O. 12549 and E.O. 12689)--No contract
may be made to parties listed on the General Services Administration's
List of Parties Excluded from Federal Procurement or Nonprocurement
Programs in accordance with E.O 12549 and E.O. 12689--Debarment and
Suspension. This list contains the names of parties debarred, suspended,
or otherwise excluded by agencies, and contractors declared ineligible
under statutory or regulatory authority other than E.O. 12549.
    Contractors with awards that exceed the small purchase threshold
must provide the required certification regarding its exclusion status
and that of its principal employees.

(Authority: 20 U.S.C. 1221e-3, 3474; OMB Circular A-110)



PART 75_DIRECT GRANT PROGRAMS--Table of Contents



                            Subpart A_General

             Regulations That Apply to Direct Grant Programs

Sec.
75.1 Programs to which part 75 applies.
75.2 Exceptions in program regulations to part 75.
75.4 Department contracts.

[[Page 131]]

                         Eligibility for a Grant

75.50 How to find out whether you are eligible.
75.51 How to prove nonprofit status.
75.52 Eligibility of faith-based organizations for a grant.

       Ineligibility of Certain Individuals To Receive Assistance

75.60 Individuals ineligible to receive assistance.
75.61 Certification of eligibility; effect of ineligibility.
75.62 Requirements applicable to entities making certain awards.

Subpart B [Reserved]

                   Subpart C_How To Apply for a Grant

                         The Application Notice

75.100 Publication of an application notice; content of the notice.
75.101 Information in the application notice that helps an applicant
          apply.
75.102 Deadline date for applications.
75.103 Deadline date for preapplications.
75.104 Applicants must meet procedural rules.
75.105 Annual priorities.

                          Application Contents

75.109 Changes to application; number of copies.
75.110 Information regarding performance measurement.
75.112 Include a proposed project period and a timeline.
75.117 Information needed for a multi-year project.
75.118 Requirements for a continuation award.
75.119 Information needed if private school students participate.

               Separate Applications--Alternative Programs

75.125 Submit a separate application to each program.
75.126 Application must list all programs to which it is submitted.

                           Group Applications

75.127 Eligible parties may apply as a group.
75.128 Who acts as applicant; the group agreement.
75.129 Legal responsibilities of each member of the group.

                         Competition Exceptions

75.135 Competition exception for proposed implementation sites,
          implementation partners, or service providers.

                        State Comment Procedures

75.155 Review procedure if State may comment on applications: Purpose of
          Sec. Sec. 75.156-75.158.
75.156 When an applicant under Sec. 75.155 must submit its application
          to the State; proof of submission.
75.157 The State reviews each application.
75.158 Deadlines for State comments.
75.159 Effect of State comments or failure to comment.

           Development of Curricula or Instructional Materials

75.190 Consultation.
75.191 Consultation costs.
75.192 Dissemination.

                      Subpart D_How Grants Are Made

                        Selection of New Projects

75.200 How applications for new grants and cooperative agreements are
          selected for funding; standards for use of cooperative
          agreements.
75.201 How the selection criteria will be used.
75.202-75.206 [Reserved]
75.209 Selection criteria based on statutory or regulatory provisions.
75.210 General selection criteria.
75.211 Selection criteria for unsolicited applications.

                          Selection Procedures

75.215 How the Department selects a new project: purpose of Sec. Sec.
          75.216-75.222.
75.216 Applications not evaluated for funding.
75.217 How the Secretary selects applications for new grants.
75.218 Applications not evaluated or selected for funding.
75.219 Exceptions to the procedures under Sec. 75.217.
75.220 Procedures the Department uses under Sec. 75.219(a).
75.221 Procedures the Department uses under Sec. 75.219(b).
75.222 Procedures the Department uses under Sec. 75.219(c).
75.223 [Reserved]
75.224 What are the procedures for using a multiple tier review process
          to evaluate applications?
75.225 What procedures does the Secretary use if the Secretary decides
          to give special consideration to novice applications?

                       Procedures To Make a Grant

75.230 How the Department makes a grant; purpose of Sec. Sec. 75.231-
          75.236.
75.231 Additional information.
75.232 The cost analysis; basis for grant amount.

[[Page 132]]

75.233 Setting the amount of the grant.
75.234 The conditions of the grant.
75.235 The notification of grant award.
75.236 Effect of the grant.

                     Approval of Multi-Year Projects

75.250 Maximum funding period.
75.251 Budget periods.
75.253 Continuation of a multi-year project after the first budget
          period.
75.254 [Reserved]

                              Miscellaneous

75.260 Allotments and reallotments.
75.261 Extension of a project period.
75.262 Conversion of a grant or a cooperative agreement.
75.263 Pre-award costs; waiver of approval.
75.264 Transfers among budget categories.
75.266 What procedures does the Secretary use if the Secretary decides
          to give special consideration to applications supported by
          strong or moderate evidence of effectiveness?

           Subpart E_What Conditions Must Be Met by a Grantee?

                            Nondiscrimination

75.500 Federal statutes and regulations on nondiscrimination.

                              Project Staff

75.511 Waiver of requirement for a full-time project director.
75.515 Use of consultants.
75.516 Compensation of consultants--employees of institutions of higher
          education.
75.517 Changes in key staff members.
75.519 Dual compensation of staff.

                          Conflict of Interest

75.524 Conflict of interest: Purpose of Sec. 75.525.
75.525 Conflict of interest: Participation in a project.

                             Allowable Costs

75.530 General cost principles.
75.531 Limit on total cost of a project.
75.532 Use of funds for religion prohibited.
75.533 Acquisition of real property; construction.
75.534 Training grants--automatic increases for additional dependents.

                           Indirect Cost Rates

75.560 General indirect cost rates; exceptions.
75.561 Approval of indirect cost rates.
75.562 Indirect cost rates for educational training projects.
75.563 Restricted indirect cost rate--programs covered.
75.564 Reimbursement of indirect costs.
75.580 Coordination with other activities.

                               Evaluation

75.590 Evaluation by the grantee.
75.591 Federal evaluation--cooperation by a grantee.
75.592 Federal evaluation--satisfying requirement for grantee
          evaluation.

                              Construction

75.600 Use of a grant for construction: Purpose of Sec. Sec. 75.601-
          75.615.
75.601 Applicant's assessment of environmental impact.
75.602 Preservation of historic sites must be described in the
          application.
75.603 Grantee's title to site.
75.604 Availability of cost-sharing funds.
75.605 Beginning the construction.
75.606 Completing the construction.
75.607 General considerations in designing facilities and carrying out
          construction.
75.608 Areas in the facilities for cultural activities.
75.609 Comply with safety and health standards.
75.610 Access by the handicapped.
75.611 Avoidance of flood hazards.
75.612 Supervision and inspection by the grantee.
75.613 Relocation assistance by the grantee.
75.614 Grantee must have operational funds.
75.615 Operation and maintenance by the grantee.
75.616 Energy conservation.
75.617 Compliance with the Coastal Barrier Resources Act.

                         Equipment and Supplies

75.618 Charges for use of equipment or supplies.

                       Publications and Copyrights

75.620 General conditions on publication.
75.621 Copyright policy for grantees.
75.622 Definition of ``project materials.''

                         Inventions and Patents

75.626 Show Federal support; give papers to vest title.

                 Other Requirements for Certain Projects

75.650 Participation of students enrolled in private schools.
75.681 Protection of human research subjects.
75.682 Treatment of animals.
75.683 Health or safety standards for facilities.

[[Page 133]]

  Subpart F_What Are the Administrative Responsibilities of a Grantee?

                 General Administrative Responsibilities

75.700 Compliance with statutes, regulations, and applications.
75.701 The grantee administers or supervises the project.
75.702 Fiscal control and fund accounting procedures.
75.703 Obligation of funds during the grant period.
75.707 When obligations are made.
75.708 Subgrants.

                                 Reports

75.720 Financial and performance reports.
75.721 [Reserved]

                                 Records

75.730 Records related to grant funds.
75.731 Records related to compliance.
75.732 Records related to performance.
75.733 [Reserved]

                                 Privacy

75.740 Protection of and access to student records; student rights in
          research, experimental programs, and testing.

  Subpart G_What Procedures Does the Department Use To Get Compliance?

75.900 Waiver of regulations prohibited.
75.901 Suspension and termination.
75.902 [Reserved]
75.903 Effective date of termination.
75.910 Cooperation with audits.

    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

    Source: 45 FR 22497, Apr. 3, 1980, unless otherwise noted.
Redesignated at 45 FR 77368, Nov. 21, 1980.



                            Subpart A_General

             Regulations That Apply to Direct Grant Programs



Sec. 75.1  Programs to which part 75 applies.

    (a) The regulations in part 75 apply to each direct grant program of
the Department of Education.
    (b) If a direct grant program does not have implementing
regulations, the Secretary implements the program under the authorizing
statute and, to the extent consistent with the authorizing statute,
under the General Education Provisions Act and the regulations in this
part. For the purposes of this part, the term ``direct grant program''
includes any grant program of the Department other than a program whose
authorizing statute or implementing regulations provide a formula for
allocating program funds among eligible States. With respect to Public
Law 81-874 (the Impact Aid Program), the term ``direct grant program''
includes only the entitlement increase for children with disabilities
under section 3(d)(2)(C) of Public Law 81-874 (20 U.S.C. 238(d)(2)(C)
and disaster assistance under section 7 of that law (20 U.S.C. 241-1).
    Note: See part 76 for the general regulations that apply to programs
that allocate funds among eligible States. For a description of the two
kinds of direct grant programs see Sec. 75.200. Paragraph (b) of that
section describes discretionary grant programs. Paragraph (c) of that
section describes formula grant programs. Also see Sec. Sec. 75.201,
75.209, and 75.210 for the selection criteria for discretionary grant
programs that do not have implementing regulations or whose implementing
regulations do not include selection criteria.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980, as amended at 45 FR 28669, Apr. 29, 1980.
Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 84059,
Dec. 22, 1980, 50 FR 29330, July 18, 1985; 52 FR 27803, July 24, 1987;
57 FR 30336, July 8, 1992; 60 FR 63873, Dec. 12, 1995]



Sec. 75.2  Exceptions in program regulations to part 75.

    If a program has regulations that are not consistent with part 75,
the implementing regulations for that program identify the sections of
part 75 that do not apply.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.4  Department contracts.

    (a) A Federal contract made by the Department is governed by--
    (1) Chapters 1 and 34 of title 48 of the Code of Federal Regulations
(Federal Acquisition Regulation and Education Department Acquisition
Regulation).
    (2) Any applicable program regulations; and
    (3) The request for proposals for the procurement, if any,
referenced in Commerce Business Daily.
    (b) The regulations in part 75 do not apply to a contract of the
Department

[[Page 134]]

unless regulations in part 75 or a program's regulations specifically
provide otherwise.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30336, July 8, 1992]

                         Eligibility for a Grant



Sec. 75.50  How to find out whether you are eligible.

    Eligibility to apply for a grant under a program of the Department
is governed by the authorizing statute and implementing regulations for
that program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27803, July 24, 1987]



Sec. 75.51  How to prove nonprofit status.

    (a) Under some programs, an applicant must show that it is a
nonprofit organization. (See the definition of nonprofit in 34 CFR
77.1.)
    (b) An applicant may show that it is a nonprofit organization by any
of the following means:
    (1) Proof that the Internal Revenue Service currently recognizes the
applicant as an organization to which contributions are tax deductible
under section 501(c)(3) of the Internal Revenue Code;
    (2) A statement from a State taxing body or the State attorney
general certifying that:
    (i) The organization is a nonprofit organization operating within
the State; and
    (ii) No part of its net earnings may lawfully benefit any private
shareholder or individual;
    (3) A certified copy of the applicant's certificate of incorporation
or similar document if it clearly establishes the nonprofit status of
the applicant; or
    (4) Any item described in paragraphs (b) (1) through (3) of this
section if that item applies to a State or national parent organization,
together with a statement by the State or parent organization that the
applicant is a local nonprofit affiliate.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.52  Eligibility of faith-based organizations for a grant.

    (a)(1) A faith-based organization is eligible to apply for and to
receive a grant under a program of the Department on the same basis as
any other private organization, with respect to programs for which such
other organizations are eligible.
    (2) In the selection of grantees, the Department shall not
discriminate for or against a private organization on the basis of the
organization's religious character or affiliation.
    (b) The provisions of Sec. 75.532 apply to a faith-based
organization that receives a grant under a program of the Department.
    (c) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a grant from the Department, and
participation in any such inherently religious activities by
beneficiaries of the programs supported by the grant must be voluntary.
    (d)(1) A faith-based organization that applies for or receives a
grant under a program of the Department may retain its independence,
autonomy, right of expression, religious character, and authority over
its governance.
    (2) A faith-based organization may, among other things--
    (i) Retain religious terms in its name;
    (ii) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
    (iii) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
    (iv) Select its board members and otherwise govern itself on a
religious basis; and
    (v) Include religious references in its mission statement and other
chartering or governing documents.
    (e) A private organization that receives a grant under a program of
the Department shall not discriminate against a beneficiary or
prospective beneficiary in the provision of program

[[Page 135]]

services on the basis of religion or religious belief.
    (f) If a grantee contributes its own funds in excess of those funds
required by a matching or grant agreement to supplement federally funded
activities, the grantee has the option to segregate those additional
funds or commingle them with the funds required by the matching
requirements or grant agreement. However, if the additional funds are
commingled, this section applies to all of the commingled funds.
    (g) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization receives financial assistance from
the Department.


(Authority: 20 U.S.C. 1221e-3 and 3474)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[69 FR 31710, June 4, 2004]

       Ineligibility of Certain Individuals To Receive Assistance

    Source: Sections 75.60 through 75.62 appear at 57 FR 30337, July 8,
1992, unless otherwise noted.



Sec. 75.60  Individuals ineligible to receive assistance.

    (a) An individual is ineligible to receive a fellowship,
scholarship, or discretionary grant funded by the Department if the
individual--
    (1) Is not current in repaying a debt or is in default, as that term
is used in 34 CFR part 668, on a debt--
    (i) Under a program listed in paragraph (b) of this section; or
    (ii) To the Federal Government under a nonprocurement transaction;
and
    (2) Has not made satisfactory arrangements to repay the debt.
    (b) An individual who is not current in repaying a debt, or is in
default, as that term is used in 34 CFR part 668, on a debt under a
fellowship, scholarship, discretionary grant, or loan program, as
included in the following list, and who has not made satisfactory
arrangements to repay the debt, is ineligible under paragraph (a) of
this section:
    (1) A grant awarded under the Pell Grant (20 U.S.C. 1070a, et seq.),
National Early Intervention Scholarship and Partnership (NEISP) Program
(20 U.S.C. 1070a-21, et seq.), Supplemental Educational Opportunity
Grant (SEOG) (20 U.S.C. 1070b, et seq.), or State Student Incentive
Grant (SSIG) (20 U.S.C. 1070c, et seq.) program, or a scholarship
awarded under the Robert C. Byrd Honors Scholarship Program (20 U.S.C.
1070d-31, et seq.), a fellowship awarded under the Jacob K. Javits
Fellows Program (20 U.S.C. 1134h-1134k), or a fellowship awarded under
the Patricia Roberts Harris Fellowship Program (20 U.S.C. 1134d-1134f).
    (2) A fellowship awarded under the Christa McAuliffe Fellowship
Program (20 U.S.C. 1113-1113e), the Bilingual Education Fellowship
Program (20 U.S.C. 3221-3262), or the Rehabilitation Long-Term Training
Program (29 U.S.C. 774(b)).
    (3) A loan made under the Perkins Loan Program (20 U.S.C. 1087aa, et
seq.), the Income Contingent Direct Loan Demonstration Project (20
U.S.C. 1087a, et seq.), the Stafford Loan Program, Supplemental Loans
for Students (SLS), PLUS, or Consolidation Loan Program (20 U.S.C. 1071,
et seq.), or the Cuban Student Loan Program (22 U.S.C. 2601, et seq.).
    (4) A scholarship or repayment obligation incurred under the Paul
Douglas Teacher Scholarship Program (20 U.S.C. 1111, et seq.).
    (5) A grant, or a loan, made under the Law Enforcement Education
Program (42 U.S.C. 3775).
    (6) A stipend awarded under the Indian Fellowship Program (29 U.S.C.
774(b)).
    (7) A scholarship awarded under the Teacher Quality Enhancement
Grants Program (20 U.S.C. 1021 et seq.).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30337, July 8, 1992, as amended at 59 FR 24870, May 12, 1994; 65
FR 19609, Apr. 11, 2000]



Sec. 75.61  Certification of eligibility; effect of ineligibility.

    (a) An individual who applies for a fellowship, scholarship, or
discretionary grant from the Department shall provide with his or her
application a certification under the penalty of perjury--

[[Page 136]]

    (1) That the individual is eligible under Sec. 75.60; and
    (2) That the individual has not been debarred or suspended by a
judge under section 5301 of the Anti-Drug Abuse Act of 1988 (21 U.S.C.
853a).
    (b) The Secretary specifies the form of the certification required
under paragraph (a) of this section.
    (c) The Secretary does not award a fellowship, scholarship, or
discretionary grant to an individual who--
    (1) Fails to provide the certification required under paragraph (a)
of this section; or
    (2) Is ineligible, based on information available to the Secretary
at the time the award is made.
    (d) If a fellowship, scholarship, or discretionary grant is made to
an individual who provided a false certification under paragraph (a) of
this section, the individual is liable for recovery of the funds made
available under the certification, for civil damages or penalties
imposed for false representation, and for criminal prosecution under 18
U.S.C. 1001.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.62  Requirements applicable to entities making certain awards.

    (a) An entity that provides a fellowship, scholarship, or
discretionary grant to an individual under a grant from, or an agreement
with, the Secretary shall require the individual who applies for such an
award to provide with his or her application a certification under the
penalty of perjury--
    (1) That the individual is eligible under Sec. 75.60; and
    (2) That the individual has not been debarred or suspended by a
judge under section 5301 of the Anti-Drug Abuse Act of 1988 (21 U.S.C.
853a).
    (b) An entity subject to this section may not award a fellowship,
scholarship, or discretionary grant to an individual if--
    (1) The individual fails to provide the certification required under
paragraph (a) of this section; or
    (2) The Secretary informs the entity that the individual is
ineligible under Sec. 75.60.
    (c) If a fellowship, scholarship, or discretionary grant is made to
an individual who provided a false certification under paragraph (a) of
this section, the individual is liable for recovery of the funds made
available under the certification, for civil damages or penalties
imposed for false representation, and for criminal prosecution under 18
U.S.C. 1001.
    (d) The Secretary may require an entity subject to this section to
provide a list of the individuals to whom fellowship, scholarship, or
discretionary grant awards have been made or are proposed to be made by
the entity.

(Authority: 20 U.S.C. 1221e-3 and 3474)

Subpart B [Reserved]



                   Subpart C_How To Apply for a Grant

                         The Application Notice



Sec. 75.100  Publication of an application notice; content of the notice.

    (a) Each fiscal year the Secretary publishes application notices in
the Federal Register that explain what kind of assistance is available
for new grants under the programs that the Secretary administers.
    (b) The application notice for a program explains one or more of the
following:
    (1) How to apply for a new grant.
    (2) If preapplications are used under the program, how to preapply
for a new grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86297, Dec. 30, 1980; 51 FR 20824, June 9, 1986; 59
FR 30261, June 10, 1994]



Sec. 75.101  Information in the application notice that helps an
applicant apply.

    (a) The Secretary may include such information as the following in
an application notice:
    (1) How an applicant can get an application package that contains:
    (i) Information about the program; and
    (ii) The application form that the applicant must use.
    (2) The amount of funds available for grants, the estimated number
of those grants, the estimated amounts of those

[[Page 137]]

grants and, if appropriate, the maximum award amounts of those grants.
    (3) If the Secretary plans to approve multi-year projects, the
project period that will be approved.
    (4) Any priorities established by the Secretary for the program for
that year and the method the Secretary will use to implement the
priorities. (See Sec. 75.105 Annual priorities.)
    (5) Where to find the regulations that apply to the program.
    (6) The statutory authority for the program.
    (7) The deadlines established under Sec. 75.102 (Deadline date for
applications.) and 34 CFR 79.8 (How does the Secretary provide States an
opportunity to comment on proposed Federal financial assistance?)
    (b) If the Secretary either requires or permits preapplications
under a program, an application notice for the program explains how an
applicant can get the preapplication form.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR 77.1--definitions of ``budget period''
and ``project period.''

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 84059, Dec. 22, 1980; 46 FR 3205, Jan. 14, 1981; 51
FR 20824, June 9, 1986; 51 FR 21164, June 11, 1986; 60 FR 63873, Dec.
12, 1995; 61 FR 8455, Mar. 4, 1996]



Sec. 75.102  Deadline date for applications.

    (a) The application notice for a program sets a deadline date for
the transmittal of applications to the Department.
    (b) If an applicant wants a new grant, the applicant must submit an
application in accordance with the requirements in the application
notice.
    (c) [Reserved]
    (d) If the Secretary allows an applicant to submit a paper
application, the applicant must show one of the following as proof of
mailing by the deadline date:
    (1) A legibly dated U.S. Postal Service postmark.
    (2) A legible mail receipt with the date of mailing stamped by the
U.S. Postal Service.
    (3) A dated shipping label, invoice, or receipt from a commercial
carrier.
    (4) Any other proof of mailing acceptable to the Secretary.
    (e) If an application is mailed through the U.S. Postal Service, the
Secretary does not accept either of the following as proof of mailing:
    (1) A private metered postmark.
    (2) A mail receipt that is not dated by the U.S. Postal Service.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Note: The U.S. Postal Service does not uniformly provide a dated
postmark. Before relying on this method, an applicant should check with
its local post office.

[45 FR 22497, Apr. 3, 1980, as amended at 51 FR 20824, June 9, 1986; 69
FR 41201, July 8, 2004]



Sec. 75.103  Deadline date for preapplications.

    (a) If the Secretary invites or requires preapplications under a
program, the application notice for the program sets a deadline date for
preapplications.
    (b) An applicant shall submit its preapplication in accordance with
the procedures for applications in Sec. 75.102(b) and (d).

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.104  Applicants must meet procedural rules.

    (a) The Secretary may make a grant only to an eligible party that
submits an application.
    (b) If a maximum award amount is established in a notice published
in the Federal Register, the Secretary may reject without consideration
or evaluation any application that proposes a project funding level that
exceeds the stated maximum award amount.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[61 FR 8455, Mar. 4, 1996]



Sec. 75.105  Annual priorities.

    (a) What programs are covered by this section? This section applies
to any program for which the Secretary establishes priorities for
selection of applications in a particular fiscal year.
    (b) How does the Secretary establish annual priorities? (1) The
Secretary establishes final annual priorities by publishing the
priorities in a notice in the

[[Page 138]]

Federal Register, usually in the application notice for that program.
    (2) The Secretary publishes proposed annual priorities for public
comment, unless:
    (i) The final annual priorities will be implemented only by inviting
applications that meet the priorities (Cross-reference: See 34 CFR
75.105(c)(1));
    (ii) The final annual priorities are chosen from a list of
priorities already established in the program's regulations;
    (iii) Publishing proposed annual priorities would seriously
interfere with an orderly, responsible grant award process or would
otherwise be impracticable, unnecessary, or contrary to the public
interest;
    (iv) The program statute requires or authorizes the Secretary to
establish specified priorities; or
    (v) The annual priorities are chosen from allowable activities
specified in the program statute.
    (c) How does the Secretary implement an annual priority? The
Secretary may choose one or more of the following methods to implement
an annual priority:
    (1) Invitations. The Secretary may simply invite applications that
meet a priority. If the Secetary chooses this method, an application
that meets the priority receives no competitive or absolute preference
over applications that do not meet the priority.
    (2) Competitive preference. The Secretary may give one of the
following kinds of competitive preference to applications that meet a
priority.
    (i) The Secretary may award some or all bonus points to an
application depending on the extent to which the application meets the
priority. These points are in addition to any points the applicant earns
under the selection criteria (see Sec. 75.200(b)). The notice states
the maximum number of additional points that the Secretary may award to
an application depending upon how well the application meets the
priority.
    (ii) The Secretary may select an application that meets a priority
over an application of comparable merit that does not meet the priority.
    (3) Absolute preference. The Secretary may give an absolute
preference to applications that meet a priority. The Secretary
establishes a separate competition for applications that meet the
priority and reserves all or part of a program's funds solely for that
competition. The Secretary may adjust the amount reserved for the
priority after determining the number of high quality applications
received.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[46 FR 3205, Jan. 14, 1981, as amended at 57 FR 30337, July 8, 1992; 60
FR 63873, Dec. 12, 1995]

                          Application Contents

    Cross Reference: See Sec. 75.200 for a description of discretionary
and formula grant programs.



Sec. 75.109  Changes to application; number of copies.

    (a) Each applicant that submits a paper application shall submit an
original and two copies to the Department, including any information
that the applicant supplies voluntarily.
    (b) An applicant may make changes to its application on or before
the deadline date for submitting applications under the program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See Sec. 75.200 How applications for new grants
are selected for funding.

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 69 FR 41201, July 8, 2004]



Sec. 75.110  Information regarding performance measurement.

    (a) The Secretary may establish in an application notice for a
competition one or more performance measurement requirements, including
requirements for performance measures, baseline data, or performance
targets, and a requirement that applicants propose in their applications
one or more of their own performance measures, baseline data, or
performance targets.
    (b) If an application notice requires applicants to propose project-
specific performance measures, baseline data, or performance targets,
the application must include the following, as required by the
application notice:
    (1) Performance measures. How each proposed performance measure
would accurately measure the performance of

[[Page 139]]

the project and how the proposed performance measure would be consistent
with the performance measures established for the program funding the
competition.
    (2) Baseline data. (i) Why each proposed baseline is valid; or
    (ii) If the applicant has determined that there are no established
baseline data for a particular performance measure, an explanation of
why there is no established baseline and of how and when, during the
project period, the applicant would establish a valid baseline for the
performance measure.
    (3) Performance targets. Why each proposed performance target is
ambitious yet achievable compared to the baseline for the performance
measure and when, during the project period, the applicant would meet
the performance target(s).
    (c) If the application notice establishes performance measurement
requirements, the applicant must also describe in the application--
    (1)(i) The data collection and reporting methods the applicant would
use and why those methods are likely to yield reliable, valid, and
meaningful performance data; and
    (ii) If the Secretary requires applicants to collect data after the
substantive work of a project is complete regarding the attainment of
certain performance targets, the data collection and reporting methods
the applicant would use during the post-performance period and why those
methods are likely to yield reliable, valid, and meaningful performance
data.
    (2) The applicant's capacity to collect and report reliable, valid,
and meaningful performance data, as evidenced by high-quality data
collection, analysis, and reporting in other projects or research.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[78 FR 49352, Aug. 13, 2013]



Sec. 75.112  Include a proposed project period and a timeline.

    (a) An application must propose a project period for the project.
    (b) An application must include a narrative that describes how and
when, in each budget period of the project, the applicant plans to meet
each objective of the project.

(Approved by the Office of Management and Budget under control number
1875-0102)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 59 FR 30261, June 10, 1994]



Sec. 75.117  Information needed for a multi-year project.

    An applicant that proposes a multi-year project shall include in its
application:
    (a) Information that shows why a multi-year project is needed;
    (b) A budget narrative accompanied by a budget form prescribed by
the Secretary, that provides budget information for each budget period
of the proposed project period.

(Approved by the Office of Management and Budget under control number
1875-0102)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 59 FR 30261, June 10, 1994]



Sec. 75.118  Requirements for a continuation award.

    (a) A recipient that wants to receive a continuation award shall
submit a performance report that provides the most current performance
and financial expenditure information, as directed by the Secretary,
that is sufficient to meet the reporting requirements of 34 CFR 74.51,
75.590, 75.720, and 80.40.
    (b) If a recipient fails to submit a performance report that meets
the requirements of paragraph (a) of this section, the Secretary denies
continued funding for the grant.

(Approved by the Office of Management and Budget under control number
1875-0102)

(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)

    Cross Reference: See Sec. 75.117 Information needed for a multi-
year project, and Sec. Sec. 75.250 through 75.253 Approval of multi-
year projects, Sec. 75.590 Evaluation by the recipient, Sec. 75.720
Financial and performance reports, Sec. 74.51 Monitoring and reporting
program performance, and Sec. 80.40 Monitoring and reporting program
performance.

[59 FR 30261, June 10, 1994, as amended at 64 FR 50391, Sept. 16, 1999]

[[Page 140]]



Sec. 75.119  Information needed if private school students participate.

    If a program requires the applicant to provide an opportunity for
participation of students enrolled in private schools, the application
must include the information required of subgrantees under 34 CFR
76.656.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 49143, Dec. 6, 1988]

               Separate Applications--Alternative Programs



Sec. 75.125  Submit a separate application to each program.

    An applicant shall submit a separate application to each program
under which it wants a grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27803, July 24, 1987; 60 FR 46493, Sept. 6, 1995]



Sec. 75.126  Application must list all programs to which it is
submitted.

    If an applicant is submitting an application for the same project
under more than one Federal program, the applicant shall list these
programs in its application. The Secretary uses this information to
avoid duplicate grants for the same project.

(Authority: 20 U.S.C. 1221e-3 and 3474)

                           Group Applications



Sec. 75.127  Eligible parties may apply as a group.

    (a) Eligible parties may apply as a group for a grant.
    (b) Depending on the program under which a group of eligible parties
seeks assistance, the term used to refer to the group may vary. The list
that follows contains some of the terms used to identify a group of
eligible parties:
    (1) Combination of institutions of higher education.
    (2) Consortium.
    (3) Joint applicants.
    (4) Cooperative arrangements.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.128  Who acts as applicant; the group agreement.

    (a) If a group of eligible parties applies for a grant, the members
of the group shall either:
    (1) Designate one member of the group to apply for the grant; or
    (2) Establish a separate, eligible legal entity to apply for the
grant.
    (b) The members of the group shall enter into an agreement that:
    (1) Details the activities that each member of the group plans to
perform; and
    (2) Binds each member of the group to every statement and assurance
made by the applicant in the application.
    (c) The applicant shall submit the agreement with its application.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.129  Legal responsibilities of each member of the group.

    (a) If the Secretary makes a grant to a group of eligible
applicants, the applicant for the group is the grantee and is legally
responsible for:
    (1) The use of all grant funds;
    (2) Ensuring that the project is carried out by the group in
accordance with Federal requirements; and
    (3) Ensuring that indirect cost funds are determined as required
under Sec. 75.564(e).
    (b) Each member of the group is legally responsible to:
    (1) Carry out the activities it agrees to perform; and
    (2) Use the funds that it receives under the agreement in accordance
with Federal requirements that apply to the grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 59 FR 59581, Nov. 17, 1994]

                         Competition Exceptions



Sec. 75.135  Competition exception for proposed implementation sites,
implementation partners, or service providers.

    (a) When entering into a contract with implementation sites or
partners, an applicant is not required to comply with the competition
requirements in

[[Page 141]]

34 CFR 74.43 or 80.36(c), as applicable, if--
    (1) The contract is with an entity that agrees to provide a site or
sites where the applicant would conduct the project activities under the
grant;
    (2) The implementation sites or partner entities that the applicant
proposes to use are identified in the application for the grant; and
    (3) The implementation sites or partner entities are included in the
application in order to meet a regulatory, statutory, or priority
requirement related to the competition.
    (b) When entering into a contract for data collection, data
analysis, evaluation services, or essential services, an applicant may
select a provider using the informal, small-purchase procurement
procedures in 34 CFR 80.36(d)(1), regardless of whether that applicant
would otherwise be subject to that part or whether the evaluation
contract would meet the standards for a small purchase order, if--
    (1) The contract is with the data collection, data analysis,
evaluation service, or essential service provider;
    (2) The data collection, data analysis, evaluation service, or
essential service provider that the applicant proposes to use is
identified in the application for the grant; and
    (3) The data collection, data analysis, evaluation service, or
essential service provider is identified in the application in order to
meet a statutory, regulatory, or priority requirement related to the
competition.
    (c) If the grantee relied on the exceptions under paragraph (a) or
(b) of this section, the grantee must certify in its application that
any employee, officer, or agent participating in the selection, award,
or administration of a contract is free of any real or apparent conflict
of interest and, if the grantee relied on the exceptions of paragraph
(b) of this section, that the grantee used small purchase procedures to
obtain the product or service.
    (d) A grantee must obtain the Secretary's prior approval for any
change to an implementation site, implementation partner, or data
collection, data analysis, evaluation service, or essential service
provider, if the grantee relied on the exceptions under paragraph (a) or
(b) of this section to select the entity.
    (e) The exceptions in paragraphs (a) and (b) of this section do not
extend to the other procurement requirements in 34 CFR part 74 and 34
CFR part 80 regarding contracting by grantees and subgrantees.
    (f) For the purposes of this section, essential service means a
product or service directly related to the grant that would, if not
provided, have a detrimental effect on the grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[78 FR 49352, Aug. 13, 2013]

                        State Comment Procedures



Sec. 75.155  Review procedures if State may comment on applications:
Purpose of Sec. Sec. 75.156-75.158.

    If the authorizing statute for a program requires that a specific
State agency be given an opportunity to comment on each application, the
State and the applicant shall use the procedures in Sec. Sec. 75.156-
75.158 for that purpose.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR part 79 (Intergovernmental Review of
Department of Education Programs and Activities) for the regulations
implementing the application review procedures that States may use under
E.O. 12372.

[57 FR 30338, July 8, 1992]



Sec. 75.156  When an applicant under Sec. 75.155 must submit its
application to the State; proof of submission.

    (a) Each applicant under a program covered by Sec. 75.155 shall
submit a copy of its application to the State on or before the deadline
date for submitting its application to the Department.
    (b) The applicant shall attach to its application a copy of its
letter that requests the State to comment on the application.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.157  The State reviews each application.

    A State that receives an application under Sec. 75.156 may review
and comment on the application.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)

[[Page 142]]



Sec. 75.158  Deadlines for State comments.

    (a) The Secretary may establish a deadline date for receipt of State
comments on applications.
    (b) The State shall make its comments in a written statement signed
by an appropriate State official.
    (c) The appropriate State official shall submit comments to the
Secretary by the deadline date for State comments. The procedures in
Sec. 75.102 (b) and (d) (how to meet a deadline) of this part apply to
this submission.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.159  Effect of State comments or failure to comment.

    (a) The Secretary considers those comments of the State that relate
to:
    (1) Any selection criterion that applies under the program; or
    (2) Any other matter that affects the selection of projects for
funding under the program.
    (b) If the State fails to comment on an application on or before the
deadline date for the appropriate program, the State waives its right to
comment.
    (c) If the applicant does not give the State an opportunity to
comment, the Secretary does not select that project for a grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

           Development of Curricula or Instructional Materials



Sec. 75.190  Consultation.

    Each applicant that intends to develop curricula or instructional
materials under a grant is encouraged to assure that the curricula or
materials will be developed in a manner conducive to dissemination,
through continuing consultations with publishers, personnel of State and
local educational agencies, teachers, administrators, community
representatives, and other individuals experienced in dissemination.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.191  Consultation costs.

    An applicant may budget reasonable consultation fees or planning
costs in connection with the development of curricula or instructional
materials.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.192  Dissemination.

    If an applicant proposes to publish and disseminate curricula or
instructional materials under a grant, the applicant shall include an
assurance in its application that the curricula or materials will reach
the populations for which the curricula or materials were developed.

(Authority: 20 U.S.C. 1221e-3 and 3474)



                      Subpart D_How Grants Are Made

                        Selection of New Projects



Sec. 75.200  How applications for new grants and cooperative agreements
are selected for funding; standards for use of cooperative agreements.

    (a) Direct grant programs. The Department administers two kinds of
direct grant programs. A direct grant program is either a discretionary
grant or a formula grant program.
    (b) Discretionary grant programs. (1) A discretionary grant program
is one that permits the Secretary to use discretionary judgment in
selecting applications for funding.

    Cross Reference: See Sec. 75.219 Exceptions to the procedures under
Sec. 75.217.

    (2) The Secretary uses selection criteria to evaluate the
applications submitted for new grants under a discretionary grant
program.
    (3) To evaluate the applications for new grants under the program
the Secretary may use:
    (i) Selection criteria established under Sec. 75.209.
    (ii) Selection criteria in program-specific regulations.
    (iii) Selection criteria established under Sec. 75.210.
    (iv) Any combination of criteria from paragraphs (b)(3)(i),
(b)(3)(ii), and (b)(3)(iii) of this section.
    (4) The Secretary may award a cooperative agreement instead of a
grant if the Secretary determines that substantial involvement between
the Department and the recipient is necessary to carry out a
collaborative project.

[[Page 143]]

    (5) The Secretary uses the selection procedures in this subpart to
select recipients of cooperative agreements.
    (c) Formula grant programs. (1) A formula grant program is one that
entitles certain applicants to receive grants if they meet the
requirements of the program. Applicants do not compete with each other
for the funds, and each grant is either for a set amount or for an
amount determined under a formula.
    (2) The Secretary applies the program statute and regulations to
fund projects under a formula grant program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27803, July 24, 1987; 57 FR 30338, July 8, 1992; 60
FR 63873, Dec. 12, 1995; 62 FR 10401, Mar. 6, 1997]



Sec. 75.201  How the selection criteria will be used.

    (a) In the application package or a notice published in the Federal
Register, the Secretary informs applicants of--
    (1) The selection criteria chosen; and
    (2) The factors selected for considering the selection criteria, if
any.
    (b) If points or weights are assigned to the selection criteria, the
Secretary informs applicants in the application package or a notice
published in the Federal Register of--
    (1) The total possible score for all of the criteria for a program;
and
    (2) The assigned weight or the maximum possible score for each
criterion or factor under that criterion.
    (c) If no points or weights are assigned to the selection criteria
and selected factors, the Secretary evaluates each criterion equally
and, within each criterion, each factor equally.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[62 FR 10401, Mar. 6, 1997]



Sec. Sec. 75.202-75.206  [Reserved]



Sec. 75.209  Selection criteria based on statutory or regulatory
provisions.

    The Secretary may establish selection criteria and factors based on
statutory or regulatory provisions that apply to the authorized program,
which may include, but are not limited to criteria and factors that
reflect--
    (a) Criteria contained in the program statute or regulations;
    (b) Criteria in Sec. 75.210;
    (c) Allowable activities specified in the program statute or
regulations;
    (d) Application content requirements specified in the program
statute or regulations;
    (e) Program purposes, as described in the program statute or
regulations; or
    (f) Other pre-award and post-award conditions specified in the
program statute or regulations.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[78 FR 49353, Aug. 13, 2013]



Sec. 75.210  General selection criteria.

    In determining the selection criteria to evaluate applications
submitted in a grant competition, the Secretary may select one or more
of the following criteria and may select from among the list of optional
factors under each criterion. The Secretary may define a selection
criterion by selecting one or more specific factors within a criterion
or assigning factors from one criterion to another criterion.
    (a) Need for project. (1) The Secretary considers the need for the
proposed project.
    (2) In determining the need for the proposed project, the Secretary
considers one or more of the following factors:
    (i) The magnitude or severity of the problem to be addressed by the
proposed project.
    (ii) The magnitude of the need for the services to be provided or
the activities to be carried out by the proposed project.
    (iii) The extent to which the proposed project will provide services
or otherwise address the needs of students at risk of educational
failure.
    (iv) The extent to which the proposed project will focus on serving
or otherwise addressing the needs of disadvantaged individuals.
    (v) The extent to which specific gaps or weaknesses in services,
infrastructure, or opportunities have been identified and will be
addressed by the proposed project, including the nature and magnitude of
those gaps or weaknesses.

[[Page 144]]

    (vi) The extent to which the proposed project will prepare personnel
for fields in which shortages have been demonstrated.
    (b) Significance. (1) The Secretary considers the significance of
the proposed project.
    (2) In determining the significance of the proposed project, the
Secretary considers one or more of the following factors:
    (i) The national significance of the proposed project.
    (ii) The significance of the problem or issue to be addressed by the
proposed project.
    (iii) The potential contribution of the proposed project to
increased knowledge or understanding of educational problems, issues, or
effective strategies.
    (iv) The potential contribution of the proposed project to increased
knowledge or understanding of rehabilitation problems, issues, or
effective strategies.
    (v) The likelihood that the proposed project will result in system
change or improvement.
    (vi) The potential contribution of the proposed project to the
development and advancement of theory, knowledge, and practices in the
field of study.
    (vii) The potential for generalizing from the findings or results of
the proposed project.
    (viii) The extent to which the proposed project is likely to yield
findings that may be utilized by other appropriate agencies and
organizations.
    (ix) The extent to which the proposed project is likely to build
local capacity to provide, improve, or expand services that address the
needs of the target population.
    (x) The extent to which the proposed project involves the
development or demonstration of promising new strategies that build on,
or are alternatives to, existing strategies.
    (xi) The likely utility of the products (such as information,
materials, processes, or techniques) that will result from the proposed
project, including the potential for their being used effectively in a
variety of other settings.
    (xii) The extent to which the results of the proposed project are to
be disseminated in ways that will enable others to use the information
or strategies.
    (xiii) The potential replicability of the proposed project or
strategies, including, as appropriate, the potential for implementation
in a variety of settings.
    (xiv) The importance or magnitude of the results or outcomes likely
to be attained by the proposed project, especially improvements in
teaching and student achievement.
    (xv) The importance or magnitude of the results or outcomes likely
to be attained by the proposed project, especially improvements in
employment, independent living services, or both, as appropriate.
    (xvi) The importance or magnitude of the results or outcomes likely
to be attained by the proposed project.
    (c) Quality of the project design. (1) The Secretary considers the
quality of the design of the proposed project.
    (2) In determining the quality of the design of the proposed
project, the Secretary considers one or more of the following factors:
    (i) The extent to which the goals, objectives, and outcomes to be
achieved by the proposed project are clearly specified and measurable.
    (ii) The extent to which the design of the proposed project is
appropriate to, and will successfully address, the needs of the target
population or other identified needs.
    (iii) The extent to which there is a conceptual framework underlying
the proposed research or demonstration activities and the quality of
that framework.
    (iv) The extent to which the proposed activities constitute a
coherent, sustained program of research and development in the field,
including, as appropriate, a substantial addition to an ongoing line of
inquiry.
    (v) The extent to which the proposed activities constitute a
coherent, sustained program of training in the field.
    (vi) The extent to which the proposed project is based upon a
specific research design, and the quality and appropriateness of that
design, including the scientific rigor of the studies involved.

[[Page 145]]

    (vii) The extent to which the proposed research design includes a
thorough, high-quality review of the relevant literature, a high-quality
plan for research activities, and the use of appropriate theoretical and
methodological tools, including those of a variety of disciplines, if
appropriate.
    (viii) The extent to which the design of the proposed project
includes a thorough, high-quality review of the relevant literature, a
high-quality plan for project implementation, and the use of appropriate
methodological tools to ensure successful achievement of project
objectives.
    (ix) The quality of the proposed demonstration design and procedures
for documenting project activities and results.
    (x) The extent to which the design for implementing and evaluating
the proposed project will result in information to guide possible
replication of project activities or strategies, including information
about the effectiveness of the approach or strategies employed by the
project.
    (xi) The extent to which the proposed development efforts include
adequate quality controls and, as appropriate, repeated testing of
products.
    (xii) The extent to which the proposed project is designed to build
capacity and yield results that will extend beyond the period of Federal
financial assistance.
    (xiii) The extent to which the design of the proposed project
reflects up-to-date knowledge from research and effective practice.
    (xiv) The extent to which the proposed project represents an
exceptional approach for meeting statutory purposes and requirements.
    (xv) The extent to which the proposed project represents an
exceptional approach to the priority or priorities established for the
competition.
    (xvi) The extent to which the proposed project will integrate with
or build on similar or related efforts to improve relevant outcomes (as
defined in 34 CFR 77.1(c)), using existing funding streams from other
programs or policies supported by community, State, and Federal
resources.
    (xvii) The extent to which the proposed project will establish
linkages with other appropriate agencies and organizations providing
services to the target population.
    (xviii) The extent to which the proposed project is part of a
comprehensive effort to improve teaching and learning and support
rigorous academic standards for students.
    (xix) The extent to which the proposed project encourages parental
involvement.
    (xx) The extent to which the proposed project encourages consumer
involvement.
    (xxi) The extent to which performance feedback and continuous
improvement are integral to the design of the proposed project.
    (xxii) The quality of the methodology to be employed in the proposed
project.
    (xxiii) The extent to which fellowship recipients or other project
participants are to be selected on the basis of academic excellence.
    (xxiv) The extent to which the applicant demonstrates that it has
the resources to operate the project beyond the length of the grant,
including a multi-year financial and operating model and accompanying
plan; the demonstrated commitment of any partners; evidence of broad
support from stakeholders (e.g., State educational agencies, teachers'
unions) critical to the project's long-term success; or more than one of
these types of evidence.
    (xxv) The potential and planning for the incorporation of project
purposes, activities, or benefits into the ongoing work of the applicant
beyond the end of the grant.
    (xxvi) The extent to which the proposed project will increase
efficiency in the use of time, staff, money, or other resources in order
to improve results and increase productivity.
    (xxvii) The extent to which the proposed project will integrate with
or build on similar or related efforts in order to improve relevant
outcomes (as defined in 34 CFR 77.1(c)), using nonpublic funds or
resources.
    (xxviii) The extent to which the proposed project is supported by
evidence of promise (as defined in 34 CFR 77.1(c)).

[[Page 146]]

    (xxix) The extent to which the proposed project is supported by
strong theory (as defined in 34 CFR 77.1(c)).
    (d) Quality of project services. (1) The Secretary considers the
quality of the services to be provided by the proposed project.
    (2) In determining the quality of the services to be provided by the
proposed project, the Secretary considers the quality and sufficiency of
strategies for ensuring equal access and treatment for eligible project
participants who are members of groups that have traditionally been
underrepresented based on race, color, national origin, gender, age, or
disability.
    (3) In addition, the Secretary considers one or more of the
following factors:
    (i) The extent to which the services to be provided by the proposed
project are appropriate to the needs of the intended recipients or
beneficiaries of those services.
    (ii) The extent to which entities that are to be served by the
proposed technical assistance project demonstrate support for the
project.
    (iii) The extent to which the services to be provided by the
proposed project reflect up-to-date knowledge from research and
effective practice.
    (iv) The likely impact of the services to be provided by the
proposed project on the intended recipients of those services.
    (v) The extent to which the training or professional development
services to be provided by the proposed project are of sufficient
quality, intensity, and duration to lead to improvements in practice
among the recipients of those services.
    (vi) The extent to which the training or professional development
services to be provided by the proposed project are likely to alleviate
the personnel shortages that have been identified or are the focus of
the proposed project.
    (vii) The likelihood that the services to be provided by the
proposed project will lead to improvements in the achievement of
students as measured against rigorous academic standards.
    (viii) The likelihood that the services to be provided by the
proposed project will lead to improvements in the skills necessary to
gain employment or build capacity for independent living.
    (ix) The extent to which the services to be provided by the proposed
project involve the collaboration of appropriate partners for maximizing
the effectiveness of project services.
    (x) The extent to which the technical assistance services to be
provided by the proposed project involve the use of efficient
strategies, including the use of technology, as appropriate, and the
leveraging of non-project resources.
    (xi) The extent to which the services to be provided by the proposed
project are focused on those with greatest needs.
    (xii) The quality of plans for providing an opportunity for
participation in the proposed project of students enrolled in private
schools.
    (e) Quality of project personnel. (1) The Secretary considers the
quality of the personnel who will carry out the proposed project.
    (2) In determining the quality of project personnel, the Secretary
considers the extent to which the applicant encourages applications for
employment from persons who are members of groups that have
traditionally been underrepresented based on race, color, national
origin, gender, age, or disability.
    (3) In addition, the Secretary considers one or more of the
following factors:
    (i) The qualifications, including relevant training and experience,
of the project director or principal investigator.
    (ii) The qualifications, including relevant training and experience,
of key project personnel.
    (iii) The qualifications, including relevant training and
experience, of project consultants or subcontractors.
    (f) Adequacy of resources. (1) The Secretary considers the adequacy
of resources for the proposed project.
    (2) In determining the adequacy of resources for the proposed
project, the Secretary considers one or more of the following factors:
    (i) The adequacy of support, including facilities, equipment,
supplies, and other resources, from the applicant organization or the
lead applicant organization.

[[Page 147]]

    (ii) The relevance and demonstrated commitment of each partner in
the proposed project to the implementation and success of the project.
    (iii) The extent to which the budget is adequate to support the
proposed project.
    (iv) The extent to which the costs are reasonable in relation to the
objectives, design, and potential significance of the proposed project.
    (v) The extent to which the costs are reasonable in relation to the
number of persons to be served and to the anticipated results and
benefits.
    (vi) The potential for continued support of the project after
Federal funding ends, including, as appropriate, the demonstrated
commitment of appropriate entities to such support.
    (vii) The potential for the incorporation of project purposes,
activities, or benefits into the ongoing program of the agency or
organization at the end of Federal funding.
    (g) Quality of the management plan. (1) The Secretary considers the
quality of the management plan for the proposed project.
    (2) In determining the quality of the management plan for the
proposed project, the Secretary considers one or more of the following
factors:
    (i) The adequacy of the management plan to achieve the objectives of
the proposed project on time and within budget, including clearly
defined responsibilities, timelines, and milestones for accomplishing
project tasks.
    (ii) The adequacy of procedures for ensuring feedback and continuous
improvement in the operation of the proposed project.
    (iii) The adequacy of mechanisms for ensuring high-quality products
and services from the proposed project.
    (iv) The extent to which the time commitments of the project
director and principal investigator and other key project personnel are
appropriate and adequate to meet the objectives of the proposed project.
    (v) How the applicant will ensure that a diversity of perspectives
are brought to bear in the operation of the proposed project, including
those of parents, teachers, the business community, a variety of
disciplinary and professional fields, recipients or beneficiaries of
services, or others, as appropriate.
    (h) Quality of the project evaluation. (1) The Secretary considers
the quality of the evaluation to be conducted of the proposed project.
    (2) In determining the quality of the evaluation, the Secretary
considers one or more of the following factors:
    (i) The extent to which the methods of evaluation are thorough,
feasible, and appropriate to the goals, objectives, and outcomes of the
proposed project.
    (ii) The extent to which the methods of evaluation are appropriate
to the context within which the project operates.
    (iii) The extent to which the methods of evaluation provide for
examining the effectiveness of project implementation strategies.
    (iv) The extent to which the methods of evaluation include the use
of objective performance measures that are clearly related to the
intended outcomes of the project and will produce quantitative and
qualitative data to the extent possible.
    (v) The extent to which the methods of evaluation will provide
timely guidance for quality assurance.
    (vi) The extent to which the methods of evaluation will provide
performance feedback and permit periodic assessment of progress toward
achieving intended outcomes.
    (vii) The extent to which the evaluation will provide guidance about
effective strategies suitable for replication or testing in other
settings.
    (viii) The extent to which the methods of evaluation will, if well-
implemented, produce evidence about the project's effectiveness that
would meet the What Works Clearinghouse Evidence Standards without
reservations.\1\
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following link: http://ies.ed.gov/ncee/wwc/DocumentSum.aspx?sid=19.
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    (ix) The extent to which the methods of evaluation will, if well-
implemented, produce evidence about the project's effectiveness that
would meet the What

[[Page 148]]

Works Clearinghouse Evidence Standards with reservations.\2\
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    (x) The extent to which the methods of evaluation will, if well-
implemented, produce evidence of promise (as defined in 34 CFR 77.1(c)).
    (xi) The extent to which the methods of evaluation will provide
valid and reliable performance data on relevant outcomes.
    (xii) The extent to which the evaluation plan clearly articulates
the key components, mediators, and outcomes of the grant-supported
intervention, as well as a measurable threshold for acceptable
implementation.
    (i) Strategy to scale. (1) The Secretary considers the applicant's
strategy to scale the proposed project.
    (2) In determining the applicant's capacity to scale the proposed
project, the Secretary considers one or more of the following factors:
    (i) The applicant's capacity (e.g., in terms of qualified personnel,
financial resources, or management capacity) to bring the proposed
project to scale on a national or regional level (as defined in 34 CFR
77.1(c)) working directly, or through partners, during the grant period.
    (ii) The applicant's capacity (e.g., in terms of qualified
personnel, financial resources, or management capacity) to further
develop and bring to scale the proposed process, product, strategy, or
practice, or to work with others to ensure that the proposed process,
product, strategy, or practice can be further developed and brought to
scale, based on the findings of the proposed project.
    (iii) The feasibility of successful replication of the proposed
project, if favorable results are obtained, in a variety of settings and
with a variety of populations.
    (iv) The mechanisms the applicant will use to broadly disseminate
information on its project so as to support further development or
replication.
    (v) The extent to which the applicant demonstrates there is unmet
demand for the process, product, strategy, or practice that will enable
the applicant to reach the level of scale that is proposed in the
application.
    (vi) The extent to which the applicant identifies a specific
strategy or strategies that address a particular barrier or barriers
that prevented the applicant, in the past, from reaching the level of
scale that is proposed in the application.

(Approved by the Office of Management and Budget under control number
1875-0102)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[62 FR 10401, Mar. 6, 1997, as amended at 78 FR 49353, Aug. 13, 2013]



Sec. 75.211  Selection criteria for unsolicited applications.

    (a) If the Secretary considers an unsolicited application under 34
CFR 75.222(a)(2)(ii), the Secretary uses the selection criteria and
factors, if any, used for the competition under which the application
could have been funded.
    (b) If the Secretary considers an unsolicited application under 34
CFR 75.222(a)(2)(iii), the Secretary selects from among the criteria in
Sec. 75.210(b), and may select from among the specific factors listed
under each criterion, the criteria that are most appropriate to evaluate
the activities proposed in the application.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[62 FR 10403, Mar. 6, 1997]

                          Selection Procedures



Sec. 75.215  How the Department selects a new project: purpose of
Sec. Sec. 75.216-75.222.

    Sections 75.216-75.222 describe the process the Secretary uses to
select applications for new grants. All of these sections apply to a
discretionary grant program. However, only Sec. 75.216 applies also to
a formula grant program.

    Cross Reference: See Sec. 75.200(b) Discretionary grant program,
and (c) Formula grant program.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.216  Applications not evaluated for funding.

    The Secretary does not evaluate an application if--
    (a) The applicant is not eligible;

[[Page 149]]

    (b) The applicant does not comply with all of the procedural rules
that govern the submission of the application;
    (c) The application does not contain the information required under
the program; or
    (d) The proposed project cannot be funded under the authorizing
statute or implementing regulations for the program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30338, July 8, 1992]



Sec. 75.217  How the Secretary selects applications for new grants.

    (a) The Secretary selects applications for new grants on the basis
of the authorizing statute, the selection criteria, and any priorities
or other requirements that have been published in the Federal Register
and apply to the selection of those applications.
    (b)(1) The Secretary may use experts to evaluate the applications
submitted under a program.
    (2) These experts may include persons who are not employees of the
Federal Government.
    (c) The Secretary prepares a rank order of the applications based
solely on the evaluation of their quality according to the selection
criteria.
    (d) The Secretary then determines the order in which applications
will be selected for grants. The Secretary considers the following in
making these determinations:
    (1) The information in each application.
    (2) The rank ordering of the applications.
    (3) Any other information--
    (i) Relevant to a criterion, priority, or other requirement that
applies to the selection of applications for new grants;
    (ii) Concerning the applicant's performance and use of funds under a
previous award under any Department program; and
    (iii) Concerning the applicant's failure under any Department
program to submit a performance report or its submission of a
performance report of unacceptable quality.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[52 FR 27804, July 24, 1987, as amended at 62 FR 4167, Jan. 29, 1997]



Sec. 75.218  Applications not evaluated or selected for funding.

    (a) The Secretary informs an applicant if its application--
    (1) Is not evaluated; or
    (2) Is not selected for funding.
    (b) If an applicant requests an explanation of the reason its
application was not evaluated or selected, the Secretary provides that
explanation.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30338, July 8, 1992]



Sec. 75.219  Exceptions to the procedures under Sec. 75.217.

    The Secretary may select an application for funding without
following the procedures in Sec. 75.217 if:
    (a) The objectives of the project cannot be achieved unless the
Secretary makes the grant before the date grants can be made under the
procedures in Sec. 75.217;
    (b)(1) The application was evaluated under the preceding competition
of the program;
    (2) The application rated high enough to deserve selection under
Sec. 75.217; and
    (3) The application was not selected for funding because the
application was mishandled by the Department; or
    (c) The Secretary receives an unsolicited application that meets the
requirements of Sec. 75.222.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27804, July 24, 1987; 60 FR 12096, Mar. 3, 1995]



Sec. 75.220  Procedures the Department uses under Sec. 75.219(a).

    If the special circumstances of Sec. 75.219(a) appear to exist for
an application, the Secretary uses the following procedures:
    (a) The Secretary assembles a board to review the application.
    (b) The board consists of:
    (1) A program officer of the program under which the applicant wants
a grant;

[[Page 150]]

    (2) An employee from the Office of the Chief Financial Officer
(OCFO) with responsibility for grant policy; and
    (3) A Department employee who is not a program officer of the
program but who is qualified to evaluate the application.
    (c) The board reviews the application to decide if:
    (1) The special circumstances under Sec. 75.219(a) are satisfied;
    (2) The application rates high enough, based on the selection
criteria, priorities, and other requirements that apply to the program,
to deserve selection; and
    (3) Selection of the application will not have an adverse impact on
the budget of the program.
    (d) The board forwards the results of its review to the Secretary.
    (e) If each of the conditions in paragraph (c) of this section is
satisfied, the Secretary may select the application for funding.
    (f) Even if the Secretary does not select the application for
funding, the applicant may submit its application under the procedures
in Subpart C of this part.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86297, Dec. 30, 1980; 64 FR 50391, Sept. 16, 1999]



Sec. 75.221  Procedures the Department uses under Sec. 75.219(b).

    If the special circumstances of Sec. 75.219(b) appear to exist for
an application, the Secretary may select the application for funding if:
    (a) The Secretary has documentary evidence that the special
circumstances of Sec. 75.219(b) exist; and
    (b) The Secretary has a statement that explains the circumstances of
the mishandling.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27804, July 24, 1987. Redesignated at 60 FR 12096,
Mar. 3, 1995]



Sec. 75.222  Procedures the Department uses under Sec. 75.219(c).

    If the Secretary receives an unsolicited application, the Secretary
may consider the application under the following procedures unless the
Secretary has published a notice in the Federal Register stating that
the program that would fund the application would not consider
unsolicited applications:
    (a)(1) The Secretary determines whether the application could be
funded under a competition planned or conducted for the fiscal year
under which funds would be used to fund the application.
    (2)(i) If the application could be funded under a competition
described in paragraph (a)(1) of this section and the deadline for
submission of applications has not passed, the Secretary refers the
application to the appropriate competition for consideration under the
procedures in Sec. 75.217.
    (ii)(A) If the application could have been funded under a
competition described in paragraph (a)(1) of this section and the
deadline for submission of applications has passed, the Secretary may
consider the application only in exceptional circumstances, as
determined by the Secretary.
    (B) If the Secretary considers an application under paragraph
(a)(2)(ii) of this section, the Secretary considers the application
under paragraphs (b) through (e) of this section.
    (iii) If the application could not be funded under a competition
described in paragraph (a)(1) of this section, the Secretary considers
the application under paragraphs (b) through (e) of this section.
    (b) If an application may be considered under paragraphs (a)(2)(ii)
or (iii) of this section, the Secretary determines if--
    (1) There is a substantial likelihood that the application is of
exceptional quality and national significance for a program administered
by ED;
    (2) The application meets the requirements of all applicable
statutes and codified regulations that apply to the program; and
    (3) Selection of the project will not have an adverse impact on the
funds available for other awards planned for the program.
    (c) If the Secretary determines that the criteria in paragraph (b)
of this section have been met, the Secretary assembles a panel of
experts that does

[[Page 151]]

not include any employees of the Department to review the application.
    (d) The experts--
    (1) Evaluate the application based on the selection criteria; and
    (2) Determine whether the application is of such exceptional quality
and national significance that it should be funded as an unsolicited
application.
    (e) If the experts highly rate the application and determine that
the application is of such exceptional quality and national significance
that it should be funded as an unsolicited application, the Secretary
may fund the application.

    Note to Sec. 75.222: To assure prompt consideration, applicants
submitting unsolicited applications should send the application, marked
``Unsolicited Application'' on the outside, to the Chief, Application
Control Center, U.S. Department of Education, Washington, DC 20202-4725.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[60 FR 12096, Mar. 3, 1995]



Sec. 75.223  [Reserved]



Sec. 75.224  What are the procedures for using a multiple tier review
process to evaluate applications?

    (a) The Secretary may use a multiple tier review process to evaluate
applications.
    (b) The Secretary may refuse to review applications in any tier that
do not meet a minimum cut-off score established for the prior tier.
    (c) The Secretary may establish the minimum cut-off score--
    (1) In the application notice published in the Federal Register; or
    (2) After reviewing the applications to determine the overall range
in the quality of applications received.
    (d) The Secretary may, in any tier--
    (1) Use more than one group of experts to gain different
perspectives on an application; and
    (2) Refuse to consider an application if the application is rejected
under paragraph (b) of this section by any one of the groups used in the
prior tier.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[66 FR 60138, Nov. 30, 2001]



Sec. 75.225  What procedures does the Secretary use if the Secretary
decides to give special consideration to novice applications?

    (a) As used in this section, ``novice applicant'' means--
    (1) Any applicant for a grant from ED that--
    (i) Has never received a grant or subgrant under the program from
which it seeks funding;
    (ii) Has never been a member of a group application, submitted in
accordance with Sec. Sec. 75.127-75.129, that received a grant under
the program from which it seeks funding; and
    (iii) Has not had an active discretionary grant from the Federal
Government in the five years before the deadline date for applications
under the program.
    (2) In the case of a group application submitted in accordance with
Sec. Sec. 75.127-75.129, a group that includes only parties that meet
the requirements of paragraph (a)(1) of this section.
    (b) For the purposes of paragraph (a)(1)(iii) of this section, a
grant is active until the end of the grant's project or funding period,
including any extensions of those periods that extend the grantee's
authority to obligate funds.
    (c) If the Secretary determines that special consideration of novice
applications is appropriate, the Secretary may either--
    (1) Establish a separate competition for novice applicants; or
    (2) Give competitive preference to novice applicants under the
procedures in 34 CFR 75.105(c)(2).
    (d) Before making a grant to a novice applicant, the Secretary
imposes special conditions, if necessary, to ensure the grant is managed
effectively and project objectives are achieved.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[66 FR 60138, Nov. 30, 2001; 67 FR 4316, Jan. 29, 2002]

                       Procedures To Make a Grant



Sec. 75.230  How the Department makes a grant; purpose of Sec.
Sec. 75.231-75.236.

    If the Secretary selects an application under Sec. Sec. 75.217,
75.220, or 75.222, the Secretary follows the procedures in Sec. Sec.
75.231-75.236 to set the amount and determine the conditions of a grant.

[[Page 152]]

Sections 75.235-75.236 also apply to grants under formula grant
programs.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See Sec. 75.200 How applications for new grants
are selected for funding.



Sec. 75.231  Additional information.

    After selecting an application for funding, the Secretary may
require the applicant to submit additional information.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.232  The cost analysis; basis for grant amount.

    (a) Before the Secretary sets the amount of a new grant, the
Secretary does a cost analysis of the project. The Secretary:
    (1) Verifies the cost data in the detailed budget for the project;
    (2) Evaluates specific elements of costs; and
    (3) Examines costs to determine if they are necessary, reasonable,
and allowable under applicable statutes and regulations.
    (b) The Secretary uses the cost analysis as a basis for determining
the amount of the grant to the applicant. The cost analysis shows
whether the applicant can achieve the objectives of the project with
reasonable efficiency and economy under the budget in the application.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 59 FR 30261, June 10, 1994]



Sec. 75.233  Setting the amount of the grant.

    (a) Subject to any applicable matching or cost-sharing requirements,
the Secretary may fund up to 100 percent of the allowable costs in the
applicant's budget.
    (b) In deciding what percentage of the allowable costs to fund, the
Secretary may consider any other financial resources available to the
applicant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30338, July 8, 1992]



Sec. 75.234  The conditions of the grant.

    (a) The Secretary makes a grant to an applicant only after
determining--
    (1) The approved costs; and
    (2) Any special conditions.
    (b) In awarding a cooperative agreement, the Secretary includes
conditions that state the explicit character and extent of anticipated
collaboration between the Department and the recipient.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30338, July 8, 1992]



Sec. 75.235  The notification of grant award.

    (a) To make a grant, the Secretary issues a notification of grant
award and sends it to the grantee.
    (b) The notification of grant award sets the amount of the grant
award and establishes other specific conditions, if any.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30338, July 8, 1992]



Sec. 75.236  Effect of the grant.

    The grant obligates both the Federal Government and the grantee to
the requirements that apply to the grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR part 74, Subpart L--Programmatic Changes
and Budget Revisions.

                     Approval of Multi-Year Projects



Sec. 75.250  Maximum funding period.

    (a) The Secretary may approve a project period of up to 60 months to
perform the substantive work of a grant.
    (b) The Secretary may approve a data collection period for a grant
for a period of up to 72 months after the end of the project period and
provide funding for the data collection period for the sole purpose of
collecting, analyzing, and reporting performance measurement data
regarding the project. The Secretary may inform applicants of the
Secretary's intent to approve data collection periods in the application
notice published for a competition or

[[Page 153]]

may decide to fund data collection periods after grantees have started
their project periods.

(Authority: 20 U.S.C. 1221e-3 and 3474.)

[78 FR 49353, Aug. 13, 2013]



Sec. 75.251  Budget periods.

    (a) The Secretary usually approves a budget period of not more than
12 months, even if the project has a multi-year project period.
    (b) If the Secretary approves a multi-year project period, the
Secretary:
    (1) Makes a grant to the project for the initial budget period; and
    (2) Indicates his or her intention to make contination awards to
fund the remainder of the project period.
    (c) If the Secretary funds a multi-year data collection period, the
Secretary may fund the data collection period through separate budget
periods and fund those budget periods in the same manner as those
periods are funded during the project period.

[45 FR 22497, Apr. 3, 1980, as amended at 78 FR 49354, Aug. 13, 2013]

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.253  Continuation of a multi-year project after the first
budget period.

    (a) The Secretary may make a continuation award for a budget period
after the first budget period of an approved multi-year project if:
    (1) The Congress has appropriated sufficient funds under the
program;
    (2) The grantee has either--
    (i) Made substantial progress in achieving--
    (A) The goals and objectives of the project; and
    (B) If the Secretary established performance measurement
requirements for the grant in the application notice, the performance
targets in the grantee's approved application; or
    (ii) Obtained the Secretary's approval for changes to the project
that--
    (A) Do not increase the amount of funds obligated to the project by
the Secretary; and
    (B) Enable the grantee to achieve the goals and objectives of the
project and meet the performance targets of the project, if any, without
changing the scope or objectives of the project.
    (3) The recipient has submitted all reports as required by Sec.
75.118, and
    (4) Continuation of the project is in the best interest of the
Federal Government.
    (5) The grantee has maintained financial and administrative
management systems that meet the requirements in 34 CFR 74.21 or 80.20,
as appropriate.
    (b) In deciding whether a grantee has made substantial progress, the
Secretary may consider any information relevant to the authorizing
statute, a criterion, a priority, or a performance measure, or to a
financial or other requirement that applies to the selection of
applications for new grants.
    (c) Subject to the criteria in paragraph (a) of this section, in
selecting applications for funding under a program the Secretary gives
priority to contination awards over new grants.
    (d)(1) Notwithstanding any regulatory requirements in 34 CFR part
80, a grantee may expend funds that have not been obligated at the end
of a budget period for obligations of the subsequent budget period if--
    (i) The obligation is for an allowable cost that falls within the
scope and objectives of the project; and
    (ii) ED regulations other than 34 CFR part 80, statutes, or the
conditions of the grant do not prohibit the obligation.

    Note: See 34 CFR 74.25(e)(2).

    (2) The Secretary may--
    (i) Require the grantee to send a written statement describing how
the funds made available under this section will be used; and
    (ii) Determine the amount of new funds that the Department will make
available for the subsequent budget period after considering the
statement the grantee provides under paragraph (c)(2)(i) of this section
or any other information available to the Secretary about the use of
funds under the grant.
    (3) In determining the amount of new funds to make available to a
grantee under this section, the Secretary considers whether the
unobligated funds made available are needed to complete activities that
were planned for completion in the prior budget period.

[[Page 154]]

    (e)(1) If the Secretary decides, under this section, not to make a
continuation award, the Secretary may authorize a no-cost extension of
the last budget period of the grant in order to provide for the orderly
closeout of the grant.
    (2) If the Secretary makes a continuation award under this section--
    (i) The Secretary makes the award under Sec. Sec. 75.231-75.236;
and
    (ii) The new budget period begins on the day after the previous
budget period ends.
    (f) Unless prohibited by the program statute or regulations, a
grantee that is in the final budget period of its project period may
seek continued assistance for the project as required under the
procedures for selecting new projects for grants.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross References: 1. See Subpart C--How to Apply for a Grant.

    2. See Sec. 75.117 Information needed for a multi-year project; and
Sec. 75.118 Application for a continuation award.

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30338, July 8, 1992; 59 FR 30261, June 10, 1994; 62
FR 40424, July 28, 1997; 78 FR 49354, Aug. 13, 2013]



Sec. 75.254  [Reserved]

                              Miscellaneous



Sec. 75.260  Allotments and reallotments.

    (a) Under some of the programs covered by this part, the Secretary
allots funds under a statutory or regulatory formula.
    (b) Any reallotment to other grantees will be made by the Secretary
in accordance with the authorizing statute for that program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27804, July 24, 1987]



Sec. 75.261  Extension of a project period.

    (a) General rule. A grantee may, notwithstanding any regulatory
requirement in 34 CFR part 80, extend the project period of an award one
time for a period up to twelve months without the prior approval of the
Secretary, if--
    (1) The grantee meets the requirements for extension of 34 CFR
74.25(e)(2); and
    (2) ED regulations other than the regulations in 34 CFR part 80,
statutes or the conditions of an award do not prohibit the extension.
    (b) Specific rule for certain programs of the National Institute on
Disability and Rehabilitation Research. Notwithstanding paragraph (a) of
this section, grantees under the following programs of NIDRR must
request prior approval to extend their grants under paragraph (c) of
this section:
    (1) The Knowledge Dissemination and Utilization Centers and
Disability and Technical Assistance Centers authorized under 29 U.S.C.
761a(b)(2), (4), (5), (6), and (11) and implemented at 34 CFR part 350,
subpart B, Sec. Sec. 350.17-350.19.
    (2) The Rehabilitation Research and Training Centers program
authorized under 29 U.S.C. 762(b) and implemented at 34 CFR part 350,
subpart C.
    (3) The Rehabilitation Engineering Research Centers authorized under
29 U.S.C. 762(b)(3) and implemented at 34 CFR part 350, subpart D.
    (4) The Special Projects and Demonstrations for Spinal Cord Injuries
authorized under 29 U.S.C. 762(b)(4) and implemented at 34 CFR part 359.
    (c) Other regulations. If ED regulations, other than the regulations
in 34 CFR part 80, or the conditions of the award require the grantee to
get prior approval to extend the project period, the Secretary may
permit the grantee to extend the project period if--
    (1) The extension does not violate any statute or regulations;
    (2) The extension does not involve the obligation of additional
Federal funds;
    (3) The extension is to carry out the activities in the approved
application; and
    (4)(i) The Secretary determines that, due to special or unusual
circumstances applicable to a class of grantees, the project periods for
the grantees should be extended; or
    (ii)(A) The Secretary determines that special or unusual
circumstances would delay completion of the project beyond the end of
the project period;
    (B) The grantee requests an extension of the project at least 45
calendar

[[Page 155]]

days before the end of the project period; and
    (C) The grantee provides a written statement before the end of the
project period giving the reasons why the extension is appropriate under
paragraph (c)(4)(ii)(A) of this section and the period for which the
project needs extension.
    (d) Waiver. The Secretary may waive the requirement in paragraph
(a)(4)(ii)(B) of this section if--
    (1) The grantee could not reasonably have known of the need for the
extension on or before the start of the 45-day time period; or
    (2) The failure to give notice on or before the start of the 45-day
time period was unavoidable.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30338, July 8, 1992, as amended at 62 FR 40424, July 28, 1997]



Sec. 75.262  Conversion of a grant or a cooperative agreement.

    (a)(1) The Secretary may convert a grant to a cooperative agreement
or a cooperative agreement to a grant at the time a continuation award
is made under Sec. 75.253.
    (2) In deciding whether to convert a grant to a cooperative
agreement or a cooperative agreement to a grant, the Secretary considers
the factors included in Sec. 75.200(b) (4) and (5).
    (b) The Secretary and a recipient may agree at any time to convert a
grant to a cooperative agreement or a cooperative agreement to a grant,
subject to the factors included in Sec. 75.200(b) (4) and (5).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30339, July 8, 1992]



Sec. 75.263  Pre-award costs; waiver of approval.

    A grantee may, notwithstanding any requirement in 34 CFR part 80,
incur pre-award costs as specified in 34 CFR 74.25(e)(1) unless--
    (a) ED regulations other than 34 CFR part 80 or a statute prohibit
these costs; or
    (b) The conditions of the award prohibit these costs.

(Authority: 20 U.S.C. 1221e-3 and 3474; OMB Circulars A-21, A-87, and A-
122)

[62 FR 40425, July 28, 1997]



Sec. 75.264  Transfers among budget categories.

    A grantee may, notwithstanding any requirement in 34 CFR part 80,
make transfers as specified in 34 CFR 74.25 unless--
    (a) ED regulations other than 34 CFR part 80 or a statute prohibit
these transfers; or
    (b) The conditions of the grant prohibit these transfers.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[62 FR 40425, July 28, 1997]



Sec. 75.266  What procedures does the Secretary use if the Secretary
decides to give special consideration to applications supported by

strong or moderate evidence of effectiveness?

    (a) As used in this section, ``strong evidence of effectiveness'' is
defined in 34 CFR 77.1(c);
    (b) As used in this section, ``moderate evidence of effectiveness''
is defined in 34 CFR 77.1(c); and
    (c) If the Secretary determines that special consideration of
applications supported by strong or moderate evidence of effectiveness
is appropriate, the Secretary may establish a separate competition under
the procedures in 34 CFR 75.105(c)(3), or provide competitive preference
under the procedures in 34 CFR 75.105(c)(2), for applications supported
by:
    (1) Evidence of effectiveness that meets the conditions set out in
paragraph (a) of the definition of ``strong evidence of effectiveness''
in 34 CFR 77.1;
    (2) Evidence of effectiveness that meets the conditions set out in
either paragraph (a) or (b) of the definition of ``strong evidence of
effectiveness'' in 34 CFR 77.1; or
    (3) Evidence of effectiveness that meets the conditions set out in
the definition of ``moderate evidence of effectiveness.''

(Authority: 20 U.S.C. 1221e-3 and 3474.)

[78 FR 49354, Aug. 13, 2013]

[[Page 156]]



           Subpart E_What Conditions Must Be Met by a Grantee?

                            Nondiscrimination



Sec. 75.500  Federal statutes and regulations on nondiscrimination.

    (a) Each grantee shall comply with the following statutes and
regulations:

------------------------------------------------------------------------
             Subject                    Statute           Regulations
------------------------------------------------------------------------
Discrimination on the basis of    Title VI of the     34 CFR part 100.
 race, color or national origin.   Civil Rights Act
                                   of 1964 (42
                                   U.S.C. 2000d
                                   through 2000d-4).
Discrimination on the basis of    Title IX of the     34 CFR part 106.
 sex.                              Education
                                   Amendments of
                                   1972 (20 U.S.C.
                                   1681-1683).
Discrimination on the basis of    Section 504 of the  34 CFR part 104.
 handicap.                         Rehabilitation
                                   Act of 1973 (29
                                   U.S.C. 794).
Discrimination on the basis of    The Age             34 CFR part 110.
 age.                              Discrimination
                                   Act (42 U.S.C.
                                   6101 et seq.).
------------------------------------------------------------------------

    (b) A grantee that is a covered entity as defined in Sec. 108.3 of
this title shall comply with the nondiscrimination requirements of the
Boy Scouts of America Equal Access Act, 20 U.S.C. 7905, 34 CFR part 108.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 71 FR 15002, Mar. 24, 2006]

                              Project Staff



Sec. 75.511  Waiver of requirement for a full-time project director.

    (a) If regulations under a program require a full-time project
director, the Secretary may waive that requirement under the following
conditions:
    (1) The project will not be adversely affected by the waiver.
    (2)(i) The project director is needed to coordinate two or more
related projects; or
    (ii) The project director must teach a minimum number of hours to
retain faculty status.
    (b) The waiver either permits the grantee:
    (1) To use a part-time project director; or
    (2) Not to use any project director.
    (c)(1) An applicant or a grantee may request the waiver.
    (2) The request must be in writing and must demonstrate that a
waiver is appropriate under this section.
    (3) The Secretary gives the waiver in writing. The waiver is
effective on the date the Secretary signs the waiver.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR 74.25, Revision of budget and program
plans; and 34 CFR 80.30, Changes.



Sec. 75.515  Use of consultants.

    (a) Subject to Federal statutes and regulations, a grantee shall use
its general policies and practices when it hires, uses, and pays a
consultant as part of the project staff.
    (b) The grantee may not use its grant to pay a consultant unless:
    (1) There is a need in the project for the services of that
consultant; and
    (2) The grantee cannot meet that need by using an employee rather
than a consultant.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.516  Compensation of consultants--employees of institutions of
higher education.

    If an institution of higher education receives a grant for research
or for educational services, it may pay a consultant's fee to one of its
employees only in unusual circumstances and only if:
    (a) The work performed by the consultant is in addition to his or
her regular departmental load; and
    (b)(1) The consultation is across departmental lines; or
    (2) The consultation involves a separate or remote operation.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.517  Changes in key staff members.

    A grantee shall comply with 34 CFR 74.25(c)(2) concerning
replacement or lesser involvement of any key project staff, whether or
not the grant is for research.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980, as amended at 64 FR 50391, Sept. 16, 1999]



Sec. 75.519  Dual compensation of staff.

    A grantee may not use its grantee to pay a project staff member for
time or work for which that staff member is

[[Page 157]]

compensated from some other source of funds.

(Authority: 20 U.S.C. 1221e-3 and 3474)

                          Conflict of Interest



Sec. 75.524  Conflict of interest: Purpose of Sec. 75.525.

    (a) The conflict of interest regulations of the Department that
apply to a grant are in Sec. 75.525.
    (b) These conflict of interest regulations do not apply to a
``government'' as defined in 34 CFR 80.3.
    (c) The regulations in Sec. 75.525 do not apply to a grantee's
procurement contracts. The conflict of interest regulations that cover
those procurement contracts are in 34 CFR part 74.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980, as amended at 64 FR 50391, Sept. 16, 1999]



Sec. 75.525  Conflict of interest: Participation in a project.

    (a) A grantee may not permit a person to participate in an
administrative decision regarding a project if:
    (1) The decision is likely to benefit that person or a member of his
or her immediate family; and
    (2) The person:
    (i) Is a public official; or
    (ii) Has a family or business relationship with the grantee.
    (b) A grantee may not permit any person participating in the project
to use his or her position for a purpose that is--or gives the
appearance of being--motivated by a desire for a private financial gain
for that person or for others.

(Authority: 20 U.S.C. 1221e-3 and 3474)

                             Allowable Costs



Sec. 75.530  General cost principles.

    The general principles to be used in determining costs applicable to
grants and cost-type contracts under grants are specified at 34 CFR
74.27 (for administration of grants to institutions of higher education,
and other non-profit organizations) and 34 CFR 80.22 (for uniform
administrative requirements for grants and cooperative agreements to
State and local governments).

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR part 74, Subpart D--After-the-Award
Requirements and 34 CFR part 80, Subpart C--Post-Award Requirements.

[64 FR 50391, Sept. 16, 1999]



Sec. 75.531  Limit on total cost of a project.

    A grantee shall insure that the total cost to the Federal Government
is not more than the amount stated in the notification of grant award.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.532  Use of funds for religion prohibited.

    (a) No grantee may use its grant to pay for any of the following:
    (1) Religious worship, instruction, or proselytization.
    (2) Equipment or supplies to be used for any of the activities
specified in paragraph (a)(1) of this section.
    (b) [Reserved]

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 69 FR 31711, June 4, 2004]



Sec. 75.533  Acquisition of real property; construction.

    No grantee may use its grant for acquisition of real property or for
construction unless specifically permitted by the authorizing statute or
implementing regulations for the program.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.534  Training grants--automatic increases for additional
dependents.

    The Secretary may increase a grant to cover the cost of additional
dependents not specified in the notice of award under Sec. 75.235 if--
    (a) Allowances for dependents are authorized by the program statute
and are allowable under the grant; and
    (b) Appropriations are available to cover the cost.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30339, July 8, 1992]

[[Page 158]]

                           Indirect Cost Rates



Sec. 75.560  General indirect cost rates; exceptions.

    (a) The differences between direct and indirect costs and the
principles for determining the general indirect cost rate that a grantee
may use for grants under most programs are specified in the cost
principles for--
    (1) Institutions of higher education, at 34 CFR 74.27;
    (2) Hospitals, at 34 CFR 74.27;
    (3) Other nonprofit organizations, at 34 CFR 74.27;
    (4) Commercial (for-profit) organizations, at 34 CFR 74.27; and
    (5) State and local governments and federally-recognized Indian
tribal organizations, at 34 CFR 80.22.
    (b) A grantee must have obtained a current indirect cost rate
agreement from its cognizant agency, to charge indirect costs to a
grant. To obtain an indirect cost rate, a grantee must submit an
indirect cost proposal to its cognizant agency within 90 days after the
date the Department issues the Grant Award Notification (GAN).
    (c) If a grantee does not have a federally recognized indirect cost
rate agreement, the Secretary may permit the grantee to charge its grant
for indirect costs at a temporary rate of 10 percent of budgeted direct
salaries and wages.
    (d)(1) If a grantee fails to submit an indirect cost rate proposal
to its cognizant agency within the required 90 days, the grantee may not
charge indirect costs to its grant from the end of the 90-day period
until it obtains a federally recognized indirect cost rate agreement
applicable to the grant.
    (2) If the Secretary determines that exceptional circumstances
warrant continuation of a temporary indirect cost rate, the Secretary
may authorize the grantee to continue charging indirect costs to its
grant at the temporary rate specified in paragraph (c) of this section
even though the grantee has not submitted its indirect cost rate
proposal within the 90-day period.
    (3) Once a grantee obtains a federally recognized indirect cost rate
that is applicable to the affected grant, the grantee may use that
indirect cost rate to claim indirect cost reimbursement for expenditures
made on or after the date the grantee submitted its indirect cost
proposal to its cognizant agency or the start of the project period,
whichever is later. However, this authority is subject to the following
limitations:
    (i) The total amount of funds recovered by the grantee under the
federally recognized indirect cost rate is reduced by the amount of
indirect costs previously recovered under the temporary indirect cost
rate.
    (ii) The grantee must obtain prior approval from the Secretary to
shift direct costs to indirect costs in order to recover indirect costs
at a higher negotiated indirect cost rate.
    (iii) The grantee may not request additional funds to recover
indirect costs that it cannot recover by shifting direct costs to
indirect costs.
    (e) The Secretary accepts an indirect cost rate negotiated by a
grantee's cognizant agency, but may establish a restricted indirect cost
rate for a grantee to satisfy the statutory requirements of certain
programs administered by the Department.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30339, July 8, 1992; 59 FR 59582, Nov. 17, 1994; 72
FR 69147, Dec. 7, 2007]



Sec. 75.561  Approval of indirect cost rates.

    (a) If the Department of Education is the cognizant agency, the
Secretary approves an indirect cost rate for a grantee other than a
local educational agency. For the purposes of this section, the term
local educational agency does not include a State agency.
    (b) Each State educational agency, on the basis of a plan approved
by the Secretary, shall approve an indirect cost rate for each local
educational agency that requests it to do so. These rates may be for
periods longer than a year if rates are sufficiently stable to justify a
longer period.
    (c) The Secretary generally approves indirect cost rate agreements
annually. Indirect cost rate agreements may be approved for periods
longer than a year if the Secretary determines that rates

[[Page 159]]

will be sufficiently stable to justify a longer rate period.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[59 FR 59583, Nov. 17, 1994]



Sec. 75.562  Indirect cost rates for educational training projects.

    (a) Educational training grants provide funding for training or
other educational services. Examples of the work supported by training
grants are summer institutes, training programs for selected
participants, the introduction of new or expanded courses, and similar
instructional undertakings that are separately budgeted and accounted
for by the sponsoring institution. These grants do not usually support
activities involving research, development, and dissemination of new
educational materials and methods. Training grants largely implement
previously developed materials and methods and require no significant
adaptation of techniques or instructional services to fit different
circumstances.
    (b) The Secretary uses the definition in paragraph (a) to determine
which grants are educational training grants.
    (c)(1) Indirect cost reimbursement on a training grant is limited to
the recipient's actual indirect costs, as determined in its negotiated
indirect cost rate agreement, or eight percent of a modified total
direct cost base, whichever amount is less.

    Note to paragraph (c)(1):
    If the grantee did not have a federally recognized indirect cost
rate agreement on the date the training grant was awarded, indirect cost
recovery is also limited to the amount authorized under Sec.
75.560(d)(3).

    (2) For the purposes of this section, a modified total direct cost
base consists of total direct costs minus the following:
    (i) The amount of each sub-award in excess of $25,000.
    (ii) Stipends.
    (iii) Tuition and related fees.
    (iv) Equipment, as defined in 34 CFR 74.2 and 80.3, as applicable.

    Note to paragraph (c)(2)(iv):
    If the grantee has established a threshold for equipment that is
lower than $5,000 for other purposes, it must use that threshold to
exclude equipment under the modified total direct cost base for the
purposes of this section.

    (3) The eight percent indirect cost reimbursement limit specified in
paragraph (c)(1) of this section also applies to sub-awards that fund
training, as determined by the Secretary under paragraph (b) of this
section.
    (4) The eight percent limit does not apply to agencies of State or
local governments, including federally recognized Indian tribal
governments, as defined in 34 CFR 80.3.
    (5) Indirect costs in excess of the eight percent limit may not be
charged directly, used to satisfy matching or cost-sharing requirements,
or charged to another Federal award.
    (d) A grantee using the training rate of eight percent is required
to have documentation available for audit that shows that its negotiated
indirect cost rate is at least eight percent.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[59 FR 59582, Nov. 17, 1994, as amended at 72 FR 69147, Dec. 7, 2007]



Sec. 75.563  Restricted indirect cost rate--programs covered.

    If a grantee decides to charge indirect costs to a program that has
a statutory requirement prohibiting the use of Federal funds to supplant
non-Federal funds, the grantee shall use a restricted indirect cost rate
computed under 34 CFR 76.564 through 76.569.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[59 FR 59583, Nov. 17, 1994]



Sec. 75.564  Reimbursement of indirect costs.

    (a) Reimbursement of indirect costs is subject to the availability
of funds and statutory or administrative restrictions.
    (b) The application of the rates and the determination of the direct
cost base by a grantee must be in accordance with the indirect cost rate
agreement approved by the grantee's cognizant agency.
    (c) Indirect cost reimbursement is not allowable under grants for--
    (1) Fellowships and similar awards if Federal financing is
exclusively in the form of fixed amounts such as scholarships, stipend
allowances, or the tuition and fees of an institution;
    (2) Construction grants;
    (3) Grants to individuals;

[[Page 160]]

    (4) Grants to organizations located outside the territorial limits
of the United States;
    (5) Grants to Federal organizations; and
    (6) Grants made exclusively to support conferences.
    (d) Indirect cost reimbursement on grants received under programs
with statutory restrictions or other limitations on indirect costs must
be made in accordance with the restrictions in 34 CFR 76.564 through
76.569.
    (e)(1) Indirect costs for a group of eligible parties (See
Sec. Sec. 75.127 through 75.129) are limited to the amount derived by
applying the rate of the applicant, or a restricted rate when
applicable, to the direct cost base for the grant in keeping with the
terms of the applicant's federally recognized indirect cost rate
agreement.
    (2) If a group of eligible parties applies for a training grant
under the group application procedures in Sec. Sec. 75.127 through
75.129, the grant funds allocated among the members of the group are not
considered sub-awards for the purposes of applying the indirect cost
rate in Sec. 75.562(c).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[59 FR 59583, Nov. 17, 1994, as amended at 72 FR 69148, Dec. 7, 2007]



Sec. 75.580  Coordination with other activities.

    A grantee shall, to the extent possible, coordinate its project with
other activities that are in the same geographic area served by the
project and that serve similar purposes and target groups.

(Authority: 20 U.S.C. 1221e-3, 2890, and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30339, July 8, 1992]

                               Evaluation



Sec. 75.590  Evaluation by the grantee.

    (a) If the application notice for a competition required applicants
to describe how they would evaluate their projects, each grantee under
that competition must demonstrate to the Department that--
    (1) The evaluation meets the standards of the evaluation in the
approved application for the project; and
    (2) The performance measurement data collected by the grantee and
used in the evaluation meet the performance measurement requirements of
the approved application.
    (b) If the application notice for a competition did not require
applicants to describe how they would evaluate their projects, each
grantee must provide information in its performance report
demonstrating--
    (1) The progress made by the grantee in the most recent budget
period, including progress based on the performance measurement
requirements for the grant, if any;
    (2) The effectiveness of the grant, including fulfilling the
performance measurement requirements of the approved application, if
any; and
    (3) The effect of the project on the participants served by the
project, if any.

(Authority: 20 U.S.C. 1221e-3 and 3474.)

[78 FR 49354, Aug. 13, 2013]



Sec. 75.591  Federal evaluation--cooperation by a grantee.

    A grantee shall cooperate in any evaluation of the program by the
Secretary.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 86297, Dec. 30, 1980]



Sec. 75.592  Federal evaluation--satisfying requirement for grantee
evaluation.

    If a grantee cooperates in a Federal evaluation of a program, the
Secretary may determine that the grantee meets the evaluation
requirements of the program, including Sec. 75.590.

(Authority: 20 U.S.C. 1221e-3 and 3474)

                              Construction

    Cross Reference: See 34 CFR part 74, Subpart P--Procurement
Standards.



Sec. 75.600  Use of a grant for construction: Purpose of Sec.
Sec. 75.601-75.615.

    Sections 75.601-75.615 apply to:
    (a) An applicant that requests funds for construction; and

[[Page 161]]

    (b) A grantee whose grant includes funds for construction.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.601  Applicant's assessment of environmental impact.

    An applicant shall include with its application its assessment of
the impact of the proposed construction on the quality of the
environment in accordance with section 102(2)(C) of the National
Environmental Policy Act of 1969 and Executive Order 11514 (34 FR 4247).

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.602  Preservation of historic sites must be described in the
application.

    (a) An applicant shall describe in its application the relationship
of the proposed construction to and probable effect on any district,
site, building, structure, or object that is:
    (1) Included in the National Register of Historic Places; or
    (2) Eligible under criteria established by the Secretary of Interior
for inclusion in the National Register of Historic Places.

    Cross Reference: See 36 CFR part 60 for these criteria.
    (b) In deciding whether to make a grant, the Secretary considers:
    (1) The information provided by the applicant under paragraph (a) of
this section; and
    (2) Any comments by the Advisory Council on Historic Preservation.

    Cross Reference: See 36 CFR part 800, which provides for comments
from the Council.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.603  Grantee's title to site.

    A grantee must have or obtain a full title or other interest in the
site, including right of access, that is sufficient to insure the
grantee's undisturbed use and possession of the facilities for 50 years
or the useful life of the facilities, whichever is longer.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.604  Availability of cost-sharing funds.

    A grantee shall ensure that sufficient funds are available to meet
any non-Federal share of the cost of constructing the facility.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.605  Beginning the construction.

    (a) A grantee shall begin work on construction within a reasonable
time after the grant for the construction is made.
    (b) Before construction is advertised or placed on the market for
bidding, the grantee shall get approval by the Secretary of the final
working drawings and specifications.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.606  Completing the construction.

    (a) A grantee shall complete its construction within a reasonable
time.
    (b) The grantee shall complete the construction in accordance with
the application and approved drawings and specifications.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.607  General considerations in designing facilities and
carrying out construction.

    (a) A grantee shall insure that the construction is:
    (1) Functional;
    (2) Economical; and
    (3) Not elaborate in design or extravagant in the use of materials,
compared with facilities of a similar type constructed in the State or
other applicable geographic area.
    (b) The grantee shall, in developing plans for the facilities,
consider excellence of architecture and design and inclusion of works of
art. The grantee may not spend more than one percent of the cost of the
project on inclusion of works of art.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.608  Areas in the facilities for cultural activities.

    A grantee may make reasonable provision, consistent with the other
uses to be made of the facilities, for areas in

[[Page 162]]

the facilities that are adaptable for artistic and other cultural
activities.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30339, July 8, 1992]



Sec. 75.609  Comply with safety and health standards.

    In planning for and designing facilities, a grantee shall observe:
    (a) The standards under the Occupational Safety and Health Act of
1970 (Pub. L. 91-576) (See 36 CFR part 1910); and
    (b) State and local codes, to the extent that they are more
stringent.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.610  Access by the handicapped.

    A grantee shall comply with the Federal regulations on access by the
handicapped that apply to construction and alteration of facilities.
These regulations are:
    (a) For residential facilities--24 CFR part 40; and
    (b) For non-residential facilities--41 CFR subpart 101-19.6.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.611  Avoidance of flood hazards.

    In planning the construction, a grantee shall, in accordance with
the provisions of Executive Order 11988 of February 10, 1978 (43 FR
6030) and rules and regulations that may be issued by the Secretary to
carry out those provisions:
    (a) Evaluate flood hazards in connection with the construction; and
    (b) As far as practicable, avoid uneconomic, hazardous, or
unnecessary use of flood plains in connection with the construction.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.612  Supervision and inspection by the grantee.

    A grantee shall maintain competent architectural engineering
supervision and inspection at the construction site to insure that the
work conforms to the approved drawings and specifications.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.613  Relocation assistance by the grantee.

    A grantee is subject to the regulations on relocation assistance and
real property acquisition in 34 CFR part 15.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.614  Grantee must have operational funds.

    A grantee shall insure that, when construction is completed,
sufficient funds will be available for effective operation and
maintenance of the facilities.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.615  Operation and maintenance by the grantee.

    A grantee shall operate and maintain the facilities in accordance
with applicable Federal, State, and local requirements.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.616  Energy conservation.

    (a) To the extent feasible, a grantee shall design and construct
facilities to maximize the efficient use of energy.
    (b) The following standards of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers (ASHRAE) are incorporated
by reference in this section:
    (1) ASHRAE-90 A-1980 (Sections 1-9).
    (2) ASHRAE-90 B-1975 (Sections 10-11).
    (3) ASHRAE-90 C-1977 (Section 12).

Incorporation by reference of these provisions has been approved by the
Director of the Office of the Federal Register pursuant to the
Director's authority under 5 U.S.C. 552 (a) and 1 CFR part 51. The
incorporated document is on file at the Department of Education, Grants
and Contracts Service, rm. 3636 ROB-3, 400 Maryland Avenue, SW.,
Washington, DC 20202-4700 or at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal_register/code_of_federal_regulations/ibr_locations.html. These
standards may be obtained from the publication sales department at the
American Society of Heating, Refrigerating, and Air

[[Page 163]]

Conditioning Engineers, Inc., 1791 Tullie Circle, NE., Atlanta, Georgia
30329.
    (c) A grantee shall comply with ASHRAE standards listed in paragraph
(b) of this section in designing and constructing facilities built with
project funds.

(Authority: 20 U.S.C. 1221e-3 and 3474, 42 U.S.C. 8373(b), and E.O.
12185)

[57 FR 30339, July 8, 1992, as amended at 69 FR 18803, Apr. 9, 2004]



Sec. 75.617  Compliance with the Coastal Barrier Resources Act.

    A recipient may not use, within the Coastal Barrier Resources
System, funds made available under a program administered by the
Secretary for any purpose prohibited by 31 U.S.C. chapter 55 (sections
3501-3510).

(Authority: 20 U.S.C. 1221e-3 and 3474, 31 U.S.C. 3504, 3505)

[57 FR 30339, July 8, 1992]

                         Equipment and Supplies

    Cross Reference: See 34 CFR 74.32 Real property; 34 CFR 74.35
Supplies and other expendable property; 34 CFR 74.36 Intangible
property; 34 CFR 74.2 Definitions; 34 CFR 80.31 Real property; 34 CFR
80.32 Equipment; 34 CFR 80.33 Supplies; and 34 CFR 80.34 Copyrights.



Sec. 75.618  Charges for use of equipment or supplies.

    A grantee may not charge students or school personnel for the
ordinary use of equipment or supplies purchased with grant funds.

(Authority: 20 U.S.C. 1221e-3 and 3474)

                       Publications and Copyrights



Sec. 75.620  General conditions on publication.

    (a) Content of materials. Subject to any specific requirements that
apply to its grant, a grantee may decide the format and content of
project materials that it publishes or arranges to have published.
    (b) Required statement. The grantee shall ensure that any
publication that contains project materials also contains the following
statements:

    The contents of this (insert type of publication; e.g., book,
report, film) were developed under a grant from the Department of
Education. However, those contents do not necessarily represent the
policy of the Department of Education, and you should not assume
endorsement by the Federal Government.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86297, Dec. 30, 1980]



Sec. 75.621  Copyright policy for grantees.

    A grantee may copyright project materials in accordance with 34 CFR
part 74 or 80, as appropriate.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR 74.22 Payment; 34 CFR 74.24 Program
income; and 34 CFR 74.36 Intangible property; 34 CFR 80.25 Program
income; and 34 CFR 80.34 Copyrights.

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 19118, May 26, 1988; 57 FR 30339, July 8, 1992]



Sec. 75.622  Definition of ``project materials.''

    As used in Sec. Sec. 75.620-75.621, ``project materials'' means a
copyrightable work developed with funds from a grant of the Department.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30339, July 8, 1992]

                         Inventions and Patents

    Cross Reference: See 34 CFR 74.25, Program income and 34 CFR 80.25,
Program income.



Sec. 75.626  Show Federal support; give papers to vest title.

    Any patent application filed by a grantee for an invention made
under a grant must include the following statement in the first
paragraph:

    The invention described in this application was made under a grant
from the Department of Education.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86297, Dec. 30, 1980; 57 FR 30339, July 8, 1992]

[[Page 164]]

                 Other Requirements for Certain Projects

    Cross Reference: See 34 CFR 74.21, Standards for financial
management systems; 34 CFR 74.48, Contract provisions; 34 CFR 80.20,
Standards for financial management and 34 CFR 80.36, Procurement.



Sec. 75.650  Participation of students enrolled in private schools.

    If the authorizing statute for a program requires a grantee to
provide for participation by students enrolled in private schools, the
grantee shall provide a genuine opportunity for equitable participation
in accordance with the requirements that apply to subgrantees under 34
CFR 76.650-76.662.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.681  Protection of human research subjects.

    If a grantee uses a human subject in a research project, the grantee
shall protect the person from physical, psychological, or social injury
resulting from the project.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR part 97--Protection of Human Subjects.



Sec. 75.682  Treatment of animals.

    If a grantee uses an animal in a project, the grantee shall provide
the animal with proper care and humane treatment in accordance with the
Animal Welfare Act of 1970.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.683  Health or safety standards for facilities.

    A grantee shall comply with any Federal health or safety
requirements that apply to the facilities that the grantee uses for the
project.

(Authority: 20 U.S.C. 1221e-3 and 3474)



  Subpart F_What Are the Administrative Responsibilities of a Grantee?

                 General Administrative Responsibilities



Sec. 75.700  Compliance with statutes, regulations, and applications.

    A grantee shall comply with applicable statutes, regulations, and
approved applications, and shall use Federal funds in accordance with
those statutes, regulations, and applications.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.701  The grantee administers or supervises the project.

    A grantee shall directly administer or supervise the administration
of the project.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.702  Fiscal control and fund accounting procedures.

    A grantee shall use fiscal control and fund accounting procedures
that insure proper disbursement of and accounting for Federal funds.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR part 74, Subpart C--Post-Award
Requirements and Subpart D--After-the-Award Requirements and 34 CFR part
80, Subpart C--Post-Award Requirements and Subpart D--After-the-Grant
Requirements.



Sec. 75.703  Obligation of funds during the grant period.

    A grantee may use grant funds only for obligations it makes during
the grant period.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.707  When obligations are made.

    The following table shows when a grantee makes obligations for
various kinds of property and services.

------------------------------------------------------------------------
        If the obligation is for--            The obligation is made--
------------------------------------------------------------------------
(a) Acquisition of real or personal         On the date the grantee
 property.                                   makes a binding written
                                             commitment to acquire the
                                             property.
(b) Personal services by an employee of     When the services are
 the grantee.                                performed.

[[Page 165]]


(c) Personnal services by a contractor who  On the date on which the
 is not an employee of the grantee.          grantee makes a binding
                                             written commitment to
                                             obtain the services.
(d) Performance of work other than          On the date on which the
 personal services.                          grantee makes a binding
                                             written commitment to
                                             obtain the work.
(e) Public utility services...............  When the grantee receives
                                             the services.
(f) Travel................................  When the travel is taken.
(g) Rental of real or personal property...  When the grantee uses the
                                             property.
(h) A preagreement cost that was properly
 approved by the Secretary under the cost
 principles identified in 34 CFR 74.171 or
 80.22.
------------------------------------------------------------------------


(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30340, July 8, 1992]



Sec. 75.708  Subgrants.

    (a) A grantee may not make a subgrant under a program covered by
this part unless authorized by statute or by paragraph (b) of this
section.
    (b) The Secretary may, through an announcement in the Federal
Register, authorize subgrants when necessary to meet the purposes of a
program. In this announcement, the Secretary will--
    (1) Designate the types of entities, e.g., State educational
agencies, local educational agencies, institutions of higher education,
and nonprofit organizations, to which subgrants can be awarded; and
    (2) Indicate whether subgrants can be made to entities identified in
an approved application or, without regard to whether the entity is
identified in an approved application, have to be selected through a
competitive process set out in subgranting procedures established by the
grantee.
    (c) If authorized under paragraph (b) of this section, a subgrant is
allowed if it will be used by that entity to directly carry out project
activities described in that application.
    (d) The grantee, in awarding subgrants under paragraph (b) of this
section, must--
    (1) Ensure that subgrants are awarded on the basis of an approved
budget that is consistent with the grantee's approved application and
all applicable Federal statutory, regulatory, and other requirements;
    (2) Ensure that every subgrant includes any conditions required by
Federal statute and executive orders and their implementing regulations;
and
    (3) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statute and regulation, including the Federal anti-
discrimination laws enforced by the Department.
    (e) A grantee may contract for supplies, equipment, construction,
and other services, in accordance with 34 CFR part 74, Subpart C--Post-
Award Requirements (Procurement Standards Sec. Sec. 74.40-74.48) and 34
CFR part 80, Subpart C--Post-Award Requirements (Sec. 80.36
Procurement).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27804, July 24, 1987; 64 FR 50392, Sept. 16, 1999;
78 FR 49534, Aug. 13, 2013]

                                 Reports

    Cross Reference: See 34 CFR 74.51, Monitoring and reporting program
performance; 34 CFR 74.52, Financial reporting; 34 CFR 80.40, Monitoring
and reporting program performance; and 34 CFR 80.41 Financial reporting.



Sec. 75.720  Financial and performance reports.

    (a) This section applies to the reports required under--
    (1) 34 CFR 74.51 (Monitoring and reporting program performance) and
34 CFR 74.52 (Financial reporting); and
    (2) 34 CFR 80.40 (Monitoring and reporting program performance) and
34 CFR 80.41 (Financial reporting).
    (b) A grantee shall submit these reports annually, unless the
Secretary allows less frequent reporting. However, the Secretary may
require a grantee of a grant made under 34 CFR part 700, 706, 707, or
708 (certain programs of the Office of Educational Research and
Improvement) to submit performance reports more often than annually.
    (c) The Secretary may require a grantee to report more frequently
than annually under 34 CFR 74.14 (Special

[[Page 166]]

award conditions), 34 CFR 74.21 (Standards for financial management
systems), 34 CFR 80.12 (Special grant or subgrant conditions for ``high-
risk'' grantees) or 34 CFR 80.20 (Standards for financial management
systems).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30340, July 8, 1992, as amended at 64 FR 50392, Sept. 16, 1999]



Sec. 75.721  [Reserved]

                                 Records

    Cross Reference: See 34 CFR 74.53, Retention and access requirements
for records and 34 CFR 80.42, Retention and access requirements for
records.



Sec. 75.730  Records related to grant funds.

    A grantee shall keep records that fully show:
    (a) The amount of funds under the grant;
    (b) How the grantee uses the funds;
    (c) The total cost of the project;
    (d) The share of that cost provided from other sources; and
    (e) Other records to facilitate an effective audit.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 49143, Dec. 6, 1988]



Sec. 75.731  Records related to compliance.

    A grantee shall keep records to show its compliance with program
requirements.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.732  Records related to performance.

    (a) A grantee shall keep records of significant project experiences
and results.
    (b) The grantee shall use the records under paragraph (a) to:
    (1) Determine progress in accomplishing project objectives; and
    (2) Revise those objectives, if necessary.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See 34 CFR 74.25, Revision of budget and program
plans.

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 49143, Dec. 6, 1988]



Sec. 75.733  [Reserved]

                                 Privacy



Sec. 75.740  Protection of and access to student records; student
rights in research, experimental programs, and testing.

    (a) Most records on present or past students are subject to the
requirements of section 444 of GEPA and its implementing regulations in
34 CFR part 99. (Section 444 is the Family Educational Rights and
Privacy Act of 1974.)
    (b) Under most programs administered by the Secretary, research,
experimentation, and testing are subject to the requirements of section
445 of GEPA and its implementing regulations at 34 CFR part 98.

(Authority: 20 U.S.C. 1221e-3, 1232g, 1232h, and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30340, July 8, 1992; 60 FR 46493, Sept. 6, 1995]



  Subpart G_What Procedures Does the Department Use To Get Compliance?

    Cross Reference: See 34 CFR part 74, Subpart M--Grant and Subgrant
Closeout, Suspension, and Termination.



Sec. 75.900  Waiver of regulations prohibited.

    (a) No official, agent, or employee of ED may waive any regulation
that applies to a Department program, unless the regulation specifically
provides that it may be waived.

[[Page 167]]

    (b) No act or failure to act by an official, agent, or employee of
ED can affect the authority of the Secretary to enforce regulations.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 75.901  Suspension and termination.

    (a) [Reserved]
    (b) The Secretary may use the Education Appeal Board to resolve
disputes that are not subject to other procedures. Cross reference: See
the following sections in part 74:
    (1) Section 74.113 (Violation of terms).
    (2) Section 74.114 (Suspension).
    (3) Section 74.115 (Termination).
    (4) The last sentence of Sec. 74.73(c) (Financial reporting after a
termination).
    (5) Section 74.112 (Amounts payable to the Federal Government).

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 86297, Dec. 30, 1980]



Sec. 75.902  [Reserved]



Sec. 75.903  Effective date of termination.

    Termination is effective on the latest of:
    (a) The date of delivery to the grantee of the notice of
termination;
    (b) The termination date given in the notice of termination; or
    (c) The date of a final decision of the Secretary under part 78 of
this title.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86298, Dec. 30, 1980]



Sec. 75.910  Cooperation with audits.

    A grantee shall cooperate with the Secretary and the Comptroller
General of the United States or any of their authorized representatives
in the conduct of audits authorized by Federal law. This cooperation
includes access without unreasonable restrictions to records and
personnel of the grantee for the purpose of obtaining relevant
information.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[54 FR 21775, May 19, 1989]



PART 76_STATE-ADMINISTERED PROGRAMS--Table of Contents



                            Subpart A_General

          Regulations that Apply to State-Administered Programs

Sec.
76.1 Programs to which part 76 applies.
76.2 Exceptions in program regulations to part 76.

                   Eligibility for a Grant or Subgrant

76.50 Statutes determine eligibility and whether subgrants are made.
76.51 A State distributes funds by formula or competition.
76.52 Eligibility of faith-based organizations for a subgrant.

                Subpart B_How a State Applies for a Grant

                      State Plans and Applications

76.100 Effect of this subpart.
76.101 The general State application.
76.102 Definition of ``State plan'' for part 76.
76.103 Multi-year State plans.
76.104 A State shall include certain certifications in its State plan.
76.106 State documents are public information.

            Consolidated Grant Applications for Insular Areas

76.125 What is the purpose of these regulations?
76.126 What regulations apply to the consolidated grant applications for
          insular areas?
76.127 What is the purpose of a consolidated grant?
76.128 What is a consolidated grant?
76.129 How does a consolidated grant work?
76.130 How are consolidated grants made?
76.131 How does an insular area apply for a consolidated grant?
76.132 What assurances must be in a consolidated grant application?
76.133 What is the reallocation authority?
76.134 What is the relationship between consolidated and non-
          consolidated grants?
76.135 Are there any requirements for matching funds?
76.136 Under what programs may consolidated grant funds be spent?
76.137 How may carryover funds be used under the consolidated grant
          application?

                               Amendments

76.140 Amendments to a State plan.
76.141 An amendment requires the same procedures as the document being
          amended.

[[Page 168]]

76.142 An amendment is approved on the same basis as the document being
          amended.

                Subpart C_How a Grant Is Made to a State

                Approval or Disapproval by the Secretary

76.201 A State plan must meet all statutory and regulatory requirements.
76.202 Opportunity for a hearing before a State plan is disapproved.
76.235 The notification of grant award.

               Allotments and Reallotments of Grant Funds

76.260 Allotments are made under program statute or regulations.
76.261 Realloted funds are part of a State's grant.

           Subpart D_How To Apply to the State for a Subgrant

76.300 Contact the State for procedures to follow.
76.301 Local educational agency general application.
76.302 The notice to the subgrantee.
76.303 Joint applications and projects.
76.304 Subgrantee shall make subgrant application available to the
          public.

            Subpart E_How a Subgrant Is Made to an Applicant

76.400 State procedures for reviewing an application.
76.401 Disapproval of an application--opportunity for a hearing.

 Subpart F_What Conditions Must Be Met by the State and Its Subgrantees?

                            Nondiscrimination

76.500 Federal statutes and regulations on nondiscrimination.

                             Allowable costs

76.530 General cost principles.
76.532 Use of funds for religion prohibited.
76.533 Acquisition of real property; construction.
76.534 Use of tuition and fees restricted.

                           Indirect Cost Rates

76.560 General indirect cost rates; exceptions.
76.561 Approval of indirect cost rates.
76.563 Restricted indirect cost rate--programs covered.
76.564 Restricted indirect cost rate--formula.
76.565 General management costs--restricted rate.
76.566 Fixed costs--restricted rate.
76.567 Other expenditures--restricted rate.
76.568 Occupancy and space maintenance costs--restricted rate.
76.569 Using the restricted indirect cost rate.
76.580 Coordination with other activities.

                               Evaluation

76.591 Federal evaluation--cooperation by a grantee.
76.592 Federal evaluation--satisfying requirement for State or
          subgrantee evaluation.

                              Construction

76.600 Where to find construction regulations.

          Participation of Students Enrolled in Private Schools

76.650 Private schools; purpose of Sec. Sec. 76.651-76.662.
76.651 Responsibility of a State and a subgrantee.
76.652 Consultation with representatives of private school students.
76.653 Needs, number of students, and types of services.
76.654 Benefits for private school students.
76.655 Level of expenditures for students enrolled in private schools.
76.656 Information in an application for a subgrant.
76.657 Separate classes prohibited.
76.658 Funds not to benefit a private school.
76.659 Use of public school personnel.
76.660 Use of private school personnel.
76.661 Equipment and supplies.
76.662 Construction.

                          Procedures for Bypass

76.670 Applicability and filing requirements.
76.671 Notice by the Secretary.
76.672 Bypass procedures.
76.673 Appointment and functions of a hearing officer.
76.674 Hearing procedures.
76.675 Posthearing procedures.
76.676 Judicial review of a bypass action.
76.677 Continuation of a bypass.

                 Other Requirements for Certain Programs

76.681 Protection of human subjects.
76.682 Treatment of animals.

[[Page 169]]

76.683 Health or safety standards for facilities.

Subpart G_What Are the Administrative Responsibilities of the State and
                            Its Subgrantees?

                 General Administrative Responsibilities

76.700 Compliance with statutes, regulations, State plan, and
          applications.
76.701 The State or subgrantee administers or supervises each project.
76.702 Fiscal control and fund accounting procedures.
76.703 When a State may begin to obligate funds.
76.704 New State plan requirements that must be addressed in a State
          plan.
76.707 When obligations are made.
76.708 When certain subgrantees may begin to obligate funds.
76.709 Funds may be obligated during a ``carryover period.''
76.710 Obligations made during a carryover period are subject to current
          statutes, regulations, and applications.
76.711 Requesting funds by CFDA number.

                                 Reports

76.720 State reporting requirements.
76.722 Subgrantee reporting requirements.

                                 Records

76.730 Records related to grant funds.
76.731 Records related to compliance.

                                 Privacy

76.740 Protection of and access to student records; student rights in
          research, experimental programs, and testing.

                 Use of Funds by States and Subgrantees

76.760 More than one program may assist a single activity.
76.761 Federal funds may pay 100 percent of cost.

                  State Administrative Responsibilities

76.770 A State shall have procedures to ensure compliance.
76.783 State educational agency action--subgrantee's opportunity for a
          hearing.

Subpart H_How Does a State or Local Educational Agency Allocate Funds to
                            Charter Schools?

                                 General

76.785 What is the purpose of this subpart?
76.786 What entities are governed by this subpart?
76.787 What definitions apply to this subpart?

               Responsibilities for Notice and Information

76.788 What are a charter school LEA's responsibilities under this
          subpart?
76.789 What are an SEA's responsibilities under this subpart?

            Allocation of Funds by State Educational Agencies

76.791 On what basis does an SEA determine whether a charter school LEA
          that opens or significantly expands its enrollment is eligible
          to receive funds under a covered program?
76.792 How does an SEA allocate funds to eligible charter school LEAs
          under a covered program in which the SEA awards subgrants on a
          formula basis?
76.793 When is an SEA required to allocate funds to a charter school LEA
          under this subpart?
76.794 How does an SEA allocate funds to charter school LEAs under a
          covered program in which the SEA awards subgrants on a
          discretionary basis?

                               Adjustments

76.796 What are the consequences of an SEA allocating more or fewer
          funds to a charter school LEA under a covered program than the
          amount for which the charter school LEA is eligible when the
          charter school LEA actually opens or significantly expands its
          enrollment?
76.797 When is an SEA required to make adjustments to allocations under
          this subpart?

       Applicability of This Subpart to Local Educational Agencies

76.799 Do the requirements in this subpart apply to LEAs?

   Subpart I_What Procedures Does the Secretary Use To Get Compliance?

76.900 Waiver of regulations prohibited.
76.901 Office of Administrative Law Judges.
76.902 Judicial review.
76.910 Cooperation with audits.

    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

    Source: 45 FR 22517, Apr. 3, 1980, unless otherwise noted.
Redesignated at 45 FR 77368, Nov. 21, 1980.

[[Page 170]]



                            Subpart A_General

          Regulations That Apply to State-Administered Programs



Sec. 76.1  Programs to which part 76 applies.

    (a) The regulations in part 76 apply to each State-administered
program of the Department.
    (b) If a State formula grant program does not have implementing
regulations, the Secretary implements the program under the authorizing
statute and, to the extent consistent with the authorizing statute,
under the General Education Provisions Act and the regulations in this
part. For the purposes of this part, the term State formula grant
program means a program whose authorizing statute or implementing
regulations provide a formula for allocating program funds among
eligible States.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 84059, Dec. 22, 1980; 50 FR 29330, July 18, 1985; 52
FR 27804, July 24, 1987; 54 FR 21776, May 19, 1989; 55 FR 14816, Apr.
18, 1990]



Sec. 76.2  Exceptions in program regulations to part 76.

    If a program has regulations that are not consistent with part 76,
the implementing regulations for that program identify the sections of
part 76 that do not apply.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 54 FR 21776, May 19, 1989]

                   Eligibility for a Grant or Subgrant



Sec. 76.50  Statutes determine eligibility and whether subgrants are
made.

    (a) Under a program covered by this part, the Secretary makes a
grant:
    (1) To the State agency designated by the authorizing statute for
the program; or
    (2) To the State agency designated by the State in accordance with
the authorizing statute.
    (b) The authorizing statute determines the extent to which a State
may:
    (1) Use grant funds directly; and
    (2) Make subgrants to eligible applicants.
    (c) The regulations in part 76 on subgrants apply to a program only
if subgrants are authorized under that program.
    (d) The authorizing statute determines the eligibility of an
applicant for a subgrant.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 52 FR 27804, July 24, 1987; 54 FR 21776, May 19, 1989]



Sec. 76.51  A State distributes funds by formula or competition.

    If a program statute authorizes a State to make subgrants, the
statute:
    (a) Requires the State to use a formula to distribute funds;
    (b) Gives the State discretion to select subgrantees through a
competition among the applicants or through some other procedure; or
    (c) Allows some combination of these procedures.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 54 FR 21776, May 19, 1989]



Sec. 76.52  Eligibility of faith-based organizations for a subgrant.

    (a)(1) A faith-based organization is eligible to apply for and to
receive a subgrant under a program of the Department on the same basis
as any other private organization, with respect to programs for which
such other organizations are eligible.
    (2) In the selection of subgrantees, States shall not discriminate
for or against a private organization on the basis of the organization's
religious character or affiliation.
    (b) The provisions of Sec. 76.532 apply to a faith-based
organization that receives a subgrant from a State under a State-
administered program of the Department.
    (c) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location

[[Page 171]]

from any programs or services supported by a subgrant from a State under
a State-administered program of the Department, and participation in any
such inherently religious activities by beneficiaries of the programs
supported by the subgrant must be voluntary.
    (d)(1) A faith-based organization that applies for or receives a
subgrant from a State under a State-administered program of the
Department may retain its independence, autonomy, right of expression,
religious character, and authority over its governance.
    (2) A faith-based organization may, among other things--
    (i) Retain religious terms in its name;
    (ii) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
    (iii) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
    (iv) Select its board members and otherwise govern itself on a
religious basis; and
    (v) Include religious references in its mission statement and other
chartering or governing documents.
    (e) A private organization that receives a subgrant from a State
under a State-administered program of the Department shall not
discriminate against a beneficiary or prospective beneficiary in the
provision of program services on the basis of religion or religious
belief.
    (f) If a State or subgrantee contributes its own funds in excess of
those funds required by a matching or grant agreement to supplement
Federally funded activities, the State or subgrantee has the option to
segregate those additional funds or commingle them with the funds
required by the matching requirements or grant agreement. However, if
the additional funds are commingled, this section applies to all of the
commingled funds.
    (g) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization receives financial assistance from
the Department.


(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 69 FR 31711, June 4, 2004]



                Subpart B_How a State Applies for a Grant

                      State Plans and Applications



Sec. 76.100  Effect of this subpart.

    This subpart establishes general requirements that a State must meet
to apply for a grant under a program covered by this part. Additional
requirements are in the authorizing statute and the implementing
regulations for the program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[52 FR 27804, July 24, 1987]



Sec. 76.101  The general State application.

    A State that makes subgrants to local educational agencies under a
program subject to this part shall have on file with the Secretary a
general application that meets the requirements of section 441 of the
General Education Provisions Act.

(Authority: 20 U.S.C. 1221e-3, 1232d, and 3474)

[52 FR 27804, July 24, 1987, as amended at 60 FR 46493, Sept. 6, 1995]



Sec. 76.102  Definition of ``State plan'' for part 76.

    As used in this part, State plan means any of the following
documents:

[[Page 172]]



----------------------------------------------------------------------------------------------------------------
               Document                          Program             Authorizing statute       Principal Office
----------------------------------------------------------------------------------------------------------------
State plan............................  Assistance to States for  Part B (except section     OSERS
                                         Education of              619), Individuals with
                                         Handicapped Children.     Disabilities Education
                                                                   Act (20 U.S.C. 1411-
                                                                   1420).
Application...........................  Preschool Grants........  Section 619, Individuals   OSERS
                                                                   with Disabilities
                                                                   Education Act (20 U.S.C.
                                                                   1419).
Application...........................  Handicapped Infants and   Part H, Individuals with   OSERS
                                         Toddlers.                 Disabilities Education
                                                                   Act (20 U.S.C. 1471-
                                                                   1485).
Application or written request for      Client Assistance         Section 112,               OSERS
 assistance.                             Program.                  Rehabilitation Act of
                                                                   1973 (29 U.S.C. 732).
Application...........................  Removal of Architectural  Section 607, Individuals   OSERS
                                         Barriers to the           with Disabilities
                                         Handicapped Program.      Education Act (20 U.S.C.
                                                                   1406).
State plan............................  State Vocational          Title I, Parts A-C,        OSERS
                                         Rehabilitation Services   Rehabilitation Act of
                                         Program.                  1973 (29 U.S.C. 720-741).
State plan supplement.................  State Supported           Title VI, Part C,          OSERS
                                         Employment Services       Rehabilitation Act of
                                         Program.                  1973 (29 U.S.C. 795j-
                                                                   795r).
State plan............................  State Independent Living  Title VII, Part A,         OSERS
                                         Services Program.         Rehabilitation Act of
                                                                   1973 (29 U.S.C. 796-
                                                                   796d).
State plan............................  State Vocational          Title I, Part B, Carl D.   OVAE
                                         Education Program.        Perkins Vocational
                                                                   Education Act (20 U.S.C.
                                                                   2321-2325).
State plan and application............  State-Administered Adult  Section 341, Adult         OVAE
                                         Education Program.        Education Act (20 U.S.C.
                                                                   1206).
State plan............................  Even Start Family         Title I, Chapter 1, Part   OESE
                                         Literacy Program.         B of the Elementary and
                                                                   Secondary Education Act
                                                                   of 1965 (20 U.S.C. 2741-
                                                                   2749).
State application.....................  State Grants for          Title II, Part A,          OESE
                                         Strengthening             Elementary and Secondary
                                         Instruction in            Education Act of 1965,
                                         Mathematics and Science.  as amended (20 U.S.C.
                                                                   2981-2993).
State application.....................  Federal, State and Local  Title I, Chapter 2,        OESE
                                         Partnership for           Elementary and Secondary
                                         Educational Improvement.  Education Act of 1965,
                                                                   as amended (20 U.S.C.
                                                                   2911-2952 and 2971-2976).
State plan or application.............  Migrant Education         Sections 1201, 1202,       OESE
                                         Program.                  Chapter 1, Title I,
                                                                   Elementary and Secondary
                                                                   Education Act of 1965,
                                                                   as amended (20 U.S.C.
                                                                   2781 and 2782).
Application...........................  State Student Incentive   Section 415C, Higher       OPE
                                         Grant Program.            Education Act of 1965
                                                                   (20 U.S.C. 1070c-2).
Application...........................  Paul Douglas Teacher      Section 553, Higher        OPE
                                         Scholarship Program.      Education Act of 1965
                                                                   (20 U.S.C. 1111b).
Basic State plan, long-range program,   The Library Services and  Library Services and       OERI
 and annual program.                     Construction Act State-   Construction Act (20
                                         Administered Program.     U.S.C. 351-355e-3).
Application...........................  Emergency Immigrant       Emergency Immigrant        OBEMLA
                                         Education Program.        Education Act (20 U.S.C.
                                                                   3121-3130).
Application...........................  Transition Program for    Section 412(d)             OBEMLA
                                         Refugee Children.         Immigration and
                                                                   Naturalization Act (8
                                                                   U.S.C. 1522 (d)).
Any document that the authorizing       Any State-administered    Section 408(a)(1),         Dept-wide
 statute for a State-administered        program without           General Education
 program requires a State to submit to   implementing              Provisions Act and
 receive funds.                          regulations.              Section 414, Department
                                                                   of Education
                                                                   Organization Act (20
                                                                   U.S.C. 1221e-3(a)(1) and
                                                                   3474).
----------------------------------------------------------------------------------------------------------------


(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30340, July 8, 1992]



Sec. 76.103  Multi-year State plans.

    (a) Beginning with fiscal year 1996, each State plan will be
effective for a period of more than one fiscal year, to be determined by
the Secretary or by regulations.
    (b) If the Secretary determines that the multi-year State plans
under a program should be submitted by the States on a staggered
schedule, the Secretary may require groups of States to submit or
resubmit their plans in different years.
    (c) This section does not apply to:
    (1) The annual accountability report under part A of title I of the
Vocational Education Act;
    (2) The annual programs under the Library Services and Construction
Act;
    (3) The application under sections 141-143 of the Elementary and
Secondary Education Act; and

[[Page 173]]

    (4) The State application under section 209 of title II of the
Education for Economic Security Act.
    (d) A State may submit an annual State plan under the Vocational
Education Act. If a State submits an annual plan under that program,
this section does not apply to that plan.
    Note: This section is based on a provision in the General Education
Provisions Act (GEPA). Section 427 of the Department of Education
Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the
extent inconsistent with the DEOA, the GEPA ``shall apply to functions
transferred by this Act to the extent applicable on the day preceding
the effective date of this Act.'' Although standardized nomenclature is
used in this section to reflect the creation of the Department of
Education, there is no intent to extend the coverage of the GEPA beyond
that authorized under section 427 or other applicable law.

(Authority: 20 U.S.C. 1231g(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86296, Dec. 30, 1980; 50 FR 43545, Oct. 25, 1985; 60
FR 46493, Sept. 6, 1995]



Sec. 76.104  A State shall include certain certifications in its State
plan.

    (a) A State shall include the following certifications in each State
plan:
    (1) That the plan is submitted by the State agency that is eligible
to submit the plan.
    (2) That the State agency has authority under State law to perform
the functions of the State under the program.
    (3) That the State legally may carry out each provision of the plan.
    (4) That all provisions of the plan are consistent with State law.
    (5) That a State officer, specified by title in the certification,
has authority under State law to receive, hold, and disburse Federal
funds made available under the plan.
    (6) That the State officer who submits the plan, specified by title
in the certification, has authority to submit the plan.
    (7) That the agency that submits the plan has adopted or otherwise
formally approved the plan.
    (8) That the plan is the basis for State operation and
administration of the program.
    (b) [Reserved]

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.106  State documents are public information.

    A State shall make the following documents available for public
inspection:
    (a) All State plans and related official materials.
    (b) All approved subgrant applications.
    (c) All documents that the Secretary transmits to the State
regarding a program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

            Consolidated Grant Applications for Insular Areas

    Authority: Title V, Pub. L. 95-134, 91 Stat. 1159 (48 U.S.C. 1469a).



Sec. 76.125  What is the purpose of these regulations?

    (a) Sections 76.125 through 76.137 of this part contain requirements
for the submission of an application by an Insular Area for the
consolidation of two or more grants under the programs described in
paragraph (c) of this section.
    (b) For the purpose of Sec. Sec. 76.125-76.137 of this part the
term Insular Area means the Virgin Islands, Guam, American Samoa, the
Trust Territory of the Pacific Islands, or the Commonwealth of the
Northern Mariana Islands.
    (c) The Secretary may make an annual consolidated grant to assist an
Insular Area in carrying out one or more State-administered formula
grant programs of the Department.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[47 FR 17421, Apr. 22, 1982, as amended at 54 FR 21776, May 19, 1989; 57
FR 30341, July 8, 1992]



Sec. 76.126  What regulations apply to the consolidated grant
applications for insular areas?

    The following regulations apply to those programs included in a
consolidated grant:
    (a) The regulations in Sec. Sec. 76.125 through 76.137; and
    (b) The regulations that apply to each specific program included in
a

[[Page 174]]

consolidated grant for which funds are used.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.127  What is the purpose of a consolidated grant?

    An Insular Area may apply for a consolidated grant for two or more
of the programs listed in Sec. 76.125(c). This procedure is intended
to:
    (a) Simplify the application and reporting procedures that would
otherwise apply for each of the programs included in the consolidated
grant; and
    (b) Provide the Insular Area with flexibility in allocating the
funds under the consolidated grant to achieve any of the purposes to be
served by the programs that are consolidated.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.128  What is a consolidated grant?

    A consolidated grant is a grant to an Insular Area for any two or
more of the programs listed in Sec. 76.125(c). The amount of the
consolidated grant is the sum of the allocations the Insular Area
receives under each of the programs included in the consolidated grant
if there had been no consolidation.

    Example. Assume the Virgin Islands applies for a consolidated grant
that includes programs under the Adult Education Act, Vocational
Education Act, and Chapter 1 of the Education Consolidation and
Improvement Act. If the Virgin Islands' allocation under the formula for
each of these three programs is $150,000; the total consolidated grant
to the Virgin Islands would be $450,000.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.129  How does a consolidated grant work?

    (a) An Insular Area shall use the funds it receives under a
consolidated grant to carry out, in its jurisdiction, one or more of the
programs included in the grant.

    Example. Assume that Guam applies for a consolidated grant under the
Vocational Education Act, the Handicapped Preschool and School Programs-
Incentive Grants, and the Adult Education Act and that the sum of the
allocations under these programs is $700,000. Guam may choose to
allocate this $700,000 among all of the programs authorized under the
three programs. Alternatively, it may choose to allocate the entire
$700,000 to one or two of the programs; for example, the Adult Education
Act Program.

    (b) An Insular Area shall comply with the statutory and regulatory
requirements that apply to each program under which funds from the
consolidated grant are expended.

    Example. Assume that American Samoa uses part of the funds under a
consolidated grant for the State program under the Adult Education Act.
American Samoa need not submit to the Secretary a State plan that
requires policies and procedures to assure all students equal access to
adult education programs. However, in carrying out the program, American
Samoa must meet and be able to demonstrate compliance with this equal
access requirement.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.130  How are consolidated grants made?

    (a) The Secretary annually makes a single consolidated grant to each
Insular Area that meets the requirements of Sec. Sec. 76.125 through
76.137 and each program under which the grant funds are to be used and
administered.
    (b) The Secretary may decide that one or more programs cannot be
included in the consolidated grant if the Secretary determines that the
Insular Area failed to meet the program objectives stated in its plan
for the previous fiscal year in which it carried out the programs.
    (c) Under a consolidated grant, an Insular Area may use a single
advisory council for any or all of the programs that require an advisory
council.
    (d) Although Pub. L. 95-134 authorizies the Secretary to consolidate
grant funds that the Department awards to an Insular Area, it does not
confer eligibility for any grant funds. The eligibility of a particular
Insular Area to receive grant funds under a Federal education program is
determined under the statute and regulations for that program.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]

[[Page 175]]



Sec. 76.131  How does an insular area apply for a consolidated grant?

    (a) An Insular Area that desires to apply for a grant consolidating
two or more programs listed in Sec. 76.125(c) shall submit to the
Secretary an application that:
    (1) Contains the assurances in Sec. 76.132; and
    (2) Meets the application requirements in paragraph (c) of this
section.
    (b) The submission of an application that contains these
requirements and assurances takes the place of a separate State plan or
other similar document required by this part or by the authorizing
statutes and regulations for programs included in the consolidated
grant.
    (c) An Insular Area shall include in its consolidated grant
application a program plan that:
    (1) Contains a list of the programs in Sec. 76.125(c) to be
included in the consolidated grant;
    (2) Describes the program or programs in Sec. 76.125(c) under which
the consolidated grant funds will be used and administered;
    (3) Describes the goals, objectives, activities, and the means of
evaluating program outcomes for the programs for which the Insular Area
will use the funds received under the consolidated grant during the
fiscal year for which it submits the application, including needs of the
population that will be met by the consolidation of funds; and
    (4) Contains a budget that includes a description of the allocation
of funds--including any anticipated carryover funds of the program in
the consolidated grant from the preceding year--among the programs to be
included in the consolidated grant.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982, as amended at 53 FR 49143, Dec. 6, 1988]



Sec. 76.132  What assurances must be in a consolidated grant
application?

    (a) An Insular Area shall include in its consolidated grant
application assurances to the Secretary that it will:
    (1) Follow policies and use administrative practices that will
insure that non-Federal funds will not be supplanted by Federal funds
made available under the authority of the programs in the consolidated
grant;
    (2) Comply with the requirements (except those relating to the
submission of State plans or similar documents) in the authorizing
statutes and implementing regulations for the programs under which funds
are to be used and administered, (except requirements for matching
funds);
    (3) Provide for proper and efficient administration of funds in
accordance with the authorizing statutes and implementing regulations
for those programs under which funds are to be used and administered;
    (4) Provide for fiscal control and fund accounting procedures to
assure proper disbursement of, and accounting for, Federal funds
received under the consolidated grant;
    (5) Submit an annual report to the Secretary containing information
covering the program or programs for which the grant is used and
administered, including the financial and program performance
information required under 34 CFR 74.51-74.52 and 34 CFR 80.40-80.41.
    (6) Provide that funds received under the consolidated grant will be
under control of, and that title to property acquired with these funds
will be in, a public agency, institution, or organization. The public
agency shall administer these funds and property;
    (7) Keep records, including a copy of the State Plan or application
document under which funds are to be spent, which show how the funds
received under the consolidated grant have been spent.
    (8) Adopt and use methods of monitoring and providing technical
assistance to any agencies, organizations, or institutions that carry
out the programs under the consolidated grant and enforce any
obligations imposed on them under the applicable statutes and
regulations.
    (9) Evaluate the effectiveness of these programs in meeting the
purposes and objectives in the authorizing statutes under which program
funds are used and administered;
    (10) Conduct evaluations of these programs at intervals and in
accordance

[[Page 176]]

with procedures the Secretary may prescribe; and
    (11) Provide appropriate opportunities for participation by local
agencies, representatives of the groups affected by the programs, and
other interested institutions, organizations, and individuals in
planning and operating the programs.
    (b) These assurances remain in effect for the duration of the
programs they cover.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982, as amended at 64 FR 50392, Sept. 16, 1999]



Sec. 76.133  What is the reallocation authority?

    (a) After an Insular Area receives a consolidated grant, it may
reallocate the funds in a manner different from the allocation described
in its consolidated grant application. However, the funds cannot be used
for purposes that are not authorized under the programs in the
consolidated grant under which funds are to be used and administered.
    (b) If an Insular Area decides to reallocate the funds it receives
under a consolidated grant, it shall notify the Secretary by amending
its original application to include an update of the information
required under Sec. 76.131.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.134  What is the relationship between consolidated and
non-consolidated grants?

    (a) An Insular Area may request that any number of programs in Sec.
76.125(c) be included in its consolidated grant and may apply separately
for assistance under any other programs listed in Sec. 76.125(c) for
which it is eligible.
    (b) Those programs that an Insular Area decides to exclude from
consolidation--for which it must submit separate plans or applications--
are implemented in accordance with the applicable program statutes and
regulations. The excluded programs are not subject to the provisions for
allocation of funds among programs in a consolidated grant.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.135  Are there any requirements for matching funds?

    The Secretary waives all requirements for matching funds for those
programs that are consolidated by an Insular Area in a consolidated
grant application.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982]



Sec. 76.136  Under what programs may consolidated grant funds be spent?

    Insular Areas may only use and administer funds under programs
described in Sec. 76.125(c) during a fiscal year for which the Insular
Area is entitled to receive funds under an appropriation for that
program.

(Authority: 48 U.S.C. 1469a)

[47 FR 17421, Apr. 22, 1982, as amended at 57 FR 30341, July 8, 1992]



Sec. 76.137  How may carryover funds be used under the consolidated
grant application?

    Any funds under any applicable program which are available for
obligation and expenditure in the year succeeding the fiscal year for
which they are appropriated must be obligated and expended in accordance
with the consolidated grant application submitted by the Insular Area
for that program for the succeeding fiscal year.

(Authority: 20 U.S.C. 1225(b); 48 U.S.C. 1469a)

                               Amendments



Sec. 76.140  Amendments to a State plan.

    (a) If the Secretary determines that an amendment to a State plan is
essential during the effective period of the plan, the State shall make
the amendment.
    (b) A State shall also amend a State plan if there is a significant
and relevant change in:
    (1) The information or the assurances in the plan;
    (2) The administration or operation of the plan; or

[[Page 177]]

    (3) The organization, policies, or operations of the State agency
that received the grant, if the change materially affects the
information or assurances in the plan.

(Authority: 20 U.S.C. 1221e-3, 1231g(a), and 3474)



Sec. 76.141  An amendment requires the same procedures as the document
being amended.

    If a State amends a State plan under Sec. 76.140, the State shall
use the same procedures as those it must use to prepare and submit a
State plan.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.142  An amendment is approved on the same basis as the document
being amended.

    The Secretary uses the same procedures to approve an amendment to a
State plan--or any other document a State submits--as the Secretary uses
to approve the original document.

(Authority: 20 U.S.C. 1221e-3 and 3474)



                Subpart C_How a Grant Is Made to a State

                Approval or Disapproval by the Secretary



Sec. 76.201  A State plan must meet all statutory and regulatory
requirements.

    The Secretary approves a State plan if it meets the requirements of
the Federal statutes and regulations that apply to the plan.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.202  Opportunity for a hearing before a State plan is
disapproved.

    The Secretary may disapprove a State plan only after:
    (a) Notifying the State;
    (b) Offering the State a reasonable opportunity for a hearing; and
    (c) Holding the hearing, if requested by the State.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.235  The notification of grant award.

    (a) To make a grant to a State, the Secretary issues and sends to
the State a notification of grant award.
    (b) The notification of grant award tells the amount of the grant
and provides other information about the grant.

(Authority: 20 U.S.C. 1221e-3 and 3474)

               Allotments and Reallotments of Grant Funds



Sec. 76.260  Allotments are made under program statute or regulations.

    (a) The Secretary allots program funds to a State in accordance with
the authorizing statute or implementing regulations for the program.
    (b) Any reallotment to other States will be made by the Secretary in
accordance with the authorizing statute or implementing regulations for
that program.

(Authority: 20 U.S.C. 3474(a))

[50 FR 29330, July 18, 1985]



Sec. 76.261  Reallotted funds are part of a State's grant.

    Funds that a State receives as a result of a reallotment are part of
the State's grant for the appropriate fiscal year. However, the
Secretary does not consider a reallotment in determining the maximum or
minimum amount to which a State is entitled for a following fiscal year.

(Authority: 20 U.S.C. 1221e-3 and 3474)



           Subpart D_How To Apply to the State for a Subgrant



Sec. 76.300  Contact the State for procedures to follow.

    An applicant for a subgrant can find out the procedures it must
follow by contacting the State agency that administers the program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Cross Reference: See subparts E and G of this part for the general
responsibilities of the State regarding applications for subgrants.

[[Page 178]]



Sec. 76.301  Local educational agency general application.

    A local educational agency that applies for a subgrant under a
program subject to this part shall have on file with the State a general
application that meets the requirements of Section 442 of the General
Education Provisions Act.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3, 1232d, and 3474)

[52 FR 27804, July 24, 1987, as amended at 53 FR 49143, Dec. 6, 1988; 60
FR 46493, Sept. 6, 1995]



Sec. 76.302  The notice to the subgrantee.

    A State shall notify a subgrantee in writing of:
    (a) The amount of the subgrant;
    (b) The period during which the subgrantee may obligate the funds;
and
    (c) The Federal requirements that apply to the subgrant.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1221e-3 and 3474)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 49143, Dec. 6, 1988]



Sec. 76.303  Joint applications and projects.

    (a) Two or more eligible parties may submit a joint application for
a subgrant.
    (b) If the State must use a formula to distribute subgrant funds
(see Sec. 76.51), the State may not make a subgrant that exceeds the
sum of the entitlements of the separate subgrantees.
    (c) If the State funds the application, each subgrantee shall:
    (1) Carry out the activities that the subgrantee agreed to carry
out; and
    (2) Use the funds in accordance with Federal requirements.
    (d) Each subgrantee shall use an accounting system that permits
identification of the costs paid for under its subgrant.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.304  Subgrantee shall make subgrant application available to the
public.

    A subgrantee shall make any application, evaluation, periodic
program plan, or report relating to each program available for public
inspection.

(Authority: 20 U.S.C. 1221e-3, 1232e, and 3474)



            Subpart E_How a Subgrant Is Made to an Applicant



Sec. 76.400  State procedures for reviewing an application.

    A State that receives an application for a subgrant shall take the
following steps:
    (a) Review. The State shall review the application.
    (b) Approval--entitlement programs. The State shall approve an
application if:
    (1) The application is submitted by an applicant that is entitled to
receive a subgrant under the program; and
    (2) The applicant meets the requirements of the Federal statutes and
regulations that apply to the program.
    (c) Approval--discretionary programs. The State may approve an
application if:
    (1) The application is submitted by an eligible applicant under a
program in which the State has the discretion to select subgrantees;
    (2) The applicant meets the requirements of the Federal statutes and
regulations that apply to the program; and
    (3) The State determines that the project should be funded under the
authorizing statute and implementing regulations for the program.
    (d) Disapproval--entitlement and discretionary programs. If an
application does not meet the requirements of the Federal statutes and
regulations that apply to a program, the State shall not approve the
application.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.401  Disapproval of an application--opportunity for a hearing.

    (a) State agency hearing before disapproval. Under the programs
listed in the chart below, the State agency that administers the program
shall provide

[[Page 179]]

an applicant with notice and an opportunity for a hearing before it may
disapprove the application.

------------------------------------------------------------------------
                                                            Implementing
                                                             regulations
              Program                 Authorizing statute   Title 34 CFR
                                                                Part
------------------------------------------------------------------------
Chapter 1, Program in Local         Title I, Chapter 1,              200
 Educational Agencies.               Elementary and
                                     Secondary Education
                                     Act of 1965, as
                                     amended (20 U.S.C.
                                     2701-2731, 2821-2838,
                                     2851-2854, and 2891-
                                     2901).
Chapter 1, Program for Neglected    Title 1, Chapter 1,              203
 and Delinquent Children.            Elementary and
                                     Secondary Education
                                     Act of 1965, as
                                     amended (20 U.S.C.
                                     2801-2804).
State Grants for Strengthening      Title II, Part A,                208
 Instruction in Mathematics and      Elementary and
 Science.                            Secondary Education
                                     Act of 1965, as
                                     amended (20 U.S.C.
                                     2981-2993).
Federal, State, and Local           Title I, Chapter 2,              298
 Partnership for Educational         Elementary and
 Improvement.                        Secondary Education
                                     Act of 1965, as
                                     amended (20 U.S.C.
                                     2911-2952 and 2971-
                                     2976).
Assistance to States for Education  Part B, Individuals              300
 of Handicapped Children.            with Disabilities
                                     Education Act (except
                                     Section 619) (20
                                     U.S.C. 1411-1420).
Preschool Grants..................  Section 619,                     301
                                     Individuals with
                                     Disabilities
                                     Education Act (20
                                     U.S.C. 1419).
Chapter 1, State-Operated or        Title 1, Chapter 1,              302
 Supported Programs for              Elementary and
 Handicapped Children.               Secondary Education
                                     Act of 1965, as
                                     amended (20 U.S.C.
                                     2791-2795).
Transition Program for Refugee      Section 412(d),                  538
 Children.                           Immigration and
                                     Naturalization Act (8
                                     U.S.C. 1522(d)).
Emergency Immigrant Education       Emergency Immigrant              581
 Program.                            Education Act (20
                                     U.S.C. 3121-3130).
Financial Assistance for            Section 711, Higher              617
 Construction, Reconstruction, or    Education Act of 1965
 Renovation of Higher Education      (20 U.S.C. 1132b).
 Facilities.
------------------------------------------------------------------------

    (b) Other programs--hearings not required. Under other programs
covered by this part, a State agency--other than a State educational
agency--is not required to provide an opportunity for a hearing
regarding the agency's disapproval of an application.
    (c) If an applicant for a subgrant alleges that any of the following
actions of a State educational agency violates a State or Federal
statute or regulation, the State educational agency and the applicant
shall use the procedures in paragraph (d) of this section:
    (1) Disapproval of or failure to approve the application or project
in whole or in part.
    (2) Failure to provide funds in amounts in accordance with the
requirements of statutes and regulations.
    (d) State educational agency hearing procedures. (1) If the
applicant applied under a program listed in paragraph (a) of this
section, the State educational agency shall provide an opportunity for a
hearing before the agency disapproves the application.
    (2) If the applicant applied under a program not listed in paragraph
(a) of this section, the State educational agency shall provide an
opportunity for a hearing either before or after the agency disapproves
the application.
    (3) The applicant shall request the hearing within 30 days of the
action of the State educational agency.
    (4)(i) Within 30 days after it receives a request, the State
educational agency shall hold a hearing on the record and shall review
its action.
    (ii) No later than 10 days after the hearing the agency shall issue
its written ruling, including findings of fact and reasons for the
ruling.
    (iii) If the agency determines that its action was contrary to State
or Federal statutes or regulations that govern the applicable program,
the agency shall rescind its action.
    (5) If the State educational agency does not rescind its final
action after a review under this paragraph, the applicant may appeal to
the Secretary. The

[[Page 180]]

applicant shall file a notice of the appeal with the Secretary within 20
days after the applicant has been notified by the State educational
agency of the results of the agency's review. If supported by
substantial evidence, findings of fact of the State educational agency
are final.
    (6)(i) The Secretary may also issue interim orders to State
educational agencies as he or she may decide are necessary and
appropriate pending appeal or review.
    (ii) If the Secretary determines that the action of the State
educational agency was contrary to Federal statutes or regulations that
govern the applicable program, the Secretary issues an order that
requires the State educational agency to take appropriate action.
    (7) Each State educational agency shall make available at reasonable
times and places to each applicant all records of the agency pertaining
to any review or appeal the applicant is conducting under this section,
including records of other applicants.
    (8) If a State educational agency does not comply with any provision
of this section, or with any order of the Secretary under this section,
the Secretary terminates all assistance to the State educational agency
under the applicable program or issues such other orders as the
Secretary deems appropriate to achieve compliance.
    (e) Other State agency hearing procedures. State agencies that are
required to provide a hearing under paragraph (a) of this section--other
than State educational agencies--are not required to use the procedures
in paragraph (d) of this section.
    Note: This section is based on a provision in the General Education
Provisions Act (GEPA). Section 427 of the Department of Education
Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the
extent inconsistent with the DEOA, the GEPA ``shall apply to functions
transferred by this Act to the extent applicable on the day preceding
the effective date of this Act.'' Although standardized nomenclature is
used in this section to reflect the creation of the Department of
Education, there is no intent to extend the coverage of the GEPA beyond
that authorized under Section 427 or other applicable law.

(Authority: 20 U.S.C. 1221e-3, 1231b-2, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86296, Dec. 30, 1980; 50 FR 43545, Oct. 25, 1985; 52
FR 27805, July 24, 1987; 54 FR 21775, May 19, 1989; 55 FR 14816, Apr.
18, 1990; 57 FR 30341, July 8, 1992; 60 FR 46493, Sept. 6, 1995]



 Subpart F_What Conditions Must Be Met by the State and Its
 Subgrantees?

                            Nondiscrimination



Sec. 76.500  Federal statutes and regulations on nondiscrimination.

    (a) A State and a subgrantee shall comply with the following
statutes and regulations:

------------------------------------------------------------------------
             Subject                    Statute           Regulation
------------------------------------------------------------------------
Discrimination on the basis of    Title VI of the     34 CFR part 100.
 race, color, or national origin.  Civil Rights Act
                                   of 1964 (45
                                   U.S.C. 2000d
                                   through 2000d-4).
Discrimination on the basis of    Title IX of the     34 CFR part 106.
 sex.                              Education
                                   Amendments of
                                   1972 (20 U.S.C.
                                   1681-1683).
Discrimination on the basis of    Section 504 of the  34 CFR part 104.
 handicap.                         Rehabilitation
                                   Act of 1973 (29
                                   U.S.C. 794).
Discrimination on the basis of    The Age             34 CFR part 110.
 age.                              Discrimination
                                   Act (42 U.S.C.
                                   6101 et seq.).
------------------------------------------------------------------------

    (b) A State or subgrantee that is a covered entity as defined in
Sec. 108.3 of this title shall comply with the nondiscrimination
requirements of the Boy Scouts of America Equal Access Act, 20 U.S.C.
7905, 34 CFR part 108.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 71 FR 15002, Mar. 24, 2006]

                             Allowable Costs



Sec. 76.530  General cost principles.

    Both 34 CFR 74.27 and 34 CFR 80.22 reference the general cost
principles that apply to grants, subgrants and

[[Page 181]]

cost type contracts under grants and subgrants.

(Authority: 20 U.S.C. 1221e-3, 3474 and 6511(a))

[64 FR 50392, Sept. 16, 1999]



Sec. 76.532  Use of funds for religion prohibited.

    (a) No State or subgrantee may use its grant or subgrant to pay for
any of the following:
    (1) Religious worship, instruction, or proselytization.
    (2) Equipment or supplies to be used for any of the activities
specified in paragraph (a)(1) of this section.
    (b) [Reserved]

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 69 FR 31711, June 4, 2004]



Sec. 76.533  Acquisition of real property; construction.

    No State or subgrantee may use its grant or subgrant for acquisition
of real property or for construction unless specifically permitted by
the authorizing statute or implementing regulations for the program.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.534  Use of tuition and fees restricted.

    No State or subgrantee may count tuition and fees collected from
students toward meeting matching, cost sharing, or maintenance of effort
requirements of a program.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

                           Indirect Cost Rates



Sec. 76.560  General indirect cost rates; exceptions.

    (a) The differences between direct and indirect costs and the
principles for determining the general indirect cost rate that a grantee
may use for grants under most programs are specified in the cost
principles for--
    (1) Institutions of higher education, at 34 CFR 74.27;
    (2) Hospitals, at 34 CFR 74.27;
    (3) Other nonprofit organizations, at 34 CFR 74.27;
    (4) Commercial (for-profit) organizations, at 34 CFR 74.27; and
    (5) State and local governments and federally-recognized Indian
tribal organizations, at 34 CFR 80.22.
    (b) A grantee must have a current indirect cost rate agreement to
charge indirect costs to a grant. To obtain an indirect cost rate, a
grantee must submit an indirect cost proposal to its cognizant agency
and negotiate an indirect cost rate agreement.
    (c) The Secretary may establish a temporary indirect cost rate for a
grantee that does not have an indirect cost rate agreement with its
cognizant agency.
    (d) The Secretary accepts an indirect cost rate negotiated by a
grantee's cognizant agency, but may establish a restricted indirect cost
rate for a grantee to satisfy the statutory requirements of certain
programs administered by the Department.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[57 FR 30341, July 8, 1992, as amended at 59 FR 59582, Nov. 17, 1994]



Sec. 76.561  Approval of indirect cost rates.

    (a) If the Department of Education is the cognizant agency, the
Secretary approves an indirect cost rate for a State agency and for a
subgrantee other than a local educational agency. For the purposes of
this section, the term local educational agency does not include a State
agency.
    (b) Each State educational agency, on the basis of a plan approved
by the Secretary, shall approve an indirect cost rate for each local
educational agency that requests it to do so. These rates may be for
periods longer than a year if rates are sufficiently stable to justify a
longer period.
    (c) The Secretary generally approves indirect cost rate agreements
annually. Indirect cost rate agreements may be approved for periods
longer than a year if the Secretary determines that rates will be
sufficiently stable to justify a longer rate period.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[59 FR 59583, Nov. 17, 1994]

[[Page 182]]



Sec. 76.563  Restricted indirect cost rate--programs covered.

    Sections 76.564 through 76.569 apply to agencies of State and local
governments that are grantees under programs with a statutory
requirement prohibiting the use of Federal funds to supplant non-Federal
funds, and to their subgrantees under these programs.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[59 FR 59583, Nov. 17, 1994]



Sec. 76.564  Restricted indirect cost rate--formula.

    (a) An indirect cost rate for a grant covered by Sec. 76.563 or 34
CFR 75.563 is determined by the following formula:

Restricted indirect cost rate = (General management costs + Fixed costs)
    / (Other expenditures)

    (b) General management costs, fixed costs, and other expenditures
must be determined under Sec. Sec. 76.565 through 76.567.
    (c) Under the programs covered by Sec. 76.563, a subgrantee of an
agency of a State or a local government (as those terms are defined in
34 CFR 80.3) or a grantee subject to 34 CFR 75.563 that is not a State
or local government agency may use--
    (1) An indirect cost rate computed under paragraph (a) of this
section; or
    (2) An indirect cost rate of eight percent unless the Secretary
determines that the subgrantee or grantee would have a lower rate under
paragraph (a) of this section.
    (d) Indirect costs that are unrecovered as a result of these
restrictions may not be charged directly, used to satisfy matching or
cost-sharing requirements, or charged to another Federal award.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59583, Nov. 17, 1994]



Sec. 76.565  General management costs--restricted rate.

    (a) As used in Sec. 76.564, general management costs means the
costs of activities that are for the direction and control of the
grantee's affairs that are organization-wide. An activity is not
organization-wide if it is limited to one activity, one component of the
grantee, one subject, one phase of operations, or other single
responsibility.
    (b) General management costs include the costs of performing a
service function, such as accounting, payroll preparation, or personnel
management, that is normally at the grantee's level even if the function
is physically located elsewhere for convenience or better management.
The term also includes certain occupancy and space maintenance costs as
determined under Sec. 76.568.
    (c) The term does not include expenditures for--
    (1) Divisional administration that is limited to one component of
the grantee;
    (2) The governing body of the grantee;
    (3) Compensation of the chief executive officer of the grantee;
    (4) Compensation of the chief executive officer of any component of
the grantee; and
    (5) Operation of the immediate offices of these officers.
    (d) For purposes of this section--
    (1) The chief executive officer of the grantee is the individual who
is the head of the executive office of the grantee and exercises overall
responsibility for the operation and management of the organization. The
chief executive officer's immediate office includes any deputy chief
executive officer or similar officer along with immediate support staff
of these individuals. The term does not include the governing body of
the grantee, such as a board or a similar elected or appointed governing
body; and
    (2) Components of the grantee are those organizational units
supervised directly or indirectly by the chief executive officer. These
organizational units generally exist one management level below the
executive office of the grantee. The term does not include the office of
the chief executive officer or a deputy chief executive officer or
similar position.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59583, Nov. 17, 1994]

[[Page 183]]



Sec. 76.566  Fixed costs--restricted rate.

    As used in Sec. 76.564, fixed costs means contributions of the
grantee to fringe benefits and similar costs, but only those associated
with salaries and wages that are charged as indirect costs, including--
    (a) Retirement, including State, county, or local retirement funds,
Social Security, and pension payments;
    (b) Unemployment compensation payments; and
    (c) Property, employee, health, and liability insurance.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59583, Nov. 17, 1994]



Sec. 76.567  Other expenditures--restricted rate.

    (a) As used in Sec. 76.564, other expenditures means the grantee's
total expenditures for its federally- and non-federally-funded
activities in the most recent year for which data are available. The
term also includes direct occupancy and space maintenance costs as
determined under Sec. 76.568 and costs related to the chief executive
officers of the grantee and components of the grantee and their offices
(see Sec. 76.565(c) and (d)).
    (b) The term does not include--
    (1) General management costs determined under Sec. 76.565;
    (2) Fixed costs determined under Sec. 76.566;
    (3) Subgrants;
    (4) Capital outlay;
    (5) Debt service;
    (6) Fines and penalties;
    (7) Contingencies; and
    (8) Election expenses. However, the term does include election
expenses that result from elections required by an applicable Federal
statute.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59583, Nov. 17, 1994]



Sec. 76.568  Occupancy and space maintenance costs--restricted rate.

    (a) As used in the calculation of a restricted indirect cost rate,
occupancy and space maintenance costs means such costs as--
    (1) Building costs whether owned or rented;
    (2) Janitorial services and supplies;
    (3) Building, grounds, and parking lot maintenance;
    (4) Guard services;
    (5) Light, heat, and power;
    (6) Depreciation, use allowances, and amortization; and
    (7) All other related space costs.
    (b) Occupancy and space maintenance costs associated with
organization-wide service functions (accounting, payroll, personnel) may
be included as general management costs if a space allocation or use
study supports the allocation.
    (c) Occupancy and space maintenance costs associated with functions
that are not organization-wide must be included with other expenditures
in the indirect cost formula. These costs may be charged directly to
affected programs only to the extent that statutory supplanting
prohibitions are not violated. This reimbursement must be approved in
advance by the Secretary.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59584, Nov. 17, 1994]



Sec. 76.569  Using the restricted indirect cost rate.

    (a) Under the programs referenced in Sec. 76.563, the maximum
amount of indirect costs under a grant is determined by the following
formula:

Indirect costs=(Restricted indirect cost rate)x(Total direct costs of
the grant minus capital outlays, subgrants, and other distorting or
unallowable items as specified in the grantee's indirect cost rate
agreement)

    (b) If a grantee uses a restricted indirect cost rate, the general
management and fixed costs covered by that rate must be excluded by the
grantee from the direct costs it charges to the grant.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[59 FR 59584, Nov. 17, 1994]



Sec. 76.580  Coordination with other activities.

    A State and a subgrantee shall, to the extent possible, coordinate
each of its projects with other activities that are in the same
geographic area served

[[Page 184]]

by the project and that serve similar purposes and target groups.

(Authority: 20 U.S.C. 1221e-3, 2890, and 3474)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30341, July 8, 1992]

                               Evaluation



Sec. 76.591  Federal evaluation--cooperation by a grantee.

    A grantee shall cooperate in any evaluation of the program by the
Secretary.

(Authority: 20 U.S.C. 1221e-3, 1226c, 1231a, 3474, and 6511(a))

[45 FR 86298, Dec. 30, 1980, as amended at 57 FR 30341, July 8, 1992]



Sec. 76.592  Federal evaluation--satisfying requirement for State or
subgrantee evaluation.

    If a State or a subgrantee cooperates in a Federal evaluation of a
program, the Secretary may determine that the State or subgrantee meets
the evaluation requirements of the program.

(Authority: 20 U.S.C. 1226c; 1231a)

                              Construction



Sec. 76.600  Where to find construction regulations.

    (a) A State or a subgrantee that requests program funds for
construction, or whose grant or subgrant includes funds for
construction, shall comply with the rules on construction that apply to
applicants and grantees under 34 CFR 75.600-75.617.
    (b) The State shall perform the functions that the Secretary
performs under Sec. Sec. 75.602 (Preservation of historic sites) and
75.605 (Approval of drawings and specifications) of this title.
    (c) The State shall provide to the Secretary the information
required under 34 CFR 75.602(a) (Preservation of historic sites).

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86298, Dec. 30, 1980; 57 FR 30341, July 8, 1992]

          Participation of Students Enrolled in Private Schools



Sec. 76.650  Private schools; purpose of Sec. Sec. 76.651-76.662.

    (a) Under some programs, the authorizing statute requires that a
State and its subgrantees provide for participation by students enrolled
in private schools. Sections 76.651-76.662 apply to those programs and
provide rules for that participation. These sections do not affect the
authority of the State or a subgrantee to enter into a contract with a
private party.
    (b) If any other rules for participation of students enrolled in
private schools apply under a particular program, they are in the
authorizing statute or implementing regulations for that program.

(Authority: 20 U.S.C. 1221e-3 and 3474)

    Note: Some program statutes authorize the Secretary--under certain
circumstances--to provide benefits directly to private school students.
These ``bypass'' provisions--where they apply--are implemented in the
individual program regulations.



Sec. 76.651  Responsibility of a State and a subgrantee.

    (a)(1) A subgrantee shall provide students enrolled in private
schools with a genuine opportunity for equitable participation in
accordance with the requirements in Sec. Sec. 76.652-76.662 and in the
authorizing statute and implementing regulations for a program.
    (2) The subgrantee shall provide that opportunity to participate in
a manner that is consistent with the number of eligible private school
students and their needs.
    (3) The subgrantee shall maintain continuing administrative
direction and control over funds and property that benefit students
enrolled in private schools.
    (b)(1) A State shall ensure that each subgrantee complies with the
requirements in Sec. Sec. 76.651-76.662.
    (2) If a State carries out a project directly, it shall comply with
these requirements as if it were a subgrantee.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[[Page 185]]



Sec. 76.652  Consultation with representatives of private school
students.

    (a) An applicant for a subgrant shall consult with appropriate
representatives of students enrolled in private schools during all
phases of the development and design of the project covered by the
application, including consideration of:
    (1) Which children will receive benefits under the project;
    (2) How the children's needs will be identified;
    (3) What benefits will be provided;
    (4) How the benefits will be provided; and
    (5) How the project will be evaluated.
    (b) A subgrantee shall consult with appropriate representatives of
students enrolled in private schools before the subgrantee makes any
decision that affects the opportunities of those students to participate
in the project.
    (c) The applicant or subgrantee shall give the appropriate
representatives a genuine opportunity to express their views regarding
each matter subject to the consultation requirements in this section.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.653  Needs, number of students, and types of services.

    A subgrantee shall determine the following matters on a basis
comparable to that used by the subgrantee in providing for participation
of public school students:
    (a) The needs of students enrolled in private schools.
    (b) The number of those students who will participate in a project.
    (c) The benefits that the subgrantee will provide under the program
to those students.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.654  Benefits for private school students.

    (a) Comparable benefits. The program benefits that a subgrantee
provides for students enrolled in private schools must be comparable in
quality, scope, and opportunity for participation to the program
benefits that the subgrantee provides for students enrolled in public
schools.
    (b) Same benefits. If a subgrantee uses funds under a program for
public school students in a particular attendance area, or grade or age
level, the subgrantee shall insure equitable opportunities for
participation by students enrolled in private schools who:
    (1) Have the same needs as the public school students to be served;
and
    (2) Are in that group, attendance area, or age or grade level.
    (c) Different benefits. If the needs of students enrolled in private
schools are different from the needs of students enrolled in public
schools, a subgrantee shall provide program benefits for the private
school students that are different from the benefits the subgrantee
provides for the public school students.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.655  Level of expenditures for students enrolled in private
schools.

    (a) Subject to paragraph (b) of this section, a subgrantee shall
spend the same average amount of program funds on:
    (1) A student enrolled in a private school who receives benefits
under the program; and
    (2) A student enrolled in a public school who receives benefits
under the program.
    (b) The subgrantee shall spend a different average amount on program
benefits for students enrolled in private schools if the average cost of
meeting the needs of those students is different from the average cost
of meeting the needs of students enrolled in public schools.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.656  Information in an application for a subgrant.

    An applicant for a subgrant shall include the following information
in its application:
    (a) A description of how the applicant will meet the Federal
requirements for participation of students enrolled in private schools.
    (b) The number of students enrolled in private schools who have been
identified as eligible to benefits under the program.

[[Page 186]]

    (c) The number of students enrolled in private schools who will
receive benefits under the program.
    (d) The basis the applicant used to select the students.
    (e) The manner and extent to which the applicant complied with Sec.
76.652 (consultation).
    (f) The places and times that the students will receive benefits
under the program.
    (g) The differences, if any, between the program benefits the
applicant will provide to public and private school students, and the
reasons for the differences.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.657  Separate classes prohibited.

    A subgrantee may not use program funds for classes that are
organized separately on the basis of school enrollment or religion of
the students if:
    (a) The classes are at the same site; and
    (b) The classes include students enrolled in public schools and
students enrolled in private schools.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.658  Funds not to benefit a private school.

    (a) A subgrantee may not use program funds to finance the existing
level of instruction in a private school or to otherwise benefit the
private school.
    (b) The subgrantee shall use program funds to meet the specific
needs of students enrolled in private schools, rather than:
    (1) The needs of a private school; or
    (2) The general needs of the students enrolled in a private school.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.659  Use of public school personnel.

    A subgrantee may use program funds to make public personnel
available in other than public facilities:
    (a) To the extent necessary to provide equitable program benefits
designed for students enrolled in a private school; and
    (b) If those benefits are not normally provided by the private
school.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.660  Use of private school personnel.

    A subgrantee may use program funds to pay for the services of an
employee of a private school if:
    (a) The employee performs the services outside of his or her regular
hours of duty; and
    (b) The employee performs the services under public supervision and
control.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.661  Equipment and supplies.

    (a) Under some program statutes, a public agency must keep title to
and exercise continuing administrative control of all equipment and
supplies that the subgrantee acquires with program funds. This public
agency is usually the subgrantee.
    (b) The subgrantee may place equipment and supplies in a private
school for the period of time needed for the project.
    (c) The subgrantee shall insure that the equipment or supplies
placed in a private school:
    (1) Are used only for the purposes of the project; and
    (2) Can be removed from the private school without remodeling the
private school facilities.
    (d) The subgrantee shall remove equipment or supplies from a private
school if:
    (1) The equipment or supplies are no longer needed for the purposes
of the project; or
    (2) Removal is necessary to avoid use of the equipment of supplies
for other than project purposes.

(Authority: 20 U.S.C. 1221e-3 and 3474)



Sec. 76.662  Construction.

    A subgrantee shall insure that program funds are not used for the
construction of private school facilities.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[[Page 187]]

                          Procedures for Bypass



Sec. 76.670  Applicability and filing requirements.

    (a) The regulations in Sec. Sec. 76.671 through 76.677 apply to the
following programs under which the Secretary is authorized to waive the
requirements for providing services to private school children and to
implement a bypass:

----------------------------------------------------------------------------------------------------------------
                                                                                                    Implementing
                                                                                                     regulations
         CFDA number and name of program                         Authorizing statute                title 34 CFR
                                                                                                        part
----------------------------------------------------------------------------------------------------------------
84.010 Chapter 1 Program in Local Educational     Chapter 1, Title I, Elementary and Secondary               200
 Agencies.                                         Education Act of 1965, as amended (20 U.S.C.
                                                   2701 et seq.).
84.151 Federal, State, and Local Partnership for  Chapter 2, Title I, Elementary and Secondary               298
 Educational Improvement.                          Education Act of 1965, as amended (20 U.S.C.
                                                   2911-2952, 2971-2976).
84.164 Mathematics and Science Education........  Title II, Part A, Elementary and Secondary                 208
                                                   Education Act of 1965, as amended (20 U.S.C.
                                                   2981-2993).
84.186 State and Local Programs.................  Part B, Drug Free Schools and Communities Act of          None
                                                   1986 (20 U.S.C. 3191-3197).
----------------------------------------------------------------------------------------------------------------

    (b) Filing requirements. (1) Any written submission under Sec. Sec.
76.671 through 76.675 must be filed by hand-delivery, by mail, or by
facsimile transmission. The Secretary discourages the use of facsimile
transmission for documents longer than five pages.
    (2) If agreed upon by the parties, service of a document may be made
upon the other party by facsimile transmission.
    (3) The filing date for a written submission is the date the
document is--
    (i) Hand-delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (4) A party filing by facsimile transmission is responsible for
confirming that a complete and legible copy of the document was received
by the Department.
    (5) If a document is filed by facsimile transmission, the Secretary
or the hearing officer, as applicable, may require the filing of a
follow-up hard copy by hand-delivery or by mail within a reasonable
period of time.

(Authority: 20 U.S.C. 2727(b), 2972(d)-(e), 2990(c), 3223(c))

[54 FR 21775, May 19, 1989, as amended at 57 FR 56795, Nov. 30, 1992]



Sec. 76.671  Notice by the Secretary.

    (a) Before taking any final action to implement a bypass under a
program listed in Sec. 76.670, the Secretary provides the affected
grantee and subgrantee, if appropriate, with written notice.
    (b) In the written notice, the Secretary--
    (1) States the reasons for the proposed bypass in sufficient detail
to allow the grantee and subgrantee to respond;
    (2) Cites the requirement that is the basis for the alleged failure
to comply; and
    (3) Advises the grantee and subgrantee that they--
    (i) Have at least 45 days after receiving the written notice to
submit written objections to the proposed bypass; and
    (ii) May request in writing the opportunity for a hearing to show
cause why the bypass should not be implemented.
    (c) The Secretary sends the notice to the grantee and subgrantee by
certified mail with return receipt requested.

(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))

[54 FR 21775, May 19, 1989]



Sec. 76.672  Bypass procedures.

    Sections 76.673 through 76.675 contain the procedures that the
Secretary uses in conducting a show cause hearing. The hearing officer
may modify the procedures for a particular case if all

[[Page 188]]

parties agree the modification is appropriate.

(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))

[54 FR 21776, May 19, 1989]



Sec. 76.673  Appointment and functions of a hearing officer.

    (a) If a grantee or subgrantee requests a hearing to show cause why
the Secretary should not implement a bypass, the Secretary appoints a
hearing officer and notifies appropriate representatives of the affected
private school children that they may participate in the hearing.
    (b) The hearing officer has no authority to require or conduct
discovery or to rule on the validity of any statute or regulation.
    (c) The hearing officer notifies the grantee, subgrantee, and
representatives of the private school children of the time and place of
the hearing.

(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))

[54 FR 21776, May 19, 1989]



Sec. 76.674  Hearing procedures.

    (a) The following procedures apply to a show cause hearing regarding
implementation of a bypass:
    (1) The hearing officer arranges for a transcript to be taken.
    (2) The grantee, subgrantee, and representatives of the private
school children each may--
    (i) Be represented by legal counsel; and
    (ii) Submit oral or written evidence and arguments at the hearing.
    (b) Within 10 days after the hearing, the hearing officer--
    (1) Indicates that a decision will be issued on the basis of the
existing record; or
    (2) Requests further information from the grantee, subgrantee,
representatives of the private school children, or Department officials.

(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))

[54 FR 21776, May 19, 1989]



Sec. 76.675  Posthearing procedures.

    (a)(1) Within 120 days after the record of a show cause hearing is
closed, the hearing officer issues a written decision on whether a
bypass should be implemented.
    (2) The hearing officer sends copies of the decision to the grantee,
subgrantee, representatives of the private school children, and the
Secretary.
    (b) Within 30 days after receiving the hearing officer's decision,
the grantee, subgrantee, and representatives of the private school
children may each submit to the Secretary written comments on the
decision.
    (c) The Secretary may adopt, reverse, modify, or remand the hearing
officer's decision.

(Authority: 20 U.S.C. 2727(b)(4)(A), 2972(h)(1), 2990(c), 3223(c))

[54 FR 21776, May 19, 1989]



Sec. 76.676  Judicial review of a bypass action.

    If a grantee or subgrantee is dissatisfied with the Secretary's
final action after a proceeding under Sec. Sec. 76.672 through 76.675,
it may, within 60 days after receiving notice of that action, file a
petition for review with the United States Court of Appeals for the
circuit in which the State is located.

(Authority: 20 U.S.C. 2727(b)(4)(B)-(D), 2972(h)(2)-(4), 2990(c),
3223(c))

[54 FR 21776, May 19, 1989]



Sec. 76.677  Continuation of a bypass.

    The Secretary continues a bypass until the Secretary determines that
the grantee or subgrantee will meet the requirements for providing
services to private school children.

(Authority: 20 U.S.C. 1221e-3, 2727(b)(3)(D), 2972(f), and 3474)

[54 FR 21776, May 19, 1989]

                 Other Requirements for Certain Programs



Sec. 76.681  Protection of human subjects.

    If a State or a subgrantee uses a human subject in a research
project, the State or subgrantee shall protect

[[Page 189]]

the person from physical, psychological, or social injury resulting from
the project.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30341, July 8, 1992]



Sec. 76.682  Treatment of animals.

    If a State or a subgrantee uses an animal in a project, the State or
subgrantee shall provide the animal with proper care and humane
treatment in accordance with the Animal Welfare Act of 1970.

(Authority: Pub. L. 89-544, as amended)



Sec. 76.683  Health or safety standards for facilities.

    A State and a subgrantee shall comply with any Federal health or
safety requirements that apply to the facilities that the State or
subgrantee uses for a project.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Subpart G_What Are the Administrative Responsibilities of the State and
                            Its Subgrantees?

                 General Administrative Responsibilities



Sec. 76.700  Compliance with statutes, regulations, State plan, and
applications.

    A State and a subgrantee shall comply with the State plan and
applicable statutes, regulations, and approved applications, and shall
use Federal funds in accordance with those statutes, regulations, plan,
and applications.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.701  The State or subgrantee administers or supervises each project.

    A State or a subgrantee shall directly administer or supervise the
administration of each project.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.702  Fiscal control and fund accounting procedures.

    A State and a subgrantee shall use fiscal control and fund
accounting procedures that insure proper disbursement of and accounting
for Federal funds.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.703  When a State may begin to obligate funds.

    (a)(1) The Secretary may establish, for a program subject to this
part, a date by which a State must submit for review by the Department a
State plan and any other documents required to be submitted under
guidance provided by the Department under paragraph (b)(3) of this
section.
    (2) If the Secretary does not establish a date for the submission of
State plans and any other documents required under guidance provided by
the Department, the date for submission is three months before the date
the Secretary may begin to obligate funds under the program.
    (b)(1) This paragraph (b) describes the circumstances under which
the submission date for a State plan may be deferred.
    (2) If a State asks the Secretary in writing to defer the submission
date for a State plan because of a Presidentially declared disaster that
has occurred in that State, the Secretary may defer the submission date
for the State plan and any other document required under guidance
provided by the Department if the Secretary determines that the disaster
significantly impairs the ability of the State to submit a timely State
plan or other document required under guidance provided by the
Department.
    (3)(i) The Secretary establishes, for a program subject to this
part, a date by which the program office must deliver guidance to the
States regarding the contents of the State plan under that program.
    (ii) The Secretary may only establish a date for the delivery of
guidance to the States so that there are at least as many days between
that date and the date that State plans must be submitted to the
Department as there are days between the date that State plans

[[Page 190]]

must be submitted to the Department and the date that funds are
available for obligation by the Secretary on July 1, or October 1, as
appropriate.
    (iii) If a State does not receive the guidance by the date
established under paragraph (b)(3)(i) of this section, the submission
date for the State plan under the program is deferred one day for each
day that the guidance is late in being received by the State.
    Note: The following examples describe how the regulations in Sec.
76.703(b)(3) would act to defer the date that a State would have to
submit its State plan.

    Example 1. The Secretary decides that State plans under a forward-
funded program must be submitted to the Department by May first. The
Secretary must provide guidance to the States under this program by
March first, so that the States have at least as many days between the
guidance date and the submission date (60) as the Department has between
the submission date and the date that funds are available for obligation
(60). If the program transmits guidance to the States on February 15,
specifying that State plans must be submitted by May first, States
generally would have to submit State plans by that date. However, if,
for example, a State did not receive the guidance until March third,
that State would have until May third to submit its State plan because
the submission date of its State plan would be deferred one day for each
day that the guidance to the State was late.
    Example 2. If a program publishes the guidance in the Federal
Register on March third, the States would be considered to have received
the guidance on that day. Thus, the guidance could not specify a date
for the submission of State plans before May second, giving the States
59 days between the date the guidance is published and the submission
date and giving the Department 58 days between the submission date and
the date that funds are available for obligation.

    (c)(1) For the purposes of this section, the submission date of a
State plan or other document is the date that the Secretary receives the
plan or document.
    (2) The Secretary does not determine whether a State plan is
substantially approvable until the plan and any documents required under
guidance provided by the Department have been submitted.
    (3) The Secretary notifies a State when the Department has received
the State plan and all documents required under guidance provided by the
Department.
    (d) If a State submits a State plan in substantially approvable form
(or an amendment to the State plan that makes it substantially
approvable), and submits any other document required under guidance
provided by the Department, on or before the date the State plan must be
submitted to the Department, the State may begin to obligate funds on
the date that the funds are first available for obligation by the
Secretary.
    (e) If a State submits a State plan in substantially approvable form
(or an amendment to the State plan that makes it substantially
approvable) or any other documents required under guidance provided by
the Department after the date the State plan must be submitted to the
Department, and--
    (1) The Department determines that the State plan is substantially
approvable on or before the date that the funds are first available for
obligation by the Secretary, the State may begin to obligate funds on
the date that the funds are first available for obligation by the
Secretary; or
    (2) The Department determines that the State plan is substantially
approvable after the date that the funds are first available for
obligation by the Secretary, the State may begin to obligate funds on
the earlier of the two following dates:
    (i) The date that the Secretary determines that the State plan is
substantially approvable.
    (ii) The date that is determined by adding to the date that funds
are first available for obligation by the Secretary--
    (A) The number of days after the date the State plan must be
submitted to the Department that the State plan or other document
required under guidance provided by the Department is submitted; and
    (B) If applicable, the number of days after the State receives
notice that the State plan is not substantially approvable that the
State submits additional information that makes the plan substantially
approvable.
    (f) Additional information submitted under paragraph (e)(2)(ii)(B)
of this section must be signed by the person who

[[Page 191]]

submitted the original State plan (or an authorized delegate of that
officer).
    (g)(1) If the Department does not complete its review of a State
plan during the period established for that review, the Secretary will
grant pre-award costs for the period after funds become available for
obligation by the Secretary and before the State plan is found
substantially approvable.
    (2) The period established for the Department's review of a plan
does not include any day after the State has received notice that its
plan is not substantially approvable.
    Note: The following examples describe how the regulations in Sec.
76.703 would be applied in certain circumstances. For the purpose of
these examples, assume that the grant program established an April 1 due
date for the submission of the State plan and that funds are first
available for obligation by the Secretary on July 1.

    Example 1. Paragraph (d): A State submits a plan in substantially
approvable form by April 1. The State may begin to obligate funds on
July 1.
    Example 2. Paragraph (e)(1): A State submits a plan in substantially
approvable form on May 15, and the Department notifies the State that
the plan is substantially approvable on June 20. The State may begin to
obligate funds on July 1.
    Example 3. Paragraph (e)(2)(i): A State submits a plan in
substantially approvable form on May 15, and the Department notifies the
State that the plan is substantially approvable on July 15. The State
may begin to obligate funds on July 15.
    Example 4. Paragraph (e)(2)(ii)(A): A State submits a plan in
substantially approvable form on May 15, and the Department notifies the
State that the plan is substantially approvable on August 21. The State
may begin to obligate funds on August 14. (In this example, the plan is
45 days late. By adding 45 days to July 1, we reach August 14, which is
earlier than the date, August 21, that the Department notifies the State
that the plan is substantially approvable. Therefore, if the State chose
to begin drawing funds from the Department on August 14, obligations
made on or after that date would generally be allowable.)
    Example 5. Paragraph (e)(2)(i): A State submits a plan on May 15,
and the Department notifies the State that the plan is not substantially
approvable on July 10. The State submits changes that make the plan
substantially approvable on July 20 and the Department notifies the
State that the plan is substantially approvable on July 25. The State
may begin to obligate funds on July 25. (In this example, the original
submission is 45 days late. In addition, the Department notifies the
State that the plan is not substantially approvable and the time from
that notification until the State submits changes that make the plan
substantially approvable is an additional 10 days. By adding 55 days to
July 1, we reach August 24. However, since the Department notified the
State that the plan was substantially approvable on July 25, that is the
date that the State may begin to obligate funds.)
    Example 6. Paragraph (e)(2)(ii)(B): A State submits a plan on May
15, and the Department notifies the State that the plan is not
substantially approvable on August 1. The State submits changes that
make the plan substantially approvable on August 20, and the Department
notifies the State that the plan is substantially approvable on
September 5. The State may choose to begin drawing funds from the
Department on September 2, and obligations made on or after that date
would generally be allowable. (In this example, the original submission
is 45 days late. In addition, the Department notifies the State that the
plan is not substantially approvable and the time from that notification
until the State submits changes that make the plan substantially
approvable is an additional 19 days. By adding 64 days to July 1, we
reach September 2, which is earlier than September 5, the date that the
Department notifies the State that the plan is substantially
approvable.)
    Example 7. Paragraph (g): A State submits a plan on April 15 and the
Department notifies the State that the plan is not substantially
approvable on July 16. The State makes changes to the plan and submits a
substantially approvable plan on July 30. The Department had until July
15 to decide whether the plan was substantially approvable because the
State was 15 days late in submitting the plan. The date the State may
begin to obligate funds under the regulatory deferral is July 29 (based
on the 15 day deferral for late submission plus a 14 day deferral for
the time it took to submit a substantially approvable plan after having
received notice). However, because the Department was one day late in
completing its review of the plan, the State would get pre-award costs
to cover the period of July 1 through July 29.

    (h) After determining that a State plan is in substantially
approvable form, the Secretary informs the State of the date on which it
could begin to obligate funds. Reimbursement for

[[Page 192]]

those obligations is subject to final approval of the State plan.

(Authority: 20 U.S.C. 1221e-3, 3474, 6511(a) and 31 U.S.C. 6503)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 60 FR 41294, Aug. 11, 1995; 61 FR 14484, Apr. 2, 1996]



Sec. 76.704  New State plan requirements that must be addressed in a
State plan.

    (a) This section specifies the State plan requirements that must be
addressed in a State plan if the State plan requirements established in
statutes or regulations change on a date close to the date that State
plans are due for submission to the Department.
    (b)(1) A State plan must meet the following requirements:
    (i) Every State plan requirement in effect three months before the
date the State plan is due to be submitted to the Department under 34
CFR 76.703; and
    (ii) Every State plan requirement included in statutes or
regulations that will be effective on or before the date that funds
become available for obligation by the Secretary and that have been
signed into law or published in the Federal Register as final
regulations three months before the date the State plan is due to be
submitted to the Department under 34 CFR 76.703.
    (2) If a State plan does not have to meet a new State plan
requirement under paragraph (b)(1) of this section, the Secretary takes
one of the following actions:
    (i) Require the State to submit assurances and appropriate
documentation to show that the new requirements are being followed under
the program.
    (ii) Extend the date for submission of State plans and approve pre-
award costs as necessary to hold the State harmless.
    (3) If the Secretary requires a State to submit assurances under
paragraph (b)(2) of this section, the State shall incorporate changes to
the State plan as soon as possible to comply with the new requirements.
The State shall submit the necessary changes before the start of the
next obligation period.

(Authority: 20 U.S.C. 1221e-3, 3474, 6511(a) and 31 U.S.C. 6503)

[60 FR 41296, Aug. 11, 1995]



Sec. 76.707  When obligations are made.

    The following table shows when a State or a subgrantee makes
obligations for various kinds of property and services.

------------------------------------------------------------------------
        If the obligation is for--            The obligation is made--
------------------------------------------------------------------------
(a) Acquisition of real or personal         On the date on which the
 property.                                   State or subgrantee makes a
                                             binding written commitment
                                             to acquire the property.
(b) Personal services by an employee of     When the services are
 the State or subgrantee.                    performed.
(c) Personal services by a contractor who   On the date on which the
 is not an employee of the State or          State or subgrantee makes a
 subgrantee.                                 binding written commitment
                                             to obtain the services.
(d) Performance of work other than          On the date on which the
 personal services.                          State or subgrantee makes a
                                             binding written commitment
                                             to obtain the work.
(e) Public utility services...............  When the State or subgrantee
                                             receives the services.
(f) Travel................................  When the travel is taken.
(g) Rental of real or personal property...  When the State or subgrantee
                                             uses the property.
(h) A preagreement cost that was properly
 approved by the State under the cost
 principals identified in 34 CFR 74.171
 and 80.22..
------------------------------------------------------------------------


(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 55 FR 14817, Apr. 18, 1990; 57 FR 30342, July 8, 1992]



Sec. 76.708  When certain subgrantees may begin to obligate funds.

    (a) If the authorizing statute for a program requires a State to
make subgrants on the basis of a formula (see Sec. 76.5), the State may
not authorize an applicant for a subgrant to obligate funds until the
later of the following two dates:
    (1) The date that the State may begin to obligate funds under Sec.
76.703; or
    (2) The date that the applicant submits its application to the State
in substantially approvable form.
    (b) Reimbursement for obligations under paragraph (a) of this
section is

[[Page 193]]

subject to final approval of the application.
    (c) If the authorizing statute for a program gives the State
discretion to select subgrantees, the State may not authorize an
applicant for a subgrant to obligate funds until the subgrant is made.
However, the State may approve pre-agreement costs in accordance with
the cost principles that are appended to 34 CFR part 74 (Appendices C-
F).

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980.
Further redesignated at 60 FR 41295, Aug. 11, 1995]



Sec. 76.709  Funds may be obligated during a ``carryover period.''

    (a) If a State or a subgrantee does not obligate all of its grant or
subgrant funds by the end of the fiscal year for which Congress
appropriated the funds, it may obligate the remaining funds during a
carryover period of one additional fiscal year.
    (b) The State shall return to the Federal Government any carryover
funds not obligated by the end of the carryover period by the State and
its subgrantees.
    Note: This section is based on a provision in the General Education
Provisions Act (GEPA). Section 427 of the Department of Education
Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the
extent inconsistent with the DEOA, the GEPA ``shall apply to functions
transferred by this Act to the extent applicable on the day preceding
the effective date of this Act.'' Although standardized nomenclature is
used in this section to reflect the creation of the Department of
Education, there is no intent to extend the coverage of the GEPA beyond
that authorized under section 427 or other applicable law.

(Authority: U.S.C. 1221e-3, 1225(b), and 3474)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86296, Dec. 30, 1980. Redesignated at 60 FR 41295,
Aug. 11, 1995]



Sec. 76.710  Obligations made during a carryover period are subject
to current statutes, regulations, and applications.

    A State and a subgrantee shall use carryover funds in accordance
with:
    (a) The Federal statutes and regulations that apply to the program
and are in effect for the carryover period; and
    (b) Any State plan, or application for a subgrant, that the State or
subgrantee is required to submit for the carryover period.
    Note: This section is based on a provision in the General Education
Provisions Act (GEPA). Section 427 of the Department of Education
Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the
extent inconsistent with the DEOA, the GEPA ``shall apply to functions
transferred by this Act to the extent applicable on the day preceding
the effective date of this Act.'' Although standardized nomenclature is
used in this section to reflect the creation of the Department of
Education, there is no intent to extend the coverage of the GEPA beyond
that authorized under section 427 or other applicable law.

(Authority: U.S.C. 1221e-3, 1225(b), and 3474)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86296, Dec. 30, 1980. Redesignated at 60 FR 41295,
Aug. 11, 1995]



Sec. 76.711  Requesting funds by CFDA number.

    If a program is listed in the Catalog of Federal Domestic Assistance
(CFDA), a State, when requesting funds under the program, shall identify
that program by the CFDA number.

(Authority: 20 U.S.C. 1221e-3, 6511(a), 3474, 31 U.S.C. 6503)

[60 FR 41296, Aug. 11, 1995]

                                 Reports



Sec. 76.720  State reporting requirements.

    (a) This section applies to a State's reports required under 34 CFR
80.40 (Monitoring and reporting of program performance) and 34 CFR 80.41
(Financial reporting), and other reports required by the Secretary and
approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
    (b) A State must submit these reports annually unless--
    (1) The Secretary allows less frequent reporting; or
    (2) The Secretary requires a State to report more frequently than
annually, including reporting under 34 CFR 80.12 (Special grant or
subgrant conditions for ``high-risk'' grantees) or 34 CFR

[[Page 194]]

80.20 (Standards for financial management systems).
    (c)(1) A State must submit these reports in the manner prescribed by
the Secretary, including submitting any of these reports electronically
and at the quality level specified in the data collection instrument.
    (2) Failure by a State to submit reports in accordance with
paragraph (c)(1) of this section constitutes a failure, under section
454 of the General Education Provisions Act, 20 U.S.C. 1234c, to comply
substantially with a requirement of law applicable to the funds made
available under that program.
    (3) For reports that the Secretary requires to be submitted in an
electronic manner, the Secretary may establish a transition period of up
to two years following the date the State otherwise would be required to
report the data in the electronic manner, during which time a State will
not be required to comply with that specific electronic submission
requirement, if the State submits to the Secretary--
    (i) Evidence satisfactory to the Secretary that the State will not
be able to comply with the electronic submission requirement specified
by the Secretary in the data collection instrument on the first date the
State otherwise would be required to report the data electronically;
    (ii) Information requested in the report through an alternative
means that is acceptable to the Secretary, such as through an
alternative electronic means; and
    (iii) A plan for submitting the reports in the required electronic
manner and at the level of quality specified in the data collection
instrument no later than the date two years after the first date the
State otherwise would be required to report the data in the electronic
manner prescribed by the Secretary.

(Authority: 20 U.S.C. 1221e-3, 1231a, and 3474)

[72 FR 3702, Jan. 25, 2007]



Sec. 76.722  Subgrantee reporting requirements.

    A State may require a subgrantee to submit reports in a manner and
format that assists the State in complying with the requirements under
34 CFR 76.720 and in carrying out other responsibilities under the
program.

(Authority: 20 U.S.C. 1221e-3, 1231a, and 3474)

[72 FR 3703, Jan. 25, 2007]

                                 Records



Sec. 76.730  Records related to grant funds.

    A State and a subgrantee shall keep records that fully show:
    (a) The amount of funds under the grant or subgrant;
    (b) How the State or subgrantee uses the funds;
    (c) The total cost of the project;
    (d) The share of that cost provided from other sources; and
    (e) Other records to facilitate an effective audit.

(Approved by the Office of Management and Budget under control number
1880-0513)

(Authority: 20 U.S.C. 1232f)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 53 FR 49143, Dec. 6, 1988]



Sec. 76.731  Records related to compliance.

    A State and a subgrantee shall keep records to show its compliance
with program requirements.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

                                 Privacy



Sec. 76.740  Protection of and access to student records; student
rights in research, experimental programs, and testing.

    (a) Most records on present or past students are subject to the
requirements of section 438 of GEPA and its implementing regulations
under 34 CFR part 99. (Section 438 is the Family Educational Rights and
Privacy Act of 1974.)
    (b) Under most programs administered by the Secretary, research,
experimentation, and testing are subject to the requirements of section
439 of

[[Page 195]]

GEPA and its implementing regulations at 34 CFR part 98.

(Authority: 20 U.S.C. 1221e-3, 1232g, 1232h, 3474, and 6511(a))

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 57 FR 30342, July 8, 1992]

                 Use of Funds by States and Subgrantees



Sec. 76.760  More than one program may assist a single activity.

    A State or a subgrantee may use funds under more than one program to
support different parts of the same project if the State or subgrantee
meets the following conditions:
    (a) The State or subgrantee complies with the requirements of each
program with respect to the part of the project assisted with funds
under that program.
    (b) The State or subgrantee has an accounting system that permits
identification of the costs paid for under each program.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.761  Federal funds may pay 100 percent of cost.

    A State or a subgrantee may use program funds to pay up to 100
percent of the cost of a project if:
    (a) The State or subgrantee is not required to match the funds; and
    (b) The project can be assisted under the authorizing statute and
implementing regulations for the program.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))

                  State Administrative Responsibilities



Sec. 76.770  A State shall have procedures to ensure compliance.

    Each State shall have procedures for reviewing and approving
applications for subgrants and amendments to those applications, for
providing technical assistance, for evaluating projects, and for
performing other administrative responsibilities the State has
determined are necessary to ensure compliance with applicable statutes
and regulations.

(Authority: 20 U.S.C. 1221e-3 and 3474)

[57 FR 30342, July 8, 1992]



Sec. 76.783  State educational agency action--subgrantee's opportunity
for a hearing.

    (a) A subgrantee may request a hearing if it alleges that any of the
following actions by the State educational agency violated a State or
Federal statute or regulation:
    (1) Ordering, in accordance with a final State audit resolution
determination, the repayment of misspent or misapplied Federal funds; or
    (2) Terminating further assistance for an approved project.
    (b) The procedures in Sec. 76.401(d)(2)-(7) apply to any request
for a hearing under this section.
    Note: This section is based on a provision in the General Education
Provisions Act (GEPA). Section 427 of the Department of Education
Organization Act (DEOA), 20 U.S.C. 3487, provides that except to the
extent inconsistent with the DEOA, the GEPA ``shall apply to functions
transferred by this Act to the extent applicable on the day preceding
the effective date of this Act.'' Although standardized nomenclature is
used in this section to reflect the creation of the Department of
Education, there is no intent to extend the coverage of the GEPA beyond
that authorized under section 427 or other applicable law.

(Authority: 20 U.S.C. 1231b-2)

[45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980,
as amended at 45 FR 86296, Dec. 30, 1980; 57 FR 30342, July 8, 1992]



Subpart H_How Does a State or Local Educational Agency Allocate Funds to
                            Charter Schools?

    Source: 64 FR 71965, Dec. 22, 1999, unless otherwise noted.

                                 General



Sec. 76.785  What is the purpose of this subpart?

    The regulations in this subpart implement section 10306 of the
Elementary and Secondary Education Act of 1965 (ESEA), which requires
States to take measures to ensure that each

[[Page 196]]

charter school in the State receives the funds for which it is eligible
under a covered program during its first year of operation and during
subsequent years in which the charter school expands its enrollment.

(Authority: 20 U.S.C. 8065a)



Sec. 76.786  What entities are governed by this subpart?

    The regulations in this subpart apply to--
    (a) State educational agencies (SEAs) and local educational agencies
(LEAs) that fund charter schools under a covered program, including SEAs
and LEAs located in States that do not participate in the Department's
Public Charter Schools Program;
    (b) State agencies that are not SEAs, if they are responsible for
administering a covered program. State agencies that are not SEAs must
comply with the provisions in this subpart that are applicable to SEAs;
and
    (c) Charter schools that are scheduled to open or significantly
expand their enrollment during the academic year and wish to participate
in a covered program.

(Authority: 20 U.S.C. 8065a)



Sec. 76.787  What definitions apply to this subpart?

    For purposes of this subpart--
    Academic year means the regular school year (as defined by State
law, policy, or practice) and for which the State allocates funds under
a covered program.
    Charter school has the same meaning as provided in title X, part C
of the ESEA.
    Charter school LEA means a charter school that is treated as a local
educational agency for purposes of the applicable covered program.
    Covered program means an elementary or secondary education program
administered by the Department under which the Secretary allocates funds
to States on a formula basis, except that the term does not include a
program or portion of a program under which an SEA awards subgrants on a
discretionary, noncompetitive basis.
    Local educational agency has the same meaning for each covered
program as provided in the authorizing statute for the program.
    Significant expansion of enrollment means a substantial increase in
the number of students attending a charter school due to a significant
event that is unlikely to occur on a regular basis, such as the addition
of one or more grades or educational programs in major curriculum areas.
The term also includes any other expansion of enrollment that the SEA
determines to be significant.

(Authority: 20 U.S.C. 8065a)

               Reponsibilities for Notice and Information



Sec. 76.788  What are a charter school LEA's responsibilities under
this subpart?

    (a) Notice. At least 120 days before the date a charter school LEA
is scheduled to open or significantly expand its enrollment, the charter
school LEA or its authorized public chartering agency must provide its
SEA with written notification of that date.
    (b) Information. (1) In order to receive funds, a charter school LEA
must provide to the SEA any available data or information that the SEA
may reasonably require to assist the SEA in estimating the amount of
funds the charter school LEA may be eligible to receive under a covered
program.
    (2)(i) Once a charter school LEA has opened or significantly
expanded its enrollment, the charter school LEA must provide actual
enrollment and eligibility data to the SEA at a time the SEA may
reasonably require.
    (ii) An SEA is not required to provide funds to a charter school LEA
until the charter school LEA provides the SEA with the required actual
enrollment and eligibility data.
    (c) Compliance. Except as provided in Sec. 76.791(a), or the
authorizing statute or implementing regulations for the applicable
covered program, a charter school LEA must establish its eligibility and
comply with all applicable program requirements on the same basis as
other LEAs.

(Approved by the Office of Management and Budget under control number
1810-0623)

(Authority: 20 U.S.C. 8065a)

[[Page 197]]



Sec. 76.789  What are an SEA's responsibilities under this subpart?

    (a) Information. Upon receiving notice under Sec. 76.788(a) of the
date a charter school LEA is scheduled to open or significantly expand
its enrollment, an SEA must provide the charter school LEA with timely
and meaningful information about each covered program in which the
charter school LEA may be eligible to participate, including notice of
any upcoming competitions under the program.
    (b) Allocation of Funds. (1) An SEA must allocate funds under a
covered program in accordance with this subpart to any charter school
LEA that--
    (i) Opens for the first time or significantly expands its enrollment
during an academic year for which the State awards funds by formula or
through a competition under the program;
    (ii) In accordance with Sec. 76.791(a), establishes its eligibility
and complies with all applicable program requirements; and
    (iii) Meets the requirements of Sec. 76.788(a).
    (2) In order to meet the requirements of this subpart, an SEA may
allocate funds to, or reserve funds for, an eligible charter school LEA
based on reasonable estimates of projected enrollment at the charter
school LEA.
    (3)(i) The failure of an eligible charter school LEA or its
authorized public chartering agency to provide notice to its SEA in
accordance with Sec. 76.788(a) relieves the SEA of any obligation to
allocate funds to the charter school within five months.
    (ii) Except as provided in Sec. 76.792(c), an SEA that receives
less than 120 days' actual notice of the date an eligible charter school
LEA is scheduled to open or significantly expand its enrollment must
allocate funds to the charter school LEA on or before the date the SEA
allocates funds to LEAs under the applicable covered program for the
succeeding academic year.
    (iii) The SEA may provide funds to the charter school LEA from the
SEA's allocation under the applicable covered program for the academic
year in which the charter school LEA opened or significantly expanded
its enrollment, or from the SEA's allocation under the program for the
succeeding academic year.

(Approved by the Office of Management and Budget under control number
1810-0623)

(Authority: 20 U.S.C. 8065a)

            Allocation of Funds by State Educational Agencies



Sec. 76.791  On what basis does an SEA determine whether a charter
school LEA that opens or significantly expands its enrollment is

eligible to receive funds under a covered program?

    (a) For purposes of this subpart, an SEA must determine whether a
charter school LEA is eligible to receive funds under a covered program
based on actual enrollment or other eligibility data for the charter
school LEA on or after the date the charter school LEA opens or
significantly expands its enrollment.
    (b) For the year the charter school LEA opens or significantly
expands its enrollment, the eligibility determination may not be based
on enrollment or eligibility data from a prior year, even if the SEA
makes eligibility determinations for other LEAs under the program based
on enrollment or eligibility data from a prior year.

(Authority: 20 U.S.C. 8065a)



Sec. 76.792  How does an SEA allocate funds to eligible charter school
LEAs under a covered program in which the SEA awards subgrants on a

formula basis?

    (a) For each eligible charter school LEA that opens or significantly
expands its enrollment on or before November 1 of an academic year, the
SEA must implement procedures that ensure that the charter school LEA
receives the proportionate amount of funds for which the charter school
LEA is eligible under each covered program.
    (b) For each eligible charter school LEA that opens or significantly
expands its enrollment after November 1 but before February 1 of an
academic year, the SEA must implement procedures that ensure that the
charter school LEA receives at least a pro rata portion of the
proportionate amount of funds for which the charter school LEA is
eligible under each covered program.

[[Page 198]]

The pro rata amount must be based on the number of months or days during
the academic year the charter school LEA will participate in the program
as compared to the total number of months or days in the academic year.
    (c) For each eligible charter school LEA that opens or significantly
expands its enrollment on or after February 1 of an academic year, the
SEA may implement procedures to provide the charter school LEA with a
pro rata portion of the proportionate amount of funds for which the
charter school LEA is eligible under each covered program.

(Authority: 20 U.S.C. 8065a)



Sec. 76.793  When is an SEA required to allocate funds to a charter
school LEA under this subpart?

    Except as provided in Sec. Sec. 76.788(b) and 76.789(b)(3):
    (a) For each eligible charter school LEA that opens or significantly
expands its enrollment on or before November 1 of an academic year, the
SEA must allocate funds to the charter school LEA within five months of
the date the charter school LEA opens or significantly expands its
enrollment; and
    (b)(1) For each eligible charter school LEA that opens or
significantly expands its enrollment after November 1, but before
February 1 of an academic year, the SEA must allocate funds to the
charter school LEA on or before the date the SEA allocates funds to LEAs
under the applicable covered program for the succeeding academic year.
    (2) The SEA may provide funds to the charter school LEA from the
SEA's allocation under the program for the academic year in which the
charter school LEA opened or significantly expanded its enrollment, or
from the SEA's allocation under the program for the succeeding academic
year.

(Authority: 20 U.S.C. 8065a)



Sec. 76.794  How does an SEA allocate funds to charter school LEAs
under a covered program in which the SEA awards subgrants on a

discretionary basis?

    (a) Competitive programs. (1) For covered programs in which the SEA
awards subgrants on a competitive basis, the SEA must provide each
eligible charter school LEA in the State that is scheduled to open on or
before the closing date of any competition under the program a full and
fair opportunity to apply to participate in the program.
    (2) An SEA is not required to delay the competitive process in order
to allow a charter school LEA that has not yet opened or significantly
expanded its enrollment to compete for funds under a covered program.
    (b) Noncompetitive discretionary programs. The requirements in this
subpart do not apply to discretionary programs or portions of programs
under which the SEA does not award subgrants through a competition.

(Authority: 20 U.S.C. 8065a)

                               Adjustments



Sec. 76.796  What are the consequences of an SEA allocating more or
fewer funds to a charter school LEA under a covered program than the

amount for which the charter school LEA is eligible when the charter
school LEA actually opens or significantly expands its enrollment?

    (a) An SEA that allocates more or fewer funds to a charter school
LEA than the amount for which the charter school LEA is eligible, based
on actual enrollment or eligibility data when the charter school LEA
opens or significantly expands its enrollment, must make appropriate
adjustments to the amount of funds allocated to the charter school LEA
as well as to other LEAs under the applicable program.
    (b) Any adjustments to allocations to charter school LEAs under this
subpart must be based on actual enrollment or other eligibility data for
the charter school LEA on or after the date the charter school LEA first
opens or significantly expands its enrollment, even if allocations or
adjustments to allocations to other LEAs in the State are based on
enrollment or eligibility data from a prior year.

(Authority: 20 U.S.C. 8065a)

[[Page 199]]



Sec. 76.797  When is an SEA required to make adjustments to
allocations under this subpart?

    (a) The SEA must make any necessary adjustments to allocations under
a covered program on or before the date the SEA allocates funds to LEAs
under the program for the succeeding academic year.
    (b) In allocating funds to a charter school LEA based on adjustments
made in accordance with paragraph (a) of this section, the SEA may use
funds from the SEA's allocation under the applicable covered program for
the academic year in which the charter school LEA opened or
significantly expanded its enrollment, or from the SEA's allocation
under the program for the succeeding academic year.

(Authority: 20 U.S.C. 8065a)

       Applicability of This Subpart to Local Educational Agencies



Sec. 76.799  Do the requirements in this subpart apply to LEAs?

    (a) Each LEA that is responsible for funding a charter school under
a covered program must comply with the requirements in this subpart on
the same basis as SEAs are required to comply with the requirements in
this subpart.
    (b) In applying the requirements in this subpart (except for
Sec. Sec. 76.785, 76.786, and 76.787) to LEAs, references to SEA (or
State), charter school LEA, and LEA must be read as references to LEA,
charter school, and public school, respectively.

(Authority: 20 U.S.C. 8065a)



   Subpart I_What Procedures Does the Secretary Use To Get Compliance?

    Source: 45 FR 22517, Apr. 3, 1980, unless otherwise noted.
Redesignated at 45 FR 77368, Nov. 21, 1980, and further redesignated at
64 FR 71965, Dec. 22, 1999.



Sec. 76.900  Waiver of regulations prohibited.

    (a) No official, agent, or employee of ED may waive any regulation
that applies to a Department program unless the regulation specifically
provide that it may be waived.
    (b) No act or failure to act by an official, agent, or employee of
ED can affect the authority of the Secretary to enforce regulations.

(Authority: 43 Dec. Comp. Gen. 31(1963))



Sec. 76.901  Office of Administrative Law Judges.

    (a) The Office of Administrative Law Judges, established under Part
E of GEPA, has the following functions:
    (1) Recovery of funds hearings under section 452 of GEPA.
    (2) Withholding hearings under section 455 of GEPA.
    (3) Cease and desist hearings under section 456 of GEPA.
    (4) Any other proceeding designated by the Secretary under section
451 of GEPA.
    (b) The regulations of the Office of Administrative Law Judges are
at 34 CFR part 81.

(Authority: 20 U.S.C. 1234)

[57 FR 30342, July 8, 1992]



Sec. 76.902  Judicial review.

    After a hearing by the Secretary, a State is usually entitled--
generally by the statute that required the hearing--to judicial review
of the Secretary's decision.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6511(a))



Sec. 76.910  Cooperation with audits.

    A grantee or subgrantee shall cooperate with the Secretary and the
Comptroller General of the United States or any of their authorized
representatives in the conduct of audits authorized by Federal law. This
cooperation includes access without unreasonable restrictions to records
and personnel of the grantee or subgrantee for the purpose of obtaining
relevant information.

(Authority: 5 U.S.C. appendix 3, sections 4(a)(1), 4(b)(1)(A), and
6(a)(1); 20 U.S.C. 1221e-3(a)(1), 1232f)

[54 FR 21776, May 19, 1989]



PART 77_DEFINITIONS THAT APPLY TO DEPARTMENT REGULATIONS--Table of
Contents



    Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.

[[Page 200]]



Sec. 77.1  Definitions that apply to all Department programs.

    (a) [Reserved]
    (b) Unless a statute or regulation provides otherwise, the following
definitions in part 74 or 80 of this title apply to the regulations in
title 34 of the Code of Federal Regulations. The section of part 74 or
80 that contains the definition is given in parentheses.

Award (Sec. 74.2)
Contract (includes definition of ``Subcontract'') (Sec. 74.2) (Sec.
80.3)
Equipment (Sec. 74.2) (Sec. 80.3)
Grant (Sec. 80.3)
Personal property (Sec. 74.2)
Project period (Sec. 74.2)
Real property (Sec. 74.2) (Sec. 80.3)
Recipient (Sec. 74.2)
Supplies (Sec. 74.2) (Sec. 80.3)

    (c) Unless a statute or regulation provides otherwise, the following
definitions also apply to the regulations in this title:
    Acquisition means taking ownership of property, receiving the
property as a gift, entering into a lease-purchase arrangement, or
leasing the property. The term includes processing, delivery, and
installation of property.
    Ambitious means promoting continued, meaningful improvement for
program participants or for other individuals or entities affected by
the grant, or representing a significant advancement in the field of
education research, practices, or methodologies. When used to describe a
performance target, whether a performance target is ambitious depends
upon the context of the relevant performance measure and the baseline
for that measure.
    Applicant means a party requesting a grant or subgrant under a
program of the Department.
    Application means a request for a grant or subgrant under a program
of the Department.
    Baseline means the starting point from which performance is measured
and targets are set.
    Budget means that recipient's financial plan for carrying out the
project or program.
    Budget period means an interval of time into which a project period
is divided for budgetary purposes.
    Department means the U.S. Department of Education.
    Director of the Institute of Musuem Services means the Director of
the Institute of Museum Services or an officer or employee of the
Institute of Museum Services acting for the Director under a delegation
of authority.
    Director of the National Institute of Education means the Director
of the National Institute of Education or an officer or employee of the
National Institute of Education acting for the Director under a
delegation of authority.
    ED means the U.S. Department of Education.
    EDGAR means the Education Department General Administrative
Regulations (34 CFR parts 74, 75, 76, 77, 79, 80, 81, 82, 84, 86, 97,
98, and 99).
    Elementary school means a day or residential school that provides
elementary education, as determined under State law.
    Evidence of promise means there is empirical evidence to support the
theoretical linkage(s) between at least one critical component and at
least one relevant outcome presented in the logic model for the proposed
process, product, strategy, or practice. Specifically, evidence of
promise means the conditions in paragraphs (a) and (b) of this section
are met:
    (i) There is at least one study that is a--
    (A) Correlational study with statistical controls for selection
bias;
    (B) Quasi-experimental study that meets the What Works Clearinghouse
Evidence Standards with reservations; \1\ or
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    (C) Randomized controlled trial that meets the What Works
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    (ii) The study referenced in paragraph (a) found a statistically
significant or substantively important (defined as a difference of 0.25
standard deviations or larger), favorable association between at least
one critical component and one relevant outcome presented in the logic
model for the proposed process, product, strategy, or practice.
    Facilities means one or more structures in one or more locations.
    Fiscal year means the Federal fiscal year--a period beginning on
October 1 and ending on the following September 30.
    GEPA means The General Education Provisions Act.
    Grant period means the period for which funds have been awarded.
    Grantee means the legal entity other than a Government subject to 34
CFR part 80 to which a grant is awarded and which is accountable to the
Federal Government for the use of the funds provided. The grantee is the
entire legal entity even if only a particular component of the entity is
designated in the award document. For example, a grant award document
may name as the grantee one school or campus of a university. In this
case, the granting agency usually intends, or actually intends, that the
named component assume primary or sole responsibility for administering
the grant-assisted project or program. Nevertheless, the naming of a
component of a legal entity as the grantee in a grant award document
shall not be construed as relieving the whole legal entity from
accountability to the Federal Government for the use of the funds
provided. (This definition is not intended to affect the eligibility
provision of grant programs in which eligibility is limited to
organizations which may be only components of a legal entity.) The term
``grantee'' does not include any secondary recipients such as
subgrantees, contractors, etc., who may receive funds from a grantee
pursuant to a grant. The definition of ``grantee'' for State, local, and
tribal governments is contained in 34 CFR 80.3.
    Large sample means an analytic sample of 350 or more students (or
other single analysis units) who were randomly assigned to a treatment
or control group or 50 or more groups (such as classrooms or schools)
that contain 10 or more students (or other single analysis units) and
that were randomly assigned to a treatment or control group.
    Local educational agency means:
    (a) A public board of education or other public authority legally
constituted within a State for either administrative control of or
direction of, or to perform service functions for, public elementary or
secondary schools in:
    (1) A city, county, township, school district, or other political
subdivision of a State; or
    (2) Such combination of school districts or counties a State
recognizes as an administrative agency for its public elementary or
secondary schools; or
    (b) Any other public institution or agency that has administrative
control and direction of a public elementary or secondary school.
    (c) As used in 34 CFR parts 400, 408, 525, 526 and 527 (vocational
education programs), the term also includes any other public institution
or agency that has administrative control and direction of a vocational
education program.
    Logic model (also referred to as theory of action) means a well-
specified conceptual framework that identifies key components of the
proposed process, product, strategy, or practice (i.e., the active
``ingredients'' that are hypothesized to be critical to achieving the
relevant outcomes) and describes the relationships among the key
components and outcomes, theoretically and operationally.
    Minor remodeling means minor alterations in a previously completed
building. The term also includes the extension of utility lines, such as
water and electricity, from points beyond the confines of the space in
which the minor remodeling is undertaken but within the confines of the
previously completed building. The term does not include building
construction, stuctural alterations to buildings, building maintenance,
or repairs.
    Moderate evidence of effectiveness means one of the following
conditions is met:
    (i) There is at least one study of the effectiveness of the process,
product,

[[Page 202]]

strategy, or practice being proposed that meets the What Works
Clearinghouse Evidence Standards without reservations,\3\ found a
statistically significant favorable impact on a relevant outcome (with
no statistically significant and overriding unfavorable impacts on that
outcome for relevant populations in the study or in other studies of the
intervention reviewed by and reported on by the What Works
Clearinghouse), and includes a sample that overlaps with the populations
or settings proposed to receive the process, product, strategy, or
practice.
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    (ii) There is at least one study of the effectiveness of the
process, product, strategy, or practice being proposed that meets the
What Works Clearinghouse Evidence Standards with reservations,\4\ found
a statistically significant favorable impact on a relevant outcome (with
no statistically significant and overriding unfavorable impacts on that
outcome for relevant populations in the study or in other studies of the
intervention reviewed by and reported on by the What Works
Clearinghouse), includes a sample that overlaps with the populations or
settings proposed to receive the process, product, strategy, or
practice, and includes a large sample and a multi-site sample (Note:
multiple studies can cumulatively meet the large and multi-site sample
requirements as long as each study meets the other requirements in this
paragraph).
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    Multi-site sample means more than one site, where site can be
defined as an LEA, locality, or State.
    National level describes the level of scope or effectiveness of a
process, product, strategy, or practice that is able to be effective in
a wide variety of communities, including rural and urban areas, as well
as with different groups (e.g., economically disadvantaged, racial and
ethnic groups, migrant populations, individuals with disabilities,
English learners, and individuals of each gender).
    Nonprofit, as applied to an agency, organization, or institution,
means that it is owned and operated by one or more corporations or
associations whose net earnings do not benefit, and cannot lawfully
benefit, any private shareholder or entity.
    Nonpublic, as applied to an agency, organization, or institution,
means that the agency, organization, or institution is nonprofit and is
not under Federal or public supervision or control.
    Performance measure means any quantitative indicator, statistic, or
metric used to gauge program or project performance.
    Performance target means a level of performance that an applicant
would seek to meet during the course of a project or as a result of a
project.
    Preschool means the educational level from a child's birth to the
time at which the State provides elementary education.
    Private, as applied to an agency, organization, or institution,
means that it is not under Federal or public supervision or control.
    Project means the activity described in an application.
    Public, as applied to an agency, organization, or institution, means
that the agency, organization, or institution is under the
administrative supervision or control of a government other than the
Federal Government.
    Quasi-experimental design study means a study using a design that
attempts to approximate an experimental design by identifying a
comparison group that is similar to the treatment group in important
respects. These studies, depending on design and implementation, can
meet What Works Clearinghouse Evidence Standards with reservations \5\
(they cannot meet What Works Clearinghouse Evidence Standards without
reservations).
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    Randomized controlled trial means a study that employs random
assignment

[[Page 203]]

of, for example, students, teachers, classrooms, schools, or districts
to receive the intervention being evaluated (the treatment group) or not
to receive the intervention (the control group). The estimated
effectiveness of the intervention is the difference between the average
outcome for the treatment group and for the control group. These
studies, depending on design and implementation, can meet What Works
Clearinghouse Evidence Standards without reservations.\6\
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    Regional level describes the level of scope or effectiveness of a
process, product, strategy, or practice that is able to serve a variety
of communities within a State or multiple States, including rural and
urban areas, as well as with different groups (e.g., economically
disadvantaged, racial and ethnic groups, migrant populations,
individuals with disabilities, English learners, and individuals of each
gender). For an LEA-based project, to be considered a regional-level
project, a process, product, strategy, or practice must serve students
in more than one LEA, unless the process, product, strategy, or practice
is implemented in a State in which the State educational agency is the
sole educational agency for all schools.
    Relevant outcome means the student outcome(s) (or the ultimate
outcome if not related to students) the proposed process, product,
strategy, or practice is designed to improve; consistent with the
specific goals of a program.
    Secondary school means a day or residential school that provides
secondary education as determined under State law. In the absence of
State law, the Secretary may determine, with respect to that State,
whether the term includes education beyond the twelfth grade.
    Secretary means the Secretary of the Department of Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.
    Service function, with respect to a local educational agency:
    (a) Means an educational service that is performed by a legal
entity--such as an intermediate agency:
    (1)(i) Whose jurisdiction does not extend to the whole State; and
    (ii) That is authorized to provide consultative, advisory, or
educational services to public elementary or secondary schools; or
    (2) That has regulatory functions over agencies having
administrative control or direction of public elementary or secondary
schools.
    (b) The term does not include a service that is performed by a
cultural or educational resource.
    State means any of the 50 States, the Commonwealth of Puerto Rico,
the District of Columbia, Guam, American Samoa, the Virgin Islands, the
Northern Mariana Islands, or the Trust Territory of the Pacific Islands.
    State educational agency means the State board of education or other
agency or officer primarily responsible for the supervision of public
elementary and secondary schools in a State. In the absence of this
officer or agency, it is an officer or agency designated by the Governor
or State law.
    Strong evidence of effectiveness means one of the following
conditions is met:
    (i) There is at least one study of the effectiveness of the process,
product, strategy, or practice being proposed that meets the What Works
Clearinghouse Evidence Standards without reservations,\7\ found a
statistically significant favorable impact on a relevant outcome (with
no statistically significant and overriding unfavorable impacts on that
outcome for relevant populations in the study or in other studies of the
intervention reviewed by and reported on by the What Works
Clearinghouse), includes a sample that overlaps with the populations and
settings proposed to receive the process, product, strategy, or
practice, and includes a large sample and a multi-site sample (Note:
multiple studies can cumulatively meet the large and multi-site sample
requirements as long as

[[Page 204]]

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    (ii) There are at least two studies of the effectiveness of the
process, product, strategy, or practice being proposed, each of which:
Meets the What Works Clearinghouse Evidence Standards with
reservations,\8\ found a statistically significant favorable impact on a
relevant outcome (with no statistically significant and overriding
unfavorable impacts on that outcome for relevant populations in the
studies or in other studies of the intervention reviewed by and reported
on by the What Works Clearinghouse), includes a sample that overlaps
with the populations and settings proposed to receive the process,
product, strategy, or practice, and includes a large sample and a multi-
site sample.
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    Strong theory means a rationale for the proposed process, product,
strategy, or practice that includes a logic model.
    Work of art means an item that is incorporated into facilities
primarily because of its aesthetic value.

(Authority: 20 U.S.C. 1221e-3(a)(1), 2831(a), 2974(b), and 3474)

[45 FR 22529, Apr. 3, 1980, as amended at 45 FR 37442, June 3, 1980.
Redesignated at 45 FR 77368, Nov. 21, 1980, as amended at 45 FR 86298,
Dec. 30, 1980; 54 FR 21776, May 19, 1989; 57 FR 30342, July 8, 1992; 59
FR 34739, July 6, 1994; 64 FR 50392, Sept. 16, 1999; 77 FR 18679, Mar.
28, 2012; 78 FR 49355, Aug. 13, 2013]



PART 79_INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF EDUCATION PROGRAMS
AND ACTIVITIES--Table of Contents



Sec.
79.1 What is the purpose of these regulations?
79.2 What definitions apply to these regulations?
79.3 What programs and activities of the Department are subject to these
          regulations?
79.4 What are the Secretary's general responsibilities under the Order?
79.5 What is the Secretary's obligation with respect to Federal
          interagency coordinations?
79.6 What procedures apply to the selection of programs and activities
          under these regulations?
79.7 How does the Secretary communicate with State and local officials
          concerning the Department's programs and activities?
79.8 How does the Secretary provide States an opportunity to comment on
          proposed Federal financial assistance?
79.9 How does the Secretary receive and respond to comments?
79.10 How does the Secretary make efforts to accommodate
          intergovernmental concerns?
79.11 What are the Secretary's obligations in interstate situations?
79.12 How may a State simplify, consolidate, or substitute federally
          required State plans?
79.13 [Reserved]

    Authority: 31 U.S.C. 6506; 42 U.S.C. 3334; and E.O. 12372, unless
otherwise noted.

    Source: 48 FR 29166, June 24, 1983, unless otherwise noted.



Sec. 79.1  What is the purpose of these regulations?

    (a) The regulations in this part implement Executive Order 12372,
``Intergovernmental Review of Federal Programs,'' issued July 14, 1982
and amended on April 8, 1983. These regulations also implement
applicable provisions of Section 401 of the Intergovernmental
Cooperation Act of 1968 and Section 204 of the Demonstration Cities and
Metropolitan Development Act of 1966.
    (b) These regulations are intended to foster an intergovernmental
partnership and a strengthened Federalism by relying on state processes
and on state, areawide, regional, and local coordination for review of
proposed federal financial assistance.
    (c) These regulations are intended to aid the internal management of
the Department, and are not intended to create any right or benefit
enforceable at law by a party against the Department or its officers.

(Authority: E.O. 12372)



Sec. 79.2  What definitions apply to these regulations?

    Department means the U.S. Department of Education.

[[Page 205]]

    Order means Executive Order 12372, issued July 14, 1982, amended
April 8, 1983, and titled ``Intergovernmental Review of Federal
Programs.''
    Secretary means the Secretary of the U.S. Department of Education or
an official or employee of the Department acting for the Secretary under
a delegation of authority.
    State means any of the 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana
Islands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust
Territory of the Pacific Islands.

(Authority: E.O. 12372)



Sec. 79.3  What programs and activities of the Department are subject
to these regulations?

    (a) The Secretary publishes in the Federal Register a list of the
Department's programs and activities that are subject to these
regulations and identifies which of these are subject to the
requirements of section 204 of the Demonstration Cities and Metropolitan
Development Act.
    (b) If a program or activity of the Department that provides Federal
financial assistance does not have implementing regulations, the
regulations in this part apply to that program or activity.
    (c) The following programs and activities are excluded from coverage
under this part:
    (1) Proposed legislation.
    (2) Regulation and budget formulation.
    (3) National security matters.
    (4) Procurement.
    (5) Direct payments to individuals.
    (6) Financial transfers for which the Department has no funding
discretion or direct authority to approve specific sites or projects
(e.g., block grants under Chapter 2 of the Education Consolidation and
Improvement Act of 1981).
    (7) Research and development national in scope.
    (8) Assistance to federally recognized Indian tribes.
    (d) In addition to the programs and activities excluded in paragraph
(c) of this section, the Secretary may only exclude a Federal financial
assistance program or activity from coverage under this part if the
program or activity does not directly affect State or local governments.

(Authority: E.O. 12372)

[48 FR 29166, June 24, 1983, as amended at 51 FR 20824, June 9, 1986]



Sec. 79.4  What are the Secretary's general responsibilities under the
Order?

    (a) The Secretary provides opportunities for consultation by elected
officials of those state and local governments that would provide the
nonfederal funds for, or that would be directly affected by, proposed
federal financial assistance from the Department.
    (b) If a state adopts a process under the Order to review and
coordinate proposed federal financial assistance, the Secretary, to the
extent permitted by law:
    (1) Uses the state process to determine official views of state and
local elected officials;
    (2) Communicates with state and local elected officials as early in
a program planning cycle as is reasonably feasible to explain specific
plans and actions;
    (3) Makes efforts to accommodate state and local elected official's
concerns with proposed federal financial assistance that are
communicated through the state process;
    (4) Allows the states to simplify and consolidate existing federally
required state plan submissions;
    (5) Where state planning and budgeting systems are sufficient and
where permitted by law, encourages the substitution of state plans for
federally required state plans;
    (6) Seeks the coordination of views of affected state and local
elected officials in one state with those of another state when proposed
federal financial assistance has an impact on interstate metropolitan
urban centers or other interstate areas; and
    (7) Supports state and local governments by discouraging the
reauthorization or creation of any planning organization which is
federally funded, which has a limited purpose, and which is not
adequately representative of, or

[[Page 206]]

accountable to, state or local elected officials.

(Authority: E.O. 12372, Sec. 2)



Sec. 79.5  What is the Secretary's obligation with respect to Federal
interagency coordination?

    The Secretary, to the maximum extent practicable, consults with and
seeks advice from all other substantially affected federal departments
and agencies in an effort to assure full coordination between such
agencies and the Department regarding programs and activities covered
under these regulations.

(Authority: E.O. 12372)



Sec. 79.6  What procedures apply to the selection of programs and
activities under these regulations?

    (a) A state may select any program or activity published in the
Federal Register in accordance with Sec. 79.3 for intergovernmental
review under these regulations. Each state, before selecting programs
and activities, shall consult with local elected officials.
    (b) Each state that adopts a process shall notify the Secretary of
the Department's programs and activities selected for that process.
    (c) A state may notify the Secretary of changes in its selections at
any time. For each change, the state shall submit to the Secretary an
assurance that the state has consulted with local elected officials
regarding the change. The Department may establish deadlines by which
states are required to inform the Secretary of changes in their program
selections.
    (d) The Secretary uses a state's process as soon as feasible,
depending on individual programs and activities, after the Secretary is
notified of its selections.

(Authority: E.O. 12372, sec. 2)



Sec. 79.7  How does the Secretary communicate with State and local
officials concerning the Department's programs and activities?

    (a) [Reserved]
    (b)(1) The Secretary provides notice to directly affected state,
areawide, regional, and local entities in a state of proposed federal
financial assistance if:
    (i) The state has not adopted a process under the Order; or
    (ii) The assistance involves a program or activity not selected for
the state process.
    (2) This notice may be made by publication in the Federal Register
or other means which the Secretary determine appropriate.

(Authority: E.O. 12372, Sec. 2)



Sec. 79.8  How does the Secretary provide States an opportunity to
comment on proposed Federal financial assistance?

    (a) Except in unusual circumstances, the Secretary gives State
processes or directly affected State, areawide, regional, and local
officials and entities--
    (1) At least 30 days to comment on proposed Federal financial
assistance in the form of noncompeting continuation awards; and
    (2) At least 60 days to comment on proposed Federal financial
assistance other than noncompeting continuation awards.
    (b) The Secretary establishes a date for mailing or hand-delivering
comments under paragraph (a) of this section using one of the following
two procedures:
    (1) If the comments relate to continuation award applications, the
Secretary notifies each applicant and each State Single Point of Contact
(SPOC) of the date by which SPOC comments should be submitted.
    (2) If the comments relate to applications for new grants, the
Secretary establishes the date in a notice published in the Federal
Register.
    (c) This section also applies to comments in cases in which the
review, coordination, and communication with the Department have been
delegated.
    (d) Applicants for programs and activities subject to Section 204 of
the Demonstration Cities and Metropolitan Act shall allow areawide
agencies a 60-day opportunity for review and comment.

(Authority: E.O. 12372, Sec. 2)

[48 FR 29166, June 24, 1983, as amended at 51 FR 20825, June 9, 1986]

[[Page 207]]



Sec. 79.9  How does the Secretary receive and respond to comments?

    (a) The Secretary follows the procedure in Sec. 79.10 if:
    (1) A state office or official is designated to act as a single
point of contact between a state process and all federal agencies, and
    (2) That office or official transmits a State process
recommendation, and identifies it as such, for a program selected under
Sec. 79.6.
    (b)(1) The single point of contact is not obligated to transmit
comments from state, areawide, regional, or local officials and entities
if there is no state process recommendation.
    (2) If a state process recommendation is transmitted by a single
point of contact, all comments from state, areawide, regional, and local
officials and entities that differ from it must also be transmitted.
    (c) If a state has not established a process, or is unable to submit
a state process recommendation, state, areawide, regional, and local
officials and entities may submit comments to the Department.
    (d) If a program or activity is not selected for a state process,
state, areawide, regional, and local officials and entities may submit
comments to the Department. In addition, if a state process
recommendation for a nonselected program or activity is transmitted to
the Department by the single point of contact, the Secretary follows the
procedures of Sec. 79.10.
    (e) The Secretary considers comments which do not constitute a state
process recommendation submitted under these regulations and for which
the Secretary is not required to apply the procedures of Sec. 79.10 of
this part, if those comments are provided by a single point of contact,
or directly to the Department by a commenting party.

(Authority: E.O. 12372, Sec. 2)

[48 FR 29166, June 24, 1983, as amended at 51 FR 20825, June 9, 1986]



Sec. 79.10  How does the Secretary make efforts to accommodate
intergovernmental concerns?

    (a) If a state process provides a state process recommendation to
the Department through its single point of contact, the Secretary
either:
    (1) Accepts the recommendation;
    (2) Reaches a mutually agreeable solution with the state process; or
    (3) Provides the single point of contact with a written explanation
of the decision in such form as the Secretary deems appropriate. The
Secretary may also supplement the written explanation by providing the
explanation to the single point of contact by telephone, other
telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the
Secretary informs the single point of contact that:
    (1) The Department will not implement its decision for at least ten
days after the single point of contact receives the explanation; or
    (2) The Secretary has reviewed the decision and determined that,
because of unusual circumstances, the waiting period of at least ten
days is not feasible.
    (c) For purposes of computing the waiting period under paragraph
(b)(1) of this section, a single point of contact is presumed to have
received written notification 5 days after the date of mailing of the
notification.

(Authority: E.O. 12372, Sec. 2)



Sec. 79.11  What are the Secretary's obligations in interstate
situations?

    (a) The Secretary is responsible for:
    (1) Identifying proposed federal financial assistance that has an
impact on interstate areas;
    (2) Notifying appropriate officials and entities in states which
have adopted a process and which select the Department's program or
activity.
    (3) Making efforts to identify and notify the affected state,
areawide, regional, and local officials and entities in those states
that have not adopted a process under the Order or do not select the
Department's program or activity;
    (4) Responding under Sec. 79.10 if the Secretary receives a
recommendation from a designated areawide agency transmitted by a single
point of contact, in cases in which the review, coordination, and
communication with the Department have been delegated.

[[Page 208]]

    (b) In an interstate situation subject to this section, the
Secretary uses the procedures in Sec. 79.10 if a state process provides
a state process recommendation to the Department through a single point
of contact.

(Authority: E.O. 12372, Sec. 2(e))



Sec. 79.12  How may a State simplify, consolidate, or substitute
federally required State plans?

    (a) As used in this section:
    (1) Simplify means that a state may develop its own format, choose
its own submission date, and select the planning period for a state
plan.
    (2) Consolidate means that a state may meet statutory and regulatory
requirements by combining two or more plans into one document and that
the state can select the format, submission date, and planning period
for the consolidated plan.
    (3) Substitute means that a state may use a plan or other document
that it has developed for its own purposes to meet Federal requirements.
    (b) If not inconsistent with law, a state may decide to try to
simplify, consolidate, or substitute federally required state plans
without prior approval by the Secretary.
    (c) The Secretary reviews each state plan that a state has
simplified, consolidated, or substituted and accepts the plan only if
its contents meet federal requirements.

(Authority: E.O. 12372, sec. 2)



Sec. 79.13  [Reserved]



PART 80_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE
AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents



                            Subpart A_General

Sec.
80.1 Purpose and scope of this part.
80.2 Scope of subpart.
80.3 Definitions.
80.4 Applicability.
80.5 Effect on other issuances.
80.6 Additions and exceptions.

                    Subpart B_Pre-Award Requirements

80.10 Forms for applying for grants.
80.11 State plans.
80.12 Special grant or subgrant conditions for ``high-risk'' grantees.

                    Subpart C_Post-Award Requirements

                        Financial Administration

80.20 Standards for financial management systems.
80.21 Payment.
80.22 Allowable costs.
80.23 Period of availability of funds.
80.24 Matching or cost sharing.
80.25 Program income.
80.26 Non-Federal audit.

                    Changes, Property, and Subawards

80.30 Changes.
80.31 Real property.
80.32 Equipment.
80.33 Supplies.
80.34 Copyrights.
80.35 Subawards to debarred and suspended parties.
80.36 Procurement.
80.37 Subgrants.

               Reports, Records Retention, and Enforcement

80.40 Monitoring and reporting program performance.
80.41 Financial reporting.
80.42 Retention and access requirements for records.
80.43 Enforcement.
80.44 Termination for convenience.

                 Subpart D_After-the-Grant Requirements

80.50 Closeout.
80.51 Later disallowances and adjustments.
80.52 Collections of amounts due.

Subpart E--Entitlement [Reserved]

    Authority: 20 U.S.C. 1221e-3(a)(1) and 3474, OMB Circular A-102,
unless otherwise noted.

    Source: 53 FR 8071, 8087, Mar. 11, 1988, unless otherwise noted.



                            Subpart A_General



Sec. 80.1  Purpose and scope of this part.

    This part establishes uniform administrative rules for Federal
grants and cooperative agreements and subawards to State, local and
Indian tribal governments.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[[Page 209]]



Sec. 80.2  Scope of subpart.

    This subpart contains general rules pertaining to this part and
procedures for control of exceptions from this part.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.3  Definitions.

    As used in this part:
    Accrued expenditures mean the charges incurred by the grantee during
a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subgrantees,
subcontractors, and other payees; and
    (3) Other amounts becoming owed under programs for which no current
services or performance is required, such as annuities, insurance
claims, and other benefit payments.
    Accrued income means the sum of:
    (1) Earnings during a given period from services performed by the
grantee and goods and other tangible property delivered to purchasers,
and
    (2) Amounts becoming owed to the grantee for which no current
services or performance is required by the grantee.
    Acquisition cost of an item of purchased equipment means the net
invoice unit price of the property including the cost of modifications,
attachments, accessories, or auxiliary apparatus necessary to make the
property usable for the purpose for which it was acquired. Other charges
such as the cost of installation, transportation, taxes, duty or
protective in-transit insurance, shall be included or excluded from the
unit acquisition cost in accordance with the grantee's regular
accounting practices.
    Administrative requirements mean those matters common to grants in
general, such as financial management, kinds and frequency of reports,
and retention of records. These are distinguished from programmatic
requirements, which concern matters that can be treated only on a
program-by-program or grant-by-grant basis, such as kinds of activities
that can be supported by grants under a particular program.
    Awarding agency means (1) with respect to a grant, the Federal
agency, and (2) with respect to a subgrant, the party that awarded the
subgrant.
    Cash contributions means the grantee's cash outlay, including the
outlay of money contributed to the grantee or subgrantee by other public
agencies and institutions, and private organizations and individuals.
When authorized by Federal legislation, Federal funds received from
other assistance agreements may be considered as grantee or subgrantee
cash contributions.
    Contract means (except as used in the definitions for grant and
subgrant in this section and except where qualified by Federal) a
procurement contract under a grant or subgrant, and means a procurement
subcontract under a contract.
    Cost sharing or matching means the value of the third party in-kind
contributions and the portion of the costs of a federally assisted
project or program not borne by the Federal Government.
    Cost-type contract means a contract or subcontract under a grant in
which the contractor or subcontractor is paid on the basis of the costs
it incurs, with or without a fee.
    Equipment means tangible, nonexpendable, personal property having a
useful life of more than one year and an acquisition cost of $5,000 or
more per unit. A grantee may use its own definition of equipment
provided that such definition would at least include all equipment
defined above.
    Expenditure report means:
    (1) For nonconstruction grants, the SF-269 ``Financial Status
Report'' (or other equivalent report);
    (2) For construction grants, the SF-271 ``Outlay Report and Request
for Reimbursement'' (or other equivalent report).
    Federally recognized Indian tribal government means the governing
body or a governmental agency of any Indian tribe, band, nation, or
other organized group or community (including any Native village as
defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat
688) certified by the Secretary of the Interior as eligible for the

[[Page 210]]

special programs and services provided by him through the Bureau of
Indian Affairs.
    Government means a State or local government or a federally
recognized Indian tribal government.
    Grant means an award of financial assistance, including cooperative
agreements, in the form of money, or property in lieu of money, by the
Federal Government to an eligible grantee. The term does not include
technical assistance which provides services instead of money, or other
assistance in the form of revenue sharing, loans, loan guarantees,
interest subsidies, insurance, or direct appropriations. Also, the term
does not include assistance, such as a fellowship or other lump sum
award, which the grantee is not required to account for.
    Grantee means the government to which a grant is awarded and which
is accountable for the use of the funds provided. The grantee is the
entire legal entity even if only a particular component of the entity is
designated in the grant award document.
    Local government means a county, municipality, city, town, township,
local public authority (including any public and Indian housing agency
under the United States Housing Act of 1937) school district, special
district, intrastate district, council of governments (whether or not
incorporated as a nonprofit corporation under state law), any other
regional or interstate government entity, or any agency or
instrumentality of a local government.
    Obligations means the amounts of orders placed, contracts and
subgrants awarded, goods and services received, and similar transactions
during a given period that will require payment by the grantee during
the same or a future period.
    OMB means the United States Office of Management and Budget.
    Outlays (expenditures) mean charges made to the project or program.
They may be reported on a cash or accrual basis. For reports prepared on
a cash basis, outlays are the sum of actual cash disbursement for direct
charges for goods and services, the amount of indirect expense incurred,
the value of in-kind contributions applied, and the amount of cash
advances and payments made to contractors and subgrantees. For reports
prepared on an accrued expenditure basis, outlays are the sum of actual
cash disbursements, the amount of indirect expense incurred, the value
of inkind contributions applied, and the new increase (or decrease) in
the amounts owed by the grantee for goods and other property received,
for services performed by employees, contractors, subgrantees,
subcontractors, and other payees, and other amounts becoming owed under
programs for which no current services or performance are required, such
as annuities, insurance claims, and other benefit payments.
    Percentage of completion method refers to a system under which
payments are made for construction work according to the percentage of
completion of the work, rather than to the grantee's cost incurred.
    Prior approval means documentation evidencing consent prior to
incurring specific cost.
    Real property means land, including land improvements, structures
and appurtenances thereto, excluding movable machinery and equipment.
    Share, when referring to the awarding agency's portion of real
property, equipment or supplies, means the same percentage as the
awarding agency's portion of the acquiring party's total costs under the
grant to which the acquisition costs under the grant to which the
acquisition cost of the property was charged. Only costs are to be
counted--not the value of third-party in-kind contributions.
    State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public and Indian housing agency under United States Housing Act of
1937.
    (1) The definition of State in this section is used for the purpose
of determining the scope of part 80 regulations. Some program
regulations contain different definitions for State based on program
statute eligibility requirements.
    Subgrant means an award of financial assistance in the form of
money, or

[[Page 211]]

property in lieu of money, made under a grant by a grantee to an
eligible subgrantee. The term includes financial assistance when
provided by contractual legal agreement, but does not include
procurement purchases, nor does it include any form of assistance which
is excluded from the definition of grant in this part.
    Subgrantee means the government or other legal entity to which a
subgrant is awarded and which is accountable to the grantee for the use
of the funds provided.
    Supplies means all tangible personal property other than equipment
as defined in this part.
    Suspension means depending on the context, either (1) temporary
withdrawal of the authority to obligate grant funds pending corrective
action by the grantee or subgrantee or a decision to terminate the
grant, or (2) an action taken by a suspending official in accordance
with agency regulations implementing E.O. 12549 to immediately exclude a
person from participating in grant transactions for a period, pending
completion of an investigation and such legal or debarment proceedings
as may ensue.
    Termination means permanent withdrawal of the authority to obligate
previously-awarded grant funds before that authority would otherwise
expire. It also means the voluntary relinquishment of that authority by
the grantee or subgrantee. Termination does not include:
    (1) Withdrawal of funds awarded on the basis of the grantee's
underestimate of the unobligated balance in a prior period;
    (2) Withdrawal of the unobligated balance as of the expiration of a
grant;
    (3) Refusal to extend a grant or award additional funds, to make a
competing or noncompeting continuation, renewal, extension, or
supplemental award; or
    (4) Voiding of a grant upon determination that the award was
obtained fraudulently, or was otherwise illegal or invalid from
inception.
    Terms of a grant or subgrant mean all requirements of the grant or
subgrant, whether in statute, regulations, or the award document.
    Third party in-kind contributions mean property or services which
benefit a federally assisted project or program and which are
contributed by non-Federal third parties without charge to the grantee,
or a cost-type contractor under the grant agreement.
    Unliquidated obligations for reports prepared on a cash basis mean
the amount of obligations incurred by the grantee that has not been
paid. For reports prepared on an accrued expenditure basis, they
represent the amount of obligations incurred by the grantee for which an
outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the
Federal agency that has not been obligated by the grantee and is
determined by deducting the cumulative obligations from the cumulative
funds authorized.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988]



Sec. 80.4  Applicability.

    (a) General. Subparts A through D of this part apply to all grants
and subgrants to governments, except where inconsistent with Federal
statutes or with regulations authorized in accordance with the exception
provision of Sec. 80.6, or:
    (1) Grants and subgrants to State and local institutions of higher
education or State and local hospitals.
    (2) The block grants authorized by the Omnibus Budget Reconciliation
Act of 1981 (Community Services; Preventive Health and Health Services;
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child
Health Services; Social Services; Low-Income Home Energy Assistance;
States' Program of Community Development Block Grants for Small Cities;
and Elementary and Secondary Education other than programs administered
by the Secretary of Education under Title V, Subtitle D, Chapter 2,
Section 583--the Secretary's discretionary grant program) and Titles I-
III of the Job Training Partnership Act of 1982 and under the Public
Health Services Act (Section 1921), Alcohol and Drug Abuse Treatment and
Rehabilitation Block

[[Page 212]]

Grant and Part C of Title V, Mental Health Service for the Homeless
Block Grant).
    (3) Entitlement grants to carry out the following programs of the
Social Security Act:
    (i) Aid to Needy Families with Dependent Children (Title IV-A of the
Act, not including the Work Incentive Program (WIN) authorized by
section 402(a)19(G); HHS grants for WIN are subject to this part);
    (ii) Child Support Enforcement and Establishment of Paternity (Title
IV-D of the Act);
    (iii) Foster Care and Adoption Assistance (Title IV-E of the Act);
    (iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and
XVI-AABD of the Act); and
    (v) Medical Assistance (Medicaid) (Title XIX of the Act) not
including the State Medicaid Fraud Control program authorized by section
1903(a)(6)(B).
    (4) Entitlement grants under the following programs of The National
School Lunch Act:
    (i) School Lunch (section 4 of the Act),
    (ii) Commodity Assistance (section 6 of the Act),
    (iii) Special Meal Assistance (section 11 of the Act),
    (iv) Summer Food Service for Children (section 13 of the Act), and
    (v) Child Care Food Program (section 17 of the Act).
    (5) Entitlement grants under the following programs of The Child
Nutrition Act of 1966:
    (i) Special Milk (section 3 of the Act), and
    (ii) School Breakfast (section 4 of the Act).
    (6) Entitlement grants for State Administrative expenses under The
Food Stamp Act of 1977 (section 16 of the Act).
    (7) A grant for an experimental, pilot, or demonstration project
that is also supported by a grant listed in paragraph (a)(3) of this
section;
    (8) Grant funds awarded under subsection 412(e) of the Immigration
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat.
1809), for cash assistance, medical assistance, and supplemental
security income benefits to refugees and entrants and the administrative
costs of providing the assistance and benefits;
    (9) Grants to local education agencies under 20 U.S.C. 236 through
241-1(a), and 242 through 244 (portions of the Impact Aid program),
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for
Handicapped Children); and
    (10) Payments under the Veterans Administration's State Home Per
Diem Program (38 U.S.C. 641(a)).
    (b) Entitlement programs. Entitlement programs enumerated above in
Sec. 80.4(a) (3) through (8) are subject to Subpart E.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.5  Effect on other issuances.

    All other grants administration provisions of codified program
regulations, program manuals, handbooks and other nonregulatory
materials which are inconsistent with this part are superseded, except
to the extent they are required by statute, or authorized in accordance
with the exception provision in Sec. 80.6.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.6  Additions and exceptions.

    (a) For classes of grants and grantees subject to this part, Federal
agencies may not impose additional administrative requirements except in
codified regulations published in the Federal Register.
    (b) Exceptions for classes of grants or grantees may be authorized
only by the Secretary after consultation with OMB.
    (c) Exceptions on a case-by-case basis and for subgrantees may be
authorized by the affected Federal agencies.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988]

[[Page 213]]



                    Subpart B_Pre-Award Requirements



Sec. 80.10  Forms for applying for grants.

    (a) Scope. (1) This section prescribes forms and instructions to be
used by governmental organizations (except hospitals and institutions of
higher education operated by a government) in applying for grants. This
section is not applicable, however, to formula grant programs which do
not require applicants to apply for funds on a project basis.
    (2) This section applies only to applications to Federal agencies
for grants, and is not required to be applied by grantees in dealing
with applicants for subgrants. However, grantees are encouraged to avoid
more detailed or burdensome application requirements for subgrants.
    (b) Authorized forms and instructions for governmental
organizations. (1) In applying for grants, applicants shall only use
standard application forms or those prescribed by the granting agency
with the approval of OMB under the Paperwork Reduction Act of 1980.
    (2) Applicants are not required to submit more than the original and
two copies of preapplications or applications.
    (3) Applicants must follow all applicable instructions that bear OMB
clearance numbers. Federal agencies may specify and describe the
programs, functions, or activities that will be used to plan, budget,
and evaluate the work under a grant. Other supplementary instructions
may be issued only with the approval of OMB to the extent required under
the Paperwork Reduction Act of 1980. For any standard form, except the
SF-424 facesheet, Federal agencies may shade out or instruct the
applicant to disregard any line item that is not needed.
    (4) When a grantee applies for additional funding (such as a
continuation or supplemental award) or amends a previously submitted
application, only the affected pages need be submitted. Previously
submitted pages with information that is still current need not be
resubmitted.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.11  State plans.

    (a) Scope. The statutes for some programs require States to submit
plans before receiving grants. Under regulations implementing Executive
Order 12372, ``Intergovernmental Review of Federal Programs,'' States
are allowed to simplify, consolidate and substitute plans. This section
contains additional provisions for plans that are subject to regulations
implementing the Executive order.
    (b) Requirements. A State need meet only Federal administrative or
programmatic requirements for a plan that are in statutes or codified
regulations.
    (c) Assurances. In each plan the State will include an assurance
that the State shall comply with all applicable Federal statutes and
regulations in effect with respect to the periods for which it receives
grant funding. For this assurance and other assurances required in the
plan, the State may:
    (1) Cite by number the statutory or regulatory provisions requiring
the assurances and affirm that it gives the assurances required by those
provisions,
    (2) Repeat the assurance language in the statutes or regulations, or
    (3) Develop its own language to the extent permitted by law.
    (d) Amendments. A State will amend a plan whenever necessary to
reflect:
    (1) New or revised Federal statutes or regulations or
    (2) A material change in any State law, organization, policy, or
State agency operation.

The State will obtain approval for the amendment and its effective date
but need submit for approval only the amended portions of the plan.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[[Page 214]]



Sec. 80.12  Special grant or subgrant conditions for ``high-risk''
grantees.

    (a) A grantee or subgrantee may be considered ``high risk'' if an
awarding agency determines that a grantee or subgrantee:
    (1) Has a history of unsatisfactory performance, or
    (2) Is not financially stable, or
    (3) Has a management system which does not meet the management
standards set forth in this part, or
    (4) Has not conformed to terms and conditions of previous awards, or
    (5) Is otherwise not responsible; and if the awarding agency
determines that an award will be made, special conditions and/or
restrictions shall correspond to the high risk condition and shall be
included in the award.
    (b) Special conditions or restrictions may include:
    (1) Payment on a reimbursement basis;
    (2) Withholding authority to proceed to the next phase until receipt
of evidence of acceptable performance within a given funding period;
    (3) Requiring additional, more detailed financial reports;
    (4) Additional project monitoring;
    (5) Requiring the grante or subgrantee to obtain technical or
management assistance; or
    (6) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such conditions, the
awarding official will notify the grantee or subgrantee as early as
possible, in writing, of:
    (1) The nature of the special conditions/restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be
removed and the time allowed for completing the corrective actions and
    (4) The method of requesting reconsideration of the conditions/
restrictions imposed.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



                    Subpart C_Post-Award Requirements

                        Financial Administration



Sec. 80.20  Standards for financial management systems.

    (a) A State must expand and account for grant funds in accordance
with State laws and procedures for expending and accounting for its own
funds. Fiscal control and accounting procedures of the State, as well as
its subgrantees and cost-type contractors, must be sufficient to:
    (1) Permit preparation of reports required by this part and the
statutes authorizing the grant, and
    (2) Permit the tracing of funds to a level of expenditures adequate
to establish that such funds have not been used in violation of the
restrictions and prohibitions of applicable statutes.
    (b) The financial management systems of other grantees and
subgrantees must meet the following standards:
    (1) Financial reporting. Accurate, current, and complete disclosure
of the financial results of financially assisted activities must be made
in accordance with the financial reporting requirements of the grant or
subgrant.
    (2) Accounting records. Grantees and subgrantees must maintain
records which adequately identify the source and application of funds
provided for financially-assisted activities. These records must contain
information pertaining to grant or subgrant awards and authorizations,
obligations, unobligated balances, assets, liabilities, outlays or
expenditures, and income.
    (3) Internal control. Effective control and accountability must be
maintained for all grant and subgrant cash, real and personal property,
and other assets. Grantees and subgrantees must adequately safeguard all
such property and must assure that it is used solely for authorized
purposes.
    (4) Budget control. Actual expenditures or outlays must be compared
with budgeted amounts for each grant or subgrant. Financial information

[[Page 215]]

must be related to performance or productivity data, including the
development of unit cost information whenever appropriate or
specifically required in the grant or subgrant agreement. If unit cost
data are required, estimates based on available documentation will be
accepted whenever possible.
    (5) Allowable cost. Applicable OMB cost principles, agency program
regulations, and the terms of grant and subgrant agreements will be
followed in determining the reasonableness, allowability, and
allocability of costs.
    (6) Source documentation. Accounting records must be supported by
such source documentation as cancelled checks, paid bills, payrolls,
time and attendance records, contract and subgrant award documents, etc.
    (7) Cash management. Procedures for minimizing the time elapsing
between the transfer of funds from the U.S. Treasury and disbursement by
grantees and subgrantees must be followed whenever advance payment
procedures are used. Grantees must establish reasonable procedures to
ensure the receipt of reports on subgrantees' cash balances and cash
disbursements in sufficient time to enable them to prepare complete and
accurate cash transactions reports to the awarding agency. When advances
are made by letter-of-credit or electronic transfer of funds methods,
the grantee must make drawdowns as close as possible to the time of
making disbursements. Grantees must monitor cash drawdowns by their
subgrantees to assure that they conform substantially to the same
standards of timing and amount as apply to advances to the grantees.
    (c) An awarding agency may review the adequacy of the financial
management system of any applicant for financial assistance as part of a
preaward review or at any time subsequent to award.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.21  Payment.

    (a) Scope. This section prescribes the basic standard and the
methods under which a Federal agency will make payments to grantees, and
grantees will make payments to subgrantees and contractors.
    (b) Basic standard. Methods and procedures for payment shall
minimize the time elapsing between the transfer of funds and
disbursement by the grantee or subgrantee, in accordance with Treasury
regulations at 31 CFR part 205.
    (c) Advances. Grantees and subgrantees shall be paid in advance,
provided they maintain or demonstrate the willingness and ability to
maintain procedures to minimize the time elapsing between the transfer
of the funds and their disbursement by the grantee or subgrantee.
    (d) Reimbursement. Reimbursement shall be the preferred method when
the requirements in paragraph (c) of this section are not met. Grantees
and subgrantees may also be paid by reimbursement for any construction
grant. Except as otherwise specified in regulation, Federal agencies
shall not use the percentage of completion method to pay construction
grants. The grantee or subgrantee may use that method to pay its
construction contractor, and if it does, the awarding agency's payments
to the grantee or subgrantee will be based on the grantee's or
subgrantee's actual rate of disbursement.
    (e) Working capital advances. If a grantee cannot meet the criteria
for advance payments described in paragraph (c) of this section, and the
Federal agency has determined that reimbursement is not feasible because
the grantee lacks sufficient working capital, the awarding agency may
provide cash or a working capital advance basis. Under this procedure
the awarding agency shall advance cash to the grantee to cover its
estimated disbursement needs for an initial period generally geared to
the grantee's disbursing cycle. Thereafter, the awarding agency shall
reimburse the grantee for its actual cash disbursements. The working
capital advance method of payment shall not be used by grantees or
subgrantees if the reason for using

[[Page 216]]

such method is the unwillingness or inability of the grantee to provide
timely advances to the subgrantee to meet the subgrantee's actual cash
disbursements.
    (f) Effect of program income, refunds, and audit recoveries on
payment. (1) Grantees and subgrantees shall disburse repayments to and
interest earned on a revolving fund before requesting additional cash
payments for the same activity.
    (2) Except as provided in paragraph (f)(1) of this section, grantees
and subgrantees shall disburse program income, rebates, refunds,
contract settlements, audit recoveries and interest earned on such funds
before requesting additional cash payments.
    (g) Withholding payments. (1) Unless otherwise required by Federal
statute, awarding agencies shall not withhold payments for proper
charges incurred by grantees or subgrantees unless--
    (i) The grantee or subgrantee has failed to comply with grant award
conditions or
    (ii) The grantee or subgrantee is indebted to the United States.
    (2) Cash withheld for failure to comply with grant award condition,
but without suspension of the grant, shall be released to the grantee
upon subsequent compliance. When a grant is suspended, payment
adjustments will be made in accordance with Sec. 80.43(c).
    (3) A Federal agency shall not make payment to grantees for amounts
that are withheld by grantees or subgrantees from payment to contractors
to assure satisfactory completion of work. Payments shall be made by the
Federal agency when the grantees or subgrantees actually disburse the
withheld funds to the contractors or to escrow accounts established to
assure satisfactory completion of work.
    (h) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, grantees
and subgrantees are encouraged to use minority banks (a bank which is
owned at least 50 percent by minority group members). A list of minority
owned banks can be obtained from the Minority Business Development
Agency, Department of Commerce, Washington, DC 20230.
    (2) A grantee or subgrantee shall maintain a separate bank account
only when required by Federal-State agreement.
    (i) Interest earned on advances. Except for interest earned on
advances of funds exempt under the Intergovernmental Cooperation Act (31
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C.
450), grantees and subgrantees shall promptly, but at least quarterly,
remit interest earned on advances to the Federal agency. The grantee or
subgrantee may keep interest amounts up to $100 per year for
administrative expenses.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.22  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any
fee or profit (or other increment above allowable costs) to the grantee
or subgrantee.
    (b) For each kind of organization, there is a set of Federal
principles for determining allowable costs. For the costs of a State,
local, or Indian tribal government, the Secretary applies the cost
principles in OMB Circular A-87, as amended on June 9, 1987.

------------------------------------------------------------------------
           For the costs of a--                Use the principles in--
------------------------------------------------------------------------
State, local or Indian tribal government..  OMB Circular A-87.
Private nonprofit organization other than   OMB Circular A-122.
 an (1) institution of higher education,
 (2) hospital, or (3) organization named
 in OMB Circular A-122 as not subject to
 that circular.
Educational institutions..................  OMB Circular A-21.
For-profit organization other than a        48 CFR part 31. Contract
 hospital and an organization named in OBM   Cost Principles and
 Circular A-122 as not subject to that       Procedures, or uniform cost
 circular.                                   accounting standards that
                                             comply with cost principles
                                             acceptable to the Federal
                                             agency.
------------------------------------------------------------------------


[[Page 217]]


(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988]



Sec. 80.23  Period of availability of funds.

    (a) General. Where a funding period is specified, a grantee may
charge to the award only costs resulting from obligations of the funding
period unless carryover of unobligated balances is permitted, in which
case the carryover balances may be charged for costs resulting from
obligations of the subsequent funding period.
    (b) Liquidation of obligations. A grantee must liquidate all
obligations incurred under the award not later than 90 days after the
end of the funding period (or as specified in a program regulation) to
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the
grantee.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.24  Matching or cost sharing.

    (a) Basic rule: Costs and contributions acceptable. With the
qualifications and exceptions listed in paragraph (b) of this section, a
matching or cost sharing requirement may be satisfied by either or both
of the following:
    (1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable
costs borne by non-Federal grants or by others cash donations from non-
Federal third parties.
    (2) The value of third party in-kind contributions applicable to the
period to which the cost sharing or matching requirements applies.
    (b) Qualifications and exceptions--(1) Costs borne by other Federal
grant agreements. Except as provided by Federal statute, a cost sharing
or matching requirement may not be met by costs borne by another Federal
grant. This prohibition does not apply to income earned by a grantee or
subgrantee from a contract awarded under another Federal grant.
    (2) General revenue sharing. For the purpose of this section,
general revenue sharing funds distributed under 31 U.S.C. 6702 are not
considered Federal grant funds.
    (3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or
matching requirement of a grant agreement if they have been or will be
counted towards satisfying a cost sharing or matching requirement of
another Federal grant agreement, a Federal procurement contract, or any
other award of Federal funds.
    (4) Costs financed by program income. Costs financed by program
income, as defined in Sec. 80.25, shall not count towards satisfying a
cost sharing or matching requirement unless they are expressly permitted
in the terms of the assistance agreement. (This use of general program
income is described in Sec. 80.25(g).)
    (5) Services or property financed by income earned by contractors.
Contractors under a grant may earn income from the activities carried
out under the contract in addition to the amounts earned from the party
awarding the contract. No costs of services or property supported by
this income may count toward satisfying a cost sharing or matching
requirement unless other provisions of the grant agreement expressly
permit this kind of income to be used to meet the requirement.
    (6) Records. Costs and third party in-kind contributions counting
towards satisfying a cost sharing or matching requirement must be
verifiable from the records of grantees and subgrantee or cost-type
contractors. These records must show how the value placed on third party
in-kind contributions was derived. To the extent feasible, volunteer
services will be supported by the same methods that the organization
uses to support the allocability of regular personnel costs.
    (7) Special standards for third party in-kind contributions. (i)
Third party in-kind contributions count towards satisfying a cost
sharing or matching requirement only where, if the party receiving the
contributions were to pay for them, the payments would be allowable
costs.
    (ii) Some third party in-kind contributions are goods and services
that,

[[Page 218]]

if the grantee, subgrantee, or contractor receiving the contribution had
to pay for them, the payments would have been an indirect costs. Costs
sharing or matching credit for such contributions shall be given only if
the grantee, subgrantee, or contractor has established, along with its
regular indirect cost rate, a special rate for allocating to individual
projects or programs the value of the contributions.
    (iii) A third party in-kind contribution to a fixed-price contract
may count towards satisfying a cost sharing or matching requirement only
if it results in:
    (A) An increase in the services or property provided under the
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for cost
sharing or matching purposes will conform to the rules in the succeeding
sections of this part. If a third party in-kind contribution is a type
not treated in those sections, the value placed upon it shall be fair
and reasonable.
    (c) Valuation of donated services--(1) Volunteer services. Unpaid
services provided to a grantee or subgrantee by individuals will be
valued at rates consistent with those ordinarily paid for similar work
in the grantee's or subgrantee's organization. If the grantee or
subgrantee does not have employees performing similar work, the rates
will be consistent with those ordinarily paid by other employers for
similar work in the same labor market. In either case, a reasonable
amount for fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a
grantee, subgrantee, or cost-type contractor furnishes free of charge
the services of an employee in the employee's normal line of work, the
services will be valued at the employee's regular rate of pay exclusive
of the employee's fringe benefits and overhead costs. If the services
are in a different line of work, paragraph (c)(1) of this section
applies.
    (d) Valuation of third party donated supplies and loaned equipment
or space. (1) If a third party donates supplies, the contribution will
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a
building but retains title, the contribution will be valued at the fair
rental rate of the equipment or space.
    (e) Valuation of third party donated equipment, buildings, and land.
If a third party donates equipment, buildings, or land, and title passes
to a grantee or subgrantee, the treatment of the donated property will
depend upon the purpose of the grant or subgrant, as follows:
    (1) Awards for capital expenditures. If the purpose of the grant or
subgrant is to assist the grantee or subgrantee in the acquisition of
property, the market value of that property at the time of donation may
be counted as cost sharing or matching,
    (2) Other awards. If assisting in the acquisition of property is not
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of
this section apply:
    (i) If approval is obtained from the awarding agency, the market
value at the time of donation of the donated equipment or buildings and
the fair rental rate of the donated land may be counted as cost sharing
or matching. In the case of a subgrant, the terms of the grant agreement
may require that the approval be obtained from the Federal agency as
well as the grantee. In all cases, the approval may be given only if a
purchase of the equipment or rental of the land would be approved as an
allowable direct cost. If any part of the donated property was acquired
with Federal funds, only the non-federal share of the property may be
counted as cost-sharing or matching.
    (ii) If approval is not obtained under paragraph (e)(2)(i) of this
section, no amount may be counted for donated land, and only
depreciation or use allowances may be counted for donated equipment and
buildings. The depreciation or use allowances for this property are not
treated as third party in-kind contributions. Instead, they are treated
as costs incurred by the grantee or subgrantee. They are computed and
allocated (usually as indirect costs) in accordance with the cost
principles

[[Page 219]]

specified in Sec. 80.22, in the same way as depreciation or use
allowances for purchased equipment and buildings. The amount of
depreciation or use allowances for donated equipment and buildings is
based on the property's market value at the time it was donated.
    (f) Valuation of grantee or subgrantee donated real property for
construction/acquisition. If a grantee or subgrantee donates real
property for a construction or facilities acquisition project, the
current market value of that property may be counted as cost sharing or
matching. If any part of the donated property was acquired with Federal
funds, only the non-federal share of the property may be counted as cost
sharing or matching.
    (g) Appraisal of real property. In some cases under paragraphs (d),
(e) and (f) of this section, it will be necessary to establish the
market value of land or a building or the fair rental rate of land or of
space in a building. In these cases, the Federal agency may require the
market value or fair rental value be set by an independent appraiser,
and that the value or rate be certified by the grantee. This requirement
will also be imposed by the grantee on subgrantees.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.25  Program income.

    (a) General. Grantees are encouraged to earn income to defray
program costs. Program income includes income from fees for services
performed, from the use or rental of real or personal property acquired
with grant funds, from the sale of commodities or items fabricated under
a grant agreement, and from payments of principal and interest on loans
made with grant funds. Except as otherwise provided in regulations of
the Federal agency, program income does not include interest on grant
funds, rebates, credits, discounts, refunds, etc. and interest earned on
any of them.
    (b) Definition of program income. Program income means gross income
received by the grantee or subgrantee directly generated by a grant
supported activity, or earned only as a result of the grant agreement
during the grant period. ``During the grant period'' is the time between
the effective date of the award and the ending date of the award
reflected in the final financial report.
    (c) Cost of generating program income. If authorized by Federal
regulations or the grant agreement, costs incident to the generation of
program income may be deducted from gross income to determine program
income.
    (d) Governmental revenues. Taxes, special assessments, levies,
fines, and other such revenues raised by a grantee or subgrantee are not
program income unless the revenues are specifically identified in the
grant agreement or Federal agency regulations as program income.
    (e) Royalties. Income from royalties and license fees for
copyrighted material, patents, and inventions developed by a grantee or
subgrantee is program income only if the revenues are specifically
identified in the grant agreement or Federal agency regulations as
program income. (See Sec. 80.34.)
    (f) Property. Proceeds from the sale of real property or equipment
will be handled in accordance with the requirements of Sec. Sec. 80.31
and 80.32.
    (g) Use of program income. Program income shall be deducted from
outlays which may be both Federal and non-Federal as described below,
unless the Federal agency regulations or the grant agreement specify
another alternative (or a combination of the alternatives). In
specifying alternatives, the Federal agency may distinguish between
income earned by the grantee and income earned by subgrantees and
between the sources, kinds, or amounts of income. When Federal agencies
authorize the alternatives in paragraphs (g) (2) and (3) of this
section, program income in excess of any limits stipulated shall also be
deducted from outlays.
    (1) Deduction. Ordinarily program income shall be deducted from
total allowable costs to determine the net allowable costs. Program
income shall be used for current costs unless the Federal agency
authorizes otherwise. Program income which the grantee did not

[[Page 220]]

anticipate at the time of the award shall be used to reduce the Federal
agency and grantee contributions rather than to increase the funds
committed to the project.
    (2) Addition. When authorized, program income may be added to the
funds committed to the grant agreement by the Federal agency and the
grantee. The program income shall be used for the purposes and under the
conditions of the grant agreement.
    (3) Cost sharing or matching. When authorized, program income may be
used to meet the cost sharing or matching requirement of the grant
agreement. The amount of the Federal grant award remains the same.
    (h) Income after the award period. There are no Federal requirements
governing the disposition of program income earned after the end of the
award period (i.e., until the ending date of the final financial report,
see paragraph (a) of this section), unless the terms of the agreement or
the Federal agency regulations provide otherwise.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.26  Non-Federal audit.

    (a) Basic Rule. Grantees and subgrantees are responsible for
obtaining audits in accordance with the Single Audit Act Amendments of
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of
States, Local Governments, and Non-Profit Organizations.'' The audits
shall be made by an independent auditor in accordance with generally
accepted government auditing standards covering financial audits.
    (b) Subgrantees. State or local governments, as those terms are
defined for purposes of the Single Audit Act Amendments of 1996, that
provide Federal awards to a subgrantee, which expends $300,000 or more
(or other amount as specified by OMB) in Federal awards in a fiscal
year, shall:
    (1) Determine whether State or local subgrantees have met the audit
requirements of the Act and whether subgrantees covered by OMB Circular
A-110, ``Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
organizations,'' have met the audit requirements of the Act. Commercial
contractors (private for-profit and private and governmental
organizations) providing goods and services to State and local
governments are not required to have a single audit performed. State and
local governments should use their own procedures to ensure that the
contractors has complied with laws and regulations affecting the
expenditures of Federal funds;
    (2) Determine whether the subgrantee spent Federal assistance funds
provided in accordance with applicable laws and regulations. This may be
accomplished by reviewing an audit of the subgrantee made in accordance
with the Act, OMB Circular A-133, or through other means (e.g., program
reviews) if the subgrantee has not had such an audit;
    (3) Ensure that appropriate corrective action is taken within six
months after receipt of the audit report in instance of noncompliance
with Federal laws and regulations;
    (4) Consider whether subgrantee audits necessitate adjustment of the
grantee's own records; and
    (5) Require each subgrantee to permit independent auditors to have
access to the records and financial statements.
    (c) Auditor selection. In arranging for audit services, Sec. 80.36
shall be followed.

(Authority: 20 U.S.C. 1221e-3(a)(1) and 3474, OMB Circulars A-102, A-128
and A-133)

    Note: The requirements for non-Federal audits are contained in the
appendix to part 80--Audit Requirements for State and Local Governments.

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988; 56 FR 1698, Jan. 16, 1991; 62 FR 45939, 45943, Aug. 29, 1997]

                    Changes, Property, and Subawards



Sec. 80.30  Changes.

    (a) General. Grantees and subgrantees are permitted to rebudget
within the approved direct cost budget to meet unanticipated
requirements and may make limited program changes to the approved
project. However, unless waived by the awarding agency, certain types of
post-award changes in budgets and projects shall require the prior
written approval of the awarding agency.

[[Page 221]]

    (b) Relation to cost principles. The applicable cost principles (see
Sec. 80.22) contain requirements for prior approval of certain types of
costs. Except where waived, those requirements apply to all grants and
subgrants even if paragraphs (c) through (f) of this section do not.
    (c) Budget changes--(1) Nonconstruction projects. Except as stated
in other regulations or an award document, grantees or subgrantees shall
obtain the prior approval of the awarding agency whenever any of the
following changes is anticipated under a nonconstruction award:
    (i) Any revision which would result in the need for additional
funding.
    (ii) Unless waived by the awarding agency, cumulative transfers
among direct cost categories, or, if applicable, among separately
budgeted programs, projects, functions, or activities which exceed or
are expected to exceed ten percent of the current total approved budget,
whenever the awarding agency's share exceeds $100,000.
    (iii) Transfer of funds allotted for training allowances (i.e., from
direct payments to trainees to other expense categories).
    (2) Construction projects. Grantees and subgrantees shall obtain
prior written approval for any budget revision which would result in the
need for additional funds.
    (3) Combined construction and nonconstruction projects. When a grant
or subgrant provides funding for both construction and nonconstruction
activities, the grantee or subgrantee must obtain prior written approval
from the awarding agency before making any fund or budget transfer from
nonconstruction to construction or vice versa.
    (d) Programmatic changes. Grantees or subgrantees must obtain the
prior approval of the awarding agency whenever any of the following
actions is anticipated:
    (1) Any revision of the scope or objectives of the project
(regardless of whether there is an associated budget revision requiring
prior approval).
    (2) Need to extend the period of availability of funds.
    (3) Changes in key persons in cases where specified in an
application or a grant award. In research projects, a change in the
project director or principal investigator shall always require approval
unless waived by the awarding agency.
    (4) Under nonconstruction projects, contracting out, subgranting (if
authorized by law) or otherwise obtaining the services of a third party
to perform activities which are central to the purposes of the award.
This approval requirement is in addition to the approval requirements of
Sec. 80.36 but does not apply to the procurement of equipment,
supplies, and general support services.
    (e) Additional prior approval requirements. The awarding agency may
not require prior approval for any budget revision which is not
described in paragraph (c) of this section.
    (f) Requesting prior approval. (1) A request for prior approval of
any budget revision will be in the same budget formal the grantee used
in its application and shall be accompanied by a narrative justification
for the proposed revision.
    (2) A request for a prior approval under the applicable Federal cost
principles (see Sec. 80.22) may be made by letter.
    (3) A request by a subgrantee for prior approval will be addressed
in writing to the grantee. The grantee will promptly review such request
and shall approve or disapprove the request in writing. A grantee will
not approve any budget or project revision which is inconsistent with
the purpose or terms and conditions of the Federal grant to the grantee.
If the revision, requested by the subgrantee would result in a change to
the grantee's approved project which requires Federal prior approval,
the grantee will obtain the Federal agency's approval before approving
the subgrantee's request.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.31  Real property.

    (a) Title. Subject to the obligations and conditions set forth in
this section,

[[Page 222]]

title to real property acquired under a grant or subgrant will vest upon
acquisition in the grantee or subgrantee respectively.
    (b) Use. Except as otherwise provided by Federal statutes, real
property will be used for the originally authorized purposes as long as
needed for that purposes, and the grantee or subgrantee shall not
dispose of or encumber its title or other interests.
    (c) Disposition. When real property is no longer needed for the
originally authorized purpose, the grantee or subgrantee will request
disposition instructions from the awarding agency. The instructions will
provide for one of the following alternatives:
    (1) Retention of title. Retain title after compensating the awarding
agency. The amount paid to the awarding agency will be computed by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the fair market value of the property.
However, in those situations where a grantee or subgrantee is disposing
of real property acquired with grant funds and acquiring replacement
real property under the same program, the net proceeds from the
disposition may be used as an offset to the cost of the replacement
property.
    (2) Sale of property. Sell the property and compensate the awarding
agency. The amount due to the awarding agency will be calculated by
applying the awarding agency's percentage of participation in the cost
of the original purchase to the proceeds of the sale after deduction of
any actual and reasonable selling and fixing-up expenses. If the grant
is still active, the net proceeds from sale may be offset against the
original cost of the property. When a grantee or subgrantee is directed
to sell property, sales procedures shall be followed that provide for
competition to the extent practicable and result in the highest possible
return.
    (3) Transfer of title. Transfer title to the awarding agency or to a
third-party designated/approved by the awarding agency. The grantee or
subgrantee shall be paid an amount calculated by applying the grantee or
subgrantee's percentage of participation in the purchase of the real
property to the current fair market value of the property.
    (d) The provisions of paragraph (c) of this section do not apply to
disaster assistance under 20 U.S.C. 241-1(b)-(c) and the construction
provisions of the Impact Aid Program, 20 U.S.C. 631-647.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988]



Sec. 80.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in
this section, title to equipment acquired under a grant or subgrant will
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment
acquired under a grant by the State in accordance with State laws and
procedures. Other grantees and subgrantees will follow paragraphs (c)
through (e) of this section.
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in
the program or project for which it was acquired as long as needed,
whether or not the project or program continues to be supported by
Federal funds. When no longer needed for the original program or
project, the equipment may be used in other activities currently or
previously supported by a Federal agency.
    (2) The grantee or subgrantee shall also make equipment available
for use on other projects or programs currently or previously supported
by the Federal Government, providing such use will not interfere with
the work on the projects or program for which it was originally
acquired. First preference for other use shall be given to other
programs or projects supported by the awarding agency. User fees should
be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 80.25(a) to earn
program income, the grantee or subgrantee must not use equipment
acquired with grant funds to provide services for a fee to compete
unfairly with private companies that provide equivalent services, unless
specifically permitted or contemplated by Federal statute.

[[Page 223]]

    (4) When acquiring replacement equipment, the grantee or subgrantee
may use the equipment to be replaced as a trade-in or sell the property
and use the proceeds to offset the cost of the replacement property,
subject to the approval of the awarding agency.
    (d) Management requirements. Procedures for managing equipment
(including replacement equipment), whether acquired in whole or in part
with grant funds, until disposition takes place will, as a minimum, meet
the following requirements:
    (1) Property records must be maintained that include a description
of the property, a serial number or other identification number, the
source of property, who holds title, the acquisition date, and cost of
the property, percentage of Federal participation in the cost of the
property, the location, use and condition of the property, and any
ultimate disposition data including the date of disposal and sale price
of the property.
    (2) A physical inventory of the property must be taken and the
results reconciled with the property records at least once every two
years.
    (3) A control system must be developed to ensure adequate safeguards
to prevent loss, damage, or theft of the property. Any loss, damage, or
theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell
the property, proper sales procedures must be established to ensure the
highest possible return.
    (e) Disposition. When original or replacement equipment acquired
under a grant or subgrant is no longer needed for the original project
or program or for other activities currently or previously supported by
a Federal agency, disposition of the equipment will be made as follows:
    (1) Items of equipment with a current per-unit fair market value of
less than $5,000 may be retained, sold or otherwise disposed of with no
further obligation to the awarding agency.
    (2) Items of equipment with a current per unit fair market value in
excess of $5,000 may be retained or sold and the awarding agency shall
have a right to an amount calculated by multiplying the current market
value or proceeds from sale by the awarding agency's share of the
equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate
disposition actions, the awarding agency may direct the grantee or
subgrantee to take excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance
with Federal agency rules and procedures, and submit an annual inventory
listing.
    (3) When the equipment is no longer needed, the grantee or
subgrantee will request disposition instructions from the Federal
agency.
    (g) Right to transfer title. The Federal awarding agency may reserve
the right to transfer title to the Federal Government or a third part
named by the awarding agency when such a third party is otherwise
eligible under existing statutes. Such transfers shall be subject to the
following standards:
    (1) The property shall be identified in the grant or otherwise made
known to the grantee in writing.
    (2) The Federal awarding agency shall issue disposition instruction
within 120 calendar days after the end of the Federal support of the
project for which it was acquired. If the Federal awarding agency fails
to issue disposition instructions within the 120 calendar-day period the
grantee shall follow Sec. 80.32(e).
    (3) When title to equipment is transferred, the grantee shall be
paid an amount calculated by applying the percentage of participation in
the purchase to the current fair market value of the property.
    (h) The provisions of paragraphs (c), (d), (e), and (g) of this
section do not apply to disaster assistance under 20 U.S.C. 241-1(b)-(c)
and the construction

[[Page 224]]

provisions of the Impact Aid Program, 20 U.S.C. 631-647.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988; 53 FR 49143, Dec. 6, 1988]



Sec. 80.33  Supplies.

    (a) Title. Title to supplies acquired under a grant or subgrant will
vest, upon acquisition, in the grantee or subgrantee respectively.
    (b) Disposition. If there is a residual inventory of unused supplies
exceeding $5,000 in total aggregate fair market value upon termination
or completion of the award, and if the supplies are not needed for any
other federally sponsored programs or projects, the grantee or
subgrantee shall compensate the awarding agency for its share.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.34  Copyrights.

    The Federal awarding agency reserves a royalty-free, nonexclusive,
and irrevocable license to reproduce, publish or otherwise use, and to
authorize others to use, for Federal Government purposes:
    (a) The copyright in any work developed under a grant, subgrant, or
contract under a grant or subgrant; and
    (b) Any rights of copyright to which a grantee, subgrantee or a
contractor purchases ownership with grant support.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.35  Subawards to debarred and suspended parties.

    Grantees and subgrantees must not make any award or permit any award
(subgrant or contract) at any tier to any party which is debarred or
suspended or is otherwise excluded from or ineligible for participation
in Federal assistance programs under Executive Order 12549, ``Debarment
and Suspension.''

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.36  Procurement.

    (a) States. When procuring property and services under a grant, a
State will follow the same policies and procedures it uses for
procurements from its non-Federal funds. The State will ensure that
every purchase order or other contract includes any clauses required by
Federal statutes and executive orders and their implementing
regulations. Other grantees and subgrantees will follow paragraphs (b)
through (i) in this section.
    (b) Procurement standards. (1) Grantees and subgrantees will use
their own procurement procedures which reflect applicable State and
local laws and regulations, provided that the procurements conform to
applicable Federal law and the standards identified in this section.
    (2) Grantees and subgrantees will maintain a contract administration
system which ensures that contractors perform in accordance with the
terms, conditions, and specifications of their contracts or purchase
orders.
    (3) Grantees and subgrantees will maintain a written code of
standards of conduct governing the performance of their employees
engaged in the award and administration of contracts. No employee,
officer or agent of the grantee or subgrantee shall participate in
selection, or in the award or administration of a contract supported by
Federal funds if a conflict of interest, real or apparent, would be
involved. Such a conflict would arise when:
    (i) The employee, officer or agent,
    (ii) Any member of his immediate family,
    (iii) His or her partner, or
    (iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm selected for
award. The grantee's or subgrantee's officers, employees or agents will
neither solicit nor accept gratuities, favors or anything of monetary
value from contractors, potential contractors, or parties to
subagreements. Grantee and subgrantees may set minimum rules where

[[Page 225]]

the financial interest is not substantial or the gift is an unsolicited
item of nominal intrinsic value. To the extent permitted by State or
local law or regulations, such standards or conduct will provide for
penalties, sanctions, or other disciplinary actions for violations of
such standards by the grantee's and subgrantee's officers, employees, or
agents, or by contractors or their agents. The awarding agency may in
regulation provide additional prohibitions relative to real, apparent,
or potential conflicts of interest.
    (4) Grantee and subgrantee procedures will provide for a review of
proposed procurements to avoid purchase of unnecessary or duplicative
items. Consideration should be given to consolidating or breaking out
procurements to obtain a more economical purchase. Where appropriate, an
analysis will be made of lease versus purchase alternatives, and any
other appropriate analysis to determine the most economical approach.
    (5) To foster greater economy and efficiency, grantees and
subgrantees are encouraged to enter into State and local
intergovernmental agreements for procurement or use of common goods and
services.
    (6) Grantees and subgrantees are encouraged to use Federal excess
and surplus property in lieu of purchasing new equipment and property
whenever such use is feasible and reduces project costs.
    (7) Grantees and subgrantees are encouraged to use value engineering
clauses in contracts for construction projects of sufficient size to
offer reasonable opportunities for cost reductions. Value engineering is
a systematic and creative anaylsis of each contract item or task to
ensure that its essential function is provided at the overall lower
cost.
    (8) Grantees and subgrantees will make awards only to responsible
contractors possessing the ability to perform successfully under the
terms and conditions of a proposed procurement. Consideration will be
given to such matters as contractor integrity, compliance with public
policy, record of past performance, and financial and technical
resources.
    (9) Grantees and subgrantees will maintain records sufficient to
detail the significant history of a procurement. These records will
include, but are not necessarily limited to the following: rationale for
the method of procurement, selection of contract type, contractor
selection or rejection, and the basis for the contract price.
    (10) Grantees and subgrantees will use time and material type
contracts only:
    (i) After a determination that no other contract is suitable, and
    (ii) If the contract includes a ceiling price that the contractor
exceeds at its own risk.
    (11) Grantees and subgrantees alone will be responsible, in
accordance with good administrative practice and sound business
judgment, for the settlement of all contractual and administrative
issues arising out of procurements. These issues include, but are not
limited to source evaluation, protests, disputes, and claims. These
standards do not relieve the grantee or subgrantee of any contractual
responsibilities under its contracts. Federal agencies will not
substitute their judgment for that of the grantee or subgrantee unless
the matter is primarily a Federal concern. Violations of law will be
referred to the local, State, or Federal authority having proper
jurisdiction.
    (12) Grantees and subgrantees will have protest procedures to handle
and resolve disputes relating to their procurements and shall in all
instances disclose information regarding the protest to the awarding
agency. A protestor must exhaust all administrative remedies with the
grantee and subgrantee before pursuing a protest with the Federal
agency. Reviews of protests by the Federal agency will be limited to:
    (i) Violations of Federal law or regulations and the standards of
this section (violations of State or local law will be under the
jurisdiction of State or local authorities) and
    (ii) Violations of the grantee's or subgrantee's protest procedures
for failure to review a complaint or protest. Protests received by the
Federal agency other than those specified above will be referred to the
grantee or subgrantee.

[[Page 226]]

    (c) Competition. (1) All procurement transactions will be conducted
in a manner providing full and open competition consistent with the
standards of Sec. 80.36. Some of the situations considered to be
restrictive of competition include but are not limited to:
    (i) Placing unreasonable requirements on firms in order for them to
qualify to do business,
    (ii) Requiring unnecessary experience and excessive bonding,
    (iii) Noncompetitive pricing practices between firms or between
affiliated companies,
    (iv) Noncompetitive awards to consultants that are on retainer
contracts,
    (v) Organizational conflicts of interest,
    (vi) Specifying only a ``brand name'' product instead of allowing
``an equal'' product to be offered and describing the performance of
other relevant requirements of the procurement, and
    (vii) Any arbitrary action in the procurement process.
    (2) Grantees and subgrantees will conduct procurements in a manner
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or
proposals, except in those cases where applicable Federal statutes
expressly mandate or encourage geographic preference. Nothing in this
section preempts State licensing laws. When contracting for
architectural and engineering (A/E) services, geographic location may be
a selection criteria provided its application leaves an appropriate
number of qualified firms, given the nature and size of the project, to
compete for the contract.
    (3) Grantees will have written selection procedures for procurement
transactions. These procedures will ensure that all solicitations:
    (i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured. Such
description shall not, in competitive procurements, contain features
which unduly restrict competition. The description may include a
statement of the qualitative nature of the material, product or service
to be procured, and when necessary, shall set forth those minimum
essential characteristics and standards to which it must conform if it
is to satisfy its intended use. Detailed product specifications should
be avoided if at all possible. When it is impractical or uneconomical to
make a clear and accurate description of the technical requirements, a
``brand name or equal'' description may be used as a means to define the
performance or other salient requirements of a procurement. The specific
features of the named brand which must be met by offerors shall be
clearly stated; and
    (ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
    (4) Grantees and subgrantees will ensure that all prequalified lists
of persons, firms, or products which are used in acquiring goods and
services are current and include enough qualified sources to ensure
maximum open and free competition. Also, grantees and subgrantees will
not preclude potential bidders from qualifying during the solicitation
period.
    (d) Methods of procurement to be followed--(1) Procurement by small
purchase procedures. Small purchase procedures are those relatively
simple and informal procurement methods for securing services, supplies,
or other property that do not cost more than the simplified acquisition
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If
small purchase procedures are used, price or rate quotations shall be
obtained from an adequate number of qualified sources.
    (2) Procurement by sealed bids (formal advertising). Bids are
publicly solicited and a firm-fixed-price contract (lump sum or unit
price) is awarded to the responsible bidder whose bid, conforming with
all the material terms and conditions of the invitation for bids, is the
lowest in price. The sealed bid method is the preferred method for
procuring construction, if the conditions in Sec. 80.36(d)(2)(i) apply.
    (i) In order for sealed bidding to be feasible, the following
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase
description is available;

[[Page 227]]

    (B) Two or more responsible bidders are willing and able to compete
effectively and for the business; and
    (C) The procurement lends itself to a firm fixed price contract and
the selection of the successful bidder can be made principally on the
basis of price.
    (ii) If sealed bids are used, the following requirements apply:
    (A) The invitation for bids will be publicly advertised and bids
shall be solicited from an adequate number of known suppliers, providing
them sufficient time prior to the date set for opening the bids;
    (B) The invitation for bids, which will include any specifications
and pertinent attachments, shall define the items or services in order
for the bidder to properly respond;
    (C) All bids will be publicly opened at the time and place
prescribed in the invitation for bids;
    (D) A firm fixed-price contract award will be made in writing to the
lowest responsive and responsible bidder. Where specified in bidding
documents, factors such as discounts, transportation cost, and life
cycle costs shall be considered in determining which bid is lowest.
Payment discounts will only be used to determine the low bid when prior
experience indicates that such discounts are usually taken advantage of;
and
    (E) Any or all bids may be rejected if there is a sound documented
reason.
    (3) Procurement by competitive proposals. The technique of
competitive proposals is normally conducted with more than one source
submitting an offer, and either a fixed-price or cost-reimbursement type
contract is awarded. It is generally used when conditions are not
appropriate for the use of sealed bids. If this method is used, the
following requirements apply:
    (i) Requests for proposals will be publicized and identify all
evaluation factors and their relative importance. Any response to
publicized requests for proposals shall be honored to the maximum extent
practical;
    (ii) Proposals will be solicited from an adequate number of
qualified sources;
    (iii) Grantees and subgrantees will have a method for conducting
technical evaluations of the proposals received and for selecting
awardees;
    (iv) Awards will be made to the responsible firm whose proposal is
most advantageous to the program, with price and other factors
considered; and
    (v) Grantees and subgrantees may use competitive proposal procedures
for qualifications-based procurement of architectural/engineering (A/E)
professional services whereby competitors' qualifications are evaluated
and the most qualified competitor is selected, subject to negotiation of
fair and reasonable compensation. The method, where price is not used as
a selection factor, can only be used in procurement of A/E professional
services. It cannot be used to purchase other types of services though
A/E firms are a potential source to perform the proposed effort.
    (4) Procurement by noncompetitive proposals is procurement through
solicitation of a proposal from only one source, or after solicitation
of a number of sources, competition is determined inadequate.
    (i) Procurement by noncompetitive proposals may be used only when
the award of a contract is infeasible under small purchase procedures,
sealed bids or competitive proposals and one of the following
circumstances applies:
    (A) The item is available only from a single source;
    (B) The public exigency or emergency for the requirement will not
permit a delay resulting from competitive solicitation;
    (C) The awarding agency authorizes noncompetitive proposals; or
    (D) After solicitation of a number of sources, competition is
determined inadequate.
    (ii) Cost analysis, i.e., verifying the proposed cost data, the
projections of the data, and the evaluation of the specific elements of
costs and profits, is required.
    (iii) Grantees and subgrantees may be required to submit the
proposed procurement to the awarding agency for pre-award review in
accordance with paragraph (g) of this section.
    (e) Contracting with small and minority firms, women's business
enterprise and labor surplus area firms. (1) The grantee and subgrantee
will take all necessary

[[Page 228]]

affirmative steps to assure that minority firms, women's business
enterprises, and labor surplus area firms are used when possible.
    (2) Affirmative steps shall include:
    (i) Placing qualified small and minority businesses and women's
business enterprises on solicitation lists;
    (ii) Assuring that small and minority businesses, and women's
business enterprises are solicited whenever they are potential sources;
    (iii) Dividing total requirements, when economically feasible, into
smaller tasks or quantities to permit maximum participation by small and
minority business, and women's business enterprises;
    (iv) Establishing delivery schedules, where the requirement permits,
which encourage participation by small and minority business, and
women's business enterprises;
    (v) Using the services and assistance of the Small Business
Administration, and the Minority Business Development Agency of the
Department of Commerce; and
    (vi) Requiring the prime contractor, if subcontracts are to be let,
to take the affirmative steps listed in paragraphs (e)(2) (i) through
(v) of this section.
    (f) Contract cost and price. (1) Grantees and subgrantees must
perform a cost or price analysis in connection with every procurement
action including contract modifications. The method and degree of
analysis is dependent on the facts surrounding the particular
procurement situation, but as a starting point, grantees must make
independent estimates before receiving bids or proposals. A cost
analysis must be performed when the offeror is required to submit the
elements of his estimated cost, e.g., under professional, consulting,
and architectural engineering services contracts. A cost analysis will
be necessary when adequate price competition is lacking, and for sole
source procurements, including contract modifications or change orders,
unless price resonableness can be established on the basis of a catalog
or market price of a commercial product sold in substantial quantities
to the general public or based on prices set by law or regulation. A
price analysis will be used in all other instances to determine the
reasonableness of the proposed contract price.
    (2) Grantees and subgrantees will negotiate profit as a separate
element of the price for each contract in which there is no price
competition and in all cases where cost analysis is performed. To
establish a fair and reasonable profit, consideration will be given to
the complexity of the work to be performed, the risk borne by the
contractor, the contractor's investment, the amount of subcontracting,
the quality of its record of past performance, and industry profit rates
in the surrounding geographical area for similar work.
    (3) Costs or prices based on estimated costs for contracts under
grants will be allowable only to the extent that costs incurred or cost
estimates included in negotiated prices are consistent with Federal cost
principles (see Sec. 80.22). Grantees may reference their own cost
principles that comply with the applicable Federal cost principles.
    (4) The cost plus a percentage of cost and percentage of
construction cost methods of contracting shall not be used.
    (g) Awarding agency review. (1) Grantees and subgrantees must make
available, upon request of the awarding agency, technical specifications
on proposed procurements where the awarding agency believes such review
is needed to ensure that the item and/or service specified is the one
being proposed for purchase. This review generally will take place prior
to the time the specification is incorporated into a solicitation
document. However, if the grantee or subgrantee desires to have the
review accomplished after a solicitation has been developed, the
awarding agency may still review the specifications, with such review
usually limited to the technical aspects of the proposed purchase.
    (2) Grantees and subgrantees must on request make available for
awarding agency pre-award review procurement documents, such as requests
for proposals or invitations for bids, independent cost estimates, etc.
when:
    (i) A grantee's or subgrantee's procurement procedures or operation
fails

[[Page 229]]

to comply with the procurement standards in this section; or
    (ii) The procurement is expected to exceed the simplified
acquisition threshold and is to be awarded without competition or only
one bid or offer is received in response to a solicitation; or
    (iii) The procurement, which is expected to exceed the simplified
acquisition threshold, specifies a ``brand name'' product; or
    (iv) The proposed award is more than the simplified acquisition
threshold and is to be awarded to other than the apparent low bidder
under a sealed bid procurement; or
    (v) A proposed contract modification changes the scope of a contract
or increases the contract amount by more than the simplified acquisition
threshold.
    (3) A grantee or subgrantee will be exempt from the pre-award review
in paragraph (g)(2) of this section if the awarding agency determines
that its procurement systems comply with the standards of this section.
    (i) A grantee or subgrantee may request that its procurement system
be reviewed by the awarding agency to determine whether its system meets
these standards in order for its system to be certified. Generally,
these reviews shall occur where there is a continuous high-dollar
funding, and third-party contracts are awarded on a regular basis.
    (ii) A grantee or subgrantee may self-certify its procurement
system. Such self-certification shall not limit the awarding agency's
right to survey the system. Under a self-certification procedure,
awarding agencies may wish to rely on written assurances from the
grantee or subgrantee that it is complying with these standards. A
grantee or subgrantee will cite specific procedures, regulations,
standards, etc., as being in compliance with these requirements and have
its system available for review.
    (h) Bonding requirements. For construction or facility improvement
contracts or subcontracts exceeding the simplified acquisition
threshold, the awarding agency may accept the bonding policy and
requirements of the grantee or subgrantee provided the awarding agency
has made a determination that the awarding agency's interest is
adequately protected. If such a determination has not been made, the
minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of
the bid price. The ``bid guarantee'' shall consist of a firm commitment
such as a bid bond, certified check, or other negotiable instrument
accompanying a bid as assurance that the bidder will, upon acceptance of
his bid, execute such contractual documents as may be required within
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent
of the contract price. A ``performance bond'' is one executed in
connection with a contract to secure fulfillment of all the contractor's
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of
the contract price. A ``payment bond'' is one executed in connection
with a contract to assure payment as required by law of all persons
supplying labor and material in the execution of the work provided for
in the contract.
    (i) Contract provisions. A grantee's and subgrantee's contracts must
contain provisions in paragraph (i) of this section. Federal agencies
are permitted to require changes, remedies, changed conditions, access
and records retention, suspension of work, and other clauses approved by
the Office of Federal Procurement Policy.
    (1) Administrative, contractual, or legal remedies in instances
where contractors violate or breach contract terms, and provide for such
sanctions and penalties as may be appropriate. (Contracts more than the
simplified acquisition threshold)
    (2) Termination for cause and for convenience by the grantee or
subgrantee including the manner by which it will be effected and the
basis for settlement. (All contracts in excess of $10,000)
    (3) Compliance with Executive Order 11246 of September 24, 1965,
entitled ``Equal Employment Opportunity,'' as amended by Executive Order
11375 of October 13, 1967, and as supplemented in Department of Labor
regulations (41

[[Page 230]]

CFR chapter 60). (All construction contracts awarded in excess of
$10,000 by grantees and their contractors or subgrantees)
    (4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C.
874) as supplemented in Department of Labor regulations (29 CFR part 3).
(All contracts and subgrants for construction or repair)
    (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7)
as supplemented by Department of Labor regulations (29 CFR part 5).
(Construction contracts in excess of $2000 awarded by grantees and
subgrantees when required by Federal grant program legislation)
    (6) Compliance with sections 103 and 107 of the Contract Work Hours
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by
Department of Labor regulations (29 CFR part 5). (Construction contracts
awarded by grantees and subgrantees in excess of $2000, and in excess of
$2500 for other contracts which involve the employment of mechanics or
laborers)
    (7) Notice of awarding agency requirements and regulations
pertaining to reporting.
    (8) Notice of awarding agency requirements and regulations
pertaining to patent rights with respect to any discovery or invention
which arises or is developed in the course of or under such contract.
    (9) Awarding agency requirements and regulations pertaining to
copyrights and rights in data.
    (10) Access by the grantee, the subgrantee, the Federal grantor
agency, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records of the contractor which are directly pertinent to that specific
contract for the purpose of making audit, examination, excerpts, and
transcriptions.
    (11) Retention of all required records for three years after
grantees or subgrantees make final payments and all other pending
matters are closed.
    (12) Compliance with all applicable standards, orders, or
requirements issued under section 306 of the Clean Air Act (42 U.S.C.
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive
Order 11738, and Environmental Protection Agency regulations (40 CFR
part 15). (Contracts, subcontracts, and subgrants of amounts in excess
of $100,000)
    (13) Mandatory standards and policies relating to energy efficiency
which are contained in the state energy conservation plan issued in
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163,
89 Stat. 871).
    (j) Contracting with faith-based organizations. (1)(i) A faith-based
organization is eligible to contract with grantees and subgrantees,
including States, on the same basis as any other private organization,
with respect to contracts for which such other organizations are
eligible.
    (ii) In the selection of goods and services providers, grantees and
subgrantees, including States, shall not discriminate for or against a
private organization on the basis of the organization's religious
character or affiliation.
    (2) The provisions of Sec. Sec. 75.532 and 76.532 applicable to
grantees and subgrantees apply to a faith-based organization that
contracts with a grantee or subgrantee, including a State, unless the
faith-based organization is selected as a result of the genuine and
independent private choices of individual beneficiaries of the program
and provided the organization otherwise satisfies the requirements of
the program.
    (3) A private organization that engages in inherently religious
activities, such as religious worship, instruction, or proselytization,
must offer those services separately in time or location from any
programs or services supported by a contract with a grantee or
subgrantee, including a State, and participation in any such inherently
religious activities by beneficiaries of the programs supported by the
contract must be voluntary, unless the organization is selected as a
result of the genuine and independent private choices of individual
beneficiaries of the program and provided the organization otherwise
satisfies the requirements of the program.
    (4)(i) A faith-based organization that contracts with a grantee or
subgrantee,

[[Page 231]]

including a State, may retain its independence, autonomy, right of
expression, religious character, and authority over its governance.
    (ii) A faith-based organization may, among other things--
    (A) Retain religious terms in its name;
    (B) Continue to carry out its mission, including the definition,
development, practice, and expression of its religious beliefs;
    (C) Use its facilities to provide services without removing or
altering religious art, icons, scriptures, or other symbols from these
facilities;
    (D) Select its board members and otherwise govern itself on a
religious basis; and
    (E) Include religious references in its mission statement and other
chartering or governing documents.
    (5) A private organization that contracts with a grantee or
subgrantee, including a State, shall not discriminate against a
beneficiary or prospective beneficiary in the provision of program
services on the basis of religion or religious belief.
    (6) A religious organization's exemption from the Federal
prohibition on employment discrimination on the basis of religion, in
section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is
not forfeited when the organization contracts with a grantee or
subgrantee.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988; 60 FR 19639, 19643, Apr. 19, 1995; 69 FR 31711, June 4, 2004]



Sec. 80.37  Subgrants.

    (a) States. States shall follow state law and procedures when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. States shall:
    (1) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
    (2) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statute and regulation;
    (3) Ensure that a provision for compliance with Sec. 80.42 is
placed in every cost reimbursement subgrant; and
    (4) Conform any advances of grant funds to subgrantees substantially
to the same standards of timing and amount that apply to cash advances
by Federal agencies.
    (b) All other grantees. All other grantees shall follow the
provisions of this part which are applicable to awarding agencies when
awarding and administering subgrants (whether on a cost reimbursement or
fixed amount basis) of financial assistance to local and Indian tribal
governments. Grantees shall:
    (1) Ensure that every subgrant includes a provision for compliance
with this part;
    (2) Ensure that every subgrant includes any clauses required by
Federal statute and executive orders and their implementing regulations;
and
    (3) Ensure that subgrantees are aware of requirements imposed upon
them by Federal statutes and regulations.
    (c) Exceptions. By their own terms, certain provisions of this part
do not apply to the award and administration of subgrants:
    (1) Section 80.10;
    (2) Section 80.11;
    (3) The letter-of-credit procedures specified in Treasury
Regulations at 31 CFR part 205, cited in Sec. 80.21; and
    (4) Section 80.50.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

               Reports, Records Retention, and Enforcement



Sec. 80.40  Monitoring and reporting program performance.

    (a) Monitoring by grantees. Grantees are responsible for managing
the day-to-day operations of grant and subgrant supported activities.
Grantees must monitor grant and subgrant supported activities to assure
compliance with applicable Federal requirements and that performance
goals are being achieved. Grantee monitoring must cover each program,
function or activity.

[[Page 232]]

    (b) Nonconstruction performance reports. The Federal agency may, if
it decides that performance information available from subsequent
applications contains sufficient information to meet its programmatic
needs, require the grantee to submit a performance report only upon
expiration or termination of grant support. Unless waived by the Federal
agency this report will be due on the same date as the final Financial
Status Report.
    (1) Grantees shall submit annual performance reports unless the
awarding agency requires quarterly or semi-annual reports. However,
performance reports will not be required more frequently than quarterly.
Annual reports shall be due 90 days after the grant year, quarterly or
semi-annual reports shall be due 30 days after the reporting period. The
final performance report will be due 90 days after the expiration or
termination of grant support. If a justified request is submitted by a
grantee, the Federal agency may extend the due date for any performance
report. Additionally, requirements for unnecessary performance reports
may be waived by the Federal agency.
    (2) Performance reports will contain, for each grant, brief
information on the following:
    (i) A comparison of actual accomplishments to the objectives
established for the period. Where the output of the project can be
quantified, a computation of the cost per unit of output may be required
if that information will be useful.
    (ii) The reasons for slippage if established objectives were not
met.
    (iii) Additional pertinent information including, when appropriate,
analysis and explanation of cost overruns or high unit costs.
    (3) Grantees will not be required to submit more than the original
and two copies of performance reports.
    (4) Grantees will adhere to the standards in this section in
prescribing performance reporting requirements for subgrantees.
    (c) Construction performance reports. For the most part, on-site
technical inspections and certified percentage-of-completion data are
relied on heavily by Federal agencies to monitor progress under
construction grants and subgrants. The Federal agency will require
additional formal performance reports only when considered necessary,
and never more frequently than quarterly.
    (d) Significant developments. Events may occur between the scheduled
performance reporting dates which have significant impact upon the grant
or subgrant supported activity. In such cases, the grantee must inform
the Federal agency as soon as the following types of conditions become
known:
    (1) Problems, delays, or adverse conditions which will materially
impair the ability to meet the objective of the award. This disclosure
must include a statement of the action taken, or contemplated, and any
assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and
objectives sooner or at less cost than anticipated or producing more
beneficial results than originally planned.
    (e) Federal agencies may make site visits as warranted by program
needs.
    (f) Waivers, extensions. (1) Federal agencies may waive any
performance report required by this part if not needed.
    (2) The grantee may waive any performance report from a subgrantee
when not needed. The grantee may extend the due date for any performance
report from a subgrantee if the grantee will still be able to meet its
performance reporting obligations to the Federal agency.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.41  Financial reporting.

    (a) General. (1) Except as provided in paragraphs (a) (2) and (5) of
this section, grantees will use only the forms specified in paragraphs
(a) through (e) of this section, and such supplementary or other forms
as may from time to time be authorized by OMB, for:
    (i) Submitting financial reports to Federal agencies, or

[[Page 233]]

    (ii) Requesting advances or reimbursements when letters of credit
are not used.
    (2) Grantees need not apply the forms prescribed in this section in
dealing with their subgrantees. However, grantees shall not impose more
burdensome requirements on subgrantees.
    (3) Grantees shall follow all applicable standard and supplemental
Federal agency instructions approved by OMB to the extend required under
the Paperwork Reduction Act of 1980 for use in connection with forms
specified in paragraphs (b) through (e) of this section. Federal
agencies may issue substantive supplementary instructions only with the
approval of OMB. Federal agencies may shade out or instruct the grantee
to disregard any line item that the Federal agency finds unnecessary for
its decisionmaking purposes.
    (4) Grantees will not be required to submit more than the original
and two copies of forms required under this part.
    (5) Federal agencies may provide computer outputs to grantees to
expedite or contribute to the accuracy of reporting. Federal agencies
may accept the required information from grantees in machine usable
format or computer printouts instead of prescribed forms.
    (6) Federal agencies may waive any report required by this section
if not needed.
    (7) Federal agencies may extend the due date of any financial report
upon receiving a justified request from a grantee.
    (b) Financial Status Report--(1) Form. Grantees will use Standard
Form 269 or 269A, Financial Status Report, to report the status of funds
for all nonconstruction grants and for construction grants when required
in accordance with Sec. 80.41(e)(2)(iii).
    (2) Accounting basis. Each grantee will report program outlays and
program income on a cash or accrual basis as prescribed by the awarding
agency. If the Federal agency requires accrual information and the
grantee's accounting records are not normally kept on the accural basis,
the grantee shall not be required to convert its accounting system but
shall develop such accrual information through and analysis of the
documentation on hand.
    (3) Frequency. The Federal agency may prescribe the frequency of the
report for each project or program. However, the report will not be
required more frequently than quarterly. If the Federal agency does not
specify the frequency of the report, it will be submitted annually. A
final report will be required upon expiration or termination of grant
support.
    (4) Due date. When reports are required on a quarterly or semiannual
basis, they will be due 30 days after the reporting period. When
required on an annual basis, they will be due 90 days after the grant
year. Final reports will be due 90 days after the expiration or
termination of grant support.
    (c) Federal Cash Transactions Report--(1) Form. (i) For grants paid
by letter or credit, Treasury check advances or electronic transfer of
funds, the grantee will submit the Standard Form 272, Federal Cash
Transactions Report, and when necessary, its continuation sheet,
Standard Form 272a, unless the terms of the award exempt the grantee
from this requirement.
    (ii) These reports will be used by the Federal agency to monitor
cash advanced to grantees and to obtain disbursement or outlay
information for each grant from grantees. The format of the report may
be adapted as appropriate when reporting is to be accomplished with the
assistance of automatic data processing equipment provided that the
information to be submitted is not changed in substance.
    (2) Forecasts of Federal cash requirements. Forecasts of Federal
cash requirements may be required in the ``Remarks'' section of the
report.
    (3) Cash in hands of subgrantees. When considered necessary and
feasible by the Federal agency, grantees may be required to report the
amount of cash advances in excess of three days' needs in the hands of
their subgrantees or contractors and to provide short narrative
explanations of actions taken by the grantee to reduce the excess
balances.
    (4) Frequency and due date. Grantees must submit the report no later
than 15 working days following the end of each quarter. However, where
an advance either by letter of credit or electronic transfer of funds is
authorized at an

[[Page 234]]

annualized rate of one million dollars or more, the Federal agency may
require the report to be submitted within 15 working days following the
end of each month.
    (d) Request for advance or reimbursement--(1) Advance payments.
Requests for Treasury check advance payments will be submitted on
Standard Form 270, Request for Advance or Reimbursement. (This form will
not be used for drawdowns under a letter of credit, electronic funds
transfer or when Treasury check advance payments are made to the grantee
automatically on a predetermined basis.)
    (2) Reimbursements. Requests for reimbursement under nonconstruction
grants will also be submitted on Standard Form 270. (For reimbursement
requests under construction grants, see paragraph (e)(1) of this
section.)
    (3) The frequency for submitting payment requests is treated in
Sec. 80.41(b)(3).
    (e) Outlay report and request for reimbursement for construction
programs--(1) Grants that support construction activities paid by
reimbursement method. (i) Requests for reimbursement under construction
grants will be submitted on Standard Form 271, Outlay Report and Request
for Reimbursement for Construction Programs. Federal agencies may,
however, prescribe the Request for Advance or Reimbursement form,
specified in Sec. 80.41(d), instead of this form.
    (ii) The frequency for submitting reimbursement requests is treated
in Sec. 80.41(b)(3).
    (2) Grants that support construction activities paid by letter of
credit, electronic funds transfer or Treasury check advance. (i) When a
construction grant is paid by letter of credit, electronic funds
transfer or Treasury check advances, the grantee will report its outlays
to the Federal agency using Standard Form 271, Outlay Report and Request
for Reimbursement for Construction Programs. The Federal agency will
provide any necessary special instruction. However, frequency and due
date shall be governed by Sec. 80.41(b) (3) and (4).
    (ii) When a construction grant is paid by Treasury check advances
based on periodic requests from the grantee, the advances will be
requested on the form specified in Sec. 80.41(d).
    (iii) The Federal agency may substitute the Financial Status Report
specified in Sec. 80.41(b) for the Outlay Report and Request for
Reimbursement for Construction Programs.
    (3) Accounting basis. The accounting basis for the Outlay Report and
Request for Reimbursement for Construction Programs shall be governed by
Sec. 80.41(b)(2).

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.42  Retention and access requirements for records.

    (a) Applicability. (1) This section applies to all financial and
programmatic records, supporting documents, statistical records, and
other records of grantees or subgrantees which are:
    (i) Required to be maintained by the terms of this part, program
regulations or the grant agreement, or
    (ii) Otherwise reasonably considered as pertinent to program
regulations or the grant agreement.
    (2) This section does not apply to records maintained by contractors
or subcontractors. For a requirement to place a provision concerning
records in certain kinds of contracts, see Sec. 80.36(i)(10).
    (b) Length of retention period. (1) Except as otherwise provided,
records must be retained for three years from the starting date
specified in paragraph (c) of this section.
    (2) If any litigation, claim, negotiation, audit or other action
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action
and resolution of all issues which arise from it, or until the end of
the regular 3-year period, whichever is later.
    (3) To avoid duplicate recordkeeping, awarding agencies may make
special arrangements with grantees and subgrantees to retain any records
which are continuously needed for joint use. The awarding agency will
request transfer of records to its custody when

[[Page 235]]

it determines that the records possess long-term retention value. When
the records are transferred to or maintained by the Federal agency, the
3-year retention requirement is not applicable to the grantee or
subgrantee.
    (4) A recipient that receives funds under a program subject to 20
U.S.C. 1232f (section 437 of the General Education Provisions Act) shall
retain records for a minimum of three years after the starting date
specified in paragraph (c) of this section.
    (c) Starting date of retention period--(1) General. When grant
support is continued or renewed at annual or other intervals, the
retention period for the records of each funding period starts on the
day the grantee or subgrantee submits to the awarding agency its single
or last expenditure report for that period. However, if grant support is
continued or renewed quarterly, the retention period for each year's
records starts on the day the grantee submits its expenditure report for
the last quarter of the Federal fiscal year. In all other cases, the
retention period starts on the day the grantee submits its final
expenditure report. If an expenditure report has been waived, the
retention period starts on the day the report would have been due.
    (2) Real property and equipment records. The retention period for
real property and equipment records starts from the date of the
disposition or replacement or transfer at the direction of the awarding
agency.
    (3) Records for income transactions after grant or subgrant support.
In some cases grantees must report income after the period of grant
support. Where there is such a requirement, the retention period for the
records pertaining to the earning of the income starts from the end of
the grantee's fiscal year in which the income is earned.
    (4) Indirect cost rate proposals, cost allocations plans, etc. This
paragraph applies to the following types of documents, and their
supporting records: indirect cost rate computations or proposals, cost
allocation plans, and any similar accounting computations of the rate at
which a particular group of costs is chargeable (such as computer usage
chargeback rates or composite fringe benefit rates).
    (i) If submitted for negotiation. If the proposal, plan, or other
computation is required to be submitted to the Federal Government (or to
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of
such submission.
    (ii) If not submitted for negotiation. If the proposal, plan, or
other computation is not required to be submitted to the Federal
Government (or to the grantee) for negotiation purposes, then the 3-year
retention period for the proposal plan, or computation and its
supporting records starts from end of the fiscal year (or other
accounting period) covered by the proposal, plan, or other computation.
    (d) Substitution of microfilm. Copies made by microfilming,
photocopying, or similar methods may be substituted for the original
records.
    (e) Access to records--(1) Records of grantees and subgrantees. The
awarding agency and the Comptroller General of the United States, or any
of their authorized representatives, shall have the right of access to
any pertinent books, documents, papers, or other records of grantees and
subgrantees which are pertinent to the grant, in order to make audits,
examinations, excerpts, and transcripts.
    (2) Expiration of right of access. The rights of access in this
section must not be limited to the required retention period but shall
last as long as the records are retained.
    (f) Restrictions on public access. The Federal Freedom of
Information Act (5 U.S.C. 552) does not apply to records Unless required
by Federal, State, or local law, grantees and subgrantees are not
required to permit public access to their records.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 8072, Mar. 11,
1988; 53 FR 49143, Dec. 6, 1988; 64 FR 50392, Sept. 16, 1999]



Sec. 80.43  Enforcement.

    (a) Remedies for noncompliance. If a grantee or subgrantee
materially fails to comply with any term of an award,

[[Page 236]]

whether stated in a Federal statute or regulation, an assurance, in a
State plan or application, a notice of award, or elsewhere, the awarding
agency may take one or more of the following actions, as appropriate in
the circumstances:
    (1) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee or more severe enforcement
action by the awarding agency,
    (2) Disallow (that is, deny both use of funds and matching credit
for) all or part of the cost of the activity or action not in
compliance,
    (3) Wholly or partly suspend or terminate the current award for the
grantee's or subgrantee's program,
    (4) Withhold further awards for the program, or
    (5) Take other remedies that may be legally available.
    (b) Hearings, appeals. In taking an enforcement action, the awarding
agency will provide the grantee or subgrantee an opportunity for such
hearing, appeal, or other administrative proceeding to which the grantee
or subgrantee is entitled under any statute or regulation applicable to
the action involved.
    (c) Effects of suspension and termination. Costs of grantee or
subgrantee resulting from obligations incurred by the grantee or
subgrantee during a suspension or after termination of an award are not
allowable unless the awarding agency expressly authorizes them in the
notice of suspension or termination or subsequently. Other grantee or
subgrantee costs during suspension or after termination which are
necessary and not reasonably avoidable are allowable if:
    (1) The costs result from obligations which were properly incurred
by the grantee or subgrantee before the effective date of suspension or
termination, are not in anticipation of it, and, in the case of a
termination, are noncancellable, and,
    (2) The costs would be allowable if the award were not suspended or
expired normally at the end of the funding period in which the
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement
remedies identified in this section, including suspension and
termination, do not preclude grantee or subgrantee from being subject to
``Debarment and Suspension'' under E.O. 12549 (see Sec. 80.35).

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.44  Termination for convenience.

    Except as provided in Sec. 80.43 awards may be terminated in whole
or in part only as follows:
    (a) By the awarding agency with the consent of the grantee or
subgrantee in which case the two parties shall agree upon the
termination conditions, including the effective date and in the case of
partial termination, the portion to be terminated, or
    (b) By the grantee or subgrantee upon written notification to the
awarding agency, setting forth the reasons for such termination, the
effective date, and in the case of partial termination, the portion to
be terminated. However, if, in the case of a partial termination, the
awarding agency determines that the remaining portion of the award will
not accomplish the purposes for which the award was made, the awarding
agency may terminate the award in its entirety under either Sec. 80.43
or paragraph (a) of this section.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



                 Subpart D_After-the-Grant Requirements



Sec. 80.50  Closeout.

    (a) General. The Federal agency will close out the award when it
determines that all applicable administrative actions and all required
work of the grant has been completed.
    (b) Reports. Within 90 days after the expiration or termination of
the grant, the grantee must submit all financial, performance, and other
reports required as a condition of the grant. Upon request by the
grantee, Federal agencies may extend this timeframe. These may include
but are not limited to:
    (1) Final performance or progress report.

[[Page 237]]

    (2) Financial Status Report (SF 269) or Outlay Report and Request
for Reimbursement for Construction Programs (SF-271) (as applicable).
    (3) Final request for payment (SF-270) (if applicable).
    (4) Invention disclosure (if applicable).
    (5) Federally-owned property report. In accordance with Sec.
80.32(f), a grantee must submit an inventory of all federally owned
property (as distinct from property acquired with grant funds) for which
it is accountable and request disposition instructions from the Federal
agency of property no longer needed.
    (c) Cost adjustment. The Federal agency will, within 90 days after
receipt of reports in paragraph (b) of this section, make upward or
downward adjustments to the allowable costs.
    (d) Cash adjustments. (1) The Federal agency will make prompt
payment to the grantee for allowable reimbursable costs.
    (2) The grantee must immediately refund to the Federal agency any
balance of unobligated (unencumbered) cash advanced that is not
authorized to be retained for use on other grants.

(Approved by the Office of Management and Budget under control number
1880-0517)

(Authority: 20 U.S.C. 3474; OMB Circular A-102)

[53 FR 8071, 8087, Mar. 11, 1988, as amended at 53 FR 49143, Dec. 6,
1988]



Sec. 80.51  Later disallowances and adjustments.

    The closeout of a grant does not affect:
    (a) The Federal agency's right to disallow costs and recover funds
on the basis of a later audit or other review;
    (b) The grantee's obligation to return any funds due as a result of
later refunds, corrections, or other transactions;
    (c) Records retention as required in Sec. 80.42;
    (d) Property management requirements in Sec. Sec. 80.31 and 80.32;
and
    (e) Audit requirements in Sec. 80.26.

(Authority: 20 U.S.C. 3474; OMB Circular A-102)



Sec. 80.52  Collection of amounts due.

    (a) Any funds paid to a grantee in excess of the amount to which the
grantee is finally determined to be entitled under the terms of the
award constitute a debt to the Federal Government. If not paid within a
reasonable period after demand, the Federal agency may reduce the debt
by:
    (1) Making an adminstrative offset against other requests for
reimbursements,
    (2) Withholding advance payments otherwise due to the grantee, or
    (3) Other action permitted by law.
    (b) Except where otherwise provided by statutes or regulations, the
Federal agency will charge interest on an overdue debt in accordance
with the Federal Claims Collection Standards (4 CFR Ch. II). The date
from which interest is computed is not extended by litigation or the
filing of any form of appeal.

Subpart E--Entitlement [Reserved]



PART 81_GENERAL EDUCATION PROVISIONS ACT_ENFORCEMENT--Table of Contents



                      Subpart A_General Provisions

Sec.
81.1 Purpose.
81.2 Definitions.
81.3 Jurisdiction of the Office of Administrative Law Judges.
81.4 Membership and assignment to cases.
81.5 Authority and responsibility of an Administrative Law Judge.
81.6 Hearing on the record.
81.7 Non-party participation.
81.8 Representation.
81.9 Location of proceedings.
81.10 Ex parte communications.
81.11 Motions.
81.12 Filing requirements.
81.13 Mediation.
81.14 Settlement negotiations.
81.15 Evidence.
81.16 Discovery.
81.17 Privileges.
81.18 The record.
81.19 Costs and fees of parties.
81.20 Interlocutory appeals to the Secretary from rulings of an ALJ.

                Subpart B_Hearings for Recovery of Funds

81.30 Basis for recovery of funds.
81.31 Measure of recovery.
81.32 Proportionality.

[[Page 238]]

81.33 Mitigating circumstances.
81.34 Notice of a disallowance decision.
81.35 Reduction of claims.
81.36 Compromise of claims under General Education Provisions Act.
81.37 Application for review of a disallowance decision.
81.38 Consideration of an application for review.
81.39 Submission of evidence.
81.40 Burden of proof.
81.41 Initial decision.
81.42 Petition for review of initial decision.
81.43 Review by the Secretary.
81.44 Final decision of the Department.
81.45 Collection of claims.

Appendix to Part 81--Illustrations of Proportionality

    Authority: 20 U.S.C. 1221e-3, 1234-1234i, and 3474(a), unless
otherwise noted.

    Source: 54 FR 19512, May 5, 1989, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 81.1  Purpose.

    The regulations in this part govern the enforcement of legal
requirements under applicable programs administered by the Department of
Education and implement Part E of the General Education Provisions Act
(GEPA).

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))



Sec. 81.2  Definitions.

    The following definitions apply to the terms used in this part:
    Administrative Law Judge (ALJ) means a judge appointed by the
Secretary in accordance with section 451 (b) and (c) of GEPA.
    Applicable program means any program for which the Secretary of
Education has administrative responsibility, except a program authorized
by--
    (a) The Higher Education Act of 1965, as amended;
    (b) The Act of September 30, 1950 (Pub. L. 874, 81st Congress), as
amended; or
    (c) The Act of September 23, 1950 (Pub. L. 815, 81st Congress), as
amended.
    Department means the United States Department of Education.
    Disallowance decision means the decision of an authorized
Departmental official that a recipient must return funds because it made
an expenditure of funds that was not allowable or otherwise failed to
discharge its obligation to account properly for funds. Such a decision,
referred to as a ``preliminary departmental decision'' in section 452 of
GEPA, is subject to review by the Office of Administrative Law Judges.
    Party means either of the following:
    (a) A recipient that appeals a decision.
    (b) An authorized Departmental official who issues a decision that
is appealed.
    Recipient means the recipient of a grant or cooperative agreement
under an applicable program.
    Secretary means the Secretary of the Department of Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.

(Authority: 20 U.S.C. 1221e-3, 1234 (b), (c), and (f)(1), 1234a(a)(1),
1234i, and 3474(a))

[54 FR 19512, May 5, 1989, as amended at 58 FR 43473, Aug. 16, 1993]



Sec. 81.3  Jurisdiction of the Office of Administrative Law Judges.

    (a) The Office of Administrative Law Judges (OALJ) established under
section 451(a) of GEPA has jurisdiction to conduct the following
proceedings concerning an applicable program:
    (1) Hearings for recovery of funds.
    (2) Withholding hearings.
    (3) Cease and desist hearings.
    (b) The OALJ also has jurisdiction to conduct other proceedings
designated by the Secretary. If a proceeding or class of proceedings is
so designated, the Department publishes a notice of the designation in
the Federal Register.

(Authority: 5 U.S.C. 554, 20 U.S.C. 1234(a))



Sec. 81.4  Membership and assignment to cases.

    (a) The Secretary appoints Administrative Law Judges as members of
the OALJ.
    (b) The Secretary appoints one of the members of the OALJ to be the
chief judge. The chief judge is responsible for the efficient and
effective administration of the OALJ.

[[Page 239]]

    (c) The chief judge assigns an ALJ to each case or class of cases
within the jurisdiction of the OALJ.

(Authority: 20 U.S.C. 1221e-3, 1234 (b) and (c), and 3474(a))



Sec. 81.5  Authority and responsibility of an Administrative Law Judge.

    (a) An ALJ assigned to a case conducts a hearing on the record. The
ALJ regulates the course of the proceedings and the conduct of the
parties to ensure a fair, expeditious, and economical resolution of the
case in accordance with applicable law.
    (b) An ALJ is bound by all applicable statutes and regulations and
may neither waive them nor rule them invalid.
    (c) An ALJ is disqualified in any case in which the ALJ has a
substantial interest, has been of counsel, is or has been a material
witness, or is so related to or connected with any party or the party's
attorney as to make it improper for the ALJ to be assigned to the case.
    (d)(1) An ALJ may disqualify himself or herself at any time on the
basis of the standards in paragraph (c) of this section.
    (2) A party may file a motion to disqualify an ALJ under the
standards in paragraph (c) of this section. A motion to disqualify must
be accompanied by an affidavit that meets the requirements of 5 U.S.C.
556(b). Upon the filing of such a motion and affidavit, the ALJ decides
the disqualification matter before proceeding further with the case.

(Authority: 5 U.S.C. 556(b); 20 U.S.C. 1221e-3, 1234 (d), (f)(1) and
(g)(1), and 3474(a))



Sec. 81.6  Hearing on the record.

    (a) A hearing on the record is a process for the orderly
presentation of evidence and arguments by the parties.
    (b) Except as otherwise provided in this part or in a notice of
designation under Sec. 81.3(b), an ALJ conducts the hearing entirely on
the basis of briefs and other written submissions unless--
    (1) The ALJ determines, after reviewing all appropriate submissions,
that an evidentiary hearing is needed to resolve a material factual
issue in dispute; or
    (2) The ALJ determines, after reviewing all appropriate submissions,
that oral argument is needed to clarify the issues in the case.
    (c) At a party's request, the ALJ shall confer with the parties in
person or by conference telephone call before determining whether an
evidentiary hearing or an oral argument is needed.

(Authority: 5 U.S.C. 556(d); 20 U.S.C. 1221e-3, 1234(f)(1), and 3474)



Sec. 81.7  Non-party participation.

    (a) A person or organization, other than a party, that wishes to
participate in a case shall file an application to participate with the
ALJ assigned to the case. The application must--
    (1) Identify the case in which participation is sought;
    (2) State how the applicant's interest relates to the case;
    (3) State how the applicant's participation would aid in the
disposition of the case; and
    (4) State how the applicant seeks to participate.
    (b) The ALJ may permit an applicant to participate if the ALJ
determines that the applicant's participation--
    (1) Will aid in the disposition of the case;
    (2) Will not unduly delay the proceedings; and
    (3) Will not prejudice the adjudication of the parties' rights.
    (c) If the ALJ permits an applicant to participate, the ALJ permits
the applicant to file briefs.
    (d)(1) In addition to the participation described in paragraph (c)
of this section, the ALJ may permit the applicant to participate in any
or all of the following ways:
    (i) Submit documentary evidence.
    (ii) Participate in an evidentiary hearing afforded the parties.
    (iii) Participate in an oral argument afforded the parties.
    (2) The ALJ may place appropriate limits on an applicant's
participation to ensure the efficient conduct of the proceedings.
    (e) A non-party participant shall comply with the requirements for
parties in Sec. 81.11 and Sec. 81.12.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))

[[Page 240]]



Sec. 81.8  Representation.

    A party to, or other participant in, a case may be represented by
counsel.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))



Sec. 81.9  Location of proceedings.

    (a) An ALJ may hold conferences of the parties in person or by
conference telephone call.
    (b) Any conference, hearing, argument, or other proceeding at which
the parties are required to appear in person is held in the Washington,
DC metropolitan area unless the ALJ determines that the convenience and
necessity of the parties or their representatives requires that it be
held elsewhere.

(Authority: 5 U.S.C. 554(b); 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))



Sec. 81.10  Ex parte communications.

    A party to, or other participant in, a case may not communicate with
an ALJ on any fact in issue in the case or on any matter relevant to the
merits of the case unless the parties are given notice and an
opportunity to participate.

(Authority: 5 U.S.C. 554(d)(1), 557(d)(1)(A); 20 U.S.C. 1221e-3,
1234(f)(1), and 3474(a))



Sec. 81.11  Motions.

    (a) To obtain an order or a ruling from an ALJ, a party shall make a
motion to the ALJ.
    (b) Except for a request for an extension of time, a motion must be
made in writing unless the parties appear in person or participate in a
conference telephone call. The ALJ may require a party to reduce an oral
motion to writing.
    (c) If a party files a motion, the party shall serve a copy of the
motion on the other party on the filing date by hand-delivery or by
mail. If agreed upon by the parties, service of the motion may be made
upon the other party by facsimile transmission.
    (d) Except for a request for an extension of time, the ALJ may not
grant a party's written motion without the consent of the other party
unless the other party has had at least 21 days from the date of service
of the motion to respond. However, the ALJ may deny a motion without
awaiting a response.
    (e) The date of service of a motion is determined by the standards
for determining a filing date in Sec. 81.12(d).

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))

[54 FR 19512, May 5, 1989, as amended at 57 FR 56795, Nov. 30, 1992]



Sec. 81.12  Filing requirements.

    (a) Any written submission to an ALJ or the OALJ under this part
must be filed by hand-delivery, by mail, or by facsimile transmission.
The Secretary discourages the use of facsimile transmission for
documents longer than five pages.
    (b) If a party files a brief or other document with an ALJ or the
OALJ, the party shall serve a copy of the filed material on the other
party on the filing date by hand-delivery or by mail. If agreed upon by
the parties, service of a document may be made upon the other party by
facsimile transmission.
    (c) Any written submission to an ALJ or the OALJ must be accompanied
by a statement certifying the date that the filed material was filed and
served on the other party.
    (d)(1) The filing date for a written submission to an ALJ or the
OALJ is the date the document is--
    (i) Hand-delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (2) If a scheduled filing date falls on a Saturday, Sunday, or
Federal holiday, the filing deadline is the next business day.
    (e) A party filing by facsimile transmission is responsible for
confirming that a complete and legible copy of the document was received
by the Department.
    (f) If a document is filed by facsimile transmission, a follow-up
hard copy must be filed by hand-delivery or by mail within a reasonable
period of time.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))

[54 FR 19512, May 5, 1989, as amended at 57 FR 56795, Nov. 30, 1992]

[[Page 241]]



Sec. 81.13  Mediation.

    (a) Voluntary mediation is available for proceedings that are
pending before the OALJ.
    (b) A mediator must be independent of, and agreed to by, the parties
to the case.
    (c) A party may request mediation by filing a motion with the ALJ
assigned to the case. The OALJ arranges for a mediator if the parties to
the case agree to mediation.
    (d) A party may terminate mediation at any time. Mediation is
limited to 120 days unless the mediator informs the ALJ that--
    (1) The parties are likely to resolve some or all of the dispute;
and
    (2) An extension of time will facilitate an agreement.
    (e) The ALJ stays the proceedings during mediation.
    (f)(1) Evidence of conduct or statements made during mediation is
not admissible in any proceeding under this part. However, evidence that
is otherwise discoverable may not be excluded merely because it was
presented during mediation.
    (2) A mediator may not disclose, in any proceeding under this part,
information acquired as a part of his or her official mediation duties
that relates to any fact in issue in the case or any matter relevant to
the merits of the case.

(Authority: 20 U.S.C. 1221e-3, 1234 (f)(1) and (h), and 3474(a))



Sec. 81.14  Settlement negotiations.

    (a) If the parties to a case file a joint motion requesting a stay
of the proceedings for settlement negotiations, or for approval of a
settlement agreement, the ALJ may grant a stay of the proceedings upon a
finding of good cause.
    (b) Evidence of conduct or statements made during settlement
negotiations is not admissible in any proceeding under this part.
However, evidence that is otherwise discoverable may not be excluded
merely because it was presented during settlement negotiations.
    (c) The parties may not disclose the contents of settlement
negotiations to the ALJ. If the parties enter into a settlement
agreement and file a joint motion to dismiss the case, the ALJ grants
the motion.

(Authority: 20 U.S.C. 554(c)(1), 1221e-3, 1234(f)(1), and 3474(a))

[54 FR 19512, May 5, 1989, as amended at 58 FR 43473, Aug. 16, 1993]



Sec. 81.15  Evidence.

    (a) The Federal Rules of Evidence do not apply to proceedings under
this part. However, the ALJ accepts only evidence that is--
    (1) Relevant;
    (2) Material;
    (3) Not unduly repetitious; and
    (4) Not inadmissible under Sec. 81.13 or Sec. 81.14.
    (b) The ALJ may take official notice of facts that are generally
known or capable of accurate and ready determination by resort to
sources whose accuracy cannot reasonably be questioned.

(Authority: 5 U.S.C. 556 (d) and (e); 20 U.S.C. 1221e-3, 1234(f)(1), and
3474(a))



Sec. 81.16  Discovery.

    (a) The parties to a case are encouraged to exchange relevant
documents and information voluntarily.
    (b) The ALJ, at a party's request, may order compulsory discovery
described in paragraph (c) of this section if the ALJ determines that--
    (1) The order is necessary to secure a fair, expeditious, and
economical resolution of the case;
    (2) The discovery requested is likely to elicit relevant information
with respect to an issue in the case;
    (3) The discovery request was not made primarily for the purposes of
delay or harassment; and
    (4) The order would serve the ends of justice.
    (c) If a compulsory discovery is permissible under paragraph (b) of
this section, the ALJ may order a party to do one or more of the
following:
    (1) Make relevant documents available for inspection and copying by
the party making the request.
    (2) Answer written interrogatories that inquire into relevant
matters.
    (3) Have depositions taken.

[[Page 242]]

    (d) The ALJ may issue a subpoena to enforce an order described in
this section and may apply to the appropriate court of the United States
to enforce the subpoena.
    (e) The ALJ may not compel the discovery of information that is
legally privileged.
    (f)(1) The ALJ limits the period for discovery to not more than 90
days but may grant an extension for good cause.
    (2) At a party's request, the ALJ may set a specific schedule for
discovery.

(Authority: 20 U.S.C. 1234(f)(1) and (g))



Sec. 81.17  Privileges.

    The privilege of a person or governmental organization not to
produce documents or provide information in a proceeding under this part
is governed by the principles of common law as interpreted by the courts
of the United States.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))



Sec. 81.18  The record.

    (a) The ALJ arranges for any evidentiary hearing or oral argument to
be recorded and transcribed and makes the transcript available to the
parties. Transcripts are made available to non-Departmental parties at a
cost not to exceed the actual cost of duplication.
    (b) The record of a hearing on the record consists of--
    (1) All papers filed in the proceeding;
    (2) Documentary evidence admitted by the ALJ;
    (3) The transcript of any evidentiary hearing or oral argument; and
    (4) Rulings, orders, and subpoenas issued by the ALJ.

(Authority: 5 U.S.C. 556(e), 557(c); 20 U.S.C. 1221e-3(a)(1),
1234(f)(1), 3474(a))

[54 FR 19512, May 5, 1989, as amended at 58 FR 43473, Aug. 16, 1993]



Sec. 81.19  Costs and fees of parties.

    The Equal Access to Justice Act, 5 U.S.C. 504, applies by its terms
to proceedings under this part. Regulations under that statute are in 34
CFR part 21.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), and 3474(a))



Sec. 81.20  Interlocutory appeals to the Secretary from rulings of an ALJ.

    (a) A ruling by an ALJ may not be appealed to the Secretary until
the issuance of an initial decision, except that the Secretary may, at
any time prior to the issuance of an initial decision, grant review of a
ruling upon either an ALJ's certification of the ruling to the Secretary
for review, or the filing of a petition seeking review of an interim
ruling by one or both of the parties, if--
    (1) That ruling involves a controlling question of substantive or
procedural law; and
    (2) The immediate resolution of the question will materially advance
the final disposition of the proceeding or subsequent review will be an
inadequate remedy.
    (b)(1) A petition for interlocutory review of an interim ruling must
include the following:
    (i) A brief statement of the facts necessary to an understanding of
the issue on which review is sought.
    (ii) A statement of the issue.
    (iii) A statement of the reasons showing that the ruling complained
of involves a controlling question of substantive or procedural law and
why immediate review of the ruling will materially advance the
disposition of the case, or why subsequent review will be an inadequate
remedy.
    (2) A petition may not exceed ten pages, double-spaced, and must be
accompanied by a copy of the ruling and any findings and opinions
relating to the ruling. The petition must be filed with the Office of
Hearings and Appeals, which immediately forwards the petition to the
Office of the Secretary.
    (c) A copy of the petition must be provided to the ALJ at the time
the petition is filed under paragraph (b)(2) of this section, and a copy
of a petition or any certification must be served upon the parties by
certified mail, return receipt requested. The petition or certification
must reflect that service.
    (d) If a party files a petition under this section, the ALJ may
state to the Secretary a view as to whether review is appropriate or
inappropriate by submitting a brief statement addressing the party's
petition within 10 days of

[[Page 243]]

the ALJ's receipt of the petition for interlocutory review. A copy of
the statement must be served on all parties by certified mail, return
receipt requested.
    (e)(1) A party's response, if any, to a petition or certification
for interlocutory review must be filed within seven days after service
of the petition or certification, and may not exceed ten pages, double-
spaced, in length. A copy of the response must be filed with the ALJ by
hand delivery, by regular mail, or by facsimile transmission.
    (2) A party shall serve a copy of its response on all parties on the
filing date by hand-delivery or regular mail. If agreed upon by the
parties, service of a copy of the response may be made upon the other
parties by facsimile transmission.
    (f) The filing of a request for interlocutory review does not
automatically stay the proceedings. Rather, a stay during consideration
of a petition for review may be granted by the ALJ if the ALJ has
certified or stated to the Secretary that review of the ruling is
appropriate. The Secretary may order a stay of proceedings at any time
after the filing of a request for interlocutory review.
    (g) The Secretary notifies the parties if a petition or
certification for interlocutory review is accepted, and may provide the
parties a reasonable time within which to submit written argument or
other existing material in the administrative record with regard to the
merit of the petition or certification.
    (h) If the Secretary takes no action on a request for interlocutory
review within 15 days of receipt of it, the request is deemed to be
denied.
    (i) The Secretary may affirm, modify, set aside, or remand the ALJ's
ruling.

(Authority: 5 U.S.C. 557(b); 20 U.S.C. 1234(f)(1))

[58 FR 43473, Aug. 16, 1993]



                Subpart B_Hearings for Recovery of Funds



Sec. 81.30  Basis for recovery of funds.

    (a) Subject to the provisions of Sec. 81.31, an authorized
Departmental official requires a recipient to return funds to the
Department if--
    (1) The recipient made an unallowable expenditure of funds under a
grant or cooperative agreement; or
    (2) The recipient otherwise failed to discharge its obligation to
account properly for funds under a grant or cooperative agreement.
    (b) An authorized Departmental offcial may base a decision to
require a recipient to return funds upon an audit report, an
investigative report, a monitoring report, or any other evidence.

(Authority: 20 U.S.C. 1234a(a) (1) and (2))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



Sec. 81.31  Measure of recovery.

    A recipient that made an unallowable expenditure or otherwise failed
to discharge its obligation to account properly for funds shall return
an amount that--
    (a) Meets the standards for proportionality in Sec. 81.32;
    (b) In the case of a State or local educational agency, excludes any
amount attributable to mitigating circumstances under the standards in
Sec. 81.23; and
    (c) Excludes any amount expended in a manner not authorized by law
more than five years before the recipient received the notice of a
disallowance decision under Sec. 81.34.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(k), 1234b (a) and (b),
and 3474(a))

[54 FR 19512, May 5, 1989; 54 FR 21622, May 19, 1989. Redesignated and
amended at 58 FR 43473, Aug. 16, 1993]



Sec. 81.32  Proportionality.

    (a)(1) A recipient that made an unallowable expenditure or otherwise
failed to account properly for funds shall return an amount that is
proportional to the extent of the harm its violation caused to an
identifiable Federal interest associated with the program under which it
received the grant or cooperative agreement.
    (2) An identifiable Federal interest under paragraph (a)(1) of this
section includes, but is not limited to, the following:
    (i) Serving only eligible beneficiaries.

[[Page 244]]

    (ii) Providing only authorized services or benefits.
    (iii) Complying with expenditure requirements and conditions, such
as set-aside, excess cost, maintenance of effort, comparability,
supplement-not-supplant, and matching requirements.
    (iv) Preserving the integrity of planning, application,
recordkeeping, and reporting requirements.
    (v) Maintaining accountability for the use of funds.
    (b) The appendix to this part contains examples that illustrate how
the standards for proportionality apply. The examples present
hypothetical cases and do not represent interpretations of any actual
program statute or regulation.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234b(a), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated at 58 FR 43473, Aug. 16, 1993]



Sec. 81.33  Mitigating circumstances.

    (a) A recipient that is a State or local educational agency and that
has made an unallowable expenditure or otherwise failed to account
properly for funds is not required to return any amount that is
attributable to the mitigating circumstances described in paragraph (b),
(c), or (d) of this section.
    (b) Mitigating circumstances exist if it would be unjust to compel
the recovery of funds because the recipient's violation was caused by
erroneous written guidance from the department. To prove mitigating
circumstances under this paragraph, the recipient shall prove that--
    (1) The guidance was provided in response to a specific written
request from the recipient that was submitted to the Department at the
address provided by notice published in the Federal Register under this
section;
    (2) The guidance was provided by a Departmental official authorized
to provide the guidance, as described by that notice;
    (3) The recipient actually relied on the guidance as the basis for
the conduct that constituted the violation; and
    (4) The recipient's reliance on the guidance was reasonable.
    (c) Mitigating circumstances exist if it would be unjust to compel
the recovery of funds because the recipient's violation was caused by
the Department's failure to provide timely guidance. To prove mitigating
circumstances under this paragraph, the recipient shall prove that--
    (1) The recipient in good faith submitted a written request for
guidance with respect to the legality of a proposed expenditure or
practice;
    (2) The request was submitted to the Department at the address
provided by notice published in the Federal Register under this section;
    (3) The request--
    (i) Accurately described the proposed expenditure or practice; and
    (ii) Included the facts necessary for the Department's determination
of its legality;
    (4) The request contained the certification of the chief legal
officer of the appropriate State educational agency that the officer--
    (i) Examined the proposed expenditure or practice; and
    (ii) Believed it was permissible under State and Federal law
applicable at the time of the certification;
    (5) The recipient reasonably believed the proposed expenditure or
practice was permissible under State and Federal law applicable at the
time it submitted the request to the Department;
    (6) No Departmental official authorized to provide the requested
guidance responded to the request within 90 days of its receipt by the
Department; and
    (7) The recipient made the proposed expenditure or engaged in the
proposed practice after the expiration of the 90-day period.
    (d) Mitigating circumstances exist if it would be unjust to compel
the recovery of funds because the recipient's violation was caused by
the recipient's compliance with a judicial decree from a court of
competent jurisdiction. To prove mitigating circumstances under this
paragraph, the recipient shall prove that--
    (1) The recipient was legally bound by the decree;
    (2) The recipient actually relied on the decree when it engaged in
the conduct that constituted the violation; and
    (3) The recipient's reliance on the decree was reasonable.

[[Page 245]]

    (e) If a Departmental official authorized to provide the requested
guidance responds to a request described in paragraph (c) of this
section more than 90 days after its receipt, the recipient that made the
request shall comply with the guidance at the earliest practicable time.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234b(b), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated at 58 FR 43473, Aug. 16, 1993]



Sec. 81.34  Notice of a disallowance decision.

    (a) If an authorized Departmental official decides that a recipient
must return funds under Sec. 81.30, the official gives the recipient
written notice of a disallowance decision. The official sends the notice
by certified mail, return receipt requested, or other means that ensure
proof of receipt.
    (b)(1) The notice must establish a prima facie case for the recovery
of funds, including an analysis reflecting the value of the program
services actually obtained in a determination of harm to the Federal
interest.
    (2) For the purpose of this section, a prima facie case is a
statement of the law and the facts that, unless rebutted, is sufficient
to sustain the conclusion drawn in the notice. The facts may be set out
in the notice or in a document that is identified in the notice and
available to the recipient.
    (3) A statement that the recipient failed to maintain records
required by law or failed to allow an authorized representative of the
Secretary access to those records constitutes a prima facie case for the
recovery of the funds affected.
    (i) If the recipient failed to maintain records, the statement must
briefly describe the types of records that were not maintained and
identify the recordkeeping requirement that was violated.
    (ii) If the recipient failed to allow access to records, the
statement must briefly describe the recipient's actions that constituted
the failure and identify the access requirement that was violated.
    (c) The notice must inform the recipient that it may--
    (1) Obtain a review of the disallowance decision by the OALJ; and
    (2) Request mediation under Sec. 81.13.
    (d) The notice must describe--
    (1) The time available to apply for a review of the disallowance
decision; and
    (2) The procedure for filing an application for review.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(a), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993; 60 FR 46494, Sept. 6, 1995; 61 FR 14484, Apr. 2, 1996]



Sec. 81.35  Reduction of claims.

    The Secretary or an authorized Departmental official as appropriate
may, after the issuance of a disallowance decision, reduce the amount of
a claim established under this subpart by--
    (a) Redetermining the claim on the basis of the proper application
of the law, including the standards for the measure of recovery under
Sec. 81.31, to the facts;
    (b) Compromising the claim under the Federal Claims Collection
Standards in 4 CFR part 103; or
    (c) Compromising the claim under Sec. 81.36, if applicable.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(j), and 3474(a); 31
U.S.C. 3711)

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



Sec. 81.36  Compromise of claims under General Education Provisions Act.

    (a) The Secretary or an authorized Departmental official as
appropriate may compromise a claim established under this subpart
without following the procedures in 4 CFR part 103 if--
    (1)(i) The amount of the claim does not exceed $200,000; or
    (ii) The difference between the amount of the claim and the amount
agreed to be returned does not exceed $200,000; and
    (2) The Secretary or the official determines that--
    (i) The collection of the amount by which the claim is reduced under
the compromise would not be practical or in the public interest; and
    (ii) The practice that resulted in the disallowance decision has
been corrected and will not recur.

[[Page 246]]

    (b) Not less than 45 days before compromising a claim under this
section, the Department publishes a notice in the Federal Register
stating--
    (1) The intention to compromise the claim; and
    (2) That interested persons may comment on the proposed compromise.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a (j), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated at 58 FR 43473, Aug. 16, 1993]



Sec. 81.37  Application for review of a disallowance decision.

    (a) If a recipient wishes to obtain review of a disallowance
decision, the recipient shall file a written application for review with
the Office of Administrative Law Judges, c/o Docket Clerk, Office of
Hearings and Appeals, and, as required by Sec. 81.12(b), shall serve a
copy on the applicable Departmental official who made the disallowance
decision.
    (b) A recipient shall file an application for review not later than
60 days after the date it receives the notice of a disallowance
decision.
    (c) Within 10 days after receipt of a copy of the application for
review, the authorized Departmental official who made the disallowance
decision shall provide the ALJ with a copy of any document identified in
the notice pursuant to Sec. 81.34(b)(2).
    (d) An application for review must contain--
    (1) A copy of the disallowance decision of which review is sought;
    (2) A statement certifying the date the recipient received the
notice of that decision;
    (3) A short and plain statement of the disputed issues of law and
fact, the recipient's position with respect to these issues, and the
disallowed funds the recipient contends need not be returned; and
    (4) A statement of the facts and the reasons that support the
recipient's position.
    (e) The ALJ who considers a timely application for review that
substantially complies with the requirements of paragraph (c) of this
section may permit the recipient to supplement or amend the application
with respect to issues that were timely raised. Any requirement to
return funds that is not timely appealed becomes the final decision of
the Department.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(b)(1), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473,
43474, Aug. 16, 1993; 58 FR 51013, Sept. 30, 1993; 60 FR 46494, Sept. 6,
1995]



Sec. 81.38  Consideration of an application for review.

    (a) The ALJ assigned to the case under Sec. 81.4 considers an
application for review of a disallowance decision.
    (b) The ALJ decides whether the notice of a disallowance decision
meets the requirements of Sec. 81.34, as provided by section 451(e) of
GEPA.
    (1) If the notice does not meet those requirements, the ALJ--
    (i) Returns the notice, as expeditiously as possible, to the
authorized Departmental official who made the disallowance decision;
    (ii) Gives the official the reasons why the notice does not meet the
requirements of Sec. 81.34; and
    (iii) Informs the recipient of the ALJ's decision by certified mail,
return receipt requested.
    (2) An authorized Departmental official may modify and reissue a
notice that an ALJ returns.
    (c) If the notice of a disallowance decision meets the requirements
of Sec. 81.34, the ALJ decides whether the application for review meets
the requirements of Sec. 81.37.
    (1) If the application, including any supplements or amendments
under Sec. 81.37(d), does not meet those requirements, the disallowance
decision becomes the final decision of the Department.
    (2) If the application meets those requirements, the ALJ--
    (i) Informs the recipient and the authorized Departmental official
that the OALJ has accepted jurisdiction of the case; and
    (ii) Schedules a hearing on the record.
    (3) The ALJ informs the recipient of the disposition of its
application for review by certified mail, return receipt requested. If
the ALJ decides that the application does not meet the requirements of
Sec. 81.37, the ALJ informs the

[[Page 247]]

recipient of the reasons for the decision.

(Authority: 20 U.S.C. 1221e-3, 1234 (e) and (f)(1), 1234a(b), and
3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



Sec. 81.39  Submission of evidence.

    (a) The ALJ schedules the submission of the evidence, whether oral
or documentary, to occur within 90 days of the OALJ's receipt of an
acceptable application for review under Sec. 81.37.
    (b) The ALJ may waive the 90-day requirement for good cause.

(Authority: 5 U.S.C. 556(d); 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(c),
and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



Sec. 81.40  Burden of proof.

    If the OALJ accepts jurisdiction of a case under Sec. 81.38, the
recipient shall present its case first and shall have the burden of
proving that the recipient is not required to return the amount of funds
that the disallowance decision requires to be returned because--
    (a) An expenditure identified in the disallowance decision as
unallowable was allowable;
    (b) The recipient discharged its obligation to account properly for
the funds;
    (c) The amount required to be returned does not meet the standards
for proportionality in Sec. 81.32;
    (d) The amount required to be returned includes an amount
attributable to mitigating circumstances under the standards in Sec.
81.33; or
    (e) The amount required to be returned includes an amount expended
in a manner not authorized by law more than five years before the
recipient received the notice of the disallowance decision.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(b)(3), 1234b(b)(1), and
3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



Sec. 81.41  Initial decision.

    (a) The ALJ makes an initial decision based on the record.
    (b) The initial decision includes the ALJ's findings of fact,
conclusions of law, and reasoning on all material issues.
    (c) The initial decision is transmitted to the Secretary by hand-
delivery or Department mail, and to the parties by certified mail,
return receipt requested, by the Office of Administrative Law Judges.
    (d) For the purpose of this part, ``initial decision'' includes an
ALJ's modified decision after the Secretary's remand of a case.

(Authority: 5 U.S.C. 557(c); 20 U.S.C 1221e-3, 1234(f)(1), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473,
43474, Aug. 16, 1993]



Sec. 81.42  Petition for review of initial decision.

    (a) If a party seeks to obtain the Secretary's review of the initial
decision of an ALJ, the party shall file a petition for review with the
Office of Hearings and Appeals, which immediately forwards the petition
to the Office of the Secretary.
    (b) A party shall file a petition for review not later than 30 days
after the date it receives the initial decision.
    (c) If a party files a petition for review, the party shall serve a
copy of the petition on the other party on the filing date by hand
delivery or by ``overnight or express'' mail. If agreed upon by the
parties, service of a copy of the petition may be made upon the other
party by facsimile transmission.
    (d) Any written submission to the Secretary under this section must
be accompanied by a statement certifying the date that the filed
material was served on the other party.
    (e) A petition for review of an initial decision must contain--
    (1) The identity of the initial decision for which review is sought;
and
    (2) A statement of the reasons asserted by the party for affirming,
modifying, setting aside, or remanding the initial decision in whole or
in part.
    (f)(1) A party may respond to a petition for review of an initial
decision by filing a statement of its views on the issues raised in the
petition with the Secretary, as provided for in this section, not later
than 15 days after the date it receives the petition.
    (2) A party shall serve a copy of its statement of views on the
other party

[[Page 248]]

by hand delivery or mail, and shall certify that it has done so pursuant
to the provisions of paragraph (d) of this section. If agreed upon by
the parties, service of a copy of the statement of views may be made
upon the other party by facsimile transmission.
    (g)(1) The filing date for written submissions under this section is
the date the document is--
    (i) Hand delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (2) If a scheduled filing date falls on a Saturday, Sunday or a
Federal holiday, the filing deadline is the next business day.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(e), and 3474(a))

[58 FR 43474, Aug. 16, 1993]



Sec. 81.43  Review by the Secretary.

    (a)(1) The Secretary's review of an initial decision is based on the
record of the case, the initial decision, and any proper submissions of
the parties or other participants in the case.
    (2) During the Secretary's review of the initial decision there
shall not be any ex parte contact between the Secretary and individuals
representing the Department or the recipient.
    (b) The ALJ's findings of fact, if supported by substantial
evidence, are conclusive.
    (c) The Secretary may affirm, modify, set aside, or remand the ALJ's
initial decision.
    (1) If the Secretary modifies, sets aside, or remands an initial
decision, in whole or in part, the Secretary's decision includes a
statement of reasons that supports the Secretary's decision.
    (2)(i) The Secretary may remand the case to the ALJ with
instructions to make additional findings of fact or conclusions of law,
or both, based on the evidence of record. The Secretary may also remand
the case to the ALJ for further briefing or for clarification or
revision of the initial decision.
    (ii) If a case is remanded, the ALJ shall make new or modified
findings of fact or conclusions of law or otherwise modify the initial
decision in accordance with the Secretary's remand order.
    (iii) A party may appeal a modified decision of the ALJ under the
provisions of Sec. Sec. 81.42 through 81.45. However, upon that review,
the ALJ's new or modified findings, if supported by substantial
evidence, are conclusive.
    (3) The Secretary, for good cause shown, may remand the case to the
ALJ to take further evidence, and the ALJ may make new or modified
findings of fact and may modify the initial decision based on that new
evidence. These new or modified findings of fact are likewise conclusive
if supported by substantial evidence.

(Authority: 5 U.S.C. 557(b); 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(d),
and 3474(a))

[58 FR 43474, Aug. 16, 1993, as amended at 60 FR 46494, Sept. 6, 1995]



Sec. 81.44  Final decision of the Department.

    (a) The ALJ's initial decision becomes the final decision of the
Department 60 days after the recipient receives the ALJ's decision
unless the Secretary modifies, sets aside, or remands the decision
during the 60-day period.
    (b) If the Secretary modifies or sets aside the ALJ's initial
decision, a copy of the Secretary's decision is sent by the Office of
Hearings and Appeals to the parties by certified mail, return receipt
requested. The Secretary's decision becomes the final decision of the
Department on the date the recipient receives the Secretary's decision.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234a(g), and 3474(a))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473,
43474, Aug. 16, 1993]



Sec. 81.45  Collection of claims.

    (a) An authorized Departmental official collects a claim established
under this subpart by using the standards and procedures in 34 CFR part
30.
    (b) A claim established under this subpart may be collected--
    (1) 30 days after a recipient receives notice of a disallowance
decision if the recipient fails to file an acceptable application for
review under Sec. 81.37; or
    (2) On the date of the final decision of the Department under Sec.
81.44 if the recipient obtains review of a disallowance decision.
    (c) The Department takes no collection action pending judicial
review of a

[[Page 249]]

final decision of the Department under section 458 of GEPA.
    (d) If a recipient obtains review of a disallowance decision under
Sec. 81.38, the Department does not collect interest on the claim for
the period between the date of the disallowance decision and the date of
the final decision of the Department under Sec. 81.44.

(Authority: 20 U.S.C. 1234(f)(1); 1234a(f)(1) and (2), (i), and (1))

[54 FR 19512, May 5, 1989. Redesignated and amended at 58 FR 43473, Aug.
16, 1993]



       Sec. Appendix to Part 81--Illustrations of Proportionality

    (1) Ineligible beneficiaries. A State uses 15 percent of its grant
to meet the special educational needs of children who were migratory,
but who have not migrated for more than five years as a Federal program
statute requires for eligibility to participate in the program. Result:
Recovery of 15 percent of the grant--all program funds spent for the
benefit of those children. Although the services were authorized, the
children were not eligible to receive them.
    (2) Ineligible beneficiaries. A Federal program designed to meet the
special educational needs of gifted and talented children requires that
at least 80 percent of the children served in any project must be
identified as gifted or talented. A local educational agency (LEA)
conducts a project in which 76 students are identified as gifted or
talented and 24 are not. The project was designed and implemented to
meet the special educational needs of gifted and talented students.
Result: The LEA must return five percent of the project costs. The LEA
provided authorized services for a project in which the 76 target
students had to constitute at least 80 percent of the total. Thus, the
maximum number of non-target students permitted was 19. Project costs
relating to the remaining five students must be returned.
    (3) Ineligible beneficiaries. Same as the example in paragraph (2),
except that only 15 percent of the children were identified as gifted or
talented. On the basis of the low percentage of these children and other
evidence, the authorized Departmental official finds that the project as
a whole did not address their special educational needs and was outside
the purpose of the statute. Result: The LEA must return its entire
award. The difference between the required percentage of gifted and
talented children and the percentage actually enrolled is so substantial
that, if consistent with other evidence, the official may reasonably
conclude the entire grant was misused.
    (4) Ineligible beneficiaries. Same as the example in paragraph (2),
except that 60 percent of the children were identified as gifted or
talented, and it is not clear whether the project was designed or
implemented to meet the special educational needs of these children.
Result: If it is determined that the project was designed and
implemented to serve their special educational needs, the LEA must
return 25 percent of the project costs. A project that included 60
target children would meet the requirement that 80 percent of the
children served be gifted and talented if it included no more than 15
other children. Thus, while the LEA provided authorized services, only
75 percent of the beneficiaries were authorized to participate in the
project (60 target children and 15 others). If the authorized
Departmental official, after examining all the relevant facts,
determines that the project was not designed and implemented to serve
the special educational needs of gifted or talented students, the LEA
must return its entire award because it did not provide services
authorized by the statute.
    (5) Unauthorized activities. An LEA uses ten percent of its grant
under a Federal program that authorizes activities only to meet the
special educational needs of educationally deprived children to pay for
health services that are available to all children in the LEA. All the
children who use the Federally funded health services happen to be
educationally deprived, and thus eligible to receive program services.
Result: Recovery of ten percent of the grant--all program funds spent
for the health services. Although the children were eligible to receive
program services, the health services were unrelated to a special
educational need and, therefore, not authorized by law.
    (6) Set-aside requirement. A State uses 22 percent of its grant for
one fiscal year under a Federal adult education program to provide
programs of equivalency to a certificate of graduation from a secondary
school. The adult education program statute restricts those programs to
no more than 20 percent of the State's grant. Result: Two percent of the
State's grant must be returned. Although all 22 percent of the funds
supported adult education, the State had no authority to spend more than
20 percent on secondary school equivalency programs.
    (7) Set-aside requirement. A State uses eight percent of its basic
State grant under a Federal vocational education program to pay for the
excess cost of vocational education services and activities for
handicapped individuals. The program statute requires a State to use ten
percent of its basic State grant for this purpose. Result: The State
must return two percent of its basic State grant, regardless of how it
was used. Because the State was required to spend that two percent on
services and activities for handicapped individuals and did not do so,
it diverted those

[[Page 250]]

funds from their intended purposes, and the Federal interest was harmed
to that extent.
    (8) Excess cost requirement. An LEA uses funds reserved for the
disadvantaged under a Federal vocational education program to pay for
the cost of the same vocational education services it provides to non-
disadvantaged individuals. The program statute requires that funds
reserved for the disadvantaged must be used to pay only for the
supplemental or additional costs of vocational education services that
are not provided to other individuals and that are required for
disadvantaged individuals to participate in vocational education.
Result: All the funds spent on the disadvantaged must be returned.
Although the funds were spent to serve the disadvantaged, the funds were
available to pay for only the supplemental or additional costs of
providing services to the disadvantaged.
    (9) Maintenance-of-effort requirement. An LEA participates in a
Federal program in fiscal year 1988 that requires it to maintain its
expenditures from non-Federal sources for program purposes to receive
its full allotment. The program statute requires that non-Federal funds
expended in the first preceding fiscal year must be at least 90 percent
of non-Federal funds expended in the second preceding fiscal year and
provides for a reduction in grant amount proportional to the shortfall
in expenditures. No waiver of the requirement is authorized. In fiscal
year 1986 the LEA spent $100,000 from non-Federal sources for program
purposes; in fiscal year 1987, only $87,000. Result: The LEA must return
\1/30\ of its fiscal year 1988 grant--the amount of its grant that
equals the proportion of its shortfall ($3,000) to the required level of
expenditures ($90,000). If, instead, the statute made maintenance of
expenditures a clear condition of the LEA's eligibility to receive funds
and did not provide for a proportional reduction in the grant award, the
LEA would be required to return its entire grant.
    (10) Supplanting prohibition. An LEA uses funds under a Federal drug
education program to provide drug abuse prevention counseling to
students in the eighth grade. The LEA is required to provide that same
counseling under State law. Funds under the Federal program statute are
subject to a supplement-not-supplant requirement. Result: All the funds
used to provide the required counseling to the eighth-grade students
must be returned. The Federal funds did not increase the total amount of
spending for program purposes because the counseling would have been
provided with non-Federal funds if the Federal funds were not available.
    (11) Matching requirement. A State receives an allotment of $90,000
for fiscal year 1988 under a Federal adult education program. It expends
its full allotment and $8,000 from its own resources for adult
education. Under the Federal statute, the Federal share of expenditures
for the State's program is 90 percent. Result: The State must return the
unmatched Federal funds, or $18,000. Expenditure of a $90,000 Federal
allotment required $10,000 in matching State expenditures, $2,000 more
than the State's actual expenditures. At a ratio of one State dollar for
every nine Federal dollars, $18,000 in Federal funds were unmatched.
    (12) Application requirements. In order to receive funds under a
Federal program that supports a wide range of activities designed to
improve the quality of elementary and secondary education, an LEA
submits an application to its State educational agency (SEA) for a
subgrant to carry out school-level basic skills development programs.
The LEA submits its application after conducting an assessment of the
needs of its students in consultation with parents, teachers, community
leaders, and interested members of the general public. The Federal
program statute requires the application and consultation processes. The
SEA reviews the LEA's application, determines that the proposed programs
are sound and the application is in compliance with Federal law, and
approves the application. After the LEA receives the subgrant, it
unilaterally decides to use 20 percent of the funds for gifted and
talented elementary school students--an authorized activity under the
Federal statute. However, the LEA does not consult with interested
parties and does not amend its application. Result: 20 percent of the
LEA's subgrant must be returned. The LEA had no legal authority to use
Federal funds for programs or activities other than those described in
its approved application, and its actions with respect to 20 percent of
the subgrant not only impaired the integrity of the application process,
but caused significant harm to other Federal interests associated with
the program as follows: the required planning process was circumvented
because the LEA did not consult with the specified local interests;
program accountability was impaired because neither the SEA nor the
various local interests that were to be consulted had an opportunity to
review and comment on the merits of the gifted and talented program
activities, and the LEA never had to justify those activities to them;
and fiscal accountability was impaired because the SEA and those various
local interests were, in effect, misled by the LEA's unamended
application regarding the expenditure of Federal funds.
    (13) Harmless violation. Under a Federal program, a grantee is
required to establish a 15-member advisory council of affected teachers,
school administrators, parents, and students to assist in program
design, monitoring, and evaluation. Although the law requires at least
three student members of the council, a grantee's council contains only
two. The project is carried out, and no damage to the project
attributable to the lack of

[[Page 251]]

a third student member can be identified. Result: No financial recovery
is required, although the grantee must take other appropriate steps to
come into compliance with the law. The grantee's violation has not
measurably harmed a Federal interest associated with the program.

(Authority: 20 U.S.C. 1221e-3, 1234(f)(1), 1234b(a), and 3474(a))

[54 FR 19512, May 5, 1989; 54 FR 21622, May 19, 1989]



PART 82_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
82.100 Conditions on use of funds.
82.105 Definitions.
82.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

82.200 Agency and legislative liaison.
82.205 Professional and technical services.
82.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

82.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

82.400 Penalties.
82.405 Penalty procedures.
82.410 Enforcement.

                          Subpart E_Exemptions

82.500 Secretary of Defense.

                        Subpart F_Agency Reports

82.600 Semi-annual compilation.
82.605 Inspector General report.

Appendix A to Part 82--Certification Regarding Lobbying
Appendix B to Part 82--Disclosure Form To Report Lobbying

    Authority: Section 319, Pub. L. 101-121 (31 U.S.C. 1352); 20 U.S.C.
3474.

    Source: 55 FR 6737, 6752, Feb. 26, 1990, unless otherwise noted.

    Cross Reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.



                            Subpart A_General



Sec. 82.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative ageement to pay any person
for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with any of the following
covered Federal actions: the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
    (c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with

[[Page 252]]

that agency a disclosure form, set forth in appendix B, if that person
has made or has agreed to make any payment to influence or attempt to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with that loan insurance or guarantee.



Sec. 82.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
    (b) Covered Federal action means any of the following Federal
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
    (c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct appropriation made by law to any person. The term does not
include technical assistance which provides services instead of money,
or other assistance in the form of revenue sharing, loans, loan
guarantees, loan insurance, interest subsidies, insurance, or direct
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the
intent to influence, any communication to or appearance before an
officer or employee or any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
    (k) Officer or employee of an agency includes the following
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government
under title 5, U.S. Code, including a position under a temporary
appointment;
    (2) A member of the uniformed services as defined in section 101(3),
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, title 5, U.S. Code
appendix 2.
    (l) Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term

[[Page 253]]

excludes an Indian tribe, tribal organization, or any other Indian
organization with respect to expenditures specifically permitted by
other Federal law.
    (m) Reasonable compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or employee for
work that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier,
and subgrantees at any tier of the recipient of funds received in
connection with a Federal contract, grant, loan, or cooperative
agreement. The term excludes an Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures specifically
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee
of a person requesting or receiving a Federal contract, grant, loan, or
cooperative agreement or a commitment providing for the United States to
insure or guarantee a loan, an officer or employee who is employed by
such person for at least 130 working days within one year immediately
preceding the date of the submission that initiates agency consideration
of such person for receipt of such contract, grant, loan, cooperative
agreement, loan insurance commitment, or loan guarantee commitment. An
officer or employee who is employed by such person for less than 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person shall be
considered to be regularly employed as soon as he or she is employed by
such person for 130 working days.
    (q) State means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession of
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and
powers.



Sec. 82.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
    (2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000,

Unless such person previously filed a certification, and a disclosure
form, if required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal
contract;

[[Page 254]]

    (2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement,

Shall file a certification, and a disclosure form, if required, to the
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraphs
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
    (g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
    (h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.



                  Subpart B_Activities by Own Employees



Sec. 82.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec.
82.100(a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement if
the payment is for agency and legislative liaison activities not
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
    (c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
    (1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
    (d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
    (2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Pub. L. 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are
allowable under this section.

[[Page 255]]



Sec. 82.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.
82.100(a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement or
an extension, continuation, renewal, amendment, or modification of a
Federal contract, grant, loan, or cooperative agreement if payment is
for professional or technical services rendered directly in the
preparation, submission, or negotiation of any bid, proposal, or
application for that Federal contract, grant, loan, or cooperative
agreement or for meeting requirements imposed by or pursuant to law as a
condition for receiving that Federal contract, grant, loan, or
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are
allowable under this section.



Sec. 82.210  Reporting.

    No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.



            Subpart C_Activities by Other Than Own Employees



Sec. 82.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.
82.100(a), does not apply in the case of any reasonable payment to a
person, other than an officer or employee of a person requesting or
receiving a covered Federal action, if the payment is for professional
or technical services rendered directly in the preparation, submission,
or negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 82.110(a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.

[[Page 256]]

    (c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting or a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
    (f) Only those services expressly authorized by this section are
allowable under this section.



                   Subpart D_Penalties and Enforcement



Sec. 82.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see
appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
    (c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.

[[Page 257]]



Sec. 82.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and
3812, insofar as these provisions are not inconsistent with the
requirements herein.



Sec. 82.410  Enforcement.

    The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.



                          Subpart E_Exemptions



Sec. 82.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a
covered Federal action from the prohibition whenever the Secretary
determines, in writing, that such an exemption is in the national
interest. The Secretary shall transmit a copy of each such written
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec. 82.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure
reports (see appendix B) and, on May 31 and November 30 of each year,
submit to the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
    (c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
    (d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
    (g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.



Sec. 82.605  Inspector General report.

    (a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that

[[Page 258]]

may be necessary to strengthen or improve the requirements.
    (b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
    (c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.



      Sec. Appendix A to Part 82--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with this Federal contract, grant, loan, or cooperative
agreement, the undersigned shall complete and submit Standard Form-LLL,
``Disclosure Form to Report Lobbying,'' in accordance with its
instructions.
    (3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards at
all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which
reliance was placed when this transaction was made or entered into.
Submission of this certification is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required certification shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and
belief, that:
    If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this commitment
providing for the United States to insure or guarantee a loan, the
undersigned shall complete and submit Standard Form-LLL, ``Disclosure
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required statement shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.

[[Page 259]]

        Appendix B to Part 82--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC21OC91.056


[[Page 260]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.057


[[Page 261]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.058


[[Page 262]]





PART 84_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE
(FINANCIAL ASSISTANCE)--Table of Contents



                     Subpart A_Purpose and Coverage

Sec.
84.100 What does this part do?
84.105 Does this part apply to me?
84.110 Are any of my Federal assistance awards exempt from this part?
84.115 Does this part affect the Federal contracts that I receive?

      Subpart B_Requirements for Recipients Other Than Individuals

84.200 What must I do to comply with this part?
84.205 What must I include in my drug-free workplace statement?
84.210 To whom must I distribute my drug-free workplace statement?
84.215 What must I include in my drug-free awareness program?
84.220 By when must I publish my drug-free workplace statement and
          establish my drug-free awareness program?
84.225 What actions must I take concerning employees who are convicted
          of drug violations in the workplace?
84.230 How and when must I identify workplaces?

        Subpart C_Requirements for Recipients Who Are Individuals

84.300 What must I do to comply with this part if I am an individual
          recipient?
84.301 [Reserved]

           Subpart D_Responsibilities of ED Awarding Officials

84.400 What are my responsibilities as an ED awarding official?

           Subpart E_Violations of This Part and Consequences

84.500 How are violations of this part determined for recipients other
          than individuals?
84.505 How are violations of this part determined for recipients who are
          individuals?
84.510 What actions will the Federal Government take against a recipient
          determined to have violated this part?
84.515 Are there any exceptions to those actions?

                          Subpart F_Definitions

84.605 Award.
84.610 Controlled substance.
84.615 Conviction.
84.620 Cooperative agreement.
84.625 Criminal drug statute.
84.630 Debarment.
84.635 Drug-free workplace.
84.640 Employee.
84.645 Federal agency or agency.
84.650 Grant.
84.655 Individual.
84.660 Recipient.
84.665 State.
84.670 Suspension.

    Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327, unless
otherwise noted.

    Source: 68 FR 66557, 66610, Nov. 26, 2003, unless otherwise noted.



                     Subpart A_Purpose and Coverage



Sec. 84.100  What does this part do?

    This part carries out the portion of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also
applies the provisions of the Act to cooperative agreements and other
financial assistance awards, as a matter of Federal Government policy.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.105  Does this part apply to me?

    (a) Portions of this part apply to you if you are either--
    (1) A recipient of an assistance award from the Department of
Education; or
    (2) A(n) ED awarding official. (See definitions of award and
recipient in Sec. Sec. 84.605 and 84.660, respectively.)
    (b) The following table shows the subparts that apply to you:

------------------------------------------------------------------------
            If you are . . .                    see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an            A, B and E.
 individual.
(2) A recipient who is an individual...  A, C and E.
(3) A(n) ED awarding official..........  A, D and E.
------------------------------------------------------------------------


[[Page 263]]


(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.110  Are any of my Federal assistance awards exempt from this
part?

    This part does not apply to any award that the ED Deciding Official
determines that the application of this part would be inconsistent with
the international obligations of the United States or the laws or
regulations of a foreign government.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.115  Does this part affect the Federal contracts that I
receive?

    It will affect future contract awards indirectly if you are debarred
or suspended for a violation of the requirements of this part, as
described in Sec. 84. 510(c). However, this part does not apply
directly to procurement contracts. The portion of the Drug-Free
Workplace Act of 1988 that applies to Federal procurement contracts is
carried out through the Federal Acquisition Regulation in chapter 1 of
Title 48 of the Code of Federal Regulations (the drug-free workplace
coverage currently is in 48 CFR part 23, subpart 23.5).

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



      Subpart B_Requirements for Recipients Other Than Individuals



Sec. 84.200  What must I do to comply with this part?

    There are two general requirements if you are a recipient other than
an individual.
    (a) First, you must make a good faith effort, on a continuing basis,
to maintain a drug-free workplace. You must agree to do so as a
condition for receiving any award covered by this part. The specific
measures that you must take in this regard are described in more detail
in subsequent sections of this subpart. Briefly, those measures are to--
    (1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 84.205 through
84.220); and
    (2) Take actions concerning employees who are convicted of violating
drug statutes in the workplace (see Sec. 84.225).
    (b) Second, you must identify all known workplaces under your
Federal awards (see Sec. 84.230).

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.205  What must I include in my drug-free workplace statement?

    You must publish a statement that--
    (a) Tells your employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance
is prohibited in your workplace;
    (b) Specifies the actions that you will take against employees for
violating that prohibition; and
    (c) Lets each employee know that, as a condition of employment under
any award, he or she:
    (1) Will abide by the terms of the statement; and
    (2) Must notify you in writing if he or she is convicted for a
violation of a criminal drug statute occurring in the workplace and must
do so no more than five calendar days after the conviction.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.210  To whom must I distribute my drug-free workplace statement?

    You must require that a copy of the statement described in Sec.
84.205 be given to each employee who will be engaged in the performance
of any Federal award.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.215  What must I include in my drug-free awareness program?

    You must establish an ongoing drug-free awareness program to inform
employees about--

[[Page 264]]

    (a) The dangers of drug abuse in the workplace;
    (b) Your policy of maintaining a drug-free workplace;
    (c) Any available drug counseling, rehabilitation, and employee
assistance programs; and
    (d) The penalties that you may impose upon them for drug abuse
violations occurring in the workplace.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.220  By when must I publish my drug-free workplace statement
and establish my drug-free awareness program?

    If you are a new recipient that does not already have a policy
statement as described in Sec. 84.205 and an ongoing awareness program
as described in Sec. 84.215, you must publish the statement and
establish the program by the time given in the following table:

------------------------------------------------------------------------
                If . . .                          then you . . .
------------------------------------------------------------------------
(a) The performance period of the award  must have the policy statement
 is less than 30 days.                    and program in place as soon
                                          as possible, but before the
                                          date on which performance is
                                          expected to be completed.
(b) The performance period of the award  must have the policy statement
 is 30 days or more.                      and program in place within 30
                                          days after award.
(c) You believe there are extraordinary  may ask the ED awarding
 circumstances that will require more     official to give you more time
 than 30 days for you to publish the      to do so. The amount of
 policy statement and establish the       additional time, if any, to be
 awareness program.                       given is at the discretion of
                                          the awarding official.
------------------------------------------------------------------------


(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.225  What actions must I take concerning employees who are
convicted of drug violations in the workplace?

    There are two actions you must take if an employee is convicted of a
drug violation in the workplace:
    (a) First, you must notify Federal agencies if an employee who is
engaged in the performance of an award informs you about a conviction,
as required by Sec. 84.205(c)(2), or you otherwise learn of the
conviction. Your notification to the Federal agencies must--
    (1) Be in writing;
    (2) Include the employee's position title;
    (3) Include the identification number(s) of each affected award;
    (4) Be sent within ten calendar days after you learn of the
conviction; and
    (5) Be sent to every Federal agency on whose award the convicted
employee was working. It must be sent to every awarding official or his
or her official designee, unless the Federal agency has specified a
central point for the receipt of the notices.
    (b) Second, within 30 calendar days of learning about an employee's
conviction, you must either--
    (1) Take appropriate personnel action against the employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
    (2) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for these purposes
by a Federal, State or local health, law enforcement, or other
appropriate agency.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.230  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each ED award. A
failure to do so is a violation of your drug-free workplace
requirements. You may identify the workplaces--
    (1) To the ED official that is making the award, either at the time
of application or upon award; or
    (2) In documents that you keep on file in your offices during the
performance of the award, in which case you must make the information
available for inspection upon request by ED officials or their
designated representatives.

[[Page 265]]

    (b) Your workplace identification for an award must include the
actual address of buildings (or parts of buildings) or other sites where
work under the award takes place. Categorical descriptions may be used
(e.g., all vehicles of a mass transit authority or State highway
department while in operation, State employees in each local
unemployment office, performers in concert halls or radio studios).
    (c) If you identified workplaces to the ED awarding official at the
time of application or award, as described in paragraph (a)(1) of this
section, and any workplace that you identified changes during the
performance of the award, you must inform the ED awarding official.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



        Subpart C_Requirements for Recipients Who Are Individuals



Sec. 84.300  What must I do to comply with this part if I am an
individual recipient?

    As a condition of receiving a(n) ED award, if you are an individual
recipient, you must agree that--
    (a) You will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity related to the award; and
    (b) If you are convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any award activity, you will
report the conviction:
    (1) In writing.
    (2) Within 10 calendar days of the conviction.
    (3) To the ED awarding official or other designee for each award
that you currently have, unless Sec. 84.301 or the award document
designates a central point for the receipt of the notices. When notice
is made to a central point, it must include the identification number(s)
of each affected award.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.301  [Reserved]



           Subpart D_Responsibilities of ED Awarding Officials



Sec. 84.400  What are my responsibilities as a(n) ED awarding
official?

    As a(n) ED awarding official, you must obtain each recipient's
agreement, as a condition of the award, to comply with the requirements
in--
    (a) Subpart B of this part, if the recipient is not an individual;
or
    (b) Subpart C of this part, if the recipient is an individual.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



           Subpart E_Violations of this Part and Consequences



Sec. 84.500  How are violations of this part determined for
recipients other than individuals?

    A recipient other than an individual is in violation of the
requirements of this part if the ED Deciding Official determines, in
writing, that--
    (a) The recipient has violated the requirements of subpart B of this
part; or
    (b) The number of convictions of the recipient's employees for
violating criminal drug statutes in the workplace is large enough to
indicate that the recipient has failed to make a good faith effort to
provide a drug-free workplace.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.505  How are violations of this part determined for recipients
who are individuals?

    An individual recipient is in violation of the requirements of this
part if the ED Deciding Official determines, in writing, that--
    (a) The recipient has violated the requirements of subpart C of this
part; or
    (b) The recipient is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any award activity.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)

[[Page 266]]



Sec. 84.510  What actions will the Federal Government take against
a recipient determined to have violated this part?

    If a recipient is determined to have violated this part, as
described in Sec. 84.500 or Sec. 84.505, the Department of Education
may take one or more of the following actions--
    (a) Suspension of payments under the award;
    (b) Suspension or termination of the award; and
    (c) Suspension or debarment of the recipient under 34 CFR Part 85,
for a period not to exceed five years.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.515  Are there any exceptions to those actions?

    The ED Deciding Official may waive with respect to a particular
award, in writing, a suspension of payments under an award, suspension
or termination of an award, or suspension or debarment of a recipient if
the ED Deciding Official determines that such a waiver would be in the
public interest. This exception authority cannot be delegated to any
other official.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



                          Subpart F_Definitions



Sec. 84.605  Award.

    Award means an award of financial assistance by the Department of
Education or other Federal agency directly to a recipient.
    (a) The term award includes:
    (1) A Federal grant or cooperative agreement, in the form of money
or property in lieu of money.
    (2) A block grant or a grant in an entitlement program, whether or
not the grant is exempted from coverage under the Governmentwide rule 34
CFR Part 85 that implements OMB Circular A-102 (for availability, see 5
CFR 1310.3) and specifies uniform administrative requirements.
    (b) The term award does not include:
    (1) Technical assistance that provides services instead of money.
    (2) Loans.
    (3) Loan guarantees.
    (4) Interest subsidies.
    (5) Insurance.
    (6) Direct appropriations.
    (7) Veterans' benefits to individuals (i.e., any benefit to
veterans, their families, or survivors by virtue of the service of a
veteran in the Armed Forces of the United States).

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.610  Controlled substance.

    Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.615  Conviction.

    Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.620  Cooperative agreement.

    Cooperative agreement means an award of financial assistance that,
consistent with 31 U.S.C. 6305, is used to enter into the same kind of
relationship as a grant (see definition of grant in Sec. 84.650),
except that substantial involvement is expected between the Federal
agency and the recipient when carrying out the activity contemplated by
the award. The term does not include cooperative research and
development agreements as defined in 15 U.S.C. 3710a.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)

[[Page 267]]



Sec. 84.625  Criminal drug statute.

    Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.630  Debarment.

    Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement contracts
and covered nonprocurement transactions. A recipient so prohibited is
debarred, in accordance with the Federal Acquisition Regulation for
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule,
Government-wide Debarment and Suspension (Nonprocurement), that
implements Executive Order 12549 and Executive Order 12689.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.635  Drug-free workplace.

    Drug-free workplace means a site for the performance of work done in
connection with a specific award at which employees of the recipient are
prohibited from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.640  Employee.

    (a) Employee means the employee of a recipient directly engaged in
the performance of work under the award, including--
    (1) All direct charge employees;
    (2) All indirect charge employees, unless their impact or
involvement in the performance of work under the award is insignificant
to the performance of the award; and
    (3) Temporary personnel and consultants who are directly engaged in
the performance of work under the award and who are on the recipient's
payroll.
    (b) This definition does not include workers not on the payroll of
the recipient (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the payroll;
or employees of subrecipients or subcontractors in covered workplaces).

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.645  Federal agency or agency.

    Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.650  Grant.

    Grant means an award of financial assistance that, consistent with
31 U.S.C. 6304, is used to enter into a relationship--
    (a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Federal Government's direct benefit or use;
and
    (b) In which substantial involvement is not expected between the
Federal agency and the recipient when carrying out the activity
contemplated by the award.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.655  Individual.

    Individual means a natural person.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.660  Recipient.

    Recipient means any individual, corporation, partnership,
association, unit of government (except a Federal agency) or legal
entity, however organized,

[[Page 268]]

that receives an award directly from a Federal agency.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.665  State.

    State means any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



Sec. 84.670  Suspension.

    Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement transactions
for a temporary period, pending completion of an investigation and any
judicial or administrative proceedings that may ensue. A recipient so
prohibited is suspended, in accordance with the Federal Acquisition
Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and
the common rule, Government-wide Debarment and Suspension
(Nonprocurement), that implements Executive Order 12549 and Executive
Order 12689. Suspension of a recipient is a distinct and separate action
from suspension of an award or suspension of payments under an award.

(Authority: E.O.s 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)



PART 86_DRUG AND ALCOHOL ABUSE PREVENTION--Table of Contents



                            Subpart A_General

Sec.
86.1 What is the purpose of the Drug and Alcohol Abuse Prevention
          regulations?
86.2 What Federal programs are covered by this part?
86.3 What actions shall an IHE take to comply with the requirements of
          this part?
86.4 What are the procedures for submitting a drug prevention program
          certification?
86.5 What are the consequences if an IHE fails to submit a drug
          prevention program certification?
86.6 When must an IHE submit a drug prevention program certification?
86.7 What definitions apply to this part?

               Subpart B_Institutions of Higher Education

86.100 What must the IHE's drug prevention program include?
86.101 What review of IHE drug prevention programs does the Secretary
          conduct?
86.102 What is required of an IHE that the Secretary selects for annual
          review?
86.103 What records and information must an IHE make available to the
          Secretary and the public concerning its drug prevention
          program?

Subpart C [Reserved]

Subpart D_Responses and Sanctions Issued or Imposed by the Secretary for
                          Violations by an IHE

86.300 What constitutes a violation of this part by an IHE?
86.301 What actions may the Secretary take if an IHE violates this part?
86.302 What are the procedures used by the Secretary for providing
          information or technical assistance?
86.303 What are the procedures used by the Secretary for issuing a
          response other than the formulation of a compliance agreement
          or the provision of information or technical assistance?
86.304 What are the procedures used by the Secretary to demand repayment
          of Federal financial assistance or terminate an IHE's
          eligibility for any or all forms of Federal financial
          assistance?

                       Subpart E_Appeal Procedures

86.400 What is the scope of this subpart?
86.401 What are the authority and responsibility of the ALJ?
86.402 Who may be a party in a hearing under this subpart?
86.403 May a party be represented by counsel?
86.404 How may a party communicate with an ALJ?
86.405 What are the requirements for filing written submissions?
86.406 What must the ALJ do if the parties enter settlement
          negotiations?
86.407 What are the procedures for scheduling a hearing?
86.408 What are the procedures for conducting a pre-hearing conference?
86.409 What are the procedures for conducting a hearing on the record?
86.410 What are the procedures for issuance of a decision?
86.411 What are the procedures for requesting reinstatement of
          eligibility?


[[Page 269]]


    Authority: 20 U.S.C. 1145g, unless otherwise noted.

    Source: 55 FR 33581, Aug. 16, 1990, unless otherwise noted.



                            Subpart A_General



Sec. 86.1  What is the purpose of the Drug and Alcohol Abuse
Prevention regulations?

    The purpose of the Drug and Alcohol Abuse Prevention regulations is
to implement section 22 of the Drug-Free Schools and Communities Act
Amendments of 1989, which added section 1213 to the Higher Education
Act. These amendments require that, as a condition of receiving funds or
any other form of financial assistance under any Federal program, an
institution of higher education (IHE) must certify that it has adopted
and implemented a drug prevention program as described in this part.

(Authority: 20 U.S.C. 1145g)

[61 FR 66225, Dec. 17, 1996]



Sec. 86.2  What Federal programs are covered by this part?

    The Federal programs covered by this part include--
    (a) All programs administered by the Department of Education under
which an IHE may receive funds or any other form of Federal financial
assistance; and
    (b) All programs administered by any other Federal agency under
which an IHE may receive funds or any other form of Federal financial
assistance.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.3  What actions shall an IHE take to comply with the
requirements of this part?

    (a) An IHE shall adopt and implement a drug prevention program as
described in Sec. 86.100 to prevent the unlawful possession, use, or
distribution of illicit drugs and alcohol by all students and employees
on school premises or as part of any of its activities.
    (b) An IHE shall provide a written certification that it has adopted
and implemented the drug prevention program described in Sec. 86.100.

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, 66226, Dec. 17,
1996]



Sec. 86.4  What are the procedures for submitting a drug prevention
program certification?

    An IHE shall submit to the Secretary the drug prevention program
certification required by Sec. 86.3(b).

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66226, Dec. 17, 1996]



Sec. 86.5  What are the consequences if an IHE fails to submit a drug
prevention program certification?

    (a) An IHE that fails to submit a drug prevention program
certification is not eligible to receive funds or any other form of
financial assistance under any Federal program.
    (b) The effect of loss of eligibility to receive funds or any other
form of Federal financial assistance is determined by the statute and
regulations governing the Federal programs under which an IHE receives
or desires to receive assistance.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.6  When must an IHE submit a drug prevention program
certification?

    (a) After October 1, 1990, except as provided in paragraph (b) of
this section, an IHE is not eligible to receive funds or any other form
of financial assistance under any Federal program until the IHE has
submitted a drug prevention program certification.
    (b)(1) The Secretary may allow an IHE until not later than April 1,
1991, to submit the drug prevention program certification, only if the
IHE establishes that it has a need, other than administrative
convenience, for more time to adopt and implement its drug prevention
program.

[[Page 270]]

    (2) An IHE that wants to receive an extension of time to submit its
drug prevention program certification shall submit a written
justification to the Secretary that--
    (i) Describes each part of its drug prevention program, whether in
effect or planned;
    (ii) Provides a schedule to complete and implement its drug
prevention program; and
    (iii) Explains why it has a need, other than administrative
convenience, for more time to adopt and implement its drug prevention
program.
    (3) An IHE shall submit a request for an extension to the Secretary.

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66226, Dec. 17, 1996]



Sec. 86.7  What definitions apply to this part?

    (a) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR part 77:


Department

EDGAR

Secretary
    (b) Other definitions. The following terms used in this part are
defined as follows:
    Compliance agreement means an agreement between the Secretary and an
IHE that is not in full compliance with its drug prevention program
certification. The agreement specifies the steps the IHE will take to
comply fully with its drug prevention program certification, and
provides a schedule for the accomplishment of those steps. A compliance
agreement does not excuse or remedy past violations of this part.
    Institution of higher education means--
    (1) An institution of higher education, as defined in 34 CFR 600.4;
    (2) A proprietary institution of higher education, as defined in 34
CFR 600.5;
    (3) A postsecondary vocational institution, as defined in 34 CFR
600.6; and
    (4) A vocational school, as defined in 34 CFR 600.7.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66226, Dec. 17, 1996]



               Subpart B_Institutions of Higher Education



Sec. 86.100  What must the IHE's drug prevention program include?

    The IHE's drug prevention program must, at a minimum, include the
following:
    (a) The annual distribution in writing to each employee, and to each
student who is taking one or more classes for any type of academic
credit except for continuing education units, regardless of the length
of the student's program of study, of--
    (1) Standards of conduct that clearly prohibit, at a minimum, the
unlawful possession, use, or distribution of illicit drugs and alcohol
by students and employees on its property or as part of any of its
activities;
    (2) A description of the applicable legal sanctions under local,
State, or Federal law for the unlawful possession or distribution of
illicit drugs and alcohol;
    (3) A description of the health risks associated with the use of
illicit drugs and the abuse of alcohol;
    (4) A description of any drug or alcohol counseling, treatment, or
rehabilitation or re-entry programs that are available to employees or
students; and
    (5) A clear statement that the IHE will impose disciplinary
sanctions on students and employees (consistent with local, State, and
Federal law), and a description of those sanctions, up to and including
expulsion or termination of employment and referral for prosecution, for
violations of the standards of conduct required by paragraph (a)(1) of
this section. For the purpose of this section, a disciplinary sanction
may include the completion of an appropriate rehabilitation program.
    (b) A biennial review by the IHE of its program to--
    (1) Determine its effectiveness and implement changes to the program
if they are needed; and
    (2) Ensure that the disciplinary sanctions described in paragraph
(a)(5) of this section are consistently enforced.

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)

[[Page 271]]



Sec. 86.101  What review of IHE drug prevention programs does the
Secretary conduct?

    The Secretary annually reviews a representative sample of IHE drug
prevention programs.

(Authority: 20 U.S.C. 1145g)



Sec. 86.102  What is required of an IHE that the Secretary selects for
annual review?

    If the Secretary selects an IHE for review under Sec. 86.101, the
IHE shall provide the Secretary access to personnel, records, documents
and any other necessary information requested by the Secretary to review
the IHE's adoption and implementation of its drug prevention program.

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)



Sec. 86.103  What records and information must an IHE make available to
the Secretary and the public concerning its drug prevention program?

    (a) Each IHE that provides the drug prevention program certification
required by Sec. 86.3(b) shall, upon request, make available to the
Secretary and the public a copy of each item required by Sec. 86.100(a)
as well as the results of the biennial review required by Sec.
86.100(b).
    (b)(1) An IHE shall retain the following records for three years
after the fiscal year in which the record was created:
    (i) The items described in paragraph (a) of this section.
    (ii) Any other records reasonably related to the IHE's compliance
with the drug prevention program certification.
    (2) If any litigation, claim, negotiation, audit, review, or other
action involving the records has been started before expiration of the
three-year period, the IHE shall retain the records until completion of
the action and resolution of all issues that arise from it, or until the
end of the regular three-year period, whichever is later.

(Approved by the Office of Management and Budget under control number
1880-0522)

(Authority: 20 U.S.C. 1145g)

Subpart C [Reserved]



Subpart D_Responses and Sanctions Issued or Imposed by the Secretary for
                          Violations by an IHE



Sec. 86.300  What constitutes a violation of this part by an IHE?

    An IHE violates this part by--
    (a) Receiving any form of Federal financial assistance after
becoming ineligible to receive that assistance because of failure to
submit a certification in accordance with Sec. 86.3(b); or
    (b) Violating its certification. Violation of a certification
includes failure of an IHE to--
    (1) Adopt or implement its drug prevention program; or
    (2) Consistently enforce its disciplinary sanctions for violations
by students and employees of the standards of conduct adopted by an IHE
under Sec. 86.100(a)(1).

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66226, Dec. 17, 1996]



Sec. 86.301  What actions may the Secretary take if an IHE violates this
part?

    (a) If an IHE violates its certification, the Secretary may issue a
response to the IHE. A response may include, but is not limited to--
    (1) Provision of information and technical assistance; and
    (2) Formulation of a compliance agreement designed to bring the IHE
into full compliance with this part as soon as feasible.
    (b) If an IHE receives any form of Federal financial assistance
without having submitted a certification or violates its certification,
the Secretary may impose one or more sanctions on the IHE, including--
    (1) Repayment of any or all forms of Federal financial assistance
received by the IHE when it was in violation of this part; and
    (2) The termination of any or all forms of Federal financial
assistance that--
    (i)(A) Except as specified in paragraph (b)(2)(ii) of this section,
ends an IHE's eligibility to receive any or all

[[Page 272]]

forms of Federal financial assistance. The Secretary specifies which
forms of Federal financial assistance would be affected; and
    (B) Prohibits an IHE from making any new obligations against Federal
funds; and
    (ii) For purposes of an IHE's participation in the student financial
assistance programs authorized by title IV of the Higher Education Act
of 1965 as amended, has the same effect as a termination under 34 CFR
668.94.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.302  What are the procedures used by the Secretary for
providing information or technical assistance?

    (a) The Secretary provides information or technical assistance to an
IHE in writing, through site visits, or by other means.
    (b) The IHE shall inform the Secretary of any corrective action it
has taken within a period specified by the Secretary.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.303  What are the procedures used by the Secretary for issuing
a response other than the formulation of a compliance agreement or the

provision of information or technical assistance?

    (a) If the Secretary intends to issue a response other than the
formulation of a compliance agreement or the provision of information or
technical assistance, the Secretary notifies the IHE in writing of--
    (1) The Secretary's determination that there are grounds to issue a
response other than the formulation of a compliance agreement or
providing information or technical assistance; and
    (2) The response the Secretary intends to issue.
    (b) An IHE may submit written comments to the Secretary on the
determination under paragraph (a)(1) of this section and the intended
response under paragraph (a)(2) of this section within 30 days after the
date the IHE receives the notification of the Secretary's intent to
issue a response.
    (c) Based on the initial notification and the written comments of
the IHE the Secretary makes a final determination and, if appropriate,
issues a final response.
    (d) The IHE shall inform the Secretary of the corrective action it
has taken in order to comply with the terms of the Secretary's response
within a period specified by the Secretary.
    (e) If an IHE does not comply with the terms of a response issued by
the Secretary, the Secretary may issue an additional response or impose
a sanction on the IHE in accordance with the procedures in Sec. 86.304.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.304  What are the procedures used by the Secretary to demand
repayment of Federal financial assistance or terminate an IHE's

eligibility for any or all forms of Federal financial assistance?

    (a) A designated Department official begins a proceeding for
repayment of Federal financial assistance or termination, or both, of an
IHE's eligibility for any or all forms of Federal financial assistance
by sending the IHE a notice by certified mail with return receipt
requested. This notice--
    (1) Informs the IHE of the Secretary's intent to demand repayment of
Federal financial assistance or to terminate, describes the consequences
of that action, and identifies the alleged violations that constitute
the basis for the action;
    (2) Specifies, as appropriate--
    (i) The amount of Federal financial assistance that must be repaid
and the date by which the IHE must repay the funds; and
    (ii) The proposed effective date of the termination, which must be
at least 30 days after the date of receipt of the notice of intent; and
    (3) Informs the IHE that the repayment of Federal financial
assistance will not be required or that the termination will not be
effective on the date specified in the notice if the designated
Department official receives, within a 30-day period beginning on the
date the IHE receives the notice of intent described in this paragraph--

[[Page 273]]

    (i) Written material indicating why the repayment of Federal
financial assistance or termination should not take place; or
    (ii) A request for a hearing that contains a concise statement of
disputed issues of law and fact, the IHE's position with respect to
these issues, and, if appropriate, a description of which Federal
financial assistance the IHE contends need not be repaid.
    (b) If the IHE does not request a hearing but submits written
material--
    (1) The IHE receives no additional opportunity to request or receive
a hearing; and
    (2) The designated Department official, after considering the
written material, notifies the IHE in writing whether--
    (i) Any or all of the Federal financial assistance must be repaid;
or
    (ii) The proposed termination is dismissed or imposed as of a
specified date.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



                       Subpart E_Appeal Procedures



Sec. 86.400  What is the scope of this subpart?

    (a) The procedures in this subpart are the exclusive procedures
governing appeals of decisions by a designated Department official to
demand the repayment of Federal financial assistance or terminate the
eligibility of an IHE to receive some or all forms of Federal financial
assistance for violations of this part.
    (b) An Administrative Law Judge (ALJ) hears appeals under this
subpart.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.401  What are the authority and responsibility of the ALJ?

    (a) The ALJ regulates the course of the proceeding and conduct of
the parties during the hearing and takes all steps necessary to conduct
a fair and impartial proceeding.
    (b) The ALJ is not authorized to issue subpoenas.
    (c) The ALJ takes whatever measures are appropriate to expedite the
proceeding. These measures may include, but are not limited to--
    (1) Scheduling of conferences;
    (2) Setting time limits for hearings and submission of written
documents; and
    (3) Terminating the hearing and issuing a decision against a party
if that party does not meet those time limits.
    (d) The scope of the ALJ's review is limited to determining
whether--
    (1) The IHE received any form of Federal financial assistance after
becoming ineligible to receive that assistance because of failure to
submit a certification; or
    (2) The IHE violated its certification.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.402  Who may be a party in a hearing under this subpart?

    (a) Only the designated Department official and the IHE that is the
subject of the proposed termination or recovery of Federal financial
assistance may be parties in a hearing under this subpart.
    (b) Except as provided in this subpart, no person or organization
other than a party may participate in a hearing under this subpart.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.403  May a party be represented by counsel?

    A party may be represented by counsel.

(Authority: 20 U.S.C. 1145g)



Sec. 86.404  How may a party communicate with an ALJ?

    (a) A party may not communicate with an ALJ on any fact at issue in
the case or on any matter relevant to the merits of the case unless the
other party is given notice and an opportunity to participate.
    (b)(1) To obtain an order or ruling from an ALJ, a party shall make
a motion to the ALJ.

[[Page 274]]

    (2) Except for a request for an extension of time, a motion must be
made in writing unless the parties appear in person or participate in a
conference telephone call. The ALJ may require a party to reduce an oral
motion to writing.
    (3) If a party files a written motion, the party shall do so in
accordance with Sec. 86.405.
    (4) Except for a request for an extension of time, the ALJ may not
grant a party's written motion without the consent of the other party
unless the other party has had at least 21 days from the date of service
of the motion to respond. However, the ALJ may deny a motion without
awaiting a response.
    (5) The date of service of a motion is determined by the standards
for determining a filing date in Sec. 86.405(d).

(Authority: 20 U.S.C. 1145g)



Sec. 86.405  What are the requirements for filing written submissions?

    (a) Any written submission under this subpart must be filed by hand-
delivery, by mail, or by facsimile transmission. The Secretary
discourages the use of facsimile transmission for documents longer than
five pages.
    (b) If a party files a brief or other document, the party shall
serve a copy of the filed material on the other party on the filing date
by hand-delivery or by mail. If agreed upon by the parties, service of a
document may be made upon the other party by facsimile transmission.
    (c) Any written submission must be accompanied by a statement
certifying the date that the filed material was filed and served on the
other party.
    (d)(1) The filing date for a written submission is the date the
document is--
    (i) Hand-delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (2) If a scheduled filing date falls on a Saturday, Sunday, or
Federal holiday, the filing deadline is the next Federal business day.
    (e) A party filing by facsimile transmission is responsible for
confirming that a complete and legible copy of the document was received
by the Department.
    (f) If a document is filed by facsimile transmission, the Secretary
or the designated Department official, as applicable, may require the
filing of a follow-up hard copy by hand-delivery or by mail within a
reasonable period of time.

(Authority: 20 U.S.C. 1145g)

[57 FR 56795, Nov. 30, 1992]



Sec. 86.406  What must the ALJ do if the parties enter settlement
negotiations?

    (a) If the parties to a case file a joint motion requesting a stay
of the proceedings for settlement negotiations or for the parties to
obtain approval of a settlement agreement, the ALJ grants the stay.
    (b) The following are not admissible in any proceeding under this
part:
    (1) Evidence of conduct during settlement negotiations.
    (2) Statements made during settlement negotiations.
    (3) Terms of settlement offers.
    (c) The parties may not disclose the contents of settlement
negotiations to the ALJ. If the parties enter into a settlement
agreement and file a joint motion to dismiss the case, the ALJ grants
the motion.

(Authority: 20 U.S.C. 1145g)



Sec. 86.407  What are the procedures for scheduling a hearing?

    (a) If the IHE requests a hearing by the time specified in Sec.
86.304(a)(3), the designated Department official sets the date and the
place.
    (b)(1) The date is at least 15 days after the designated Department
official receives the request and no later than 45 days after the
request for hearing is received by the Department.
    (2) On the motion of either or both parties, the ALJ may extend the
period before the hearing is scheduled beyond the 45 days specified in
paragraph (b)(1) of this section.
    (c) No termination takes effect until after a hearing is held and a
decision is issued by the Department.
    (d) With the approval of the ALJ and the consent of the designated
Department official and the IHE, any time

[[Page 275]]

schedule specified in this section may be shortened.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.408  What are the procedures for conducting a pre-hearing
conference?

    (a)(1) A pre-hearing conference may be convened by the ALJ if the
ALJ thinks that such a conference would be useful, or if requested by--
    (i) The designated Department official; or
    (ii) The IHE.
    (2) The purpose of a pre-hearing conference is to allow the parties
to settle, narrow, or clarify the dispute.
    (b) A pre-hearing conference may consist of--
    (1) A conference telephone call;
    (2) An informal meeting; or
    (3) The submission and exchange of written material.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.409  What are the procedures for conducting a hearing on the
record?

    (a) A hearing on the record is an orderly presentation of arguments
and evidence conducted by an ALJ.
    (b) An ALJ conducts the hearing entirely on the basis of briefs and
other written submissions unless--
    (1) The ALJ determines, after reviewing all appropriate submissions,
that an evidentiary hearing is needed to resolve a material factual
issue in dispute; or
    (2) The ALJ determines, after reviewing all appropriate submissions,
that oral argument is needed to clarify the issues in the case.
    (c) The hearing process may be expedited as agreed by the ALJ, the
designated Department official, and the IHE. Procedures to expedite may
include, but are not limited to, the following:
    (1) A restriction on the number or length of submissions.
    (2) The conduct of the hearing by telephone conference call.
    (3) A review limited to the written record.
    (4) A certification by the parties to facts and legal authorities
not in dispute.
    (d)(1) The formal rules of evidence and procedures applicable to
proceedings in a court of law are not applicable.
    (2) The designated Department official has the burden of persuasion
in any proceeding under this subpart.
    (3)(i) The parties may agree to exchange relevant documents and
information.
    (ii) The ALJ may not order discovery, as provided for under the
Federal Rules of Civil Procedure, or any other exchange between the
parties of documents or information.
    (4) The ALJ accepts only evidence that is relevant and material to
the proceeding and is not unduly repetitious.
    (e) The ALJ makes a transcribed record of any evidentiary hearing or
oral argument that is held, and makes the record available to--
    (1) The designated Department official; and
    (2) The IHE on its request and upon payment of a fee comparable to
that prescribed under the Department of Education Freedom of Information
Act regulations (34 CFR part 5).

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.410  What are the procedures for issuance of a decision?

    (a)(1) The ALJ issues a written decision to the IHE, the designated
Department official, and the Secretary by certified mail, return receipt
requested, within 30 days after--
    (i) The last brief is filed;
    (ii) The last day of the hearing if one is held; or
    (iii) The date on which the ALJ terminates the hearing in accordance
with Sec. 86.401(c)(3).
    (2) The ALJ's decision states whether the violation or violations
contained in the Secretary's notification occurred, and articulates the
reasons for the ALJ's finding.

[[Page 276]]

    (3) The ALJ bases findings of fact only on evidence in the hearing
record and on matters given judicial notice.
    (b)(1) The ALJ's decision is the final decision of the agency.
However, the Secretary reviews the decision on request of either party,
and may review the decision on his or her own initiative.
    (2) If the Secretary decides to review the decision on his or her
own initiative, the Secretary informs the parties of his or her
intention to review by written notice sent within 15 days of the
Secretary's receipt of the ALJ's decision.
    (c)(1) Either party may request review by the Secretary by
submitting a brief or written materials to the Secretary within 20 days
of the party's receipt of the ALJ's decision. The submission must
explain why the decision of the ALJ should be modified, reversed, or
remanded. The other party shall respond within 20 days of receipt of the
brief or written materials filed by the opposing party.
    (2) Neither party may introduce new evidence on review.
    (d) The decision of the ALJ ordering the repayment of Federal
financial assistance or terminating the eligibility of an IHE does not
take effect pending the Secretary's review.
    (e)(1) The Secretary reviews the ALJ's decision considering only
evidence introduced into the record.
    (2) The Secretary's decision may affirm, modify, reverse or remand
the ALJ's decision and includes a statement of reasons for the decision.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



Sec. 86.411  What are the procedures for requesting reinstatement of
eligibility?

    (a)(1) An IHE whose eligibility to receive any or all forms of
Federal financial assistance has been terminated may file with the
Department a request for reinstatement as an eligible entity no earlier
than 18 months after the effective date of the termination.
    (2) In order to be reinstated, the IHE must demonstrate that it has
corrected the violation or violations on which the termination was
based, and that it has met any repayment obligation imposed upon it
under Sec. 86.301(b)(1) of this part.
    (b) In addition to the requirements of paragraph (a) of this
section, the IHE shall comply with the requirements and procedures for
reinstatement of eligibility applicable to any Federal program under
which it desires to receive Federal financial assistance.

(Authority: 20 U.S.C. 1145g)

[55 FR 33581, Aug. 16, 1990, as amended at 61 FR 66225, Dec. 17, 1996]



PART 97_PROTECTION OF HUMAN SUBJECTS--Table of Contents



Subpart A_Federal Policy for the Protection of Human Subjects (Basic ED
            Policy for Protection of Human Research Subjects)

Sec.
97.101 To what does this policy apply?
97.102 Definitions.
97.103 Assuring compliance with this policy--research conducted or
          supported by any Federal Department or Agency.
97.104-97.106 [Reserved]
97.107 IRB membership.
97.108 IRB functions and operations.
97.109 IRB review of research.
97.110 Expedited review procedures for certain kinds of research
          involving no more than minimal risk, and for minor changes in
          approved research.
97.111 Criteria for IRB approval of research.
97.112 Review by institution.
97.113 Suspension or termination of IRB approval of research.
97.114 Cooperative research.
97.115 IRB records.
97.116 General requirements for informed consent.
97.117 Documentation of informed consent.
97.118 Applications and proposals lacking definite plans for involvement
          of human subjects.
97.119 Research undertaken without the intention of involving human
          subjects.
97.120 Evaluation and disposition of applications and proposals for
          research to be conducted or supported by a Federal Department
          or Agency.
97.121 [Reserved]
97.122 Use of Federal funds.
97.123 Early termination of research support: Evaluation of applications
          and proposals.
97.124 Conditions.

Subparts B-C [Reserved]

[[Page 277]]

  Subpart D_Additional ED Protections for Children Who are Subjects in
                                Research

97.401 To what do these regulations apply?
97.402 Definitions.
97.403 IRB duties.
97.404 Research not involving greater than minimal risk.
97.405 Research involving greater than minimal risk but presenting the
          prospect of direct benefit to the individual subjects.
97.406 Research involving greater than minimal risk and no prospect of
          direct benefit to individual subjects, but likely to yield
          generalizable knowledge about the subject's disorder or
          condition.
97.407 Research not otherwise approvable which presents an opportunity
          to understand, prevent, or alleviate a serious problem
          affecting the health or welfare of children.
97.408 Requirements for permission by parents or guardians and for
          assent by children.
97.409 Wards.

    Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; 42 U.S.C. 300v-
1(b).

    Source: 56 FR 28012, 28021, June 18, 1991, unless otherwise noted.



Subpart A_Federal Policy for the Protection of Human Subjects (Basic ED
            Policy for Protection of Human Research Subjects)



Sec. 97.101  To what does this policy apply?

    (a) Except as provided in paragraph (b) of this section, this policy
applies to all research involving human subjects conducted, supported or
otherwise subject to regulation by any federal department or agency
which takes appropriate administrative action to make the policy
applicable to such research. This includes research conducted by federal
civilian employees or military personnel, except that each department or
agency head may adopt such procedural modifications as may be
appropriate from an administrative standpoint. It also includes research
conducted, supported, or otherwise subject to regulation by the federal
government outside the United States.
    (1) Research that is conducted or supported by a federal department
or agency, whether or not it is regulated as defined in Sec. 97.102(e),
must comply with all sections of this policy.
    (2) Research that is neither conducted nor supported by a federal
department or agency but is subject to regulation as defined in Sec.
97.102(e) must be reviewed and approved, in compliance with Sec. Sec.
97.101, 97.102, and Sec. Sec. 97.107 through 97.117 of this policy, by
an institutional review board (IRB) that operates in accordance with the
pertinent requirements of this policy.
    (b) Unless otherwise required by department or agency heads,
research activities in which the only involvement of human subjects will
be in one or more of the following categories are exempt from this
policy:
    (1) Research conducted in established or commonly accepted
educational settings, involving normal educational practices, such as
(i) research on regular and special education instructional strategies,
or (ii) research on the effectiveness of or the comparison among
instructional techniques, curricula, or classroom management methods.
    (2) Research involving the use of educational tests (cognitive,
diagnostic, aptitude, achievement), survey procedures, interview
procedures or observation of public behavior, unless:
    (i) Information obtained is recorded in such a manner that human
subjects can be identified, directly or through identifiers linked to
the subjects; and
    (ii) Any disclosure of the human subjects' responses outside the
research could reasonably place the subjects at risk of criminal or
civil liability or be damaging to the subjects' financial standing,
employability, or reputation.
    (3) Research involving the use of educational tests (cognitive,
diagnostic, aptitude, achievement), survey procedures, interview
procedures, or observation of public behavior that is not exempt under
paragraph (b)(2) of this section, if:
    (i) The human subjects are elected or appointed public officials or
candidates for public office; or
    (ii) Federal statute(s) require(s) without exception that the
confidentiality of the personally identifiable information will be
maintained throughout the research and thereafter.

[[Page 278]]

    (4) Research, involving the collection or study of existing data,
documents, records, pathological specimens, or diagnostic specimens, if
these sources are publicly available or if the information is recorded
by the investigator in such a manner that subjects cannot be identified,
directly or through identifiers linked to the subjects.
    (5) Research and demonstration projects which are conducted by or
subject to the approval of department or agency heads, and which are
designed to study, evaluate, or otherwise examine:
    (i) Public benefit or service programs;
    (ii) Procedures for obtaining benefits or services under those
programs;
    (iii) Possible changes in or alternatives to those programs or
procedures; or
    (iv) Possible changes in methods or levels of payment for benefits
or services under those programs.
    (6) Taste and food quality evaluation and consumer acceptance
studies,
    (i) If wholesome foods without additives are consumed or
    (ii) If a food is consumed that contains a food ingredient at or
below the level and for a use found to be safe, or agricultural chemical
or environmental contaminant at or below the level found to be safe, by
the Food and Drug Administration or approved by the Environmental
Protection Agency or the Food Safety and Inspection Service of the U.S.
Department of Agriculture.
    (c) Department or agency heads retain final judgment as to whether a
particular activity is covered by this policy.
    (d) Department or agency heads may require that specific research
activities or classes of research activities conducted, supported, or
otherwise subject to regulation by the department or agency but not
otherwise covered by this policy, comply with some or all of the
requirements of this policy.
    (e) Compliance with this policy requires compliance with pertinent
federal laws or regulations which provide additional protections for
human subjects.
    (f) This policy does not affect any state or local laws or
regulations which may otherwise be applicable and which provide
additional protections for human subjects.
    (g) This policy does not affect any foreign laws or regulations
which may otherwise be applicable and which provide additional
protections to human subjects of research.
    (h) When research covered by this policy takes place in foreign
countries, procedures normally followed in the foreign countries to
protect human subjects may differ from those set forth in this policy.
(An example is a foreign institution which complies with guidelines
consistent with the World Medical Assembly Declaration (Declaration of
Helsinki amended 1989) issued either by sovereign states or by an
organization whose function for the protection of human research
subjects is internationally recognized.) In these circumstances, if a
department or agency head determines that the procedures prescribed by
the institution afford protections that are at least equivalent to those
provided in this policy, the department or agency head may approve the
substitution of the foreign procedures in lieu of the procedural
requirements provided in this policy. Except when otherwise required by
statute, Executive Order, or the department or agency head, notices of
these actions as they occur will be published in the Federal Register or
will be otherwise published as provided in department or agency
procedures.
    (i) Unless otherwise required by law, department or agency heads may
waive the applicability of some or all of the provisions of this policy
to specific research activities or classes of research activities
otherwise covered by this policy. Except when otherwise required by
statute or Executive Order, the department or agency head shall forward
advance notices of these actions to the Office for Human Research
Protections, Department of Health and Human Services (HHS), or any
successor office, and shall also publish them in the Federal Register or
in

[[Page 279]]

such other manner as provided in department or agency procedures. \1\
---------------------------------------------------------------------------

    \1\ Institutions with HHS-approved assurances on file will abide by
provisions of title 45 CFR part 46 subparts A-D. Some of the other
Departments and Agencies have incorporated all provisions of title 45
CFR part 46 into their policies and procedures as well. However, the
exemptions at 45 CFR 46.101(b) do not apply to research involving
prisoners, subpart C. The exemption at 45 CFR 46.101(b)(2), for research
involving survey or interview procedures or observation of public
behavior, does not apply to research with children, subpart D, except
for research involving observations of public behavior when the
investigator(s) do not participate in the activities being observed.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
---------------------------------------------------------------------------
1(b))

[56 FR 28012, 28021, June 18, 1991; 56 FR 29756, June 28, 1991, as
amended at 70 FR 36328, June 23, 2005]



Sec. 97.102  Definitions.

    (a) Department or agency head means the head of any federal
department or agency and any other officer or employee of any department
or agency to whom authority has been delegated.
    (b) Institution means any public or private entity or agency
(including federal, state, and other agencies).
    (c) Legally authorized representative means an individual or
judicial or other body authorized under applicable law to consent on
behalf of a prospective subject to the subject's participation in the
procedure(s) involved in the research.
    (d) Research means a systematic investigation, including research
development, testing and evaluation, designed to develop or contribute
to generalizable knowledge. Activities which meet this definition
constitute research for purposes of this policy, whether or not they are
conducted or supported under a program which is considered research for
other purposes. For example, some demonstration and service programs may
include research activities.
    (e) Research subject to regulation, and similar terms are intended
to encompass those research activities for which a federal department or
agency has specific responsibility for regulating as a research
activity, (for example, Investigational New Drug requirements
administered by the Food and Drug Administration). It does not include
research activities which are incidentally regulated by a federal
department or agency solely as part of the department's or agency's
broader responsibility to regulate certain types of activities whether
research or non-research in nature (for example, Wage and Hour
requirements administered by the Department of Labor).
    (f) Human subject means a living individual about whom an
investigator (whether professional or student) conducting research
obtains
    (1) Data through intervention or interaction with the individual, or
    (2) Identifiable private information.

Intervention includes both physical procedures by which data are
gathered (for example, venipuncture) and manipulations of the subject or
the subject's environment that are performed for research purposes.
Interaction includes communication or interpersonal contact between
investigator and subject. ``Private information'' includes information
about behavior that occurs in a context in which an individual can
reasonably expect that no observation or recording is taking place, and
information which has been provided for specific purposes by an
individual and which the individual can reasonably expect will not be
made public (for example, a medical record). Private information must be
individually identifiable (i.e., the identity of the subject is or may
readily be ascertained by the investigator or associated with the
information) in order for obtaining the information to constitute
research involving human subjects.
    (g) IRB means an institutional review board established in accord
with and for the purposes expressed in this policy.
    (h) IRB approval means the determination of the IRB that the
research has been reviewed and may be conducted at an institution within
the constraints set forth by the IRB and by other institutional and
federal requirements.
    (i) Minimal risk means that the probability and magnitude of harm or
discomfort anticipated in the research are not greater in and of
themselves than

[[Page 280]]

those ordinarily encountered in daily life or during the performance of
routine physical or psychological examinations or tests.
    (j) Certification means the official notification by the institution
to the supporting department or agency, in accordance with the
requirements of this policy, that a research project or activity
involving human subjects has been reviewed and approved by an IRB in
accordance with an approved assurance.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.103  Assuring compliance with this policy--research conducted
or supported by any Federal Department or Agency.

    (a) Each institution engaged in research which is covered by this
policy and which is conducted or supported by a federal department or
agency shall provide written assurance satisfactory to the department or
agency head that it will comply with the requirements set forth in this
policy. In lieu of requiring submission of an assurance, individual
department or agency heads shall accept the existence of a current
assurance, appropriate for the research in question, on file with the
Office for Human Research Protections, HHS, or any successor office, and
approved for federalwide use by that office. When the existence of an
HHS-approved assurance is accepted in lieu of requiring submission of an
assurance, reports (except certification) required by this policy to be
made to department and agency heads shall also be made to the Office for
Human Research Protections, (HHS), or any successor office.
    (b) Departments and agencies will conduct or support research
covered by this policy only if the institution has an assurance approved
as provided in this section, and only if the institution has certified
to the department or agency head that the research has been reviewed and
approved by an IRB provided for in the assurance, and will be subject to
continuing review by the IRB. Assurances applicable to federally
supported or conducted research shall at a minimum include:
    (1) A statement of principles governing the institution in the
discharge of its responsibilities for protecting the rights and welfare
of human subjects of research conducted at or sponsored by the
institution, regardless of whether the research is subject to federal
regulation. This may include an appropriate existing code, declaration,
or statement of ethical principles, or a statement formulated by the
institution itself. This requirement does not preempt provisions of this
policy applicable to department- or agency-supported or regulated
research and need not be applicable to any research exempted or waived
under Sec. 97.101 (b) or (i).
    (2) Designation of one or more IRBs established in accordance with
the requirements of this policy, and for which provisions are made for
meeting space and sufficient staff to support the IRB's review and
recordkeeping duties.
    (3) A list of IRB members identified by name; earned degrees;
representative capacity; indications of experience such as board
certifications, licenses, etc., sufficient to describe each member's
chief anticipated contributions to IRB deliberations; and any employment
or other relationship between each member and the institution; for
example: full-time employee, part-time employee, member of governing
panel or board, stockholder, paid or unpaid consultant. Changes in IRB
membership shall be reported to the department or agency head, unless in
accord with Sec. 97.103(a) of this policy, the existence of an HHS-
approved assurance is accepted. In this case, change in IRB membership
shall be reported to the Office for Human Research Protections, HHS, or
any successor office.
    (4) Written procedures which the IRB will follow (i) for conducting
its initial and continuing review of research and for reporting its
findings and actions to the investigator and the institution; (ii) for
determining which projects require review more often than annually and
which projects need verification from sources other than the
investigators that no material changes have occurred since previous IRB
review; and (iii) for ensuring prompt reporting to the IRB of proposed
changes in a research activity, and for ensuring that such changes in
approved research,

[[Page 281]]

during the period for which IRB approval has already been given, may not
be initiated without IRB review and approval except when necessary to
eliminate apparent immediate hazards to the subject.
    (5) Written procedures for ensuring prompt reporting to the IRB,
appropriate institutional officials, and the department or agency head
of (i) any unanticipated problems involving risks to subjects or others
or any serious or continuing noncompliance with this policy or the
requirements or determinations of the IRB and (ii) any suspension or
termination of IRB approval.
    (c) The assurance shall be executed by an individual authorized to
act for the institution and to assume on behalf of the institution the
obligations imposed by this policy and shall be filed in such form and
manner as the department or agency head prescribes.
    (d) The department or agency head will evaluate all assurances
submitted in accordance with this policy through such officers and
employees of the department or agency and such experts or consultants
engaged for this purpose as the department or agency head determines to
be appropriate. The department or agency head's evaluation will take
into consideration the adequacy of the proposed IRB in light of the
anticipated scope of the institution's research activities and the types
of subject populations likely to be involved, the appropriateness of the
proposed initial and continuing review procedures in light of the
probable risks, and the size and complexity of the institution.
    (e) On the basis of this evaluation, the department or agency head
may approve or disapprove the assurance, or enter into negotiations to
develop an approvable one. The department or agency head may limit the
period during which any particular approved assurance or class of
approved assurances shall remain effective or otherwise condition or
restrict approval.
    (f) Certification is required when the research is supported by a
federal department or agency and not otherwise exempted or waived under
Sec. 97.101 (b) or (i). An institution with an approved assurance shall
certify that each application or proposal for research covered by the
assurance and by Sec. 97.103 of this Policy has been reviewed and
approved by the IRB. Such certification must be submitted with the
application or proposal or by such later date as may be prescribed by
the department or agency to which the application or proposal is
submitted. Under no condition shall research covered by Sec. 97.103 of
the Policy be supported prior to receipt of the certification that the
research has been reviewed and approved by the IRB. Institutions without
an approved assurance covering the research shall certify within 30 days
after receipt of a request for such a certification from the department
or agency, that the application or proposal has been approved by the
IRB. If the certification is not submitted within these time limits, the
application or proposal may be returned to the institution.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991; 56 FR 29756, June 28, 1991, as
amended at 70 FR 36328, June 23, 2005]



Sec. Sec. 97.104-97.106  [Reserved]



Sec. 97.107  IRB membership.

    (a) Each IRB shall have at least five members, with varying
backgrounds to promote complete and adequate review of research
activities commonly conducted by the institution. The IRB shall be
sufficiently qualified through the experience and expertise of its
members, and the diversity of the members, including consideration of
race, gender, and cultural backgrounds and sensitivity to such issues as
community attitudes, to promote respect for its advice and counsel in
safeguarding the rights and welfare of human subjects. In addition to
possessing the professional competence necessary to review specific
research activities, the IRB shall be able to ascertain the
acceptability of proposed research in terms of institutional commitments
and regulations, applicable law, and standards of professional conduct
and practice. The IRB shall therefore include persons knowledgeable in
these areas. If an IRB regularly reviews research that involves a
vulnerable

[[Page 282]]

category of subjects, such as children, prisoners, pregnant women, or
handicapped or mentally disabled persons, consideration shall be given
to the inclusion of one or more individuals who are knowledgeable about
and experienced in working with these subjects.
    (b) Every nondiscriminatory effort will be made to ensure that no
IRB consists entirely of men or entirely of women, including the
institution's consideration of qualified persons of both sexes, so long
as no selection is made to the IRB on the basis of gender. No IRB may
consist entirely of members of one profession.
    (c) Each IRB shall include at least one member whose primary
concerns are in scientific areas and at least one member whose primary
concerns are in nonscientific areas.
    (d) Each IRB shall include at least one member who is not otherwise
affiliated with the institution and who is not part of the immediate
family of a person who is affiliated with the institution.
    (e) No IRB may have a member participate in the IRB's initial or
continuing review of any project in which the member has a conflicting
interest, except to provide information requested by the IRB.
    (f) An IRB may, in its discretion, invite individuals with
competence in special areas to assist in the review of issues which
require expertise beyond or in addition to that available on the IRB.
These individuals may not vote with the IRB.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.108  IRB functions and operations.

    In order to fulfill the requirements of this policy each IRB shall:
    (a) Follow written procedures in the same detail as described in
Sec. 97.103(b)(4) and, to the extent required by, Sec. 97.103(b)(5).
    (b) Except when an expedited review procedure is used (see Sec.
97.110), review proposed research at convened meetings at which a
majority of the members of the IRB are present, including at least one
member whose primary concerns are in nonscientific areas. In order for
the research to be approved, it shall receive the approval of a majority
of those members present at the meeting.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.109  IRB review of research.

    (a) An IRB shall review and have authority to approve, require
modifications in (to secure approval), or disapprove all research
activities covered by this policy.
    (b) An IRB shall require that information given to subjects as part
of informed consent is in accordance with Sec. 97.116. The IRB may
require that information, in addition to that specifically mentioned in
Sec. 97.116, be given to the subjects when in the IRB's judgment the
information would meaningfully add to the protection of the rights and
welfare of subjects.
    (c) An IRB shall require documentation of informed consent or may
waive documentation in accordance with Sec. 97.117.
    (d) An IRB shall notify investigators and the institution in writing
of its decision to approve or disapprove the proposed research activity,
or of modifications required to secure IRB approval of the research
activity. If the IRB decides to disapprove a research activity, it shall
include in its written notification a statement of the reasons for its
decision and give the investigator an opportunity to respond in person
or in writing.
    (e) An IRB shall conduct continuing review of research covered by
this policy at intervals appropriate to the degree of risk, but not less
than once per year, and shall have authority to observe or have a third
party observe the consent process and the research.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.110  Expedited review procedures for certain kinds of research
involving no more than minimal risk, and for minor changes in approved

research.

    (a) The Secretary, HHS, has established, and published as a Notice
in the

[[Page 283]]

Federal Register, a list of categories of research that may be reviewed
by the IRB through an expedited review procedure. The list will be
amended, as appropriate after consultation with other departments and
agencies, through periodic republication by the Secretary, HHS, in the
Federal Register. A copy of the list is available from the Office for
Human Research Protections, HHS, or any successor office.
    (b) An IRB may use the expedited review procedure to review either
or both of the following:
    (1) Some or all of the research appearing on the list and found by
the reviewer(s) to involve no more than minimal risk,
    (2) Minor changes in previously approved research during the period
(of one year or less) for which approval is authorized.

Under an expedited review procedure, the review may be carried out by
the IRB chairperson or by one or more experienced reviewers designated
by the chairperson from among members of the IRB. In reviewing the
research, the reviewers may exercise all of the authorities of the IRB
except that the reviewers may not disapprove the research. A research
activity may be disapproved only after review in accordance with the
non-expedited procedure set forth in Sec. 97.108(b).
    (c) Each IRB which uses an expedited review procedure shall adopt a
method for keeping all members advised of research proposals which have
been approved under the procedure.
    (d) The department or agency head may restrict, suspend, terminate,
or choose not to authorize an institution's or IRB's use of the
expedited review procedure.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]



Sec. 97.111  Criteria for IRB approval of research.

    (a) In order to approve research covered by this policy the IRB
shall determine that all of the following requirements are satisfied:
    (1) Risks to subjects are minimized:
    (i) By using procedures which are consistent with sound research
design and which do not unnecessarily expose subjects to risk, and
    (ii) Whenever appropriate, by using procedures already being
performed on the subjects for diagnostic or treatment purposes.
    (2) Risks to subjects are reasonable in relation to anticipated
benefits, if any, to subjects, and the importance of the knowledge that
may reasonably be expected to result. In evaluating risks and benefits,
the IRB should consider only those risks and benefits that may result
from the research (as distinguished from risks and benefits of therapies
subjects would receive even if not participating in the research). The
IRB should not consider possible long-range effects of applying
knowledge gained in the research (for example, the possible effects of
the research on public policy) as among those research risks that fall
within the purview of its responsibility.
    (3) Selection of subjects is equitable. In making this assessment
the IRB should take into account the purposes of the research and the
setting in which the research will be conducted and should be
particularly cognizant of the special problems of research involving
vulnerable populations, such as children, prisoners, pregnant women,
mentally disabled persons, or economically or educationally
disadvantaged persons.
    (4) Informed consent will be sought from each prospective subject or
the subject's legally authorized representative, in accordance with, and
to the extent required by Sec. 97.116.
    (5) Informed consent will be appropriately documented, in accordance
with, and to the extent required by Sec. 97.117.
    (6) When appropriate, the research plan makes adequate provision for
monitoring the data collected to ensure the safety of subjects.
    (7) When appropriate, there are adequate provisions to protect the
privacy of subjects and to maintain the confidentiality of data.
    (b) When some or all of the subjects are likely to be vulnerable to
coercion or undue influence, such as children, prisoners, pregnant
women, mentally

[[Page 284]]

disabled persons, or economically or educationally disadvantaged
persons, additional safeguards have been included in the study to
protect the rights and welfare of these subjects.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.112  Review by institution.

    Research covered by this policy that has been approved by an IRB may
be subject to further appropriate review and approval or disapproval by
officials of the institution. However, those officials may not approve
the research if it has not been approved by an IRB.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.113  Suspension or termination of IRB approval of research.

    An IRB shall have authority to suspend or terminate approval of
research that is not being conducted in accordance with the IRB's
requirements or that has been associated with unexpected serious harm to
subjects. Any suspension or termination of approval shall include a
statement of the reasons for the IRB's action and shall be reported
promptly to the investigator, appropriate institutional officials, and
the department or agency head.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]



Sec. 97.114  Cooperative research.

    Cooperative research projects are those projects covered by this
policy which involve more than one institution. In the conduct of
cooperative research projects, each institution is responsible for
safeguarding the rights and welfare of human subjects and for complying
with this policy. With the approval of the department or agency head, an
institution participating in a cooperative project may enter into a
joint review arrangement, rely upon the review of another qualified IRB,
or make similar arrangements for avoiding duplication of effort.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.115  IRB records.

    (a) An institution, or when appropriate an IRB, shall prepare and
maintain adequate documentation of IRB activities, including the
following:
    (1) Copies of all research proposals reviewed, scientific
evaluations, if any, that accompany the proposals, approved sample
consent documents, progress reports submitted by investigators, and
reports of injuries to subjects.
    (2) Minutes of IRB meetings which shall be in sufficient detail to
show attendance at the meetings; actions taken by the IRB; the vote on
these actions including the number of members voting for, against, and
abstaining; the basis for requiring changes in or disapproving research;
and a written summary of the discussion of controverted issues and their
resolution.
    (3) Records of continuing review activities.
    (4) Copies of all correspondence between the IRB and the
investigators.
    (5) A list of IRB members in the same detail as described is Sec.
97.103(b)(3).
    (6) Written procedures for the IRB in the same detail as described
in Sec. 97.103(b)(4) and Sec. 97.103(b)(5).
    (7) Statements of significant new findings provided to subjects, as
required by Sec. 97.116(b)(5).
    (b) The records required by this policy shall be retained for at
least 3 years, and records relating to research which is conducted shall
be retained for at least 3 years after completion of the research. All
records shall be accessible for inspection and copying by authorized
representatives of the department or agency at reasonable times and in a
reasonable manner.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]

[[Page 285]]



Sec. 97.116  General requirements for informed consent.

    Except as provided elsewhere in this policy, no investigator may
involve a human being as a subject in research covered by this policy
unless the investigator has obtained the legally effective informed
consent of the subject or the subject's legally authorized
representative. An investigator shall seek such consent only under
circumstances that provide the prospective subject or the representative
sufficient opportunity to consider whether or not to participate and
that minimize the possibility of coercion or undue influence. The
information that is given to the subject or the representative shall be
in language understandable to the subject or the representative. No
informed consent, whether oral or written, may include any exculpatory
language through which the subject or the representative is made to
waive or appear to waive any of the subject's legal rights, or releases
or appears to release the investigator, the sponsor, the institution or
its agents from liability for negligence.
    (a) Basic elements of informed consent. Except as provided in
paragraph (c) or (d) of this section, in seeking informed consent the
following information shall be provided to each subject:
    (1) A statement that the study involves research, an explanation of
the purposes of the research and the expected duration of the subject's
participation, a description of the procedures to be followed, and
identification of any procedures which are experimental;
    (2) A description of any reasonably foreseeable risks or discomforts
to the subject;
    (3) A description of any benefits to the subject or to others which
may reasonably be expected from the research;
    (4) A disclosure of appropriate alternative procedures or courses of
treatment, if any, that might be advantageous to the subject;
    (5) A statement describing the extent, if any, to which
confidentiality of records identifying the subject will be maintained;
    (6) For research involving more than minimal risk, an explanation as
to whether any compensation and an explanation as to whether any medical
treatments are available if injury occurs and, if so, what they consist
of, or where further information may be obtained;
    (7) An explanation of whom to contact for answers to pertinent
questions about the research and research subjects' rights, and whom to
contact in the event of a research-related injury to the subject; and
    (8) A statement that participation is voluntary, refusal to
participate will involve no penalty or loss of benefits to which the
subject is otherwise entitled, and the subject may discontinue
participation at any time without penalty or loss of benefits to which
the subject is otherwise entitled.
    (b) Additional elements of informed consent. When appropriate, one
or more of the following elements of information shall also be provided
to each subject:
    (1) A statement that the particular treatment or procedure may
involve risks to the subject (or to the embryo or fetus, if the subject
is or may become pregnant) which are currently unforeseeable;
    (2) Anticipated circumstances under which the subject's
participation may be terminated by the investigator without regard to
the subject's consent;
    (3) Any additional costs to the subject that may result from
participation in the research;
    (4) The consequences of a subject's decision to withdraw from the
research and procedures for orderly termination of participation by the
subject;
    (5) A statement that significant new findings developed during the
course of the research which may relate to the subject's willingness to
continue participation will be provided to the subject; and
    (6) The approximate number of subjects involved in the study.
    (c) An IRB may approve a consent procedure which does not include,
or which alters, some or all of the elements of informed consent set
forth above, or waive the requirement to obtain informed consent
provided the IRB finds and documents that:
    (1) The research or demonstration project is to be conducted by or
subject

[[Page 286]]

to the approval of state or local government officials and is designed
to study, evaluate, or otherwise examine:
    (i) Public benefit of service programs;
    (ii) Procedures for obtaining benefits or services under those
programs;
    (iii) Possible changes in or alternatives to those programs or
procedures; or
    (iv) Possible changes in methods or levels of payment for benefits
or services under those programs; and
    (2) The research could not practicably be carried out without the
waiver or alteration.
    (d) An IRB may approve a consent procedure which does not include,
or which alters, some or all of the elements of informed consent set
forth in this section, or waive the requirements to obtain informed
consent provided the IRB finds and documents that:
    (1) The research involves no more than minimal risk to the subjects;
    (2) The waiver or alteration will not adversely affect the rights
and welfare of the subjects;
    (3) The research could not practicably be carried out without the
waiver or alteration; and
    (4) Whenever appropriate, the subjects will be provided with
additional pertinent information after participation.
    (e) The informed consent requirements in this policy are not
intended to preempt any applicable federal, state, or local laws which
require additional information to be disclosed in order for informed
consent to be legally effective.
    (f) Nothing in this policy is intended to limit the authority of a
physician to provide emergency medical care, to the extent the physician
is permitted to do so under applicable federal, state, or local law.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]



Sec. 97.117  Documentation of informed consent.

    (a) Except as provided in paragraph (c) of this section, informed
consent shall be documented by the use of a written consent form
approved by the IRB and signed by the subject or the subject's legally
authorized representative. A copy shall be given to the person signing
the form.
    (b) Except as provided in paragraph (c) of this section, the consent
form may be either of the following:
    (1) A written consent document that embodies the elements of
informed consent required by Sec. 97.116. This form may be read to the
subject or the subject's legally authorized representative, but in any
event, the investigator shall give either the subject or the
representative adequate opportunity to read it before it is signed; or
    (2) A short form written consent document stating that the elements
of informed consent required by Sec. 97.116 have been presented orally
to the subject or the subject's legally authorized representative. When
this method is used, there shall be a witness to the oral presentation.
Also, the IRB shall approve a written summary of what is to be said to
the subject or the representative. Only the short form itself is to be
signed by the subject or the representative. However, the witness shall
sign both the short form and a copy of the summary, and the person
actually obtaining consent shall sign a copy of the summary. A copy of
the summary shall be given to the subject or the representative, in
addition to a copy of the short form.
    (c) An IRB may waive the requirement for the investigator to obtain
a signed consent form for some or all subjects if it finds either:
    (1) That the only record linking the subject and the research would
be the consent document and the principal risk would be potential harm
resulting from a breach of confidentiality. Each subject will be asked
whether the subject wants documentation linking the subject with the
research, and the subject's wishes will govern; or
    (2) That the research presents no more than minimal risk of harm to
subjects and involves no procedures for which written consent is
normally required outside of the research context.

[[Page 287]]


In cases in which the documentation requirement is waived, the IRB may
require the investigator to provide subjects with a written statement
regarding the research.

(Approved by the Office of Management and Budget under Control Number
0990-0260)

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

[56 FR 28012, 28021, June 18, 1991, as amended at 70 FR 36328, June 23,
2005]



Sec. 97.118  Applications and proposals lacking definite plans for
involvement of human subjects.

    Certain types of applications for grants, cooperative agreements, or
contracts are submitted to departments or agencies with the knowledge
that subjects may be involved within the period of support, but definite
plans would not normally be set forth in the application or proposal.
These include activities such as institutional type grants when
selection of specific projects is the institution's responsibility;
research training grants in which the activities involving subjects
remain to be selected; and projects in which human subject's involvement
will depend upon completion of instruments, prior animal studies, or
purification of compounds. These applications need not be reviewed by an
IRB before an award may be made. However, except for research exempted
or waived under Sec. 97.101 (b) or (i), no human subjects may be
involved in any project supported by these awards until the project has
been reviewed and approved by the IRB, as provided in this policy, and
certification submitted, by the institution, to the department or
agency.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.119  Research undertaken without the intention of involving
human subjects.

    In the event research is undertaken without the intention of
involving human subjects, but it is later proposed to involve human
subjects in the research, the research shall first be reviewed and
approved by an IRB, as provided in this policy, a certification
submitted, by the institution, to the department or agency, and final
approval given to the proposed change by the department or agency.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.120  Evaluation and disposition of applications and proposals
for research to be conducted or supported by a Federal Department or

Agency.

    (a) The department or agency head will evaluate all applications and
proposals involving human subjects submitted to the department or agency
through such officers and employees of the department or agency and such
experts and consultants as the department or agency head determines to
be appropriate. This evaluation will take into consideration the risks
to the subjects, the adequacy of protection against these risks, the
potential benefits of the research to the subjects and others, and the
importance of the knowledge gained or to be gained.
    (b) On the basis of this evaluation, the department or agency head
may approve or disapprove the application or proposal, or enter into
negotiations to develop an approvable one.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.121  [Reserved]



Sec. 97.122  Use of Federal funds.

    Federal funds administered by a department or agency may not be
expended for research involving human subjects unless the requirements
of this policy have been satisfied.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.123  Early termination of research support: Evaluation of
applications and proposals.

    (a) The department or agency head may require that department or
agency support for any project be terminated or suspended in the manner
prescribed in applicable program requirements, when the department or
agency head finds an institution has materially failed to comply with
the terms of this policy.
    (b) In making decisions about supporting or approving applications
or

[[Page 288]]

proposals covered by this policy the department or agency head may take
into account, in addition to all other eligibility requirements and
program criteria, factors such as whether the applicant has been subject
to a termination or suspension under paragarph (a) of this section and
whether the applicant or the person or persons who would direct or has
have directed the scientific and technical aspects of an activity has
have, in the judgment of the department or agency head, materially
failed to discharge responsibility for the protection of the rights and
welfare of human subjects (whether or not the research was subject to
federal regulation).

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.124  Conditions.

    With respect to any research project or any class of research
projects the department or agency head may impose additional conditions
prior to or at the time of approval when in the judgment of the
department or agency head additional conditions are necessary for the
protection of human subjects.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))

Subparts B-C [Reserved]



  Subpart D_Additional ED Protections for Children Who Are Subjects in
                                Research

    Source: 62 FR 63221, Nov. 26, 1997, unless otherwise noted.



Sec. 97.401  To what do these regulations apply?

    (a) This subpart applies to all research involving children as
subjects conducted or supported by the Department of Education.
    (1) This subpart applies to research conducted by Department
employees.
    (2) This subpart applies to research conducted or supported by the
Department of Education outside the United States, but in appropriate
circumstances the Secretary may, under Sec. 97.101(i), waive the
applicability of some or all of the requirements of the regulations in
this subpart for that research.
    (b) Exemptions in Sec. 97.101(b)(1) and (b)(3) through (b)(6) are
applicable to this subpart. The exemption in Sec. 97.101(b)(2)
regarding educational tests is also applicable to this subpart. The
exemption in Sec. 97.101(b)(2) for research involving survey or
interview procedures or observations of public behavior does not apply
to research covered by this subpart, except for research involving
observation of public behavior when the investigator or investigators do
not participate in the activities being observed.
    (c) The exceptions, additions, and provisions for waiver as they
appear in Sec. 97.101(c) through (i) are applicable to this subpart.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b)).



Sec. 97.402  Definitions.

    The definitions in Sec. 97.102 apply to this subpart. In addition,
the following definitions also apply to this subpart:
    (a) Children are persons who have not attained the legal age for
consent to treatments or procedures involved in the research, under the
applicable law of the jurisdiction in which the research will be
conducted.
    (b) Assent means a child's affirmative agreement to participate in
research. Mere failure to object should not, absent affirmative
agreement, be construed as assent.
    (c) Permission means the agreement of parent(s) or guardian to the
participation of their child or ward in research.
    (d) Parent means a child's biological or adoptive parent.
    (e) Guardian means an individual who is authorized under applicable
State or local law to consent on behalf of a child to general medical
care.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b)).



Sec. 97.403  IRB duties.

    In addition to other responsibilities assigned to IRBs under this
part, each IRB shall review research covered by this subpart and approve
only research

[[Page 289]]

that satisfies the conditions of all applicable sections of this
subpart.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b)).



Sec. 97.404  Research not involving greater than minimal risk.

    ED conducts or funds research in which the IRB finds that no greater
than minimal risk to children is presented, only if the IRB finds that
adequate provisions are made for soliciting the assent of the children
and the permission of their parents or guardians, as set forth in Sec.
97.408.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.405  Research involving greater than minimal risk but
presenting the prospect of direct benefit to the individual subjects.

    ED conducts or funds research in which the IRB finds that more than
minimal risk to children is presented by an intervention or procedure
that holds out the prospect of direct benefit for the individual
subject, or by a monitoring procedure that is likely to contribute to
the subject's well-being, only if the IRB finds that--
    (a) The risk is justified by the anticipated benefit to the
subjects;
    (b) The relation of the anticipated benefit to the risk is at least
as favorable to the subjects as that presented by available alternative
approaches; and
    (c) Adequate provisions are made for soliciting the assent of the
children and permission of their parents or guardians, as set forth in
Sec. 97.408.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.406  Research involving greater than minimal risk and no
prospect of direct benefit to individual subjects, but likely to yield

generalizable knowledge about the subject's disorder or condition.

    ED conducts or funds research in which the IRB finds that more than
minimal risk to children is presented by an intervention or procedure
that does not hold out the prospect of direct benefit for the individual
subject, or by a monitoring procedure which is not likely to contribute
to the well-being of the subject, only if the IRB finds that--
    (a) The risk represents a minor increase over minimal risk;
    (b) The intervention or procedure presents experiences to subjects
that are reasonably commensurate with those inherent in their actual or
expected medical, dental, psychological, social, or educational
situations;
    (c) The intervention or procedure is likely to yield generalizable
knowledge about the subjects' disorder or condition that is of vital
importance for the understanding or amelioration of the subjects'
disorder or condition; and
    (d) Adequate provisions are made for soliciting assent of the
children and permission of their parents or guardians, as set forth in
Sec. 97.408.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.407  Research not otherwise approvable which presents an
opportunity to understand, prevent, or alleviate a serious problem

affecting the health or welfare of children.

    ED conducts or funds research that the IRB does not believe meets
the requirements of Sec. 97.404, Sec. 97.405, or Sec. 97.406 only
if--
    (a) The IRB finds that the research presents a reasonable
opportunity to further the understanding, prevention, or alleviation of
a serious problem affecting the health or welfare of children; and
    (b) The Secretary, after consultation with a panel of experts in
pertinent disciplines (for example: science, medicine, education,
ethics, law) and following opportunity for public review and comment,
has determined either that--
    (1) The research in fact satisfies the conditions of Sec. 97.404,
Sec. 97.405, or Sec. 97.406, as applicable; or
    (2)(i) The research presents a reasonable opportunity to further the
understanding, prevention, or alleviation of a serious problem affecting
the health or welfare of children;
    (ii) The research will be conducted in accordance with sound ethical
principles; and
    (iii) Adequate provisions are made for soliciting the assent of
children and

[[Page 290]]

the permission of their parents or guardians, as set forth in Sec.
97.408.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.408  Requirements for permission by parents or guardians and
for assent by children.

    (a) In addition to the determinations required under other
applicable sections of this subpart, the IRB shall determine that
adequate provisions are made for soliciting the assent of the children,
if in the judgment of the IRB the children are capable of providing
assent. In determining whether children are capable of assenting, the
IRB shall take into account the ages, maturity, and psychological state
of the children involved. This judgment may be made for all children to
be involved in research under a particular protocol, or for each child,
as the IRB deems appropriate. If the IRB determines that the capability
of some or all of the children is so limited that they cannot reasonably
be consulted or that the intervention or procedure involved in the
research holds out a prospect of direct benefit that is important to the
health or well-being of the children and is available only in the
context of the research, the assent of the children is not a necessary
condition for proceeding with the research. Even if the IRB determines
that the subjects are capable of assenting, the IRB may still waive the
assent requirement under circumstances in which consent may be waived in
accord with Sec. 97.116.
    (b) In addition to the determinations required under other
applicable sections of this subpart, the IRB shall determine, in
accordance with and to the extent that consent is required by Sec.
97.116, that adequate provisions are made for soliciting the permission
of each child's parent(s) or guardian(s). If parental permission is to
be obtained, the IRB may find that the permission of one parent is
sufficient for research to be conducted under Sec. 97.404 or Sec.
97.405. If research is covered by Sec. Sec. 97.406 and 97.407 and
permission is to be obtained from parents, both parents must give their
permission unless one parent is deceased, unknown, incompetent, or not
reasonably available, or if only one parent has legal responsibility for
the care and custody of the child.
    (c) In addition to the provisions for waiver contained in Sec.
97.116, if the IRB determines that a research protocol is designed for
conditions or for a subject population for which parental or guardian
permission is not a reasonable requirement to protect the subjects (for
example, neglected or abused children), it may waive the consent
requirements in subpart A of this part and paragraph (b) of this
section, provided an appropriate mechanism for protecting the children
who will participate as subjects in the research is substituted, and
provided further that the waiver is not inconsistent with Federal,
State, or local law. The choice of an appropriate mechanism depends upon
the nature and purpose of the activities described in the protocol, the
risk and anticipated benefit to the research subjects, and their age,
maturity, status, and condition.
    (d) Permission by parents or guardians must be documented in
accordance with and to the extent required by Sec. 97.117.
    (e) If the IRB determines that assent is required, it shall also
determine whether and how assent must be documented.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



Sec. 97.409  Wards.

    (a) Children who are wards of the State or any other agency,
institution, or entity may be included in research approved under Sec.
97.406 or Sec. 97.407 only if that research is--
    (1) Related to their status as wards; or
    (2) Conducted in schools, camps, hospitals, institutions, or similar
settings in which the majority of children involved as subjects are not
wards.
    (b) If research is approved under paragraph (a) of this section, the
IRB shall require appointment of an advocate for each child who is a
ward, in addition to any other individual acting on behalf of the child
as guardian or in loco parentis. One individual may serve as advocate
for more than one child. The advocate must be an individual who has the
background and experience to act in, and agrees to act in, the best

[[Page 291]]

interest of the child for the duration of the child's participation in
the research and who is not associated in any way (except in the role as
advocate or member of the IRB) with the research, the investigator or
investigators, or the guardian organization.

(Authority: 5 U.S.C. 301; 20 U.S.C. 1221e-3, 3474; and 42 U.S.C. 300v-
1(b))



PART 98_STUDENT RIGHTS IN RESEARCH, EXPERIMENTAL PROGRAMS, AND
TESTING--Table of Contents



Sec.
98.1 Applicability of part.
98.2 Definitions.
98.3 Access to instructional material used in a research or
          experimentation program.
98.4 Protection of students' privacy in examination, testing, or
          treatment.
98.5 Information and investigation office.
98.6 Reports.
98.7 Filing a complaint.
98.8 Notice of the complaint.
98.9 Investigation and findings.
98.10 Enforcement of the findings.

    Authority: Sec. 514(a) of Pub. L. 93-380, 88 Stat. 574 (20 U.S.C.
1232h(a)); sec. 1250 of Pub. L. 95-561, 92 Stat. 2355-2356 (20 U.S.C.
1232h(b)); and sec. 408(a)(1) of Pub. L. 90-247, 88 Stat. 559-560, as
amended (20 U.S.C. 1221e-3(a)(1)); sec. 414(a) of Pub. L. 96-88, 93
Stat. 685 (20 U.S.C. 3474(a)), unless otherwise noted.

    Source: 49 FR 35321, Sept. 6, 1984, unless otherwise noted.



Sec. 98.1  Applicability of part.

    This part applies to any program administered by the Secretary of
Education that:
    (a)(1) Was transferred to the Department by the Department of
Education Organization Act (DEOA); and
    (2) Was administered by the Education Division of the Department of
Health, Education, and Welfare on the day before the effective date of
the DEOA; or
    (b) Was enacted after the effective date of the DEOA, unless the law
enacting the new Federal program has the effect of making section 439 of
the General Education Provisions Act inapplicable.
    (c) The following chart lists the funded programs to which part 98
does not apply as of February 16, 1984.

------------------------------------------------------------------------
                                      Authorizing        Implementing
         Name of program                statute           regulations
------------------------------------------------------------------------
1. High School Equivalency        Section 418A of     part 206.
 Program and College Assistance    the Higher
 Migrant Program.                  Education Act of
                                   1965 as amended
                                   by the Education
                                   Amendments of
                                   1980 (Pub. L. 96-
                                   374) 20 U.S.C.
                                   1070d-2).
2. Programs administered by the   The Rehabilitation  parts 351-356,
 Commissioner of the               Act of 1973 as      361, 362, 365,
 Rehabilitative Services           amended by Pub.     366, 369-375,
 Administration.                   L. 95-602 (29       378, 379, 385-
                                   U.S.C. 700, et      390, and 395.
                                   seq.).
3. College housing..............  Title IV of the     part 614.
                                   Housing Act of
                                   1950 as amended
                                   (12 U.S.C. 1749,
                                   et seq.).
------------------------------------------------------------------------


(Authority: 20 U.S.C. 1221e-3(a)(1), 1230, 1232h, 3487, 3507)



Sec. 98.2  Definitions.

    (a) The following terms used in this part are defined in 34 CFR part
77; ``Department,'' ``Recipient,'' ``Secretary.''
    (b) The following definitions apply to this part:
    Act means the General Education Provisions Act.
    Office means the information and investigation office specified in
Sec. 98.5.

(Authority: 20 U.S.C. 1221e-3(a)(1))



Sec. 98.3  Access to instructional material used in a research or
experimentation program.

    (a) All instructional material--including teachers' manuals, films,
tapes, or other supplementary instructional material--which will be used
in connection with any research or experimentation program or project
shall be available for inspection by the parents or guardians of the
children engaged in such program or project.
    (b) For the purpose of this part research or experimentation program
or project means any program or project in any program under Sec. 98.1
(a) or (b) that is designed to explore or develop new or unproven
teaching methods or techniques.
    (c) For the purpose of the section children means persons not above
age 21 who are enrolled in a program under

[[Page 292]]

Sec. 98.1 (a) or (b) not above the elementary or secondary education
level, as determined under State law.

(Authority: 20 U.S.C. 1221e-3(a)(1), 1232h(a))



Sec. 98.4  Protection of students' privacy in examination, testing, or
treatment.

    (a) No student shall be required, as part of any program specified
in Sec. 98.1 (a) or (b), to submit without prior consent to psychiatric
examination, testing, or treatment, or psychological examination,
testing, or treatment, in which the primary purpose is to reveal
information concerning one or more of the following:
    (1) Political affiliations;
    (2) Mental and psychological problems potentially embarrassing to
the student or his or her family;
    (3) Sex behavior and attitudes;
    (4) Illegal, anti-social, self-incriminating and demeaning behavior;
    (5) Critical appraisals of other individuals with whom the student
has close family relationships;
    (6) Legally recognized privileged and analogous relationships, such
as those of lawyers, physicians, and ministers; or
    (7) Income, other than that required by law to determine eligibility
for participation in a program or for receiving financial assistance
under a program.
    (b) As used in paragraph (a) of this section, prior consent means:
    (1) Prior consent of the student, if the student is an adult or
emancipated minor; or
    (2) Prior written consent of the parent or guardian, if the student
is an unemancipated minor.
    (c) As used in paragraph (a) of this section:
    (1) Psychiatric or psychological examination or test means a method
of obtaining information, including a group activity, that is not
directly related to academic instruction and that is designed to elicit
information about attitudes, habits, traits, opinions, beliefs or
feelings; and
    (2) Psychiatric or psychological treatment means an activity
involving the planned, systematic use of methods or techniques that are
not directly related to academic instruction and that is designed to
affect behavioral, emotional, or attitudinal characteristics of an
individual or group.

(Authority: 20 U.S.C. 1232h(b))



Sec. 98.5  Information and investigation office.

    (a) The Secretary has designated an office to provide information
about the requirements of section 439 of the Act, and to investigate,
process, and review complaints that may be filed concerning alleged
violations of the provisions of the section.
    (b) The following is the name and address of the office designated
under paragraph (a) of this section: Family Educational Rights and
Privacy Act Office, U.S. Department of Education, 400 Maryland Avenue,
SW., Washington, DC 20202.

(Authority: 20 U.S.C. 1231e-3(a)(1), 1232h)



Sec. 98.6  Reports.

    The Secretary may require the recipient to submit reports containing
information necessary to resolve complaints under section 439 of the Act
and the regulations in this part.

(Authority: 20 U.S.C. 1221e-3(a)(1), 1232h)



Sec. 98.7  Filing a complaint.

    (a) Only a student or a parent or guardian of a student directly
affected by a violation under Section 439 of the Act may file a
complaint under this part. The complaint must be submitted in writing to
the Office.
    (b) The complaint filed under paragraph (a) of this section must--
    (1) Contain specific allegations of fact giving reasonable cause to
believe that a violation of either Sec. 98.3 or Sec. 98.4 exists; and
    (2) Include evidence of attempted resolution of the complaint at the
local level (and at the State level if a State complaint resolution
process exists), including the names of local and State officials
contacted and significant dates in the attempted resolution process.
    (c) The Office investigates each complaint which the Office receives
that meets the requirements of this section to determine whether the
recipient or

[[Page 293]]

contractor failed to comply with the provisions of section 439 of the
Act.

(Approved by the Office of Management and Budget under control number
1880-0507)

(Authority: 20 U.S.C. 1221e-3(a)(1), 1232h)



Sec. 98.8  Notice of the complaint.

    (a) If the Office receives a complaint that meets the requirements
of Sec. 98.7, it provides written notification to the complainant and
the recipient or contractor against which the violation has been alleged
that the complaint has been received.
    (b) The notice to the recipient or contractor under paragraph (a) of
this section must:
    (1) Include the substance of the alleged violation; and
    (2) Inform the recipient or contractor that the Office will
investigate the complaint and that the recipient or contractor may
submit a written response to the complaint.

(Authority: 20 U.S.C. 1221e-3(A)(1), 1232h)



Sec. 98.9  Investigation and findings.

    (a) The Office may permit the parties to submit further written or
oral arguments or information.
    (b) Following its investigations, the Office provides to the
complainant and recipient or contractor written notice of its findings
and the basis for its findings.
    (c) If the Office finds that the recipient or contractor has not
complied with section 439 of the Act, the Office includes in its notice
under paragraph (b) of this section:
    (1) A statement of the specific steps that the Secretary recommends
the recipient or contractor take to comply; and
    (2) Provides a reasonable period of time, given all of the
circumstances of the case, during which the recipient or contractor may
comply voluntarily.

(Authority: 20 U.S.C. 1221e-3(a)(1), 1232h)



Sec. 98.10  Enforcement of the findings.

    (a) If the recipient or contractor does not comply during the period
of time set under Sec. 98.9(c), the Secretary may either:
    (1) For a recipient, take an action authorized under 34 CFR part 78,
including:
    (i) Issuing a notice of intent to terminate funds under 34 CFR
78.21;
    (ii) Issuing a notice to withhold funds under 34 CFR 78.21,
200.94(b), or 298.45(b), depending upon the applicable program under
which the notice is issued; or
    (iii) Issuing a notice to cease and desist under 34 CFR 78.31,
200.94(c) or 298.45(c), depending upon the program under which the
notice is issued; or
    (2) For a contractor, direct the contracting officer to take an
appropriate action authorized under the Federal Acquisition Regulations,
including either:
    (i) Issuing a notice to suspend operations under 48 CFR 12.5; or
    (ii) Issuing a notice to terminate for default, either in whole or
in part under 48 CFR 49.102.
    (b) If, after an investigation under Sec. 98.9, the Secretary finds
that a recipient or contractor has complied voluntarily with section 439
of the Act, the Secretary provides the complainant and the recipient or
contractor written notice of the decision and the basis for the
decision.

(Authority: 20 U.S.C. 1221e-3(a)(1), 1232h)



PART 99_FAMILY EDUCATIONAL RIGHTS AND PRIVACY--Table of Contents



                            Subpart A_General

Sec.
99.1 To which educational agencies or institutions do these regulations
          apply?
99.2 What is the purpose of these regulations?
99.3 What definitions apply to these regulations?
99.4 What are the rights of parents?
99.5 What are the rights of students?
99.6 [Reserved]
99.7 What must an educational agency or institution include in its
          annual notification?
99.8 What provisions apply to records of a law enforcement unit?

  Subpart B_What Are the Rights of Inspection and Review of Education
                                Records?

99.10 What rights exist for a parent or eligible student to inspect and
          review education records?

[[Page 294]]

99.11 May an educational agency or institution charge a fee for copies
          of education records?
99.12 What limitations exist on the right to inspect and review records?

    Subpart C_What Are the Procedures for Amending Education Records?

99.20 How can a parent or eligible student request amendment of the
          student's education records?
99.21 Under what conditions does a parent or eligible student have the
          right to a hearing?
99.22 What minimum requirements exist for the conduct of a hearing?

 Subpart D_May an Educational Agency or Institution Disclose Personally
            Identifiable Information From Education Records?

99.30 Under what conditions is prior consent required to disclose
          information?
99.31 Under what conditions is prior consent not required to disclose
          information?
99.32 What recordkeeping requirements exist concerning requests and
          disclosures?
99.33 What limitations apply to the redisclosure of information?
99.34 What conditions apply to disclosure of information to other
          educational agencies or institutions?
99.35 What conditions apply to disclosure of information for Federal or
          State program purposes?
99.36 What conditions apply to disclosure of information in health and
          safety emergencies?
99.37 What conditions apply to disclosing directory information?
99.38 What conditions apply to disclosure of information as permitted by
          State statute adopted after November 19, 1974, concerning the
          juvenile justice system?
99.39 What definitions apply to the nonconsensual disclosure of records
          by postsecondary educational institutions in connection with
          disciplinary proceedings concerning crimes of violence or non-
          forcible sex offenses?

             Subpart E_What Are the Enforcement Procedures?

99.60 What functions has the Secretary delegated to the Office and to
          the Office of Administrative Law Judges?
99.61 What responsibility does an educational agency or institution, a
          recipient of Department funds, or a third party outside of an
          educational agency or institution have concerning conflict
          with State or local laws?
99.62 What information must an educational agency or institution or
          other recipient of Department funds submit to the Office?
99.63 Where are complaints filed?
99.64 What is the investigation procedure?
99.65 What is the content of the notice of investigation issued by the
          Office?
99.66 What are the responsibilities of the Office in the enforcement
          process?
99.67 How does the Secretary enforce decisions?

Appendix A to Part 99--Crimes of Violence Definitions

    Authority: 20 U.S.C. 1232g, unless otherwise noted.

    Source: 53 FR 11943, Apr. 11, 1988, unless otherwise noted.



                            Subpart A_General



Sec. 99.1  To which educational agencies or institutions do these
regulations apply?

    (a) Except as otherwise noted in Sec. 99.10, this part applies to
an educational agency or institution to which funds have been made
available under any program administered by the Secretary, if--
    (1) The educational institution provides educational services or
instruction, or both, to students; or
    (2) The educational agency is authorized to direct and control
public elementary or secondary, or postsecondary educational
institutions.
    (b) This part does not apply to an educational agency or institution
solely because students attending that agency or institution receive
non-monetary benefits under a program referenced in paragraph (a) of
this section, if no funds under that program are made available to the
agency or institution.
    (c) The Secretary considers funds to be made available to an
educational agency or institution of funds under one or more of the
programs referenced in paragraph (a) of this section--
    (1) Are provided to the agency or institution by grant, cooperative
agreement, contract, subgrant, or subcontract; or
    (2) Are provided to students attending the agency or institution and
the funds may be paid to the agency or institution by those students for
educational purposes, such as under the

[[Page 295]]

Pell Grant Program and the Guaranteed Student Loan Program (titles IV-A-
1 and IV-B, respectively, of the Higher Education Act of 1965, as
amended).
    (d) If an educational agency or institution receives funds under one
or more of the programs covered by this section, the regulations in this
part apply to the recipient as a whole, including each of its components
(such as a department within a university).

(Authority: 20 U.S.C. 1232g)

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59295, Nov. 21, 1996;
65 FR 41852, July 6, 2000]



Sec. 99.2  What is the purpose of these regulations?

    The purpose of this part is to set out requirements for the
protection of privacy of parents and students under section 444 of the
General Education Provisions Act, as amended.

(Authority: 20 U.S.C. 1232g)

    Note to Sec. 99.2: 34 CFR 300.610 through 300.626 contain
requirements regarding the confidentiality of information relating to
children with disabilities who receive evaluations, services or other
benefits under Part B of the Individuals with Disabilities Education Act
(IDEA). 34 CFR 303.402 and 303.460 identify the confidentiality of
information requirements regarding children and infants and toddlers
with disabilities and their families who receive evaluations, services,
or other benefits under Part C of IDEA. 34 CFR 300.610 through 300.627
contain the confidentiality of information requirements that apply to
personally identifiable data, information, and records collected or
maintained pursuant to Part B of the IDEA.

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59295, Nov. 21, 1996;
73 FR 74851, Dec. 9, 2008]



Sec. 99.3  What definitions apply to these regulations?

    The following definitions apply to this part:
    Act means the Family Educational Rights and Privacy Act of 1974, as
amended, enacted as section 444 of the General Education Provisions Act.

(Authority: 20 U.S.C. 1232g)

    Attendance includes, but is not limited to--
    (a) Attendance in person or by paper correspondence,
videoconference, satellite, Internet, or other electronic information
and telecommunications technologies for students who are not physically
present in the classroom; and
    (b) The period during which a person is working under a work-study
program.


(Authority: 20 U.S.C. 1232g)

    Authorized representative means any entity or individual designated
by a State or local educational authority or an agency headed by an
official listed in Sec. 99.31(a)(3) to conduct--with respect to
Federal- or State-supported education programs--any audit or evaluation,
or any compliance or enforcement activity in connection with Federal
legal requirements that relate to these programs.

(Authority: 20 U.S.C. 1232g(b)(1)(C), (b)(3), and (b)(5))

    Biometric record, as used in the definition of personally
identifiable information, means a record of one or more measurable
biological or behavioral characteristics that can be used for automated
recognition of an individual. Examples include fingerprints; retina and
iris patterns; voiceprints; DNA sequence; facial characteristics; and
handwriting.


(Authority: 20 U.S.C. 1232g)

    Dates of attendance. (a) The term means the period of time during
which a student attends or attended an educational agency or
institution. Examples of dates of attendance include an academic year, a
spring semester, or a first quarter.
    (b) The term does not include specific daily records of a student's
attendance at an educational agency or institution.


(Authority: 20 U.S.C. 1232g(a)(5)(A))

    Directory information means information contained in an education
record of a student that would not generally be considered harmful or an
invasion of privacy if disclosed.
    (a) Directory information includes, but is not limited to, the
student's name; address; telephone listing; electronic mail address;
photograph; date and place of birth; major field of study;

[[Page 296]]

grade level; enrollment status (e.g., undergraduate or graduate, full-
time or part-time); dates of attendance; participation in officially
recognized activities and sports; weight and height of members of
athletic teams; degrees, honors, and awards received; and the most
recent educational agency or institution attended.
    (b) Directory information does not include a student's--
    (1) Social security number; or
    (2) Student identification (ID) number, except as provided in
paragraph (c) of this definition.
    (c) In accordance with paragraphs (a) and (b) of this definition,
directory information includes--
    (1) A student ID number, user ID, or other unique personal
identifier used by a student for purposes of accessing or communicating
in electronic systems, but only if the identifier cannot be used to gain
access to education records except when used in conjunction with one or
more factors that authenticate the user's identity, such as a personal
identification number (PIN), password or other factor known or possessed
only by the authorized user; and
    (2) A student ID number or other unique personal identifier that is
displayed on a student ID badge, but only if the identifier cannot be
used to gain access to education records except when used in conjunction
with one or more factors that authenticate the user's identity, such as
a PIN, password, or other factor known or possessed only by the
authorized user.

(Authority: 20 U.S.C. 1232g(a)(5)(A))

    Disciplinary action or proceeding means the investigation,
adjudication, or imposition of sanctions by an educational agency or
institution with respect to an infraction or violation of the internal
rules of conduct applicable to students of the agency or institution.
    Disclosure means to permit access to or the release, transfer, or
other communication of personally identifiable information contained in
education records by any means, including oral, written, or electronic
means, to any party except the party identified as the party that
provided or created the record.


(Authority: 20 U.S.C. 1232g(b)(1) and (b)(2))

    Early childhood education program means--
    (a) A Head Start program or an Early Head Start program carried out
under the Head Start Act (42 U.S.C. 9831 et seq.), including a migrant
or seasonal Head Start program, an Indian Head Start program, or a Head
Start program or an Early Head Start program that also receives State
funding;
    (b) A State licensed or regulated child care program; or
    (c) A program that--
    (1) Serves children from birth through age six that addresses the
children's cognitive (including language, early literacy, and early
mathematics), social, emotional, and physical development; and
    (2) Is--
    (i) A State prekindergarten program;
    (ii) A program authorized under section 619 or part C of the
Individuals with Disabilities Education Act; or
    (iii) A program operated by a local educational agency.
    Educational agency or institution means any public or private agency
or institution to which this part applies under Sec. 99.1(a).


(Authority: 20 U.S.C. 1232g(a)(3))

    Education program means any program that is principally engaged in
the provision of education, including, but not limited to, early
childhood education, elementary and secondary education, postsecondary
education, special education, job training, career and technical
education, and adult education, and any program that is administered by
an educational agency or institution.

(Authority: 20 U.S.C. 1232g(b)(3), (b)(5))

    Education records. (a) The term means those records that are:
    (1) Directly related to a student; and
    (2) Maintained by an educational agency or institution or by a party
acting for the agency or institution.
    (b) The term does not include:
    (1) Records that are kept in the sole possession of the maker, are
used only as a personal memory aid, and are not

[[Page 297]]

accessible or revealed to any other person except a temporary substitute
for the maker of the record.
    (2) Records of the law enforcement unit of an educational agency or
institution, subject to the provisions of Sec. 99.8.
    (3)(i) Records relating to an individual who is employed by an
educational agency or institution, that:
    (A) Are made and maintained in the normal course of business;
    (B) Relate exclusively to the individual in that individual's
capacity as an employee; and
    (C) Are not available for use for any other purpose.
    (ii) Records relating to an individual in attendance at the agency
or institution who is employed as a result of his or her status as a
student are education records and not excepted under paragraph (b)(3)(i)
of this definition.
    (4) Records on a student who is 18 years of age or older, or is
attending an institution of postsecondary education, that are:
    (i) Made or maintained by a physician, psychiatrist, psychologist,
or other recognized professional or paraprofessional acting in his or
her professional capacity or assisting in a paraprofessional capacity;
    (ii) Made, maintained, or used only in connection with treatment of
the student; and
    (iii) Disclosed only to individuals providing the treatment. For the
purpose of this definition, ``treatment'' does not include remedial
educational activities or activities that are part of the program of
instruction at the agency or institution; and
    (5) Records created or received by an educational agency or
institution after an individual is no longer a student in attendance and
that are not directly related to the individual's attendance as a
student.


    (6) Grades on peer-graded papers before they are collected and
recorded by a teacher.

(Authority: 20 U.S.C. 1232g(a)(4))
    Eligible student means a student who has reached 18 years of age or
is attending an institution of postsecondary education.


(Authority: 20 U.S.C. 1232g(d))

    Institution of postsecondary education means an institution that
provides education to students beyond the secondary school level;
``secondary school level'' means the educational level (not beyond grade
12) at which secondary education is provided as determined under State
law.


(Authority: 20 U.S.C. 1232g(d))

    Parent means a parent of a student and includes a natural parent, a
guardian, or an individual acting as a parent in the absence of a parent
or a guardian.


(Authority: 20 U.S.C. 1232g)

    Party means an individual, agency, institution, or organization.


(Authority: 20 U.S.C. 1232g(b)(4)(A))

                   Personally Identifiable Information

    The term includes, but is not limited to--
    (a) The student's name;
    (b) The name of the student's parent or other family members;
    (c) The address of the student or student's family;
    (d) A personal identifier, such as the student's social security
number, student number, or biometric record;
    (e) Other indirect identifiers, such as the student's date of birth,
place of birth, and mother's maiden name;
    (f) Other information that, alone or in combination, is linked or
linkable to a specific student that would allow a reasonable person in
the school community, who does not have personal knowledge of the
relevant circumstances, to identify the student with reasonable
certainty; or
    (g) Information requested by a person who the educational agency or
institution reasonably believes knows the identity of the student to
whom the education record relates.


(Authority: 20 U.S.C. 1232g)

    Record means any information recorded in any way, including, but not

[[Page 298]]

limited to, handwriting, print, computer media, video or audio tape,
film, microfilm, and microfiche.


(Authority: 20 U.S.C. 1232g)

    Secretary means the Secretary of the U.S. Department of Education or
an official or employee of the Department of Education acting for the
Secretary under a delegation of authority.


(Authority: 20 U.S.C. 1232g)

    Student, except as otherwise specifically provided in this part,
means any individual who is or has been in attendance at an educational
agency or institution and regarding whom the agency or institution
maintains education records.

(Authority: 20 U.S.C. 1232g(a)(6))

[53 FR 11943, Apr. 11, 1988, as amended at 60 FR 3468, Jan. 17, 1995; 61
FR 59295, Nov. 21, 1996; 65 FR 41852, July 6, 2000; 73 FR 74851, Dec. 9,
2008; 76 FR 75641, Dec. 2, 2011]



Sec. 99.4  What are the rights of parents?

    An educational agency or institution shall give full rights under
the Act to either parent, unless the agency or institution has been
provided with evidence that there is a court order, State statute, or
legally binding document relating to such matters as divorce,
separation, or custody that specifically revokes these rights.

(Authority: 20 U.S.C. 1232g)



Sec. 99.5  What are the rights of students?

    (a)(1) When a student becomes an eligible student, the rights
accorded to, and consent required of, parents under this part transfer
from the parents to the student.
    (2) Nothing in this section prevents an educational agency or
institution from disclosing education records, or personally
identifiable information from education records, to a parent without the
prior written consent of an eligible student if the disclosure meets the
conditions in Sec. 99.31(a)(8), Sec. 99.31(a)(10), Sec. 99.31(a)(15),
or any other provision in Sec. 99.31(a).
    (b) The Act and this part do not prevent educational agencies or
institutions from giving students rights in addition to those given to
parents.
    (c) An individual who is or has been a student at an educational
institution and who applies for admission at another component of that
institution does not have rights under this part with respect to records
maintained by that other component, including records maintained in
connection with the student's application for admission, unless the
student is accepted and attends that other component of the institution.

(Authority: 20 U.S.C. 1232g(d))

[53 FR 11943, Apr. 11, 1988, as amended at 58 FR 3188, Jan. 7, 1993; 65
FR 41853, July 6, 2000; 73 FR 74852, Dec. 9, 2008]



Sec. 99.6  [Reserved]



Sec. 99.7  What must an educational agency or institution include in
its annual notification?

    (a)(1) Each educational agency or institution shall annually notify
parents of students currently in attendance, or eligible students
currently in attendance, of their rights under the Act and this part.
    (2) The notice must inform parents or eligible students that they
have the right to--
    (i) Inspect and review the student's education records;
    (ii) Seek amendment of the student's education records that the
parent or eligible student believes to be inaccurate, misleading, or
otherwise in violation of the student's privacy rights;
    (iii) Consent to disclosures of personally identifiable information
contained in the student's education records, except to the extent that
the Act and Sec. 99.31 authorize disclosure without consent; and
    (iv) File with the Department a complaint under Sec. Sec. 99.63 and
99.64 concerning alleged failures by the educational agency or
institution to comply with the requirements of the Act and this part.
    (3) The notice must include all of the following:
    (i) The procedure for exercising the right to inspect and review
education records.
    (ii) The procedure for requesting amendment of records under Sec.
99.20.

[[Page 299]]

    (iii) If the educational agency or institution has a policy of
disclosing education records under Sec. 99.31(a)(1), a specification of
criteria for determining who constitutes a school official and what
constitutes a legitimate educational interest.
    (b) An educational agency or institution may provide this notice by
any means that are reasonably likely to inform the parents or eligible
students of their rights.
    (1) An educational agency or institution shall effectively notify
parents or eligible students who are disabled.
    (2) An agency or institution of elementary or secondary education
shall effectively notify parents who have a primary or home language
other than English.

(Approved by the Office of Management and Budget under control number
1880-0508)

(Authority: 20 U.S.C. 1232g (e) and (f))

[61 FR 59295, Nov. 21, 1996]



Sec. 99.8  What provisions apply to records of a law enforcement unit?

    (a)(1) Law enforcement unit means any individual, office,
department, division, or other component of an educational agency or
institution, such as a unit of commissioned police officers or non-
commissioned security guards, that is officially authorized or
designated by that agency or institution to--
    (i) Enforce any local, State, or Federal law, or refer to
appropriate authorities a matter for enforcement of any local, State, or
Federal law against any individual or organization other than the agency
or institution itself; or
    (ii) Maintain the physical security and safety of the agency or
institution.
    (2) A component of an educational agency or institution does not
lose its status as a law enforcement unit if it also performs other,
non-law enforcement functions for the agency or institution, including
investigation of incidents or conduct that constitutes or leads to a
disciplinary action or proceedings against the student.
    (b)(1) Records of a law enforcement unit means those records, files,
documents, and other materials that are--
    (i) Created by a law enforcement unit;
    (ii) Created for a law enforcement purpose; and
    (iii) Maintained by the law enforcement unit.
    (2) Records of a law enforcement unit does not mean--
    (i) Records created by a law enforcement unit for a law enforcement
purpose that are maintained by a component of the educational agency or
institution other than the law enforcement unit; or
    (ii) Records created and maintained by a law enforcement unit
exclusively for a non-law enforcement purpose, such as a disciplinary
action or proceeding conducted by the educational agency or institution.
    (c)(1) Nothing in the Act prohibits an educational agency or
institution from contacting its law enforcement unit, orally or in
writing, for the purpose of asking that unit to investigate a possible
violation of, or to enforce, any local, State, or Federal law.
    (2) Education records, and personally identifiable information
contained in education records, do not lose their status as education
records and remain subject to the Act, including the disclosure
provisions of Sec. 99.30, while in the possession of the law
enforcement unit.
    (d) The Act neither requires nor prohibits the disclosure by an
educational agency or institution of its law enforcement unit records.

(Authority: 20 U.S.C. 1232g(a)(4)(B)(ii))

[60 FR 3469, Jan. 17, 1995]



  Subpart B_What Are the Rights of Inspection and Review of Education
                                Records?



Sec. 99.10  What rights exist for a parent or eligible student to
inspect and review education records?

    (a) Except as limited under Sec. 99.12, a parent or eligible
student must be given the opportunity to inspect and review the
student's education records. This provision applies to--
    (1) Any educational agency or institution; and
    (2) Any State educational agency (SEA) and its components.
    (i) For the purposes of subpart B of this part, an SEA and its
components

[[Page 300]]

constitute an educational agency or institution.
    (ii) An SEA and its components are subject to subpart B of this part
if the SEA maintains education records on students who are or have been
in attendance at any school of an educational agency or institution
subject to the Act and this part.
    (b) The educational agency or institution, or SEA or its component,
shall comply with a request for access to records within a reasonable
period of time, but not more than 45 days after it has received the
request.
    (c) The educational agency or institution, or SEA or its component
shall respond to reasonable requests for explanations and
interpretations of the records.
    (d) If circumstances effectively prevent the parent or eligible
student from exercising the right to inspect and review the student's
education records, the educational agency or institution, or SEA or its
component, shall--
    (1) Provide the parent or eligible student with a copy of the
records requested; or
    (2) Make other arrangements for the parent or eligible student to
inspect and review the requested records.
    (e) The educational agency or institution, or SEA or its component
shall not destroy any education records if there is an outstanding
request to inspect and review the records under this section.
    (f) While an education agency or institution is not required to give
an eligible student access to treatment records under paragraph (b)(4)
of the definition of Education records in Sec. 99.3, the student may
have those records reviewed by a physician or other appropriate
professional of the student's choice.

(Authority: 20 U.S.C. 1232g(a)(1) (A) and (B))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59296, Nov. 21, 1996]



Sec. 99.11  May an educational agency or institution charge a fee for
copies of education records?

    (a) Unless the imposition of a fee effectively prevents a parent or
eligible student from exercising the right to inspect and review the
student's education records, an educational agency or institution may
charge a fee for a copy of an education record which is made for the
parent or eligible student.
    (b) An educational agency or institution may not charge a fee to
search for or to retrieve the education records of a student.

(Authority: 20 U.S.C. 1232g(a)(1))



Sec. 99.12  What limitations exist on the right to inspect and review
records?

    (a) If the education records of a student contain information on
more than one student, the parent or eligible student may inspect and
review or be informed of only the specific information about that
student.
    (b) A postsecondary institution does not have to permit a student to
inspect and review education records that are:
    (1) Financial records, including any information those records
contain, of his or her parents;
    (2) Confidential letters and confidential statements of
recommendation placed in the education records of the student before
January 1, 1975, as long as the statements are used only for the
purposes for which they were specifically intended; and
    (3) Confidential letters and confidential statements of
recommendation placed in the student's education records after January
1, 1975, if:
    (i) The student has waived his or her right to inspect and review
those letters and statements; and
    (ii) Those letters and statements are related to the student's:
    (A) Admission to an educational institution;
    (B) Application for employment; or
    (C) Receipt of an honor or honorary recognition.
    (c)(1) A waiver under paragraph (b)(3)(i) of this section is valid
only if:
    (i) The educational agency or institution does not require the
waiver as a condition for admission to or receipt of a service or
benefit from the agency or institution; and
    (ii) The waiver is made in writing and signed by the student,
regardless of age.
    (2) If a student has waived his or her rights under paragraph
(b)(3)(i) of this

[[Page 301]]

section, the educational institution shall:
    (i) Give the student, on request, the names of the individuals who
provided the letters and statements of recommendation; and
    (ii) Use the letters and statements of recommendation only for the
purpose for which they were intended.
    (3)(i) A waiver under paragraph (b)(3)(i) of this section may be
revoked with respect to any actions occurring after the revocation.
    (ii) A revocation under paragraph (c)(3)(i) of this section must be
in writing.

(Authority: 20 U.S.C. 1232g(a)(1) (A), (B), (C), and (D))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59296, Nov. 21, 1996]



    Subpart C_What Are the Procedures for Amending Education Records?



Sec. 99.20  How can a parent or eligible student request amendment of
the student's education records?

    (a) If a parent or eligible student believes the education records
relating to the student contain information that is inaccurate,
misleading, or in violation of the student's rights of privacy, he or
she may ask the educational agency or institution to amend the record.
    (b) The educational agency or institution shall decide whether to
amend the record as requested within a reasonable time after the agency
or institution receives the request.
    (c) If the educational agency or institution decides not to amend
the record as requested, it shall inform the parent or eligible student
of its decision and of his or her right to a hearing under Sec. 99.21.

(Authority: 20 U.S.C. 1232g(a)(2))

[53 FR 11943, Apr. 11, 1988; 53 FR 19368, May 27, 1988, as amended at 61
FR 59296, Nov. 21, 1996]



Sec. 99.21  Under what conditions does a parent or eligible student
have the right to a hearing?

    (a) An educational agency or institution shall give a parent or
eligible student, on request, an opportunity for a hearing to challenge
the content of the student's education records on the grounds that the
information contained in the education records is inaccurate,
misleading, or in violation of the privacy rights of the student.
    (b)(1) If, as a result of the hearing, the educational agency or
institution decides that the information is inaccurate, misleading, or
otherwise in violation of the privacy rights of the student, it shall:
    (i) Amend the record accordingly; and
    (ii) Inform the parent or eligible student of the amendment in
writing.
    (2) If, as a result of the hearing, the educational agency or
institution decides that the information in the education record is not
inaccurate, misleading, or otherwise in violation of the privacy rights
of the student, it shall inform the parent or eligible student of the
right to place a statement in the record commenting on the contested
information in the record or stating why he or she disagrees with the
decision of the agency or institution, or both.
    (c) If an educational agency or institution places a statement in
the education records of a student under paragraph (b)(2) of this
section, the agency or institution shall:
    (1) Maintain the statement with the contested part of the record for
as long as the record is maintained; and
    (2) Disclose the statement whenever it discloses the portion of the
record to which the statement relates.

(Authority: 20 U.S.C. 1232g(a)(2))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59296, Nov. 21, 1996]



Sec. 99.22  What minimum requirements exist for the conduct of a
hearing?

    The hearing required by Sec. 99.21 must meet, at a minimum, the
following requirements:
    (a) The educational agency or institution shall hold the hearing
within a reasonable time after it has received the request for the
hearing from the parent or eligible student.
    (b) The educational agency or institution shall give the parent or
eligible student notice of the date, time, and place, reasonably in
advance of the hearing.

[[Page 302]]

    (c) The hearing may be conducted by any individual, including an
official of the educational agency or institution, who does not have a
direct interest in the outcome of the hearing.
    (d) The educational agency or institution shall give the parent or
eligible student a full and fair opportunity to present evidence
relevant to the issues raised under Sec. 99.21. The parent or eligible
student may, at their own expense, be assisted or represented by one or
more individuals of his or her own choice, including an attorney.
    (e) The educational agency or institution shall make its decision in
writing within a reasonable period of time after the hearing.
    (f) The decision must be based solely on the evidence presented at
the hearing, and must include a summary of the evidence and the reasons
for the decision.

(Authority: 20 U.S.C. 1232g(a)(2))



 Subpart D_May an Educational Agency or Institution Disclose Personally
            Identifiable Information From Education Records?



Sec. 99.30  Under what conditions is prior consent required to disclose
information?

    (a) The parent or eligible student shall provide a signed and dated
written consent before an educational agency or institution discloses
personally identifiable information from the student's education
records, except as provided in Sec. 99.31.
    (b) The written consent must:
    (1) Specify the records that may be disclosed;
    (2) State the purpose of the disclosure; and
    (3) Identify the party or class of parties to whom the disclosure
may be made.
    (c) When a disclosure is made under paragraph (a) of this section:
    (1) If a parent or eligible student so requests, the educational
agency or institution shall provide him or her with a copy of the
records disclosed; and
    (2) If the parent of a student who is not an eligible student so
requests, the agency or institution shall provide the student with a
copy of the records disclosed.
    (d) ``Signed and dated written consent'' under this part may include
a record and signature in electronic form that--
    (1) Identifies and authenticates a particular person as the source
of the electronic consent; and
    (2) Indicates such person's approval of the information contained in
the electronic consent.

(Authority: 20 U.S.C. 1232g (b)(1) and (b)(2)(A))

[53 FR 11943, Apr. 11, 1988, as amended at 58 FR 3189, Jan. 7, 1993; 69
FR 21671, Apr. 21, 2004]



Sec. 99.31  Under what conditions is prior consent not required to
disclose information?

    (a) An educational agency or institution may disclose personally
identifiable information from an education record of a student without
the consent required by Sec. 99.30 if the disclosure meets one or more
of the following conditions:
    (1)(i)(A) The disclosure is to other school officials, including
teachers, within the agency or institution whom the agency or
institution has determined to have legitimate educational interests.
    (B) A contractor, consultant, volunteer, or other party to whom an
agency or institution has outsourced institutional services or functions
may be considered a school official under this paragraph provided that
the outside party--
    (1) Performs an institutional service or function for which the
agency or institution would otherwise use employees;
    (2) Is under the direct control of the agency or institution with
respect to the use and maintenance of education records; and
    (3) Is subject to the requirements of Sec. 99.33(a) governing the
use and redisclosure of personally identifiable information from
education records.
    (ii) An educational agency or institution must use reasonable
methods to ensure that school officials obtain access to only those
education records in which they have legitimate educational interests.
An educational

[[Page 303]]

agency or institution that does not use physical or technological access
controls must ensure that its administrative policy for controlling
access to education records is effective and that it remains in
compliance with the legitimate educational interest requirement in
paragraph (a)(1)(i)(A) of this section.
    (2) The disclosure is, subject to the requirements of Sec. 99.34,
to officials of another school, school system, or institution of
postsecondary education where the student seeks or intends to enroll, or
where the student is already enrolled so long as the disclosure is for
purposes related to the student's enrollment or transfer.
    Note: Section 4155(b) of the No Child Left Behind Act of 2001, 20
U.S.C. 7165(b), requires each State to assure the Secretary of Education
that it has a procedure in place to facilitate the transfer of
disciplinary records with respect to a suspension or expulsion of a
student by a local educational agency to any private or public
elementary or secondary school in which the student is subsequently
enrolled or seeks, intends, or is instructed to enroll.
    (3) The disclosure is, subject to the requirements of Sec. 99.35,
to authorized representatives of--
    (i) The Comptroller General of the United States;
    (ii) The Attorney General of the United States;
    (iii) The Secretary; or
    (iv) State and local educational authorities.
    (4)(i) The disclosure is in connection with financial aid for which
the student has applied or which the student has received, if the
information is necessary for such purposes as to:
    (A) Determine eligibility for the aid;
    (B) Determine the amount of the aid;
    (C) Determine the conditions for the aid; or
    (D) Enforce the terms and conditions of the aid.
    (ii) As used in paragraph (a)(4)(i) of this section, financial aid
means a payment of funds provided to an individual (or a payment in kind
of tangible or intangible property to the individual) that is
conditioned on the individual's attendance at an educational agency or
institution.

(Authority: 20 U.S.C. 1232g(b)(1)(D))

    (5)(i) The disclosure is to State and local officials or authorities
to whom this information is specifically--
    (A) Allowed to be reported or disclosed pursuant to State statute
adopted before November 19, 1974, if the allowed reporting or disclosure
concerns the juvenile justice system and the system's ability to
effectively serve the student whose records are released; or
    (B) Allowed to be reported or disclosed pursuant to State statute
adopted after November 19, 1974, subject to the requirements of Sec.
99.38.
    (ii) Paragraph (a)(5)(i) of this section does not prevent a State
from further limiting the number or type of State or local officials to
whom disclosures may be made under that paragraph.
    (6)(i) The disclosure is to organizations conducting studies for, or
on behalf of, educational agencies or institutions to:
    (A) Develop, validate, or administer predictive tests;
    (B) Administer student aid programs; or
    (C) Improve instruction.
    (ii) Nothing in the Act or this part prevents a State or local
educational authority or agency headed by an official listed in
paragraph (a)(3) of this section from entering into agreements with
organizations conducting studies under paragraph (a)(6)(i) of this
section and redisclosing personally identifiable information from
education records on behalf of educational agencies and institutions
that disclosed the information to the State or local educational
authority or agency headed by an official listed in paragraph (a)(3) of
this section in accordance with the requirements of Sec. 99.33(b).
    (iii) An educational agency or institution may disclose personally
identifiable information under paragraph (a)(6)(i) of this section, and
a State or local educational authority or agency headed by an official
listed in paragraph (a)(3) of this section may redisclose personally
identifiable information under paragraph (a)(6)(i) and (a)(6)(ii) of
this section, only if--
    (A) The study is conducted in a manner that does not permit personal
identification of parents and students by individuals other than
representatives

[[Page 304]]

of the organization that have legitimate interests in the information;
    (B) The information is destroyed when no longer needed for the
purposes for which the study was conducted; and
    (C) The educational agency or institution or the State or local
educational authority or agency headed by an official listed in
paragraph (a)(3) of this section enters into a written agreement with
the organization that--
    (1) Specifies the purpose, scope, and duration of the study or
studies and the information to be disclosed;
    (2) Requires the organization to use personally identifiable
information from education records only to meet the purpose or purposes
of the study as stated in the written agreement;
    (3) Requires the organization to conduct the study in a manner that
does not permit personal identification of parents and students, as
defined in this part, by anyone other than representatives of the
organization with legitimate interests;

and
    (4) Requires the organization to destroy all personally identifiable
information when the information is no longer needed for the purposes
for which the study was conducted and specifies the time period in which
the information must be destroyed.
    (iv) An educational agency or institution or State or local
educational authority or Federal agency headed by an official listed in
paragraph (a)(3) of this section is not required to initiate a study or
agree with or endorse the conclusions or results of the study.
    (v) For the purposes of paragraph (a)(6) of this section, the term
organization includes, but is not limited to, Federal, State, and local
agencies, and independent organizations.
    (7) The disclosure is to accrediting organizations to carry out
their accrediting functions.
    (8) The disclosure is to parents, as defined in Sec. 99.3, of a
dependent student, as defined in section 152 of the Internal Revenue
Code of 1986.
    (9)(i) The disclosure is to comply with a judicial order or lawfully
issued subpoena.
    (ii) The educational agency or institution may disclose information
under paragraph (a)(9)(i) of this section only if the agency or
institution makes a reasonable effort to notify the parent or eligible
student of the order or subpoena in advance of compliance, so that the
parent or eligible student may seek protective action, unless the
disclosure is in compliance with--
    (A) A Federal grand jury subpoena and the court has ordered that the
existence or the contents of the subpoena or the information furnished
in response to the subpoena not be disclosed;
    (B) Any other subpoena issued for a law enforcement purpose and the
court or other issuing agency has ordered that the existence or the
contents of the subpoena or the information furnished in response to the
subpoena not be disclosed; or
    (C) An ex parte court order obtained by the United States Attorney
General (or designee not lower than an Assistant Attorney General)
concerning investigations or prosecutions of an offense listed in 18
U.S.C. 2332b(g)(5)(B) or an act of domestic or international terrorism
as defined in 18 U.S.C. 2331.
    (iii)(A) If an educational agency or institution initiates legal
action against a parent or student, the educational agency or
institution may disclose to the court, without a court order or
subpoena, the education records of the student that are relevant for the
educational agency or institution to proceed with the legal action as
plaintiff.
    (B) If a parent or eligible student initiates legal action against
an educational agency or institution, the educational agency or
institution may disclose to the court, without a court order or
subpoena, the student's education records that are relevant for the
educational agency or institution to defend itself.
    (10) The disclosure is in connection with a health or safety
emergency, under the conditions described in Sec. 99.36.
    (11) The disclosure is information the educational agency or
institution has designated as ``directory information'', under the
conditions described in Sec. 99.37.
    (12) The disclosure is to the parent of a student who is not an
eligible student or to the student.

[[Page 305]]

    (13) The disclosure, subject to the requirements in Sec. 99.39, is
to a victim of an alleged perpetrator of a crime of violence or a non-
forcible sex offense. The disclosure may only include the final results
of the disciplinary proceeding conducted by the institution of
postsecondary education with respect to that alleged crime or offense.
The institution may disclose the final results of the disciplinary
proceeding, regardless of whether the institution concluded a violation
was committed.
    (14)(i) The disclosure, subject to the requirements in Sec. 99.39,
is in connection with a disciplinary proceeding at an institution of
postsecondary education. The institution must not disclose the final
results of the disciplinary proceeding unless it determines that--
    (A) The student is an alleged perpetrator of a crime of violence or
non-forcible sex offense; and
    (B) With respect to the allegation made against him or her, the
student has committed a violation of the institution's rules or
policies.
    (ii) The institution may not disclose the name of any other student,
including a victim or witness, without the prior written consent of the
other student.
    (iii) This section applies only to disciplinary proceedings in which
the final results were reached on or after October 7, 1998.
    (15)(i) The disclosure is to a parent of a student at an institution
of postsecondary education regarding the student's violation of any
Federal, State, or local law, or of any rule or policy of the
institution, governing the use or possession of alcohol or a controlled
substance if--
    (A) The institution determines that the student has committed a
disciplinary violation with respect to that use or possession; and
    (B) The student is under the age of 21 at the time of the disclosure
to the parent.
    (ii) Paragraph (a)(15) of this section does not supersede any
provision of State law that prohibits an institution of postsecondary
education from disclosing information.
    (16) The disclosure concerns sex offenders and other individuals
required to register under section 170101 of the Violent Crime Control
and Law Enforcement Act of 1994, 42 U.S.C. 14071, and the information
was provided to the educational agency or institution under 42 U.S.C.
14071 and applicable Federal guidelines.
    (b)(1) De-identified records and information. An educational agency
or institution, or a party that has received education records or
information from education records under this part, may release the
records or information without the consent required by Sec. 99.30 after
the removal of all personally identifiable information provided that the
educational agency or institution or other party has made a reasonable
determination that a student's identity is not personally identifiable,
whether through single or multiple releases, and taking into account
other reasonably available information.
    (2) An educational agency or institution, or a party that has
received education records or information from education records under
this part, may release de-identified student level data from education
records for the purpose of education research by attaching a code to
each record that may allow the recipient to match information received
from the same source, provided that--
    (i) An educational agency or institution or other party that
releases de-identified data under paragraph (b)(2) of this section does
not disclose any information about how it generates and assigns a record
code, or that would allow a recipient to identify a student based on a
record code;
    (ii) The record code is used for no purpose other than identifying a
de-identified record for purposes of education research and cannot be
used to ascertain personally identifiable information about a student;
and
    (iii) The record code is not based on a student's social security
number or other personal information.
    (c) An educational agency or institution must use reasonable methods
to identify and authenticate the identity of parents, students, school
officials, and any other parties to whom the agency or institution
discloses personally identifiable information from education records.

[[Page 306]]

    (d) Paragraphs (a) and (b) of this section do not require an
educational agency or institution or any other party to disclose
education records or information from education records to any party
except for parties under paragraph (a)(12) of this section.

(Authority: 20 U.S.C. 1232g(a)(5)(A), (b), (h), (i), and (j)).

[53 FR 11943, Apr. 11, 1988; 53 FR 19368, May 27, 1988, as amended at 58
FR 3189, Jan. 7, 1993; 61 FR 59296, Nov. 21, 1996; 65 FR 41853, July 6,
2000; 73 FR 74852, Dec, 9, 2008; 74 FR 401, Jan. 6, 2009; 76 FR 75641,
Dec. 2, 2011]



Sec. 99.32  What recordkeeping requirements exist concerning requests
and disclosures?

    (a)(1) An educational agency or institution must maintain a record
of each request for access to and each disclosure of personally
identifiable information from the education records of each student, as
well as the names of State and local educational authorities and Federal
officials and agencies listed in Sec. 99.31(a)(3) that may make further
disclosures of personally identifiable information from the student's
education records without consent under Sec. 99.33(b).
    (2) The agency or institution shall maintain the record with the
education records of the student as long as the records are maintained.
    (3) For each request or disclosure the record must include:
    (i) The parties who have requested or received personally
identifiable information from the education records; and
    (ii) The legitimate interests the parties had in requesting or
obtaining the information.
    (4) An educational agency or institution must obtain a copy of the
record of further disclosures maintained under paragraph (b)(2) of this
section and make it available in response to a parent's or eligible
student's request to review the record required under paragraph (a)(1)
of this section.
    (5) An educational agency or institution must record the following
information when it discloses personally identifiable information from
education records under the health or safety emergency exception in
Sec. 99.31(a)(10) and Sec. 99.36:
    (i) The articulable and significant threat to the health or safety
of a student or other individuals that formed the basis for the
disclosure; and
    (ii) The parties to whom the agency or institution disclosed the
information.
    (b)(1) Except as provided in paragraph (b)(2) of this section, if an
educational agency or institution discloses personally identifiable
information from education records with the understanding authorized
under Sec. 99.33(b), the record of the disclosure required under this
section must include:
    (i) The names of the additional parties to which the receiving party
may disclose the information on behalf of the educational agency or
institution; and
    (ii) The legitimate interests under Sec. 99.31 which each of the
additional parties has in requesting or obtaining the information.
    (2)(i) A State or local educational authority or Federal official or
agency listed in Sec. 99.31(a)(3) that makes further disclosures of
information from education records under Sec. 99.33(b) must record the
names of the additional parties to which it discloses information on
behalf of an educational agency or institution and their legitimate
interests in the information under Sec. 99.31 if the information was
received from:
    (A) An educational agency or institution that has not recorded the
further disclosures under paragraph (b)(1) of this section; or
    (B) Another State or local educational authority or Federal official
or agency listed in Sec. 99.31(a)(3).
    (ii) A State or local educational authority or Federal official or
agency that records further disclosures of information under paragraph
(b)(2)(i) of this section may maintain the record by the student's
class, school, district, or other appropriate grouping rather than by
the name of the student.
    (iii) Upon request of an educational agency or institution, a State
or local educational authority or Federal official or agency listed in
Sec. 99.31(a)(3) that maintains a record of further disclosures under
paragraph (b)(2)(i) of this section must provide a copy of the record of
further disclosures to the

[[Page 307]]

educational agency or institution within a reasonable period of time not
to exceed 30 days.
    (c) The following parties may inspect the record relating to each
student:
    (1) The parent or eligible student.
    (2) The school official or his or her assistants who are responsible
for the custody of the records.
    (3) Those parties authorized in Sec. 99.31(a) (1) and (3) for the
purposes of auditing the recordkeeping procedures of the educational
agency or institution.
    (d) Paragraph (a) of this section does not apply if the request was
from, or the disclosure was to:
    (1) The parent or eligible student;
    (2) A school official under Sec. 99.31(a)(1);
    (3) A party with written consent from the parent or eligible
student;
    (4) A party seeking directory information; or
    (5) A party seeking or receiving records in accordance with Sec.
99.31(a)(9)(ii)(A) through (C).

(Approved by the Office of Management and Budget under control number
1880-0508)

(Authority: 20 U.S.C. 1232g(b)(1) and (b)(4)(A))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59297, Nov. 21, 1996;
73 FR 74853, Dec. 9, 2008]



Sec. 99.33  What limitations apply to the redisclosure of information?

    (a)(1) An educational agency or institution may disclose personally
identifiable information from an education record only on the condition
that the party to whom the information is disclosed will not disclose
the information to any other party without the prior consent of the
parent or eligible student.
    (2) The officers, employees, and agents of a party that receives
information under paragraph (a)(1) of this section may use the
information, but only for the purposes for which the disclosure was
made.
    (b)(1) Paragraph (a) of this section does not prevent an educational
agency or institution from disclosing personally identifiable
information with the understanding that the party receiving the
information may make further disclosures of the information on behalf of
the educational agency or institution if--
    (i) The disclosures meet the requirements of Sec. 99.31; and
    (ii)(A) The educational agency or institution has complied with the
requirements of Sec. 99.32(b); or
    (B) A State or local educational authority or Federal official or
agency listed in Sec. 99.31(a)(3) has complied with the requirements of
Sec. 99.32(b)(2).
    (2) A party that receives a court order or lawfully issued subpoena
and rediscloses personally identifiable information from education
records on behalf of an educational agency or institution in response to
that order or subpoena under Sec. 99.31(a)(9) must provide the
notification required under Sec. 99.31(a)(9)(ii).
    (c) Paragraph (a) of this section does not apply to disclosures
under Sec. Sec. 99.31(a)(8), (9), (11), (12), (14), (15), and (16), and
to information that postsecondary institutions are required to disclose
under the Jeanne Clery Disclosure of Campus Security Policy and Campus
Crime Statistics Act, 20 U.S.C. 1092(f) (Clery Act), to the accuser and
accused regarding the outcome of any campus disciplinary proceeding
brought alleging a sexual offense.
    (d) An educational agency or institution must inform a party to whom
disclosure is made of the requirements of paragraph (a) of this section
except for disclosures made under Sec. Sec. 99.31(a)(8), (9), (11),
(12), (14), (15), and (16), and to information that postsecondary
institutions are required to disclose under the Clery Act to the accuser
and accused regarding the outcome of any campus disciplinary proceeding
brought alleging a sexual offense.

(Authority: 20 U.S.C. 1232g(b)(4)(B))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59297, Nov. 21, 1996;
65 FR 41853, July 6, 2000; 73 FR 74853, Dec. 9, 2008; 76 FR 75642, Dec.
2, 2011]



Sec. 99.34  What conditions apply to disclosure of information to
other educational agencies or institutions?

    (a) An educational agency or institution that discloses an education
record under Sec. 99.31(a)(2) shall:
    (1) Make a reasonable attempt to notify the parent or eligible
student at the last known address of the parent or eligible student,
unless:

[[Page 308]]

    (i) The disclosure is initiated by the parent or eligible student;
or
    (ii) The annual notification of the agency or institution under
Sec. 99.7 includes a notice that the agency or institution forwards
education records to other agencies or institutions that have requested
the records and in which the student seeks or intends to enroll or is
already enrolled so long as the disclosure is for purposes related to
the student's enrollment or transfer;
    (2) Give the parent or eligible student, upon request, a copy of the
record that was disclosed; and
    (3) Give the parent or eligible student, upon request, an
opportunity for a hearing under subpart C.
    (b) An educational agency or institution may disclose an education
record of a student in attendance to another educational agency or
institution if:
    (1) The student is enrolled in or receives services from the other
agency or institution; and
    (2) The disclosure meets the requirements of paragraph (a) of this
section.

(Authority: 20 U.S.C. 1232g(b)(1)(B))

[53 FR 11943, Apr. 11, 1988, as amended at 61 FR 59297, Nov. 21, 1996;
73 FR 74854, Dec. 9, 2008]



Sec. 99.35  What conditions apply to disclosure of information for
Federal or State program purposes?

    (a)(1) Authorized representatives of the officials or agencies
headed by officials listed in Sec. 99.31(a)(3) may have access to
education records in connection with an audit or evaluation of Federal
or State supported education programs, or for the enforcement of or
compliance with Federal legal requirements that relate to those
programs.
    (2) The State or local educational authority or agency headed by an
official listed in Sec. 99.31(a)(3) is responsible for using reasonable
methods to ensure to the greatest extent practicable that any entity or
individual designated as its authorized representative--
    (i) Uses personally identifiable information only to carry out an
audit or evaluation of Federal- or State-supported education programs,
or for the enforcement of or compliance with Federal legal requirements
related to these programs;
    (ii) Protects the personally identifiable information from further
disclosures or other uses, except as authorized in paragraph (b)(1) of
this section; and
    (iii) Destroys the personally identifiable information in accordance
with the requirements of paragraphs (b) and (c) of this section.
    (3) The State or local educational authority or agency headed by an
official listed in Sec. 99.31(a)(3) must use a written agreement to
designate any authorized representative, other than an employee. The
written agreement must--
    (i) Designate the individual or entity as an authorized
representative;
    (ii) Specify--
    (A) The personally identifiable information from education records
to be disclosed;
    (B) That the purpose for which the personally identifiable
information from education records is disclosed to the authorized
representative is to carry out an audit or evaluation of Federal- or
State-supported education programs, or to enforce or to comply with
Federal legal requirements that relate to those programs; and
    (C) A description of the activity with sufficient specificity to
make clear that the work falls within the exception of Sec.
99.31(a)(3), including a description of how the personally identifiable
information from education records will be used;
    (iii) Require the authorized representative to destroy personally
identifiable information from education records when the information is
no longer needed for the purpose specified;
    (iv) Specify the time period in which the information must be
destroyed; and
    (v) Establish policies and procedures, consistent with the Act and
other Federal and State confidentiality and privacy provisions, to
protect personally identifiable information from education records from
further disclosure (except back to the disclosing entity) and
unauthorized use, including limiting use of personally identifiable
information from education records to only authorized representatives
with legitimate interests in the audit or evaluation of a Federal- or
State-supported education program or for compliance or enforcement of
Federal legal

[[Page 309]]

requirements related to these programs.
    (b) Information that is collected under paragraph (a) of this
section must--
    (1) Be protected in a manner that does not permit personal
identification of individuals by anyone other than the State or local
educational authority or agency headed by an official listed in Sec.
99.31(a)(3) and their authorized representatives, except that the State
or local educational authority or agency headed by an official listed in
Sec. 99.31(a)(3) may make further disclosures of personally
identifiable information from education records on behalf of the
educational agency or institution in accordance with the requirements of
Sec. 99.33(b); and
    (2) Be destroyed when no longer needed for the purposes listed in
paragraph (a) of this section.
    (c) Paragraph (b) of this section does not apply if:
    (1) The parent or eligible student has given written consent for the
disclosure under Sec. 99.30; or
    (2) The collection of personally identifiable information is
specifically authorized by Federal law.

(Authority: 20 U.S.C. 1232g(b)(1)(C), (b)(3), and (b)(5))

[53 FR 11943, Apr. 11, 1988, as amended at 73 FR 74854, Dec. 9, 2008; 76
FR 75642, Dec. 2, 2011]



Sec. 99.36  What conditions apply to disclosure of information in
health and safety emergencies?

    (a) An educational agency or institution may disclose personally
identifiable information from an education record to appropriate
parties, including parents of an eligible student, in connection with an
emergency if knowledge of the information is necessary to protect the
health or safety of the student or other individuals.
    (b) Nothing in this Act or this part shall prevent an educational
agency or institution from--
    (1) Including in the education records of a student appropriate
information concerning disciplinary action taken against the student for
conduct that posed a significant risk to the safety or well-being of
that student, other students, or other members of the school community;
    (2) Disclosing appropriate information maintained under paragraph
(b)(1) of this section to teachers and school officials within the
agency or institution who the agency or institution has determined have
legitimate educational interests in the behavior of the student; or
    (3) Disclosing appropriate information maintained under paragraph
(b)(1) of this section to teachers and school officials in other schools
who have been determined to have legitimate educational interests in the
behavior of the student.
    (c) In making a determination under paragraph (a) of this section,
an educational agency or institution may take into account the totality
of the circumstances pertaining to a threat to the health or safety of a
student or other individuals. If the educational agency or institution
determines that there is an articulable and significant threat to the
health or safety of a student or other individuals, it may disclose
information from education records to any person whose knowledge of the
information is necessary to protect the health or safety of the student
or other individuals. If, based on the information available at the time
of the determination, there is a rational basis for the determination,
the Department will not substitute its judgment for that of the
educational agency or institution in evaluating the circumstances and
making its determination.

(Authority: 20 U.S.C. 1232g (b)(1)(I) and (h))

[53 FR 11943, Apr. 11, 1988; 53 FR 19368, May 27, 1988, as amended at 61
FR 59297, Nov. 21, 1996; 73 FR 74854, Dec. 9, 2008]



Sec. 99.37  What conditions apply to disclosing directory information?

    (a) An educational agency or institution may disclose directory
information if it has given public notice to parents of students in
attendance and eligible students in attendance at the agency or
institution of:
    (1) The types of personally identifiable information that the agency
or institution has designated as directory information;

[[Page 310]]

    (2) A parent's or eligible student's right to refuse to let the
agency or institution designate any or all of those types of information
about the student as directory information; and
    (3) The period of time within which a parent or eligible student has
to notify the agency or institution in writing that he or she does not
want any or all of those types of information about the student
designated as directory information.
    (b) An educational agency or institution may disclose directory
information about former students without complying with the notice and
opt out conditions in paragraph (a) of this section. However, the agency
or institution must continue to honor any valid request to opt out of
the disclosure of directory information made while a student was in
attendance unless the student rescinds the opt out request.
    (c) A parent or eligible student may not use the right under
paragraph (a)(2) of this section to opt out of directory information
disclosures to--
    (1) Prevent an educational agency or institution from disclosing or
requiring a student to disclose the student's name, identifier, or
institutional email address in a class in which the student is enrolled;
or
    (2) Prevent an educational agency or institution from requiring a
student to wear, to display publicly, or to disclose a student ID card
or badge that exhibits information that may be designated as directory
information under Sec. 99.3 and that has been properly designated by
the educational agency or institution as directory information in the
public notice provided under paragraph (a)(1) of this section.
    (d) In its public notice to parents and eligible students in
attendance at the agency or institution that is described in paragraph
(a) of this section, an educational agency or institution may specify
that disclosure of directory information will be limited to specific
parties, for specific purposes, or both. When an educational agency or
institution specifies that disclosure of directory information will be
limited to specific parties, for specific purposes, or both, the
educational agency or institution must limit its directory information
disclosures to those specified in its public notice that is described in
paragraph (a) of this section.
    (e) An educational agency or institution may not disclose or confirm
directory information without meeting the written consent requirements
in Sec. 99.30 if a student's social security number or other non-
directory information is used alone or combined with other data elements
to identify or help identify the student or the student's records.

(Authority: 20 U.S.C. 1232g(a)(5) (A) and (B))

[53 FR 11943, Apr. 11, 1988, as amended at 73 FR 74854, Dec. 9, 2008; 76
FR 75642, Dec. 2, 2011]



Sec. 99.38  What conditions apply to disclosure of information as
permitted by State statute adopted after November 19, 1974, concerning

the juvenile justice system?

    (a) If reporting or disclosure allowed by State statute concerns the
juvenile justice system and the system's ability to effectively serve,
prior to adjudication, the student whose records are released, an
educational agency or institution may disclose education records under
Sec. 99.31(a)(5)(i)(B).
    (b) The officials and authorities to whom the records are disclosed
shall certify in writing to the educational agency or institution that
the information will not be disclosed to any other party, except as
provided under State law, without the prior written consent of the
parent of the student.

(Authority: 20 U.S.C. 1232g(b)(1)(J))

[61 FR 59297, Nov. 21, 1996]



Sec. 99.39  What definitions apply to the nonconsensual disclosure of
records by postsecondary educational institutions in connection with

disciplinary proceedings concerning crimes of violence or non-forcible
sex offenses?

    As used in this part:
    Alleged perpetrator of a crime of violence is a student who is
alleged to have committed acts that would, if proven, constitute any of
the following offenses or attempts to commit the following offenses that
are defined in appendix A to this part:

Arson
Assault offenses
Burglary

[[Page 311]]

Criminal homicide--manslaughter by negligence
Criminal homicide--murder and nonnegligent manslaughter
Destruction/damage/vandalism of property
Kidnapping/abduction
Robbery
Forcible sex offenses.

    Alleged perpetrator of a nonforcible sex offense means a student who
is alleged to have committed acts that, if proven, would constitute
statutory rape or incest. These offenses are defined in appendix A to
this part.
    Final results means a decision or determination, made by an honor
court or council, committee, commission, or other entity authorized to
resolve disciplinary matters within the institution. The disclosure of
final results must include only the name of the student, the violation
committed, and any sanction imposed by the institution against the
student.
    Sanction imposed means a description of the disciplinary action
taken by the institution, the date of its imposition, and its duration.
    Violation committed means the institutional rules or code sections
that were violated and any essential findings supporting the
institution's conclusion that the violation was committed.

(Authority: 20 U.S.C. 1232g(b)(6))

[65 FR 41853, July 6, 2000]



             Subpart E_What Are the Enforcement Procedures?



Sec. 99.60  What functions has the Secretary delegated to the Office
and to the Office of Administrative Law Judges?

    (a) For the purposes of this subpart, Office means the Family Policy
Compliance Office, U.S. Department of Education.
    (b) The Secretary designates the Office to:
    (1) Investigate, process, and review complaints and violations under
the Act and this part; and
    (2) Provide technical assistance to ensure compliance with the Act
and this part.
    (c) The Secretary designates the Office of Administrative Law Judges
to act as the Review Board required under the Act to enforce the Act
with respect to all applicable programs. The term applicable program is
defined in section 400 of the General Education Provisions Act.

(Authority: 20 U.S.C. 1232g (f) and (g), 1234)

[53 FR 11943, Apr. 11, 1988, as amended at 58 FR 3189, Jan. 7, 1993]



Sec. 99.61  What responsibility does an educational agency or
institution, a recipient of Department funds, or a third party outside

of an educational agency or institution have concerning conflict with
State or local laws?

    If an educational agency or institution determines that it cannot
comply with the Act or this part due to a conflict with State or local
law, it must notify the Office within 45 days, giving the text and
citation of the conflicting law. If another recipient of Department
funds under any program administered by the Secretary or a third party
to which personally identifiable information from education records has
been non-consensually disclosed determines that it cannot comply with
the Act or this part due to a conflict with State or local law, it also
must notify the Office within 45 days, giving the text and citation of
the conflicting law.

(Authority: 20 U.S.C. 1232g(f))

[76 FR 75642, Dec. 2, 2011]



Sec. 99.62  What information must an educational agency or institution
or other recipient of Department funds submit to the Office?

    The Office may require an educational agency or institution, other
recipient of Department funds under any program administered by the
Secretary to which personally identifiable information from education
records is non-consensually disclosed, or any third party outside of an
educational agency or institution to which personally identifiable
information from education records is non-consensually disclosed to
submit reports, information on policies and procedures, annual
notifications, training materials, or other information necessary to
carry out the

[[Page 312]]

Office's enforcement responsibilities under the Act or this part.

(Authority: 20 U.S.C. 1232g(b)(4)(B), (f), and (g))

[76 FR 75643, Dec. 2, 2011]



Sec. 99.63  Where are complaints filed?

    A parent or eligible student may file a written complaint with the
Office regarding an alleged violation under the Act and this part. The
Office's address is: Family Policy Compliance Office, U.S. Department of
Education, 400 Maryland Avenue, SW., Washington, DC 20202.

(Authority: 20 U.S.C. 1232g(g))

[65 FR 41854, July 6, 2000, as amended at 73 FR 74854, Dec. 9, 2008]



Sec. 99.64  What is the investigation procedure?

    (a) A complaint must contain specific allegations of fact giving
reasonable cause to believe that a violation of the Act or this part has
occurred. A complaint does not have to allege that a violation is based
on a policy or practice of the educational agency or institution, other
recipient of Department funds under any program administered by the
Secretary, or any third party outside of an educational agency or
institution.
    (b) The Office investigates a timely complaint filed by a parent or
eligible student, or conducts its own investigation when no complaint
has been filed or a complaint has been withdrawn, to determine whether
an educational agency or institution or other recipient of Department
funds under any program administered by the Secretary has failed to
comply with a provision of the Act or this part. If the Office
determines that an educational agency or institution or other recipient
of Department funds under any program administered by the Secretary has
failed to comply with a provision of the Act or this part, it may also
determine whether the failure to comply is based on a policy or practice
of the agency or institution or other recipient. The Office also
investigates a timely complaint filed by a parent or eligible student,
or conducts its own investigation when no complaint has been filed or a
complaint has been withdrawn, to determine whether a third party outside
of the educational agency or institution has failed to comply with the
provisions of Sec. 99.31(a)(6)(iii)(B) or has improperly redisclosed
personally identifiable information from education records in violation
of Sec. 99.33.

(Authority: 20 U.S.C. 1232g(b)(4)(B), (f) and (g))
    (c) A timely complaint is defined as an allegation of a violation of
the Act that is submitted to the Office within 180 days of the date of
the alleged violation or of the date that the complainant knew or
reasonably should have known of the alleged violation.
    (d) The Office may extend the time limit in this section for good
cause shown.

(Authority: 20 U.S.C. 1232g(b)(4)(B), (f) and (g))

[53 FR 11943, Apr. 11, 1988, as amended at 58 FR 3189, Jan. 7, 1993; 65
FR 41854, July 6, 2000; 73 FR 74854, Dec. 9, 2008; 76 FR 75643, Dec. 2,
2011]



Sec. 99.65  What is the content of the notice of investigation issued
by the Office?

    (a) The Office notifies in writing the complainant, if any, and the
educational agency or institution, the recipient of Department funds
under any program administered by the Secretary, or the third party
outside of an educational agency or institution if it initiates an
investigation under Sec. 99.64(b). The written notice--
    (1) Includes the substance of the allegations against the
educational agency or institution, other recipient, or third party; and
    (2) Directs the agency or institution, other recipient, or third
party to submit a written response and other relevant information, as
set forth in Sec. 99.62, within a specified period of time, including
information about its policies and practices regarding education
records.
    (b) The Office notifies the complainant if it does not initiate an
investigation because the complaint fails to meet the requirements of
Sec. 99.64.

(Authority: 20 U.S.C. 1232g(g))

[73 FR 74855, Dec. 9, 2008, as amended at 76 FR 75643, Dec. 2, 2011]

[[Page 313]]



Sec. 99.66  What are the responsibilities of the Office in the
enforcement process?

    (a) The Office reviews a complaint, if any, information submitted by
the educational agency or institution, other recipient of Department
funds under any program administered by the Secretary, or third party
outside of an educational agency or institution, and any other relevant
information. The Office may permit the parties to submit further written
or oral arguments or information.
    (b) Following its investigation, the Office provides to the
complainant, if any, and the educational agency or institution, other
recipient, or third party a written notice of its findings and the basis
for its findings.
    (c) If the Office finds that an educational agency or institution or
other recipient has not complied with a provision of the Act or this
part, it may also find that the failure to comply was based on a policy
or practice of the agency or institution or other recipient. A notice of
findings issued under paragraph (b) of this section to an educational
agency or institution, or other recipient that has not complied with a
provision of the Act or this part--
    (1) Includes a statement of the specific steps that the agency or
institution or other recipient must take to comply; and
    (2) Provides a reasonable period of time, given all of the
circumstances of the case, during which the educational agency or
institution or other recipient may comply voluntarily.
    (d) If the Office finds that a third party outside of an educational
agency or institution has not complied with the provisions of Sec.
99.31(a)(6)(iii)(B) or has improperly redisclosed personally
identifiable information from education records in violation of Sec.
99.33, the Office's notice of findings issued under paragraph (b) of
this section--
    (1) Includes a statement of the specific steps that the third party
outside of the educational agency or institution must take to comply;
and
    (2) Provides a reasonable period of time, given all of the
circumstances of the case, during which the third party may comply
voluntarily.

(Authority: 20 U.S.C. 1232g(b)(4)(B), (f), and (g))

[76 FR 75643, Dec. 2, 2011]



Sec. 99.67  How does the Secretary enforce decisions?

    (a) If an educational agency or institution or other recipient of
Department funds under any program administered by the Secretary does
not comply during the period of time set under Sec. 99.66(c), the
Secretary may take any legally available enforcement action in
accordance with the Act, including, but not limited to, the following
enforcement actions available in accordance with part D of the General
Education Provisions Act--
    (1) Withhold further payments under any applicable program;
    (2) Issue a complaint to compel compliance through a cease and
desist order; or
    (3) Terminate eligibility to receive funding under any applicable
program.
    (b) If, after an investigation under Sec. 99.66, the Secretary
finds that an educational agency or institution, other recipient, or
third party has complied voluntarily with the Act or this part, the
Secretary provides the complainant and the agency or institution, other
recipient, or third party with written notice of the decision and the
basis for the decision.
    (c) If the Office finds that a third party, outside the educational
agency or institution, violates Sec. 99.31(a)(6)(iii)(B), then the
educational agency or institution from which the personally identifiable
information originated may not allow the third party found to be
responsible for the violation of Sec. 99.31(a)(6)(iii)(B) access to
personally identifiable information from education records for at least
five years.
    (d) If the Office finds that a State or local educational authority,
a Federal agency headed by an official listed in Sec. 99.31(a)(3), or
an authorized representative of a State or local educational authority
or a Federal agency headed by an official listed in Sec. 99.31(a)(3),
improperly rediscloses personally identifiable information from
education records, then the educational agency or

[[Page 314]]

institution from which the personally identifiable information
originated may not allow the third party found to be responsible for the
improper redisclosure access to personally identifiable information from
education records for at least five years.
    (e) If the Office finds that a third party, outside the educational
agency or institution, improperly rediscloses personally identifiable
information from education records in violation of Sec. 99.33 or fails
to provide the notification required under Sec. 99.33(b)(2), then the
educational agency or institution from which the personally identifiable
information originated may not allow the third party found to be
responsible for the violation access to personally identifiable
information from education records for at least five years.

(Authority: 20 U.S.C. 1232g(b)(4)(B) and (f); 20 U.S.C. 1234c)

[76 FR 75643, Dec. 2, 2011]



       Sec. Appendix A to Part 99--Crimes of Violence Definitions

                                  Arson

    Any willful or malicious burning or attempt to burn, with or without
intent to defraud, a dwelling house, public building, motor vehicle or
aircraft, personal property of another, etc.

                            Assault Offenses

    An unlawful attack by one person upon another.
    Note: By definition there can be no ``attempted'' assaults, only
``completed'' assaults.
    (a) Aggravated Assault. An unlawful attack by one person upon
another for the purpose of inflicting severe or aggravated bodily
injury. This type of assault usually is accompanied by the use of a
weapon or by means likely to produce death or great bodily harm. (It is
not necessary that injury result from an aggravated assault when a gun,
knife, or other weapon is used which could and probably would result in
serious injury if the crime were successfully completed.)
    (b) Simple Assault. An unlawful physical attack by one person upon
another where neither the offender displays a weapon, nor the victim
suffers obvious severe or aggravated bodily injury involving apparent
broken bones, loss of teeth, possible internal injury, severe
laceration, or loss of consciousness.
    (c) Intimidation. To unlawfully place another person in reasonable
fear of bodily harm through the use of threatening words or other
conduct, or both, but without displaying a weapon or subjecting the
victim to actual physical attack.

    Note: This offense includes stalking.

                                Burglary

    The unlawful entry into a building or other structure with the
intent to commit a felony or a theft.

              Criminal Homicide--Manslaughter by Negligence

    The killing of another person through gross negligence.

         Criminal Homicide--Murder and Nonnegligent Manslaughter

    The willful (nonnegligent) killing of one human being by another.

                Destruction/Damage/Vandalism of Property

    To willfully or maliciously destroy, damage, deface, or otherwise
injure real or personal property without the consent of the owner or the
person having custody or control of it.

                          Kidnapping/Abduction

    The unlawful seizure, transportation, or detention of a person, or
any combination of these actions, against his or her will, or of a minor
without the consent of his or her custodial parent(s) or legal guardian.

    Note: Kidnapping/Abduction includes hostage taking.

                                 Robbery

    The taking of, or attempting to take, anything of value under
confrontational circumstances from the control, custody, or care of a
person or persons by force or threat of force or violence or by putting
the victim in fear.

    Note: Carjackings are robbery offenses where a motor vehicle is
taken through force or threat of force.

                         Sex Offenses, Forcible

    Any sexual act directed against another person, forcibly or against
that person's will, or both; or not forcibly or against the person's
will where the victim is incapable of giving consent.
    (a) Forcible Rape (Except ``Statutory Rape''). The carnal knowledge
of a person, forcibly or against that person's will, or both; or not
forcibly or against the person's will where the victim is incapable of
giving consent because of his or her temporary or permanent mental or
physical incapacity (or because of his or her youth).
    (b) Forcible Sodomy. Oral or anal sexual intercourse with another
person, forcibly or

[[Page 315]]

against that person's will, or both; or not forcibly or against the
person's will where the victim is incapable of giving consent because of
his or her youth or because of his or her temporary or permanent mental
or physical incapacity.
    (c) Sexual Assault With An Object. To use an object or instrument to
unlawfully penetrate, however slightly, the genital or anal opening of
the body of another person, forcibly or against that person's will, or
both; or not forcibly or against the person's will where the victim is
incapable of giving consent because of his or her youth or because of
his or her temporary or permanent mental or physical incapacity.

    Note: An ``object'' or ``instrument'' is anything used by the
offender other than the offender's genitalia. Examples are a finger,
bottle, handgun, stick, etc.

    (d) Forcible Fondling. The touching of the private body parts of
another person for the purpose of sexual gratification, forcibly or
against that person's will, or both; or not forcibly or against the
person's will where the victim is incapable of giving consent because of
his or her youth or because of his or her temporary or permanent mental
or physical incapacity.

    Note: Forcible Fondling includes ``Indecent Liberties'' and ``Child
Molesting.''

       Nonforcible Sex Offenses (Except ``Prostitution Offenses'')

    Unlawful, nonforcible sexual intercourse.
    (a) Incest. Nonforcible sexual intercourse between persons who are
related to each other within the degrees wherein marriage is prohibited
by law.
    (b) Statutory Rape. Nonforcible sexual intercourse with a person who
is under the statutory age of consent.

(Authority: 20 U.S.C. 1232g(b)(6) and 18 U.S.C. 16)

[65 FR 41854, July 6, 2000]

[[Page 317]]

  Subtitle B--Regulations of the Offices of the Department of Education

[[Page 319]]



       CHAPTER I--OFFICE FOR CIVIL RIGHTS, DEPARTMENT OF EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
100             Nondiscrimination under programs receiving
                    Federal assistance through the
                    Department of Education effectuation of
                    title VI of the Civil Rights Act of 1964         321
101             Practice and procedure for hearings under
                    part 100 of this title..................         342
104             Nondiscrimination on the basis of handicap
                    in programs or activities receiving
                    Federal financial assistance............         353
105             Enforcement of nondiscrimination on the
                    basis of handicap in programs or
                    activities conducted by the Department
                    of Education............................         386
106             Nondiscrimination on the basis of sex in
                    education programs or activities
                    receiving Federal financial assistance..         392
108             Equal access to public school facilities for
                    the Boy Scouts of America and other
                    designated youth groups.................         412
110             Nondiscrimination on the basis of age in
                    programs or activities receiving Federal
                    financial assistance....................         415
111-199

[Reserved]

[[Page 321]]



 PART 100_NONDISCRIMINATION UNDER PROGRAMS RECEIVING FEDERAL ASSISTANCE
 THROUGH THE DEPARTMENT OF EDUCATION EFFECTUATION OF TITLE VI OF THE

 CIVIL RIGHTS ACT OF 1964--Table of Contents



Sec.
100.1 Purpose.
100.2 Application of this regulation.
100.3 Discrimination prohibited.
100.4 Assurances required.
100.5 Illustrative application.
100.6 Compliance information.
100.7 Conduct of investigations.
100.8 Procedure for effecting compliance.
100.9 Hearings.
100.10 Decisions and notices.
100.11 Judicial review.
100.12 Effect on other regulations; forms and instructions.
100.13 Definitions.

Appendix A to Part 100--Federal Financial Assistance to Which These
          Regulations Apply
Appendix B to Part 100--Guidelines for Eliminating Discrimination and
          Denial of Services on the Basis of Race, Color, National
          Origin, Sex, and Handicap in Vocational Education Programs

    Authority: Sec. 602, 78 Stat. 252; 42 U.S.C. 2000d-1, unless
otherwise noted.

    Source: 45 FR 30918, May 9, 1980, unless otherwise noted.



Sec. 100.1  Purpose.

    The purpose of this part is to effectuate the provisions of title VI
of the Civil Rights Act of 1964 (hereafter referred to as the ``Act'')
to the end that no person in the United States shall; on the ground of
race, color, or national origin, be excluded from participation in, be
denied the benefits of, or be otherwise subjected to discrimination
under any program or activity receiving Federal financial assistance
from the Department of Education.

(Authority: Sec. 601, Civil Rights Act of 1964; 78 Stat. 252; 42 U.S.C.
2000d)



Sec. 100.2  Application of this regulation.

    This regulation applies to any program to which Federal financial
assistance is authorized to be extended to a recipient under a law
administered by the Department, including the Federal financial
assistance listed in appendix A of this regulation. It applies to money
paid, property transferred, or other Federal financial assistance
extended after the effective date of the regulation pursuant to an
application approved prior to such effective date. This regulation does
not apply to (a) any Federal financial assistance by way of insurance or
guaranty contracts, (b) money paid, property transferred, or other
assistance extended before the effective date of this regulation, (c)
the use of any assistance by any individual who is the ultimate
beneficiary, or (d) any employment practice, or any employer, employment
agency, or labor organization, except to the extent described in Sec.
100.3. The fact that a type of Federal assistance is not listed in
appendix A shall not mean, if title VI of the Act is otherwise
applicable, that a program is not covered. Federal financial assistance
under statutes now in force or hereinafter enacted may be added to this
list by notice published in the Federal Register.

(Authority: Secs. 602, 604, Civil Rights Act of 1964; 78 Stat. 252, 253;
42 U.S.C. 2000d-1, 2000d-3)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68053, Nov. 13, 2000]



Sec. 100.3  Discrimination prohibited.

    (a) General. No person in the United States shall, on the ground of
race, color, or national origin be excluded from participation in, be
denied the benefits of, or be otherwise subjected to discrimination
under any program to which this part applies.
    (b) Specific discriminatory actions prohibited. (1) A recipient
under any program to which this part applies may not, directly or
through contractual or other arrangements, on ground of race, color, or
national origin:
    (i) Deny an individual any service, financial aid, or other benefit
provided under the program;
    (ii) Provide any service, financial aid, or other benefit to an
individual which is different, or is provided in a different manner,
from that provided to others under the program;
    (iii) Subject an individual to segregation or separate treatment in
any matter related to his receipt of any service, financial aid, or
other benefit under the program;

[[Page 322]]

    (iv) Restrict an individual in any way in the enjoyment of any
advantage or privilege enjoyed by others receiving any service,
financial aid, or other benefit under the program;
    (v) Treat an individual differently from others in determining
whether he satisfies any admission, enrollment, quota, eligibility,
membership or other requirement or condition which individuals must meet
in order to be provided any service, financial aid, or other benefit
provided under the program;
    (vi) Deny an individual an opportunity to participate in the program
through the provision of services or otherwise or afford him an
opportunity to do so which is different from that afforded others under
the program (including the opportunity to participate in the program as
an employee but only to the extent set forth in paragraph (c) of this
section).
    (vii) Deny a person the opportunity to participate as a member of a
planning or advisory body which is an integral part of the program.
    (2) A recipient, in determining the types of services, financial
aid, or other benefits, or facilities which will be provided under any
such program, or the class of individuals to whom, or the situations in
which, such services, financial aid, other benefits, or facilities will
be provided under any such program, or the class of individuals to be
afforded an opportunity to participate in any such program, may not,
directly or through contractual or other arrangements, utilize criteria
or methods of administration which have the effect of subjecting
individuals to discrimination because of their race, color, or national
origin, or have the effect of defeating or substantially impairing
accomplishment of the objectives of the program as respect individuals
of a particular race, color, or national origin.
    (3) In determining the site or location of a facilities, an
applicant or recipient may not make selections with the effect of
excluding individuals from, denying them the benefits of, or subjecting
them to discrimination under any programs to which this regulation
applies, on the ground of race, color, or national origin; or with the
purpose or effect of defeating or substantially impairing the
accomplishment of the objectives of the Act or this regulation.
    (4) As used in this section, the services, financial aid, or other
benefits provided under a program receiving Federal financial assistance
shall be deemed to include any service, financial aid, or other benefits
provided in or through a facility provided with the aid of Federal
financial assistance.
    (5) The enumeration of specific forms of prohibited discrimination
in this paragraph and paragraph (c) of this section does not limit the
generality of the prohibition in paragraph (a) of this section.
    (6)(i) In administering a program regarding which the recipient has
previously discriminated against persons on the ground of race, color,
or national origin, the recipient must take affirmative action to
overcome the effects of prior discrimination.
    (ii) Even in the absence of such prior discrimination, a recipient
in administering a program may take affirmative action to overcome the
effects of conditions which resulted in limiting participation by
persons of a particular race, color, or national origin.
    (c) Employment practices. (1) Where a primary objective of the
Federal financial assistance to a program to which this regulation
applies is to provide employment, a recipient may not (directly or
through contractual or other arrangements) subject an individual to
discrimination on the ground of race, color, or national origin in its
employment practices under such program (including recruitment or
recruitment advertising, employment, layoff or termination, upgrading,
demotion, or transfer, rates of pay or other forms of compensation, and
use of facilities), including programs where a primary objective of the
Federal financial assistance is (i) to reduce the employment of such
individuals or to help them through employment to meet subsistence
needs, (ii) to assist such individuals through employment to meet
expenses incident to the commencement or continuation of their education
or training, (iii) to provide work experience which contributes to the
education or training of

[[Page 323]]

such individuals, or (iv) to provide remunerative activity to such
individuals who because of handicaps cannot be readily absorbed in the
competitive labor market. The following, under existing laws, have one
of the above objectives as a primary objective:
    (A) Projects under the Public Works Acceleration Act, Pub. L. 87-
658, 42 U.S.C. 2641-2643.
    (B) Work-study under the Vocational Education Act of 1963, as
amended, 20 U.S.C. 1371-1374.
    (C) Programs assisted under laws listed in appendix A as respects
employment opportunities provided thereunder, or in facilities provided
thereunder, which are limited, or for which preference is given, to
students, fellows, or other persons in training for the same or related
employments.
    (D) Assistance to rehabilitation facilities under the Vocational
Rehabilitation Act, 29 U.S.C. 32-34, 41a and 41b.
    (2) The requirements applicable to construction employment under any
such program shall be those specified in or pursuant to Part III of
Executive Order 11246 or any Executive order which supersedes it.
    (3) Where a primary objective of the Federal financial assistance is
not to provide employment, but discrimination on the ground of race,
color, or national origin in the employment practices of the recipient
or other persons subject to the regulation tends, on the ground of race,
color, or national origin, to exclude individuals from participation in,
to deny them the benefits of, or to subject them to discrimination under
any program to which this regulation applies, the foregoing provisions
of this paragraph (c) shall apply to the employment practices of the
recipient or other persons subject to the regulation, to the extent
necessary to assure equality of opportunity to, and nondiscriminatory
treatment of, beneficiaries.
    (d) Indian health and Cuban refugee services. An individual shall
not be deemed subjected to discrimination by reason of his exclusion
from benefits limited by Federal law to individuals of a particular
race, color, or national origin different from his.
    (e) Medical emergencies. Notwithstanding the foregoing provisions of
this section, a recipient of Federal financial assistance shall not be
deemed to have failed to comply with paragraph (a) of this section if
immediate provision of a service or other benefit to an individual is
necessary to prevent his death or serious impairment of his health, and
such service or other benefit cannot be provided except by or through a
medical institution which refuses or fails to comply with paragraph (a)
of this section.

(Authority: Sec. 601, 602, 604, Civil Rights Act of 1964; 78 Stat. 252,
253, 42 U.S.C. 2000d, 2000d-1, 2000d-3)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68053, Nov. 13, 2000]



Sec. 100.4  Assurances required.

    (a) General. (1) Every application for Federal financial assistance
to which this part applies, except an application to which paragraph (b)
of this section applies, and every application for Federal financial
assistance to provide a facility shall, as a condition to its approval
and the extension of any Federal financial assistance pursuant to the
application, contain or be accompanied by an assurance that the program
will be conducted or the facility operated in compliance with all
requirements imposed by or pursuant to this part. In the case of an
application for Federal financial assistance to provide real property or
structures thereon, the assurance shall obligate the recipient, or, in
the case of a subsequent transfer, the transferee, for the period during
which the real property or structures are used for a purpose for which
the Federal financial assistance is extended or for another purpose
involving the provision of similar services or benefits. In the case of
personal property the assurance shall obligate the recipient for the
period during which he retains ownership or possession of the property.
In all other cases the assurance shall obligate the recipient for the
period during which Federal financial assistance is extended pursuant to
the application. The responsible Department official shall specify the
form of the foregoing assurances, and the extent to which like
assurances will be required of subgrantees, contractors and
subcontractors, transferees, successors in interest, and other

[[Page 324]]

participants. Any such assurance shall include provisions which give the
United States a right to seek its judicial enforcement.
    (2) Where Federal financial assistance is provided in the form of a
transfer of real property or interest therein from the Federal
Government the instrument effecting or recording the transfer shall
contain a covenant running with the land to assure nondiscrimination for
the period during which the real property is used for a purpose for
which the Federal financial assistance is extended or for another
purpose involving the provision of similar services or benefits. Where
no transfer of property is involved but property is improved with
Federal financial assistance, the recipient shall agree to include such
a covenant to any subsequent transfer of the property. Where the
property is obtained from the Federal Government, such covenant may also
include a condition coupled with a right to be reserved by the
Department to revert title to the property in the event of a breach of
the covenant where, in the discretion of the responsible Department
official, such a condition and right of reverter is appropriate to the
statute under which the real property is obtained and to the nature of
the grant and the grantee. In the event a transferee of real property
proposes to mortgage or otherwise encumber the real property as security
for financing construction of new, or improvement of existing,
facilities on such property for the purposes for which the property was
transferred, the responsible Department official may agree, upon request
of the transferee and if necessary to accomplish such financing, and
upon such conditions as he deems appropriate, to forbear the exercise of
such right to revert title for so long as the lien of such mortgage or
other encumbrance remains effective.
    (b) Continuing Federal financial assistance. Every application by a
State or a State agency for continuing Federal financial assistance to
which this regulation applies (including the Federal financial
assistance listed in part 2 of appendix A) shall as a condition to its
approval and the extension of any Federal financial assistance pursuant
to the application (1) contain or be accompanied by a statement that the
program is (or, in the case of a new program, will be) conducted in
compliance with all requirements imposed by or pursuant to this
regulation, and (2) provide or be accompanied by provision for such
methods of administration for the program as are found by the
responsible Department official to give reasonable assurance that the
applicant and all recipients of Federal financial assistance under such
program will comply with all requirements imposed by or pursuant to this
regulation.
    (c) Elementary and secondary schools. The requirements of paragraph
(a) or (b) of this section with respect to any elementary or secondary
school or school system shall be deemed to be satisfied if such school
or school system (1) is subject to a final order of a court of the
United States for the desegregation of such school or school system, and
provides an assurance that it will comply with such order, including any
future modification of such order, or (2) submits a plan for the
desegregation of such school or school system which the responsible
Department official determines is adequate to accomplish the purposes of
the Act and this part, at the earliest practicable time, and provides
reasonable assurance that it will carry out such plan; in any case of
continuing Federal financial assistance the responsible Department
official may reserve the right to redetermine, after such period as may
be specified by him, the adequacy of the plan to accomplish the purposes
of the Act and the regulations in this part. In any case in which a
final order of a court of the United States for the desegregation of
such school or school system is entered after submission of such a plan,
such plan shall be revised to conform to such final order, including any
future modification of such order.
    (d) Assurance from institutions. (1) In the case of any application
for Federal financial assistance to an institution of higher education
(including assistance for construction, for research, for special
training project, for student loans

[[Page 325]]

or for any other purpose), the assurance required by this section shall
extend to admission practices and to all other practices relating to the
treatment of students.
    (2) The assurance required with respect to an institution of higher
education, hospital, or any other institution, insofar as the assurance
relates to the institution's practices with respect to admission or
other treatment of individuals as students, patients, or clients of the
institution or to the opportunity to participate in the provision of
services or other benefits to such individuals, shall be applicable to
the entire institution.

(Authority: Sec. 601, 602, Civil Rights Act of 1964; 78 Stat. 252; 42
U.S.C. 2000d, 2000d-1. Sec. 182; 80 Stat. 1209; 42 U.S.C. 2000d-5)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68053, Nov. 13, 2000]



Sec. 100.5  Illustrative application.

    The following examples will illustrate the programs aided by Federal
financial assistance of the Department. (In all cases the discrimination
prohibited is discrimination on the ground of race, color, or national
origin prohibited by title VI of the Act and this regulation, as a
condition of the receipt of Federal financial assistance).
    (a) In federally-affected area assistance (Pub. L. 815 and Pub. L.
874) for construction aid and for general support of the operation of
elementary or secondary schools, or in more limited support to such
schools such as for the acquisition of equipment, the provision of
vocational education, or the provision of guidance and counseling
services, discrimination by the recipient school district in any of its
elementary or secondary schools in the admission of students, or in the
treatment of its students in any aspect of the educational process, is
prohibited. In this and the following illustrations the prohibition of
discrimination in the treatment of students or other trainees includes
the prohibition of discrimination among the students or trainees in the
availability or use of any academic, dormitory, eating, recreational, or
other facilities of the grantee or other recipient.
    (b) In a research, training, demonstration, or other grant to a
university for activities to be conducted in a graduate school,
discrimination in the admission and treatment of students in the
graduate school is prohibited, and the prohibition extends to the entire
university.
    (c) In a training grant to a hospital or other nonacademic
institution, discrimination is prohibited in the selection of
individuals to be trained and in their treatment by the grantee during
their training. In a research or demonstration grant to such an
institution discrimination is prohibited with respect to any educational
activity and any provision of medical or other services and any
financial aid to individuals incident to the program.
    (d) In grants to assist in the construction of facilities for the
provision of health, educational or welfare services, assurances will be
required that services will be provided without discrimination, to the
same extent that discrimination would be prohibited as a condition of
Federal operating grants for the support of such services. Thus, as a
condition of grants for the construction of academic, research, or other
facilities at institutions of higher education, assurances will be
required that there will be no discrimination in the admission or
treatment of students.
    (e) Upon transfers of real or personal surplus property for
educational uses, discrimination is prohibited to the same extent as in
the case of grants for the construction of facilities or the provision
of equipment for like purposes.
    (f) Each applicant for a grant for the construction of educational
television facilities is required to provide an assurance that it will,
in its broadcast services, give due consideration to the interests of
all significant racial or ethnic groups within the population to be
served by the applicant.
    (g) A recipient may not take action that is calculated to bring
about indirectly what this regulation forbids it to accomplish directly.
Thus, a State, in selecting or approving projects or sites for the
construction of public libraries which will receive Federal financial
assistance, may not base its selections or approvals on criteria which

[[Page 326]]

have the effect of defeating or of substantially impairing
accomplishments of the objectives of the Federal assistance as respects
individuals of a particular race, color or national origin.
    (h) In some situations, even though past discriminatory practices
attributable to a recipient or applicant have been abandoned, the
consequences of such practices continue to impede the full availability
of a benefit. If the efforts required of the applicant or recipient
under Sec. 100.6(d), to provide information as to the availability of
the program or activity and the rights of beneficiaries under this
regulation, have failed to overcome these consequences, it will become
necessary under the requirement stated in paragraph (i) of Sec.
100.3(b)(6) for such applicant or recipient to take additional steps to
make the benefits fully available to racial and nationality groups
previously subject to discrimination. This action might take the form,
for example, of special arrangements for obtaining referrals or making
selections which will insure that groups previously subjected to
discrimination are adequately served.
    (i) Even though an applicant or recipient has never used
discriminatory policies, the services and benefits of the program or
activity it administers may not in fact be equally available to some
racial or nationality groups. In such circumstances, an applicant or
recipient may properly give special consideration to race, color, or
national origin to make the benefits of its program more widely
available to such groups, not then being adequately served. For example,
where a university is not adequately serving members of a particular
racial or nationality group, it may establish special recruitment
policies to make its program better known and more readily available to
such group, and take other steps to provide that group with more
adequate service.

(Authority: Sec. 601, 602, Civil Rights Act of 1964; 78 Stat. 252; 42
U.S.C. 2000d, 2000d-1)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68053, Nov. 13, 2000]



Sec. 100.6  Compliance information.

    (a) Cooperation and assistance. The responsible Department official
shall to the fullest extent practicable seek the cooperation of
recipients in obtaining compliance with this part and shall provide
assistance and guidance to recipients to help them comply voluntarily
with this part.
    (b) Compliance reports. Each recipient shall keep such records and
submit to the responsible Department official or his designee timely,
complete and accurate compliance reports at such times, and in such form
and containing such information, as the responsible Department official
or his designee may determine to be necessary to enable him to ascertain
whether the recipient has complied or is complying with this part. For
example, recipients should have available for the Department racial and
ethnic data showing the extent to which members of minority groups are
beneficiaries of and participants in federally-assisted programs. In the
case in which a primary recipient extends Federal financial assistance
to any other recipient, such other recipient shall also submit such
compliance reports to the primary recipient as may be necessary to
enable the primary recipient to carry out its obligations under this
part.
    (c) Access to sources of information. Each recipient shall permit
access by the responsible Department official or his designee during
normal business hours to such of its books, records, accounts, and other
sources of information, and its facilities as may be pertinent to
ascertain compliance with this part. Where any information required of a
recipient is in the exclusive possession of any other agency,
institution or person and this agency, institution or person shall fail
or refuse to furnish this information the recipient shall so certify in
its report and shall set forth what efforts it has made to obtain the
information. Asserted considerations of privacy or confidentiality may
not operate to bar the Department from evaluating or seeking to enforce
compliance with this part. Information of a confidential nature obtained
in connection with compliance evaluation or enforcement shall not be
disclosed except where necessary in formal enforcement proceedings or
where otherwise required by law.

[[Page 327]]

    (d) Information to beneficiaries and participants. Each recipient
shall make available to participants, beneficiaries, and other
interested persons such information regarding the provisions of this
regulation and its applicability to the program for which the recipient
receives Federal financial assistance, and make such information
available to them in such manner, as the responsible Department official
finds necessary to apprise such persons of the protections against
discrimination assured them by the Act and this regulation.

(Approved by the Office of Management and Budget under control number
1870-0500)

(Authority: Sec. 601, 602, Civil Rights Act of 1964; 78 Stat. 252; 42
U.S.C. 2000d, 2000d-1)

[45 FR 30918, May 9, 1980, as amended at 53 FR 49143, Dec. 6, 1988; 65
FR 68053, Nov. 13, 2000]



Sec. 100.7  Conduct of investigations.

    (a) Periodic compliance reviews. The responsible Department official
or his designee shall from time to time review the practices of
recipients to determine whether they are complying with this part.
    (b) Complaints. Any person who believes himself or any specific
class of individuals to be subjected to discrimination prohibited by
this part may by himself or by a representative file with the
responsible Department official or his designee a written complaint. A
complaint must be filed not later than 180 days from the date of the
alleged discrimination, unless the time for filing is extended by the
responsible Department official or his designee.
    (c) Investigations. The responsible Department official or his
designee will make a prompt investigation whenever a compliance review,
report, complaint, or any other information indicates a possible failure
to comply with this part. The investigation should include, where
appropriate, a review of the pertinent practices and policies of the
recipient, the circumstances under which the possible noncompliance with
this part occurred, and other factors relevant to a determination as to
whether the recipient has failed to comply with this part.
    (d) Resolution of matters. (1) If an investigation pursuant to
paragraph (c) of this section indicates a failure to comply with this
part, the responsible Department official or his designee will so inform
the recipient and the matter will be resolved by informal means whenever
possible. If it has been determined that the matter cannot be resolved
by informal means, action will be taken as provided for in Sec. 100.8.
    (2) If an investigation does not warrant action pursuant to
paragraph (1) of this paragraph (d) the responsible Department official
or his designee will so inform the recipient and the complainant, if
any, in writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or
other person shall intimidate, threaten, coerce, or discriminate against
any individual for the purpose of interfering with any right or
privilege secured by section 601 of the Act or this part, or because he
has made a complaint, testified, assisted, or participated in any manner
in an investigation, proceeding or hearing under this part. The identity
of complainants shall be kept confidential except to the extent
necessary to carry out the purposes of this part, including the conduct
of any investigation, hearing, or judicial proceeding arising
thereunder.

(Authority: Sec. 601, 602, Civil Rights Act of 1964; 78 Stat. 252; 42
U.S.C. 2000d, 2000d-1)



Sec. 100.8  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure
to comply with this regulation, and if the noncompliance or threatened
noncompliance cannot be corrected by informal means, compliance with
this part may be effected by the suspension or termination of or refusal
to grant or to continue Federal financial assistance or by any other
means authorized by law. Such other means may include, but are not
limited to, (1) a reference to the Department of Justice with a
recommendation that appropriate proceedings be brought to enforce any
rights of the United States under any law of the United States
(including other titles of the Act), or any assurance or other
contractual undertaking,

[[Page 328]]

and (2) any applicable proceeding under State or local law.
    (b) Noncompliance with Sec. 100.4. If an applicant fails or refuses
to furnish an assurance required under Sec. 100.4 or otherwise fails or
refuses to comply with a requirement imposed by or pursuant to that
section Federal financial assistance may be refused in accordance with
the procedures of paragraph (c) of this section. The Department shall
not be required to provide assistance in such a case during the pendency
of the administrative proceedings under such paragraph except that the
Department shall continue assistance during the pendency of such
proceedings where such assistance is due and payable pursuant to an
application therefor approved prior to the effective date of this part.
    (c) Termination of or refusal to grant or to continue Federal
financial assistance. No order suspending, terminating or refusing to
grant or continue Federal financial assistance shall become effective
until (1) the responsible Department official has advised the applicant
or recipient of his failure to comply and has determined that compliance
cannot be secured by voluntary means, (2) there has been an express
finding on the record, after opportunity for hearing, of a failure by
the applicant or recipient to comply with a requirement imposed by or
pursuant to this part, (3) the expiration of 30 days after the Secretary
has filed with the committee of the House and the committee of the
Senate having legislative jurisdiction over the program involved, a full
written report of the circumstances and the grounds for such action. Any
action to suspend or terminate or to refuse to grant or to continue
Federal financial assistance shall be limited to the particular
political entity, or part thereof, or other applicant or recipient as to
whom such a finding has been made and shall be limited in its effect to
the particular program, or part thereof, in which such noncompliance has
been so found.
    (d) Other means authorized by law. No action to effect compliance by
any other means authorized by law shall be taken until (1) the
responsible Department official has determined that compliance cannot be
secured by voluntary means, (2) the recipient or other person has been
notified of its failure to comply and of the action to be taken to
effect compliance, and (3) the expiration of at least 10 days from the
mailing of such notice to the recipient or other person. During this
period of at least 10 days additional efforts shall be made to persuade
the recipient or other person to comply with the regulation and to take
such corrective action as may be appropriate.

(Authority: Sec. 601, 602, Civil Rights Act of 1964; 78 Stat. 252; 42
U.S.C. 2000d, 2000d-1. Sec. 182, 80 Stat. 1209; 42 U.S.C. 2000d-5)



Sec. 100.9  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing
is required by Sec. 100.8(c), reasonable notice shall be given by
registered or certified mail, return receipt requested, to the affected
applicant or recipient. This notice shall advise the applicant or
recipient of the action proposed to be taken, the specific provision
under which the proposed action against it is to be taken, and the
matters of fact or law asserted as the basis for this action, and either
(1) fix a date not less than 20 days after the date of such notice
within which the applicant or recipient may request of the responsible
Department official that the matter be scheduled for hearing or (2)
advise the applicant or recipient that the matter in question has been
set down for hearing at a stated place and time. The time and place so
fixed shall be reasonable and shall be subject to change for cause. The
complainant, if any, shall be advised of the time and place of the
hearing. An applicant or recipient may waive a hearing and submit
written information and argument for the record. The failure of an
applicant or recipient to request a hearing for which a date has been
set shall be deemed to be a waiver of the right to a hearing under
section 602 of the Act and Sec. 100.8(c) of this regulation and consent
to the making of a decision on the basis of such information as may be
filed as the record.
    (b) Time and place of hearing. Hearings shall be held at the offices
of the Department in Washington, DC, at a time fixed by the responsible
Department official unless he determines that

[[Page 329]]

the convenience of the applicant or recipient or of the Department
requires that another place be selected. Hearings shall be held before a
hearing examiner designated in accordance with 5 U.S.C. 3105 and 3344
(section 11 of the Administrative Procedure Act).
    (c) Right to counsel. In all proceedings under this section, the
applicant or recipient and the Department shall have the right to be
represented by counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and
any administrative review thereof shall be conducted in conformity with
sections 5-8 of the Administrative Procedure Act, and in accordance with
such rules of procedure as are proper (and not inconsistent with this
section) relating to the conduct of the hearing, giving of notices
subsequent to those provided for in paragraph (a) of this section,
taking of testimony, exhibits, arguments and briefs, requests for
findings, and other related matters. Both the Department and the
applicant or recipient shall be entitled to introduce all relevant
evidence on the issues as stated in the notice for hearing or as
determined by the officer conducting the hearing at the outset of or
during the hearing. Any person (other than a Government employee
considered to be on official business) who, having been invited or
requested to appear and testify as a witness on the Government's behalf,
attends at a time and place scheduled for a hearing provided for by this
part, may be reimbursed for his travel and actual expenses of attendance
in an amount not to exceed the amount payable under the standardized
travel regulations to a Government employee traveling on official
business.
    (2) Technical rules of evidence shall not apply to hearings
conducted pursuant to this part, but rules or principles designed to
assure production of the most credible evidence available and to subject
testimony to test by cross-examination shall be applied where reasonably
necessary by the officer conducting the hearing. The hearing officer may
exclude irrelevant, immaterial, or unduly repetitious evidence. All
documents and other evidence offered or taken for the record shall be
open to examination by the parties and opportunity shall be given to
refute facts and arguments advanced on either side of the issues. A
transcript shall be made of the oral evidence except to the extent the
substance thereof is stipulated for the record. All decisions shall be
based upon the hearing record and written findings shall be made.
    (e) Consolidated or joint hearings. In cases in which the same or
related facts are asserted to constitute noncompliance with this
regulation with respect to two or more Federal assistance statutes to
which this part applies, or noncompliance with this part and the
regulations of one or more other Federal departments or agencies issued
under title VI of the Act, the responsible Department official may, by
agreement with such other departments or agencies where applicable,
provide for the conduct of consolidated or joint hearings, and for the
application to such hearings of rules of procedures not inconsistent
with this part. Final decisions in such cases, insofar as this
regulation is concerned, shall be made in accordance with Sec. 100.10.

(Authority: Sec. 602, Civil Rights Act of 1964; 78 Stat. 252; 42 U.S.C.
2000d-1)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 100.10  Decisions and notices.

    (a) Decisions by hearing examiners. After a hearing is held by a
hearing examiner such hearing examiner shall either make an initial
decision, if so authorized, or certify the entire record including his
recommended findings and proposed decision to the reviewing authority
for a final decision, and a copy of such initial decision or
certification shall be mailed to the applicant or recipient and to the
complainant, if any. Where the initial decision referred to in this
paragraph or in paragraph (c) of this section is made by the hearing
examiner, the applicant or recipient or the counsel for the Department
may, within the period provided for in the rules of procedure issued by
the responsible Department official, file with the reviewing authority
exceptions to the initial decision, with his reasons therefor. Upon the
filing of such exceptions the reviewing authority shall review the
initial decision and issue its own decision thereof including the
reasons therefor. In the absence of exceptions

[[Page 330]]

the initial decision shall constitute the final decision, subject to the
provisions of paragraph (e) of this section.
    (b) Decisions on record or review by the reviewing authority.
Whenever a record is certified to the reviewing authority for decision
or it reviews the decision of a hearing examiner pursuant to paragraph
(a) or (c) of this section, the applicant or recipient shall be given
reasonable opportunity to file with it briefs or other written
statements of its contentions, and a copy of the final decision of the
reviewing authority shall be given in writing to the applicant or
recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. Whenever a
hearing is waived pursuant to Sec. 100.9(a) the reviewing authority
shall make its final decision on the record or refer the matter to a
hearing examiner for an initial decision to be made on the record. A
copy of such decision shall be given in writing to the applicant or
recipient, and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing examiner or
reviewing authority shall set forth a ruling on each finding,
conclusion, or exception presented, and shall identify the requirement
or requirements imposed by or pursuant to this part with which it is
found that the applicant or recipient has failed to comply.
    (e) Review in certain cases by the Secretary. If the Secretary has
not personally made the final decision referred to in paragraphs (a),
(b), or (c) of this section, a recipient or applicant or the counsel for
the Department may request the Secretary to review a decision of the
Reviewing Authority in accordance with rules of procedure issued by the
responsible Department official. Such review is not a matter of right
and shall be granted only where the Secretary determines there are
special and important reasons therefor. The Secretary may grant or deny
such request, in whole or in part. He may also review such a decision
upon his own motion in accordance with rules of procedure issued by the
responsible Department official. In the absence of a review under this
paragraph, a final decision referred to in paragraphs (a), (b), (c) of
this section shall become the final decision of the Department when the
Secretary transmits it as such to Congressional committees with the
report required under section 602 of the Act. Failure of an applicant or
recipient to file an exception with the Reviewing Authority or to
request review under this paragraph shall not be deemed a failure to
exhaust administrative remedies for the purpose of obtaining judicial
review.
    (f) Content of orders. The final decision may provide for suspension
or termination of, or refusal to grant or continue Federal financial
assistance, in whole or in part, to which this regulation applies, and
may contain such terms, conditions, and other provisions as are
consistent with and will effectuate the purposes of the Act and this
regulation, including provisions designed to assure that no Federal
financial assistance to which this regulation applies will thereafter be
extended under such law or laws to the applicant or recipient determined
by such decision to be in default in its performance of an assurance
given by it pursuant to this regulation, or to have otherwise failed to
comply with this regulation unless and until it corrects its
noncompliance and satisfies the responsible Department official that it
will fully comply with this regulation.
    (g) Post-termination proceedings. (1) An applicant or recipient
adversely affected by an order issued under paragraph (f) of this
section shall be restored to full eligibility to receive Federal
financial assistance if it satisfies the terms and conditions of that
order for such eligibility or if it brings itself into compliance with
this part and provides reasonable assurance that it will fully comply
with this part. An elementary or secondary school or school system which
is unable to file an assurance of compliance with Sec. 100.3 shall be
restored to full eligibility to receive Federal financial assistance, if
it files a court order or a plan for desegregation which meets the
requirements of Sec. 100.4(c), and provides reasonable assurance that
it will comply with the court order or plan.
    (2) Any applicant or recipient adversely affected by an order
entered

[[Page 331]]

pursuant to paragraph (f) of this section may at any time request the
responsible Department official to restore fully its eligibility to
receive Federal financial assistance. Any such request shall be
supported by information showing that the applicant or recipient has met
the requirements of paragraph (g)(1) of this section. If the responsible
Department official determines that those requirements have been
satisfied, he shall restore such eligibility.
    (3) If the responsible Department official denies any such request,
the applicant or recipient may submit a request for a hearing in
writing, specifying why it believes such official to have been in error.
It shall thereupon be given an expeditious hearing, with a decision on
the record, in accordance with rules of procedure issued by the
responsible Department official. The applicant or recipient will be
restored to such eligibility if it proves at such hearing that it
satisfied the requirements of paragraph (g)(1) of this section. While
proceedings under this paragraph are pending, the sanctions imposed by
the order issued under paragraph (f) of this section shall remain in
effect.

(Authority: Sec. 602, Civil Rights Act of 1964; 78 Stat. 252; 42 U.S.C.
2000d-1)



Sec. 100.11  Judicial review.

    Action taken pursuant to section 602 of the Act is subject to
judicial review as provided in section 603 of the Act.

(Authority: Sec. 603, 78 Stat. 253; 42 U.S.C. 2000d-2)



Sec. 100.12  Effect on other regulations; forms and instructions.

    (a) Effect on other regulations. All regulations, orders, or like
directions heretofore issued by any officer of the Department which
impose requirements designed to prohibit any discrimination against
individuals on the ground of race, color, or national origin under any
program to which this regulation applies, and which authorize the
suspension or termination of or refusal to grant or to continue Federal
financial assistance to any applicant for or recipient of assistance for
failure to comply with such requirements, are hereby superseded to the
extent that such discrimination is prohibited by this regulation, except
that nothing in this regulation shall be deemed to relieve any person of
any obligation assumed or imposed under any such superseded regulation,
order, instruction, or like direction prior to the effective date of
this regulation. Nothing in this regulation, however, shall be deemed to
supersede any of the following (including future amendments thereof):
    (1) Executive Order 11063 and regulations issued thereunder, or any
other regulations or instructions, insofar as such Order, regulations,
or instructions prohibit discrimination on the ground of race, color, or
national origin in any program or situation to which this regulation is
inapplicable, or prohibit discrimination on any other ground; or
    (2) Requirements for Emergency School Assistance as published in 35
FR 13442 and codified as 34 CFR part 280.
    (b) Forms and instructions. The responsible Department official
shall issue and promptly make available to interested persons forms and
detailed instructions and procedures for effectuating this part.
    (c) Supervision and coordination. The responsible Department
official may from time to time assign to officials of the Department, or
to officials of other departments or agencies of the Government with the
consent of such departments or agencies, responsibilities in connection
with the effectuation of the purposes of title VI of the Act and this
regulation (other than responsibility for review as provided in Sec.
100.10(e)), including the achievements of effective coordination and
maximum uniformity within the Department and within the Executive Branch
of the Government in the application of title VI and this regulation to
similar programs and in similar situations. Any action taken,
determination made, or requirement imposed by an official of another
Department or Agency acting pursuant to an assignment of responsibility
under this section shall have the same effect as though such action had
been taken by the responsible official of this Department.

(Authority: Sec. 602, Civil Rights Act of 1964; 78 Stat. 252; 42 U.S.C.
2000d-1)

[[Page 332]]



Sec. 100.13  Definitions.

    As used in this part:
    (a) The term Department means the Department of Education.
    (b) The term Secretary means the Secretary of Education.
    (c) The term responsible Department official means the Secretary or,
to the extent of any delegation by the Secretary of authority to act in
his stead under any one or more provisions of this part, any person or
persons to whom the Secretary has heretofore delegated, or to whom the
Secretary may hereafter delegate such authority.
    (d) The term reviewing authority means the Secretary, or any person
or persons (including a board or other body specially created for that
purpose and also including the responsible Department official) acting
pursuant to authority delegated by the Secretary to carry out
responsibilities under Sec. 100.10(a)-(d).
    (e) The term United States means the States of the United States,
the District of Columbia, Puerto Rico, the Virgin Islands, American
Samoa, Guam, Wake Island, the Canal Zone, and the territories and
possessions of the United States, and the term ``State'' means any one
of the foregoing.
    (f) The term Federal financial assistance includes (1) grants and
loans of Federal funds, (2) the grant or donation of Federal property
and interests in property, (3) the detail of Federal personnel, (4) the
sale and lease of, and the permission to use (on other than a casual or
transient basis), Federal property or any interest in such property
without consideration or at a nominal consideration, or at a
consideration which is reduced for the purpose of assisting the
recipient, or in recognition of the public interest to be served by such
sale or lease to the recipient, and (5) any Federal agreement,
arrangement, or other contract which has as one of its purposes the
provision of assistance.
    (g) The term program or activity and the term program mean all of
the operations of--
    (1)(i) A department, agency, special purpose district, or other
instrumentality of a State or of a local government; or
    (ii) The entity of such State or local government that distributes
such assistance and each such department or agency (and each other State
or local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
    (2)(i) A college, university, or other postsecondary institution, or
a public system of higher education; or
    (ii) A local educational agency (as defined in 20 U.S.C. 8801),
system of vocational education, or other school system;
    (3)(i) An entire corporation, partnership, or other private
organization, or an entire sole proprietorship--
    (A) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
    (ii) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
    (4) Any other entity that is established by two or more of the
entities described in paragraph (g)(1), (2), or (3) of this section; any
part of which is extended Federal financial assistance.

(Authority: 42 U.S.C. 2000d-4)

    (h) The term facility includes all or any portion of structures,
equipment, or other real or personal property or interests therein, and
the provision of facilities includes the construction, expansion,
renovation, remodeling, alteration or acquisition of facilities.
    (i) The term recipient means any State, political subdivision of any
State, or instrumentality of any State or political subdivision, any
public or private agency, institution, or organization, or other entity,
or any individual, in any State, to whom Federal financial assistance is
extended, directly or through another recipient, including any
successor, assign, or transferee thereof, but such term does not include
any ultimate beneficiary.

[[Page 333]]

    (j) The term primary recipient means any recipient which is
authorized or required to extend Federal financial assistance to another
recipient.
    (k) The term applicant means one who submits an application,
request, or plan required to be approved by a Department official, or by
a primary recipient, as a condition to eligibility for Federal financial
assistance, and the term application means such an application, request,
or plan.

(Authority: Sec. 602, Civil Rights Act of 1964; 78 Stat. 252; 42 U.S.C.
2000d-1)

[45 FR 30918, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. Appendix A to Part 100--Federal Financial Assistance to Which These
                            Regulations Apply

      Part 1--Assistance Other Than Continuing Assistance to States

    1. Loans for acquisition of equipment for academic subjects, and for
minor remodeling (20 U.S.C. 445).
    2. Construction of facilities for institutions of higher education
(20 U.S.C. 701-758).
    3. School Construction in federally-affected and in major disaster
areas (20 U.S.C. 631-647).
    4. Construction of educational broadcast facilities (47 U.S.C. 390-
399).
    5. Loan service of captioned films and educational media; research
on, and production and distribution of, educational media for the
handicapped, and training of persons in the use of such media for the
handicapped (20 U.S.C. 1452).
    6. Demonstration residential vocational education schools (20 U.S.C.
1321).
    7. Research and related activities in education of handicapped
children (20 U.S.C. 1441).
    8. Educational research, dissemination and demonstration projects;
research training; and construction under the Cooperation Research Act
(20 U.S.C. 331-332(b)).
    9. Research in teaching modern foreign languages (20 U.S.C. 512).
    10. Training projects for manpower development and training (42
U.S.C. 2601, 2602, 2610a-2610c).
    11. Research and training projects in Vocational Education (20
U.S.C. 1281(a), 1282-1284).
    12. Allowances to institutions training NDEA graduate fellows (20
U.S.C. 461-465).
    13. Grants for training in librarianship (20 U.S.C. 1031-1033).
    14. Grants for training personnel for the education of handicapped
children (20 U.S.C. 1431).
    15. Allowances for institutions training teachers and related
educational personnel in elementary and secondary education, or post-
secondary vocational education (20 U.S.C. 1111-1118).
    16. Recruitment, enrollment, training and assignment of Teacher
Corps personnel (20 U.S.C. 1101-1107a).
    17. Operation and maintenance of schools in Federally-affected and
in major disaster areas (20 U.S.C. 236-241; 241-1; 242-244).
    18. Grants or contracts for the operation of training institutes for
elementary or secondary school personnel to deal with special
educational problems occasioned by desegregation (42 U.S.C. 2000c-3).
    19. Grants for in-service training of teachers and other schools
personnel and employment of specialists in desegregation problems (42
U.S.C. 2000c-4).
    20. Higher education students loan program (Title II, National
Defense Education Act, 20 U.S.C. 421-429).
    21. Educational Opportunity grants and assistance for State and
private programs of low-interest insured loans and State loans to
students in institutions of higher education (Title IV, Higher Education
Act of 1965, 20 U.S.C. 1061-1087).
    22. Grants and contracts for the conduct of Talent Search, Upward
Bound, and Special Services Programs (20 U.S.C. 1068).
    23. Land-grant college aid (7 U.S.C. 301-308; 321-326; 328-331).
    24. Language and area centers (Title VI, National Defense Education
Act, 20 U.S.C. 511).
    25. American Printing House for the Blind (20 U.S.C. 101-105).
    26. Future Farmers of America (36 U.S.C. 271-391) and similar
programs.
    27. Science clubs (Pub. L. 85-875, 20 U.S.C. 2, note).
    28. Howard University (20 U.S.C. 121-129).
    29. Gallaudet College (31 D.C. Code, Chapter 10).
    30. Establishment and operation of a model secondary school for the
deaf by Gallaudet College (31 D.C. Code 1051-1053; 80 Stat. 1027-1028).
    31. Faculty development programs, workshops and institutes (20
U.S.C. 1131-1132).
    32. National Technical Institute for the Deaf (20 U.S.C. 681-685).
    33. Institutes and other programs for training educational personnel
(parts D, E, and F, Title V, Higher Education Act of 1965) (20 U.S.C.
1119-1119c-4).
    34. Grants and contracts for research and demonstration projects in
librarianship (20 U.S.C. 1034).
    35. Acquisition of college library resources (20 U.S.C. 1021-1028).
    36. Grants for strengthening developing institutions of higher
education (20 U.S.C. 1051-1054); National Fellowships for teaching at
developing institutions (20 U.S.C. 1055), and grants to retired
professors to teach at developing institutions (20 U.S.C. 1056).

[[Page 334]]

    37. College Work-Study Program (42 U.S.C. 2751-2757).
    38. Financial assistance for acquisition of higher education
equipment, and minor remodeling (20 U.S.C. 1121-1129).
    39. Grants for special experimental demonstration projects and
teacher training in adult education (20 U.S.C. 1208).
    40. Grant programs for advanced and undergraduate international
studies (20 U.S.C. 1171-1176; 22 U.S.C. 2452(b)).
    41. Experimental projects for developing State leadership or
establishment of special services (20 U.S.C. 865).
    42. Grants to and arrangements with State educational and other
agencies to meet special educational needs of migratory children of
migratory agricultural workers (20 U.S.C. 241e(c)).
    43. Grants by the Secretary to local educational agencies for
supplementary educational centers and services; guidance, counseling,
and testing (20 U.S.C. 841-844; 844b).
    44. Resource centers for improvement of education of handicapped
children (20 U.S.C. 1421) and centers and services for deaf-blind
children (20 U.S.C. 1422).
    45. Recruitment of personnel and dissemination of information on
education of handicapped (20 U.S.C. 1433).
    46. Grants for research and demonstrations relating to physical
education or recreation for handicapped children (20 U.S.C. 1442) and
training of physical educators and recreation personnel (20 U.S.C.
1434).
    47. Dropout prevention projects (20 U.S.C. 887).
    48. Bilingual education programs (20 U.S.C. 880b-880b-6).
    49. Grants to agencies and organizations for Cuban refugees (22
U.S.C. 2601(b)(4)).
    50. Grants and contracts for special programs for children with
specific learning disabilities including research and related
activities, training and operating model centers (20 U.S.C. 1461).
    51. Curriculum development in vocational and technical education (20
U.S.C. 1391).
    52. Establishment, including construction, and operation of a
National Center on Educational Media and Materials for the Handicapped
(20 U.S.C. 1453).
    53. Grants and contracts for the development and operation of
experimental preschool and early education programs for handicapped (20
U.S.C. 1423).
    54. Grants to public or private non-profit agencies to carry on the
Follow Through Program in kindergarten and elementary schools (42 U.S.C.
2809 (a)(2)).
    55. Grants for programs of cooperative education and grants and
contracts for training and research in cooperative education (20 U.S.C.
1087a-1087c).
    56. Grants and contracts to encourage the sharing of college
facilities and resources (network for knowledge) (20 U.S.C. 1133-
1133b).
    57. Grants, contracts, and fellowships to improve programs preparing
persons for public service and to attract students to public service (20
U.S.C. 1134-1134b).
    58. Grants for the improvement of graduate programs (20 U.S.C. 1135-
1135c).
    59. Contracts for expanding and improving law school clinical
experience programs (20 U.S.C. 1136-1136b).
    60. Exemplary programs and projects in vocational education (20
U.S.C. 1301-1305).
    61. Grants to reduce borrowing cost for construction of residential
schools and dormitories (20 U.S.C. 1323).
    62. Surplus real and related personal property disposal for
educational purposes (40 U.S.C. 484(k)).

                 Part 2--Continuing Assistance to States

    1. Grants to States for public library service and construction,
interlibrary cooperation and specialized State library services for
certain State institutions and the physically handicapped (20 U.S.C.
351-355).
    2. Grants to States for strengthening instruction in academic
subjects (20 U.S.C. 441-444).
    3. Grants to States for vocational education (20 U.S.C. 1241-1264).
    4. Arrangements with State education agencies for training under the
Manpower Development and Training Act (42 U.S.C. 2601-2602, 2610a).
    5. Grants to States to assist in the elementary and secondary
education of children of low-income families (20 U.S.C. 241a-242m).
    6. Grants to States to provide for school library resources,
textbooks and other instructional materials for pupils and teachers in
elementary and secondary schools (20 U.S.C. 821-827).
    7. Grants to States to strengthen State departments of education (20
U.S.C. 861-870).
    8. Grants to States for community service programs (20 U.S.C. 1001-
1011).
    9. Grants to States for adult basic education and related research,
teacher training and special projects (20 U.S.C. 1201-1211).
    10. Grants to States educational agencies for supplementary
educational centers and services, and guidance, counseling and testing
(20 U.S.C. 841-847).
    11. Grants to States for research and training in vocational
education (20 U.S.C. 1281(b)).
    12. Grants to States for exemplary programs and projects in
vocational education (20 U.S.C. 1301-1305).
    13. Grants to States for residential vocational education schools
(20 U.S.C. 1321).
    14. Grants to States for consumer and homemaking education (20
U.S.C. 1341).
    15. Grants to States for cooperative vocational educational program
(20 U.S.C. 1351-1355).

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    16. Grants to States for vocational work-study programs (20 U.S.C.
1371-1374).
    17. Grants to States to attract and qualify teachers to meet
critical teaching shortages (20 U.S.C. 1108-1110c).
    18. Grants to States for education of handicapped children (20
U.S.C. 1411-1414).
    19. Grants for administration of State plans and for comprehensive
planning to determine construction needs of institutions of higher
education (20 U.S.C. 715(b)).

[45 FR 30918, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



 Sec. Appendix B to Part 100--Guidelines for Eliminating Discrimination
  and Denial of Services on the Basis of Race, Color, National Origin,
           Sex, and Handicap in Vocational Education Programs

                          I. Scope and Coverage

                      A. Application of Guidelines

    These Guidelines apply to recipients of any Federal financial
assistance from the Department of Education that offer or administer
programs of vocational education or training. This includes State agency
recipients.

                       B. Definition of Recipient

    The definition of recipient of Federal financial assistance is
established by Department regulations implementing Title VI, Title IX,
and Section 504 (34 CFR 100.13(i), 106.2(h), 104.3(f).
    For the purposes of Title VI:
    The term recipient means any State, political subdivision of any
State, or instrumentality of any State or political subdivision, any
public or private agency, institution, or organization, or other entity,
or any individual, in any State, to whom Federal financial assistance is
extended, directly or through another recipient, for any program,
including any successor, assignee, or transferee thereof, but such terms
does not include any ultimate beneficiary [e.g., students] under any
such program. (34 CFR 100.13(i)).
    For the purposes of Title IX:
    Recipient means any State or political subdivision thereof, or any
instrumentality of a State or political subdivision thereof, any public
or private agency, institution, or organization, or other entity, or any
person to whom Federal financial assistance is extended, directly or
through another recipient and which operates an education program or
activity which receives or benefits from such assistance, including any
subunit, successor, assignee, or transferee thereof. (34 CFR 106.2(h)).
    For the purposes of Section 504:
    Recipient means any State or its political subdivision any
instrumentality of a State or its political subdivision, any public or
private agency, institution, or organization, or other entity, or any
person to which Federal financial assistance is extended, directly or
through another recipient, including any successor, assignee, or
transferee of a recipient, but excluding the ultimate beneficiary of the
assistance. (34 CFR 104.3(f)).

          C. Examples of Recipients Covered by These Guidelines

    The following education agencies, when they provide vocational
education, are examples of recipients covered by these Guidelines:
    1. The board of education of a public school district and its
administrative agency.
    2. The administrative board of a specialized vocational high school
serving students from more than one school district.
    3. The administrative board of a technical or vocational school that
is used exclusively or principally for the provision of vocational
education to persons who have completed or left high school (including
persons seeking a certificate or an associate degree through a
vocational program offered by the school) and who are available for
study in preparation for entering the labor market.
    4. The administrative board of a postsecondary institution, such as
a technical institute, skill center, junior college, community college,
or four year college that has a department or division that provides
vocational education to students seeking immediate employment, a
certificate or an associate degree.
    5. The administrative board of a proprietary (private) vocational
education school.
    6. A State agency recipient itself operating a vocational education
facility.

         D. Examples of Schools to Which These Guidelines Apply

    The following are examples of the types of schools to which these
Guidelines apply.
    1. A junior high school, middle school, or those grades of a
comprehensive high school that offers instruction to inform, orient, or
prepare students for vocational education at the secondary level.
    2. A vocational education facility operated by a State agency.
    3. A comprehensive high school that has a department exclusively or
principally used for providing vocational education; or that offers at
least one vocational program to secondary level students who are
available for study in preparation for entering the labor market; or
that offers adult vocational education to persons who have completed or
left high school and who are available for study in preparation for
entering the labor market.

[[Page 336]]

    4. A comprehensive high school, offering the activities described
above, that receives students on a contract basis from other school
districts for the purpose of providing vocational education.
    5. A specialized high school used exclusively or principally for the
provision of vocational education, that enrolls students form one or
more school districts for the purpose of providing vocational education.
    6. A technical or vocational school that primarily provides
vocational education to persons who have completed or left high school
and who are available for study in preparation for entering the labor
market, including students seeking an associate degree or certificate
through a course of vocational instruction offered by the school.
    7. A junior college, a community college, or four-year college that
has a department or division that provides vocational education to
students seeking immediate employment, an associate degree or a
certificate through a course of vocational instruction offered by the
school.
    8. A proprietary school, licensed by the State that offers
vocational education.

    Note: Subsequent sections of these Guidelines may use the term
secondary vocational education center in referring to the institutions
described in paragraphs 3, 4 and 5 above or the term postsecondary
vocational education center in referring to institutions described in
paragraphs 6 and 7 above or the term vocational education center in
referring to any or all institutions described above.

      II. Responsibilities Assigned Only to State Agency Recipients

           A. Responsibilities of All State Agency Recipients

    State agency recipients, in addition to complying with all other
provisions of the Guidelines relevant to them, may not require, approve
of, or engage in any discrimination or denial of services on the basis
of race, color, national origin, sex, or handicap in performing any of
the following activities:
    1. Establishment of criteria or formulas for distribution of Federal
or State funds to vocational education programs in the State;
    2. Establishment of requirements for admission to or requirements
for the administration of vocational education programs;
    3. Approval of action by local entities providing vocational
education. (For example, a State agency must ensure compliance with
Section IV of these Guidelines if and when it reviews a vocational
education agency decision to create or change a geographic service
area.);
    4. Conducting its own programs. (For example, in employing its staff
it may not discriminate on the basis of sex or handicap.)

         B. State Agencies Performing Oversight Responsibilities

    The State agency responsible for the administration of vocational
education programs must adopt a compliance program to prevent, identify
and remedy discrimination on the basis of race, color, national origin,
sex or handicap by its subrecipients. (A ``subrecipient,'' in this
context, is a local agency or vocational education center that receives
financial assistance through a State agency.) This compliance program
must include:
    1. Collecting and analyzing civil rights related data and
information that subrecipients compile for their own purposes or that
are submitted to State and Federal officials under existing authorities;
    2. Conducting periodic compliance reviews of selected subrecipients
(i.e., an investigation of a subrecipient to determine whether it
engages in unlawful discrimination in any aspect of its program); upon
finding unlawful discrimination, notifying the subrecipient of steps it
must take to attain compliance and attempting to obtain voluntary
compliance;
    3. Providing technical assistance upon request to subrecipients.
This will include assisting subrecipients to identify unlawful
discrimination and instructing them in remedies for and prevention of
such discrimination;
    4. Periodically reporting its activities and findings under the
foregoing paragraphs, including findings of unlawful discrimination
under paragraph 2, immediately above, to the Office for Civil Rights.
    State agencies are not required to terminate or defer assistance to
any subrecipient. Nor are they required to conduct hearings. The
responsibilities of the Office for Civil Rights to collect and analyze
data, to conduct compliance reviews, to investigate complaints and to
provide technical assistance are not diminished or attenuated by the
requirements of Section II of the Guidelines.

                C. Statement of Procedures and Practices

    Within one year from the publication of these Guidelines in final
form, each State agency recipient performing oversight responsibilities
must submit to the Office for Civil Rights the methods of administration
and related procedures it will follow to comply with the requirements
described in paragraphs A and B immediately above. The Department will
review each submission and will promptly either approve it, or return it
to State officials for revision.

[[Page 337]]

 III. Distribution of Federal Financial Assistance and Other Funds for
                          Vocational Education

                       A. Agency Responsibilities

    Recipients that administer grants for vocational education must
distribute Federal, State, or local vocational education funds so that
no student or group of students is unlawfully denied an equal
opportunity to benefit from vocational education on the basis of race,
color, national origin, sex, or handicap.

                        B. Distribution of Funds

    Recipients may not adopt a formula or other method for the
allocation of Federal, State, or local vocational education funds that
has the effect of discriminating on the basis of race, color, national
origin, sex, or handicap. However, a recipient may adopt a formula or
other method of allocation that uses as a factor race, color, national
origin, sex, or handicap [or an index or proxy for race, color, national
origin, sex, or handicap e.g., number of persons receiving Aid to
Families with Dependent Children or with limited English speaking
ability] if the factor is included to compensate for past discrimination
or to comply with those provisions of the Vocational Education
Amendments of 1976 designed to assist specified protected groups.

       C. Example of a Pattern Suggesting Unlawful Discrimination

    In each State it is likely that some local recipients will enroll
greater proportions of minority students in vocational education than
the State-wide proportion of minority students in vocational education.
A funding formula or other method of allocation that results in such
local recipients receiving per-pupil allocations of Federal or State
vocational education funds lower than the State-wide average per-pupil
allocation will be presumed unlawfully discriminatory.

         D. Distribution Through Competitive Grants or Contracts

    Each State agency that establishes criteria for awarding competitive
vocational education grants or contracts must establish and apply the
criteria without regard to the race, color, national origin, sex, or
handicap of any or all of a recipient's students, except to compensate
for past discrimination.

    E. Application Processes for Competitive or Discretionary Grants

    State agencies must disseminate information needed to satisfy the
requirements of any application process for competitive or discretionary
grants so that all recipients, including those having a high percentage
of minority or handicapped students, are informed of and able to seek
funds. State agencies that provide technical assistance for the
completion of the application process must provide such assistance
without discrimination against any one recipient or class of recipients.

     F. Alteration of Fund Distribution to Provide Equal Opportunity

    If the Office for Civil Rights finds that a recipient's system for
distributing vocational education funds unlawfully discriminates on the
basis of race, color, national origin, sex, or handicap, it will require
the recipient to adopt an alternative nondiscriminatory method of
distribution. The Office for Civil Rights may also require the recipient
to compensate for the effects of its past unlawful discrimination in the
distribution of funds.

  IV. Access and Admission of Students to Vocational Education Programs

                      A. Recipient Responsibilities

    Criteria controlling student eligibility for admission to vocational
education schools, facilities and programs may not unlawfully
discriminate on the basis of race, color, national origin, sex, or
handicap. A recipient may not develop, impose, maintain, approve, or
implement such discriminatory admissions criteria.

                B. Site Selection for Vocational Schools

    State and local recipients may not select or approve a site for a
vocational education facility for the purpose or with the effect of
excluding, segregating, or otherwise discriminating against students on
the basis of race, color, or national origin. Recipients must locate
vocational education facilities at sites that are readily accessible to
both nonminority and minority communities, and that do not tend to
identify the facility or program as intended for nonminority or minority
students.

 C. Eligibility for Admission to Vocational Education Centers Based on
                                Residence

    Recipients may not establish, approve or maintain geographic
boundaries for a vocational education center service area or attendance
zone, (hereinafter ``service area''), that unlawfully exclude students
on the basis of race, color, or national origin. The Office for Civil
Rights will presume, subject to rebuttal, that any one or combination of
the following circumstances indicates that the boundaries of a given
service area are unlawfully constituted:
    1. A school system or service area contiguous to the given service
area, contains minority or nonminority students in substantially greater
proportion than the given service area;

[[Page 338]]

    2. A substantial number of minority students who reside outside the
given vocational education center service area, and who are not eligible
for the center reside, nonetheless, as close to the center as a
substantial number of non-minority students who are eligible for the
center;
    3. The over-all vocational education program of the given service
area in comparison to the over-all vocational education program of a
contiguous school system or service area enrolling a substantially
greater proportion of minority students:
    (a) Provides its students with a broader range of curricular
offerings, facilities and equipment; or (b) provides its graduates
greater opportunity for employment in jobs:
    (i) For which there is a demonstrated need in the community or
region; (ii) that pay higher entry level salaries or wages; or (iii)
that are generally acknowledged to offer greater prestige or status.

D. Additions and Renovations to Existing Vocational Education Facilities

    A recipient may not add to, modify, or renovate the physical plant
of a vocational education facility in a manner that creates, maintains,
or increases student segregation on the basis of race, color, national
origin, sex, or handicap.

E. Remedies for Violations of Site Selection and Geographic Service Area
                              Requirements

    If the conditions specified in paragraphs IV, A, B, C, or D,
immediately above, are found and not rebutted by proof of
nondiscrimination, the Office for Civil Rights will require the
recipient(s) to submit a plan to remedy the discrimination. The
following are examples of steps that may be included in the plan, where
necessary to overcome the discrimination:
    (1) Redrawing of the boundaries of the vocational education center's
service area to include areas unlawfully excluded and/or to exclude
areas unlawfully included; (2) provision of transportation to students
residing in areas unlawfully excluded; (3) provision of additional
programs and services to students who would have been eligible for
attendance at the vocational education center but for the discriminatory
service area or site selection; (4) reassignment of students; and (5)
construction of new facilities or expansion of existing facilities.

 F. Eligibility for Admission to Secondary Vocational Education Centers
          Based on Numerical Limits Imposed on Sending Schools

    A recipient may not adopt or maintain a system for admission to a
secondary vocational education center or program that limits admission
to a fixed number of students from each sending school included in the
center's service area if such a system disproportionately excludes
students from the center on the basis of race, sex, national origin or
handicap. (Example: Assume 25 percent of a school district's high school
students are black and that most of those black students are enrolled in
one high school; the white students, 75 percent of the district's total
enrollment, are generally enrolled in the five remaining high schools.
This paragraph prohibits a system of admission to the secondary
vocational education center that limits eligibility to a fixed and equal
number of students from each of the district's six high schools.)

   G. Remedies for Violation of Eligibility Based on Numerical Limits
                              Requirements

    If the Office for Civil Rights finds a violation of paragraph F,
above, the recipient must implement an alternative system of admissions
that does not disproportionately exclude students on the basis of race,
color, national origin, sex, or handicap.

 H. Eligibility for Admission to Vocational Education Centers, Branches
                  or Annexes Based Upon Student Option

    A vocational education center, branch or annex, open to all students
in a service area and predominantly enrolling minority students or
students of one race, national origin or sex, will be presumed
unlawfully segregated if:
    (1) It was established by a recipient for members of one race,
national origin or sex; or (2) it has since its construction been
attended primarily by members of one race, national origin or sex; or
(3) most of its program offerings have traditionally been selected
predominantly by members of one race, national origin or sex.

     I. Remedies for Facility Segregation Under Student Option Plans

    If the conditions specified in paragraph IV-H are found and not
rebutted by proof of nondiscrimination, the Office for Civil Rights will
require the recipient(s) to submit a plan to remedy the segregation. The
following are examples of steps that may be included in the plan, where
necessary to overcome the discrimination:
    (1) Elimination of program duplication in the segregated facility
and other proximate vocational facilities; (2) relocation or
``clustering'' of programs or courses; (3) adding programs and courses
that traditionally have been identified as intended for members of a
particular race, national origin or sex to schools that have
traditionally served members of the other sex or traditionally served
persons of a different race or national origin; (4) merger of programs
into one facility through school closings or new construction;

[[Page 339]]

(5) intensive outreach recruitment and counseling; (6) providing free
transportation to students whose enrollment would promote desegregation.

                              J. [Reserved]

 K. Eligibility Based on Evaluation of Each Applicant Under Admissions
                                Criteria

    Recipients may not judge candidates for admission to vocational
education programs on the basis of criteria that have the effect of
disproportionately excluding persons of a particular race, color,
national origin, sex, or handicap. However, if a recipient can
demonstrate that such criteria have been validated as essential to
participation in a given program and that alternative equally valid
criteria that do not have such a disproportionate adverse effect are
unavailable, the criteria will be judged nondiscriminatory. Examples of
admissions criteria that must meet this test are past academic
performance, record of disciplinary infractions, counselors' approval,
teachers' recommendations, interest inventories, high school diplomas
and standardized tests, such as the Test of Adult Basic Education
(TABE).
    An introductory, preliminary, or exploratory course may not be
established as a prerequisite for admission to a program unless the
course has been and is available without regard to race, color, national
origin, sex, and handicap. However, a course that was formerly only
available on a discriminatory basis may be made a prerequisite for
admission to a program if the recipient can demonstrate that:
    (a) The course is essential to participation in the program; and (b)
the course is presently available to those seeking enrollment for the
first time and to those formerly excluded.

L. Eligibility of National Origin Minority Persons With Limited English
                             Language Skills

    Recipients may not restrict an applicant's admission to vocational
education programs because the applicant, as a member of a national
origin minority with limited English language skills, cannot participate
in and benefit from vocational instruction to the same extent as a
student whose primary language is English. It is the responsibility of
the recipient to identify such applicants and assess their ability to
participate in vocational instruction.
    Acceptable methods of identification include: (1) Identification by
administrative staff, teachers, or parents of secondary level students;
(2) identification by the student in postsecondary or adult programs;
and (3) appropriate diagnostic procedures, if necessary.
    Recipients must take steps to open all vocational programs to these
national origin minority students. A recipient must demonstrate that a
concentration of students with limited English language skills in one or
a few programs is not the result of discriminatory limitations upon the
opportunities available to such students.

 M. Remedial Action in Behalf of Persons With Limited English Language
                                 Skills

    If the Office for Civil Rights finds that a recipient has denied
national origin minority persons admission to a vocational school or
program because of their limited English language skills or has assigned
students to vocational programs solely on the basis of their limited
English language skills, the recipient will be required to submit a
remedial plan that insures national origin minority students equal
access to vocational education programs.

                N. Equal Access for Handicapped Students

    Recipients may not deny handicapped students access to vocational
education programs or courses because of architectural or equipment
barriers, or because of the need for related aids and services or
auxiliary aids. If necessary, recipients must:
    (1) Modify instructional equipment; (2) modify or adapt the manner
in which the courses are offered; (3) house the program in facilities
that are readily accessible to mobility impaired students or alter
facilities to make them readily accessible to mobility impaired
students; and (4) provide auxiliary aids that effectively make lectures
and necessary materials available to postsecondary handicapped students;
(5) provide related aids or services that assure secondary students an
appropriate education.
    Academic requirements that the recipient can demonstrate are
essential to a program of instruction or to any directly related
licensing requirement will not be regarded as discriminatory. However,
where possible, a recipient must adjust those requirements to the needs
of individual handicapped students.
    Access to vocational programs or courses may not be denied
handicapped students on the ground that employment opportunities in any
occupation or profession may be more limited for handicapped persons
than for non-handicapped persons.

                         O. Public Notification

    Prior to the beginning of each school year, recipients must advise
students, parents, employees and the general public that all vocational
opportunities will be offered without regard to race, color, national
origin, sex, or handicap. Announcement of this policy of

[[Page 340]]

non-discrimination may be made, for example, in local newspapers,
recipient publications and/or other media that reach the general public,
program beneficiaries, minorities (including national origin minorities
with limited English language skills), women, and handicapped persons. A
brief summary of program offerings and admission criteria should be
included in the announcement; also the name, address and telephone
number of the person designated to coordinate Title IX and Section 504
compliance activity.
    If a recipient's service area contains a community of national
origin minority persons with limited English language skills, public
notification materials must be disseminated to that community in its
language and must state that recipients will take steps to assure that
the lack of English language skills will not be a barrier to admission
and participation in vocational education programs.

                V. Counseling and Prevocational Programs

                      A. Recipient Responsibilities

    Recipients must insure that their counseling materials and
activities (including student program selection and career/employment
selection), promotional, and recruitment efforts do not discriminate on
the basis of race, color, national origin, sex, or handicap.

                 B. Counseling and Prospects for Success

    Recipients that operate vocational education programs must insure
that counselors do not direct or urge any student to enroll in a
particular career or program, or measure or predict a student's
prospects for success in any career or program based upon the student's
race, color, national origin, sex, or handicap. Recipients may not
counsel handicapped students toward more restrictive career objectives
than nonhandicapped students with similar abilities and interests. If a
vocational program disproportionately enrolls male or female students,
minority or nonminority students, or handicapped students, recipients
must take steps to insure that the disproportion does not result from
unlawful discrimination in counseling activities.

                    C. Student Recruitment Activities

    Recipients must conduct their student recruitment activities so as
not to exclude or limit opportunities on the basis of race, color,
national origin, sex, or handicap. Where recruitment activities involve
the presentation or portrayal of vocational and career opportunities,
the curricula and programs described should cover a broad range of
occupational opportunities and not be limited on the basis of the race,
color, national origin, sex, or handicap of the students or potential
students to whom the presentation is made. Also, to the extent possible,
recruiting teams should include persons of different races, national
origins, sexes, and handicaps.

   D. Counseling of Students With Limited English-Speaking Ability or
                           Hearing Impairments

    Recipients must insure that counselors can effectively communicate
with national origin minority students with limited English language
skills and with students who have hearing impairments. This requirement
may be satisfied by having interpreters available.

                        E. Promotional Activities

    Recipients may not undertake promotional efforts (including
activities of school officials, counselors, and vocational staff) in a
manner that creates or perpetuates stereotypes or limitations based on
race, color, national origin, sex or handicap. Examples of promotional
efforts are career days, parents' night, shop demonstrations,
visitations by groups of prospective students and by representatives
from business and industry. Materials that are part of promotional
efforts may not create or perpetuate stereotypes through text or
illustration. To the extent possible they should portray males or
females, minorities or handicapped persons in programs and occupations
in which these groups traditionally have not been represented. If a
recipient's service area contains a community of national origin
minority persons with limited English language skills, promotional
literature must be distributed to that community in its language.

 VI. Equal Opportunity in the Vocational Education Instructional Setting

               A. Accommodations For Handicapped Students

    Recipients must place secondary level handicapped students in the
regular educational environment of any vocational education program to
the maximum extent appropriate to the needs of the student unless it can
be demonstrated that the education of the handicapped person in the
regular environment with the use of supplementary aids and services
cannot be achieved satisfactorily. Handicapped students may be placed in
a program only after the recipient satisfies the provisions of the
Department's Regulation, 34 CFR, part 104, relating to evaluation,
placement, and procedural safeguards. If a separate class or facility is
identifiable as being for handicapped persons, the facility, the
programs, and the services must be comparable to the facilities,
programs, and services offered to nonhandicapped students.

[[Page 341]]

                     B. Student Financial Assistance

    Recipients may not award financial assistance in the form of loans,
grants, scholarships, special funds, subsidies, compensation for work,
or prizes to vocational education students on the basis of race, color,
national origin, sex, or handicap, except to overcome the effects of
past discrimination. Recipients may administer sex restricted financial
assistance where the assistance and restriction are established by will,
trust, bequest, or any similar legal instrument, if the overall effect
of all financial assistance awarded does not discriminate on the basis
of sex. Materials and information used to notify students of
opportunities for financial assistance may not contain language or
examples that would lead applicants to believe the assistance is
provided on a discriminatory basis. If a recipient's service area
contains a community of national origin minority persons with limited
English language skills, such information must be disseminated to that
community in its language.

  C. Housing In Residential Postsecondary Vocational Education Centers

    Recipients must extend housing opportunities without discrimination
based on race, color, national origin, sex, or handicap. This obligation
extends to recipients that provide on-campus housing and/or that have
agreements with providers of off-campus housing. In particular, a
recipient postsecondary vocational education program that provides on-
campus or off-campus housing to its nonhandicapped students must
provide, at the same cost and under the same conditions, comparable
convenient and accessible housing to handicapped students.

                        D. Comparable Facilities

    Recipients must provide changing rooms, showers, and other
facilities for students of one sex that are comparable to those provided
to students of the other sex. This may be accomplished by alternating
use of the same facilities or by providing separate, comparable
facilities.
    Such facilities must be adapted or modified to the extent necessary
to make the vocational education program readily accessible to
handicapped persons.

 VII. Work Study, Cooperative Vocational Education, Job Placement, and
                           Apprentice Training

 A. Responsibilities in Cooperative Vocational Education Programs, Work-
               Study Programs, and Job Placement Programs

    A recipient must insure that: (a) It does not discriminate against
its students on the basis of race, color, national origin, sex, or
handicap in making available opportunities in cooperative education,
work study and job placement programs; and (b) students participating in
cooperative education, work study and job placement programs are not
discriminated against by employers or prospective employers on the basis
of race, color, national origin, sex, or handicap in recruitment,
hiring, placement, assignment to work tasks, hours of employment, levels
of responsibility, and in pay.
    If a recipient enters into a written agreement for the referral or
assignment of students to an employer, the agreement must contain an
assurance from the employer that students will be accepted and assigned
to jobs and otherwise treated without regard to race, color, national
origin, sex, or handicap.
    Recipients may not honor any employer's request for students who are
free of handicaps or for students of a particular race, color, national
origin, or sex. In the event an employer or prospective employer is or
has been subject to court action involving discrimination in employment,
school officials should rely on the court's findings if the decision
resolves the issue of whether the employer has engaged in unlawful
discrimination.

                     B. Apprentice Training Programs

    A recipient may not enter into any agreement for the provision or
support of apprentice training for students or union members with any
labor union or other sponsor that discriminates against its members or
applicants for membership on the basis of race, color, national origin,
sex, or handicap. If a recipient enters into a written agreement with a
labor union or other sponsor providing for apprentice training, the
agreement must contain an assurance from the union or other sponsor:
    (1) That it does not engage in such discrimination against its
membership or applicants for membership; and (2) that apprentice
training will be offered and conducted for its membership free of such
discrimination.

                  VIII. Employment of Faculty and Staff

                         A. Employment Generally

    Recipients may not engage in any employment practice that
discriminates against any employee or applicant for employment on the
basis of sex or handicap. Recipients may not engage in any employment
practice that discriminates on the basis of race, color, or national
origin if such discrimination tends to result in segregation, exclusion
or other discrimination against students.

                             B. Recruitment

    Recipients may not limit their recruitment for employees to schools,
communities, or companies disproportionately composed of

[[Page 342]]

persons of a particular race, color, national origin, sex, or handicap
except for the purpose of overcoming the effects of past discrimination.
Every source of faculty must be notified that the recipient does not
discriminate in employment on the basis of race, color, national origin,
sex, or handicap.

                      C. Patterns Of Discrimination

    Whenever the Office for Civil Rights finds that in light of the
representation of protected groups in the relevant labor market there is
a significant underrepresentation or overrepresentation of protected
group persons on the staff of a vocational education school or program,
it will presume that the disproportion results from unlawful
discrimination. This presumption can be overcome by proof that qualified
persons of the particular race, color, national origin, or sex, or that
qualified handicapped persons are not in fact available in the relevant
labor market.

                           D. Salary Policies

    Recipients must establish and maintain faculty salary scales and
policy based upon the conditions and responsibilities of employment,
without regard to race, color, national origin, sex or handicap.

         E. Employment Opportunities For Handicapped Applicants

    Recipients must provide equal employment opportunities for teaching
and administrative positions to handicapped applicants who can perform
the essential functions of the position in question. Recipients must
make reasonable accommodation for the physical or mental limitations of
handicapped applicants who are otherwise qualified unless recipients can
demonstrate that the accommodation would impose an undue hardship.

                  F. The Effects Of Past Discrimination

    Recipients must take steps to overcome the effects of past
discrimination in the recruitment, hiring, and assignment of faculty.
Such steps may include the recruitment or reassignment of qualified
persons of a particular race, national origin, or sex, or who are
handicapped.

       G. Staff Of State Advisory Councils Of Vocational Education

    State Advisory Councils of Vocational Education are recipients of
Federal financial assistance and therefore must comply with Section VIII
of the Guidelines.

  H. Employment at State Operated Vocational Education Centers Through
                     State Civil-Service Authorities

    Where recruitment and hiring of staff for State operated vocational
education centers is conducted by a State civil service employment
authority, the State education agency operating the program must insure
that recruitment and hiring of staff for the vocational education center
is conducted in accordance with the requirements of these Guidelines.

              IX. Proprietary Vocational Education Schools

                      A. Recipient Responsibilities

    Proprietary vocational education schools that are recipients of
Federal financial assistance through Federal student assistance programs
or otherwise are subject to all of the requirements of the Department's
regulations and these Guidelines.

                        B. Enforcement Authority

    Enforcement of the provisions of Title IX of the Education
Amendments of 1972 and Section 504 of the Rehabilitation Act of 1973 is
the responsibility of the Department of Education. However, authority to
enforce Title VI of the Civil rights Act of 1964 for proprietary
vocational education schools has been delegated to the Veterans
Administration.
    When the Office for Civil Rights receives a Title VI complaint
alleging discrimination by a proprietary vocational education school it
will forward the complaint to the Veterans Administration and cite the
applicable requirements of the Department's regulations and these
Guidelines. The complainant will be notified of such action.

[45 FR 30918, May 9, 1980; 45 FR 37426, June 3, 1980]



PART 101_PRACTICE AND PROCEDURE FOR HEARINGS UNDER PART 100 OF THIS
TITLE--Table of Contents



                      Subpart A_General Information

Sec.
101.1 Scope of rules.
101.2 Records to be public.
101.3 Use of gender and number.
101.4 Suspension of rules.

                    Subpart B_Appearance and Practice

101.11 Appearance.
101.12 Authority for representation.
101.13 Exclusion from hearing for misconduct.

                            Subpart C_Parties

101.21 Parties.
101.22 Amici curiae.
101.23 Complainants not parties.

[[Page 343]]

       Subpart D_Form, Execution, Service and Filing of Documents

101.31 Form of documents to be filed.
101.32 Signature of documents.
101.33 Filing and service.
101.34 Service--how made.
101.35 Date of service.
101.36 Certificate of service.

                             Subpart E_Time

101.41 Computation.
101.42 Extension of time or postponement.
101.43 Reduction of time to file documents.

                 Subpart F_Proceedings Prior to Hearing

101.51 Notice of hearing or opportunity for hearing.
101.52 Answer to notice.
101.53 Amendment of notice or answer.
101.54 Request for hearing.
101.55 Consolidation.
101.56 Motions.
101.57 Responses to motions and petitions.
101.58 Disposition of motions and petitions.

       Subpart G_Responsibilities and Duties of Presiding Officer

101.61 Who presides.
101.62 Designation of hearing examiner.
101.63 Authority of presiding officer.

                      Subpart H_Hearing Procedures

101.71 Statement of position and trial briefs.
101.72 Evidentiary purpose.
101.73 Testimony.
101.74 Exhibits.
101.75 Affidavits.
101.76 Depositions.
101.77 Admissions as to facts and documents.
101.78 Evidence.
101.79 Cross-examination.
101.80 Unsponsored written material.
101.81 Objections.
101.82 Exceptions to rulings of presiding officer unnecessary.
101.83 Official notice.
101.84 Public document items.
101.85 Offer of proof.
101.86 Appeals from ruling of presiding officer.

                          Subpart I_The Record

101.91 Official transcript.
101.92 Record for decision.

               Subpart J_Posthearing Procedures, Decisions

101.101 Posthearing briefs: proposed findings and conclusions.
101.102 Decisions following hearing.
101.103 Exceptions to initial or recommended decisions.
101.104 Final decisions.
101.105 Oral argument to the reviewing authority.
101.106 Review by the Secretary.
101.107 Service on amici curiae.

                Subpart K_Judicial Standards of Practice

101.111 Conduct.
101.112 Improper conduct.
101.113 Ex parte communications.
101.114 Expeditious treatment.
101.115 Matters not prohibited.
101.116 Filing of ex parte communications.

                  Subpart L_Posttermination Proceedings

101.121 Posttermination proceedings.

                          Subpart M_Definitions

101.131 Definitions.

    Authority: 5 U.S.C. 301.

    Source: 45 FR 30931, May 9, 1980, unless otherwise noted.



                      Subpart A_General Information



Sec. 101.1  Scope of rules.

    The rules of procedure in this part supplement Sec. Sec. 100.9 and
100.10 of this subtitle and govern the practice for hearings, decisions,
and administrative review conducted by the Department of Education,
pursuant to Title VI of the Civil Rights Act of 1964 (section 602, 78
Stat. 252) and part 100 of this subtitle.



Sec. 101.2  Records to be public.

    All pleadings, correspondence, exhibits, transcripts, of testimony,
exceptions, briefs, decisions, and other documents filed in the docket
in any proceeding may be inspected and copied in the office of the Civil
Rights hearing clerk. Inquiries may be made at the Department of
Education, 400 Maryland Avenue SW., Washington, DC 20202.



Sec. 101.3  Use of gender and number.

    As used in this part, words importing the singular number may extend
and be applied to several persons or things, and vice versa. Words
importing the masculine gender may be applied to females or
organizations.

[[Page 344]]



Sec. 101.4  Suspension of rules.

    Upon notice to all parties, the reviewing authority or the presiding
officer, with respect to matters pending before them, may modify or
waive any rule in this part upon determination that no party will be
unduly prejudiced and the ends of justice will thereby be served.



                    Subpart B_Appearance and Practice



Sec. 101.11  Appearance.

    A party may appear in person or by counsel and participate fully in
any proceeding. A State agency or a corporation may appear by any of its
officers or by any employee it authorizes to appear on its behalf.
Counsel must be members in good standing of the bar of a State,
Territory, or possession of the United States or of the District of
Columbia or the Commonwealth of Puerto Rico.



Sec. 101.12  Authority for representation.

    Any individual acting in a representative capacity in any proceeding
may be required to show his authority to act in such capacity.



Sec. 101.13  Exclusion from hearing for misconduct.

    Disrespectful, disorderly, or contumacious language or contemptuous
conduct, refusal to comply with directions, or continued use of dilatory
tactics by any person at any hearing before a presiding officer shall
constitute grounds for immediate exclusion of such person from the
hearing by the presiding officer.



                            Subpart C_Parties



Sec. 101.21  Parties.

    (a) The term party shall include an applicant or recipient or other
person to whom a notice of hearing or opportunity for hearing has been
mailed naming him a respondent.
    (b) The Assistant Secretary for Civil Rights of the Department of
Education, shall be deemed a party to all proceedings.



Sec. 101.22  Amici curiae.

    (a) Any interested person or organization may file a petition to
participate in a proceeding as an amicus curiae. Such petition shall be
filed prior to the prehearing conference, or if none is held, before the
commencement of the hearing, unless the petitioner shows good cause for
filing the petition later. The presiding officer may grant the petition
if he finds that the petitioner has a legitimate interest in the
proceedings, that such participation will not unduly delay the outcome,
and may contribute materially to the proper disposition thereof. An
amicus curiae is not a party and may not introduce evidence at a
hearing.
    (b) An amicus curiae may submit a statement of position to the
presiding officer prior to the beginning of a hearing, and shall serve a
copy on each party. The amicus curiae may submit a brief on each
occasion a decision is to be made or a prior decision is subject to
review. His brief shall be filed and served on each party within the
time limits applicable to the party whose position he deems himself to
support; or if he does not deem himself to support the position of any
party, within the longest time limit applicable to any party at that
particular stage of the proceedings.
    (c) When all parties have completed their initial examination of a
witness, any amicus curiae may request the presiding officer to propound
specific questions to the witness. The presiding officer, in his
discretion, may grant any such request if he believes the proposed
additional testimony may assist materially in elucidating factual
matters at issue between the parties and will not expand the issues.



Sec. 101.23  Complainants not parties.

    A person submitting a complaint pursuant to Sec. 100.7(b) of this
title is not a party to the proceedings governed by this part, but may
petition, after proceedings are initiated, to become an amicus curiae.

[[Page 345]]



       Subpart D_Form, Execution, Service and Filing of Documents



Sec. 101.31  Form of documents to be filed.

    Documents to be filed under the rules in this part shall be dated,
the original signed in ink, shall show the docket description and title
of the proceeding, and shall show the title, if any, and address of the
signatory. Copies need not be signed but the name of the person signing
the original shall be reproduced. Documents shall be legible and shall
not be more than 8\1/2\ inches wide and 12 inches long.



Sec. 101.32  Signature of documents.

    The signature of a party, authorized officer, employee or attorney
constitutes a certificate that he has read the document, that to the
best of his knowledge, information, and belief there is good ground to
support it, and that it is not interposed for delay. If a document is
not signed or is signed with intent to defeat the purpose of this
section, it may be stricken as sham and false and the proceeding may
proceed as though the document had not been filed. Similar action may be
taken if scandalous or indecent matter is inserted.



Sec. 101.33  Filing and service.

    All notices by a Department official, and all written motions,
requests, petitions, memoranda, pleadings, exceptions, briefs,
decisions, and correspondence to a Department official from a party, or
vice versa, relating to a proceeding after its commencement shall be
filed and served on all parties. Parties shall supply the original and
two copies of documents submitted for filing. Filings shall be made with
the Civil Rights hearing clerk at the address stated in the notice of
hearing or notice of opportunity for hearing, during regular business
hours. Regular business hours are every Monday through Friday (legal
holidays in the District of Columbia excepted) from 9 a.m. to 5:30 p.m.,
eastern standard or daylight saving time, whichever is effective in the
District of Columbia at the time. Originals only on exhibits and
transcripts of testimony need be filed. For requirements of service on
amici curiae, see Sec. 101.107.



Sec. 101.34  Service--how made.

    Service shall be made by personal delivery of one copy to each
person to be served or by mailing by first-class mail, properly
addressed with postage prepaid. When a party or amicus has appeared by
attorney or other representative, service upon such attorney or
representative will be deemed service upon the party or amicus.
Documents served by mail preferably should be mailed in sufficient time
to reach the addressee by the date on which the original is due to be
filed, and should be air mailed if the addressee is more than 300 miles
distant.



Sec. 101.35  Date of service.

    The date of service shall be the day when the matter is deposited in
the U.S. mail or is delivered in person, except that the date of service
of the initial notice of hearing or opportunity for hearing shall be the
date of its delivery, or of its attempted delivery if refused.



Sec. 101.36  Certificate of service.

    The original of every document filed and required to be served upon
parties to a proceeding shall be endorsed with a certificate of service
signed by the party making service or by his attorney or representative,
stating that such service has been made, the date of service, and the
manner of service, whether by mail or personal delivery.



                             Subpart E_Time



Sec. 101.41  Computation.

    In computing any period of time under the rules in this part or in
an order issued hereunder, the time begins with the day following the
act, event, or default, and includes the last day of the period, unless
it is a Saturday, Sunday, or legal holiday observed in the District of
Columbia, in which event it includes the next following business day.
When the period of time prescribed or allowed is less than 7 days,
intermediate Saturdays, Sundays, and legal holidays shall be excluded
from the computation.

[[Page 346]]



Sec. 101.42  Extension of time or postponement.

    Requests for extension of time should be served on all parties and
should set forth the reasons for the application. Applications may be
granted upon a showing of good cause by the applicant. From the
designation of a presiding officer until the issuance of his decision
such requests should be addressed to him. Answers to such requests are
permitted, if made promptly.



Sec. 101.43  Reduction of time to file documents.

    For good cause, the reviewing authority or the presiding officer,
with respect to matters pending before them, may reduce any time limit
prescribed by the rules in this part, except as provided by law or in
part 80 of this title.



                 Subpart F_Proceedings Prior to Hearing



Sec. 101.51  Notice of hearing or opportunity for hearing.

    Proceedings are commenced by mailing a notice of hearing or
opportunity for hearing to an affected applicant or recipient, pursuant
to Sec. 100.9 of this title.



Sec. 101.52  Answer to notice.

    The respondent, applicant or recipient may file an answer to the
notice within 20 days after service thereof. Answers shall admit or deny
specifically and in detail each allegation of the notice, unless the
respondent party is without knowledge, in which case his answer should
so state, and the statement will be deemed a denial. Allegations of fact
in the notice not denied or controverted by answer shall be deemed
admitted. Matters alleged as affirmative defenses shall be separately
stated and numbered. Failure of the respondent to file an answer within
the 20-day period following service of the notice may be deemed an
admission of all matters of fact recited in the notice.



Sec. 101.53  Amendment of notice or answer.

    The Assistant Secretary for Civil Rights may amend the notice of
hearing or opportunity for hearing once as a matter of course before an
answer thereto is served, and each respondent may amend his answer once
as a matter of course not later than 10 days before the date fixed for
hearing but in no event later than 20 days from the date of service of
his original answer. Otherwise a notice or answer may be amended only by
leave of the presiding officer. A respondent shall file his answer to an
amended notice within the time remaining for filing the answer to the
original notice or within 10 days after service of the amended notice,
whichever period may be the longer, unless the presiding officer
otherwise orders.



Sec. 101.54  Request for hearing.

    Within 20 days after service of a notice of opportunity for hearing
which does not fix a date for hearing the respondent, either in his
answer or in a separate document, may request a hearing. Failure of the
respondent to request a hearing shall be deemed a waiver of the right to
a hearing and to constitute his consent to the making of a decision on
the basis of such information as is available.



Sec. 101.55  Consolidation.

    The responsible Department official may provide for proceedings in
the Department to be joined or consolidated for hearing with proceedings
in other Federal departments or agencies, by agreement with such other
departments or agencies. All parties to any proceeding consolidated
subsequently to service of the notice of hearing or opportunity for
hearing shall be promptly served with notice of such consolidation.



Sec. 101.56  Motions.

    Motions and petitions shall state the relief sought, the authority
relied upon, and the facts alleged. If made before or after the hearing,
these matters shall be in writing. If made at the hearing, they may be
stated orally; but the presiding officer may require that they be
reduced to writing and filed and

[[Page 347]]

served on all parties in the same manner as a formal motion. Motions,
answers, and replies shall be addressed to the presiding officer, if the
case is pending before him. A repetitious motion will not be
entertained.



Sec. 101.57  Responses to motions and petitions.

    Within 8 days after a written motion or petition is served, or such
other period as the reviewing authority or the presiding officer may
fix, any party may file a response thereto. An immediate oral response
may be made to an oral motion.



Sec. 101.58  Disposition of motions and petitions.

    The reviewing authority or the presiding officer may not sustain or
grant a written motion or petition prior to expiration of the time for
filing responses thereto, but may overrule or deny such motion or
petition without awaiting response: Provided, however, That prehearing
conferences, hearings and decisions need not be delayed pending
disposition of motions or petitions. Oral motions and petitions may be
ruled on immediately. Motions and petitions submitted to the reviewing
authority or the presiding officer, respectively, and not disposed of in
separate rulings or in their respective decisions will be deemed denied.
Oral arguments shall not be held or written motions or petitions unless
the presiding officer in his discretion expressly so orders.



       Subpart G_Responsibilities and Duties of Presiding Officer



Sec. 101.61  Who presides.

    A hearing examiner assigned under 5 U.S.C. 3105 or 3344 (formerly
section 11 of the Administrative Procedure Act) shall preside over the
taking of evidence in any hearing to which these rules of procedure
apply.



Sec. 101.62  Designation of hearing examiner.

    The designation of the hearing examiner as presiding officer shall
be in writing, and shall specify whether the examiner is to make an
initial decision or to certify the entire record including his
recommended findings and proposed decision to the reviewing authority,
and may also fix the time and place of hearing. A copy of such order
shall be served on all parties. After service of an order designating a
hearing examiner to preside, and until such examiner makes his decision,
motions and petitions shall be submitted to him. In the case of the
death, illness, disqualification or unavailability of the designated
hearing examiner, another hearing examiner may be designated to take his
place.



Sec. 101.63  Authority of presiding officer.

    The presiding officer shall have the duty to conduct a fair hearing,
to take all necessary action to avoid delay, and to maintain order. He
shall have all powers necessary to these ends, including (but not
limited to) the power to:
    (a) Arrange and issue notice of the date, time, and place of
hearings, or, upon due notice to the parties, to change the date, time,
and place of hearings previously set.
    (b) Hold conferences to settle, simplify, or fix the issues in a
proceeding, or to consider other matters that may aid in the expeditious
disposition of the proceeding.
    (c) Require parties and amici curiae to state their position with
respect to the various issues in the proceeding.
    (d) Administer oaths and affirmations.
    (e) Rule on motions, and other procedural items on matters pending
before him.
    (f) Regulate the course of the hearing and conduct of counsel
therein.
    (g) Examine witnesses and direct witnesses to testify.
    (h) Receive, rule on, exclude or limit evidence.
    (i) Fix the time for filing motions, petitions, briefs, or other
items in matters pending before him.
    (j) Issue initial or recommended decisions.
    (k) Take any action authorized by the rules in this part or in
conformance with the provisions of 5 U.S.C. 551-559 (the Administrative
Procedure Act).

[[Page 348]]



                      Subpart H_Hearing Procedures



Sec. 101.71  Statement of position and trial briefs.

    The presiding officer may require parties and amici curiae to file
written statements of position prior to the beginning of a hearing. The
presiding officer may also require the parties to submit trial briefs.



Sec. 101.72  Evidentiary purpose.

    (a) The hearing is directed to receiving factual evidence and expert
opinion testimony related to the issues in the proceeding. Argument will
not be received in evidence; rather it should be presented in
statements, memoranda, or briefs, as determined by the presiding
officer. Brief opening statements, which shall be limited to statement
of the party's position and what he intends to prove, may be made at
hearings.
    (b) Hearings for the reception of evidence will be held only in
cases where issues of fact must be resolved in order to determine
whether the respondent has failed to comply with one or more applicable
requirements of part 100 of this title. In any case where it appears
from the respondent's answer to the notice of hearing or opportunity for
hearing, from his failure timely to answer, or from his admissions or
stipulations in the record, that there are no matters of material fact
in dispute, the reviewing authority or presiding officer may enter an
order so finding, vacating the hearing date if one has been set, and
fixing the time for filing briefs under Sec. 101.101. Thereafter the
proceedings shall go to conclusion in accordance with subpart J of this
part. The presiding officer may allow an appeal from such order in
accordance with Sec. 101.86.



Sec. 101.73  Testimony.

    Testimony shall be given orally under oath or affirmation by
witnesses at the hearing; but the presiding officer, in his discretion,
may require or permit that the direct testimony of any witness be
prepared in writing and served on all parties in advance of the hearing.
Such testimony may be adopted by the witness at the hearing, and filed
as part of the record thereof. Unless authorized by the presiding
officer, witnesses will not be permitted to read prepared testimony into
the record. Except as provided in Sec. Sec. 101.75 and 101.76,
witnesses shall be available at the hearing for cross-examination.



Sec. 101.74  Exhibits.

    Proposed exhibits shall be exchanged at the prehearing conference,
or otherwise prior to the hearing if the presiding officer so requires.
Proposed exhibits not so exchanged may be denied admission as evidence.
The authenticity of all proposed exhibits exchanged prior to hearing
will be deemed admitted unless written objection thereto is filed prior
to the hearing or unless good cause is shown at the hearing for failure
to file such written objection.



Sec. 101.75  Affidavits.

    An affidavit is; not inadmissible as such. Unless the presiding
officer fixes other time periods affidavits shall be filed and served on
the parties not later than 15 days prior to the hearing; and not less
than 7 days prior to hearing a party may file and serve written
objection to any affidavit on the ground that he believes it necessary
to test the truth of assertions therein at hearing. In such event the
assertions objected to will not be received in evidence unless the
affiant is made available for cross-examination, or the presiding
officer determines that cross-examination is not necessary for the full
and true disclosure of facts referred to in such assertions.
Notwithstanding any objection, however, affidavits may be considered in
the case of any respondent who waives a hearing.



Sec. 101.76  Depositions.

    Upon such terms as may be just, for the convenience of the parties
or of the Department, the presiding officer may authorize or direct the
testimony of any witness to be taken by deposition.



Sec. 101.77  Admissions as to facts and documents.

    Not later than 15 days prior to the scheduled date of the hearing
except for good cause shown, or prior to such earlier date as the
presiding officer may order, any party may serve upon

[[Page 349]]

an opposing party a written request for the admission of the genuineness
and authenticity of any relevant documents described in and exhibited
with the request, or for the admission of the truth of any relevant
matters of fact stated in the request. Each of the matters of which an
admission is requested shall be deemed admitted, unless within a period
designated in the request (not less than 10 days after service thereof,
or within such further time as the presiding officer or the reviewing
authority if no presiding officer has yet been designated may allow upon
motion and notice) the party to whom the request is directed serves upon
the requesting party a sworn statement either denying specifically the
matters of which an admission is requested or setting forth in detail
the reasons why he cannot truthfully either admit or deny such matters.
Copies of requests for admission and answers thereto shall be served on
all parties. Any admission made by a party to such request is only for
the purposes of the pending proceeding, or any proceeding or action
instituted for the enforcement of any order entered therein, and shall
not constitute and admission by him for any other purpose or be used
against him in any other proceeding or action.



Sec. 101.78  Evidence.

    Irrelevant, immaterial, unreliable, and unduly repetitious evidence
will be excluded.



Sec. 101.79  Cross-examination.

    A witness may be cross-examined on any matter material to the
proceeding without regard to the scope of his direct examination.



Sec. 101.80  Unsponsored written material.

    Letters expressing views or urging action and other unsponsored
written material regarding matters in issue in a hearing will be placed
in the correspondence section of the docket of the proceeding. These
data are not deemed part of the evidence or record in the hearing.



Sec. 101.81  Objections.

    Objections to evidence shall be timely and briefly state the ground
relied upon.



Sec. 101.82  Exceptions to rulings of presiding officer unnecessary.

    Exceptions to rulings of the presiding officer are unnecessary. It
is sufficient that a party, at the time the ruling of the presiding
officer is sought, makes known the action which he desires the presiding
officer to take, or his objection to an action taken, and his grounds
therefor.



Sec. 101.83  Official notice.

    Where official notice is taken or is to be taken of a material fact
not appearing in the evidence of record, any party, on timely request,
shall be afforded an opportunity to show the contrary.



Sec. 101.84  Public document items.

    Whenever there is offered (in whole or in part) a public document,
such as an official report, decision, opinion, or published scientific
or economic statistical data issued by any of the executive departments
(or their subdivisions), legislative agencies or committees, or
administrative agencies of the Federal Government (including Government-
owned corporations), or a similar document issued by a State or its
agencies, and such document (or part thereof) has been shown by the
offeror to be reasonably available to the public, such document need not
be produced or marked for identification, but may be offered for
official notice, as a public document item by specifying the document or
relevant part thereof.



Sec. 101.85  Offer of proof.

    An offer of proof made in connection with an objection taken to any
ruling of the presiding officer rejecting or excluding proffered oral
testimony shall consist of a statement of the substance of the evidence
which counsel contends would be adduced by such testimony; and, if the
excluded evidence consists of evidence in documentary or written form or
of reference to documents or records, a copy of such evidence shall be
marked for identification and shall

[[Page 350]]

accompany the record as the offer of proof.



Sec. 101.86  Appeals from ruling of presiding officer.

    Rulings of the presiding officer may not be appealed to the
reviewing authority prior to his consideration of the entire proceeding
except with the consent of the presiding officer and where he certifies
on the record or in writing that the allowance of an interlocutory
appeal is clearly necessary to prevent exceptional delay, expense, or
prejudice to any party, or substantial detriment to the public interest.
If an appeal is allowed, any party may file a brief with the reviewing
authority within such period as the presiding officer directs. No oral
argument will be heard unless the reviewing authority directs otherwise.
At any time prior to submission of the proceeding to it for decisions,
the reviewing authority may direct the presiding officer to certify any
question or the entire record to it for decision. Where the entire
record is so certified, the presiding officer shall recommend a
decision.



                          Subpart I_The Record



Sec. 101.91  Official transcript.

    The Department will designate the official reporter for all
hearings. The official transcripts of testimony taken, together with any
exhibits, briefs, or memoranda of law filed therewith shall be filed
with the Department. Transcripts of testimony in hearings may be
obtained from the official reporter by the parties and the public at
rates not to exceed the maximum rates fixed by the contract between the
Department and the reporter. Upon notice to all parties, the presiding
officer may authorize corrections to the transcript which involve
matters of substance.



Sec. 101.92  Record for decision.

    The transcript of testimony, exhibits, and all papers and requests
filed in the proceedings, except the correspondence section of the
docket, including rulings and any recommended or initial decision shall
constitute the exclusive record for decision.



               Subpart J_Posthearing Procedures, Decisions



Sec. 101.101  Posthearing briefs: proposed findings and conclusions.

    (a) The presiding officer shall fix the time for filing posthearing
briefs, which may contain proposed findings of fact and conclusions of
law, and, if permitted, reply briefs.
    (b) Briefs should include a summary of the evidence relied upon
together with references to exhibit numbers and pages of the transcript,
with citations of the authorities relied upon.



Sec. 101.102  Decisions following hearing.

    When the time for submission of posthearing briefs has expired, the
presiding officer shall certify the entire record, including his
recommended findings and proposed decision, to the responsible
Department official; or if so authorized he shall make an initial
decision. A copy of the recommended findings and proposed decision, or
of the initial decision, shall be served upon all parties, and amici, if
any.



Sec. 101.103  Exceptions to initial or recommended decisions.

    Within 20 days after the mailing of an initial or recommended
decision, any party may file exceptions to the decision, stating reasons
therefor, with the reviewing authority. Any other party may file a
response thereto within 30 days after the mailing of the decision. Upon
the filing of such exceptions, the reviewing authority shall review the
decision and issue its own decision thereon.



Sec. 101.104  Final decisions.

    (a) Where the hearing is conducted by a hearing examiner who makes
an initial decision, if no exceptions thereto are filed within the 20-
day period specified in Sec. 101.103, such decision shall become the
final decision of the Department, and shall constitute ``final agency
action'' within the meaning of 5 U.S.C. 704 (formerly section 10(c) of
the Administrative Procedure Act), subject to the provisions of Sec.
101.106.
    (b) Where the hearing is conducted by a hearing examiner who makes a
recommended decision, or upon the filing of exceptions to a hearing
examiner's

[[Page 351]]

initial decision, the reviewing authority shall review the recommended
or initial decision and shall issue its own decision thereon, which
shall become the final decision of the Department, and shall constitute
``final agency action'' within the meaning of 5 U.S.C. 704 (formerly
section 10(c) of the Administrative Procedure Act), subject to the
provisions of Sec. 101.106.
    (c) All final decisions shall be promptly served on all parties, and
amici, if any.



Sec. 101.105  Oral argument to the reviewing authority.

    (a) If any party desires to argue a case orally on exceptions or
replies to exceptions to an initial or recommended decision, he shall
make such request in writing. The reviewing authority may grant or deny
such requests in its discretion. If granted, it will serve notice of
oral argument on all parties. The notice will set forth the order of
presentation, the amount of time allotted, and the time and place for
argument. The names of persons who will argue should be filed with the
Department hearing clerk not later than 7 days before the date set for
oral argument.
    (b) The purpose of oral argument is to emphasize and clarify the
written argument in the briefs. Reading at length from the brief or
other texts is not favored. Participants should confine their arguments
to points of controlling importance and to points upon which exceptions
have been filed. Consolidations of appearances at oral argument by
parties taking the same side will permit the parties' interests to be
presented more effectively in the time allotted.
    (c) Pamphlets, charts, and other written material may be presented
at oral argument only if such material is limited to facts already in
the record and is served on all parties and filed with the Department
hearing clerk at least 7 days before the argument.



Sec. 101.106  Review by the Secretary.

    Within 20 days after an initial decision becomes a final decision
pursuant to Sec. 101.104(a) or within 20 days of the mailing of a final
decision referred to in Sec. 101.104(b), as the case may be, a party
may request the Secretary to review the final decision. The Secretary
may grant or deny such request, in whole or in part, or serve notice of
his intent to review the decision in whole or in part upon his own
motion. If the Secretary grants the requested review, or if he serves
notice of intent to review upon his own motion, each party to the
decision shall have 20 days following notice of the Secretary's proposed
action within which to file exceptions to the decision and supporting
briefs and memoranda, or briefs and memoranda in support of the
decision. Failure of a party to request review under this paragraph
shall not be deemed a failure to exhaust administrative remedies for the
purpose of obtaining judicial review.



Sec. 101.107  Service on amici curiae.

    All briefs, exceptions, memoranda, requests, and decisions referred
to in this subpart J shall be served upon amici curiae at the same times
and in the same manner required for service on parties. Any written
statements of position and trial briefs required of parties under Sec.
101.71 shall be served on amici.



                Subpart K_Judicial Standards of Practice



Sec. 101.111  Conduct.

    Parties and their representatives are expected to conduct themselves
with honor and dignity and observe judicial standards of practice and
ethics in all proceedings. They should not indulge in offensive
personalities, unseemly wrangling, or intemperate accusations or
characterizations. A representative of any party whether or not a lawyer
shall observe the traditional responsibilities of lawyers as officers of
the court and use his best efforts to restrain his client from
improprieties in connection with a proceeding.



Sec. 101.112  Improper conduct.

    With respect to any proceeding it is improper for any interested
person to attempt to sway the judgement of the reviewing authority by
undertaking to bring pressure or influence to bear upon any officer
having a responsibility for a decision in the proceeding,

[[Page 352]]

or his decisional staff. It is improper that such interested persons or
any members of the Department's staff or the presiding officer give
statements to communications media, by paid advertisement or otherwise,
designed to influence the judgement of any officer having a
responsibility for a decision in the proceeding, or his decisional
staff. It is improper for any person to solicit communications to any
such officer, or his decisional staff, other than proper communications
by parties or amici curiae.



Sec. 101.113  Ex parte communications.

    Only persons employed by or assigned to work with the reviewing
authority who perform no investigative or prosecuting function in
connection with a proceeding shall communicate ex parte with the
reviewing authority, or the presiding officer, or any employee or person
involved in the decisional process in such proceedings with respect to
the merits of that or a factually related proceeding. The reviewing
authority, the presiding officer, or any employee or person involved in
the decisional process of a proceeding shall communicate ex parte with
respect to the merits of that or a factually related proceeding only
with persons employed by or assigned to work with them and who perform
no investigative or prosecuting function in connection with the
proceeding.



Sec. 101.114  Expeditious treatment.

    Requests for expeditious treatment of matters pending before the
responsible Department official or the presiding officer are deemed
communications on the merits, and are improper except when forwarded
from parties to a proceeding and served upon all other parties thereto.
Such communications should be in the form of a motion.



Sec. 101.115  Matters not prohibited.

    A request for information which merely inquires about the status of
a proceeding without discussing issues or expressing points of view is
not deemed an ex parte communication. Such requests should be directed
to the Civil Rights hearing clerk. Communications with respect to minor
procedural matters or inquiries or emergency requests for extensions of
time are not deemed ex parte communications prohibited by Sec. 101.113.
Where feasible, however, such communications should be by letter with
copies to all parties. Ex parte communications between a respondent and
the responsible Department official or the Secretary with respect to
securing such respondent's voluntary compliance with any requirement of
part 100 of this title are not prohibited.



Sec. 101.116  Filing of ex parte communications.

    A prohibited communication in writing received by the Secretary, the
reviewing authority, or by the presiding officer, shall be made public
by placing it in the correspondence file of the docket in the case and
will not be considered as part of the record for decision. If the
prohibited communication is received orally a memorandum setting forth
its substance shall be made and filed in the correspondence section of
the docket in the case. A person referred to in such memorandum may file
a comment for inclusion in the docket if he considers the memorandum to
be incorrect.



                  Subpart L_Posttermination Proceedings



Sec. 101.121  Posttermination proceedings.

    (a) An applicant or recipient adversely affected by the order
terminating, discontinuing, or refusing Federal financial assistance in
consequence of proceedings pursuant to this title may request the
responsible Department official for an order authorizing payment, or
permitting resumption, of Federal financial assistance. Such request
shall be in writing and shall affirmatively show that since entry of the
order, it has brought its program or activity into compliance with the
requirements of the Act, and with the Regulation thereunder, and shall
set forth specifically, and in detail, the steps which it has taken to
achieve such compliance. If the responsible Department official denies
such request the applicant or recipient shall be given an expeditious
hearing if it so requests in writing and specifies why it

[[Page 353]]

believes the responsible Department official to have been in error. The
request for such a hearing shall be addressed to the responsible
Department official and shall be made within 30 days after the applicant
or recipient is informed that the responsible Department official has
refused to authorize payment or permit resumption of Federal financial
assistance.
    (b) In the event that a hearing shall be requested pursuant to
paragraph (a) of this section, the hearing procedures established by
this part shall be applicable to the proceedings, except as otherwise
provided in this section.



                          Subpart M_Definitions



Sec. 101.131  Definitions.

    The definitions contained in Sec. 100.13 of this subtitle apply to
this part, unless the context otherwise requires, and the term
``reviewing authority'' as used herein includes the Secretary of
Education, with respect to action by that official under Sec. 101.106.

Transition provisions: (a) The amendments herein shall become effective
upon publication in the Federal Register.
    (b) These rules shall apply to any proceeding or part thereof to
which part 100 of this title applies. In the case of any proceeding or
part thereof governed by the provisions of 34 CFR, part 100 (Title VI
regulations of the Department of Education) as that part existed prior
to the amendments published in the Federal Register on Oct. 19, 1967
(effective on that date), the rules in this part 101 shall apply as if
those amendments were not in effect.



PART 104_NONDISCRIMINATION ON THE BASIS OF HANDICAP IN PROGRAMS OR
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                      Subpart A_General Provisions

Sec.
104.1 Purpose.
104.2 Application.
104.3 Definitions.
104.4 Discrimination prohibited.
104.5 Assurances required.
104.6 Remedial action, voluntary action, and self-evaluation.
104.7 Designation of responsible employee and adoption of grievance
          procedures.
104.8 Notice.
104.9 Administrative requirements for small recipients.
104.10 Effect of state or local law or other requirements and effect of
          employment opportunities.

                     Subpart B_Employment Practices

104.11 Discrimination prohibited.
104.12 Reasonable accommodation.
104.13 Employment criteria.
104.14 Preemployment inquiries.

                         Subpart C_Accessibility

104.21 Discrimination prohibited.
104.22 Existing facilities.
104.23 New construction.

        Subpart D_Preschool, Elementary, and Secondary Education

104.31 Application of this subpart.
104.32 Location and notification.
104.33 Free appropriate public education.
104.34 Educational setting.
104.35 Evaluation and placement.
104.36 Procedural safeguards.
104.37 Nonacademic services.
104.38 Preschool and adult education.
104.39 Private education.

                    Subpart E_Postsecondary Education

104.41 Application of this subpart.
104.42 Admissions and recruitment.
104.43 Treatment of students; general.
104.44 Academic adjustments.
104.45 Housing.
104.46 Financial and employment assistance to students.
104.47 Nonacademic services.

             Subpart F_Health, Welfare, and Social Services

104.51 Application of this subpart.
104.52 Health, welfare, and other social services.
104.53 Drug and alcohol addicts.
104.54 Education of institutionalized persons.

                          Subpart G_Procedures

104.61 Procedures.

Appendix A to Part 104--Analysis of Final Regulation
Appendix B to Part 104--Guidelines for Eliminating Discrimination and
          Denial of Services on the Basis of Race,

[[Page 354]]

          Color, National Origin, Sex, and Handicap in Vocational
          Education Programs [Note]

    Authority: 20 U.S.C. 1405; 29 U.S.C. 794.

    Source: 45 FR 30936, May 9, 1980, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 104.1  Purpose.

    The purpose of this part is to effectuate section 504 of the
Rehabilitation Act of 1973, which is designed to eliminate
discrimination on the basis of handicap in any program or activity
receiving Federal financial assistance.



Sec. 104.2  Application.

    This part applies to each recipient of Federal financial assistance
from the Department of Education and to the program or activity that
receives such assistance.

[65 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.3  Definitions.

    As used in this part, the term:
    (a) The Act means the Rehabilitation Act of 1973, Pub. L. 93-112, as
amended by the Rehabilitation Act Amendments of 1974, Pub. L. 93-516, 29
U.S.C. 794.
    (b) Section 504 means section 504 of the Act.
    (c) Education of the Handicapped Act means that statute as amended
by the Education for all Handicapped Children Act of 1975, Pub. L. 94-
142, 20 U.S.C. 1401 et seq.
    (d) Department means the Department of Education.
    (e) Assistant Secretary means the Assistant Secretary for Civil
Rights of the Department of Education.
    (f) Recipient means any state or its political subdivision, any
instrumentality of a state or its political subdivision, any public or
private agency, institution, organization, or other entity, or any
person to which Federal financial assistance is extended directly or
through another recipient, including any successor, assignee, or
transferee of a recipient, but excluding the ultimate beneficiary of the
assistance.
    (g) Applicant for assistance means one who submits an application,
request, or plan required to be approved by a Department official or by
a recipient as a condition to becoming a recipient.
    (h) Federal financial assistance means any grant, loan, contract
(other than a procurement contract or a contract of insurance or
guaranty), or any other arrangement by which the Department provides or
otherwise makes available assistance in the form of:
    (1) Funds;
    (2) Services of Federal personnel; or
    (3) Real and personal property or any interest in or use of such
property, including:
    (i) Transfers or leases of such property for less than fair market
value or for reduced consideration; and
    (ii) Proceeds from a subsequent transfer or lease of such property
if the Federal share of its fair market value is not returned to the
Federal Government.
    (i) Facility means all or any portion of buildings, structures,
equipment, roads, walks, parking lots, or other real or personal
property or interest in such property.
    (j) Handicapped person--(1) Handicapped persons means any person who
(i) has a physical or mental impairment which substantially limits one
or more major life activities, (ii) has a record of such an impairment,
or (iii) is regarded as having such an impairment.
    (2) As used in paragraph (j)(1) of this section, the phrase:
    (i) Physical or mental impairment means (A) any physiological
disorder or condition, cosmetic disfigurement, or anatomical loss
affecting one or more of the following body systems: neurological;
musculoskeletal; special sense organs; respiratory, including speech
organs; cardiovascular; reproductive, digestive, genito-urinary; hemic
and lymphatic; skin; and endocrine; or (B) any mental or psychological
disorder, such as mental retardation, organic brain syndrome, emotional
or mental illness, and specific learning disabilities.
    (ii) Major life activities means functions such as caring for one's
self, performing manual tasks, walking, seeing, hearing, speaking,
breathing, learning, and working.
    (iii) Has a record of such an impairment means has a history of, or
has been

[[Page 355]]

misclassified as having, a mental or physical impairment that
substantially limits one or more major life activities.
    (iv) Is regarded as having an impairment means (A) has a physical or
mental impairment that does not substantially limit major life
activities but that is treated by a recipient as constituting such a
limitation; (B) has a physical or mental impairment that substantially
limits major life activities only as a result of the attitudes of others
toward such impairment; or (C) has none of the impairments defined in
paragraph (j)(2)(i) of this section but is treated by a recipient as
having such an impairment.
    (k) Program or activity means all of the operations of--
    (1)(i) A department, agency, special purpose district, or other
instrumentality of a State or of a local government; or
    (ii) The entity of such State or local government that distributes
such assistance and each such department or agency (and each other State
or local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
    (2)(i) A college, university, or other postsecondary institution, or
a public system of higher education; or
    (ii) A local educational agency (as defined in 20 U.S.C. 8801),
system of vocational education, or other school system;
    (3)(i) An entire corporation, partnership, or other private
organization, or an entire sole proprietorship--
    (A) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
    (ii) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
    (4) Any other entity which is established by two or more of the
entities described in paragraph (k)(1), (2), or (3) of this section; any
part of which is extended Federal financial assistance.

(Authority: 29 U.S.C. 794(b))

    (l) Qualified handicapped person means:
    (1) With respect to employment, a handicapped person who, with
reasonable accommodation, can perform the essential functions of the job
in question;
    (2) With respect to public preschool elementary, secondary, or adult
educational services, a handicapped person (i) of an age during which
nonhandicapped persons are provided such services, (ii) of any age
during which it is mandatory under state law to provide such services to
handicapped persons, or (iii) to whom a state is required to provide a
free appropriate public education under section 612 of the Education of
the Handicapped Act; and
    (3) With respect to postsecondary and vocational education services,
a handicapped person who meets the academic and technical standards
requisite to admission or participation in the recipient's education
program or activity;
    (4) With respect to other services, a handicapped person who meets
the essential eligibility requirements for the receipt of such services.
    (m) Handicap means any condition or characteristic that renders a
person a handicapped person as defined in paragraph (j) of this section.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.4  Discrimination prohibited.

    (a) General. No qualified handicapped person shall, on the basis of
handicap, be excluded from participation in, be denied the benefits of,
or otherwise be subjected to discrimination under any program or
activity which receives Federal financial assistance.
    (b) Discriminatory actions prohibited. (1) A recipient, in providing
any aid, benefit, or service, may not, directly or through contractual,
licensing, or other arrangements, on the basis of handicap:
    (i) Deny a qualified handicapped person the opportunity to
participate in or benefit from the aid, benefit, or service;

[[Page 356]]

    (ii) Afford a qualified handicapped person an opportunity to
participate in or benefit from the aid, benefit, or service that is not
equal to that afforded others;
    (iii) Provide a qualified handicapped person with an aid, benefit,
or service that is not as effective as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to
handicapped persons or to any class of handicapped persons unless such
action is necessary to provide qualified handicapped persons with aid,
benefits, or services that are as effective as those provided to others;
    (v) Aid or perpetuate discrimination against a qualified handicapped
person by providing significant assistance to an agency, organization,
or person that discriminates on the basis of handicap in providing any
aid, benefit, or service to beneficiaries of the recipients program or
activity;
    (vi) Deny a qualified handicapped person the opportunity to
participate as a member of planning or advisory boards; or
    (vii) Otherwise limit a qualified handicapped person in the
enjoyment of any right, privilege, advantage, or opportunity enjoyed by
others receiving an aid, benefit, or service.
    (2) For purposes of this part, aids, benefits, and services, to be
equally effective, are not required to produce the identical result or
level of achievement for handicapped and nonhandicapped persons, but
must afford handicapped persons equal opportunity to obtain the same
result, to gain the same benefit, or to reach the same level of
achievement, in the most integrated setting appropriate to the person's
needs.
    (3) Despite the existence of separate or different aid, benefits, or
services provided in accordance with this part, a recipient may not deny
a qualified handicapped person the opportunity to participate in such
aid, benefits, or services that are not separate or different.
    (4) A recipient may not, directly or through contractual or other
arrangements, utilize criteria or methods of administration (i) that
have the effect of subjecting qualified handicapped persons to
discrimination on the basis of handicap, (ii) that have the purpose or
effect of defeating or substantially impairing accomplishment of the
objectives of the recipient's program or activity with respect to
handicapped persons, or (iii) that perpetuate the discrimination of
another recipient if both recipients are subject to common
administrative control or are agencies of the same State.
    (5) In determining the site or location of a facility, an applicant
for assistance or a recipient may not make selections (i) that have the
effect of excluding handicapped persons from, denying them the benefits
of, or otherwise subjecting them to discrimination under any program or
activity that receives Federal financial assistance or (ii) that have
the purpose or effect of defeating or substantially impairing the
accomplishment of the objectives of the program or activity with respect
to handicapped persons.
    (6) As used in this section, the aid, benefit, or service provided
under a program or activity receiving Federal financial assistance
includes any aid, benefit, or service provided in or through a facility
that has been constructed, expanded, altered, leased or rented, or
otherwise acquired, in whole or in part, with Federal financial
assistance.
    (c) Aid, benefits, or services limited by Federal law. The exclusion
of nonhandicapped persons from aid, benefits, or services limited by
Federal statute or executive order to handicapped persons or the
exclusion of a specific class of handicapped persons from aid, benefits,
or services limited by Federal statute or executive order to a different
class of handicapped persons is not prohibited by this part.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.5  Assurances required.

    (a) Assurances. An applicant for Federal financial assistance to
which this part applies shall submit an assurance, on a form specified
by the Assistant Secretary, that the program or activity will be
operated in compliance with this part. An applicant may incorporate
these assurances by reference in

[[Page 357]]

subsequent applications to the Department.
    (b) Duration of obligation. (1) In the case of Federal financial
assistance extended in the form of real property or to provide real
property or structures on the property, the assurance will obligate the
recipient or, in the case of a subsequent transfer, the transferee, for
the period during which the real property or structures are used for the
purpose for which Federal financial assistance is extended or for
another purpose involving the provision of similar services or benefits.
    (2) In the case of Federal financial assistance extended to provide
personal property, the assurance will obligate the recipient for the
period during which it retains ownership or possession of the property.
    (3) In all other cases the assurance will obligate the recipient for
the period during which Federal financial assistance is extended.
    (c) Covenants. (1) Where Federal financial assistance is provided in
the form of real property or interest in the property from the
Department, the instrument effecting or recording this transfer shall
contain a covenant running with the land to assure nondiscrimination for
the period during which the real property is used for a purpose for
which the Federal financial assistance is extended or for another
purpose involving the provision of similar services or benefits.
    (2) Where no transfer of property is involved but property is
purchased or improved with Federal financial assistance, the recipient
shall agree to include the covenant described in paragraph (b)(2) of
this section in the instrument effecting or recording any subsequent
transfer of the property.
    (3) Where Federal financial assistance is provided in the form of
real property or interest in the property from the Department, the
covenant shall also include a condition coupled with a right to be
reserved by the Department to revert title to the property in the event
of a breach of the covenant. If a transferee of real property proposes
to mortgage or otherwise encumber the real property as security for
financing construction of new, or improvement of existing, facilities on
the property for the purposes for which the property was transferred,
the Assistant Secretary may, upon request of the transferee and if
necessary to accomplish such financing and upon such conditions as he or
she deems appropriate, agree to forbear the exercise of such right to
revert title for so long as the lien of such mortgage or other
encumbrance remains effective.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.6  Remedial action, voluntary action, and self-evaluation.

    (a) Remedial action. (1) If the Assistant Secretary finds that a
recipient has discriminated against persons on the basis of handicap in
violation of section 504 or this part, the recipient shall take such
remedial action as the Assistant Secretary deems necessary to overcome
the effects of the discrimination.
    (2) Where a recipient is found to have discriminated against persons
on the basis of handicap in violation of section 504 or this part and
where another recipient exercises control over the recipient that has
discriminated, the Assistant Secretary, where appropriate, may require
either or both recipients to take remedial action.
    (3) The Assistant Secretary may, where necessary to overcome the
effects of discrimination in violation of section 504 or this part,
require a recipient to take remedial action (i) with respect to
handicapped persons who are no longer participants in the recipient's
program or activity but who were participants in the program or activity
when such discrimination occurred or (ii) with respect to handicapped
persons who would have been participants in the program or activity had
the discrimination not occurred.
    (b) Voluntary action. A recipient may take steps, in addition to any
action that is required by this part, to overcome the effects of
conditions that resulted in limited participation in the recipient's
program or activity by qualified handicapped persons.
    (c) Self-evaluation. (1) A recipient shall, within one year of the
effective date of this part:

[[Page 358]]

    (i) Evaluate, with the assistance of interested persons, including
handicapped persons or organizations representing handicapped persons,
its current policies and practices and the effects thereof that do not
or may not meet the requirements of this part;
    (ii) Modify, after consultation with interested persons, including
handicapped persons or organizations representing handicapped persons,
any policies and practices that do not meet the requirements of this
part; and
    (iii) Take, after consultation with interested persons, including
handicapped persons or organizations representing handicapped persons,
appropriate remedial steps to eliminate the effects of any
discrimination that resulted from adherence to these policies and
practices.
    (2) A recipient that employs fifteen or more persons shall, for at
least three years following completion of the evaluation required under
paragraph (c)(1) of this section, maintain on file, make available for
public inspection, and provide to the Assistant Secretary upon request:
    (i) A list of the interested persons consulted,
    (ii) A description of areas examined and any problems identified,
and
    (iii) A description of any modifications made and of any remedial
steps taken.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.7  Designation of responsible employee and adoption of
grievance procedures.

    (a) Designation of responsible employee. A recipient that employs
fifteen or more persons shall designate at least one person to
coordinate its efforts to comply with this part.
    (b) Adoption of grievance procedures. A recipient that employs
fifteen or more persons shall adopt grievance procedures that
incorporate appropriate due process standards and that provide for the
prompt and equitable resolution of complaints alleging any action
prohibited by this part. Such procedures need not be established with
respect to complaints from applicants for employment or from applicants
for admission to postsecondary educational institutions.



Sec. 104.8  Notice.

    (a) A recipient that employs fifteen or more persons shall take
appropriate initial and continuing steps to notify participants,
beneficiaries, applicants, and employees, including those with impaired
vision or hearing, and unions or professional organizations holding
collective bargaining or professional agreements with the recipient that
it does not discriminate on the basis of handicap in violation of
section 504 and this part. The notification shall state, where
appropriate, that the recipient does not discriminate in admission or
access to, or treatment or employment in, its program or activity. The
notification shall also include an identification of the responsible
employee designated pursuant to Sec. 104.7(a). A recipient shall make
the initial notification required by this paragraph within 90 days of
the effective date of this part. Methods of initial and continuing
notification may include the posting of notices, publication in
newspapers and magazines, placement of notices in recipients'
publication, and distribution of memoranda or other written
communications.
    (b) If a recipient publishes or uses recruitment materials or
publications containing general information that it makes available to
participants, beneficiaries, applicants, or employees, it shall include
in those materials or publications a statement of the policy described
in paragraph (a) of this section. A recipient may meet the requirement
of this paragraph either by including appropriate inserts in existing
materials and publications or by revising and reprinting the materials
and publications.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.9  Administrative requirements for small recipients.

    The Assistant Secretary may require any recipient with fewer than
fifteen employees, or any class of such recipients, to comply with
Sec. Sec. 104.7 and 104.8, in whole or in part, when the Assistant
Secretary finds a violation of this part or finds that such compliance
will not

[[Page 359]]

significantly impair the ability of the recipient or class of recipients
to provide benefits or services.



Sec. 104.10  Effect of state or local law or other requirements and
effect of employment opportunities.

    (a) The obligation to comply with this part is not obviated or
alleviated by the existence of any state or local law or other
requirement that, on the basis of handicap, imposes prohibitions or
limits upon the eligibility of qualified handicapped persons to receive
services or to practice any occupation or profession.
    (b) The obligation to comply with this part is not obviated or
alleviated because employment opportunities in any occupation or
profession are or may be more limited for handicapped persons than for
nonhandicapped persons.



                     Subpart B_Employment Practices



Sec. 104.11  Discrimination prohibited.

    (a) General. (1) No qualified handicapped person shall, on the basis
of handicap, be subjected to discrimination in employment under any
program or activity to which this part applies.
    (2) A recipient that receives assistance under the Education of the
Handicapped Act shall take positive steps to employ and advance in
employment qualified handicapped persons in programs or activities
assisted under that Act.
    (3) A recipient shall make all decisions concerning employment under
any program or activity to which this part applies in a manner which
ensures that discrimination on the basis of handicap does not occur and
may not limit, segregate, or classify applicants or employees in any way
that adversely affects their opportunities or status because of
handicap.
    (4) A recipient may not participate in a contractual or other
relationship that has the effect of subjecting qualified handicapped
applicants or employees to discrimination prohibited by this subpart.
The relationships referred to in this paragraph include relationships
with employment and referral agencies, with labor unions, with
organizations providing or administering fringe benefits to employees of
the recipient, and with organizations providing training and
apprenticeships.
    (b) Specific activities. The provisions of this subpart apply to:
    (1) Recruitment, advertising, and the processing of applications for
employment;
    (2) Hiring, upgrading, promotion, award of tenure, demotion,
transfer, layoff, termination, right of return from layoff and rehiring;
    (3) Rates of pay or any other form of compensation and changes in
compensation;
    (4) Job assignments, job classifications, organizational structures,
position descriptions, lines of progression, and seniority lists;
    (5) Leaves of absense, sick leave, or any other leave;
    (6) Fringe benefits available by virtue of employment, whether or
not administered by the recipient;
    (7) Selection and financial support for training, including
apprenticeship, professional meetings, conferences, and other related
activities, and selection for leaves of absence to pursue training;
    (8) Employer sponsored activities, including those that are social
or recreational; and
    (9) Any other term, condition, or privilege of employment.
    (c) A recipient's obligation to comply with this subpart is not
affected by any inconsistent term of any collective bargaining agreement
to which it is a party.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.12  Reasonable accommodation.

    (a) A recipient shall make reasonable accommodation to the known
physical or mental limitations of an otherwise qualified handicapped
applicant or employee unless the recipient can demonstrate that the
accommodation would impose an undue hardship on the operation of its
program or activity.
    (b) Reasonable accommodation may include:
    (1) Making facilities used by employees readily accessible to and
usable by handicapped persons, and
    (2) Job restructuring, part-time or modified work schedules,
acquisition

[[Page 360]]

or modification of equipment or devices, the provision of readers or
interpreters, and other similar actions.
    (c) In determining pursuant to paragraph (a) of this section whether
an accommodation would impose an undue hardship on the operation of a
recipient's program or activity, factors to be considered include:
    (1) The overall size of the recipient's program or activity with
respect to number of employees, number and type of facilities, and size
of budget;
    (2) The type of the recipient's operation, including the composition
and structure of the recipient's workforce; and
    (3) The nature and cost of the accommodation needed.
    (d) A recipient may not deny any employment opportunity to a
qualified handicapped employee or applicant if the basis for the denial
is the need to make reasonable accommodation to the physical or mental
limitations of the employee or applicant.

[45 FR 30936, May 9, 2000, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.13  Employment criteria.

    (a) A recipient may not make use of any employment test or other
selection criterion that screens out or tends to screen out handicapped
persons or any class of handicapped persons unless:
    (1) The test score or other selection criterion, as used by the
recipient, is shown to be job-related for the position in question, and
    (2) Alternative job-related tests or criteria that do not screen out
or tend to screen out as many handicapped persons are not shown by the
Director to be available.
    (b) A recipient shall select and administer tests concerning
employment so as best to ensure that, when administered to an applicant
or employee who has a handicap that impairs sensory, manual, or speaking
skills, the test results accurately reflect the applicant's or
employee's job skills, aptitude, or whatever other factor the test
purports to measure, rather than reflecting the applicant's or
employee's impaired sensory, manual, or speaking skills (except where
those skills are the factors that the test purports to measure).



Sec. 104.14  Preemployment inquiries.

    (a) Except as provided in paragraphs (b) and (c) of this section, a
recipient may not conduct a preemployment medical examination or may not
make preemployment inquiry of an applicant as to whether the applicant
is a handicapped person or as to the nature or severity of a handicap. A
recipient may, however, make preemployment inquiry into an applicant's
ability to perform job-related functions.
    (b) When a recipient is taking remedial action to correct the
effects of past discrimination pursuant to Sec. 104.6 (a), when a
recipient is taking voluntary action to overcome the effects of
conditions that resulted in limited participation in its federally
assisted program or activity pursuant to Sec. 104.6(b), or when a
recipient is taking affirmative action pursuant to section 503 of the
Act, the recipient may invite applicants for employment to indicate
whether and to what extent they are handicapped, Provided, That:
    (1) The recipient states clearly on any written questionnaire used
for this purpose or makes clear orally if no written questionnaire is
used that the information requested is intended for use solely in
connection with its remedial action obligations or its voluntary or
affirmative action efforts; and
    (2) The recipient states clearly that the information is being
requested on a voluntary basis, that it will be kept confidential as
provided in paragraph (d) of this section, that refusal to provide it
will not subject the applicant or employee to any adverse treatment, and
that it will be used only in accordance with this part.
    (c) Nothing in this section shall prohibit a recipient from
conditioning an offer of employment on the results of a medical
examination conducted prior to the employee's entrance on duty,
Provided, That:
    (1) All entering employees are subjected to such an examination
regardless of handicap, and
    (2) The results of such an examination are used only in accordance
with the requirements of this part.
    (d) Information obtained in accordance with this section as to the
medical condition or history of the applicant shall be collected and
maintained

[[Page 361]]

on separate forms that shall be accorded confidentiality as medical
records, except that:
    (1) Supervisors and managers may be informed regarding restrictions
on the work or duties of handicapped persons and regarding necessary
accommodations;
    (2) First aid and safety personnel may be informed, where
appropriate, if the condition might require emergency treatment; and
    (3) Government officials investigating compliance with the Act shall
be provided relevant information upon request.



                         Subpart C_Accessibility



Sec. 104.21  Discrimination prohibited.

    No qualified handicapped person shall, because a recipient's
facilities are inaccessible to or unusable by handicapped persons, be
denied the benefits of, be excluded from participation in, or otherwise
be subjected to discrimination under any program or activity to which
this part applies.



Sec. 104.22  Existing facilities.

    (a) Accessibility. A recipient shall operate its program or activity
so that when each part is viewed in its entirety, it is readily
accessible to handicapped persons. This paragraph does not require a
recipient to make each of its existing facilities or every part of a
facility accessible to and usable by handicapped persons.
    (b) Methods. A recipient may comply with the requirements of
paragraph (a) of this section through such means as redesign of
equipment, reassignment of classes or other services to accessible
buildings, assignment of aides to beneficiaries, home visits, delivery
of health, welfare, or other social services at alternate accessible
sites, alteration of existing facilities and construction of new
facilities in conformance with the requirements of Sec. 104.23, or any
other methods that result in making its program or activity accessible
to handicapped persons. A recipient is not required to make structural
changes in existing facilities where other methods are effective in
achieving compliance with paragraph (a) of this section. In choosing
among available methods for meeting the requirement of paragraph (a) of
this section, a recipient shall give priority to those methods that
serve handicapped persons in the most integrated setting appropriate.
    (c) Small health, welfare, or other social service providers. If a
recipient with fewer than fifteen employees that provides health,
welfare, or other social services finds, after consultation with a
handicapped person seeking its services, that there is no method of
complying with paragraph (a) of this section other than making a
significant alteration in its existing facilities, the recipient may, as
an alternative, refer the handicapped person to other providers of those
services that are accessible.
    (d) Time period. A recipient shall comply with the requirement of
paragraph (a) of this section within sixty days of the effective date of
this part except that where structural changes in facilities are
necessary, such changes shall be made within three years of the
effective date of this part, but in any event as expeditiously as
possible.
    (e) Transition plan. In the event that structural changes to
facilities are necessary to meet the requirement of paragraph (a) of
this section, a recipient shall develop, within six months of the
effective date of this part, a transition plan setting forth the steps
necessary to complete such changes. The plan shall be developed with the
assistance of interested persons, including handicapped persons or
organizations representing handicapped persons. A copy of the transition
plan shall be made available for public inspection. The plan shall, at a
minimum:
    (1) Identify physical obstacles in the recipient's facilities that
limit the accessibility of its program or activity to handicapped
persons;
    (2) Describe in detail the methods that will be used to make the
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve
full accessibility in order to comply with paagraph (a) of this section
and, if the time period of the transition plan is longer than one year,
identify the steps of that will be taken during each year of the
transition period; and

[[Page 362]]

    (4) Indicate the person responsible for implementation of the plan.
    (f) Notice. The recipient shall adopt and implement procedures to
ensure that interested persons, including persons with impaired vision
or hearing, can obtain information as to the existence and location of
services, activities, and facilities that are accessible to and usuable
by handicapped persons.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.23  New construction.

    (a) Design and construction. Each facility or part of a facility
constructed by, on behalf of, or for the use of a recipient shall be
designed and constructed in such manner that the facility or part of the
facility is readily accessible to and usable by handicapped persons, if
the construction was commenced after the effective date of this part.
    (b) Alteration. Each facility or part of a facility which is altered
by, on behalf of, or for the use of a recipient after the effective date
of this part in a manner that affects or could affect the usability of
the facility or part of the facility shall, to the maximum extent
feasible, be altered in such manner that the altered portion of the
facility is readily accessible to and usable by handicapped persons.
    (c) Conformance with Uniform Federal Accessibility Standards. (1)
Effective as of January 18, 1991, design, construction, or alteration of
buildings in conformance with sections 3-8 of the Uniform Federal
Accessibility Standards (UFAS) (Appendix A to 41 CFR subpart 101-19.6)
shall be deemed to comply with the requirements of this section with
respect to those buildings. Departures from particular technical and
scoping requirements of UFAS by the use of other methods are permitted
where substantially equivalent or greater access to and usability of the
building is provided.
    (2) For purposes of this section, section 4.1.6(1)(g) of UFAS shall
be interpreted to exempt from the requirements of UFAS only mechanical
rooms and other spaces that, because of their intended use, will not
require accessibility to the public or beneficiaries or result in the
employment or residence therein of persons with phusical handicaps.
    (3) This section does not require recipients to make building
alterations that have little likelihood of being accomplished without
removing or altering a load-bearing structural member.

[45 FR 30936, May 9, 1980; 45 FR 37426, June 3, 1980, as amended at 55
FR 52138, 52141, Dec. 19, 1990]



        Subpart D_Preschool, Elementary, and Secondary Education



Sec. 104.31  Application of this subpart.

    Subpart D applies to preschool, elementary, secondary, and adult
education programs or activities that receive Federal financial
assistance and to recipients that operate, or that receive Federal
financial assistance for the operation of, such programs or activities.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.32  Location and notification.

    A recipient that operates a public elementary or secondary education
program or activity shall annually:
    (a) Undertake to identify and locate every qualified handicapped
person residing in the recipient's jurisdiction who is not receiving a
public education; and
    (b) Take appropriate steps to notify handicapped persons and their
parents or guardians of the recipient's duty under this subpart.

[45 FR 30936, May 9, 2000, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.33  Free appropriate public education.

    (a) General. A recipient that operates a public elementary or
secondary education program or activity shall provide a free appropriate
public education to each qualified handicapped person who is in the
recipient's jurisdiction, regardless of the nature or severity of the
person's handicap.
    (b) Appropriate education. (1) For the purpose of this subpart, the
provision of an appropriate education is the provision of regular or
special education and related aids and services that (i)

[[Page 363]]

are designed to meet individual educational needs of handicapped persons
as adequately as the needs of nonhandicapped persons are met and (ii)
are based upon adherence to procedures that satisfy the requirements of
Sec. Sec. 104.34, 104.35, and 104.36.
    (2) Implementation of an Individualized Education Program developed
in accordance with the Education of the Handicapped Act is one means of
meeting the standard established in paragraph (b)(1)(i) of this section.
    (3) A recipient may place a handicapped person or refer such a
person for aid, benefits, or services other than those that it operates
or provides as its means of carrying out the requirements of this
subpart. If so, the recipient remains responsible for ensuring that the
requirements of this subpart are met with respect to any handicapped
person so placed or referred.
    (c) Free education--(1) General. For the purpose of this section,
the provision of a free education is the provision of educational and
related services without cost to the handicapped person or to his or her
parents or guardian, except for those fees that are imposed on non-
handicapped persons or their parents or guardian. It may consist either
of the provision of free services or, if a recipient places a
handicapped person or refers such person for aid, benefits, or services
not operated or provided by the recipient as its means of carrying out
the requirements of this subpart, of payment for the costs of the aid,
benefits, or services. Funds available from any public or private agency
may be used to meet the requirements of this subpart. Nothing in this
section shall be construed to relieve an insurer or similar third party
from an otherwise valid obligation to provide or pay for services
provided to a handicapped person.
    (2) Transportation. If a recipient places a handicapped person or
refers such person for aid, benefits, or services not operated or
provided by the recipient as its means of carrying out the requirements
of this subpart, the recipient shall ensure that adequate transportation
to and from the aid, benefits, or services is provided at no greater
cost than would be incurred by the person or his or her parents or
guardian if the person were placed in the aid, benefits, or services
operated by the recipient.
    (3) Residential placement. If a public or private residential
placement is necessary to provide a free appropriate public education to
a handicapped person because of his or her handicap, the placement,
including non-medical care and room and board, shall be provided at no
cost to the person or his or her parents or guardian.
    (4) Placement of handicapped persons by parents. If a recipient has
made available, in conformance with the requirements of this section and
Sec. 104.34, a free appropriate public education to a handicapped
person and the person's parents or guardian choose to place the person
in a private school, the recipient is not required to pay for the
person's education in the private school. Disagreements between a parent
or guardian and a recipient regarding whether the recipient has made a
free appropriate public education available or otherwise regarding the
question of financial responsibility are subject to the due process
procedures of Sec. 104.36.
    (d) Compliance. A recipient may not exclude any qualified
handicapped person from a public elementary or secondary education after
the effective date of this part. A recipient that is not, on the
effective date of this regulation, in full compliance with the other
requirements of the preceding paragraphs of this section shall meet such
requirements at the earliest practicable time and in no event later than
September 1, 1978.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.34  Educational setting.

    (a) Academic setting. A recipient to which this subpart applies
shall educate, or shall provide for the education of, each qualified
handicapped person in its jurisdiction with persons who are not
handicapped to the maximum extent appropriate to the needs of the
handicapped person. A recipient shall place a handicapped person in the
regular educational environment operated by the recipient unless it is
demonstrated by the recipient that the education of the person in the
regular

[[Page 364]]

environment with the use of supplementary aids and services cannot be
achieved satisfactorily. Whenever a recipient places a person in a
setting other than the regular educational environment pursuant to this
paragraph, it shall take into account the proximity of the alternate
setting to the person's home.
    (b) Nonacademic settings. In providing or arranging for the
provision of nonacademic and extracurricular services and activities,
including meals, recess periods, and the services and activities set
forth in Sec. 104.37(a)(2), a recipient shall ensure that handicapped
persons participate with nonhandicapped persons in such activities and
services to the maximum extent appropriate to the needs of the
handicapped person in question.
    (c) Comparable facilities. If a recipient, in compliance with
paragraph (a) of this section, operates a facility that is identifiable
as being for handicapped persons, the recipient shall ensure that the
facility and the services and activities provided therein are comparable
to the other facilities, services, and activities of the recipient.



Sec. 104.35  Evaluation and placement.

    (a) Preplacement evaluation. A recipient that operates a public
elementary or secondary education program or activity shall conduct an
evaluation in accordance with the requirements of paragraph (b) of this
section of any person who, because of handicap, needs or is belived to
need special education or related services before taking any action with
respect to the initial placement of the person in regular or special
education and any subsequent significant change in placement.
    (b) Evaluation procedures. A recipient to which this subpart applies
shall establish standards and procedures for the evaluation and
placement of persons who, because of handicap, need or are believed to
need special education or related services which ensure that:
    (1) Tests and other evaluation materials have been validated for the
specific purpose for which they are used and are administered by trained
personnel in conformance with the instructions provided by their
producer;
    (2) Tests and other evaluation materials include those tailored to
assess specific areas of educational need and not merely those which are
designed to provide a single general intelligence quotient; and
    (3) Tests are selected and administered so as best to ensure that,
when a test is administered to a student with impaired sensory, manual,
or speaking skills, the test results accurately reflect the student's
aptitude or achievement level or whatever other factor the test purports
to measure, rather than reflecting the student's impaired sensory,
manual, or speaking skills (except where those skills are the factors
that the test purports to measure).
    (c) Placement procedures. In interpreting evaluation data and in
making placement decisions, a recipient shall (1) draw upon information
from a variety of sources, including aptitude and achievement tests,
teacher recommendations, physical condition, social or cultural
background, and adaptive behavior, (2) establish procedures to ensure
that information obtained from all such sources is documented and
carefully considered, (3) ensure that the placement decision is made by
a group of persons, including persons knowledgeable about the child, the
meaning of the evaluation data, and the placement options, and (4)
ensure that the placement decision is made in conformity with Sec.
104.34.
    (d) Reevaluation. A recipient to which this section applies shall
establish procedures, in accordance with paragraph (b) of this section,
for periodic reevaluation of students who have been provided special
education and related services. A reevaluation procedure consistent with
the Education for the Handicapped Act is one means of meeting this
requirement.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.36  Procedural safeguards.

    A recipient that operates a public elementary or secondary education
program or activity shall establish and implement, with respect to
actions regarding the identification, evaluation, or educational
placement of persons who, because of handicap, need or are believed to
need special instruction or

[[Page 365]]

related services, a system of procedural safeguards that includes
notice, an opportunity for the parents or guardian of the person to
examine relevant records, an impartial hearing with opportunity for
participation by the person's parents or guardian and representation by
counsel, and a review procedure. Compliance with the procedural
safeguards of section 615 of the Education of the Handicapped Act is one
means of meeting this requirement.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68054, Nov. 13, 2000]



Sec. 104.37  Nonacademic services.

    (a) General. (1) A recipient to which this subpart applies shall
provide non-academic and extracurricular services and activities in such
manner as is necessary to afford handicapped students an equal
opportunity for participation in such services and activities.
    (2) Nonacademic and extracurricular services and activities may
include counseling services, physical recreational athletics,
transportation, health services, recreational activities, special
interest groups or clubs sponsored by the recipients, referrals to
agencies which provide assistance to handicapped persons, and employment
of students, including both employment by the recipient and assistance
in making available outside employment.
    (b) Counseling services. A recipient to which this subpart applies
that provides personal, academic, or vocational counseling, guidance, or
placement services to its students shall provide these services without
discrimination on the basis of handicap. The recipient shall ensure that
qualified handicapped students are not counseled toward more restrictive
career objectives than are nonhandicapped students with similar
interests and abilities.
    (c) Physical education and athletics. (1) In providing physical
education courses and athletics and similar aid, benefits, or services
to any of its students, a recipient to which this subpart applies may
not discriminate on the basis of handicap. A recipient that offers
physical education courses or that operates or sponsors interscholastic,
club, or intramural athletics shall provide to qualified handicapped
students an equal opportunity for participation.
    (2) A recipient may offer to handicapped students physical education
and athletic activities that are separate or different from those
offered to nonhandicapped students only if separation or differentiation
is consistent with the requirements of Sec. 104.34 and only if no
qualified handicapped student is denied the opportunity to compete for
teams or to participate in courses that are not separate or different.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.38  Preschool and adult education.

    A recipient to which this subpart applies that provides preschool
education or day care or adult education may not, on the basis of
handicap, exclude qualified handicapped persons and shall take into
account the needs of such persons in determining the aid, benefits or
services to be provided.

[65 FR 68055, Nov. 13, 2000]



Sec. 104.39  Private education.

    (a) A recipient that provides private elementary or secondary
education may not, on the basis of handicap, exclude a qualified
handicapped person if the person can, with minor adjustments, be
provided an appropriate education, as defined in Sec. 104.33(b)(1),
within that recipient's program or activity.
    (b) A recipient to which this section applies may not charge more
for the provision of an appropriate education to handicapped persons
than to nonhandicapped persons except to the extent that any additional
charge is justified by a substantial increase in cost to the recipient.
    (c) A recipient to which this section applies that provides special
education shall do so in accordance with the provisions of Sec. Sec.
104.35 and 104.36. Each recipient to which this section applies is
subject to the provisions of Sec. Sec. 104.34, 104.37, and 104.38.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]

[[Page 366]]



                    Subpart E_Postsecondary Education



Sec. 104.41  Application of this subpart.

    Subpart E applies to postsecondary education programs or activities,
including postsecondary vocational education programs or activities,
that receive Federal financial assistance and to recipients that
operate, or that receive Federal financial assistance for the operation
of, such programs or activities.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.42  Admissions and recruitment.

    (a) General. Qualified handicapped persons may not, on the basis of
handicap, be denied admission or be subjected to discrimination in
admission or recruitment by a recipient to which this subpart applies.
    (b) Admissions. In administering its admission policies, a recipient
to which this subpart applies:
    (1) May not apply limitations upon the number or proportion of
handicapped persons who may be admitted;
    (2) May not make use of any test or criterion for admission that has
a disproportionate, adverse effect on handicapped persons or any class
of handicapped persons unless (i) the test or criterion, as used by the
recipient, has been validated as a predictor of success in the education
program or activity in question and (ii) alternate tests or criteria
that have a less disproportionate, adverse effect are not shown by the
Assistant Secretary to be available.
    (3) Shall assure itself that (i) admissions tests are selected and
administered so as best to ensure that, when a test is administered to
an applicant who has a handicap that impairs sensory, manual, or
speaking skills, the test results accurately reflect the applicant's
aptitude or achievement level or whatever other factor the test purports
to measure, rather than reflecting the applicant's impaired sensory,
manual, or speaking skills (except where those skills are the factors
that the test purports to measure); (ii) admissions tests that are
designed for persons with impaired sensory, manual, or speaking skills
are offered as often and in as timely a manner as are other admissions
tests; and (iii) admissions tests are administered in facilities that,
on the whole, are accessible to handicapped persons; and
    (4) Except as provided in paragraph (c) of this section, may not
make preadmission inquiry as to whether an applicant for admission is a
handicapped person but, after admission, may make inquiries on a
confidential basis as to handicaps that may require accommodation.
    (c) Preadmission inquiry exception. When a recipient is taking
remedial action to correct the effects of past discrimination pursuant
to Sec. 104.6(a) or when a recipient is taking voluntary action to
overcome the effects of conditions that resulted in limited
participation in its federally assisted program or activity pursuant to
Sec. 104.6(b), the recipient may invite applicants for admission to
indicate whether and to what extent they are handicapped, Provided,
That:
    (1) The recipient states clearly on any written questionnaire used
for this purpose or makes clear orally if no written questionnaire is
used that the information requested is intended for use solely in
connection with its remedial action obligations or its voluntary action
efforts; and
    (2) The recipient states clearly that the information is being
requested on a voluntary basis, that it will be kept confidential, that
refusal to provide it will not subject the applicant to any adverse
treatment, and that it will be used only in accordance with this part.
    (d) Validity studies. For the purpose of paragraph (b)(2) of this
section, a recipient may base prediction equations on first year grades,
but shall conduct periodic validity studies against the criterion of
overall success in the education program or activity in question in
order to monitor the general validity of the test scores.



Sec. 104.43  Treatment of students; general.

    (a) No qualified handicapped student shall, on the basis of
handicap, be excluded from participation in, be denied the benefits of,
or otherwise be subjected to discrimination under any academic,
research, occupational training,

[[Page 367]]

housing, health insurance, counseling, financial aid, physical
education, athletics, recreation, transportation, other extracurricular,
or other postsecondary education aid, benefits, or services to which
this subpart applies.
    (b) A recipient to which this subpart applies that considers
participation by students in education programs or activities not
operated wholly by the recipient as part of, or equivalent to, and
education program or activity operated by the recipient shall assure
itself that the other education program or activity, as a whole,
provides an equal opportunity for the participation of qualified
handicapped persons.
    (c) A recipient to which this subpart applies may not, on the basis
of handicap, exclude any qualified handicapped student from any course,
course of study, or other part of its education program or activity.
    (d) A recipient to which this subpart applies shall operate its
program or activity in the most integrated setting appropriate.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.44  Academic adjustments.

    (a) Academic requirements. A recipient to which this subpart applies
shall make such modifications to its academic requirements as are
necessary to ensure that such requirements do not discriminate or have
the effect of discriminating, on the basis of handicap, against a
qualified handicapped applicant or student. Academic requirements that
the recipient can demonstrate are essential to the instruction being
pursued by such student or to any directly related licensing requirement
will not be regarded as discriminatory within the meaning of this
section. Modifications may include changes in the length of time
permitted for the completion of degree requirements, substitution of
specific courses required for the completion of degree requirements, and
adaptation of the manner in which specific courses are conducted.
    (b) Other rules. A recipient to which this subpart applies may not
impose upon handicapped students other rules, such as the prohibition of
tape recorders in classrooms or of dog guides in campus buildings, that
have the effect of limiting the participation of handicapped students in
the recipient's education program or activity.
    (c) Course examinations. In its course examinations or other
procedures for evaluating students' academic achievement, a recipient to
which this subpart applies shall provide such methods for evaluating the
achievement of students who have a handicap that impairs sensory,
manual, or speaking skills as will best ensure that the results of the
evaluation represents the student's achievement in the course, rather
than reflecting the student's impaired sensory, manual, or speaking
skills (except where such skills are the factors that the test purports
to measure).
    (d) Auxiliary aids. (1) A recipient to which this subpart applies
shall take such steps as are necessary to ensure that no handicapped
student is denied the benefits of, excluded from participation in, or
otherwise subjected to discrimination because of the absence of
educational auxiliary aids for students with impaired sensory, manual,
or speaking skills.
    (2) Auxiliary aids may include taped texts, interpreters or other
effective methods of making orally delivered materials available to
students with hearing impairments, readers in libraries for students
with visual impairments, classroom equipment adapted for use by students
with manual impairments, and other similar services and actions.
Recipients need not provide attendants, individually prescribed devices,
readers for personal use or study, or other devices or services of a
personal nature.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.45  Housing.

    (a) Housing provided by the recipient. A recipient that provides
housing to its nonhandicapped students shall provide comparable,
convenient, and accessible housing to handicapped students at the same
cost as to others. At the end of the transition period provided for in
subpart C, such housing shall be available in sufficient quantity and
variety so that the scope of handicapped students' choice of living
accommodations

[[Page 368]]

is, as a whole, comparable to that of nonhandicapped students.
    (b) Other housing. A recipient that assists any agency,
organization, or person in making housing available to any of its
students shall take such action as may be necessary to assure itself
that such housing is, as a whole, made available in a manner that does
not result in discrimination on the basis of handicap.



Sec. 104.46  Financial and employment assistance to students.

    (a) Provision of financial assistance. (1) In providing financial
assistance to qualified handicapped persons, a recipient to which this
subpart applies may not,
    (i) On the basis of handicap, provide less assistance than is
provided to nonhandicapped persons, limit eligibility for assistance, or
otherwise discriminate or
    (ii) Assist any entity or person that provides assistance to any of
the recipient's students in a manner that discriminates against
qualified handicapped persons on the basis of handicap.
    (2) A recipient may administer or assist in the administration of
scholarships, fellowships, or other forms of financial assistance
established under wills, trusts, bequests, or similar legal instruments
that require awards to be made on the basis of factors that discriminate
or have the effect of discriminating on the basis of handicap only if
the overall effect of the award of scholarships, fellowships, and other
forms of financial assistance is not discriminatory on the basis of
handicap.
    (b) Assistance in making available outside employment. A recipient
that assists any agency, organization, or person in providing employment
opportunities to any of its students shall assure itself that such
employment opportunities, as a whole, are made available in a manner
that would not violate subpart B if they were provided by the recipient.
    (c) Employment of students by recipients. A recipient that employs
any of its students may not do so in a manner that violates subpart B.



Sec. 104.47  Nonacademic services.

    (a) Physical education and athletics. (1) In providing physical
education courses and athletics and similar aid, benefits, or services
to any of its students, a recipient to which this subpart applies may
not discriminate on the basis of handicap. A recipient that offers
physical education courses or that operates or sponsors intercollegiate,
club, or intramural athletics shall provide to qualified handicapped
students an equal opportunity for participation in these activities.
    (2) A recipient may offer to handicapped students physical education
and athletic activities that are separate or different only if
separation or differentiation is consistent with the requirements of
Sec. 104.43(d) and only if no qualified handicapped student is denied
the opportunity to compete for teams or to participate in courses that
are not separate or different.
    (b) Counseling and placement services. A recipient to which this
subpart applies that provides personal, academic, or vocational
counseling, guidance, or placement services to its students shall
provide these services without discrimination on the basis of handicap.
The recipient shall ensure that qualified handicapped students are not
counseled toward more restrictive career objectives than are
nonhandicapped students with similar interests and abilities. This
requirement does not preclude a recipient from providing factual
information about licensing and certification requirements that may
present obstacles to handicapped persons in their pursuit of particular
careers.
    (c) Social organizations. A recipient that provides significant
assistance to fraternities, sororities, or similar organizations shall
assure itself that the membership practices of such organizations do not
permit discrimination otherwise prohibited by this subpart.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]

[[Page 369]]



             Subpart F_Health, Welfare, and Social Services



Sec. 104.51  Application of this subpart.

    Subpart F applies to health, welfare, and other social service
programs or activities that receive Federal financial assistance and to
recipients that operate, or that receive Federal financial assistance
for the operation of, such programs or activities.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



Sec. 104.52  Health, welfare, and other social services.

    (a) General. In providing health, welfare, or other social services
or benefits, a recipient may not, on the basis of handicap:
    (1) Deny a qualified handicapped person these benefits or services;
    (2) Afford a qualified handicapped person an opportunity to receive
benefits or services that is not equal to that offered nonhandicapped
persons;
    (3) Provide a qualified handicapped person with benefits or services
that are not as effective (as defined in Sec. 104.4(b)) as the benefits
or services provided to others;
    (4) Provide benefits or services in a manner that limits or has the
effect of limiting the participation of qualified handicapped persons;
or
    (5) Provide different or separate benefits or services to
handicapped persons except where necessary to provide qualified
handicapped persons with benefits and services that are as effective as
those provided to others.
    (b) Notice. A recipient that provides notice concerning benefits or
services or written material concerning waivers of rights or consent to
treatment shall take such steps as are necessary to ensure that
qualified handicapped persons, including those with impaired sensory or
speaking skills, are not denied effective notice because of their
handicap.
    (c) Emergency treatment for the hearing impaired. A recipient
hospital that provides health services or benefits shall establish a
procedure for effective communication with persons with impaired hearing
for the purpose of providing emergency health care.
    (d) Auxiliary aids. (1) A recipient to which this subpart applies
that employs fifteen or more persons shall provide appropriate auxiliary
aids to persons with impaired sensory, manual, or speaking skills, where
necessary to afford such persons an equal opportunity to benefit from
the service in question.
    (2) The Assistant Secretary may require recipients with fewer than
fifteen employees to provide auxiliary aids where the provision of aids
would not significantly impair the ability of the recipient to provide
its benefits or services.
    (3) For the purpose of this paragraph, auxiliary aids may include
brailled and taped material, interpreters, and other aids for persons
with impaired hearing or vision.



Sec. 104.53  Drug and alcohol addicts.

    A recipient to which this subpart applies that operates a general
hospital or outpatient facility may not discriminate in admission or
treatment against a drug or alcohol abuser or alcoholic who is suffering
from a medical condition, because of the person's drug or alcohol abuse
or alcoholism.



Sec. 104.54  Education of institutionalized persons.

    A recipient to which this subpart applies and that operates or
supervises a program or activity that provides aid, benefits or services
for persons who are institutionalized because of handicap shall ensure
that each qualified handicapped person, as defined in Sec. 104.3(k)(2),
in its program or activity is provided an appropriate education, as
defined in Sec. 104.33(b). Nothing in this section shall be interpreted
as altering in any way the obligations of recipients under subpart D.

[45 FR 30936, May 9, 1980, as amended at 65 FR 68055, Nov. 13, 2000]



                          Subpart G_Procedures



Sec. 104.61  Procedures.

    The procedural provisions applicable to title VI of the Civil Rights
Act of 1964 apply to this part. These procedures are found in Sec. Sec.
100.6-100.10 and part 101 of this title.

[[Page 370]]



        Sec. Appendix A to Part 104--Analysis of Final Regulation

                      Subpart A--General Provisions

    Definitions--1. Recipient. Section 104.23 contains definitions used
throughout the regulation.
    One comment requested that the regulation specify that nonpublic
elementary and secondary schools that are not otherwise recipients do
not become recipients by virtue of the fact their students participate
in certain federally funded programs. The Secretary believes it
unnecessary to amend the regulation in this regard, because almost
identical language in the Department's regulations implementing title VI
and title IX of the Education Amendments of 1972 has consistently been
interpreted so as not to render such schools recipients. These schools,
however, are indirectly subject to the substantive requirements of this
regulation through the application of Sec. 104.4(b)(iv), which
prohibits recipients from assisting agencies that discriminate on the
basis of handicap in providing services to beneficiaries of the
recipients' programs.
    2. Federal financial assistance. In Sec. 104.3(h), defining federal
financial assistance, a clarifying change has been made: procurement
contracts are specifically excluded. They are covered, however, by the
Department of Labor's regulation under section 503. The Department has
never considered such contracts to be contracts of assistance; the
explicit exemption has been added only to avoid possible confusion.
    The proposed regulation's exemption of contracts of insurance or
guaranty has been retained. A number of comments argued for its deletion
on the ground that section 504, unlike title VI and title IX, contains
no statutory exemption for such contracts. There is no indication,
however, in the legislative history of the Rehabilitation Act of 1973 or
of the amendments to that Act in 1974, that Congress intended section
504 to have a broader application, in terms of federal financial
assistance, than other civil rights statutes. Indeed, Congress directed
that section 504 be implemented in the same manner as titles VI and IX.
In view of the long established exemption of contracts of insurance or
guaranty under title VI, we think it unlikely that Congress intended
section 504 to apply to such contracts.
    3. Handicapped person. Section 104.3(j), which defines the class of
persons protected under the regulation, has not been substantially
changed. The definition of handicapped person in paragraph (j)(1)
conforms to the statutory definition of handicapped person that is
applicable to section 504, as set forth in section 111(a) of the
Rehabilitation Act Amendments of 1974, Pub. L. 93-516.
    The first of the three parts of the statutory and regulatory
definition includes any person who has a physical or mental impairment
that substantially limits one or more major life activities. Paragraph
(j)(2)(i) further defines physical or mental impairments. The definition
does not set forth a list of specific diseases and conditions that
constitute physical or mental impairments because of the difficulty of
ensuring the comprehensiveness of any such list. The term includes,
however, such diseases and conditions as orthopedic, visual, speech, and
hearing impairments, cerebral palsy, epilepsy, muscular dystrophy,
multiple sclerosis, cancer, heart disease, diabetes, mental retardation,
emotional illness, and, as discussed below, drug addiction and
alcoholism.
    It should be emphasized that a physical or mental impairment does
not constitute a handicap for purposes of section 504 unless its
severity is such that it results in a substantial limitation of one or
more major life activities. Several comments observed the lack of any
definition in the proposed regulation of the phrase ``substantially
limits.'' The Department does not believe that a definition of this term
is possible at this time.
    A related issue raised by several comments is whether the definition
of handicapped person is unreasonably broad. Comments suggested
narrowing the definition in various ways. The most common recommendation
was that only ``traditional'' handicaps be covered. The Department
continues to believe, however, that it has no flexibility within the
statutory definition to limit the term to persons who have those severe,
permanent, or progressive conditions that are most commonly regarded as
handicaps. The Department intends, however, to give particular attention
in its enforcement of section 504 to eliminating discrimination against
persons with the severe handicaps that were the focus of concern in the
Rehabilitation Act of 1973.
    The definition of handicapped person also includes specific
limitations on what persons are classified as handicapped under the
regulation. The first of the three parts of the definition specifies
that only physical and mental handicaps are included. Thus,
environmental, cultural, and economic disadvantage are not in themselves
covered; nor are prison records, age, or homosexuality. Of course, if a
person who has any of these characteristics also has a physical or
mental handicap, the person is included within the definition of
handicapped person.
    In paragraph (j)(2)(i), physical or mental impairment is defined to
include, among other impairments, specific learning disabilities. The
Department will interpret the term as it is used in section 602 of the
Education of the Handicapped Act, as amended. Paragraph (15) of section
602 uses the term ``specific learning disabilities'' to describe

[[Page 371]]

such conditions as perceptual handicaps, brain injury, minimal brain
dysfunction, dyslexia, and developmental aphasia.
    Paragraph (j)(2)(i) has been shortened, but not substantively
changed, by the deletion of clause (C), which made explicit the
inclusion of any condition which is mental or physical but whose precise
nature is not at present known. Clauses (A) and (B) clearly comprehend
such conditions.
    The second part of the statutory and regulatory definition of
handicapped person includes any person who has a record of a physical or
mental impairment that substantially limits a major life activity. Under
the definition of ``record'' in paragraph (j)(2)(iii), persons who have
a history of a handicapping condition but no longer have the condition,
as well as persons who have been incorrectly classified as having such a
condition, are protected from discrimination under section 504.
Frequently occurring examples of the first group are persons with
histories of mental or emotional illness, heart disease, or cancer; of
the second group, persons who have been misclassified as mentally
retarded.
    The third part of the statutory and regulatory definition of
handicapped person includes any person who is regarded as having a
physical or mental impairment that substantially limits one or more
major life activities. It includes many persons who are ordinarily
considered to be handicapped but who do not technically fall within the
first two parts of the statutory definition, such as persons with a
limp. This part of the definition also includes some persons who might
not ordinarily be considered handicapped, such as persons with
disfiguring scars, as well as persons who have no physical or mental
impairment but are treated by a recipient as if they were handicapped.
    4. Drug addicts and alcoholics. As was the case during the first
comment period, the issue of whether to include drug addicts and
alcoholics within the definition of handicapped person was of major
concern to many commenters. The arguments presented on each side of the
issue were similar during the two comment periods, as was the preference
of commenters for exclusion of this group of persons. While some
comments reflected misconceptions about the implications of including
alcoholics and drug addicts within the scope of the regulation, the
Secretary understands the concerns that underlie the comments on this
question and recognizes that application of section 504 to active
alcoholics and drug addicts presents sensitive and difficult questions
that must be taken into account in interpretation and enforcement.
    The Secretary has carefully examined the issue and has obtained a
legal opinion from the Attorney General. That opinion concludes that
drug addiction and alcoholism are ``physical or mental impairments''
within the meaning of section 7(6) of the Rehabilitation Act of 1973, as
amended, and that drug addicts and alcoholics are therefore handicapped
for purposes of section 504 if their impairment substantially limits one
of their major life activities. The Secretary therefore believes that he
is without authority to exclude these conditions from the definition.
There is a medical and legal consensus that alcoholism and drug
addiction are diseases, although there is disagreement as to whether
they are primarily mental or physical. In addition, while Congress did
not focus specifically on the problems of drug addiction and alcoholism
in enacting section 504, the committees that considered the
Rehabilitation Act of 1973 were made aware of the Department's long-
standing practice of treating addicts and alcoholics as handicapped
individuals eligible for rehabilitation services under the Vocational
Rehabilitation Act.
    The Secretary wishes to reassure recipients that inclusion of
addicts and alcoholics within the scope of the regulation will not lead
to the consequences feared by many commenters. It cannot be emphasized
too strongly that the statute and the regulation apply only to
discrimination against qualified handicapped persons solely by reason of
their handicap. The fact that drug addiction and alcoholism may be
handicaps does not mean that these conditions must be ignored in
determining whether an individual is qualified for services or
employment opportunities. On the contrary, a recipient may hold a drug
addict or alcoholic to the same standard of performance and behavior to
which it holds others, even if any unsatisfactory performance or
behavior is related to the person's drug addiction or alcoholism. In
other words, while an alcoholic or drug addict may not be denied
services or disqualified from employment solely because of his or her
condition, the behavioral manifestations of the condition may be taken
into account in determining whether he or she is qualified.
    With respect to the employment of a drug addict or alcoholic, if it
can be shown that the addiction or alcoholism prevents successful
performance of the job, the person need not be provided the employment
opportunity in question. For example, in making employment decisions, a
recipient may judge addicts and alcoholics on the same basis it judges
all other applicants and employees. Thus, a recipient may consider--for
all applicants including drug addicts and alcoholics--past personnel
records, absenteeism, disruptive, abusive, or dangerous behavior,
violations of rules and unsatisfactory work performance. Moreover,
employers may enforce rules prohibiting the possession or use of alcohol
or drugs in the work-place, provided

[[Page 372]]

that such rules are enforced against all employees.
    With respect to other services, the implications of coverage, of
alcoholics and drug addicts are two-fold: first, no person may be
excluded from services solely by reason of the presence or history of
these conditions; second, to the extent that the manifestations of the
condition prevent the person from meeting the basic eligibility
requirements of the program or cause substantial interference with the
operation of the program, the condition may be taken into consideration.
Thus, a college may not exclude an addict or alcoholic as a student, on
the basis of addiction or alcoholism, if the person can successfully
participate in the education program and complies with the rules of the
college and if his or her behavior does not impede the performance of
other students.
    Of great concern to many commenters was the question of what effect
the inclusion of drug addicts and alcoholics as handicapped persons
would have on school disciplinary rules prohibiting the use or
possession of drugs or alcohol by students. Neither such rules nor their
application to drug addicts or alcoholics is prohibited by this
regulation, provided that the rules are enforced evenly with respect to
all students.
    5. Qualified handicapped person. Paragraph (k) of Sec. 104.3
defines the term ``qualified handicapped person.'' Throughout the
regulation, this term is used instead of the statutory term ``otherwise
qualified handicapped person.'' The Department believes that the
omission of the word ``otherwise'' is necessary in order to comport with
the intent of the statute because, read literally, ``otherwise''
qualified handicapped persons include persons who are qualified except
for their handicap, rather than in spite of their handicap. Under such a
literal reading, a blind person possessing all the qualifications for
driving a bus except sight could be said to be ``otherwise qualified''
for the job of driving. Clearly, such a result was not intended by
Congress. In all other respects, the terms ``qualified'' and ``otherwise
qualified'' are intended to be interchangeable.
    Section 104.3(k)(1) defines a qualified handicapped person with
respect to employment as a handicapped person who can, with reasonable
accommodation, perform the essential functions of the job in question.
The term ``essential functions'' does not appear in the corresponding
provision of the Department of Labor's section 503 regulation, and a few
commenters objected to its inclusion on the ground that a handicapped
person should be able to perform all job tasks. However, the Department
believes that inclusion of the phrase is useful in emphasizing that
handicapped persons should not be disqualified simply because they may
have difficulty in performing tasks that bear only a marginal
relationship to a particular job. Further, we are convinced that
inclusion of the phrase is not inconsistent with the Department of
Labor's application of its definition.
    Certain commenters urged that the definition of qualified
handicapped person be amended so as explicitly to place upon the
employer the burden of showing that a particular mental or physical
characteristic is essential. Because the same result is achieved by the
requirement contained in paragraph (a) of Sec. 104.13, which requires
an employer to establish that any selection criterion that tends to
screen out handicapped persons is job-related, that recommendation has
not been followed.
    Section 104.3(k)(2) defines qualified handicapped person, with
respect to preschool, elementary, and secondary programs, in terms of
age. Several commenters recommended that eligibility for the services be
based upon the standard of substantial benefit, rather than age, because
of the need of many handicapped children for early or extended services
if they are to have an equal opportunity to benefit from education
programs. No change has been made in this provision, again because of
the extreme difficulties in administration that would result from the
choice of the former standard. Under the remedial action provisions of
Sec. 104.6(a)(3), however, persons beyond the age limits prescribed in
Sec. 104.3(k)(2) may in appropriate cases be required to be provided
services that they were formerly denied because of a recipient's
violation of section 504.
    Section 104.3(k)(2) states that a handicapped person is qualified
for preschool, elementary, or secondary services if the person is of an
age at which nonhandicapped persons are eligible for such services or at
which State law mandates the provision of educational services to
handicapped persons. In addition, the extended age ranges for which
recipients must provide full educational opportunity to all handicapped
persons in order to be eligible for assistance under the Education of
the Handicapped Act--generally, 3-18 as of September 1978, and 3-21 as
of September 1980 are incorporated by reference in this paragraph.
    Section 104.3(k)(3) defines qualified handicapped person with
respect to postsecondary educational programs. As revised, the paragraph
means that both academic and technical standards must be met by
applicants to these programs. The term technical standards refers to all
nonacademic admissions criteria that are essential to participation in
the program in question.
    6. General prohibitions against discrimination. Section 104.4
contains general prohibitions against discrimination applicable to all
recipients of assistance from this Department.
    Paragraph (b)(1(i) prohibits the exclusion of qualified handicapped
persons from aids, benefits, or services, and paragraph (ii) requires
that equal opportunity to participate

[[Page 373]]

or benefit be provided. Paragraph (iii) requires that services provided
to handicapped persons be as effective as those provided to the
nonhandicapped. In paragraph (iv), different or separate services are
prohibited except when necessary to provide equally effective benefits.
    In this context, the term equally effective, defined in paragraph
(b)(2), is intended to encompass the concept of equivalent, as opposed
to identical, services and to acknowledge the fact that in order to meet
the individual needs of handicapped persons to the same extent that the
corresponding needs of nonhandicapped persons are met, adjustments to
regular programs or the provision of different programs may sometimes be
necessary. This standard parallels the one established under title VI of
Civil Rights Act of 1964 with respect to the provision of educational
services to students whose primary language is not English. See Lau v.
Nichols, 414 U.S. 563 (1974). To be equally effective, however, an aid,
benefit, or service need not produce equal results; it merely must
afford an equal opportunity to achieve equal results.
    It must be emphasized that, although separate services must be
required in some instances, the provision of unnecessarily separate or
different services is discriminatory. The addition to paragraph (b)(2)
of the phrase ``in the most integrated setting appropriated to the
person's needs'' is intended to reinforce this general concept. A new
paragraph (b)(3) has also been added to Sec. 104.4, requiring
recipients to give qualified handicapped persons the option of
participating in regular programs despite the existence of permissibly
separate or different programs. The requirement has been reiterated in
Sec. Sec. 104.38 and 104.47 in connection with physical education and
athletics programs.
    Section 104.4(b)(1)(v) prohibits a recipient from supporting another
entity or person that subjects participants or employees in the
recipient's program to discrimination on the basis of handicap. This
section would, for example, prohibit financial support by a recipient to
a community recreational group or to a professional or social
organization that discriminates against handicapped persons. Among the
criteria to be considered in each case are the substantiality of the
relationship between the recipient and the other entity, including
financial support by the recipient, and whether the other entity's
activities relate so closely to the recipient's program or activity that
they fairly should be considered activities of the recipient itself.
Paragraph (b)(1)(vi) was added in response to comment in order to make
explicit the prohibition against denying qualified handicapped persons
the opportunity to serve on planning and advisory boards responsible for
guiding federally assisted programs or activities.
    Several comments appeared to interpret Sec. 104.4(b)(5), which
proscribes discriminatory site selection, to prohibit a recipient that
is located on hilly terrain from erecting any new buildings at its
present site. That, of course, is not the case. This paragraph is not
intended to apply to construction of additional buildings at an existing
site. Of course, any such facilities must be made accessible in
accordance with the requirements of Sec. 104.23.
    7. Assurances of compliance. Section 104.5(a) requires a recipient
to submit to the Assistant Secretary an assurance that each of its
programs and activities receiving or benefiting from Federal financial
assistance from this Department will be conducted in compliance with
this regulation. Many commenters also sought relief from the paperwork
requirements imposed by the Department's enforcement of its various
civil rights responsibilities by requesting the Department to issue one
form incorporating title VI, title IX, and section 504 assurances. The
Secretary is sympathetic to this request. While it is not feasible to
adopt a single civil rights assurance form at this time, the Office for
Civil Rights will work toward that goal.
    8. Private rights of action. Several comments urged that the
regulation incorporate provision granting beneficiaries a private right
of action against recipients under section 504. To confer such a right
is beyond the authority of the executive branch of Government. There is,
however, case law holding that such a right exists. Lloyd v. Regional
Transportation Authority, 548 F. 2d 1277 (7th Cir. 1977); see Hairston
v. Drosick, Civil No. 75-0691 (S.D. W. Va., Jan. 14, 1976); Gurmankin v.
Castanzo, 411 F. Supp. 982 (E.D. Pa. 1976); cf. Lau v. Nichols, supra.
    9. Remedial action. Where there has been a finding of
discrimination, Sec. 104.6 requires a recipient to take remedial action
to overcome the effects of the discrimination. Actions that might be
required under paragraph (a)(1) include provision of services to persons
previously discriminated against, reinstatement of employees and
development of a remedial action plan. Should a recipient fail to take
required remedial action, the ultimate sanctions of court action or
termination of Federal financial assistance may be imposed.
    Paragraph (a)(2) extends the responsibility for taking remedial
action to a recipient that exercises control over a noncomplying
recipient. Paragraph (a)(3) also makes clear that handicapped persons
who are not in the program at the time that remedial action is required
to be taken may also be the subject of such remedial action. This
paragraph has been revised in response to comments in order to include
persons who would have been in the program if discriminatory practices
had not existed. Paragraphs (a) (1), (2), and (3) have also been amended
in response

[[Page 374]]

to comments to make plain that, in appropriate cases, remedial action
might be required to redress clear violations of the statute itself that
occurred before the effective date of this regulation.
    10. Voluntary action. In Sec. 104.6(b), the term ``voluntary
action'' has been substituted for the term ``affirmative action''
because the use of the latter term led to some confusion. We believe the
term ``voluntary action'' more accurately reflects the purpose of the
paragraph. This provision allows action, beyond that required by the
regulation, to overcome conditions that led to limited participation by
handicapped persons, whether or not the limited participation was caused
by any discriminatory actions on the part of the recipient. Several
commenters urged that paragraphs (a) and (b) be revised to require
remedial action to overcome effects of prior discriminatory practices
regardless of whether there has been an express finding of
discrimination. The self-evaluation requirement in paragraph (c)
accomplishes much the same purpose.
    11. Self-evaluation. Paragraph (c) requires recipients to conduct a
self-evaluation in order to determine whether their policies or
practices may discriminate against handicapped persons and to take steps
to modify any discriminatory policies and practices and their effects.
The Department received many comments approving of the addition to
paragraph (c) of a requirement that recipients seek the assistance of
handicapped persons in the self-evaluation process. This paragraph has
been further amended to require consultation with handicapped persons or
organizations representing them before recipients undertake the policy
modifications and remedial steps prescribed in paragraphs (c) (ii) and
(iii).
    Paragraph (c)(2), which sets forth the recordkeeping requirements
concerning self-evaluation, now applies only to recipients with fifteen
or more employees. This change was made as part of an effort to reduce
unnecessary or counterproductive administrative obligations on small
recipients. For those recipients required to keep records, the
requirements have been made more specific; records must include a list
of persons consulted and a description of areas examined, problems
identified, and corrective steps taken. Moreover, the records must be
made available for public inspection.
    12. Grievance procedure. Section 104.7 requires recipients with
fifteen or more employees to designate an individual responsible for
coordinating its compliance efforts and to adopt a grievance procedure.
Two changes were made in the section in response to comment. A general
requirement that appropriate due process procedures be followed has been
added. It was decided that the details of such procedures could not at
this time be specified because of the varied nature of the persons and
entities who must establish the procedures and of the programs to which
they apply. A sentence was also added to make clear that grievance
procedures are not required to be made available to unsuccessful
applicants for employment or to applicants for admission to colleges and
universities.
    The regulation does not require that grievance procedures be
exhausted before recourse is sought from the Department. However, the
Secretary believes that it is desirable and efficient in many cases for
complainants to seek resolution of their complaints and disputes at the
local level and therefore encourages them to use available grievance
procedures.
    A number of comments asked whether compliance with this section or
the notice requirements of Sec. 104.8 could be coordinated with
comparable action required by the title IX regulation. The Department
encourages such efforts.
    13. Notice. Section 104.8 (formerly Sec. 84.9) sets forth
requirements for dissemination of statements of nondicrimination policy
by recipients.
    It is important that both handicapped persons and the public at
large be aware of the obligations of recipients under section 504. Both
the Department and recipients have responsibilities in this regard.
Indeed the Department intends to undertake a major public information
effort to inform persons of their rights under section 504 and this
regulation. In Sec. 104.8 the Department has sought to impose a clear
obligation on major recipients to notify beneficiaries and employees of
the requirements of section 504, without dictating the precise way in
which this notice must be given. At the same time, we have avoided
imposing requirements on small recipients (those with fewer than fifteen
employees) that would create unnecessary and counterproductive paper
work burdens on them and unduly stretch the enforcement resources of the
Department.
    Section 104.8(a), as simplified, requires recipients with fifteen or
more employees to take appropriate steps to notify beneficiaries and
employees of the recipient's obligations under section 504. The last
sentence of Sec. 104.8(a) has been revised to list possible, rather
than required, means of notification. Section 104.8(b) requires
recipients to include a notification of their policy of
nondiscrimination in recruitment and other general information
materials.
    In response to a number of comments, Sec. 104.8 has been revised to
delete the requirements of publication in local newspapers, which has
proved to be both troublesome and ineffective. Several commenters
suggested that notification on separate forms be allowed until present
stocks of publications and forms are depleted. The final regulation
explicitly allows this method of compliance.

[[Page 375]]

The separate form should, however, be included with each significant
publication or form that is distributed.
    Section 104 which prohibited the use of materials that might give
the impression that a recipient excludes qualified handicapped persons
from its program, has been deleted. The Department is convinced by the
comments that this provision is unnecessary and difficult to apply. The
Department encourages recipients, however, to include in their
recruitment and other general information materials photographs of
handicapped persons and ramps and other features of accessible
buildings.
    Under new Sec. 104.9 the Assistant Secretary may, under certain
circumstances, require recipients with fewer than fifteen employees to
comply with one or more of these requirements. Thus, if experience shows
a need for imposing notice or other requirements on particular
recipients or classes of small recipients, the Department is prepared to
expand the coverage of these sections.
    14. Inconsistent State laws. Section 104.10(a) states that
compliance with the regulation is not excused by State or local laws
limiting the eligibility of qualified handicapped persons to receive
services or to practice an occupation. The provision thus applies only
with respect to state or local laws that unjustifiably differentiate on
the basis of handicap.
    Paragraph (b) further points out that the presence of limited
employment opportunities in a particular profession, does not excuse a
recipient from complying with the regulation. Thus, a law school could
not deny admission to a blind applicant because blind laywers may find
it more difficult to find jobs than do nonhandicapped lawyers.

                     Subpart B--Employment Practices

    Subpart B prescribes requirements for nondiscrimination in the
employment practices of recipients of Federal financial assistance
administered by the Department. This subpart is consistent with the
employment provisions of the Department's regulation implementing title
IX of the Education Amendments of 1972 (34 CFR, part 106) and the
regulation of the Department of Labor under section 503 of the
Rehabilitation Act, which requries certain Federal contractors to take
affirmative action in the employment and advancement of qualified
handicapped persons. All recipients subject to title IX are also subject
to this regulation. In addition, many recipients subject to this
regulation receive Federal procurement contracts in excess of $2,500 and
are therefore also subject to section 503.
    15. Discriminatory practices. Section 104.11 sets forth general
provisions with respect to discrimination in employment. A new paragraph
(a)(2) has been added to clarify the employment obligations of
recipients that receive Federal funds under Part B of the Education of
the Handicapped Act, as amended (EHA). Section 606 of the EHA obligates
elementary or secondary school systems that receive EHA funds to take
positive steps to employ and advance in employment qualified handicapped
persons. This obligation is similar to the nondiscrimination requirement
of section 504 but requires recipients to take additional steps to hire
and promote handicapped persons. In enacting section 606 Congress chose
the words ``positive steps'' instead of ``affirmative action'' advisedly
and did not intend section 606 to incorporate the types of activities
required under Executive Order 11246 (affirmative action on the basis of
race, color, sex, or national origin) or under sections 501 and 503 of
the Rehabilitation Act of 1973.
    Paragraph (b) of Sec. 104.11 sets forth the specific aspects of
employment covered by the regulation. Paragraph (c) provides that
inconsistent provisions of collective bargaining agreements do not
excuse noncompliance.
    16. Reasonable accommodation. The reasonable accommodation
requirement of Sec. 104.12 generated a substantial number of comments.
The Department remains convinced that its approach is both fair and
effective. Moreover, the Department of Labor reports that it has
experienced little difficulty in administering the requirements of
reasonable accommodation. The provision therefore remains basically
unchanged from the proposed regulation.
    Section 104.12 requires a recipient to make reasonable accommodation
to the known physical or mental limitations of a handicapped applicant
or employee unless the recipient can demonstrate that the accommodation
would impose an undue hardship on the operation of its program. Where a
handicapped person is not qualified to perform a particular job, where
reasonable accommodation does not overcome the effects of a person's
handicap, or where reasonable accommodation causes undue hardship to the
employer, failure to hire or promote the handicapped person will not be
considered discrimination.
    Section 104.12(b) lists some of the actions that constitute
reasonable accommodation. The list is neither all-inclusive nor meant to
suggest that employers must follow all of the actions listed.
    Reasonable accommodation includes modification of work schedules,
including part-time employment, and job restructuring. Job restructuring
may entail shifting nonessential duties to other employees. In other
cases, reasonable accommodation may include physical modifications or
relocation of particular offices or jobs so that they are in facilities
or parts of facilities that are accessible to and usable by handicapped
persons. If such accommodations would cause undue

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hardship to the employer, they need not be made.
    Paragraph (c) of this section sets forth the factors that the Office
for Civil Rights will consider in determining whether an accommodation
necessary to enable an applicant or employee to perform the duties of a
job would impose an undue hardship. The weight given to each of these
factors in making the determination as to whether an accommodation
constitutes undue hardship will vary depending on the facts of a
particular situation. Thus, a small day-care center might not be
required to expend more than a nominal sum, such as that necessary to
equip a telephone for use by a secretary with impaired hearing, but a
large school district might be required to make available a teacher's
aide to a blind applicant for a teaching job. The reasonable
accommodation standard in Sec. 104.12 is similar to the obligation
imposed upon Federal contractors in the regulation implementing section
503 of the Rehabilitation Act of 1973, administered by the Department of
Labor. Although the wording of the reasonable accommodation provisions
of the two regulations is not identical, the obligation that the two
regulations impose is the same, and the Federal Government's policy in
implementing the two sections will be uniform. The Department adopted
the factors listed in paragraph (c) instead of the ``business
necessity'' standard of the Labor regulation because that term seemed
inappropriate to the nature of the programs operated by the majority of
institutions subject to this regulation, e.g., public school systems,
colleges and universities. The factors listed in paragraph (c) are
intended to make the rationale underlying the business necessity
standard applicable to an understandable by recipients of ED funds.
    17. Tests and selection criteria. Revised Sec. 104.13(a) prohibits
employers from using test or other selection criteria that screen out or
tend to screen out handicapped persons unless the test or criterion is
shown to be job-related and alternative tests or criteria that do not
screen out or tend to screen out as many handicapped persons are not
shown by the Assistant Secretary to be available. This paragraph is an
application of the principle established under title VII of the Civil
Rights Act of 1964 in Griggs v. Duke Power Company, 401 U.S. 424 (1971).
    Under the proposed section, a statistical showing of adverse impact
on handicapped persons was required to trigger an employer's obligation
to show that employment criteria and qualifications relating to handicap
were necessary. This requirement was changed because the small number of
handicapped persons taking tests would make statistical showings of
``disproportionate, adverse effect'' difficult and burdensome. Under the
altered, more workable provision, once it is shown that an employment
test substantially limits the opportunities of handicapped persons, the
employer must show the test to be job-related. A recipient is no longer
limited to using predictive validity studies as the method for
demonstrating that a test or other selection criterion is in fact job-
related. Nor, in all cases, are predictive validity studies sufficient
to demonstrate that a test or criterion is job-related. In addition,
Sec. 104.13(a) has been revised to place the burden on the Assistant
Secretary, rather than the recipient, to identify alternate tests.
    Section 104.13(b) requires that a recipient take into account that
some tests and criteria depend upon sensory, manual, or speaking skills
that may not themselves be necessary to the job in question but that may
make the handicapped person unable to pass the test. The recipient must
select and administer tests so as best to ensure that the test will
measure the handicapped person's ability to perform on the job rather
than the person's ability to see, hear, speak, or perform manual tasks,
except, of course, where such skills are the factors that the test
purports to measure. For example, a person with a speech impediment may
be perfectly qualified for jobs that do not or need not, with reasonable
accommodation, require ability to speak clearly. Yet, if given an oral
test, the person will be unable to perform in a satisfactory manner. The
test results will not, therefore, predict job performance but instead
will reflect impaired speech.
    18. Preemployment inquiries. Section 104.14, concerning
preemployment inquiries, generated a large number of comments.
Commenters representing handicapped persons strongly favored a ban on
preemployment inquiries on the ground that such inquiries are often used
to discriminate against handicapped persons and are not necessary to
serve any legitimate interests of employers. Some recipients, on the
other hand, argued that preemployment inquiries are necessary to
determine qualifications of the applicant, safety hazards caused by a
particular handicapping condition, and accommodations that might be
required.
    The Secretary has concluded that a general prohibition of
preemployment inquiries is appropriate. However, a sentence has been
added to paragraph (a) to make clear that an employer may inquire into
an applicant's ability to perform job-related tasks but may not ask if
the person has a handicap. For example, an employer may not ask on an
employment form if an applicant is visually impaired but may ask if the
person has a current driver's license (if that is a necessary
qualification for the position in question). Similarly, employers may
make inquiries about an applicant's ability to perform a job safely.
Thus, an employer may not ask if an

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applicant is an epileptic but may ask whether the person can perform a
particular job without endangering other employees.
    Section 104.14(b) allows preemployment inquiries only if they are
made in conjunction with required remedial action to correct past
discrimination, with voluntary action to overcome past conditions that
have limited the participation of handicapped persons, or with
obligations under section 503 of the Rehabilitation Act of 1973. In
these instances, paragraph (b) specifies certain safeguards that must be
followed by the employer.
    Finally, the revised provision allows an employer to condition
offers of employment to handicapped persons on the results of medical
examinations, so long as the examinations are administered to all
employees in a nondiscriminatory manner and the results are treated on a
confidential basis.
    19. Specific acts of Discrimination. Sections 104.15 (recruitment),
104.16 (compensation), 104.17 (job classification and structure) and
104.18 (fringe benefits) have been deleted from the regulation as
unnecessarily duplicative of Sec. 104.11 (discrimination prohibited).
The deletion of these sections in no way changes the substantive
obligations of employers subject to this regulation from those set forth
in the July 16 proposed regulation. These deletions bring the regulation
closer in form to the Department of Labor's section 503 regulation.
    A proposed section, concerning fringe benefits, had allowed for
differences in benefits or contributions between handicapped and
nonhandicapped persons in situations only where such differences could
be justified on an actuarial basis. Section 104.11 simply bars
discrimination in providing fringe benefits and does not address the
issue of actuarial differences. The Department believes that currently
available data and experience do not demonstrate a basis for
promulgating a regulation specifically allowing for differences in
benefits or contributions.

                    Subpart C--Program Accessibility

    In general, Subpart C prohibits the exclusion of qualified
handicapped persons from federally assisted programs or activities
because a recipient's facilities are inaccessible or unusable.
    20. Existing facilities. Section 104.22 maintains the same standard
for nondiscrimination in regard to existing facilities as was included
in the proposed regulation. The section states that a recipients program
or activity, when viewed in its entirety, must be readily accessible to
and usable by handicapped persons. Paragraphs (a) and (b) make clear
that a recipient is not required to make each of its existing facilities
accessible to handicapped persons if its program as a whole is
accessible. Accessibility to the recipient's program or activity may be
achieved by a number of means, including redesign of equipment,
reassignment of classes or other services to accessible buildings, and
making aides available to beneficiaries. In choosing among methods of
compliance, recipients are required to give priority consideration to
methods that will be consistent with provision of services in the most
appropriate integrated setting. Structural changes in existing
facilities are required only where there is no other feasible way to
make the recipient's program accessible.
    Under Sec. 104.22, a university does not have to make all of its
existing classroom buildings accessible to handicapped students if some
of its buildings are already accessible and if it is possible to
reschedule or relocate enough classes so as to offer all required
courses and a reasonable selection of elective courses in accessible
facilities. If sufficient relocation of classes is not possible using
existing facilities, enough alterations to ensure program accessibility
are required. A university may not exclude a handicapped student from a
specifically requested course offering because it is not offered in an
accessible location, but it need not make every section of that course
accessible.
    Commenters representing several institutions of higher education
have suggested that it would be appropriate for one postsecondary
institution in a geographical area to be made accessible to handicapped
persons and for other colleges and universities in that area to
participate in that school's program, thereby developing an educational
consortium for the postsecondary education of handicapped students. The
Department believes that such a consortium, when developed and applied
only to handicapped persons, would not constitute compliance with Sec.
104.22, but would discriminate against qualified handicapped persons by
restricting their choice in selecting institutions of higher education
and would, therefore, be inconsistent with the basic objectives of the
statute.
    Nothing in this regulation, however, should be read as prohibiting
institutions from forming consortia for the benefit of all students.
Thus, if three colleges decide that it would be cost-efficient for one
college to offer biology, the second physics, and the third chemistry to
all students at the three colleges, the arrangement would not violate
section 504. On the other hand, it would violate the regulation if the
same institutions set up a consortium under which one college undertook
to make its biology lab accessible, another its physics lab, and a third
its chemistry lab, and under which mobility-impaired handicapped
students (but not other students) were required to attend the particular
college that is accessible for the desired courses.
    Similarly, while a public school district need not make each of its
buildings completely accessible, it may not make only one

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facility or part of a facility accessible if the result is to segregate
handicapped students in a single setting.
    All recipients that provide health, welfare, or other social
services may also comply with Sec. 104.22 by delivering services at
alternate accessible sites or making home visits. Thus, for example, a
pharmacist might arrange to make home deliveries of drugs. Under revised
Sec. 104.22(c), small providers of health, welfare, and social services
(those with fewer than fifteen employees) may refer a beneficiary to an
accessible provider of the desired service, but only if no means of
meeting the program accessibility requirement other than a significant
alteration in existing facilities is available. The referring recipient
has the responsibility of determining that the other provider is in fact
accessible and willing to provide the service.
    A recent change in the tax law may assist some recipients in meeting
their obligations under this section. Under section 2122 of the Tax
Reform Act of 1976, recipients that pay federal income tax are eligible
to claim a tax deduction of up to $25,000 for architectural and
transportation modifications made to improve accessibility for
handicapped persons. See 42 FR 17870 (April 4, 1977), adopting 26 CFR
7.190.
    Several commenters expressed concern about the feasibility of
compliance with the program accessibility standard. The Secretary
believes that the standard is flexible enough to permit recipients to
devise ways to make their programs accessible short of extremely
expensive or impractical physical changes in facilities. Accordingly,
the section does not allow for waivers. The Department is ready at all
times to provide technical assistance to recipients in meeting their
program accessibility responsibilities. For this purpose, the Department
is establishing a special technical assistance unit. Recipients are
encouraged to call upon the unit staff for advice and guidance both on
structural modifications and on other ways of meeting the program
accessibility requirement.
    Paragraph (d) has been amended to require recipients to make all
nonstructural adjustments necessary for meeting the program
accessibility standard within sixty days. Only where structural changes
in facilities are necessary will a recipient be permitted up to three
years to accomplish program accessibility. It should be emphasized that
the three-year time period is not a waiting period and that all changes
must be accomplished as expeditiously as possible. Further, it is the
Department's belief, after consultation with experts in the field, that
outside ramps to buildings can be constructed quickly and at relatively
low cost. Therefore, it will be expected that such structural additions
will be made promptly to comply with Sec. 104.22(d).
    The regulation continues to provide, as did the proposed version,
that a recipient planning to achieve program accessibility by making
structural changes must develop a transition plan for such changes
within six months of the effective date of the regulation. A number of
commenters suggested extending that period to one year. The secretary
believes that such an extension is unnecessary and unwise. Planning for
any necessary structural changes should be undertaken promptly to ensure
that they can be completed within the three-year period. The elements of
the transition plan as required by the regulation remain virtually
unchanged from the proposal but Sec. 104.22(d) now includes a
requirement that the recipient make the plan available for public
inspection.
    Several commenters expressed concern that the program accessibility
standard would result in the segregation of handicapped persons in
educational institutions. The regulation will not be applied to permit
such a result. See Sec. 104.4(c)(2)(iv), prohibiting unnecessarily
separate treatment; Sec. 104.35, requiring that students in elementary
and secondary schools be educated in the most integrated setting
appropriate to their needs; and new Sec. 104.43(d), applying the same
standard to postsecondary education.
    We have received some comments from organizations of handicapped
persons on the subject of requiring, over an extended period of time, a
barrier-free environment--that is, requiring the removal of all
architectural barriers in existing facilities. The Department has
considered these comments but has decided to take no further action at
this time concerning these suggestions, believing that such action
should only be considered in light of experience in implementing the
program accessibility standard.
    21. New construction. Section 104.23 requires that all new
facilities, as well as alterations that could affect access to and use
of existing facilities, be designed and constructed in a manner so as to
make the facility accessible to and usable by handicapped persons.
Section 104.23(a) has been amended so that it applies to each newly
constructed facility if the construction was commenced after the
effective date of the regulation. The words ``if construction has
commenced'' will be considered to mean ``if groundbreaking has taken
place.'' Thus, a recipient will not be required to alter the design of a
facility that has progressed beyond groundbreaking prior to the
effective date of the regulation.
    Paragraph (b) requires certain alterations to conform to the
requirement of physical accessibility in paragraph (a). If an alteration
is undertaken to a portion of a building the accessibility of which
could be improved by the manner in which the alteration is carried out,
the alteration must be made in that manner. Thus, if a doorway or

[[Page 379]]

wall is being altered, the door or other wall opening must be made wide
enough to accommodate wheelchairs. On the other hand, if the alteration
consists of altering ceilings, the provisions of this section are not
applicable because this alteration cannot be done in a way that affects
the accessibility of that portion of the building. The phrase ``to the
maximum extent feasible'' has been added to allow for the occasional
case in which the nature of an existing facility is such as to make it
impractical or prohibitively expensive to renovate the building in a
manner that results in its being entirely barrier-free. In all such
cases, however, the alteration should provide the maximum amount of
physical accessibility feasible.
    Section 104.23(d) of the proposed regulation, providing for a
limited deferral of action concerning facilities that are subject to
section 502 as well as section 504 of the Act, has been deleted. The
Secretary believes that the provision is unnecessary and inappropriate
to this regulation. The Department will, however, seek to coordinate
enforcement activities under this regulation with those of the
Architectural and Transportation Barriers Compliance Board.

        Subpart D--Preschool, Elementary, and Secondary Education

    Subpart D sets forth requirements for nondiscrimination in
preschool, elementary, secondary, and adult education programs and
activities, including secondary vocational education programs. In this
context, the term ``adult education'' refers only to those educational
programs and activities for adults that are operated by elementary and
secondary schools.
    The provisions of Subpart D apply to state and local educational
agencies. Although the subpart applies, in general, to both public and
private education programs and activities that are federally assisted,
Sec. Sec. 104.32 and 104.33 apply only to public programs and Sec.
104.39 applies only to private programs; Sec. Sec. 104.35 and 104.36
apply both to public programs and to those private programs that include
special services for handicapped students.
    Subpart B generally conforms to the standards established for the
education of handicapped persons in Mills v. Board of Education of the
District of Columbia, 348 F. Supp. 866 (D.D.C. 1972), Pennsylvania
Association for Retarded Children v. Commonwealth of Pennsylvania, 344
F. Supp. 1257 (E.D. 1971), 343 F. Supp. 279 (E.D. Pa. 1972), and Lebanks
v. Spears, 60, F.R.D. 135 (E.D. La. 1973), as well as in the Education
of the Handicapped Act, as amended by Pub. L. 94-142 (the EHA).
    The basic requirements common to those cases, to the EHA, and to
this regulation are (1) that handicapped persons, regardless of the
nature or severity of their handicap, be provided a free appropriate
public education, (2) that handicapped students be educated with
nonhandicapped students to the maximum extent appropriate to their
needs, (3) that educational agencies undertake to identify and locate
all unserved handicapped children, (4) that evaluation procedures be
improved in order to avoid the inappropriate education that results from
the misclassification of students, and (5) that procedural safeguard be
established to enable parents and guardians to influence decisions
regarding the evaluation and placement of their children. These
requirements are designed to ensure that no handicapped child is
excluded from school on the basis of handicap and, if a recipient
demonstrates that placement in a regular educational setting cannot be
achieved satisfactorily, that the student is provided with adequate
alternative services suited to the student's needs without additional
cost to the student's parents or guardian. Thus, a recipient that
operates a public school system must either educate handicapped children
in its regular program or provide such children with an appropriate
alternative education at public expense.
    It is not the intention of the Department, except in extraordinary
circumstances, to review the result of individual placement and other
educational decisions, so long as the school district complies with the
``process'' requirements of this subpart (concerning identification and
location, evaluation, and due process procedures). However, the
Department will place a high priority on investigating cases which may
involve exclusion of a child from the education system or a pattern or
practice of discriminatory placements or education.
    22. Location and notification. Section 104.32 requires public
schools to take steps annually to identify and locate handicapped
children who are not receiving an education and to publicize to
handicapped children and their parents the rights and duties established
by section 504 and this regulation. This section has been shortened
without substantive change.
    23. Free appropriate public education. Under Sec. 104.33(a), a
recipient is responsible for providing a free appropriate public
education to each qualified handicapped person who is in the recipient's
jurisdiction. The word ``in'' encompasses the concepts of both domicile
and actual residence. If a recipient places a child in a program other
than its own, it remains financially responsible for the child, whether
or not the other program is operated by another recipient or educational
agency. Moreover, a recipient may not place a child in a program that is
inappropriate or that otherwise violates the requirements of Subpart D.
And in no case may a recipient refuse to provide services to a
handicapped child in its jurisdiction because of another

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person's or entity's failure to assume financial responsibility.
    Section 104.33(b) concerns the provision of appropriate educational
services to handicapped children. To be appropriate, such services must
be designed to meet handicapped children's individual educational needs
to the same extent that those of nonhandicapped children are met. An
appropriate education could consist of education in regular classes,
education in regular classes with the use of supplementary services, or
special education and related services. Special education may include
specially designed instruction in classrooms, at home, or in private or
public institutions and may be accompanied by such related services as
developmental, corrective, and other supportive services (including
psychological, counseling, and medical diagnostic services). The
placement of the child must however, be consistent with the requirements
of Sec. 104.34 and be suited to his or her educational needs.
    The quality of the educational services provided to handicapped
students must equal that of the services provided to nonhandicapped
students; thus, handicapped student's teachers must be trained in the
instruction of persons with the handicap in question and appropriate
materials and equipment must be available. The Department is aware that
the supply of adequately trained teachers may, at least at the outset of
the imposition of this requirement, be insufficient to meet the demand
of all recipients. This factor will be considered in determining the
appropriateness of the remedy for noncompliance with this section. A new
Sec. 104.33(b)(2) has been added, which allows this requirement to be
met through the full implementation of an individualized education
program developed in accordance with the standards of the EHA.
    Paragraph (c) of Sec. 104.33 sets forth the specific financial
obligations of a recipient. If a recipient does not itself provide
handicapped persons with the requisite services, it must assume the cost
of any alternate placement. If, however, a recipient offers adequate
services and if alternate placement is chosen by a student's parent or
guardian, the recipient need not assume the cost of the outside
services. (If the parent or guardian believes that his or her child
cannot be suitably educated in the recipient's program, he or she may
make use of the procedures established in Sec. 104.36.) Under this
paragraph, a recipient's obligation extends beyond the provision of
tuition payments in the case of placement outside the regular program.
Adequate transportation must also be provided. Recipients must also pay
for psychological services and those medical services necessary for
diagnostic and evaluative purposes.
    If the recipient places a student, because of his or her handicap,
in a program that necessitates his or her being away from home, the
payments must also cover room and board and nonmedical care (including
custodial and supervisory care). When residential care is necessitated
not by the student's handicap but by factors such as the student's home
conditions, the recipient is not required to pay the cost of room and
board.
    Two new sentences have been added to paragraph (c)(1) to make clear
that a recipient's financial obligations need not be met solely through
its own funds. Recipients may rely on funds from any public or private
source including insurers and similar third parties.
    The EHA requires a free appropriate education to be provided to
handicapped children ``no later than September 1, 1978,'' but section
504 contains no authority for delaying enforcement. To resolve this
problem, a new paragraph (d) has been added to Sec. 104.33. Section
104.33(d) requires recipients to achieve full compliance with the free
appropriate public education requirements of Sec. 104.33 as
expeditiously as possible, but in no event later than September 1, 1978.
The provision also makes clear that, as of the effective date of this
regulation, no recipient may exclude a qualified handicapped child from
its educational program. This provision against exclusion is consistent
with the order of providing services set forth in section 612(3) of the
EHA, which places the highest priority on providing services to
handicapped children who are not receiving an education.
    24. Educational setting. Section 104.34 prescribes standards for
educating handicapped persons with nonhandicapped persons to the maximum
extent appropriate to the needs of the handicapped person in question. A
handicapped student may be removed from the regular educational setting
only where the recipient can show that the needs of the student would,
on balance, be served by placement in another setting.
    Although under Sec. 104.34, the needs of the handicapped person are
determinative as to proper placement, it should be stressed that, where
a handicapped student is so disruptive in a regular classroom that the
education of other students is significantly impaired, the needs of the
handicapped child cannot be met in that environment. Therefore, regular
placement would not be appropriate to his or her needs and would not be
required by Sec. 104.34.
    Among the factors to be considered in placing a child is the need to
place the child as close to home as possible. A new sentence has been
added to paragraph (a) requiring recipients to take this factor into
account. As pointed out in several comments, the parents' right under
Sec. 104.36 to challenge the placement of their child extends not only
to placement in special classes or separate schools but also to
placement in a distant

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school and, in particular, to residential placement. An equally
appropriate educational program may exist closer to home; this issue may
be raised by the parent or guardian under Sec. Sec. 104.34 and 104.36.
    New paragraph (b) specified that handicapped children must also be
provided nonacademic services in as integrated a setting as possible.
This requirement is especially important for children whose educational
needs necessitate their being solely with other handicapped children
during most of each day. To the maximum extent appropriate, children in
residential settings are also to be provided opportunities for
participation with other children.
    Section 104.34(c) requires that any facilities that are identifiable
as being for handicapped students be comparable in quality to other
facilities of the recipient. A number of comments objected to this
section on the basis that it encourages the creation and maintenance of
such facilities. This is not the intent of the provision. A separate
facility violates section 504 unless it is indeed necessary to the
provision of an appropriate education to certain handicapped students.
In those instances in which such facilities are necessary (as might be
the case, for example, for severely retarded persons), this provision
requires that the educational services provided be comparable to those
provided in the facilities of the recipient that are not identifiable as
being for handicapped persons.
    25. Evaluation and placement. Because the failure to provide
handicapped persons with an appropriate education is so frequently the
result of misclassification or misplacement, Sec. 104.33(b)(1) makes
compliance with its provisions contingent upon adherence to certain
procedures designed to ensure appropriate classification and placement.
These procedures, delineated in Sec. Sec. 104.35 and 104.36, are
concerned with testing and other evaluation methods and with procedural
due process rights.
    Section 104.35(a) requires that an individual evaluation be
conducted before any action is taken with respect either to the initial
placement of a handicapped child in a regular or special education
program or to any subsequent significant change in that placement. Thus,
a full reevaluation is not required every time an adjustment in
placement is made. ``Any action'' includes denials of placement.
    Paragraphs (b) and (c) of Sec. 104.35 establishes procedures
designed to ensure that children are not misclassified, unnecessarily
labeled as being handicapped, or incorrectly placed because of
inappropriate selection, administration, or interpretation of evaluation
materials. This problem has been extensively documented in ``Issues in
the Classification of Children,'' a report by the Project on
Classification of Exceptional Children, in which the HEW Interagency
Task Force participated. The provisions of these paragraphs are aimed
primarily at abuses in the placement process that result from misuse of,
or undue or misplaced reliance on, standardized scholastic aptitude
tests.
    Paragraph (b) has been shortened but not substantively changed. The
requirement in former subparagraph (1) that recipients provide and
administer evaluation materials in the native language of the student
has been deleted as unnecessary, since the same requirement already
exists under title VI and is more appropriately covered under that
statute. Paragraphs (1) and (2) are, in general, intended to prevent
misinterpretation and similar misuse of test scores and, in particular,
to avoid undue reliance on general intelligence tests. Subparagraph (3)
requires a recipient to administer tests to a student with impaired
sensory, manual, or speaking skills in whatever manner is necessary to
avoid distortion of the test results by the impairment. Former
subparagraph (4) has been deleted as unnecessarily repetitive of the
other provisions of this paragraph.
    Paragraph (c) requires a recipient to draw upon a variety of sources
in the evaluation process so that the possibility of error in
classification is minimized. In particular, it requires that all
significant factors relating to the learning process, including adaptive
behavior, be considered. (Adaptive behavior is the effectiveness with
which the individual meets the standards of personal independence and
social responsibility expected of his or her age and cultural group.)
Information from all sources must be documented and considered by a
group of persons, and the procedure must ensure that the child is placed
in the most integrated setting appropriate.
    The proposed regulation would have required a complete individual
reevaluation of the student each year. The Department has concluded that
it is inappropriate in the section 504 regulation to require full
reevaluations on such a rigid schedule. Accordingly, Sec. 104.35(c)
requires periodic reevaluations and specifies that reevaluations in
accordance with the EHA will constitute compliance. The proposed
regulation implementing the EHA allows reevaluation at three-year
intervals except under certain specified circumstances.
    Under Sec. 104.36, a recipient must establish a system of due
process procedures to be afforded to parents or guardians before the
recipient takes any action regarding the identification, evaluation, or
educational placement of a person who, because of handicap, needs or is
believed to need special education or related services. This section has
been revised. Because the due process procedures of the EHA,
incorporated by reference in the proposed section 504 regulation, are
inappropriate for some recipients not subject to that

[[Page 382]]

Act, the section now specifies minimum necessary procedures: notice, a
right to inspect records, an impartial hearing with a right to
representation by counsel, and a review procedure. The EHA procedures
remain one means of meeting the regulation's due process requirements,
however, and are recommended to recipients as a model.
    26. Nonacademic services. Section 104.37 requires a recipient to
provide nonacademic and extracurricular services and activities in such
manner as is necessary to afford handicapped students an equal
opportunity for participation. Because these services and activities are
part of a recipient's education program, they must, in accordance with
the provisions of Sec. 104.34, be provided in the most integrated
setting appropriate.
    Revised paragraph (c)(2) does permit separation or differentiation
with respect to the provision of physical education and athletics
activities, but only if qualified handicapped students are also allowed
the opportunity to compete for regular teams or participate in regular
activities. Most handicapped students are able to participate in one or
more regular physical education and athletics activities. For example, a
student in a wheelchair can participate in regular archery course, as
can a deaf student in a wrestling course.
    Finally, the one-year transition period provided in a proposed
section was deleted in response to the almost unanimous objection of
commenters to that provision.
    27. Preschool and adult education. Section 104.38 prohibits
discrimination on the basis of handicap in preschool and adult education
programs. Former paragraph (b), which emphasized that compensatory
programs for disadvantaged children are subject to section 504, has been
deleted as unnecessary, since it is comprehended by paragraph (a).
    28. Private education. Section 104.39 sets forth the requirements
applicable to recipients that operate private education programs and
activities. The obligations of these recipients have been changed in two
significant respects: first, private schools are subject to the
evaluation and due process provisions of the subpart only if they
operate special education programs; second, under Sec. 104.39(b), they
may charge more for providing services to handicapped students than to
nonhandicapped students to the extent that additional charges can be
justified by increased costs.
    Paragraph (a) of Sec. 104.39 is intended to make clear that
recipients that operate private education programs and activities are
not required to provide an appropriate education to handicapped students
with special educational needs if the recipient does not offer programs
designed to meet those needs. Thus, a private school that has no program
for mentally retarded persons is neither required to admit such a person
into its program nor to arrange or pay for the provision of the person's
education in another program. A private recipient without a special
program for blind students, however, would not be permitted to exclude,
on the basis of blindness, a blind applicant who is able to participate
in the regular program with minor adjustments in the manner in which the
program is normally offered.

                   Subpart E--Postsecondary Education

    Subpart E prescribes requirements for nondiscrimination in
recruitment, admission, and treatment of students in postsecondary
education programs and activities, including vocational education.
    29. Admission and recruitment. In addition to a general prohibition
of discrimination on the basis of handicap in Sec. 104.42(a), the
regulation delineates, in Sec. 104.42(b), specific prohibitions
concerning the establishment of limitations on admission of handicapped
students, the use of tests or selection criteria, and preadmission
inquiry. Several changes have been made in this provision.
    Section 104.42(b) provides that postsecondary educational
institutions may not use any test or criterion for admission that has a
disproportionate, adverse effect on handicapped persons unless it has
been validated as a predictor of academic success and alternate tests or
criteria with a less disproportionate, adverse effect are shown by the
Department to be available. There are two significant changes in this
approach from the July 16 proposed regulation.
    First, many commenters expressed concern that Sec. 104.42(b)(2)(ii)
could be interpreted to require a ``global search'' for alternate tests
that do not have a disproportionate, adverse impact on handicapped
persons. This was not the intent of the provision and, therefore, it has
been amended to place the burden on the Assistant Secretary for Civil
Rights, rather than on the recipient, to identify alternate tests.
    Second, a new paragraph (d), concerning validity studies, has been
added. Under the proposed regulation, overall success in an education
program, not just first-year grades, was the criterion against which
admissions tests were to be validated. This approach has been changed to
reflect the comment of professional testing services that use of first
year grades would be less disruptive of present practice and that
periodic validity studies against overall success in the education
program would be sufficient check on the reliability of first-year
grades.
    Section 104.42(b)(3) also requires a recipient to assure itself that
admissions tests are selected and administered to applicants with
impaired sensory, manual, or speaking skills in such manner as is
necessary to avoid unfair distortion of test results. Methods have been
developed for testing the aptitude and achievement of persons who are
not able to

[[Page 383]]

take written tests or even to make the marks required for mechanically
scored objective tests; in addition, methods for testing persons with
visual or hearing impairments are available. A recipient, under this
paragraph, must assure itself that such methods are used with respect to
the selection and administration of any admissions tests that it uses.
    Section 104.42(b)(3)(iii) has been amended to require that
admissions tests be administered in facilities that, on the whole, are
accessible. In this context, ``on the whole'' means that not all of the
facilities need be accessible so long as a sufficient number of
facilities are available to handicapped persons.
    Revised Sec. 104.42(b)(4) generally prohibits preadmission
inquiries as to whether an applicant has a handicap. The considerations
that led to this revision are similar to those underlying the comparable
revision of Sec. 104.14 on preemployment inquiries. The regulation
does, however, allow inquiries to be made, after admission but before
enrollment, as to handicaps that may require accommodation.
    New paragraph (c) parallels the section on preemployment inquiries
and allows postsecondary institutions to inquire about applicants'
handicaps before admission, subject to certain safeguards, if the
purpose of the inquiry is to take remedial action to correct past
discrimination or to take voluntary action to overcome the limited
participation of handicapped persons in postsecondary educational
institutions.
    Proposed Sec. 104.42(c), which would have allowed different
admissions criteria in certain cases for handicapped persons, was widely
misinterpreted in comments from both handicapped persons and recipients.
We have concluded that the section is unnecessary, and it has been
deleted.
    30. Treatment of students. Section 104.43 contains general
provisions prohibiting the discriminatory treatment of qualified
handicapped applicants. Paragraph (b) requires recipients to ensure that
equal opportunities are provided to its handicapped students in
education programs and activities that are not operated by the
recipient. The recipient must be satisfied that the outside education
program or activity as a whole is nondiscriminatory. For example, a
college must ensure that discrimination on the basis of handicap does
not occur in connection with teaching assignments of student teachers in
elementary or secondary schools not operated by the college. Under the
``as a whole'' wording, the college could continue to use elementary or
secondary school systems that discriminate if, and only if, the
college's student teaching program, when viewed in its entirety, offered
handicapped student teachers the same range and quality of choice in
student teaching assignments afforded nonhandicapped students.
    Paragraph (c) of this section prohibits a recipient from excluding
qualified handicapped students from any course, course of study, or
other part of its education program or activity. This paragraph is
designed to eliminate the practice of excluding handicapped persons from
specific courses and from areas of concentration because of factors such
as ambulatory difficulties of the student or assumptions by the
recipient that no job would be available in the area in question for a
person with that handicap.
    New paragraph (d) requires postsecondary institutions to operate
their programs and activities so that handicapped students are provided
services in the most integrated setting appropriate. Thus, if a college
had several elementary physics classes and had moved one such class to
the first floor of the science building to accommodate students in
wheelchairs, it would be a violation of this paragraph for the college
to concentrate handicapped students with no mobility impairments in the
same class.
    31. Academic adjustments. Paragraph (a) of Sec. 104.44 requires
that a recipient make certain adjustments to academic requirements and
practices that discriminate or have the effect of discriminating on the
basis of handicap. This requirement, like its predecessor in the
proposed regulation, does not obligate an institution to waive course or
other academic requirements. But such institutions must accommodate
those requirements to the needs of individual handicapped students. For
example, an institution might permit an otherwise qualified handicapped
student who is deaf to substitute an art appreciation or music history
course for a required course in music appreciation or could modify the
manner in which the music appreciation course is conducted for the deaf
student. It shoud be stressed that academic requirements that can be
demonstrated by the recipient to be essential to its program of
instruction or to particular degrees need not be changed.
    Paragraph (b) provides that postsecondary institutions may not
impose rules that have the effect of limiting the participation of
handicapped students in the education program. Such rules include
prohibition of tape recorders or braillers in classrooms and dog guides
in campus buildings. Several recipients expressed concern about allowing
students to tape record lectures because the professor may later want to
copyright the lectures. This problem may be solved by requiring students
to sign agreements that they will not release the tape recording or
transcription or otherwise hinder the professor's ability to obtain a
copyright.
    Paragraph (c) of this section, concerning the administration of
course examinations to students with impaired sensory, manual, or
speaking skills, parallels the regulation's

[[Page 384]]

provisions on admissions testing (Sec. 104.42(b)) and will be similarly
interpreted.
    Under Sec. 104.44(d), a recipient must ensure that no handicapped
student is subject to discrimination in the recipient's program because
of the absence of necessary auxiliary educational aids. Colleges and
universities expressed concern about the costs of compliance with this
provision.
    The Department emphasizes that recipients can usually meet this
obligation by assisting students in using existing resources for
auxiliary aids such as state vocational rehabilitation agencies and
private charitable organizations. Indeed, the Department anticipates
that the bulk of auxiliary aids will be paid for by state and private
agencies, not by colleges or universities. In those circumstances where
the recipient institution must provide the educational auxiliary aid,
the institution has flexibility in choosing the methods by which the
aids will be supplied. For example, some universities have used students
to work with the institution's handicapped students. Other institutions
have used existing private agencies that tape texts for handicapped
students free of charge in order to reduce the number of readers needed
for visually impaired students.
    As long as no handicapped person is excluded from a program because
of the lack of an appropriate aid, the recipient need not have all such
aids on hand at all times. Thus, readers need not be available in the
recipient's library at all times so long as the schedule of times when a
reader is available is established, is adhered to, and is sufficient. Of
course, recipients are not required to maintain a complete braille
library.
    32. Housing. Section 104.45(a) requires postsecondary institutions
to provide housing to handicapped students at the same cost as they
provide it to other students and in a convenient, accessible, and
comparable manner. Commenters, particularly blind persons pointed out
that some handicapped persons can live in any college housing and need
not wait to the end of the transition period in subpart C to be offered
the same variety and scope of housing accommodations given to
nonhandicapped persons. The Department concurs with this position and
will interpret this section accordingly.
    A number of colleges and universities reacted negatively to
paragraph (b) of this section. It provides that, if a recipient assists
in making off-campus housing available to its students, it should
develop and implement procedures to assure itself that off-campus
housing, as a whole, is available to handicapped students. Since
postsecondary institutions are presently required to assure themselves
that off-campus housing is provided in a manner that does not
discriminate on the basis of sex (Sec. 106.32 of the title IX
regulation), they may use the procedures developed under title IX in
order to comply with Sec. 104.45(b). It should be emphasized that not
every off-campus living accommodation need be made accessible to
handicapped persons.
    33. Health and insurance. A proposed section, providing that
recipients may not discriminate on the basis of handicap in the
provision of health related services, has been deleted as duplicative of
the general provisions of Sec. 104.43. This deletion represents no
change in the obligation of recipients to provide nondiscriminatory
health and insurance plans. The Department will continue to require that
nondiscriminatory health services be provided to handicapped students.
Recipients are not required, however, to provide specialized services
and aids to handicapped persons in health programs. If, for example, a
college infirmary treats only simple disorders such as cuts, bruises,
and colds, its obligation to handicapped persons is to treat such
disorders for them.
    34. Financial assistance. Section 104.46(a), prohibiting
discrimination in providing financial assistance, remains substantively
the same. It provides that recipients may not provide less assistance to
or limit the eligibility of qualified handicapped persons for such
assistance, whether the assistance is provided directly by the recipient
or by another entity through the recipient's sponsorship. Awards that
are made under wills, trusts, or similar legal instruments in a
discriminatory manner are permissible, but only if the overall effect of
the recipient's provision of financial assistance is not discriminatory
on the basis of handicap.
    It will not be considered discriminatory to deny, on the basis of
handicap, an athletic scholarship to a handicapped person if the
handicap renders the person unable to qualify for the award. For
example, a student who has a neurological disorder might be denied a
varsity football scholarship on the basis of his inability to play
football, but a deaf person could not, on the basis of handicap, be
denied a scholarship for the school's diving team. The deaf person
could, however, be denied a scholarship on the basis of comparative
diving ability.
    Commenters on Sec. 104.46(b), which applies to assistance in
obtaining outside employment for students, expressed similar concerns to
those raised under Sec. 104.43(b), concerning cooperative programs.
This paragraph has been changed in the same manner as Sec. 104.43(b) to
include the ``as a whole'' concept and will be interpreted in the same
manner as Sec. 104.43(b).
    35. Nonacademic services. Section 104.47 establishes
nondiscrimination standards for physical education and athletics
counseling and placement services, and social organizations. This
section sets the same standards as does Sec. 104.38 of subpart D,
discussed above, and will be interpreted in a similar fashion.

[[Page 385]]

             Subpart F--Health, Welfare, and Social Services

    Subpart F applies to recipients that operate health, welfare, and
social service programs. The Department received fewer comments on this
subpart than on others.
    Although many commented that subpart F lacked specificity, these
commenters provided neither concrete suggestions nor additions.
Nevertheless, some changes have been made, pursuant to comment, to
clarify the obligations of recipients in specific areas. In addition, in
an effort to reduce duplication in the regulation, the section governing
recipients providing health services has been consolidated with the
section regulating providers of welfare and social services. Since the
separate provisions that appeared in the proposed regulation were almost
identical, no substantive change should be inferred from their
consolidation.
    Several commenters asked whether subpart F applies to vocational
rehabilitation agencies whose purpose is to assist in the rehabilitation
of handicapped persons. To the extent that such agencies receive
financial assistance from the Department, they are covered by subpart F
and all other relevant subparts of the regulation. Nothing in this
regulation, however, precludes such agencies from servicing only
handicapped persons. Indeed, Sec. 104.4(c) permits recipients to offer
services or benefits that are limited by federal law to handicapped
persons or classes of handicapped persons.
    Many comments suggested requiring state social service agencies to
take an active role in the enforcement of section 504 with regard to
local social service providers. The Department believes that the
possibility for federal-state cooperation in the administration and
enforcement of section 504 warrants further consideration.
    A number of comments also discussed whether section 504 should be
read to require payment of compensation to institutionalized handicapped
patients who perform services for the institution in which they reside.
The Department of Labor has recently issued a proposed regulation under
the Fair Labor Standards Act (FLSA) that covers the question of
compensation for institutionalized persons. 42 FR 15224 (March 18,
1977). This Department will seek information and comment from the
Department of Labor concerning that agency's experience administering
the FLSA regulation.
    36. Health, welfare, and other social service providers. Section
104.52(a) has been expanded in several respects. The addition of new
paragraph (a)(2) is intended to make clear the basic requirement of
equal opportunity to receive benefits or services in the health,
welfare, and social service areas. The paragraph parallels Sec. Sec.
104.4(b)(ii) and 104.43(b). New paragaph (a)(3) requires the provision
of effective benefits or services, as defined in Sec. 104.4(b)(2)
(i.e., benefits or services which ``afford handicapped persons equal
opportunity to obtain the same result (or) to gain the same benefit * *
*'').
    Section 104.52(a) also includes provisions concerning the limitation
of benefits or services to handicapped persons and the subjection of
handicapped persons to different eligibility standards. One common
misconception about the regulation is that it would require specialized
hospitals and other health care providers to treat all handicapped
persons. The regulation makes no such requirement. Thus, a burn
treatment center need not provide other types of medical treatment to
handicapped persons unless it provides such medical services to
nonhandicapped persons. It could not, however, refuse to treat the burns
of a deaf person because of his or her deafness.
    Commenters had raised the question of whether the prohibition
against different standards of eligibility might preclude recipients
from providing special services to handicapped persons or classes of
handicapped persons. The regulation will not be so interpreted, and the
specific section in question has been eliminated. Section 104.4(c) makes
clear that special programs for handicapped persons are permitted.
    A new paragraph (a)(5) concerning the provision of different or
separate services or benefits has been added. This provision prohibits
such treatment unless necessary to provide qualified handicapped persons
with benefits and services that are as effective as those provided to
others.
    Section 104.52(b) has been amended to cover written material
concerning waivers of rights or consent to treatment as well as general
notices concerning health benefits or services. The section requires the
recipient to ensure that qualified handicapped persons are not denied
effective notice because of their handicap. For example, recipients
could use several different types of notice in order to reach persons
with impaired vision or hearing, such as brailled messages, radio spots,
and tacticle devices on cards or envelopes to inform blind persons of
the need to call the recipient for further information.
    Section 104.52(c) is a new section requiring recipient hospitals to
establish a procedure for effective communication with persons with
impaired hearing for the purpose of providing emergency health care.
Although it would be appropriate for a hospital to fulfill its
responsibilities under this section by having a full-time interpreter
for the deaf on staff, there may be other means of accomplishing the
desired result of assuring that some means of communication is
immediately available for deaf persons needing emergency treatment.

[[Page 386]]

    Section 104.52(c), also a new provision, requires recipients with
fifteen or more employees to provide appropriate auxiliary aids for
persons with impaired sensory, manual, or speaking skills. Further, the
Assistant Secretary may require a small provider to furnish auxiliary
aids where the provision of aids would not adversely affect the ability
of the recipient to provide its health benefits or service.
    37. Treatment of Drug Addicts and Alcoholics. Section 104.53 is a
new section that prohibits discrimination in the treatment and admission
of drug and alcohol addicts to hospitals and outpatient facilities.
Section 104.53 prohibits discrimination against drug abusers by
operators of outpatient facilities, despite the fact that section 407
pertains only to hospitals, because of the broader application of
section 504. This provision does not mean that all hospitals and
outpatient facilities must treat drug addiction and alcoholism. It
simply means, for example, that a cancer clinic may not refuse to treat
cancer patients simply because they are also alcoholics.
    38. Education of institutionalized persons. The regulation retains
Sec. 104.54 of the proposed regulation that requires that an
appropriate education be provided to qualified handicapped persons who
are confined to residential institutions or day care centers.

                          Subpart G--Procedures

    In Sec. 104.61, the Secretary has adopted the title VI complaint
and enforcement procedures for use in implementing section 504 until
such time as they are superseded by the issuance of a consolidated
procedureal regulation applicable to all of the civil rights statutes
and executive orders administered by the Department.

[45 FR 30936, May 9, 1980, as amended at 55 FR 52141, Dec. 19, 1990]



 Sec. Appendix B to Part 104--Guidelines for Eliminating Discrimination
  and Denial of Services on the Basis of Race, Color, National Origin,
           Sex, and Handicap in Vocational Education Programs

    Editorial Note: For the text of these guidelines, see 34 CFR part
100, appendix B.



PART 105_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN
PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF EDUCATION--Table

of Contents



Sec.
105.1 Purpose.
105.2 Application.
105.3 Definitions.
105.4-105.9 [Reserved]
105.10 Self-evaluation.
105.11 Notice.
105.12-105.19 [Reserved]
105.20 General prohibitions against discrimination.
105.21-105.29 [Reserved]
105.30 Employment.
105.31 Program accessibility: Discrimination prohibited.
105.32 Program accessibility: Existing facilities.
105.33 Program accessibility: New construction and alterations.
105.34-105.39 [Reserved]
105.40 Communications.
105.41 Compliance procedures.
105.42 Effective date.

    Authority: 29 U.S.C. 794, unless otherwise noted.

    Source: 55 FR 37168, Sept. 7, 1990, unless otherwise noted.



Sec. 105.1  Purpose.

    The purpose of this part is to effectuate section 119 of the
Rehabilitation, Comprehensive Services, and Developmental Disabilities
Amendments of 1978, which amended section 504 of the Rehabilitation Act
of 1973 to prohibit discrimination on the basis of handicap in programs
or activities conducted by Executive agencies or the United States
Postal Service.



Sec. 105.2  Application.

    This part applies to all programs or activities conducted by the
Department, except for programs or activities conducted outside the
United States that do not involve individuals with handicaps in the
United States.



Sec. 105.3  Definitions.

    For purposes of this part, the following definitions apply:
    Auxiliary aids means services or devices that enable persons with
impaired sensory, manual, or speaking

[[Page 387]]

skills to have an equal opportunity to participate in, and enjoy the
benefits of, programs or activities conducted by the Department. For
example, auxiliary aids useful for persons with impaired vision include
readers, materials in braille, audio recordings, and other similar
services and devices. Auxiliary aids useful for persons with impaired
hearing include telephone handset amplifiers, telephones compatible with
hearing aids, telecommunication devices for deaf persons (TDDs),
interpreters, notetakers, written materials, and other similar services
and devices.
    Complete complaint means a written statement that contains the
complainant's name and address and describes the Department's alleged
discriminatory action in sufficient detail to inform the Department of
the nature and date of the alleged violation of section 504. It must be
signed by the complainant or by someone authorized to do so on his or
her behalf. Complaints filed on behalf of classes or third parties must
describe or identify (by name, if possible) the alleged victims of
discrimination.
    Facility means all or any portion of buildings, structures,
equipment, roads, walks, parking lots, rolling stock or other
conveyances, or other real or personal property.
    Historic preservation programs means programs conducted by the
Department that have preservation of historic properties as a primary
purpose.
    Historic properties means those properties that are listed or
eligible for listing in the National Register of Historic Places or
properties designated as historic under a statute of the appropriate
State or local government body.
    Individual with handicaps means any person who has a physical or
mental impairment that substantially limits one or more major life
activities, has a record of such an impairment, or is regarded as having
such an impairment. As used in this definition, the phrase--
    (1) Physical or mental impairment includes--
    (i) Any physiological disorder or condition, cosmetic disfigurement,
or anatomical loss affecting one or more of the following body systems:
Neurological; musculoskeletal; special sense organs; respiratory,
including speech organs; cardiovascular; reproductive; digestive;
genitourinary; hemic and lymphatic; skin; and endocrine; or
    (ii) Any mental or psychological disorder, such as mental
retardation, organic brain syndrome, emotional or mental illness, and
specific learning disabilities.

The term physical or mental impairment includes, but is not limited to,
such diseases and conditions as orthopedic, visual, speech, and hearing
impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple
sclerosis, cancer, heart disease, diabetes, mental retardation,
emotional illness, drug addiction, and alcoholism;
    (2) Major life activities includes functions such as caring for
one's self, performing manual tasks, walking, seeing, hearing, speaking,
breathing, learning, and working;
    (3) Has a record of such an impairment means has a history of, or
has been misclassified as having, a mental or physical impairment that
substantially limits one or more major life activities; and
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially
limit major life activities but is treated by the Department as
constituting such a limitation;
    (ii) Has a physical or mental impairment that substantially limits
major life activities only as a result of the attitudes of others toward
the impairment; or
    (iii) Has none of the impairments defined in paragraph (1) of this
definition but is treated by the Department as having such an
impairment.
    Qualified individual with handicaps means--
    (1) With respect to preschool, elementary, or secondary education
services provided by the Department, an individual with handicaps who is
a member of a class of persons otherwise entitled by statute,
regulation, or Department policy to receive education services from the
Department;
    (2) With respect to any other Department program or activity under
which a person is required to perform services or to achieve a level of
accomplishment, an individual with handicaps

[[Page 388]]

who meets the essential eligibility requirements and who can achieve the
purpose of the program or activity without modifications in the program
or activity that the Department can demonstrate would result in a
fundamental alteration in its nature;
    (3) With respect to any other Department program or activity, an
individual with handicaps who meets the essential eligibility
requirements for participation in, or receipt of benefits from, that
program or activity; and
    (4) Qualified handicapped person as that term is defined for
purposes of employment in 29 CFR 1613.702(f), which is made applicable
to this part by Sec. 105.30
    Secretary means the Secretary of the Department of Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.
    Section 504 means section 504 of the Rehabilitation Act of 1973
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the
Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617);
the Rehabilitation, Comprehensive Services, and Developmental
Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); the
Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810);
and the Civil Rights Restoration Act of 1987 (Pub. L. 100-259, 102 Stat.
28). As used in this part, section 504 applies only to programs or
activities conducted by the Department and not to federally assisted
programs.
    Substantial impairment means a significant loss of the integrity of
finished materials, design quality, or special character resulting from
a permanent alteration.



Sec. Sec. 105.4-105.9  [Reserved]



Sec. 105.10  Self-evaluation.

    (a) The Department shall, within one year of the effective date of
this part, evaluate its current policies and practices, and the effects
thereof, that do not or may not meet the requirements of this part, and,
to the extent modification of any of those policies and practices is
required, the Department shall proceed to make the necessary
modifications.
    (b) The Department shall provide an opportunity to interested
persons, including individuals with handicaps or organizations
representing individuals with handicaps to participate in the self-
evaluation process by submitting comments (both oral and written).
    (c) The Department shall, for at least 3 years following completion
of the self-evaluation, maintain on file, and make available for public
inspection--
    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made.



Sec. 105.11  Notice.

    The Department shall make available, to employees, applicants,
participants, beneficiaries, and other interested persons, information
regarding the provisions of this part and its applicability to the
programs or activities conducted by the Department, and make that
information available to them in such manner as the Secretary finds
necessary to apprise those persons of the protections against
discrimination assured them by section 504 and the regulations in this
part.



Sec. Sec. 105.12-105.19  [Reserved]



Sec. 105.20  General prohibitions against discrimination.

    (a) No qualified individual with handicaps shall, on the basis of
handicap, be excluded from participation in, be denied the benefits of,
or otherwise be subjected to discrimination under, any program or
activity conducted by the Department.
    (b)(1) The Department, in providing any aid, benefit, or service,
may not, directly or through contractual, licensing, or other
arrangements, on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to
participate in or benefit from the aid, benefit, or service that is not
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid,
benefit, or

[[Page 389]]

service that is not as effective in affording equal opportunity to
obtain the same result, to gain the same benefit, or to reach the same
level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits, or services to
individuals with handicaps or to any class of individuals with handicaps
than is provided to others unless that action is necessary to provide
qualified individuals with handicaps with aid, benefits, or services
that are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to
participate as a member of planning or advisory boards; or
    (vi) Otherwise limit a qualified individual with handicaps in the
enjoyment of any right, privilege, advantage, or opportunity enjoyed by
others receiving the aid, benefit, or service.
    (2) The Department may not deny a qualified individual with
handicaps the opportunity to participate in programs or activities that
are not separate or different, despite the existence of permissibly
separate or different programs or activities.
    (3) The Department may not, directly or through contractual or other
arrangements, use criteria or methods of administration the purpose or
effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives
of a program or activity with respect to individuals with handicaps.
    (4) The Department may not, in determining the site or location of a
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits
of, or otherwise subject them to discrimination under, any program or
activity conducted by the Department; or
    (ii) Defeat or substantially impair the accomplishment of the
objectives of a program or activity with respect to individuals with
handicaps.
    (5) The Department, in the selection of procurement contractors, may
not use criteria that subject qualified individuals with handicaps to
discrimination on the basis of handicap.
    (6) The Department may not administer a licensing or certification
program in a manner that subjects qualified individuals with handicaps
to discrimination on the basis of handicap, nor may the Department
establish requirements for the program or activities of licensees or
certified entities that subject qualified individuals with handicaps to
discrimination on the basis of handicap. However, the programs or
activities of entities that are licensed or certified by the Department
are not, themselves, covered by this part.
    (c) The exclusion of nonhandicapped persons from the benefits of a
program limited by Federal statute or Executive Order to individuals
with handicaps or the exclusion of a specific class of individuals with
handicaps from a program limited by Federal statute or Executive Order
to a different class of individuals with handicaps is not prohibited by
this part.
    (d) The Department shall administer programs and activities in the
most integrated setting appropriate to the needs of qualified
individuals with handicaps.



Sec. Sec. 105.21-105.29  [Reserved]



Sec. 105.30  Employment.

    No qualified individual with handicaps shall, on the basis of
handicap, be subjected to discrimination in employment under any program
or activity conducted by the Department. As provided in Sec. 105.41(b),
the definitions, requirements, and procedures of section 501 of the
Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal
Employment Opportunity Commission in 29 CFR part 1613, shall apply to
employment in federally conducted programs or activities.



Sec. 105.31  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 105.32, no qualified
individual with handicaps shall, because the Department's facilities are
inaccessible to or

[[Page 390]]

unusable by individuals with handicaps, be denied the benefits of, be
excluded from participation in, or otherwise be subjected to
discrimination under any program or activity conducted by the
Department.



Sec. 105.32  Program accessibility: Existing facilities.

    (a) General. The Department shall operate each program or activity
so that the program or activity, viewed in its entirety, is readily
accessible to and usable by individuals with handicaps. This paragraph
does not--
    (1) Necessarily require the Department to make each of its existing
facilities accessible to and usable by individuals with handicaps;
    (2) In the case of historic preservation programs, require the
Department to take any action that would result in a substantial
impairment of significant historic features of an historic property; or
    (3)(i) Require the Department to take any action that it can
demonstrate would result in a fundamental alteration in the nature of a
program or activity or in undue financial and administrative burdens.
    (ii) The Department has the burden of proving that compliance with
Sec. 105.32(a) would result in that alteration or those burdens.
    (iii) The decision that compliance would result in that alteration
or those burdens must be made by the Secretary after considering all of
the Department's resources available for use in the funding and
operation of the conducted program or activity, and must be accompanied
by a written statement of the reasons for reaching that conclusion.
    (iv) If an action would result in that alteration or those burdens,
the Department shall take any other action that would not result in the
alteration or burdens but would nevertheless ensure that individuals
with handicaps receive the benefits and services of the program or
activity.
    (b) Methods--(1) General. (i) The Department may comply with the
requirements of this section through such means as redesign of
equipment, reassignment of services to accessible buildings, assignments
of aides to beneficiaries, home visits, delivery of services at
alternate accessible sites, alteration of existing facilities and
construction of new facilities, use of accessible rolling stock, or any
other methods that result in making its programs or activities readily
accessible to and usable by individuals with handicaps.
    (ii) The Department is not required to make structural changes in
existing facilities if other methods are effective in achieving
compliance with this section.
    (iii) The Department, in making alterations to existing buildings,
shall meet accessibility requirements to the extent compelled by the
Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157),
and any regulations implementing that Act.
    (iv) In choosing among available methods for meeting the
requirements of this section, the Department shall give priority to
those methods that offer programs and activities to qualified
individuals with handicaps in the most integrated setting appropriate.
    (2) Historic preservation programs. In meeting the requirements of
Sec. 105.32(a) in historic preservation programs, the Department shall
give priority to methods that provide physical access to individuals
with handicaps. In cases were a physical alteration to an historic
property is not required because of Sec. 105.32 (a)(2) or (a)(3),
alternative methods of achieving program accessibility include--
    (i) Using audiovisual materials and devices to depict those portions
of an historic property that cannot otherwise be made accessible;
    (ii) Assigning persons to guide individuals with handicaps into or
through portions of historic properties that cannot otherwise be made
accessible; or
    (iii) Adopting other innovative methods.
    (c) Time period for compliance. The Department shall comply with the
obligations established under this section within 60 days of the
effective date of this part except that if structural changes in
facilities are undertaken, the changes shall be made within 3 years of
the effective date of this part, but in any event as expeditiously as
possible.

[[Page 391]]

    (d) Transition plan. (1) In the event that structural changes to
facilities will be undertaken to achieve program accessibility, the
Department shall develop, within six months of the effective date of
this part, a transition plan setting forth the steps necessary to
complete those changes.
    (2) The Department shall provide an opportunity to interested
persons, including individuals with handicaps or organizations
representing individuals with handicaps, to participate in the
development of the transition plan by submitting comments (both oral and
written). A copy of the transition plan must be made available for
public inspection.
    (3) The plan must, at a minimum--
    (i) Identify physical obstacles in the Department's facilities that
limit the accessibility of its programs or activities to individuals
with handicaps;
    (ii) Describe in detail the methods that will be used to make the
facilities accessible;
    (iii) Specify the schedule for taking the steps necessary to achieve
compliance with this section and, if the time period of the transition
plan is longer than one year, identify steps that will be taken during
each year of the transition period; and
    (iv) Indicate the official responsible for implementation of the
plan.



Sec. 105.33  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered
by, on behalf of, or for the use of, the Department must be designed,
constructed, or altered so as to be readily accessible to and usable by
individuals with handicaps. The definitions, requirements, and standards
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established
in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this
section.



Sec. Sec. 105.34-105.39  [Reserved]



Sec. 105.40  Communications.

    (a) The Department shall take appropriate steps to ensure effective
communication with applicants, participants, personnel of other Federal
entities, and members of the public, as follows:
    (1)(i) The Department shall furnish appropriate auxiliary aids if
necessary to afford an individual with handicaps an equal opportunity to
participate in, and enjoy the benefits of, a program or activity
conducted by the Department.
    (ii) In determining what type of auxiliary aid is necessary, the
Department shall give primary consideration to the request of the
individual with handicaps.
    (iii) The Department need not provide individually prescribed
devices, readers for personal use or study, or other devices of a
personal nature.
    (2) If the Department communicates with applicants and beneficiaries
by telephone, telecommunication devices for deaf persons (TDDs) or
equally effective telecommunication systems must be used.
    (b) The Department shall ensure that interested persons, including
persons with impaired vision or hearing, can obtain information as to
the existence and location of accessible services, activities, and
facilities.
    (c) The Department shall provide signs at a primary entrance to each
of its inaccessible facilities, directing users to a location at which
they can obtain information about accessible facilities. The
international symbol for accessibility must be used at each primary
entrance of an accessible facility.
    (d)(1) This section does not require the Department to take any
action that it can demonstrate would result in a fundamental alteration
in the nature of a program or activity or in undue financial and
administrative burdens.
    (2) The Department has the burden of proving that compliance with
Sec. 105.40 would result in that alteration or those burdens.
    (3) The decision that compliance would result in that alteration or
those burdens must be made by the Secretary after considering all
Department resources available for use in the funding and operation of
the conducted program or activity and must be accompanied by a written
statement of the reasons for reaching that conclusion.
    (4) If an action required to comply with this section would result
in that alteration or those burdens, the Department shall take any other
action that would not result in the alteration

[[Page 392]]

or burdens but would nevertheless ensure that, to the maximum extent
possible, individuals with handicaps receive the benefits and services
of the program or activity.



Sec. 105.41  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this
section applies to all allegations of discrimination on the basis of
handicap in programs and activities conducted by the Department.
    (b) As provided in Sec. 105.30, the Department shall process
complaints alleging violations of section 504 with respect to employment
according to the procedures established by the Equal Employment
Opportunity Commission in 29 CFR part 1613 pursuant to section 501 of
the Rehabilitation Act of 1973 (29 U.S.C. 791).
    (c) The Deputy Under Secretary for Management is responsible for
coordinating implementation of this section. Complaints may be sent to
the U.S. Department of Education, Office of Management, Federal Building
No. 6, 400 Maryland Avenue SW., Washington, DC 20202.
    (d) The Department shall accept and investigate all complete
complaints for which it has jurisdiction. All complete complaints must
be filed within 180 days of the alleged act of discrimination. The
Department may extend this time period for good cause.
    (e) If the Department receives a complaint over which it does not
have jurisdiction, it shall promptly notify the complainant and shall
make reasonable efforts to refer the complaint to the appropriate
government entity.
    (f) The Department shall notify the Architectural and Transportation
Barriers Compliance Board upon receipt of any complaint alleging that a
building or facility that is subject to the Architectural Barriers Act
of 1968, as amended (42 U.S.C. 4151-4157) is not readily accessible to
and usable by individuals with handicaps.
    (g) Within 180 days of the receipt of a complete complaint for which
it has jurisdiction, the Department shall notify the complainant of the
results of the investigation in a letter containing--
    (1) Findings of fact and conclusions of law;
    (2) A description of a remedy for each violation found; and
    (3) A notice of the right to appeal.
    (h) Appeals of the findings of fact and conclusions of law or
remedies must be filed by the complainant within 90 days of receipt from
the Department of the letter required by Sec. 105.41(g). The Department
may extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the Secretary.
    (j) If the Secretary determines that additional information is
needed for the complainant, he or she shall notify the complainant of
the additional information needed to make his or her determination on
the appeal.
    (k) The Secretary shall notify the complainant of the results of the
appeal.
    (l) The time limit in paragraph (g) of this section may be extended
by the Secretary.
    (m) The Secretary may delegate the authority for conducting
complaint investigations to other Federal agencies, except that the
authority for making the final determination may not be delegated.



Sec. 105.42  Effective date.

    The effective date of this part is October 9, 1990.



PART 106_NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION PROGRAMS OR
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                         Subpart A_Introduction

Sec.
106.1 Purpose and effective date.
106.2 Definitions.
106.3 Remedial and affirmative action and self-evaluation.
106.4 Assurance required.
106.5 Transfers of property.
106.6 Effect of other requirements.
106.7 Effect of employment opportunities.
106.8 Designation of responsible employee and adoption of grievance
          procedures.
106.9 Dissemination of policy.

                           Subpart B_Coverage

106.11 Application.
106.12 Educational institutions controlled by religious organizations.

[[Page 393]]

106.13 Military and merchant marine educational institutions.
106.14 Membership practices of certain organizations.
106.15 Admissions.
106.16 Educational institutions eligible to submit transition plans.
106.17 Transition plans.

     Subpart C_Discrimination on the Basis of Sex in Admission and
                         Recruitment Prohibited

106.21 Admission.
106.22 Preference in admission.
106.23 Recruitment.

 Subpart D_Discrimination on the Basis of Sex in Education Programs or
                          Activities Prohibited

106.31 Education programs or activities.
106.32 Housing.
106.33 Comparable facilities.
106.34 Access to classes and schools.
106.35 Access to institutions of vocational education.
106.36 Counseling and use of appraisal and counseling materials.
106.37 Financial assistance.
106.38 Employment assistance to students.
106.39 Health and insurance benefits and services.
106.40 Marital or parental status.
106.41 Athletics.
106.42 Textbooks and curricular material.
106.43 Standards for measuring skill or progress in physical education
          classes.

Subpart E_Discrimination on the Basis of Sex in Employment in Education
                    Programs or Activities Prohibited

106.51 Employment.
106.52 Employment criteria.
106.53 Recruitment.
106.54 Compensation.
106.55 Job classification and structure.
106.56 Fringe benefits.
106.57 Marital or parental status.
106.58 Effect of State or local law or other requirements.
106.59 Advertising.
106.60 Pre-employment inquiries.
106.61 Sex as a bona-fide occupational qualification.

                     Subpart F_Procedures [Interim]

106.71 Procedures.

Subject Index to Title IX Preamble and Regulation
Appendix A to Part 106--Guidelines for Eliminating Discrimination and
          Denial of Services on the Basis of Race, Color, National
          Origin, Sex, and Handicap in Vocational Education Programs
          [Note]

    Authority: 20 U.S.C. 1681 et seq., unless otherwise noted.

    Source: 45 FR 30955, May 9, 1980, unless otherwise noted.



                         Subpart A_Introduction



Sec. 106.1  Purpose and effective date.

    The purpose of this part is to effectuate title IX of the Education
Amendments of 1972, as amended by Pub. L. 93-568, 88 Stat. 1855 (except
sections 904 and 906 of those Amendments) which is designed to eliminate
(with certain exceptions) discrimination on the basis of sex in any
education program or activity receiving Federal financial assistance,
whether or not such program or activity is offered or sponsored by an
educational institution as defined in this part. This part is also
intended to effectuate section 844 of the Education Amendments of 1974,
Pub. L. 93-380, 88 Stat. 484. The effective date of this part shall be
July 21, 1975.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682, as amended by Pub. L. 93-568, 88 Stat. 1855,
and sec. 844, Education Amendments of 1974, 88 Stat. 484, Pub. L. 93-
380)



Sec. 106.2  Definitions.

    As used in this part, the term:
    (a) Title IX means title IX of the Education Amendments of 1972,
Pub. L. 92-318, as amended by section 3 of Pub. L. 93-568, 88 Stat.
1855, except sections 904 and 906 thereof; 20 U.S.C. 1681, 1682, 1683,
1685, 1686.
    (b) Department means the Department of Education.
    (c) Secretary means the Secretary of Education.
    (d) Assistant Secretary means the Assistant Secretary for Civil
Rights of the Department.
    (e) Reviewing Authority means that component of the Department
delegated authority by the Secretary to appoint, and to review the
decisions of, administrative law judges in cases arising under this
part.
    (f) Administrative law judge means a person appointed by the
reviewing authority to preside over a hearing held under this part.

[[Page 394]]

    (g) Federal financial assistance means any of the following, when
authorized or extended under a law administered by the Department:
    (1) A grant or loan of Federal financial assistance, including funds
made available for:
    (i) The acquisition, construction, renovation, restoration, or
repair of a building or facility or any portion thereof; and
    (ii) Scholarships, loans, grants, wages or other funds extended to
any entity for payment to or on behalf of students admitted to that
entity, or extended directly to such students for payment to that
entity.
    (2) A grant of Federal real or personal property or any interest
therein, including surplus property, and the proceeds of the sale or
transfer of such property, if the Federal share of the fair market value
of the property is not, upon such sale or transfer, properly accounted
for to the Federal Government.
    (3) Provision of the services of Federal personnel.
    (4) Sale or lease of Federal property or any interest therein at
nominal consideration, or at consideration reduced for the purpose of
assisting the recipient or in recognition of public interest to be
served thereby, or permission to use Federal property or any interest
therein without consideration.
    (5) Any other contract, agreement, or arrangement which has as one
of its purposes the provision of assistance to any education program or
activity, except a contract of insurance or guaranty.
    (h) Program or activity and program means all of the operations of--
    (1)(i) A department, agency, special purpose district, or other
instrumentality of a State or local government; or
    (ii) The entity of a State or local government that distributes such
assistance and each such department or agency (and each other State or
local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
    (2)(i) A college, university, or other postsecondary institution, or
a public system of higher education; or
    (ii) A local educational agency (as defined in 20 U.S.C. 8801),
system of vocational education, or other school system;
    (3)(i) An entire corporation, partnership, other private
organization, or an entire sole proprietorship--
    (A) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
    (ii) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
    (4) Any other entity that is established by two or more of the
entities described in paragraph (h)(1), (2), or (3) of this section; any
part of which is extended Federal financial assistance.

(Authority: 20 U.S.C. 1687)

    (i) Recipient means any State or political subdivision thereof, or
any instrumentality of a State or political subdivision thereof, any
public or private agency, institution, or organization, or other entity,
or any person, to whom Federal financial assistance is extended directly
or through another recipient and which operates an education program or
activity which receives such assistance, including any subunit,
successor, assignee, or transferee thereof.
    (j) Applicant means one who submits an application, request, or plan
required to be approved by a Department official, or by a recipient, as
a condition to becoming a recipient.
    (k) Educational institution means a local educational agency (LEA)
as defined by section 1001(f) of the Elementary and Secondary Education
Act of 1965 (20 U.S.C. 3381), a preschool, a private elementary or
secondary school, or an applicant or recipient of the type defined by
paragraph (l), (m), (n), or (o) of this section.
    (l) Institution of graduate higher education means an institution
which:
    (1) Offers academic study beyond the bachelor of arts or bachelor of
science

[[Page 395]]

degree, whether or not leading to a certificate of any higher degree in
the liberal arts and sciences; or
    (2) Awards any degree in a professional field beyond the first
professional degree (regardless of whether the first professional degree
in such field is awarded by an institution of undergraduate higher
education or professional education); or
    (3) Awards no degree and offers no further academic study, but
operates ordinarily for the purpose of facilitating research by persons
who have received the highest graduate degree in any field of study.
    (m) Institution of undergraduate higher education means:
    (1) An institution offering at least two but less than four years of
college level study beyond the high school level, leading to a diploma
or an associate degree, or wholly or principally creditable toward a
baccalaureate degree; or
    (2) An institution offering academic study leading to a
baccalaureate degree; or
    (3) An agency or body which certifies credentials or offers degrees,
but which may or may not offer academic study.
    (n) Institution of professional education means an institution
(except any institution of undergraduate higher education) which offers
a program of academic study that leads to a first professional degree in
a field for which there is a national specialized accrediting agency
recognized by the Secretary.
    (o) Institution of vocational education means a school or
institution (except an institution of professional or graduate or
undergraduate higher education) which has as its primary purpose
preparation of students to pursue a technical, skilled, or semiskilled
occupation or trade, or to pursue study in a technical field, whether or
not the school or institution offers certificates, diplomas, or degrees
and whether or not it offers fulltime study.
    (p) Administratively separate unit means a school, department or
college of an educational institution (other than a local educational
agency) admission to which is independent of admission to any other
component of such institution.
    (q) Admission means selection for part-time, full-time, special,
associate, transfer, exchange, or any other enrollment, membership, or
matriculation in or at an education program or activity operated by a
recipient.
    (r) Student means a person who has gained admission.
    (s) Transition plan means a plan subject to the approval of the
Secretary pursuant to section 901(a)(2) of the Education Amendments of
1972, under which an educational institution operates in making the
transition from being an educational institution which admits only
students of one sex to being one which admits students of both sexes
without discrimination.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980; 45 FR 37426, June 3, 1980, as amended at 65
FR 68056, Nov. 13, 2000]



Sec. 106.3  Remedial and affirmative action and self-evaluation.

    (a) Remedial action. If the Assistant Secretary finds that a
recipient has discriminated against persons on the basis of sex in an
education program or activity, such recipient shall take such remedial
action as the Assistant Secretary deems necessary to overcome the
effects of such discrimination.
    (b) Affirmative action. In the absence of a finding of
discrimination on the basis of sex in an education program or activity,
a recipient may take affirmative action to overcome the effects of
conditions which resulted in limited participation therein by persons of
a particular sex. Nothing herein shall be interpreted to alter any
affirmative action obligations which a recipient may have under
Executive Order 11246.
    (c) Self-evaluation. Each recipient education institution shall,
within one year of the effective date of this part:
    (1) Evaluate, in terms of the requirements of this part, its current
policies and practices and the effects thereof concerning admission of
students, treatment of students, and employment of both academic and
non-academic personnel working in connection with the recipient's
education program or activity;

[[Page 396]]

    (2) Modify any of these policies and practices which do not or may
not meet the requirements of this part; and
    (3) Take appropriate remedial steps to eliminate the effects of any
discrimination which resulted or may have resulted from adherence to
these policies and practices.
    (d) Availability of self-evaluation and related materials.
Recipients shall maintain on file for at least three years following
completion of the evaluation required under paragraph (c) of this
section, and shall provide to the Assistant Secretary upon request, a
description of any modifications made pursuant to paragraph (c)(ii) of
this section and of any remedial steps taken pursuant to paragraph
(c)(iii) of this section.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.4  Assurance required.

    (a) General. Every application for Federal financial assistance
shall as condition of its approval contain or be accompanied by an
assurance from the applicant or recipient, satisfactory to the Assistant
Secretary, that the education program or activity operated by the
applicant or recipient and to which this part applies will be operated
in compliance with this part. An assurance of compliance with this part
shall not be satisfactory to the Assistant Secretary if the applicant or
recipient to whom such assurance applies fails to commit itself to take
whatever remedial action is necessary in accordance with Sec. 106.3(a)
to eliminate existing discrimination on the basis of sex or to eliminate
the effects of past discrimination whether occurring prior or subsequent
to the submission to the Assistant Secretary of such assurance.
    (b) Duration of obligation. (1) In the case of Federal financial
assistance extended to provide real property or structures thereon, such
assurance shall obligate the recipient or, in the case of a subsequent
transfer, the transferee, for the period during which the real property
or structures are used to provide an education program or activity.
    (2) In the case of Federal financial assistance extended to provide
personal property, such assurance shall obligate the recipient for the
period during which it retains ownership or possession of the property.
    (3) In all other cases such assurance shall obligate the recipient
for the period during which Federal financial assistance is extended.
    (c) Form. The Director will specify the form of the assurances
required by paragraph (a) of this section and the extent to which such
assurances will be required of the applicant's or recipient's
subgrantees, contractors, subcontractors, transferees, or successors in
interest.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 45 FR 86298, Dec. 30, 1980; 65
FR 68056, Nov. 13, 2000]



Sec. 106.5  Transfers of property.

    If a recipient sells or otherwise transfers property financed in
whole or in part with Federal financial assistance to a transferee which
operates any education program or activity, and the Federal share of the
fair market value of the property is not upon such sale or transfer
properly accounted for to the Federal Government both the transferor and
the transferee shall be deemed to be recipients, subject to the
provisions of subpart B of this part.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.6  Effect of other requirements.

    (a) Effect of other Federal provisions. The obligations imposed by
this part are independent of, and do not alter, obligations not to
discriminate on the basis of sex imposed by Executive Order 11246, as
amended; sections 704 and 855 of the Public Health Service Act (42
U.S.C. 292d and 298b-2); Title VII of the Civil Rights Act of 1964 (42
U.S.C. 2000e et seq.); the Equal Pay Act (29 U.S.C. 206 and 206(d)); and
any other Act of Congress or Federal regulation.

(Authority: Secs. 901, 902, 905, Education Amendments of 1972, 86 Stat.
373, 374, 375; 20 U.S.C. 1681, 1682, 1685)

    (b) Effect of State or local law or other requirements. The
obligation to comply

[[Page 397]]

with this part is not obviated or alleviated by any State or local law
or other requirement which would render any applicant or student
ineligible, or limit the eligibility of any applicant or student, on the
basis of sex, to practice any occupation or profession.
    (c) Effect of rules or regulations of private organizations. The
obligation to comply with this part is not obviated or alleviated by any
rule or regulation of any organization, club, athletic or other league,
or association which would render any applicant or student ineligible to
participate or limit the eligibility or participation of any applicant
or student, on the basis of sex, in any education program or activity
operated by a recipient and which receives Federal financial assistance.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



Sec. 106.7  Effect of employment opportunities.

    The obligation to comply with this part is not obviated or
alleviated because employment opportunities in any occupation or
profession are or may be more limited for members of one sex than for
members of the other sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.8  Designation of responsible employee and adoption of
grievance procedures.

    (a) Designation of responsible employee. Each recipient shall
designate at least one employee to coordinate its efforts to comply with
and carry out its responsibilities under this part, including any
investigation of any complaint communicated to such recipient alleging
its noncompliance with this part or alleging any actions which would be
prohibited by this part. The recipient shall notify all its students and
employees of the name, office address and telephone number of the
employee or employees appointed pursuant to this paragraph.
    (b) Complaint procedure of recipient. A recipient shall adopt and
publish grievance procedures providing for prompt and equitable
resolution of student and employee complaints alleging any action which
would be prohibited by this part.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.9  Dissemination of policy.

    (a) Notification of policy. (1) Each recipient shall implement
specific and continuing steps to notify applicants for admission and
employment, students and parents of elementary and secondary school
students, employees, sources of referral of applicants for admission and
employment, and all unions or professional organizations holding
collective bargaining or professional agreements with the recipient,
that it does not discriminate on the basis of sex in the educational
program or activity which it operates, and that it is required by title
IX and this part not to discriminate in such a manner. Such notification
shall contain such information, and be made in such manner, as the
Assistant Secretary finds necessary to apprise such persons of the
protections against discrimination assured them by title IX and this
part, but shall state at least that the requirement not to discriminate
in the education program or activity extends to employment therein, and
to admission thereto unless Subpart C does not apply to the recipient,
and that inquiries concerning the application of title IX and this part
to such recipient may be referred to the employee designated pursuant to
Sec. 106.8, or to the Assistant Secretary.
    (2) Each recipient shall make the initial notification required by
paragraph (a)(1) of this section within 90 days of the effective date of
this part or of the date this part first applies to such recipient,
whichever comes later, which notification shall include publication in:
    (i) Local newspapers;
    (ii) Newspapers and magazines operated by such recipient or by
student, alumnae, or alumni groups for or in connection with such
recipient; and
    (iii) Memoranda or other written communications distributed to every
student and employee of such recipient.

[[Page 398]]

    (b) Publications. (1) Each recipient shall prominently include a
statement of the policy described in paragraph (a) of this section in
each announcement, bulletin, catalog, or application form which it makes
available to any person of a type, described in paragraph (a) of this
section, or which is otherwise used in connection with the recruitment
of students or employees.
    (2) A recipient shall not use or distribute a publication of the
type described in this paragraph which suggests, by text or
illustration, that such recipient treats applicants, students, or
employees differently on the basis of sex except as such treatment is
permitted by this part.
    (c) Distribution. Each recipient shall distribute without
discrimination on the basis of sex each publication described in
paragraph (b) of this section, and shall apprise each of its admission
and employment recruitment representatives of the policy of
nondiscrimination described in paragraph (a) of this section, and
require such representatives to adhere to such policy.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



                           Subpart B_Coverage



Sec. 106.11  Application.

    Except as provided in this subpart, this part 106 applies to every
recipient and to the education program or activity operated by such
recipient which receives Federal financial assistance.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 86298, Dec. 30, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



Sec. 106.12  Educational institutions controlled by religious
organizations.

    (a) Application. This part does not apply to an educational
institution which is controlled by a religious organization to the
extent application of this part would not be consistent with the
religious tenets of such organization.
    (b) Exemption. An educational institution which wishes to claim the
exemption set forth in paragraph (a) of this section, shall do so by
submitting in writing to the Assistant Secretary a statement by the
highest ranking official of the institution, identifying the provisions
of this part which conflict with a specific tenet of the religious
organization.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.13  Military and merchant marine educational institutions.

    This part does not apply to an educational institution whose primary
purpose is the training of individuals for a military service of the
United States or for the merchant marine.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.14  Membership practices of certain organizations.

    (a) Social fraternities and sororities. This part does not apply to
the membership practices of social fraternities and sororities which are
exempt from taxation under section 501(a) of the Internal Revenue Code
of 1954, the active membership of which consists primarily of students
in attendance at institutions of higher education.
    (b) YMCA, YWCA, Girl Scouts, Boy Scouts and Camp Fire Girls. This
part does not apply to the membership practices of the Young Men's
Christian Association, the Young Women's Christian Association, the Girl
Scouts, the Boy Scouts and Camp Fire Girls.
    (c) Voluntary youth service organizations. This part does not apply
to the membership practices of voluntary youth service organizations
which are exempt from taxation under section 501(a) of the Internal
Revenue Code of 1954 and the membership of which has been traditionally
limited to members of one sex and principally to persons of less than
nineteen years of age.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682; sec. 3(a) of P.L. 93-568, 88 Stat. 1862
amending Sec. 901)

[[Page 399]]



Sec. 106.15  Admissions.

    (a) Admissions to educational institutions prior to June 24, 1973,
are not covered by this part.
    (b) Administratively separate units. For the purposes only of this
section, Sec. Sec. 106.16 and 106.17, and subpart C, each
administratively separate unit shall be deemed to be an educational
institution.
    (c) Application of subpart C. Except as provided in paragraphs (d)
and (e) of this section, subpart C applies to each recipient. A
recipient to which subpart C applies shall not discriminate on the basis
of sex in admission or recruitment in violation of that subpart.
    (d) Educational institutions. Except as provided in paragraph (e) of
this section as to recipients which are educational institutions,
subpart C applies only to institutions of vocational education,
professional education, graduate higher education, and public
institutions of undergraduate higher education.
    (e) Public institutions of undergraduate higher education. Subpart C
does not apply to any public institution of undergraduate higher
education which traditionally and continually from its establishment has
had a policy of admitting only students of one sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 45 FR 86298, Dec. 30, 1980]



Sec. 106.16  Educational institutions eligible to submit transition
plans.

    (a) Application. This section applies to each educational
institution to which subpart C applies which:
    (1) Admitted only students of one sex as regular students as of June
23, 1972; or
    (2) Admitted only students of one sex as regular students as of June
23, 1965, but thereafter admitted as regular students, students of the
sex not admitted prior to June 23, 1965.
    (b) Provision for transition plans. An educational institution to
which this section applies shall not discriminate on the basis of sex in
admission or recruitment in violation of subpart C unless it is carrying
out a transition plan approved by the Secretary as described in Sec.
106.17, which plan provides for the elimination of such discrimination
by the earliest practicable date but in no event later than June 23,
1979.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.17  Transition plans.

    (a) Submission of plans. An institution to which Sec. 106.16
applies and which is composed of more than one administratively separate
unit may submit either a single transition plan applicable to all such
units, or a separate transition plan applicable to each such unit.
    (b) Content of plans. In order to be approved by the Secretary a
transition plan shall:
    (1) State the name, address, and Federal Interagency Committee on
Education (FICE) Code of the educational institution submitting such
plan, the administratively separate units to which the plan is
applicable, and the name, address, and telephone number of the person to
whom questions concerning the plan may be addressed. The person who
submits the plan shall be the chief administrator or president of the
institution, or another individual legally authorized to bind the
institution to all actions set forth in the plan.
    (2) State whether the educational institution or administratively
separate unit admits students of both sexes, as regular students and, if
so, when it began to do so.
    (3) Identify and describe with respect to the educational
institution or administratively separate unit any obstacles to admitting
students without discrimination on the basis of sex.
    (4) Describe in detail the steps necessary to eliminate as soon as
practicable each obstacle so identified and indicate the schedule for
taking these steps and the individual directly responsible for their
implementation.
    (5) Include estimates of the number of students, by sex, expected to
apply for, be admitted to, and enter each class during the period
covered by the plan.
    (c) Nondiscrimination. No policy or practice of a recipient to which
Sec. 106.16

[[Page 400]]

applies shall result in treatment of applicants to or students of such
recipient in violation of subpart C unless such treatment is
necessitated by an obstacle identified in paragraph (b) (3) of this
section and a schedule for eliminating that obstacle has been provided
as required by paragraph (b) (4) of this section.
    (d) Effects of past exclusion. To overcome the effects of past
exclusion of students on the basis of sex, each educational institution
to which Sec. 106.16 applies shall include in its transition plan, and
shall implement, specific steps designed to encourage individuals of the
previously excluded sex to apply for admission to such institution. Such
steps shall include instituting recruitment which emphasizes the
institution's commitment to enrolling students of the sex previously
excluded.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



     Subpart C_Discrimination on the Basis of Sex in Admission and
                         Recruitment Prohibited



Sec. 106.21  Admission.

    (a) General. No person shall, on the basis of sex, be denied
admission, or be subjected to discrimination in admission, by any
recipient to which this subpart applies, except as provided in
Sec. Sec. 106.16 and 106.17.
    (b) Specific prohibitions. (1) In determining whether a person
satisfies any policy or criterion for admission, or in making any offer
of admission, a recipient to which this subpart applies shall not:
    (i) Give preference to one person over another on the basis of sex,
by ranking applicants separately on such basis, or otherwise;
    (ii) Apply numerical limitations upon the number or proportion of
persons of either sex who may be admitted; or
    (iii) Otherwise treat one individual differently from another on the
basis of sex.
    (2) A recipient shall not administer or operate any test or other
criterion for admission which has a disproportionately adverse effect on
persons on the basis of sex unless the use of such test or criterion is
shown to predict validly success in the education program or activity in
question and alternative tests or criteria which do not have such a
disproportionately adverse effect are shown to be unavailable.
    (c) Prohibitions relating to marital or parental status. In
determining whether a person satisfies any policy or criterion for
admission, or in making any offer of admission, a recipient to which
this subpart applies:
    (1) Shall not apply any rule concerning the actual or potential
parental, family, or marital status of a student or applicant which
treats persons differently on the basis of sex;
    (2) Shall not discriminate against or exclude any person on the
basis of pregnancy, childbirth, termination of pregnancy, or recovery
therefrom, or establish or follow any rule or practice which so
discriminates or excludes;
    (3) Shall treat disabilities related to pregnancy, childbirth,
termination of pregnancy, or recovery therefrom in the same manner and
under the same policies as any other temporary disability or physical
condition; and
    (4) Shall not make pre-admission inquiry as to the marital status of
an applicant for admission, including whether such applicant is ``Miss''
or ``Mrs.'' A recipient may make pre-admission inquiry as to the sex of
an applicant for admision, but only if such inquiry is made equally of
such applicants of both sexes and if the results of such inquiry are not
used in connection with discrimination prohibited by this part.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.22  Preference in admission.

    A recipient to which this subpart applies shall not give preference
to applicants for admission, on the basis of attendance at any
educational institution or other school or entity which admits as
students only or predominantly members of one sex, if the giving of

[[Page 401]]

such preference has the effect of discriminating on the basis of sex in
violation of this subpart.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.23  Recruitment.

    (a) Nondiscriminatory recruitment. A recipient to which this subpart
applies shall not discriminate on the basis of sex in the recruitment
and admission of students. A recipient may be required to undertake
additional recruitment efforts for one sex as remedial action pursuant
to Sec. 106.3(a), and may choose to undertake such efforts as
affirmative action pursuant to Sec. 106.3(b).
    (b) Recruitment at certain institutions. A recipient to which this
subpart applies shall not recruit primarily or exclusively at
educational institutions, schools or entities which admit as students
only or predominantly members of one sex, if such actions have the
effect of discriminating on the basis of sex in violation of this
subpart.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



 Subpart D_Discrimination on the Basis of Sex in Education Programs or
                          Activities Prohibited



Sec. 106.31  Education programs or activities.

    (a) General. Except as provided elsewhere in this part, no person
shall, on the basis of sex, be excluded from participation in, be denied
the benefits of, or be subjected to discrimination under any academic,
extracurricular, research, occupational training, or other education
program or activity operated by a recipient which receives Federal
financial assistance. This subpart does not apply to actions of a
recipient in connection with admission of its students to an education
program or activity of (1) a recipient to which subpart C does not
apply, or (2) an entity, not a recipient, to which subpart C would not
apply if the entity were a recipient.
    (b) Specific prohibitions. Except as provided in this subpart, in
providing any aid, benefit, or service to a student, a recipient shall
not, on the basis of sex:
    (1) Treat one person differently from another in determining whether
such person satisfies any requirement or condition for the provision of
such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid,
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior,
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a student
or applicant, including eligibility for in-state fees and tuition;
    (6) Aid or perpetuate discrimination against any person by providing
significant assistance to any agency, organization, or person which
discriminates on the basis of sex in providing any aid, benefit or
service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right,
privilege, advantage, or opportunity.
    (c) Assistance administered by a recipient educational institution
to study at a foreign institution. A recipient educational institution
may administer or assist in the administration of scholarships,
fellowships, or other awards established by foreign or domestic wills,
trusts, or similar legal instruments, or by acts of foreign governments
and restricted to members of one sex, which are designed to provide
opportunities to study abroad, and which are awarded to students who are
already matriculating at or who are graduates of the recipient
institution; Provided, a recipient educational institution which
administers or assists in the administration of such scholarships,
fellowships, or other awards which are restricted to members of one sex
provides, or otherwise makes available reasonable opportunities for
similar studies for members of the other sex. Such opportunities may be
derived from either domestic or foreign sources.
    (d) Aid, benefits or services not provided by recipient. (1) This
paragraph applies to any recipient which requires participation by any
applicant, student, or employee in any education program or

[[Page 402]]

activity not operated wholly by such recipient, or which facilitates,
permits, or considers such participation as part of or equivalent to an
education program or activity operated by such recipient, including
participation in educational consortia and cooperative employment and
student-teaching assignments.
    (2) Such recipient:
    (i) Shall develop and implement a procedure designed to assure
itself that the operator or sponsor of such other education program or
activity takes no action affecting any applicant, student, or employee
of such recipient which this part would prohibit such recipient from
taking; and
    (ii) Shall not facilitate, require, permit, or consider such
participation if such action occurs.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 47 FR 32527, July 28, 1982; 65
FR 68056, Nov. 13, 2000]



Sec. 106.32  Housing.

    (a) Generally. A recipient shall not, on the basis of sex, apply
different rules or regulations, impose different fees or requirements,
or offer different services or benefits related to housing, except as
provided in this section (including housing provided only to married
students).
    (b) Housing provided by recipient. (1) A recipient may provide
separate housing on the basis of sex.
    (2) Housing provided by a recipient to students of one sex, when
compared to that provided to students of the other sex, shall be as a
whole:
    (i) Proportionate in quantity to the number of students of that sex
applying for such housing; and
    (ii) Comparable in quality and cost to the student.
    (c) Other housing. (1) A recipient shall not, on the basis of sex,
administer different policies or practices concerning occupancy by its
students of housing other than provided by such recipient.
    (2) A recipient which, through solicitation, listing, approval of
housing, or otherwise, assists any agency, organization, or person in
making housing available to any of its students, shall take such
reasonable action as may be necessary to assure itself that such housing
as is provided to students of one sex, when compared to that provided to
students of the other sex, is as a whole:
    (i) Proportionate in quantity and
    (ii) Comparable in quality and cost to the student.

A recipient may render such assistance to any agency, organization, or
person which provides all or part of such housing to students only of
one sex.

(Authority: Secs. 901, 902, 907, Education Amendments of 1972, 86 Stat.
373, 374, 375; 20 U.S.C. 1681, 1682, 1686)



Sec. 106.33  Comparable facilities.

    A recipient may provide separate toilet, locker room, and shower
facilities on the basis of sex, but such facilities provided for
students of one sex shall be comparable to such facilities provided for
students of the other sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374)



Sec. 106.34  Access to classes and schools.

    (a) General standard. Except as provided for in this section or
otherwise in this part, a recipient shall not provide or otherwise carry
out any of its education programs or activities separately on the basis
of sex, or require or refuse participation therein by any of its
students on the basis of sex.
    (1) Contact sports in physical education classes. This section does
not prohibit separation of students by sex within physical education
classes or activities during participation in wrestling, boxing, rugby,
ice hockey, football, basketball, and other sports the purpose or major
activity of which involves bodily contact.
    (2) Ability grouping in physical education classes. This section
does not prohibit grouping of students in physical education classes and
activities by ability as assessed by objective standards of individual
performance developed and applied without regard to sex.
    (3) Human sexuality classes. Classes or portions of classes in
elementary and secondary schools that deal primarily with human
sexuality may be conducted in separate sessions for boys and girls.

[[Page 403]]

    (4) Choruses. Recipients may make requirements based on vocal range
or quality that may result in a chorus or choruses of one or
predominantly one sex.
    (b) Classes and extracurricular activities--(1) General standard.
Subject to the requirements in this paragraph, a recipient that operates
a nonvocational coeducational elementary or secondary school may provide
nonvocational single-sex classes or extracurricular activities, if--
    (i) Each single-sex class or extracurricular activity is based on
the recipient's important objective--
    (A) To improve educational achievement of its students, through a
recipient's overall established policy to provide diverse educational
opportunities, provided that the single-sex nature of the class or
extracurricular activity is substantially related to achieving that
objective; or
    (B) To meet the particular, identified educational needs of its
students, provided that the single-sex nature of the class or
extracurricular activity is substantially related to achieving that
objective;
    (ii) The recipient implements its objective in an evenhanded manner;
    (iii) Student enrollment in a single-sex class or extracurricular
activity is completely voluntary; and
    (iv) The recipient provides to all other students, including
students of the excluded sex, a substantially equal coeducational class
or extracurricular activity in the same subject or activity.
    (2) Single-sex class or extracurricular activity for the excluded
sex. A recipient that provides a single-sex class or extracurricular
activity, in order to comply with paragraph (b)(1)(ii) of this section,
may be required to provide a substantially equal single-sex class or
extracurricular activity for students of the excluded sex.
    (3) Substantially equal factors. Factors the Department will
consider, either individually or in the aggregate as appropriate, in
determining whether classes or extracurricular activities are
substantially equal include, but are not limited to, the following: the
policies and criteria of admission, the educational benefits provided,
including the quality, range, and content of curriculum and other
services and the quality and availability of books, instructional
materials, and technology, the qualifications of faculty and staff,
geographic accessibility, the quality, accessibility, and availability
of facilities and resources provided to the class, and intangible
features, such as reputation of faculty.
    (4) Periodic evaluations. (i) The recipient must conduct periodic
evaluations to ensure that single-sex classes or extracurricular
activities are based upon genuine justifications and do not rely on
overly broad generalizations about the different talents, capacities, or
preferences of either sex and that any single-sex classes or
extracurricular activities are substantially related to the achievement
of the important objective for the classes or extracurricular
activities.
    (ii) Evaluations for the purposes of paragraph (b)(4)(i) of this
section must be conducted at least every two years.
    (5) Scope of coverage. The provisions of paragraph (b)(1) through
(4) of this section apply to classes and extracurricular activities
provided by a recipient directly or through another entity, but the
provisions of paragraph (b)(1) through (4) of this section do not apply
to interscholastic, club, or intramural athletics, which are subject to
the provisions of Sec. Sec. 106.41 and 106.37(c) of this part.
    (c) Schools--(1) General Standard. Except as provided in paragraph
(c)(2) of this section, a recipient that operates a public nonvocational
elementary or secondary school that excludes from admission any
students, on the basis of sex, must provide students of the excluded sex
a substantially equal single-sex school or coeducational school.
    (2) Exception. A nonvocational public charter school that is a
single-school local educational agency under State law may be operated
as a single-sex charter school without regard to the requirements in
paragraph (c)(1) of this section.
    (3) Substantially equal factors. Factors the Department will
consider, either individually or in the aggregate as appropriate, in
determining whether schools are substantially equal include, but are not
limited to, the following:

[[Page 404]]

The policies and criteria of admission, the educational benefits
provided, including the quality, range, and content of curriculum and
other services and the quality and availability of books, instructional
materials, and technology, the quality and range of extracurricular
offerings, the qualifications of faculty and staff, geographic
accessibility, the quality, accessibility, and availability of
facilities and resources, and intangible features, such as reputation of
faculty.
    (4) Definition. For the purposes of paragraph (c)(1) through (3) of
this section, the term ``school'' includes a ``school within a school,''
which means an administratively separate school located within another
school.

(Authority: 20 U.S.C. 1681, 1682)

[71 FR 62542, Oct. 25, 2006]



Sec. 106.35  Access to institutions of vocational education.

    A recipient shall not, on the basis of sex, exclude any person from
admission to any institution of vocational education operated by that
recipient.

(Authority: 20 U.S.C. 1681, 1682)

[71 FR 62543, Oct. 25, 2006]



Sec. 106.36  Counseling and use of appraisal and counseling materials.

    (a) Counseling. A recipient shall not discriminate against any
person on the basis of sex in the counseling or guidance of students or
applicants for admission.
    (b) Use of appraisal and counseling materials. A recipient which
uses testing or other materials for appraising or counseling students
shall not use different materials for students on the basis of their sex
or use materials which permit or require different treatment of students
on such basis unless such different materials cover the same occupations
and interest areas and the use of such different materials is shown to
be essential to eliminate sex bias. Recipients shall develop and use
internal procedures for ensuring that such materials do not discriminate
on the basis of sex. Where the use of a counseling test or other
instrument results in a substantially disproportionate number of members
of one sex in any particular course of study or classification, the
recipient shall take such action as is necessary to assure itself that
such disproportion is not the result of discrimination in the instrument
or its application.
    (c) Disproportion in classes. Where a recipient finds that a
particular class contains a substantially disproportionate number of
individuals of one sex, the recipient shall take such action as is
necessary to assure itself that such disproportion is not the result of
discrimination on the basis of sex in counseling or appraisal materials
or by counselors.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.37  Financial assistance.

    (a) General. Except as provided in paragraphs (b) and (c) of this
section, in providing financial assistance to any of its students, a
recipient shall not:
    (1) On the basis of sex, provide different amount or types of such
assistance, limit eligibility for such assistance which is of any
particular type or source, apply different criteria, or otherwise
discriminate;
    (2) Through solicitation, listing, approval, provision of facilities
or other services, assist any foundation, trust, agency, organization,
or person which provides assistance to any of such recipient's students
in a manner which discriminates on the basis of sex; or
    (3) Apply any rule or assist in application of any rule concerning
eligibility for such assistance which treats persons of one sex
differently from persons of the other sex with regard to marital or
parental status.
    (b) Financial aid established by certain legal instruments. (1) A
recipient may administer or assist in the administration of
scholarships, fellowships, or other forms of financial assistance
established pursuant to domestic or foreign wills, trusts, bequests, or
similar legal instruments or by acts of a foreign government which
requires that awards be made to members of a particular sex specified
therein; Provided, That the overall effect of the award of such sex-
restricted scholarships, fellowships, and other forms of financial
assistance does not discriminate on the basis of sex.

[[Page 405]]

    (2) To ensure nondiscriminatory awards of assistance as required in
paragraph (b)(1) of this section, recipients shall develop and use
procedures under which:
    (i) Students are selected for award of financial assistance on the
basis of nondiscriminatory criteria and not on the basis of availability
of funds restricted to members of a particular sex;
    (ii) An appropriate sex-restricted scholarship, fellowship, or other
form of financial assistance is allocated to each student selected under
paragraph (b)(2)(i) of this section; and
    (iii) No student is denied the award for which he or she was
selected under paragraph (b)(2)(i) of this section because of the
absence of a scholarship, fellowship, or other form of financial
assistance designated for a member of that student's sex.
    (c) Athletic scholarships. (1) To the extent that a recipient awards
athletic scholarships or grants-in-aid, it must provide reasonable
opportunities for such awards for members of each sex in proportion to
the number of students of each sex participating in interscholastic or
intercollegiate athletics.
    (2) Separate athletic scholarships or grants-in-aid for members of
each sex may be provided as part of separate athletic teams for members
of each sex to the extent consistent with this paragraph and Sec.
106.41.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682; and Sec. 844, Education Amendments of 1974,
Pub. L. 93-380, 88 Stat. 484)



Sec. 106.38  Employment assistance to students.

    (a) Assistance by recipient in making available outside employment.
A recipient which assists any agency, organization or person in making
employment available to any of its students:
    (1) Shall assure itself that such employment is made available
without discrimination on the basis of sex; and
    (2) Shall not render such services to any agency, organization, or
person which discriminates on the basis of sex in its employment
practices.
    (b) Employment of students by recipients. A recipient which employs
any of its students shall not do so in a manner which violates subpart E
of this part.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.39  Health and insurance benefits and services.

    In providing a medical, hospital, accident, or life insurance
benefit, service, policy, or plan to any of its students, a recipient
shall not discriminate on the basis of sex, or provide such benefit,
service, policy, or plan in a manner which would violate Subpart E of
this part if it were provided to employees of the recipient. This
section shall not prohibit a recipient from providing any benefit or
service which may be used by a different proportion of students of one
sex than of the other, including family planning services. However, any
recipient which provides full coverage health service shall provide
gynecological care.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.40  Marital or parental status.

    (a) Status generally. A recipient shall not apply any rule
concerning a student's actual or potential parental, family, or marital
status which treats students differently on the basis of sex.
    (b) Pregnancy and related conditions. (1) A recipient shall not
discriminate against any student, or exclude any student from its
education program or activity, including any class or extracurricular
activity, on the basis of such student's pregnancy, childbirth, false
pregnancy, termination of pregnancy or recovery therefrom, unless the
student requests voluntarily to participate in a separate portion of the
program or activity of the recipient.
    (2) A recipient may require such a student to obtain the
certification of a physician that the student is physically and
emotionally able to continue participation so long as such a
certification is required of all students for other physical or
emotional conditions requiring the attention of a physician.
    (3) A recipient which operates a portion of its education program or
activity separately for pregnant students,

[[Page 406]]

admittance to which is completely voluntary on the part of the student
as provided in paragraph (b)(1) of this section shall ensure that the
separate portion is comparable to that offered to non-pregnant students.
    (4) A recipient shall treat pregnancy, childbirth, false pregnancy,
termination of pregnancy and recovery therefrom in the same manner and
under the same policies as any other temporary disability with respect
to any medical or hospital benefit, service, plan or policy which such
recipient administers, operates, offers, or participates in with respect
to students admitted to the recipient's educational program or activity.
    (5) In the case of a recipient which does not maintain a leave
policy for its students, or in the case of a student who does not
otherwise qualify for leave under such a policy, a recipient shall treat
pregnancy, childbirth, false pregnancy, termination of pregnancy and
recovery therefrom as a justification for a leave of absence for so long
a period of time as is deemed medically necessary by the student's
physician, at the conclusion of which the student shall be reinstated to
the status which she held when the leave began.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



Sec. 106.41  Athletics.

    (a) General. No person shall, on the basis of sex, be excluded from
participation in, be denied the benefits of, be treated differently from
another person or otherwise be discriminated against in any
interscholastic, intercollegiate, club or intramural athletics offered
by a recipient, and no recipient shall provide any such athletics
separately on such basis.
    (b) Separate teams. Notwithstanding the requirements of paragraph
(a) of this section, a recipient may operate or sponsor separate teams
for members of each sex where selection for such teams is based upon
competitive skill or the activity involved is a contact sport. However,
where a recipient operates or sponsors a team in a particular sport for
members of one sex but operates or sponsors no such team for members of
the other sex, and athletic opportunities for members of that sex have
previously been limited, members of the excluded sex must be allowed to
try-out for the team offered unless the sport involved is a contact
sport. For the purposes of this part, contact sports include boxing,
wrestling, rugby, ice hockey, football, basketball and other sports the
purpose or major activity of which involves bodily contact.
    (c) Equal opportunity. A recipient which operates or sponsors
interscholastic, intercollegiate, club or intramural athletics shall
provide equal athletic opportunity for members of both sexes. In
determining whether equal opportunities are available the Director will
consider, among other factors:
    (1) Whether the selection of sports and levels of competition
effectively accommodate the interests and abilities of members of both
sexes;
    (2) The provision of equipment and supplies;
    (3) Scheduling of games and practice time;
    (4) Travel and per diem allowance;
    (5) Opportunity to receive coaching and academic tutoring;
    (6) Assignment and compensation of coaches and tutors;
    (7) Provision of locker rooms, practice and competitive facilities;
    (8) Provision of medical and training facilities and services;
    (9) Provision of housing and dining facilities and services;
    (10) Publicity.

Unequal aggregate expenditures for members of each sex or unequal
expenditures for male and female teams if a recipient operates or
sponsors separate teams will not constitute noncompliance with this
section, but the Assistant Secretary may consider the failure to provide
necessary funds for teams for one sex in assessing equality of
opportunity for members of each sex.
    (d) Adjustment period. A recipient which operates or sponsors
interscholastic, intercollegiate, club or intramural athletics at the
elementary school level shall comply fully with this section as
expeditiously as possible but in no event later than one

[[Page 407]]

year from the effective date of this regulation. A recipient which
operates or sponsors interscholastic, intercollegiate, club or
intramural athletics at the secondary or post-secondary school level
shall comply fully with this section as expeditiously as possible but in
no event later than three years from the effective date of this
regulation.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682; and Sec. 844, Education Amendments of 1974,
Pub. L. 93-380, 88 Stat. 484)



Sec. 106.42  Textbooks and curricular material.

    Nothing in this regulation shall be interpreted as requiring or
prohibiting or abridging in any way the use of particular textbooks or
curricular materials.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.43  Standards for measuring skill or progress in physical
education classes.

    If use of a single standard of measuring skill or progress in
physical education classes has an adverse effect on members of one sex,
the recipient shall use appropriate standards that do not have that
effect.

(Authority: 20 U.S.C. 1681, 1682)

[71 FR 62543, Oct. 25, 2006]



Subpart E_Discrimination on the Basis of Sex in Employment in Education
                    Programs or Activities Prohibited



Sec. 106.51  Employment.

    (a) General. (1) No person shall, on the basis of sex, be excluded
from participation in, be denied the benefits of, or be subjected to
discrimination in employment, or recruitment, consideration, or
selection therefor, whether full-time or part-time, under any education
program or activity operated by a recipient which receives Federal
financial assistance.
    (2) A recipient shall make all employment decisions in any education
program or activity operated by such recipient in a nondiscriminatory
manner and shall not limit, segregate, or classify applicants or
employees in any way which could adversely affect any applicant's or
employee's employment opportunities or status because of sex.
    (3) A recipient shall not enter into any contractual or other
relationship which directly or indirectly has the effect of subjecting
employees or students to discrimination prohibited by this subpart,
including relationships with employment and referral agencies, with
labor unions, and with organizations providing or administering fringe
benefits to employees of the recipient.
    (4) A recipient shall not grant preferences to applicants for
employment on the basis of attendance at any educational institution or
entity which admits as students only or predominantly members of one
sex, if the giving of such preferences has the effect of discriminating
on the basis of sex in violation of this part.
    (b) Application. The provisions of this subpart apply to:
    (1) Recruitment, advertising, and the process of application for
employment;
    (2) Hiring, upgrading, promotion, consideration for and award of
tenure, demotion, transfer, layoff, termination, application of nepotism
policies, right of return from layoff, and rehiring;
    (3) Rates of pay or any other form of compensation, and changes in
compensation;
    (4) Job assignments, classifications and structure, including
position descriptions, lines of progression, and seniority lists;
    (5) The terms of any collective bargaining agreement;
    (6) Granting and return from leaves of absence, leave for pregnancy,
childbirth, false pregnancy, termination of pregnancy, leave for persons
of either sex to care for children or dependents, or any other leave;
    (7) Fringe benefits available by virtue of employment, whether or
not administered by the recipient;
    (8) Selection and financial support for training, including
apprenticeship, professional meetings, conferences, and other related
activities, selection for tuition assistance, selection for sabbaticals
and leaves of absence to pursue training;

[[Page 408]]

    (9) Employer-sponsored activities, including those that are social
or recreational; and
    (10) Any other term, condition, or privilege of employment.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[45 FR 30955, May 9, 1980, as amended at 65 FR 68056, Nov. 13, 2000]



Sec. 106.52  Employment criteria.

    A recipient shall not administer or operate any test or other
criterion for any employment opportunity which has a disproportionately
adverse effect on persons on the basis of sex unless:
    (a) Use of such test or other criterion is shown to predict validly
successful performance in the position in question; and
    (b) Alternative tests or criteria for such purpose, which do not
have such disproportionately adverse effect, are shown to be
unavailable.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.53  Recruitment.

    (a) Nondiscriminatory recruitment and hiring. A recipient shall not
discriminate on the basis of sex in the recruitment and hiring of
employees. Where a recipient has been found to be presently
discriminating on the basis of sex in the recruitment or hiring of
employees, or has been found to have in the past so discriminated, the
recipient shall recruit members of the sex so discriminated against so
as to overcome the effects of such past or present discrimination.
    (b) Recruitment patterns. A recipient shall not recruit primarily or
exclusively at entities which furnish as applicants only or
predominantly members of one sex if such actions have the effect of
discriminating on the basis of sex in violation of this subpart.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.54  Compensation.

    A recipient shall not make or enforce any policy or practice which,
on the basis of sex:
    (a) Makes distinctions in rates of pay or other compensation;
    (b) Results in the payment of wages to employees of one sex at a
rate less than that paid to employees of the opposite sex for equal work
on jobs the performance of which requires equal skill, effort, and
responsibility, and which are performed under similar working
conditions.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.55  Job classification and structure.

    A recipient shall not:
    (a) Classify a job as being for males or for females;
    (b) Maintain or establish separate lines of progression, seniority
lists, career ladders, or tenure systems based on sex; or
    (c) Maintain or establish separate lines of progression, seniority
systems, career ladders, or tenure systems for similar jobs, position
descriptions, or job requirements which classify persons on the basis of
sex, unless sex is a bona-fide occupational qualification for the
positions in question as set forth in Sec. 106.61.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.56  Fringe benefits.

    (a) Fringe benefits defined. For purposes of this part, fringe
benefits means: Any medical, hospital, accident, life insurance or
retirement benefit, service, policy or plan, any profit-sharing or bonus
plan, leave, and any other benefit or service of employment not subject
to the provision of Sec. 106.54.
    (b) Prohibitions. A recipient shall not:
    (1) Discriminate on the basis of sex with regard to making fringe
benefits available to employees or make fringe benefits available to
spouses, families, or dependents of employees differently upon the basis
of the employee's sex;
    (2) Administer, operate, offer, or participate in a fringe benefit
plan which does not provide either for equal periodic benefits for
members of each sex, or for equal contributions to the plan by such
recipient for members of each sex; or

[[Page 409]]

    (3) Administer, operate, offer, or participate in a pension or
retirement plan which establishes different optional or compulsory
retirement ages based on sex or which otherwise discriminates in
benefits on the basis of sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.57  Marital or parental status.

    (a) General. A recipient shall not apply any policy or take any
employment action:
    (1) Concerning the potential marital, parental, or family status of
an employee or applicant for employment which treats persons differently
on the basis of sex; or
    (2) Which is based upon whether an employee or applicant for
employment is the head of household or principal wage earner in such
employee's or applicant's family unit.
    (b) Pregnancy. A recipient shall not discriminate against or exclude
from employment any employee or applicant for employment on the basis of
pregnancy, childbirth, false pregnancy, termination of pregnancy, or
recovery therefrom.
    (c) Pregnancy as a temporary disability. A recipient shall treat
pregnancy, childbirth, false pregnancy, termination of pregnancy, and
recovery therefrom and any temporary disability resulting therefrom as
any other temporary disability for all job related purposes, including
commencement, duration and extensions of leave, payment of disability
income, accrual of seniority and any other benefit or service, and
reinstatement, and under any fringe benefit offered to employees by
virtue of employment.
    (d) Pregnancy leave. In the case of a recipient which does not
maintain a leave policy for its employees, or in the case of an employee
with insufficient leave or accrued employment time to qualify for leave
under such a policy, a recipient shall treat pregnancy, childbirth,
false pregnancy, termination of pregnancy and recovery therefrom as a
justification for a leave of absence without pay for a reasonable period
of time, at the conclusion of which the employee shall be reinstated to
the status which she held when the leave began or to a comparable
position, without decrease in rate of compensation or loss of
promotional opportunities, or any other right or privilege of
employment.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.58  Effect of State or local law or other requirements.

    (a) Prohibitory requirements. The obligation to comply with this
subpart is not obviated or alleviated by the existence of any State or
local law or other requirement which imposes prohibitions or limits upon
employment of members of one sex which are not imposed upon members of
the other sex.
    (b) Benefits. A recipient which provides any compensation, service,
or benefit to members of one sex pursuant to a State or local law or
other requirement shall provide the same compensation, service, or
benefit to members of the other sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.59  Advertising.

    A recipient shall not in any advertising related to employment
indicate preference, limitation, specification, or discrimination based
on sex unless sex is a bona-fide occupational qualification for the
particular job in question.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



Sec. 106.60  Pre-employment inquiries.

    (a) Marital status. A recipient shall not make pre-employment
inquiry as to the marital status of an applicant for employment,
including whether such applicant is ``Miss or Mrs.''
    (b) Sex. A recipient may make pre-employment inquiry as to the sex
of an applicant for employment, but only if such inquiry is made equally
of such applicants of both sexes and if the results of such inquiry are
not used in connection with discrimination prohibited by this part.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)

[[Page 410]]



Sec. 106.61  Sex as a bona-fide occupational qualification.

    A recipient may take action otherwise prohibited by this subpart
provided it is shown that sex is a bona-fide occupational qualification
for that action, such that consideration of sex with regard to such
action is essential to successful operation of the employment function
concerned. A recipient shall not take action pursuant to this section
which is based upon alleged comparative employment characteristics or
stereotyped characterizations of one or the other sex, or upon
preference based on sex of the recipient, employees, students, or other
persons, but nothing contained in this section shall prevent a recipient
from considering an employee's sex in relation to employment in a locker
room or toilet facility used only by members of one sex.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682



                     Subpart F_Procedures [Interim]



Sec. 106.71  Procedures.

    The procedural provisions applicable to title VI of the Civil Rights
Act of 1964 are hereby adopted and incorporated herein by reference.
These procedures may be found at 34 CFR 100.6-100.11 and 34 CFR, part
101.

(Authority: Secs. 901, 902, Education Amendments of 1972, 86 Stat. 373,
374; 20 U.S.C. 1681, 1682)



       Sec. Subject Index to Title IX Preamble and Regulation \1\
---------------------------------------------------------------------------

    \1\ Preamble paragraph numbers are in brackets [ ].
---------------------------------------------------------------------------

                                    A

Access to Course Offerings [43, 55, 56, 57, 58]; 106.34
Access to Schools Operated by LEA's, [44]; 106.35
Admissions, [5, 6, 30]; 106.15, 106.21
    Affirmative and remedial action, [16, 17, 24]; 106.3(a); (b)
    Administratively separate units, [30]; 106.15(b) 106.2(o)
    Educational Institutions, [30], 106.15(d), 106.2(n)
    General, 106.21(a), 106.2(p),
    Prohibitions relating to marital and parental status, [32, 36];
106.21(c)
    Professional schools, [30], 106.2(m)
    Public institutions of undergraduate higher education, 106.15(e)
    Recruitment, [34, 35]; 106.23
    Specific prohibitions, 106.21(b)
    Tests, [31]; 106.21(b) (2)
    Preference in admission, [35]; 106.22
Advertising, 106.59
Affirmative Action, see ``Remedial and Affirmative Actions''
Assistance to ``outside'' discriminatory organizations, [40, 53];
          106.31(b) (7), (c)
Assurances, [18]; 106.4
    Duration of obligation, 106.4(b)
    Form, 106.4(c)
Athletics, [69 to 78]; 106.41
    Adjustment period, [78]; 106.41(d)
    Contact sport defined, 106.41(d)
    Equal opportunity, [76, 77]; 106.41(d)
    Determining factors, 106.41(c) (i) to (x)
    Equipment, 106.41(c)
    Expenditures, 106.41(c)
    Facilities, 106.41(c)
    Travel, 106.41(c)
    Scholarships, [64, 65]; 106.37(d)
    General, [69, 70, 71, 72, 73, 74, 75]; 106.41(a)
    Separate teams, [75]; 106.41(b)

                                    B

BFOQ, [96]; 106.61

                                    C

Comparable facilities

    Housing, [42, 54]; 106.32
    Other, 106.33, 106.35(b)
Compensation, [84, 87, 92]; 106.54
Counseling
    Disproportionate classes, [45, 59]; 106.36(c)
    General, [45, 59]; 106.36(a)
    Materials, [45, 59]; 106.36(b)
Course Offerings
    Adjustment period, [55]; 106.34(a) (i)
    General, [7, 43]; 106.34
    Music classes, [43]; 106.34(f)
    Physical education, [43, 56, 58];
    Sex education, [43, 57]; 106.34(e)
Coverage, [5]; 106.11 to 106.17
    Exemptions
Curricular materials, [52]; 106.42(a)

                                    D

Definitions, [14, 15]; 106.2 (a) to (r)
Designation of responsible employee, [20, 22]; 106.8(a), (b)
Dissemination of policy, [21]; 106.9
    Distribution, 106.9(c)
    Notification of policy, [21]; 106.9(a)
    Publications, 106.9(b)
Dress codes 106.31(b) (4)

                                    E

Education Institutions
    Controlled by religious organizations, 106.12

[[Page 411]]

    Application, [28, 29]; 106.12(a)
    Exemption, [26]; 106.12(b)
Education Program and Activities
    Benefiting from Federal financial assistance, [10, 11]; 106.11
    General, [10, 11, 53]; 106.31(a)
    Programs not operated by recipient, [41, 54]; 106.31(c)
    Specific prohibitions, [38, 39, 40, 53]; 106.31 (b)
Effective Date, [3]
    Employee responsible for Title IX, see ``Designation of Responsible
Employee''
Employment
    Advertising, 106.59
    Application, 106.51(b)
    Compensation, [84, 92]; 106.54
    Employment criteria, 106.52
    Fringe benefits, [88, 89]; 106.56
    General, [81, 82, 87]; 106.51
    Job Classification and Structure, 106.55
    Marital and Parental Status, 106.57
    Pregnancy, [85, 93]; 106.57(b)
    Pregnancy as Temporary Disability, [85, 93]; 106.57(c)
    Pregnancy Leave, [85, 93, 94]; 106.57(d)
Pre-Employment Inquiry
    Recruitment, [83, 90, 91, 95]
    Sex as a BFOQ, [96]; 106.61
    Student Employment, [66]; 106.38
    Tenure, 106.51(b) (2)
Exemptions, [5, 27, 28, 29, 30, 53]; 106.12(b), 106.13, 106.14,
          106.15(a), 106.15(d), 106.16

                                    F

Federal Financial Assistance, 106.2(a)
Financial Assistance to students, [46, 60, 61]; 106.37
    Athletic Scholarships, [46, 64, 65]; 106.37(d)
    Foreign institutions, study at [63]; 106.31(c)
    General, 106.37
    Non-need scholarships, [62]; 106.37(b)
    Pooling of sex-restrictive, [46, 61, 62]; 106.37(b)
    Sex-restrictive assistance through foreign or domestic wills [46,
61, 62]; 106.37(b)
Foreign Scholarships, see ``Financial assistance'' 106.37 and
          ``Assistance to `outside' discriminatory organizations'',
          106.31(c)
Fraternities/Sororities
    Social, [53, 27, 28]; 106.14(a)
    Business/professional, [40, 53, 27, 28]; 106.31 (b) (7)
    Honor societies, [40, 53]; 106.31(b) (7)
Fringe benefits, [67, 88, 89]; 106.56, 106.39
    Part-time employees, [89]

                                    G

Grievance Procedure, see ``Designation of responsible employee'',
          106.8(a), (b)

                                    H

Health and Insurance Benefits and Services, [67, 88, 93]; 106.39, 106.56
Honor societies, [40, 53]; 106.31(b) (7)
Housing, 106.32
    Generally, [42]; 106.32(b)
    Provided by recipient, 106.32(b)
    Other housing, [54]; 106.32(c)

                                    J

Job Classification and Structure, 106.55

                                    L

LEA's, [44]; 106.35

                                    M

Marital and Parental Status
    Employment
    General, [85, 93, 94]; 106.57
    Pregnancy, [85, 93, 94]; 106.57(b)
    Pregnancy as a temporary disability, [85, 93, 94]; 106.57(c)
    Pregnancy leave, [85, 93, 94]; 106.57(d)
    Students
    General, [49]; 106.40(a), (b)
    Pregnancy and related conditions, [50]; 106.40(b) (1) (2) (3) (4)
(5)
    Class participation, [50]; 106.40(b) (1)
    Physician certification, [50]; 106.40(b) (2)
    Special classes, [50]; 106.40(b) (3)
    Temporary leave, [50]; 106.40(b) (4), (5)
Membership Practices of Social fraternities and sororities, [27, 28,
          53]; 106.14(a)
    Voluntary youth service organizations, [27, 28, 53]; 106.14(c)
    YMCA, YWCA and others, [27, 28, 53]; 106.14(b)
Military and Merchant Marine Educational Institutions, [29]; 106.13

                                    P

Pooling, see ``Financial Assistance'', 106.37
Pre-employment Inquiries
    Marital status, [86, 95]; 106.60(a)
    Sex, 106.60(b)
Preference in Admissions, [35]; 106.22
    See also ``Remedial and Affirmative Action''
Pregnancy, Employment
    General, [85, 93, 94]; 106.57
    Pregnancy, [85, 93, 94]; 106.57(b)
    Pregnancy as temporary disability, [85, 93, 94]; 106.57(c)
    Pregnancy leave, [85, 93, 94]; 106.57(d)
    Students
    General, [49, 50]; 106.40 (a) and (b)
    Pregnancy and related conditions; [50]; 106.40(b) (1) to (5)
    Class Participation, [50, 55, 58]; 106.40(b) (1)
    Physical certification, [50]; 106.40(b) (2)
    Special class, [50]; 106.40 (b) (3)
    Temporary leave, [50]; 106.40(b) (4), (5)
Private Undergraduate Professional Schools, [30]; 106.15(d)
Purpose of Regulation, [13]; 106.1

                                    R

Real Property, 106.2(g)
Recruitment
    Employment
    Nondiscrimination, [83, 91]; 106.53(a)

[[Page 412]]

    Patterns, 106.53(b)
Student
    Nondiscrimination, [34, 35]; 106.23(a)
    Recruitment at certain institutions, 106.23 (b)
Religious Organizations
    Application, [29, 28]; 106.12(a)
    Exemption, [26]; 106.12(b)
Remedial and Affirmative Actions, [16, 17, 24]; 106.3

                                    S

Scholarships, see ``Financial Assistance'', 106.37
Self-evaluation, [16, 22]; 106.3(c), (d)
Surplus Property (see Transfer of Property 106.5)
    Duration of obligation 106.4(b)
    Real Property 106.4(b) (1)

                                    T

Textbooks and curricular materials, [52, 79, 80]; 106.42
Termination of funds, [10, 11]
Transfer of property, 106.5
Transition Plans
    Content of plans, 106.17(b)
    Different from Adjustment period, [78]; 106.41(d)
Submission of plans, 106.17(a)



 Sec. Appendix A to Part 106--Guidelines for Eliminating Discrimination
  and Denial of Services on the Basis of Race, Color, National Origin,
           Sex, and Handicap in Vocational Education Programs

    Editorial Note: For the text of these guidelines, see 34 CFR part
100, appendix B.

[44 FR 17168, Mar. 21, 1979]



PART 108_EQUAL ACCESS TO PUBLIC SCHOOL FACILITIES FOR THE BOY SCOUTS
OF AMERICA AND OTHER DESIGNATED YOUTH GROUPS--Table of Contents



Sec.
108.1 Purpose.
108.2 Applicability.
108.3 Definitions.
108.4 Effect of State or local law.
108.5 Compliance obligations.
108.6 Equal access.
108.7 Voluntary sponsorship.
108.8 Assurances.
108.9 Procedures.

    Authority: 20 U.S.C. 7905, unless otherwise noted.

    Source: 71 FR 15002, Mar. 24, 2006, unless otherwise noted.



Sec. 108.1  Purpose.

    The purpose of this part is to implement the Boy Scouts of America
Equal Access Act, 20 U.S.C. 7905.

(Authority: 20 U.S.C. 7905)



Sec. 108.2  Applicability.

    This part applies to any public elementary school, public secondary
school, local educational agency, or State educational agency that has a
designated open forum or limited public forum and that receives funds
made available through the Department.

(Authority: 20 U.S.C. 7905)



Sec. 108.3  Definitions.

    The following definitions apply to this part:
    (a) Act means the Boy Scouts of America Equal Access Act, section
9525 of the Elementary and Secondary Education Act of 1965, as amended
by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110,
115 Stat. 1425, 1981-82 (20 U.S.C. 7905).
    (b) Boy Scouts means the organization named ``Boy Scouts of
America,'' which has a Federal charter and which is listed as an
organization in title 36 of the United States Code (Patriotic and
National Observances, Ceremonies, and Organizations) in Subtitle II
(Patriotic and National Organizations), Part B (Organizations), Chapter
309 (Boy Scouts of America).
    (c) Covered entity means any public elementary school, public
secondary school, local educational agency, or State educational agency
that has a designated open forum or limited public forum and that
receives funds made available through the Department.
    (d) Department means the Department of Education.
    (e) Designated open forum means that an elementary school or
secondary school designates a time and place for one or more outside
youth or community groups to meet on school premises or in school
facilities, including during the hours in which attendance at the school
is compulsory, for reasons other than to provide the school's
educational program.
    (f) Elementary school means an elementary school as defined by
section

[[Page 413]]

9101(18) of the Elementary and Secondary Education Act of 1965, as
amended by section 901 of the No Child Left Behind Act of 2001, Pub. L.
107-110, 115 Stat. 1425, 1958 (20 U.S.C. 7801).
    (g) Group officially affiliated with any other Title 36 youth group
means a youth group resulting from the chartering process or other
process used by that Title 36 youth group to establish official
affiliation with youth groups.
    (h) Group officially affiliated with the Boy Scouts means a youth
group formed as a result of a community organization charter issued by
the Boy Scouts.
    (i) Limited public forum means that an elementary school or
secondary school grants an offering to, or opportunity for, one or more
outside youth or community groups to meet on school premises or in
school facilities before or after the hours during which attendance at
the school is compulsory.
    (j) Local educational agency means a local educational agency as
defined by section 9101(26) of the Elementary and Secondary Education
Act of 1965, as amended by section 901 of the No Child Left Behind Act
of 2001, Pub. L. 107-110, 115 Stat. 1425, 1961 (20 U.S.C. 7801).
    (k) Outside youth or community group means a youth or community
group that is not affiliated with the school.
    (l) Premises or facilities means all or any portion of buildings,
structures, equipment, roads, walks, parking lots, or other real or
personal property or interest in that property.
    (m) Secondary school means a secondary school as defined by section
9101(38) of the Elementary and Secondary Education Act of 1965, as
amended by section 901 of the No Child Left Behind Act of 2001, Pub. L.
107-110, 115 Stat. 1425, 1965 (20 U.S.C. 7801).
    (n) State educational agency means a State educational agency as
defined by section 9101(41) of the Elementary and Secondary Education
Act of 1965, as amended by section 901 of the No Child Left Behind Act
of 2001, Pub. L. 107-110, 115 Stat. 1425, 1965 (20 U.S.C. 7801).
    (o) Title 36 of the United States Code (as a patriotic society)
means title 36 (Patriotic and National Observances, Ceremonies, and
Organizations), Subtitle II (Patriotic and National Organizations) of
the United States Code.
    (p) Title 36 youth group means a group or organization listed in
title 36 of the United States Code (as a patriotic society) that is
intended to serve young people under the age of 21.
    (q) To sponsor any group officially affiliated with the Boy Scouts
or with any other Title 36 youth group means to obtain a community
organization charter issued by the Boy Scouts or to take actions
required by any other Title 36 youth group to become a sponsor of that
group.
    (r) Youth group means any group or organization intended to serve
young people under the age of 21.

(Authority: 20 U.S.C. 7905)



Sec. 108.4  Effect of State or local law.

    The obligation of a covered entity to comply with the Act and this
part is not obviated or alleviated by any State or local law or other
requirement.

(Authority: 20 U.S.C. 7905)



Sec. 108.5  Compliance obligations.

    (a) The obligation of covered entities to comply with the Act and
this part is not limited by the nature or extent of their authority to
make decisions about the use of school premises or facilities.
    (b) Consistent with the requirements of Sec. 108.6, a covered
entity must provide equal access to any group that is officially
affiliated with the Boy Scouts or is officially affiliated with any
other Title 36 youth group. A covered entity may require that any group
seeking equal access inform the covered entity whether the group is
officially affiliated with the Boy Scouts or is officially affiliated
with any other Title 36 youth group. A covered entity's failure to
request this information is not a defense to a covered entity's
noncompliance with the Act or this part.

(Authority: 20 U.S.C. 7905)



Sec. 108.6  Equal access.

    (a) General. Consistent with the requirements of paragraph (b) of
this section, no covered entity shall deny equal access or a fair
opportunity to meet to, or discriminate against, any group officially
affiliated with the Boy Scouts or officially affiliated with any

[[Page 414]]

other Title 36 youth group that requests to conduct a meeting within
that covered entity's designated open forum or limited public forum. No
covered entity shall deny that access or opportunity or discriminate for
reasons including the membership or leadership criteria or oath of
allegiance to God and country of the Boy Scouts or of the Title 36 youth
group.
    (b) Specific requirements--(1) Meetings. Any group officially
affiliated with the Boy Scouts or officially affiliated with any other
Title 36 youth group that requests to conduct a meeting in the covered
entity's designated open forum or limited public forum must be given
equal access to school premises or facilities to conduct meetings.
    (2) Benefits and services. Any group officially affiliated with the
Boy Scouts or officially affiliated with any other Title 36 youth group
that requests to conduct a meeting as described in paragraph (b)(1) of
this section must be given equal access to any other benefits and
services provided to one or more outside youth or community groups that
are allowed to meet in that same forum. These benefits and services may
include, but are not necessarily limited to, school-related means of
communication, such as bulletin board notices and literature
distribution, and recruitment.
    (3) Fees. Fees may be charged in connection with the access provided
under the Act and this part.
    (4) Terms. Any access provided under the Act and this part to any
group officially affiliated with the Boy Scouts or officially affiliated
with any other Title 36 youth group, as well as any fees charged for
this access, must be on terms that are no less favorable than the most
favorable terms provided to one or more outside youth or community
groups.
    (5) Nondiscrimination. Any decisions relevant to the provision of
equal access must be made on a nondiscriminatory basis. Any
determinations of which youth or community groups are outside groups
must be made using objective, nondiscriminatory criteria, and these
criteria must be used in a consistent, equal, and nondiscriminatory
manner.

(Authority: 20 U.S.C. 7905)



Sec. 108.7  Voluntary sponsorship.

    Nothing in the Act or this part shall be construed to require any
school, agency, or school served by an agency to sponsor any group
officially affiliated with the Boy Scouts or with any other Title 36
youth group.

(Authority: 20 U.S.C. 7905)



Sec. 108.8  Assurances.

    An applicant for funds made available through the Department to
which this part applies must submit an assurance that the applicant will
comply with the Act and this part. The assurance shall be in effect for
the period during which funds made available through the Department are
extended. The Department specifies the form of the assurance, including
the extent to which assurances will be required concerning the
compliance obligations of subgrantees, contractors and subcontractors,
and other participants, and provisions that give the United States a
right to seek its judicial enforcement. An applicant may incorporate
this assurance by reference in subsequent applications to the
Department.

(Approved by the Office of Management and Budget under control number
1870-0503)

(Authority: 20 U.S.C. 7905)



Sec. 108.9  Procedures.

    The procedural provisions applicable to title VI of the Civil Rights
Act of 1964, which are found in 34 CFR 100.6 through 100.11 and 34 CFR
part 101, apply to this part, except that, notwithstanding these
provisions and any other provision of law, no funds made available
through the Department shall be provided to any school, agency, or
school served by an agency that fails to comply with the Act or this
part.

(Authority: 20 U.S.C. 7905)

[[Page 415]]



PART 110_NONDISCRIMINATION ON THE BASIS OF AGE IN PROGRAMS OR
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                            Subpart A_General

Sec.
110.1 What is the purpose of ED's age discrimination regulations?
110.2 To what programs or activities do these regulations apply?
110.3 What definitions apply?

         Subpart B_Standards for Determining Age Discrimination

110.10 Rules against age discrimination.
110.11 Definitions of ``normal operation'' and ``statutory objective.''
110.12 Exceptions to the rules against age discrimination: Normal
          operation or statutory objective of any program or activity.
110.13 Exceptions to the rules against age discrimination: Reasonable
          factors other than age.
110.14 Burden of proof.
110.15 Affirmative action by recipients.
110.16 Special benefits for children and the elderly.
110.17 Age distinctions contained in ED's regulations.

                    Subpart C_Duties of ED Recipients

110.20 General responsibilities.
110.21 Notice to subrecipients.
110.22 Information requirements.
110.23 Assurances required.
110.24 Recipient assessment of age distinctions.
110.25 Designation of responsible employee, notice, and grievance
          procedures.

    Subpart D_Investigation, Conciliation, and Enforcement Procedures

110.30 Compliance reviews.
110.31 Complaints.
110.32 Mediation.
110.33 Investigation.
110.34 Prohibition against intimidation or retaliation.
110.35 Compliance procedure.
110.36 Hearings, decisions, and post-termination proceedings.
110.37 Procedure for disbursal of funds to an alternate recipient.
110.38 Remedial action by recipients.
110.39 Exhaustion of administrative remedies.

    Authority: 42 U.S.C. 6101 et seq., unless otherwise noted.

    Source: 58 FR 40197, July 27, 1993, unless otherwise noted.



                            Subpart A_General



Sec. 110.1  What is the purpose of ED's age discrimination regulations?

    The purpose of these regulations is to set out ED's rules for
implementing the Age Discrimination Act of 1975. The Act prohibits
discrimination on the basis of age in programs or activities receiving
Federal financial assistance. The Act permits federally assisted
programs or activities, and recipients of Federal funds, to continue to
use age distinctions and factors other than age that meet the
requirements of the Act.

(Authority: 42 U.S.C. 6101-6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68056, Nov. 13, 2000]



Sec. 110.2  To what programs or activities do these regulations apply?

    (a) These regulations apply to any program or activity receiving
Federal financial assistance from ED.
    (b) These regulations do not apply to--
    (1) An age distinction contained in that part of a Federal, State,
or local statute or ordinance adopted by an elected, general purpose
legislative body that--
    (i) Provides any benefits or assistance to persons based on age;
    (ii) Establishes criteria for participation in age-related terms; or
    (iii) Describes intended beneficiaries or target groups in age-
related terms; or
    (2) Any employment practice of any employer, employment agency,
labor organization, or any labor-management joint apprenticeship
training program, except any program or activity receiving Federal
financial assistance for employment under the Job Training Partnership
Act (29 U.S.C. 1501 et seq.).

(Authority: 42 U.S.C. 6103)



Sec. 110.3  What definitions apply?

    The following definitions apply to these regulations: Act means the
Age Discrimination Act of 1975, as amended (Title III of Pub. L. 94-
135).

[[Page 416]]

    Action means any act, activity, policy, rule, standard, or method of
administration, or the use of any policy, rule, standard, or method of
administration.
    Age means how old a person is, or the number of years from the date
of a person's birth.
    Age distinction means any action using age or an age-related term.
    Age-related term means a word or words that necessarily imply a
particular age or range of ages (e.g., ``children,'' ``adult,'' ``older
persons,'' but not ``student'' or ``grade'').
    Agency means a Federal department or agency that is empowered to
extend financial assistance.
    Applicant for Federal financial assistance means one who submits an
application, request, or plan required to be approved by a Department
official or by a recipient as a condition to becoming a recipient or
subrecipient.
    Department means the United States Department of Education.
    ED means the United States Department of Education.
    Federal financial assistance means any grant, entitlement, loan,
cooperative agreement, contract (other than a procurement contract or a
contract of insurance or guaranty), or any other arrangement by which ED
provides or otherwise makes available assistance in the form of--
    (a) Funds;
    (b) Services of Federal personnel; or
    (c) Real and personal property or any interest in or use of
property, including--
    (1) Transfers or leases of property for less than fair market value
or for reduced consideration; and
    (2) Proceeds from a subsequent transfer or lease of property if the
Federal share of its fair market value is not returned to the Federal
Government.
    Program or activity means all of the operations of--
    (a)(1) A department, agency, special purpose district, or other
instrumentality of a State or local government; or
    (2) The entity of a State or local government that distributes such
assistance and each such department or agency (and each other State or
local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
    (b)(1) A college, university, or other postsecondary institution, or
a public system of higher education; or
    (2) A local educational agency (as defined in 20 U.S.C. 8801),
system of vocational education, or other school system;
    (c)(1) An entire corporation, partnership, other private
organization, or an entire sole proprietorship--
    (i) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
    (ii) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
    (2) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
    (d) Any other entity that is established by two or more of the
entities described in paragraph (a), (b), or (c) of this section; any
part of which is extended Federal financial assistance.

(Authority: 42 U.S.C. 6107)
    Recipient means any State or its political subdivision, any
instrumentality of a State or its political subdivision, any public or
private agency, institution, organization, or other entity, or any
person to which Federal financial assistance from ED is extended,
directly or through another recipient. ``Recipient'' includes any
successor, assignee, or transferee of a recipient, but excludes the
ultimate beneficiary of the assistance.
    Secretary means the Secretary of Education, or his or her designee.
    Subrecipient means any of the entities in the definition of
``recipient'' to which a recipient extends or passes on Federal
financial assistance. A subrecipient is generally regarded as a
recipient of Federal financial assistance and has all the duties of a
recipient in these regulations.
    United States means the fifty States, the Commonwealth of Puerto
Rico, the District of Columbia, Guam, the Virgin Islands, American
Samoa, Wake Island,

[[Page 417]]

the Trust Territory of the Pacific Islands, the Commonwealth of the
Northern Mariana Islands, and the territories and possessions of the
United States.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68056, Nov. 13, 2000]



         Subpart B_Standards for Determining Age Discrimination



Sec. 110.10  Rules against age discrimination.

    The rules stated in this section are subject to the exceptions
contained in Sec. Sec. 110.12 and 110.13 of these regulations.
    (a) General rule. No person in the United States shall, on the basis
of age, be excluded from participation in, be denied the benefits of, or
be subjected to discrimination under any program or activity receiving
Federal financial assistance.
    (b) Specific rules. A recipient may not, in any program or activity
receiving Federal financial assistance, directly or through contractual,
licensing, or other arrangements, use age distinctions or take any other
actions that have the effect, on the basis of age, of--
    (1) Excluding individuals from, denying them the benefits of, or
subjecting them to discrimination under a program or activity receiving
Federal financial assistance; or
    (2) Denying or limiting individuals in their opportunity to
participate in any program or activity receiving Federal financial
assistance.
    (c) Other forms of discrimination. The specific forms of age
discrimination listed in paragraph (b) of this section do not
necessarily constitute a complete list.

(Authority: 42 U.S.C. 6101-6103)



Sec. 110.11  Definitions of ``normal operation'' and ``statutory
objective.''

    For purposes of these regulations, the terms normal operation and
statutory objective have the following meanings:
    (a) Normal operation means the operation of a program or activity
without significant changes that would impair its ability to meet its
objectives.
    (b) Statutory objective means any purpose of a program or activity
expressly stated in any Federal statute, State statute, or local statute
or ordinance adopted by an elected, general purpose legislative body.

(Authority: 42 U.S.C. 6103)



Sec. 110.12  Exceptions to the rules against age discrimination: Normal
operation or statutory objective of any program or activity.

    A recipient is permitted to take an action otherwise prohibited by
Sec. 110.10 if the action reasonably takes into account age as a factor
necessary to the normal operation or the achievement of any statutory
objective of a program or activity. An action reasonably takes into
account age as a factor necessary to the normal operation or the
achievement of any statutory objective of a program or activity, if--
    (a) Age is used as a measure or approximation of one or more other
characteristics;
    (b) The other characteristic or characteristics must be measured or
approximated in order for the normal operation of the program or
activity to continue, or to achieve any statutory objective of the
program or activity;
    (c) The other characteristic or characteristics can be reasonably
measured or approximated by the use of age; and
    (d) The other characteristic or characteristics are impractical to
measure directly on an individual basis.

(Authority: 42 U.S.C. 6103)



Sec. 110.13  Exceptions to the rules against age discrimination:
Reasonable factors other than age.

    A recipient is permitted to take an action otherwise prohibited by
Sec. 110.10 that is based on a factor other than age, even though that
action may have a disproportionate effect on persons of different ages.
An action may be based on a factor other than age only if the factor
bears a direct and substantial relationship to the normal operation of
the program or activity or to the achievement of a statutory objective.

(Authority: 42 U.S.C. 6103)

[[Page 418]]



Sec. 110.14  Burden of proof.

    The burden of proving that an age distinction or other action falls
within the exceptions outlined in Sec. Sec. 110.12 and 110.13 is on the
recipient of Federal financial assistance.

(Authority: 42 U.S.C. 6104)



Sec. 110.15  Affirmative action by recipients.

    Even in the absence of a finding of discrimination, a recipient may
take affirmative action to overcome the effects of conditions that
resulted in limited participation in the recipient's program or activity
on the basis of age.

(Authority: 42 U.S.C. 6103)



Sec. 110.16  Special benefits for children and the elderly.

    If a recipient operating a program or activity provides special
benefits to the elderly or to children, the use of age distinctions is
presumed to be necessary to the normal operation of the program or
activity, notwithstanding the provisions of Sec. 110.12.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.17  Age distinctions contained in ED's regulations.

    Any age distinction contained in regulations issued by ED is
presumed to be necessary to the achievement of a statutory objective of
the program or activity to which the regulations apply, notwithstanding
the provisions of Sec. 110.12.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



                    Subpart C_Duties of ED Recipients



Sec. 110.20  General responsibilities.

    Each ED recipient has primary responsibility for ensuring that its
program or activity is in compliance with the Act and these regulations
and shall take steps to eliminate violations of the Act. A recipient
also has responsibility to maintain records, provide information, and to
afford ED access to its records to the extent required for ED to
determine whether the recipient is in compliance with the Act and these
regulations.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.21  Notice to subrecipients.

    If the recipient initially receiving funds makes the funds available
to a subrecipient, the recipient shall notify the subrecipient of its
obligations under the Act and these regulations.

(Authority: 42 U.S.C. 6103)



Sec. 110.22  Information requirements.

    Each recipient shall--
    (a) Provide ED with information that ED determines is necessary to
ascertain whether the recipient is in compliance with the Act and these
regulations; and
    (b) Permit reasonable access by ED to the books, records, accounts,
reports, and other recipient facilities and sources of information to
the extent ED determines is necessary to ascertain whether a recipient
is in compliance with the Act and these regulations.

(Authority: 42 U.S.C. 6103)



Sec. 110.23  Assurances required.

    (a) Assurances. An applicant for Federal financial assistance to
which these regulations apply shall sign a written assurance, on a form
specified by ED, that the program or activity will be operated in
compliance with these regulations. An applicant may incorporate this
assurance by reference in subsequent applications to ED.
    (b) Duration of obligation. (1) In the case of Federal financial
assistance extended in the form of real property or to provide real
property or structures on the property, the assurance will obligate the
recipient or, in the case of a subsequent transfer, the transferee, for
the period during which the real property or structures are used for the
purpose for which Federal financial assistance is extended or for
another purpose involving the provision of similar services or benefits.

[[Page 419]]

    (2) In the case of Federal financial assistance extended to provide
personal property, the assurance will obligate the recipient for the
period during which it retains ownership or possession of the property.
    (3) In all other cases the assurance will obligate the recipient for
the period during which Federal financial assistance is extended.
    (c) Covenants. (1) If Federal financial assistance is provided in
the form of real property or interest in the property from ED, the
instrument effecting or recording this transfer must contain a covenant
running with the land to assure nondiscrimination for the period during
which the real property is used for a purpose for which the Federal
financial assistance is extended or for another purpose involving the
provision of similar services or benefits.
    (2) If no transfer of property is involved but property is purchased
or improved with Federal financial assistance, the recipient shall agree
to include the covenant described in paragraph (b)(2) of this section in
the instrument effecting or recording any subsequent transfer of the
property.
    (3) If Federal financial assistance is provided in the form of real
property or interest in the property from ED, the covenant must also
include a condition coupled with a right to be reserved by ED to revert
title to the property in the event of a breach of the covenant. If a
transferee of real property proposes to mortgage or otherwise encumber
the real property as security for financing construction of new, or
improvement of existing, facilities on the property for the purposes for
which the property was transferred, ED may, upon request of the
transferee and if necessary to accomplish that financing and upon
conditions that ED deems appropriate, agree to forbear the exercise of
the right to revert title for as long as the lien of the mortgage or
other encumbrance remains effective.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.24  Recipient assessment of age distinctions.

    (a) As part of a compliance review under Sec. 110.30 or a complaint
investigation under Sec. 110.31, ED may require a recipient employing
the equivalent of 15 or more full-time employees to complete a written
self-evaluation, in a manner specified by ED, of any age distinction
imposed in its program or activity receiving Federal financial
assistance from ED to assess the recipient's compliance with the Act.
    (b) Whenever an assessment indicates a violation of the Act or these
regulations, the recipient shall take corrective action.

(Authority: 42 U.S.C. 6103)



Sec. 110.25  Designation of responsible employee, notice, and grievance
procedures.

    (a) Designation of responsible employee. Each recipient shall
designate at least one employee to coordinate its efforts to comply with
and carry out its responsibilities under the Act and these regulations,
including investigation of any complaints that the recipient receives
alleging any actions that are prohibited by the Act and these
regulations.
    (b) Notice. A recipient shall notify its beneficiaries, in a
continuing manner, of information regarding the provisions of the Act
and these regulations. The notification must also identify the
responsible employee by name or title, address, and telephone number.
    (c) Grievance procedures. A recipient shall adopt and publish
grievance procedures providing for prompt and equitable resolution of
complaints alleging any action that would be prohibited by the Act or
these regulations.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



    Subpart D_Investigation, Conciliation, and Enforcement Procedures



Sec. 110.30  Compliance reviews.

    (a) ED may conduct compliance reviews, pre-award reviews, and other
similar procedures that permit ED to investigate and correct violations
of the Act and of these regulations. ED

[[Page 420]]

may conduct these reviews in the absence of a complaint against a
recipient. The review may be as comprehensive as necessary to determine
whether a violation of these regulations occurred.
    (b) If a compliance review or pre-award review indicates a violation
of the Act or these regulations, ED attempts to achieve voluntary
compliance with the Act. If voluntary compliance cannot be achieved, ED
arranges for enforcement as described in Sec. 110.35.

(Authority: 42 U.S.C. 6103)



Sec. 110.31  Complaints.

    (a) Any person, individually or as a member of a class or on behalf
of others, may file a complaint with ED alleging discrimination
prohibited by the Act or by these regulations based on an action
occurring on or after July 1, 1979. A complainant shall file a complaint
within 180 days from the date the complainant first had knowledge of the
alleged discrimination. However, for good cause shown, ED may extend
this time limit.
    (b) ED attempts to facilitate the filing of complaints, if possible,
by--
    (1) Accepting as a complete complaint any written statement that
identifies the parties involved and the date the complainant first had
knowledge of the alleged violation, describes generally the action or
practice complained of, and is signed by the complainant;
    (2) Freely permitting a complainant to add information to the
complaint to meet the requirements of a complete complaint;
    (3) Widely disseminating information regarding the obligations of
recipients under the Act and these regulations;
    (4) Notifying the complainant and the recipient of their rights and
obligations under the complaint procedure, including the right to have a
representative at all stages of the complaint procedure; and
    (5) Notifying the complainant and the recipient (or their
representatives) of their right to contact ED for information and
assistance regarding the complaint resolution process.
    (c) A complaint is considered to be complete on the date that ED
receives all the information necessary to process it, as described in
paragraph (b)(1) of this section.
    (d) ED returns to the complainant any complaint outside the
jurisdiction of these regulations and states the reason or reasons why
it is outside the jurisdiction of the regulations.

(Authority: 42 U.S.C. 6103)



Sec. 110.32  Mediation.

    (a) ED promptly refers to the Federal Mediation and Conciliation
Service or to the mediation agency designated by the Secretary of Health
and Human Services, all complaints that--
    (1) Fall within the jurisdiction of the Act and these regulations,
unless the age distinction complained of is clearly within an exemption
under Sec. 110.2(b); and
    (2) Contain all information necessary for further processing.
    (b) Both the complainant and the recipient shall participate in the
mediation process to the extent necessary to reach an agreement or to
make an informed judgment that an agreement is not possible. The
recipient and the complainant need not meet with the mediator at the
same time, and the meeting may be conducted by telephone or other means
of effective dialogue if a personal meeting between the party and the
mediator is impractical.
    (c) If the complainant and the recipient reach an agreement, the
mediator shall prepare a written statement of the agreement and have the
complainant and recipient sign it. The mediator shall send a copy of the
agreement to ED. ED takes no further action on the complaint unless
informed that the complainant or the recipient fails to comply with the
agreement, at which time ED reinstates the complaint.
    (d) The mediator shall protect the confidentiality of all
information obtained in the course of the mediation process. No mediator
shall testify in any adjudicative proceeding, produce any document, or
otherwise disclose any information obtained in the course of the
mediation process without prior approval of the head of the mediation
agency.
    (e) The mediation will proceed for a maximum of 60 days after a
complaint is filed with ED. Mediation ends if--

[[Page 421]]

    (1) 60 days elapse from the time the complaint is received;
    (2) Prior to the end of the 60-day period, an agreement is reached;
or
    (3) Prior to the end of the 60-day period, the mediator determines
that agreement cannot be reached.
    (f) The mediator shall return unresolved complaints to ED.

(Authority: 42 U.S.C. 6103)



Sec. 110.33  Investigation.

    (a) Initial investigation. ED investigates complaints that are
unresolved after mediation or reopened because of a violation of the
mediation agreement. ED uses methods during the investigation to
encourage voluntary resolution of the complaint, including discussions
with the complainant and recipient to establish the facts and, if
possible, resolve the complaint to the mutual satisfaction of the
parties. ED may seek the assistance of any involved State, local, or
other Federal agency.
    (b) Formal investigation, conciliation, and hearing. If ED cannot
resolve the complaint during the early stages of the investigation, ED
completes the investigation of the complaint and makes formal findings.
If the investigation indicates a violation of the Act or these
regulations, ED attempts to achieve voluntary compliance. If ED cannot
obtain voluntary compliance, ED begins enforcement as described in Sec.
110.35.

(Authority: 42 U.S.C. 6103)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.34  Prohibition against intimidation or retaliation.

    A recipient may not engage in acts of intimidation or retaliation
against any person who--
    (a) Attempts to assert a right protected by the Act or these
regulations; or
    (b) Cooperates in any mediation, investigation, hearing, or other
part of ED's investigation, conciliation, and enforcement process.

(Authority: 42 U.S.C. 6103)



Sec. 110.35  Compliance procedure.

    (a) ED may enforce the Act and these regulations under Sec.
110.35(a) (1) or (2) through--
    (1) Termination of, or refusal to grant or continue, a recipient's
Federal financial assistance from ED for a program or activity in which
the recipient has violated the Act or these regulations. The
determination of the recipient's violation may be made only after a
recipient has had an opportunity for a hearing on the record before an
administrative law judge.
    (2) Any other means authorized by law, including, but not limited
to--
    (i) Referral to the Department of Justice for proceedings to enforce
any rights of the United States or obligations of the recipient created
by the Act or these regulations; or
    (ii) Use of any requirement of or referral to any Federal, State, or
local government agency that will have the effect of correcting a
violation of the Act or of these regulations.
    (b) ED limits any termination or refusal under Sec. 110.35(a)(1) to
the particular recipient and to the particular program or activity ED
finds in violation of the Act or these regulations. ED will not base any
part of a termination on a finding with respect to any program or
activity that does not receive Federal financial assistance from ED.
    (c) ED takes no action under paragraph (a) of this section until--
    (1) ED has advised the recipient of its failure to comply with the
Act or with these regulations and has determined that voluntary
compliance cannot be obtained; and
    (2) Thirty days have elapsed after the Secretary has sent a written
report of the circumstances and grounds of the action to the committees
of the Congress having legislative jurisdiction over the program or
activity involved. The Secretary files a report if any action is taken
under Sec. 110.35(a)(1).
    (d) The Secretary also may defer granting new Federal financial
assistance from ED to a recipient if termination proceedings in Sec.
110.35(a)(1) are initiated.
    (1) New Federal financial assistance from ED includes all assistance
for which ED requires an application or

[[Page 422]]

approval, including renewal or continuation of existing activities, or
authorization of new activities, during the deferral period. New Federal
financial assistance from ED does not include increases in funding as a
result of changed computation of formula awards or assistance approved
prior to the initiation of termination proceedings.
    (2) ED does not begin a deferral until the recipient has received a
notice of an opportunity for a hearing under Sec. 110.35(a)(1). A
deferral may not continue for more than 60 days unless a hearing has
begun within that time or the time for beginning the hearing has been
extended by mutual consent of the recipient and ED. A deferral may not
continue for more than 30 days after the close of the hearing, unless
the hearing results in a finding against the recipient.

(Authority: 42 U.S.C. 6104)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.36  Hearings, decisions, and post-termination proceedings.

    (a) The following ED procedural provisions applicable to Title VI of
the Civil Rights Act of 1964 also apply to ED's enforcement of these
regulations: 34 CFR 100.9 and 100.10 and 34 CFR part 101.
    (b) Action taken under section 305 of the Act is subject to judicial
review as provided by section 306 of the Act.

(Authority: 42 U.S.C. 6104-6105)



Sec. 110.37  Procedure for disbursal of funds to an alternate recipient.

    (a) If the Secretary withholds funds from a recipient under these
regulations, the Secretary may disburse the funds withheld directly to
an alternate recipient: any public or nonprofit private organization or
agency, or State or political subdivision of the State.
    (b) The Secretary requires any alternate recipient to demonstrate--
    (1) The ability to comply with the Act and these regulations; and
    (2) The ability to achieve the goals of the Federal statute
authorizing the Federal financial assistance.

(Authority: 42 U.S.C. 6104)

[58 FR 40197, July 27, 1993, as amended at 65 FR 68057, Nov. 13, 2000]



Sec. 110.38  Remedial action by recipients.

    If ED finds that a recipient has discriminated on the basis of age,
the recipient shall take any remedial action that ED may require to
overcome the effects of the discrimination. If another recipient
exercises control over the recipient that has discriminated or if the
entity that has discriminated is a subrecipient, both recipients or
recipient and subrecipient may be required to take remedial action.

(Authority: 42 U.S.C. 6103)



Sec. 110.39  Exhaustion of administrative remedies.

    (a) A complainant may file a civil action following the exhaustion
of administrative remedies under the Act. Administrative remedies are
exhausted if--
    (1) One hundred eighty days have elapsed since the complainant filed
the complaint with ED, and ED has made no finding with regard to the
complaint; or
    (2) ED issues any finding in favor of the recipient.
    (b) If ED fails to make a finding within 180 days or issues a
finding in favor of the recipient, ED promptly--
    (1) Advises the complainant of this fact;
    (2) Advises the complainant of his or her right to bring a civil
action for injunctive relief; and
    (3) Informs the complainant--
    (i) That a civil action can be brought only in a United States
district court for the district in which the recipient is found or
transacts business;
    (ii) That a complainant prevailing in a civil action has the right
to be awarded the costs of the action, including reasonable attorney's
fees, but that these costs must be demanded in the complaint filed with
the court;
    (iii) That before commencing the action, the complainant shall give
30 days notice by registered mail to the Secretary, the Secretary of
Health and

[[Page 423]]

Human Services, the Attorney General of the United States, and the
recipient;
    (iv) That the notice shall state the alleged violation of the Act,
the relief requested, the court in which the action will be brought, and
whether or not attorney's fees are demanded in the event the complainant
prevails; and
    (v) That the complainant may not bring an action if the same alleged
violation of the Act by the same recipient is the subject of a pending
action in any court of the United States.

(Authority: 42 U.S.C. 6104)

                        PARTS 111	199 [RESERVED]

[[Page 425]]



CHAPTER II--OFFICE OF ELEMENTARY AND SECONDARY EDUCATION, DEPARTMENT OF
                                EDUCATION




  --------------------------------------------------------------------
Part                                                                Page
200             Title I--Improving the academic achievement
                    of the disadvantaged....................         427
206             Special educational programs for students
                    whose families are engaged in migrant
                    and other seasonal farmwork--high school
                    equivalency program and college
                    assistance migrant program..............         492
222             Impact aid programs.........................         497
225             Credit enhancement for charter school
                    facilities program......................         568
226             State charter school facilities incentive
                    program.................................         571
230             Innovation for teacher quality..............         575
237             Christa McAuliffe Fellowship Program........         576
263             Indian Education Discretionary Grant
                    Programs................................         579
270             Desegregation of public education...........         587
271             State Educational Agency Desegregation
                    Program.................................         589
272             Desegregation Assistance Center Program.....         592
280             Magnet Schools Assistance Program...........         595
299             General provisions..........................         602

[[Page 427]]



PART 200_TITLE I_IMPROVING THE ACADEMIC ACHIEVEMENT OF THE
DISADVANTAGED--Table of Contents



    Subpart A_Improving Basic Programs Operated by Local Educational
                                Agencies

                        Standards and Assessments

Sec.
200.1 State responsibilities for developing challenging academic
          standards.
200.2 State responsibilities for assessment.
200.3 Designing State Academic Assessment Systems.
200.4 State law exception.
200.5 Timeline for assessments.
200.6 Inclusion of all students.
200.7 Disaggregation of data.
200.8 Assessment reports.
200.9 Deferral of assessments.
200.10 Applicability of a State's academic assessments to private
          schools and private school students.

   Participation in National Assessment of Educational Progress (NAEP)

200.11 Participation in NAEP.

                       State Accountability System

200.12 Single State accountability system.

                     Adequate Yearly Progress (AYP)

200.13 Adequate yearly progress in general.
200.14 Components of Adequate Yearly Progress.
200.15 Timeline.
200.16 Starting points.
200.17 Intermediate goals.
200.18 Annual measurable objectives.
200.19 Other academic indicators.
200.20 Making adequate yearly progress.
200.21 Adequate yearly progress of a State.
200.22 National Technical Advisory Council
200.23-200.24 [Reserved]

                           Schoolwide programs

200.25 Schoolwide programs in general.
200.26 Core elements of a schoolwide program.
200.27 Development of a schoolwide program plan.
200.28 Schoolwide program components.
200.29 Consolidation of funds in a schoolwide program.

                       LEA and School Improvement

200.30 Local review.
200.31 Opportunity to review school-level data.
200.32 Identification for school improvement.
200.33 Identification for corrective action.
200.34 Identification for restructuring.
200.35 Delay and removal.
200.36 Communication with parents.
200.37 Notice of identification for improvement, corrective action, or
          restructuring.
200.38 Information about action taken.
200.39 Responsibilities resulting from identification for school
          improvement.
200.40 Technical assistance.
200.41 School improvement plan.
200.42 Corrective action.
200.43 Restructuring.
200.44 Public school choice.
200.45 Supplemental educational services.
200.46 LEA responsibilities for supplemental educational services.
200.47 SEA responsibilities for supplemental educational services.
200.48 Funding for choice-related transportation and supplemental
          educational services.
200.49 SEA responsibilities for school improvement, corrective action,
          and restructuring.
200.50 SEA review of LEA progress.
200.51 Notice of SEA action.
200.52 LEA improvement.
200.53 LEA corrective action.
200.54 [Reserved]

            Qualifications Of Teachers And Paraprofessionals

200.55 Qualifications of teachers.
200.56 Definition of ``highly qualified teacher.''
200.57 Plans to increase teacher quality.
200.58 Qualifications of paraprofessionals.
200.59 Duties of paraprofessionals.
200.60 Expenditures for professional development.
200.61 Parents' right to know.

          Participation of Eligible Children in Private Schools

200.62 Responsibilities for providing services to private school
          children.
200.63 Consultation.
200.64 Factors for determining equitable participation of private school
          children.
200.65 Determining equitable participation of teachers and families of
          participating private school children.
200.66 Requirements to ensure that funds do not benefit a private
          school.
200.67 Requirements concerning property, equipment, and supplies for the
          benefit of private school children.
200.68-200.69 [Reserved]

                           Allocations to LEAS

200.70 Allocation of funds to LEAs in general.
200.71 LEA eligibility.
200.72 Procedures for adjusting allocations determined by the Secretary
          to account for eligible LEAs not on the Census list.
200.73 Applicable hold-harmless provisions.

[[Page 428]]

200.74 Use of an alternative method to distribute grants to LEAs with
          fewer than 20,000 total residents.
200.75 Special procedures for allocating concentration grant funds in
          small States.
200.76 [Reserved]

   Procedures for the Within-District Allocation of LEA Program Funds

200.77 Reservation of funds by an LEA.
200.78 Allocation of funds to school attendance areas and schools.

                           Fiscal Requirements

200.79 Exclusion of supplemental State and local funds from supplement,
          not supplant and comparability determinations.

              Subpart B_Even Start Family Literacy Programs

200.80 Migrant Education Even Start Program definition.

                   Subpart C_Migrant Education Program

200.81 Program definitions.
200.82 Use of program funds for unique program function costs.
200.83 Responsibilities of SEAs to implement projects through a
          comprehensive needs assessment and a comprehensive State plan
          for service delivery.
200.84 Responsibilities of SEAs for evaluating the effectiveness of the
          MEP.
200.85 Responsibilities of SEAs and operating agencies for improving
          services to migratory children.
200.86 Use of MEP funds in schoolwide projects.
200.87 Responsibilities for participation of children in private
          schools.
200.88 Exclusion of supplemental State and local funds from supplement,
          not supplant and comparability determinations.
200.89 MEP allocations; re-interviewing; eligibility documentation; and
          quality control.

 Subpart D_Prevention and Intervention Programs for Children and Youth
        Who are Neglected, Delinquent, or At-Risk of Dropping Out

200.90 Program definitions.
200.91 SEA counts of eligible children.
200.92-200.99 [Reserved]

                      Subpart E_General Provisions

200.100 Reservation of funds for school improvement, State
          administration, and the State academic achievement awards
          program.
200.101-200.102 [Reserved]
200.103 Definitions.
200.104-200.109 [Reserved]

    Authority: 20 U.S.C. 6301 through 6578, unless otherwise noted.

    Source: 60 FR 34802, July 3, 1995, unless otherwise noted.



    Subpart A_Improving Basic Programs Operated by Local Educational
                                Agencies

                        Standards and Assessments



Sec. 200.1  State responsibilities for developing challenging academic
standards.

    (a) Academic standards in general. A State must develop challenging
academic content and student academic achievement standards that will be
used by the State, its local educational agencies (LEAs), and its
schools to carry out subpart A of this part. These academic standards
must--
    (1) Be the same academic content and academic achievement standards
that the State applies to all public schools and public school students
in the State, including the public schools and public school students
served under subpart A of this part, except as provided in paragraphs
(d) and (e) of this section, which apply only to the State's academic
achievement standards;
    (2) Include the same knowledge and skills expected of all students
and the same levels of achievement expected of all students, except as
provided in paragraphs (d) and (e) of this section; and
    (3) Include at least mathematics, reading/language arts, and,
beginning in the 2005-2006 school year, science, and may include other
subjects determined by the State.
    (b) Academic content standards. (1) The challenging academic content
standards required under paragraph (a) of this section must--
    (i) Specify what all students are expected to know and be able to
do;
    (ii) Contain coherent and rigorous content; and
    (iii) Encourage the teaching of advanced skills.
    (2) A State's academic content standards may--
    (i) Be grade specific; or,

[[Page 429]]

    (ii) Cover more than one grade if grade-level content expectations
are provided for each of grades 3 through 8.
    (3) At the high school level, the academic content standards must
define the knowledge and skills that all high school students are
expected to know and be able to do in at least reading/language arts,
mathematics, and, beginning in the 2005-06 school year, science,
irrespective of course titles or years completed.
    (c) Academic achievement standards. (1) The challenging student
academic achievement standards required under paragraph (a) of this
section must--
    (i) Be aligned with the State's academic content standards; and
    (ii) Include the following components for each content area:
    (A) Achievement levels that describe at least--
    (1) Two levels of high achievement--proficient and advanced--that
determine how well students are mastering the material in the State's
academic content standards; and
    (2) A third level of achievement--basic--to provide complete
information about the progress of lower-achieving students toward
mastering the proficient and advanced levels of achievement.
    (B) Descriptions of the competencies associated with each
achievement level.
    (C) Assessment scores (``cut scores'') that differentiate among the
achievement levels as specified in paragraph (c)(1)(ii)(A) of this
section, and a description of the rationale and procedures used to
determine each achievement level.
    (2) A State must develop academic achievement standards for every
grade and subject assessed, even if the State's academic content
standards cover more than one grade.
    (3) With respect to academic achievement standards in science, a
State must develop--
    (i) Achievement levels and descriptions no later than the 2005-06
school year; and
    (ii) Assessment scores (``cut scores'') after the State has
developed its science assessments but no later than the 2007-08 school
year.
    (d) Alternate academic achievement standards. For students under
section 602(3) of the Individuals with Disabilities Education Act with
the most significant cognitive disabilities who take an alternate
assessment, a State may, through a documented and validated standards-
setting process, define alternate academic achievement standards,
provided those standards--
    (1) Are aligned with the State's academic content standards;
    (2) Promote access to the general curriculum; and
    (3) Reflect professional judgment of the highest achievement
standards possible.
    (e) Modified academic achievement standards. (1) For students with
disabilities under section 602(3) of the Individuals with Disabilities
Education Act (IDEA) who meet the State's criteria under paragraph
(e)(2) of this section, a State may define modified academic achievement
standards, provided those standards--
    (i) Are aligned with the State's academic content standards for the
grade in which the student is enrolled;
    (ii) Are challenging for eligible students, but may be less
difficult than the grade-level academic achievement standards under
paragraph (c) of this section;
    (iii) Include at least three achievement levels; and
    (iv) Are developed through a documented and validated standards-
setting process that includes broad stakeholder input, including persons
knowledgeable about the State's academic content standards and
experienced in standards setting and special educators who are most
knowledgeable about students with disabilities.
    (2) In the guidelines that a State establishes under paragraph
(f)(1) of this section, the State must include criteria for IEP teams to
use in determining which students with disabilities are eligible to be
assessed based on modified academic achievement standards. Those
criteria must include, but are not limited to, each of the following:
    (i) The student's disability has precluded the student from
achieving grade-level proficiency, as demonstrated by such objective
evidence as the student's performance on--

[[Page 430]]

    (A) The State's assessments described in Sec. 200.2; or
    (B) Other assessments that can validly document academic
achievement.
    (ii)(A) The student's progress to date in response to appropriate
instruction, including special education and related services designed
to address the student's individual needs, is such that, even if
significant growth occurs, the IEP team is reasonably certain that the
student will not achieve grade-level proficiency within the year covered
by the student's IEP.
    (B) The determination of the student's progress must be based on
multiple measurements, over a period of time, that are valid for the
subjects being assessed.
    (iii) If the student's IEP includes goals for a subject assessed
under Sec. 200.2, those goals must be based on the academic content
standards for the grade in which the student is enrolled, consistent
with paragraph (f)(2) of this section.
    (f) State guidelines. If a State defines alternate or modified
academic achievement standards under paragraph (d) or (e) of this
section, the State must do the following--
    (1) For students who are assessed based on either alternate or
modified academic achievement standards, the State must--
    (i) Establish and monitor implementation of clear and appropriate
guidelines for IEP teams to apply in determining--
    (A) Students with the most significant cognitive disabilities who
will be assessed based on alternate academic achievement standards; and
    (B) Students with disabilities who meet the criteria in paragraph
(e)(2) of this section who will be assessed based on modified academic
achievement standards. These students may be assessed based on modified
academic achievement standards in one or more subjects for which
assessments are administered under Sec. 200.2;
    (ii) Inform IEP teams that students eligible to be assessed based on
alternate or modified academic achievement standards may be from any of
the disability categories listed in the IDEA;
    (iii) Provide to IEP teams a clear explanation of the differences
between assessments based on grade-level academic achievement standards
and those based on modified or alternate academic achievement standards,
including any effects of State and local policies on the student's
education resulting from taking an alternate assessment based on
alternate or modified academic achievement standards (such as whether
only satisfactory performance on a regular assessment would qualify a
student for a regular high school diploma); and
    (iv) Ensure that parents of students selected to be assessed based
on alternate or modified academic achievement standards under the
State's guidelines in this paragraph are informed that their child's
achievement will be measured based on alternate or modified academic
achievement standards.
    (2) For students who are assessed based on modified academic
achievement standards, the State must--
    (i) Inform IEP teams that a student may be assessed based on
modified academic achievement standards in one or more subjects for
which assessments are administered under Sec. 200.2;
    (ii) Establish and monitor implementation of clear and appropriate
guidelines for IEP teams to apply in developing and implementing IEPs
for students who are assessed based on modified academic achievement
standards. These students' IEPs must--
    (A) Include IEP goals that are based on the academic content
standards for the grade in which a student is enrolled; and
    (B) Be designed to monitor a student's progress in achieving the
student's standards-based goals;
    (iii) Ensure that students who are assessed based on modified
academic achievement standards have access to the curriculum, including
instruction, for the grade in which the students are enrolled;
    (iv) Ensure that students who take alternate assessments based on
modified academic achievement standards are not precluded from
attempting to complete the requirements, as defined by the State, for a
regular high school diploma; and

[[Page 431]]

    (v) Ensure that each IEP team reviews annually for each subject,
according to the criteria in paragraph (e)(2) of this section, its
decision to assess a student based on modified academic achievement
standards to ensure that those standards remain appropriate.
    (g) Subjects without standards. If an LEA serves students under
subpart A of this part in subjects for which a State has not developed
academic standards, the State must describe in its State plan a strategy
for ensuring that those students are taught the same knowledge and
skills and held to the same expectations in those subjects as are all
other students.
    (h) Other subjects with standards. If a State has developed
standards in other subjects for all students, the State must apply those
standards to students participating under subpart A of this part.

(Authority: 20 U.S.C. 6311(b)(1))

(Approved by the Office of Management and Budget under control number
1810-0576)

[67 FR 45039, July 5, 2002, as amended at 68 FR 68702, Dec. 9, 2003; 72
FR 17778, Apr. 9, 2007]



Sec. 200.2  State responsibilities for assessment.

    (a)(1) Each State, in consultation with its LEAs, must implement a
system of high-quality, yearly student academic assessments that
includes, at a minimum, academic assessments in mathematics, reading/
language arts and, beginning in the 2007-08 school year, science.
    (2)(i) The State may also measure the achievement of students in
other academic subjects in which the State has adopted challenging
academic content and student academic achievement standards.
    (ii) If a State has developed assessments in other subjects for all
students, the State must include students participating under subpart A
of this part in those assessments.
    (b) The assessment system required under this section must meet the
following requirements:
    (1) Be the same assessment system used to measure the achievement of
all students in accordance with Sec. 200.3 or Sec. 200.4.
    (2) Be designed to be valid and accessible for use by the widest
possible range of students, including students with disabilities and
students with limited English proficiency.
    (3)(i) Be aligned with the State's challenging academic content and
student academic achievement standards; and
    (ii) Provide coherent information about student attainment of those
standards.
    (4)(i) Be valid and reliable for the purposes for which the
assessment system is used; and
    (ii) Be consistent with relevant, nationally recognized professional
and technical standards.
    (5) Be supported by evidence (which the Secretary will provide, upon
request, consistent with applicable federal laws governing the
disclosure of information) from test publishers or other relevant
sources that the assessment system is--
    (i) Of adequate technical quality for each purpose required under
the Act; and
    (ii) Consistent with the requirements of this section.
    (6) Be administered in accordance with the timeline in Sec. 200.5.
    (7) Involve multiple up-to-date measures of student academic
achievement, including measures that assess higher-order thinking skills
and understanding of challenging content, as defined by the State. These
measures may include--
    (i) Single or multiple question formats that range in cognitive
complexity within a single assessment; and
    (ii) Multiple assessments within a subject area.
    (8) Objectively measure academic achievement, knowledge, and skills
without evaluating or assessing personal or family beliefs and
attitudes, except that this provision does not preclude the use of
items--
    (i) Such as constructed-response, short answer, or essay questions;
or
    (ii) That require a student to analyze a passage of text or to
express opinions.
    (9) Provide for participation in the assessment system of all
students in

[[Page 432]]

the grades being assessed consistent with Sec. 200.6.
    (10) Except as provided in Sec. 200.7, enable results to be
disaggregated within each State, LEA, and school by--
    (i) Gender;
    (ii) Each major racial and ethnic group;
    (iii) English proficiency status;
    (iv) Migrant status as defined in Title I, part C of the Elementary
and Secondary Education Act (hereinafter ``the Act'');
    (v) Students with disabilities as defined under section 602(3) of
the Individuals with Disabilities Education Act (IDEA) as compared to
all other students; and
    (vi) Economically disadvantaged students as compared to students who
are not economically disadvantaged.
    (11) Produce individual student reports consistent with Sec.
200.8(a).
    (12) Enable itemized score analyses to be produced and reported to
LEAs and schools consistent with Sec. 200.8(b).
    (c) The State assessment system may include academic assessments
that do not meet the requirements in paragraph (b) of this section as
additional measures. Those additional assessments--
    (1) May not reduce the number, or change the identity, of schools
that would otherwise be subject to school improvement, corrective
action, or restructuring under section 1116 of Title I of the Act, if
those assessments were not used; but
    (2) May identify additional schools for school improvement,
corrective action, or restructuring.

(Authority: 20 U.S.C. 6311(b)(3))

[67 FR 45040, July 5, 2002, as amended at 73 FR 64507, Oct. 29, 2008]



Sec. 200.3  Designing State Academic Assessment Systems.

    (a)(1) For each grade and subject assessed, a State's academic
assessment system must--
    (i) Address the depth and breadth of the State's academic content
standards under Sec. 200.1(b);
    (ii) Be valid, reliable, and of high technical quality;
    (iii) Express student results in terms of the State's student
academic achievement standards; and
    (iv) Be designed to provide a coherent system across grades and
subjects.
    (2) A State may include in its academic assessment system under
Sec. 200.2 either or both--
    (i) Criterion-referenced assessments; and
    (ii) Assessments that yield national norms, provided that, if the
State uses only assessments referenced against national norms at a
particular grade, those assessments--
    (A) Are augmented with additional items as necessary to measure
accurately the depth and breadth of the State's academic content
standards; and
    (B) Express student results in terms of the State's student academic
achievement standards.
    (b) A State that includes a combination of assessments as described
in paragraph (a)(2) of this section, or a combination of State and local
assessments, in its State assessment system must demonstrate in its
State plan that the system has a rational and coherent design that--
    (1) Identifies the assessments to be used;
    (2) Indicates the relative contribution of each assessment towards--
    (i) Ensuring alignment with the State's academic content standards;
and
    (ii) Determining the adequate yearly progress of each school and
LEA; and
    (3) Provides information regarding the progress of students relative
to the State's academic standards in order to inform instruction.
    (c) A State that includes local assessments in the system described
in Sec. 200.2(b) must--
    (1) Establish technical criteria to ensure that each local
assessment meets the requirements of paragraphs (a)(1) and (c)(2) of
this section;
    (2) Demonstrate in its State plan that all local assessments used
for this purpose--
    (i) Are equivalent to one another and to State assessments, where
they exist, in their content coverage, difficulty, and quality;
    (ii) Have comparable validity and reliability with respect to groups
of students described in section 1111(b)(2)(C)(v) of the Act; and

[[Page 433]]

    (iii) Provide unbiased, rational, and consistent determinations of
the annual progress of schools and LEAs within the State;
    (3) Review and approve each local assessment to ensure that it meets
or exceeds the State's technical criteria in paragraph (c)(1) of this
section and the requirements in paragraph (c)(2) of this section; and
    (4) Be able to aggregate, with confidence, data from local
assessments to determine whether the State has made adequate yearly
progress.
    (d) A State's academic assessment system may rely exclusively on
local assessments only if it meets the requirements of Sec. 200.4.

(Authority: 20 U.S.C. 6311(b)(3))

[67 FR 45040, July 5, 2002]



Sec. 200.4  State law exception.

    (a) If a State provides satisfactory evidence to the Secretary that
neither the State educational agency (SEA) nor any other State
government official, agency, or entity has sufficient authority under
State law to adopt academic content standards, student academic
achievement standards, and academic assessments applicable to all
students enrolled in the State's public schools, the State may meet the
requirements under Sec. Sec. 200.1 and 200.2 by--
    (1) Adopting academic standards and academic assessments that meet
the requirements of Sec. Sec. 200.1 and 200.2 on a Statewide basis and
limiting their applicability to students served under subpart A of this
part; or
    (2) Adopting and implementing policies that ensure that each LEA in
the State that receives funds under subpart A of this part will adopt
academic standards and academic assessments aligned with those standards
that--
    (i) Meet the requirements in Sec. Sec. 200.1 and 200.2; and
    (ii) Are applicable to all students served by the LEA.
    (b) A State that qualifies under paragraph (a) of this section
must--
    (1) Establish technical criteria for evaluating whether each LEA's--
    (i) Academic content and student academic achievement standards meet
the requirements in Sec. 200.1; and
    (ii) Academic assessments meet the requirements in Sec. 200.2,
particularly regarding validity and reliability, technical quality,
alignment with the LEA's academic standards, and inclusion of all
students in the grades assessed;
    (2) Review and approve each LEA's academic standards and academic
assessments to ensure that they--
    (i) Meet or exceed the State's technical criteria; and
    (ii) For purposes of this section--
    (A) Are equivalent to one another in their content coverage,
difficulty, and quality;
    (B) Have comparable validity and reliability with respect to groups
of students described in section 1111(b)(2)(C)(v) of the Act; and
    (C) Provide unbiased, rational, and consistent determinations of the
annual progress of LEAs and schools within the State; and
    (3) Be able to aggregate, with confidence, data from local
assessments to determine whether the State has made adequate yearly
progress.

(Authority: 20 U.S.C. 6311(b)(5))

[67 FR 45041, July 5, 2002]



Sec. 200.5  Timeline for assessments.

    (a) Reading/language arts and mathematics. (1) Through the 2004-2005
school year, a State must administer the assessments required under
Sec. 200.2 at least once during--
    (i) Grades 3 through 5;
    (ii) Grades 6 through 9; and
    (iii) Grades 10 through 12.
    (2) Except as provided in paragraph (a)(3) of this section,
beginning no later than the 2005-2006 school year, a State must
administer both the reading/language arts and mathematics assessments
required under Sec. 200.2--
    (i) In each of grades 3 through 8; and
    (ii) At least once in grades 10 through 12.
    (3) The Secretary may extend, for one additional year, the timeline
in paragraph (a)(2) of this section if a State demonstrates that--
    (i) Full implementation is not possible due to exceptional or
uncontrollable circumstances such as--
    (A) A natural disaster; or

[[Page 434]]

    (B) A precipitous and unforeseen decline in the financial resources
of the State; and
    (ii) The State can complete implementation within the additional
one-year period.
    (b) Science. Beginning no later than the 2007-2008 school year, the
science assessments required under Sec. 200.2 must be administered at
least once during--
    (1) Grades 3 through 5;
    (2) Grades 6 through 9; and
    (3) Grades 10 through 12.
    (c) Timing of results. Beginning with the 2002-2003 school year, a
State must promptly provide the results of its assessments no later than
before the beginning of the next school year to LEAs, schools, and
teachers in a manner that is clear and easy to understand.

(Authority: 20 U.S.C. 6311(b)(3))

[67 FR 45041, July 5, 2002]



Sec. 200.6  Inclusion of all students.

    A State's academic assessment system required under Sec. 200.2 must
provide for the participation of all students in the grades assessed in
accordance with this section.
    (a) Students eligible under IDEA and Section 504--(1) Appropriate
accommodations. (i) A State's academic assessment system must provide--
    (A) For each student with a disability, as defined under section
602(3) of the IDEA, appropriate accommodations that the student's IEP
team determines are necessary to measure the academic achievement of the
student relative to the State's academic content and academic
achievement standards for the grade in which the student is enrolled,
consistent with Sec. 200.1(b)(2), (b)(3), and (c); and
    (B) For each student covered under section 504 of the Rehabilitation
Act of 1973, as amended (Section 504), appropriate accommodations that
the student's placement team determines are necessary to measure the
academic achievement of the student relative to the State's academic
content and academic achievement standards for the grade in which the
student is enrolled, consistent with Sec. 200.1(b)(2), (b)(3), and (c).
    (ii) A State must--
    (A) Develop, disseminate information on, and promote the use of
appropriate accommodations to increase the number of students with
disabilities who are tested against academic achievement standards for
the grade in which a student is enrolled; and
    (B) Ensure that regular and special education teachers and other
appropriate staff know how to administer assessments, including making
appropriate use of accommodations, for students with disabilities and
students covered under Section 504.
    (2) Alternate assessments. (i) The State's academic assessment
system must provide for one or more alternate assessments for a child
with a disability as defined under section 602(3) of the Individuals
with Disabilities Education Act (IDEA) whom the child's IEP team
determines cannot participate in all or part of the State assessments
under paragraph (a)(1) of this section, even with appropriate
accommodations.
    (ii)(A) Alternate assessments must yield results for the grade in
which the student is enrolled in at least reading/language arts,
mathematics, and, beginning in the 2007-2008 school year, science,
except as provided in the following paragraph.
    (B) For students with the most significant cognitive disabilities,
alternate assessments may yield results that measure the achievement of
those students relative to the alternate academic achievement standards
the State has defined under Sec. 200.1(d).
    (iii) If a State permits the use of alternate assessments that yield
results based on alternate academic achievement standards, the State
must document that students with the most significant cognitive
disabilities are, to the extent possible, included in the general
curriculum.
    (3) Alternate assessments that are based on modified academic
achievement standards. (i) To assess students with disabilities based on
modified academic achievement standards, a State may develop a new
alternate assessment or adapt an assessment based on grade-level
academic achievement standards.
    (ii) An alternate assessment under paragraph (a)(3)(i) of this
section must--

[[Page 435]]

    (A) Be aligned with the State's grade-level academic content
standards;
    (B) Yield results that measure the achievement of those students
separately in reading/language arts and mathematics relative to the
modified academic achievement standards;
    (C) Meet the requirements in Sec. Sec. 200.2 and 200.3, including
the requirements relating to validity, reliability, and high technical
quality; and
    (D) Fit coherently in the State's overall assessment system under
Sec. 200.2.
    (4) Reporting. A State must report separately to the Secretary,
under section 1111(h)(4) of the Act, the number and percentage of
students with disabilities taking--
    (i) Regular assessments described in Sec. 200.2;
    (ii) Regular assessments with accommodations;
    (iii) Alternate assessments based on the grade-level academic
achievement standards described in Sec. 200.1(c);
    (iv) Alternate assessments based on the modified academic
achievement standards described in Sec. 200.1(e); and
    (v) Alternate assessments based on the alternate academic
achievement standards described in Sec. 200.1(d).
    (b) Limited English proficient students. A State must include
limited English proficient students in its academic assessment system as
follows:
    (1) In general. (i) Consistent with paragraphs (b)(2) and (b)(4) of
this section, the State must assess limited English proficient students
in a valid and reliable manner that includes--
    (A) Reasonable accommodations; and
    (B) To the extent practicable, assessments in the language and form
most likely to yield accurate and reliable information on what those
students know and can do to determine the students' mastery of skills in
subjects other than English until the students have achieved English
language proficiency.
    (ii) In its State plan, the State must--
    (A) Identify the languages other than English that are present in
the student population served by the SEA; and
    (B) Indicate the languages for which yearly student academic
assessments are not available and are needed.
    (iii) The State--
    (A) Must make every effort to develop such assessments; and
    (B) May request assistance from the Secretary in identifying
linguistically accessible academic assessments that are needed.
    (2) Assessing reading/language arts in English. (i) Unless an
extension of time is warranted under paragraph (b)(2)(ii) of this
section, a State must assess, using assessments written in English, the
achievement of any limited English proficient student in meeting the
State's reading/language arts academic standards if the student has
attended schools in the United States, excluding Puerto Rico, for three
or more consecutive years.
    (ii) An LEA may continue, for no more than two additional
consecutive years, to assess a limited English proficient student under
paragraph (b)(1) of this section if the LEA determines, on a case-by-
case individual basis, that the student has not reached a level of
English language proficiency sufficient to yield valid and reliable
information on what the student knows and can do on reading/language
arts assessments written in English.
    (iii) The requirements in paragraph (b)(2)(i) and (ii) of this
section do not permit an exemption from participating in the State
assessment system for limited English proficient students.
    (3) Assessing English proficiency. (i) Unless a State receives an
extension under paragraph (b)(3)(ii) of this section, the State must
require each LEA, beginning no later than the 2002-2003 school year, to
assess annually the English proficiency, including reading, writing,
speaking, and listening skills, of all students with limited English
proficiency in schools in the LEA.
    (ii) The Secretary may extend, for one additional year, the deadline
in paragraph (b)(3)(i) of this section if the State demonstrates that--
    (A) Full implementation is not possible due to exceptional or
uncontrollable circumstances such as--
    (1) A natural disaster; or
    (2) A precipitous and unforeseen decline in the financial resources
of the State; and
    (B) The State can complete implementation within the additional one-
year period.

[[Page 436]]

    (4) Recently arrived limited English proficient students. (i)(A) A
State may exempt a recently arrived limited English proficient student,
as defined in paragraph (b)(4)(iv) of this section, from one
administration of the State's reading/language arts assessment under
Sec. 200.2.
    (B) If the State does not assess a recently arrived limited English
proficient student on the State's reading/language arts assessment, the
State must count the year in which the assessment would have been
administered as the first of the three years in which the student may
take the State's reading/language arts assessment in a native language
under section 1111(b)(3)(C)(x) of the Act.
    (C) The State and its LEAs must report on State and district report
cards under section 1111(h) of the Act the number of recently arrived
limited English proficient students who are not assessed on the State's
reading/language arts assessment.
    (D) Nothing in paragraph (b)(4) of this section relieves an LEA from
its responsibility under applicable law to provide recently arrived
limited English proficient students with appropriate instruction to
assist them in gaining English language proficiency as well as content
knowledge in reading/language arts and mathematics.
    (ii) A State must assess the English language proficiency of a
recently arrived limited English proficient student pursuant to
paragraph (b)(3) of this section.
    (iii) A State must assess the mathematics achievement of a recently
arrived limited English proficient student pursuant to Sec. 200.2.
    (iv) A recently arrived limited English proficient student is a
student with limited English proficiency who has attended schools in the
United States for less than twelve months. The phrase ``schools in the
United States'' includes only schools in the 50 States and the District
of Columbia.
    (c) Migratory and other mobile students. A State must include
migratory students, as defined in Title I, part C, of the Act, and other
mobile students in its academic assessment system, even if those
students are not included for accountability purposes under section
1111(b)(3)(C)(xi) of the Act.
    (d) Students experiencing homelessness. (1) A State must include
homeless students, as defined in section 725(2) of Title VII, Subtitle B
of the McKinney-Vento Act, in its academic assessment, reporting, and
accountability systems, consistent with section 1111(b)(3)(C)(xi) of the
Act.
    (2) The State is not required to disaggregate, as a separate
category under Sec. 200.2(b)(10), the assessment results of the
students referred to in paragraph (d)(1) of this section.

(Authority: 20 U.S.C. 6311(b)(3))

(Approved by the Office of Management and Budget under control number
1810-0576)

[67 FR 45041, July 5, 2002, as amended at 67 FR 71715, Dec. 2, 2002; 68
FR 68702, Dec. 9, 2003; 71 FR 54193, Sept. 13, 2006; 72 FR 17779, Apr.
9, 2007]



Sec. 200.7  Disaggregation of data.

    (a) Statistically reliable information. (1) A State may not use
disaggregated data for one or more subgroups under Sec. 200.2(b)(10) to
report achievement results under section 1111(h) of the Act or to
identify schools in need of improvement, corrective action, or
restructuring under section 1116 of the Act if the number of students in
those subgroups is insufficient to yield statistically reliable
information.
    (2)(i) Based on sound statistical methodology, each State must
determine the minimum number of students sufficient to--
    (A) Yield statistically reliable information for each purpose for
which disaggregated data are used; and
    (B) Ensure that, to the maximum extent practicable, all student
subgroups in Sec. 200.13(b)(7)(ii) (economically disadvantaged
students; students from major racial and ethnic groups; students with
disabilities as defined in section 9101(5) of the Act; and students with
limited English proficiency as defined in section 9101(25) of the Act)
are included, particularly at the school level, for purposes of making
accountability determinations.
    (ii) Each State must revise its Consolidated State Application
Accountability Workbook under section 1111 of the Act to include--

[[Page 437]]

    (A) An explanation of how the State's minimum group size meets the
requirements of paragraph (a)(2)(i) of this section;
    (B) An explanation of how other components of the State's definition
of adequate yearly progress (AYP), in addition to the State's minimum
group size, interact to affect the statistical reliability of the data
and to ensure the maximum inclusion of all students and student
subgroups in Sec. 200.13(b)(7)(ii); and
    (C) Information regarding the number and percentage of students and
student subgroups in Sec. 200.13(b)(7)(ii) excluded from school-level
accountability determinations.
    (iii) Each State must submit a revised Consolidated State
Application Accountability Workbook in accordance with paragraph
(a)(2)(ii) of this section to the Department for technical assistance
and peer review under the process established by the Secretary under
section 1111(e)(2) of the Act in time for any changes to be in effect
for AYP determinations based on school year 2009-2010 assessment
results.
    (iv) Beginning with AYP decisions that are based on the assessments
administered in the 2007-08 school year, a State may not establish a
different minimum number of students under paragraph (a)(2)(i) of this
section for separate subgroups under Sec. 200.13(b)(7)(ii) or for the
school as a whole.
    (b) Personally identifiable information. (1) A State may not use
disaggregated data for one or more subgroups under Sec. 200.2(b)(10) to
report achievement results under section 1111(h) of the Act if the
results would reveal personally identifiable information about an
individual student.
    (2) To determine whether disaggregated results would reveal
personally identifiable information about an individual student, a State
must apply the requirements under section 444(b) of the General
Education Provisions Act (the Family Educational Rights and Privacy Act
of 1974).
    (3) Nothing in paragraph (b)(1) or (b)(2) of this section shall be
construed to abrogate the responsibility of States to implement the
requirements of section 1116(a) of the Act for determining whether
States, LEAs, and schools are making AYP on the basis of the performance
of each subgroup under section 1111(b)(2)(C)(v) of the Act.
    (4) Each State shall include in its State plan, and each State and
LEA shall implement, appropriate strategies to protect the privacy of
individual students in reporting achievement results under section
1111(h) of the Act and in determining whether schools and LEAs are
making AYP on the basis of disaggregated subgroups.
    (c) Inclusion of subgroups in assessments. If a subgroup under Sec.
200.2(b)(10) is not of sufficient size to produce statistically reliable
results, the State must still include students in that subgroup in its
State assessments under Sec. 200.2.
    (d) Disaggregation at the LEA and State. If the number of students
in a subgroup is not statistically reliable at the school level, the
State must include those students in disaggregations at each level for
which the number of students is statistically reliable--e.g., the LEA or
State level.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6311(b)(3); 1232g)

[67 FR 45042, July 5, 2002, as amended at 67 FR 71715, Dec. 2, 2002; 72
FR 17779, Apr. 9, 2007; 73 FR 64507, Oct. 29, 2008; 73 FR 78636, Dec.
23, 2008]



Sec. 200.8  Assessment reports.

    (a) Student reports. A State's academic assessment system must
produce individual student interpretive, descriptive, and diagnostic
reports that--
    (1)(i) Include information regarding achievement on the academic
assessments under Sec. 200.2 measured against the State's student
academic achievement standards; and
    (ii) Help parents, teachers, and principals to understand and
address the specific academic needs of students; and
    (2) Are provided to parents, teachers, and principals--
    (i) As soon as is practicable after the assessment is given;
    (ii) In an understandable and uniform format, including an
alternative format (e.g., Braille or large print) upon request; and

[[Page 438]]

    (iii) To the extent practicable, in a language that parents can
understand.
    (b) Itemized score analyses for LEAs and schools. (1) A State's
academic assessment system must produce and report to LEAs and schools
itemized score analyses, consistent with Sec. 200.2(b)(4), so that
parents, teachers, principals, and administrators can interpret and
address the specific academic needs of students.
    (2) The requirement to report itemized score analyses in paragraph
(b)(1) of this section does not require the release of test items.

(Authority: 20 U.S.C. 6311(b)(3))

[67 FR 45042, July 5, 2002]



Sec. 200.9  Deferral of assessments.

    (a) A State may defer the start or suspend the administration of the
assessments required under Sec. 200.2 that were not required prior to
January 8, 2002 for one year for each year for which the amount
appropriated for State assessment grants under section 6113(a)(2) of the
Act is less than the trigger amount in section 1111(b)(3)(D) of the Act.
    (b) A State may not cease the development of the assessments
referred to in paragraph (a) of this section even if sufficient funds
are not appropriated under section 6113(a)(2) of the Act.

(Authority: 20 U.S.C. 6311(b)(3); 7301b(a)(2))

[67 FR 45043, July 5, 2002]



Sec. 200.10  Applicability of a State's academic assessments to
private schools and private school students.

    (a) Nothing in Sec. 200.1 or Sec. 200.2 requires a private school,
including a private school whose students receive services under subpart
A of this part, to participate in a State's academic assessment system.
    (b)(1) If an LEA provides services to eligible private school
students under subpart A of this part, the LEA must, through timely
consultation with appropriate private school officials, determine how
services to eligible private school students will be academically
assessed and how the results of that assessment will be used to improve
those services.
    (2) The assessments referred to in paragraph (b)(1) of this section
may be the State's academic assessments under Sec. 200.2 or other
appropriate academic assessments.

(Authority: 20 U.S.C. 6320, 7886(a))

[67 FR 45043, July 5, 2002]

   Participation in National Assessment of Educational Progress (NAEP)



Sec. 200.11  Participation in NAEP.

    (a) State participation. Beginning in the 2002-2003 school year,
each State that receives funds under subpart A of this part must
participate in biennial State academic assessments of fourth and eighth
grade reading and mathematics under the State National Assessment of
Educational Progress (NAEP), if the Department pays the costs of
administering those assessments.
    (b) Local participation. In accordance with section 1112(b)(1)(F) of
the Elementary and Secondary Education Act of 1965 (ESEA), and
notwithstanding section 411(d)(1) of the National Education Statistics
Act of 1994, an LEA that receives funds under subpart A of this part
must participate, if selected, in the State-NAEP assessments referred to
in paragraph (a) of this section.
    (c) Report cards. Each State and LEA must report on its annual State
and LEA report card, respectively, the most recent available academic
achievement results in grades four and eight on the State's NAEP reading
and mathematics assessments under paragraph (a) of this section. The
report cards must include--
    (1) The percentage of students at each achievement level reported on
the NAEP in the aggregate and, for State report cards, disaggregated for
each subgroup described in Sec. 200.13(b)(7)(ii); and
    (2) The participation rates for students with disabilities and for
limited English proficient students.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6311(c)(2); 6312(b)(1)(F), 9010(d)(1))

[67 FR 71715, Dec. 2, 2002, as amended at 73 FR 64508, Oct. 29, 2008]

[[Page 439]]

                       State Accountability System



Sec. 200.12  Single State accountability system.

    (a)(1) Each State must demonstrate in its State plan that the State
has developed and is implementing, beginning with the 2002-2003 school
year, a single, statewide accountability system.
    (2) The State's accountability system must be effective in ensuring
that all public elementary and secondary schools and LEAs in the State
make AYP as defined in Sec. Sec. 200.13 through 200.20.
    (b) The State's accountability system must--
    (1) Be based on the State's academic standards under Sec. 200.1,
academic assessments under Sec. 200.2, and other academic indicators
under Sec. 200.19;
    (2) Take into account the achievement of all public elementary and
secondary school students;
    (3) Be the same accountability system the State uses for all public
elementary and secondary schools and all LEAs in the State; and
    (4) Include sanctions and rewards that the State will use to hold
public elementary and secondary schools and LEAs accountable for student
achievement and for making AYP, except that the State is not required to
subject schools and LEAs not participating under subpart A of this part
to the requirements of section 1116 of the ESEA.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6311(b)(2)(A))

[67 FR 71715, Dec. 2, 2002, as amended at 73 FR 78637, Dec. 23, 2008]

                     Adequate Yearly Progress (AYP)



Sec. 200.13  Adequate yearly progress in general.

    (a) Each State must demonstrate in its State plan what constitutes
AYP of the State and of all public schools and LEAs in the State--
    (1) Toward enabling all public school students to meet the State's
student academic achievement standards; while
    (2) Working toward the goal of narrowing the achievement gaps in the
State, its LEAs, and its public schools.
    (b) A State must define adequate yearly progress, in accordance with
Sec. Sec. 200.14 through 200.20, in a manner that--
    (1) Applies the same high standards of academic achievement to all
public school students in the State, except as provided in paragraph (c)
of this section;
    (2) Is statistically valid and reliable;
    (3) Results in continuous and substantial academic improvement for
all students;
    (4) Measures the progress of all public schools, LEAs, and the State
based primarily on the State's academic assessment system under Sec.
200.2;
    (5) Measures progress separately for reading/language arts and for
mathematics;
    (6) Is the same for all public schools and LEAs in the State; and
    (7) Consistent with Sec. 200.7, applies the same annual measurable
objectives under Sec. 200.18 separately to each of the following:
    (i) All public school students.
    (ii) Students in each of the following subgroups:
    (A) Economically disadvantaged students.
    (B) Students from major racial and ethnic groups.
    (C) Students with disabilities, as defined in section 9101(5) of the
ESEA.
    (D) Students with limited English proficiency, as defined in section
9101(25) of the ESEA.
    (c)(1) In calculating AYP for schools, LEAs, and the State, a State
must, consistent with Sec. 200.7(a), include the scores of all students
with disabilities.
    (2) With respect to scores based on alternate or modified academic
achievement standards, a State may include--
    (i) The proficient and advanced scores of students with the most
significant cognitive disabilities based on the alternate academic
achievement standards described in Sec. 200.1(d), provided that the
number of those scores at the LEA and at the State levels, separately,
does not exceed 1.0 percent of all students in the grades assessed in
reading/language arts and in mathematics; and
    (ii) The proficient and advanced scores of students with
disabilities based on the modified academic

[[Page 440]]

achievement standards described in Sec. 200.1(e)(1), provided that the
number of those scores at the LEA and at the State levels, separately,
does not exceed 2.0 percent of all students in the grades assessed in
reading/language arts and in mathematics.
    (3) A State's or LEA's number of proficient and advanced scores of
students with disabilities based on the modified academic achievement
standards described in Sec. 200.1(e)(1) may exceed 2.0 percent of all
students in the grades assessed if the number of proficient and advanced
scores based on the alternate academic achievement standards described
in Sec. 200.1(d) is less than 1.0 percent, provided the number of
proficient and advanced scores based on modified and alternate academic
achievement standards combined does not exceed 3.0 percent of all
students in the grades assessed.
    (4) A State may not request from the Secretary an exception
permitting it to exceed the caps on proficient and advanced scores based
on alternate or modified academic achievement standards under paragraph
(c)(2) and (3) of this section.
    (5)(i) A State may grant an exception to an LEA permitting it to
exceed the 1.0 percent cap on proficient and advanced scores based on
the alternate academic achievement standards described in paragraph
(c)(2)(i) of this section only if--
    (A) The LEA demonstrates that the incidence of students with the
most significant cognitive disabilities exceeds 1.0 percent of all
students in the combined grades assessed;
    (B) The LEA explains why the incidence of such students exceeds 1.0
percent of all students in the combined grades assessed, such as school,
community, or health programs in the LEA that have drawn large numbers
of families of students with the most significant cognitive
disabilities, or that the LEA has such a small overall student
population that it would take only a few students with such disabilities
to exceed the 1.0 percent cap; and
    (C) The LEA documents that it is implementing the State's guidelines
under Sec. 200.1(f).
    (ii) The State must review regularly whether an LEA's exception to
the 1.0 percent cap is still warranted.
    (6) A State may not grant an exception to an LEA to exceed the 2.0
percent cap on proficient and advanced scores based on modified academic
achievement standards under paragraph (c)(2)(ii) of this section, except
as provided in paragraph (c)(3) of this section.
    (7) In calculating AYP, if the percentage of proficient and advanced
scores based on alternate or modified academic achievement standards
under Sec. 200.1(d) or (e) exceeds the caps in paragraph (c) of this
section at the State or LEA level, the State must do the following:
    (i) Consistent with Sec. 200.7(a), include all scores based on
alternate and modified academic achievement standards.
    (ii) Count as non-proficient the proficient and advanced scores that
exceed the caps in paragraph (c) of this section.
    (iii) Determine which proficient and advanced scores to count as
non-proficient in schools and LEAs responsible for students who are
assessed based on alternate or modified academic achievement standards.
    (iv) Include non-proficient scores that exceed the caps in paragraph
(c) of this section in each applicable subgroup at the school, LEA, and
State level.
    (v) Ensure that parents of a child who is assessed based on
alternate or modified academic achievement standards are informed of the
actual academic achievement levels of their child.
    (d) The State must establish a way to hold accountable schools in
which no grade level is assessed under the State's academic assessment
system (e.g., K-2 schools), although the State is not required to
administer a formal assessment to meet this requirement.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6311(b)(2))

 Appendix to Sec. 200.13--When May a State or LEA Exceed the 1% and 2%
                                  Caps?

    The following table provides a summary of the circumstances in which
a State or LEA

[[Page 441]]

may exceed the 1% and 2% caps described in Sec. 200.13.

                               When May a State or LEA Exceed the 1% and 2% Caps?
----------------------------------------------------------------------------------------------------------------
                                          Alternate academic       Modified academic      Alternate and modified
                                       achievement standards--  achievement standards--    academic achievement
                                                1% cap                   2% cap               standards--3%
----------------------------------------------------------------------------------------------------------------
State................................  Not permitted..........  Only if State is below   Not permitted.
                                                                 1% cap, but cannot
                                                                 exceed 3%.
LEA..................................  Only if granted an       Only if LEA is below 1%  Only if granted an
                                        exception by the SEA.    cap, but cannot exceed   exception to the 1%
                                                                 3%.                      cap by the SEA, and
                                                                                          only by the amount of
                                                                                          the exception.
----------------------------------------------------------------------------------------------------------------


[67 FR 71716, Dec. 2, 2002; 68 FR 1008, Jan. 8, 2003, as amended at 68
FR 68703, Dec. 9, 2003; 72 FR 17779, Apr. 9, 2007]



Sec. 200.14  Components of Adequate Yearly Progress.

    A State's definition of AYP must include all of the following:
    (a) A timeline in accordance with Sec. 200.15.
    (b) Starting points in accordance with Sec. 200.16.
    (c) Intermediate goals in accordance with Sec. 200.17.
    (d) Annual measurable objectives in accordance with Sec. 200.18.
    (e) Other academic indicators in accordance with Sec. 200.19.

(Authority: 20 U.S.C. 6311(b)(2))

[67 FR 71716, Dec. 2, 2002]



Sec. 200.15  Timeline.

    (a) Each State must establish a timeline for making AYP that ensures
that, not later than the 2013-2014 school year, all students in each
group described in Sec. 200.13(b)(7) will meet or exceed the State's
proficient level of academic achievement.
    (b) Notwithstanding subsequent changes a State may make to its
academic assessment system or its definition of AYP under Sec. Sec.
200.13 through 200.20, the State may not extend its timeline for all
students to reach proficiency beyond the 2013-2014 school year.

(Authority: 20 U.S.C. 6311(b)(2))

[67 FR 71716, Dec. 2, 2002]



Sec. 200.16  Starting points.

    (a) Using data from the 2001-2002 school year, each State must
establish starting points in reading/language arts and in mathematics
for measuring the percentage of students meeting or exceeding the
State's proficient level of academic achievement.
    (b) Each starting point must be based, at a minimum, on the higher
of the following percentages of students at the proficient level:
    (1) The percentage in the State of proficient students in the
lowest-achieving subgroup of students under Sec. 200.13(b)(7)(ii).
    (2) The percentage of proficient students in the school that
represents 20 percent of the State's total enrollment among all schools
ranked by the percentage of students at the proficient level. The State
must determine this percentage as follows:
    (i) Rank each school in the State according to the percentage of
proficient students in the school.
    (ii) Determine 20 percent of the total enrollment in all schools in
the State.
    (iii) Beginning with the lowest-ranked school, add the number of
students enrolled in each school until reaching the school that
represents 20 percent of the State's total enrollment among all schools.
    (iv) Identify the percentage of proficient students in the school
identified in paragraph (iii).
    (c)(1) Except as permitted under paragraph (c)(2) of this section,
each starting point must be the same throughout the State for each
school, each LEA, and each group of students under Sec. 200.13(b)(7).
    (2) A State may use the procedures under paragraph (b) of this
section to

[[Page 442]]

establish separate starting points by grade span.

(Authority: 20 U.S.C. 6311(b)(2))

[67 FR 71716, Dec. 2, 2002]



Sec. 200.17  Intermediate goals.

    Each State must establish intermediate goals that increase in equal
increments over the period covered by the timeline under Sec. 200.15 as
follows:
    (a) The first incremental increase must take effect not later than
the 2004-2005 school year.
    (b) Each following incremental increase must occur in not more than
three years.

(Authority: 20 U.S.C. 6311(b)(2))

[67 FR 71716, Dec. 2, 2002]



Sec. 200.18  Annual measurable objectives.

    (a) Each State must establish annual measurable objectives that--
    (1) Identify for each year a minimum percentage of students that
must meet or exceed the proficient level of academic achievement on the
State's academic assessments; and
    (2) Ensure that all students meet or exceed the State's proficient
level of academic achievement within the timeline under Sec. 200.15.
    (b) The State's annual measurable objectives--
    (1) Must be the same throughout the State for each school, each LEA,
and each group of students under Sec. 200.13(b)(7); and
    (2) May be the same for more than one year, consistent with the
State's intermediate goals under Sec. 200.17.

(Authority: 20 U.S.C. 6311(b)(2))

[67 FR 71716, Dec. 2, 2002]



Sec. 200.19  Other academic indicators.

    (a) Elementary and middle schools--(1) Choice of indicator. To
determine AYP, consistent with Sec. 200.14(e), each State must use at
least one other academic indicator for public elementary schools and at
least one other academic indicator for public middle schools, such as
those in paragraph (c) of this section.
    (2) Goals. A State may, but is not required to, increase the goals
of its other academic indicators over the course of the timeline under
Sec. 200.15.
    (3) Reporting. A State and its LEAs must report under section
1111(h) of the Act (annual report cards) performance on the academic
indicators for elementary and middle schools at the school, LEA, and
State levels in the aggregate and disaggregated by each subgroup
described in Sec. 200.13(b)(7)(ii).
    (4) Determining AYP. A State--
    (i) Must disaggregate its other academic indicators for elementary
and middle schools by each subgroup described in Sec. 200.13(b)(7)(ii)
for purposes of determining AYP under Sec. 200.20(b)(2) (``safe
harbor'') and as required under section 1111(b)(2)(C)(vii) of the Act
(additional academic indicators under paragraph (c) of this section);
but (ii) Need not disaggregate those indicators for determining AYP
under Sec. 200.20(a)(1)(ii) (meeting the State's annual measurable
objectives).
    (b) High schools--(1) Graduation rate. Consistent with paragraphs
(b)(4) and (b)(5) of this section regarding reporting and determining
AYP, respectively, each State must calculate a graduation rate, defined
as follows, for all public high schools in the State:
    (i)(A) A State must calculate a ``four-year adjusted cohort
graduation rate,'' defined as the number of students who graduate in
four years with a regular high school diploma divided by the number of
students who form the adjusted cohort for that graduating class.
    (B) For those high schools that start after grade nine, the cohort
must be calculated based on the earliest high school grade.
    (ii) The term ``adjusted cohort'' means the students who enter grade
9 (or the earliest high school grade) and any students who transfer into
the cohort in grades 9 through 12 minus any students removed from the
cohort.
    (A) The term ``students who transfer into the cohort'' means the
students who enroll after the beginning of the entering cohort's first
year in high school, up to and including in grade 12.
    (B) To remove a student from the cohort, a school or LEA must
confirm in writing that the student transferred out, emigrated to
another country, or is deceased.
    (1) To confirm that a student transferred out, the school or LEA
must have official written documentation

[[Page 443]]

that the student enrolled in another school or in an educational program
that culminates in the award of a regular high school diploma.
    (2) A student who is retained in grade, enrolls in a General
Educational Development (GED) program, or leaves school for any other
reason may not be counted as having transferred out for the purpose of
calculating graduation rate and must remain in the adjusted cohort.
    (iii) The term ``students who graduate in four years'' means
students who earn a regular high school diploma at the conclusion of
their fourth year, before the conclusion of their fourth year, or during
a summer session immediately following their fourth year.
    (iv) The term ``regular high school diploma'' means the standard
high school diploma that is awarded to students in the State and that is
fully aligned with the State's academic content standards or a higher
diploma and does not include a GED credential, certificate of
attendance, or any alternative award.
    (v) In addition to calculating a four-year adjusted cohort
graduation rate, a State may propose to the Secretary for approval an
``extended-year adjusted cohort graduation rate.''
    (A) An extended-year adjusted cohort graduation rate is defined as
the number of students who graduate in four years or more with a regular
high school diploma divided by the number of students who form the
adjusted cohort for the four-year adjusted cohort graduation rate,
provided that the adjustments account for any students who transfer into
the cohort by the end of the year of graduation being considered minus
the number of students who transfer out, emigrate to another country, or
are deceased by the end of that year.
    (B) A State may calculate one or more extended-year adjusted cohort
graduation rates.
    (2) Transitional graduation rate. (i) Prior to the deadline in
paragraph (b)(4)(ii)(A) of this section, a State must calculate
graduation rate as defined in paragraph (b)(1) of this section or use,
on a transitional basis--
    (A) A graduation rate that measures the percentage of students from
the beginning of high school who graduate with a regular high school
diploma in the standard number of years; or
    (B) Another definition, developed by the State and approved by the
Secretary, that more accurately measures the rate of student graduation
from high school with a regular high school diploma.
    (ii) For a transitional graduation rate calculated under paragraph
(b)(2)(i) of this section--
    (A) ``Regular high school diploma'' has the same meaning as in
paragraph (b)(1)(iv) of this section;
    (B) ``Standard number of years'' means four years unless a high
school begins after ninth grade, in which case the standard number of
years is the number of grades in the school; and
    (C) A dropout may not be counted as a transfer.
    (3) Goal and targets. (i) A State must set--
    (A) A single graduation rate goal that represents the rate the State
expects all high schools in the State to meet; and
    (B) Annual graduation rate targets that reflect continuous and
substantial improvement from the prior year toward meeting or exceeding
the graduation rate goal.
    (ii) Beginning with AYP determinations under Sec. 200.20 based on
school year 2009-2010 assessment results, in order to make AYP, any high
school or LEA that serves grade 12 and the State must meet or exceed--
    (A) The graduation rate goal set by the State under paragraph
(b)(3)(i)(A) of this section; or
    (B) The State's targets for continuous and substantial improvement
from the prior year, as set by the State under paragraph (b)(3)(i)(B) of
this section.
    (4) Reporting. (i) In accordance with the deadlines in paragraph
(b)(4)(ii) of this section, a State and its LEAs must report under
section 1111(h) of the Act (annual report cards) graduation rate at the
school, LEA, and State levels in the aggregate and disaggregated by each
subgroup described in Sec. 200.13(b)(7)(ii).
    (ii)(A) Beginning with report cards providing results of assessments
administered in the 2010-2011 school year, a State and its LEAs must
report the

[[Page 444]]

four-year adjusted cohort graduation rate calculated in accordance with
paragraph (b)(1)(i) through (iv) of this section.
    (B) If a State adopts an extended-year adjusted cohort graduation
rate calculated in accordance with paragraph (b)(1)(v) of this section,
the State and its LEAs must report, beginning with the first year for
which the State calculates such a rate, the extended-year adjusted
cohort graduation rate separately from the four-year adjusted cohort
graduation rate.
    (C) Prior to the deadline in paragraph (b)(4)(ii)(A) of this
section, a State and its LEAs must report a graduation rate calculated
in accordance with paragraph (b)(1) or (b)(2) of this section in the
aggregate and disaggregated by the subgroups in Sec. 200.13(b)(7)(ii).
    (5) Determining AYP. (i) Beginning with AYP determinations under
Sec. 200.20 based on school year 2011-2012 assessment results, a State
must calculate graduation rate under paragraph (b)(1) of this section at
the school, LEA, and State levels in the aggregate and disaggregated by
each subgroup described in Sec. 200.13(b)(7)(ii).
    (ii) Prior to the AYP determinations described in paragraph
(b)(5)(i) of this section, a State must calculate graduation rate in
accordance with either paragraph (b)(1) or (b)(2) of this section--
    (A) In the aggregate at the school, LEA, and State levels for
determining AYP under Sec. 200.20(a)(1)(ii) (meeting the State's annual
measurable objectives), except as provided in paragraph (b)(7)(iii) of
this section; but
    (B) In the aggregate and disaggregated by each subgroup described in
Sec. 200.13(b)(7)(ii) for purposes of determining AYP under Sec.
200.20(b)(2) (``safe harbor'') and as required under section
1111(b)(2)(C)(vii) of the Act (additional academic indicators under
paragraph (c) of this section).
    (6) Accountability workbook. (i) A State must revise its
Consolidated State Application Accountability Workbook submitted under
section 1111 of the Act to include the following:
    (A) The State's graduation rate definition that the State will use
to determine AYP based on school year 2009-2010 assessment results.
    (B) The State's progress toward meeting the deadline in paragraph
(b)(4)(ii)(A) of this section for calculating and reporting the four-
year adjusted cohort graduation rate defined in paragraph (b)(1)(i)
through (iv) of this section.
    (C) The State's graduation rate goal and targets.
    (D) An explanation of how the State's graduation rate goal
represents the rate the State expects all high schools in the State to
meet and how the State's targets demonstrate continuous and substantial
improvement from the prior year toward meeting or exceeding the goal.
    (E) The graduation rate for the most recent school year of the high
school at the 10th percentile, the 50th percentile, and the 90th
percentile in the State (ranked in terms of graduation rate).
    (F) If a State uses an extended-year adjusted cohort graduation
rate, a description of how it will use that rate with its four-year
adjusted cohort graduation rate to determine whether its schools and
LEAs have made AYP.
    (ii) Each State must submit, consistent with the timeline in Sec.
200.7(a)(2)(iii), its revised Consolidated State Application
Accountability Workbook in accordance with paragraph (b)(6)(i) of this
section to the Department for technical assistance and peer review under
the process established by the Secretary under section 1111(e)(2) of the
Act.
    (7) Extension. (i) If a State cannot meet the deadline in paragraph
(b)(4)(ii)(A) of this section, the State may request an extension of the
deadline from the Secretary.
    (ii) To receive an extension, a State must submit to the Secretary,
by March 2, 2009--
    (A) Evidence satisfactory to the Secretary demonstrating that the
State cannot meet the deadline in paragraph (b)(4)(ii)(A) of this
section; and
    (B) A detailed plan and timeline addressing the steps the State will
take to implement, as expeditiously as possible, a graduation rate
consistent with paragraph (b)(1)(i) through (iv) of this section.
    (iii) A State that receives an extension under this paragraph must,
beginning with AYP determinations under

[[Page 445]]

Sec. 200.20 based on school year 2011-2012 assessment results,
calculate graduation rate under paragraph (b)(2) of this section at the
school, LEA, and State levels in the aggregate and disaggregated by each
subgroup described in Sec. 200.13(b)(7)(ii).
    (c) The State may include additional academic indicators determined
by the State, including, but not limited to, the following:
    (1) Additional State or locally administered assessments not
included in the State assessment system under Sec. 200.2.
    (2) Grade-to-grade retention rates.
    (3) Attendance rates.
    (4) Percentages of students completing gifted and talented, advanced
placement, and college preparatory courses.
    (d) A State must ensure that its other academic indicators are--
    (1) Valid and reliable;
    (2) Consistent with relevant, nationally recognized professional and
technical standards, if any; and
    (3) Consistent throughout the State within each grade span.
    (e) Except as provided in Sec. 200.20(b)(2), a State--
    (1) May not use the indicators in paragraphs (a) through (c) of this
section to reduce the number, or change the identity, of schools that
would otherwise be subject to school improvement, corrective action, or
restructuring if those indicators were not used; but
    (2) May use the indicators to identify additional schools for school
improvement, corrective action, or restructuring.

(Approved by the Office of Management and Budget under control numbers
1810-0581 and 1810-0576)

(Authority: 20 U.S.C. 6311(b)(2), (h))

[67 FR 71717, Dec. 2, 2002, as amended at 73 FR 64508, Oct. 29, 2008; 73
FR 72352, Nov. 28, 2008]



Sec. 200.20  Making adequate yearly progress.

    A school or LEA makes AYP if it complies with paragraph (c) and with
either paragraph (a) or (b) of this section separately in reading/
language arts and in mathematics.
    (a)(1) A school or LEA makes AYP if, consistent with paragraph (f)
of this section--
    (i) Each group of students under Sec. 200.13(b)(7) meets or exceeds
the State's annual measurable objectives under Sec. 200.18; and
    (ii) The school or LEA, respectively, meets or exceeds the State's
other academic indicators under Sec. 200.19.
    (2) For a group under Sec. 200.13(b)(7) to be included in the
determination of AYP for a school or LEA, the number of students in the
group must be sufficient to yield statistically reliable information
under Sec. 200.7(a).
    (b) If students in any group under Sec. 200.13(b)(7) in a school or
LEA do not meet the State's annual measurable objectives under Sec.
200.18, the school or LEA makes AYP if, consistent with paragraph (f) of
this section--
    (1) The percentage of students in that group below the State's
proficient achievement level decreased by at least 10 percent from the
preceding year; and
    (2) That group made progress on one or more of the State's academic
indicators under Sec. 200.19 or the LEA's academic indicators under
Sec. 200.30(c).
    (c)(1) A school or LEA makes AYP if, consistent with paragraph (f)
of this section--
    (i) Not less than 95 percent of the students enrolled in each group
under Sec. 200.13(b)(7) takes the State assessments under Sec. 200.2;
and
    (ii) The group is of sufficient size to produce statistically
reliable results under Sec. 200.7(a).
    (2) The requirement in paragraph (c)(1) of this section does not
authorize a State, LEA, or school to systematically exclude 5 percent of
the students in any group under Sec. 200.13(b)(7).
    (3) To count a student who is assessed based on alternate or
modified academic achievement standards described in Sec. 200.1(d) or
(e) as a participant for purposes of meeting the requirements of this
paragraph, the State must have, and ensure that its LEAs adhere to,
guidelines that meet the requirements of Sec. 200.1(f).
    (d) For the purpose of determining whether a school or LEA has made
AYP, a State may establish a uniform procedure for averaging data that
includes one or more of the following:

[[Page 446]]

    (1) Averaging data across school years. (i) A State may average data
from the school year for which the determination is made with data from
one or two school years immediately preceding that school year.
    (ii) If a State averages data across school years, the State must--
    (A) Implement, on schedule, the assessments in reading/language arts
and mathematics in grades 3 through 8 and once in grades 10 through 12
required under Sec. 200.5(a)(2);
    (B) Report data resulting from the assessments under Sec.
200.5(a)(2);
    (C) Determine AYP under Sec. Sec. 200.13 through 200.20, although
the State may base that determination on data only from the reading/
language arts and mathematics assessments in the three grade spans
required under Sec. 200.5(a)(1); and
    (D) Implement the requirements in section 1116 of the ESEA.
    (iii) A State that averages data across years must determine AYP on
the basis of the assessments under Sec. 200.5(a)(2) as soon as it has
data from two or three years to average. Until that time, the State may
use data from the reading/language arts and mathematics assessments
required under Sec. 200.5(a)(1) to determine adequate yearly progress.
    (2) Combining data across grades. Within each subject area and
subgroup, the State may combine data across grades in a school or LEA.
    (e)(1) In determining the AYP of an LEA, a State must include all
students who were enrolled in schools in the LEA for a full academic
year, as defined by the State.
    (2) In determining the AYP of a school, the State may not include
students who were not enrolled in that school for a full academic year,
as defined by the State.
    (f)(1) In determining AYP for a school or LEA, a State may--
    (i) Count recently arrived limited English proficient students as
having participated in the State assessments for purposes of meeting the
95 percent participation requirement under paragraph (c)(1)(i) of this
section if they take--
    (A) Either an assessment of English language proficiency under Sec.
200.6(b)(3) or the State's reading/language arts assessment under Sec.
200.2; and
    (B) The State's mathematics assessment under Sec. 200.2; and
    (ii) Choose not to include the scores of recently arrived limited
English proficient students on the mathematics assessment, the reading/
language arts assessment (if administered to these students), or both,
even if these students have been enrolled in the same school or LEA for
a full academic year as defined by the State.
    (2)(i) In determining AYP for the subgroup of limited English
proficient students and the subgroup of students with disabilities, a
State may include, for up to two AYP determination cycles, the scores
of--
    (A) Students who were limited English proficient but who no longer
meet the State's definition of limited English proficiency; and
    (B) Students who were previously identified under section 602(3) of
the IDEA but who no longer receive special education services.
    (ii) If a State, in determining AYP for the subgroup of limited
English proficient students and the subgroup of students with
disabilities, includes the scores of the students described in paragraph
(f)(2)(i) of this section, the State must include the scores of all such
students, but is not required to--
    (A) Include those students in the limited English proficient
subgroup or in the students with disabilities subgroup in determining if
the number of limited English proficient students or students with
disabilities, respectively, is sufficient to yield statistically
reliable information under Sec. 200.7(a); or
    (B) With respect to students who are no longer limited English
proficient--
    (1) Assess those students' English language proficiency under Sec.
200.6(b)(3); or
    (2) Provide English language services to those students.
    (iii) For the purpose of reporting information on report cards under
section 1111(h) of the Act--
    (A) A State may include the scores of former limited English
proficient students and former students with disabilities as part of the
limited English proficient and students with disabilities

[[Page 447]]

subgroups, respectively, for the purpose of reporting AYP at the State
level under section 1111(h)(1)(C)(ii) of the Act;
    (B) An LEA may include the scores of former limited English
proficient students and former students with disabilities as part of the
limited English proficient and students with disabilities subgroups,
respectively, for the purpose of reporting AYP at the LEA and school
levels under section 1111(h)(2)(B) of the Act; but
    (C) A State or LEA may not include the scores of former limited
English proficient students or former students with disabilities as part
of the limited English proficient or students with disabilities
subgroup, respectively, in reporting any other information under section
1111(h) of the Act.
    (g) Transition provision regarding modified academic achievement
standards. The Secretary may provide a State that is moving
expeditiously to adopt and administer alternate assessments based on
modified academic achievement standards flexibility in accounting for
the achievement of students with disabilities in AYP determinations that
are based on assessments administered in 2007-08 and 2008-09. To be
eligible for this flexibility, a State must meet criteria, as the
Secretary determines appropriate, for each year for which the
flexibility is available.
    (h) Student academic growth. (1) A State may request authority under
section 9401 of the Act to incorporate student academic growth in the
State's definition of AYP under this section.
    (2) A State's policy for incorporating student academic growth in
the State's definition of AYP must--
    (i) Set annual growth targets that--
    (A) Will lead to all students, by school year 2013-2014, meeting or
exceeding the State's proficient level of academic achievement on the
State assessments under Sec. 200.2;
    (B) Are based on meeting the State's proficient level of academic
achievement on the State assessments under Sec. 200.2 and are not based
on individual student background characteristics; and
    (C) Measure student achievement separately in mathematics and
reading/language arts;
    (ii) Ensure that all students enrolled in the grades tested under
Sec. 200.2 are included in the State's assessment and accountability
systems;
    (iii) Hold all schools and LEAs accountable for the performance of
all students and the student subgroups described in Sec.
200.13(b)(7)(ii);
    (iv) Be based on State assessments that--
    (A) Produce comparable results from grade to grade and from year to
year in mathematics and reading/language arts;
    (B) Have been in use by the State for more than one year; and
    (C) Have received full approval from the Secretary before the State
determines AYP based on student academic growth;
    (v) Track student progress through the State data system;
    (vi) Include, as separate factors in determining whether schools are
making AYP for a particular year--
    (A) The rate of student participation in assessments under Sec.
200.2; and
    (B) Other academic indicators as described in Sec. 200.19; and
    (vii) Describe how the State's annual growth targets fit into the
State's accountability system in a manner that ensures that the system
is coherent and that incorporating student academic growth into the
State's definition of AYP does not dilute accountability.
    (3) A State's proposal to incorporate student academic growth in the
State's definition of AYP will be peer reviewed under the process
established by the Secretary under section 1111(e)(2) of the Act.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6311(b)(2), (b)(3)(C)(xi); 7861)

[67 FR 71717, Dec. 2, 2002, as amended at 71 FR 54193, Sept. 13, 2006;
72 FR 17780, Apr. 9, 2007; 73 FR 64510, Oct. 29, 2008]



Sec. 200.21  Adequate yearly progress of a State.

    For each State that receives funds under subpart A of this part and
under subpart 1 of part A of Title III of the ESEA, the Secretary must,
beginning with the 2004-2005 school year, annually review whether the
State has--

[[Page 448]]

    (a)(1) Made AYP as defined by the State in accordance with
Sec. Sec. 200.13 through 200.20 for each group of students in Sec.
200.13(b)(7); and
    (2) Met its annual measurable achievement objectives under section
3122(a) of the ESEA relating to the development and attainment of
English proficiency by limited English proficient students.
    (b) A State must include all students who were enrolled in schools
in the State for a full academic year in reporting on the yearly
progress of the State.

(Authority: 20 U.S.C. 7325)

[67 FR 71717, Dec. 2, 2002]



Sec. 200.22  National Technical Advisory Council.

    (a) To provide advice to the Department on technical issues related
to the design and implementation of standards, assessments, and
accountability systems, the Secretary shall establish a National
Technical Advisory Council (hereafter referred to as the ``National
TAC''), which shall be governed by the provisions of the Federal
Advisory Committee Act (FACA) (Pub. L. 92-463, as amended; 5 U.S.C.
App.).
    (b)(1) The members of the National TAC must include persons who have
knowledge of and expertise in the design and implementation of
educational standards, assessments, and accountability systems for all
students, including students with disabilities and limited English
proficient students, and experts with technical knowledge related to
statistics and psychometrics.
    (2) The National TAC shall be composed of 10 to 20 members who may
meet as a whole or in committees, as the Secretary may determine.
    (3) The Secretary shall, through a notice published in the Federal
Register--
    (i) Solicit nominations from the public for members of the National
TAC; and
    (ii) Publish the list of members, once selected.
    (4) The Secretary shall screen nominees for membership on the
National TAC for potential conflicts of interest to prevent, to the
extent possible, such conflicts, or the appearance thereof, in the
National TAC's performance of its responsibilities under this section.
    (c) The Secretary shall use the National TAC to provide its expert
opinions on matters that arise during the State Plan review process.
    (d) The Secretary shall prescribe and publish the rules of procedure
for the National TAC.

(Authority: 20 U.S.C. 6311(e))

[73 FR 64510, Oct. 29, 2008]



Sec. Sec. 200.23-200.24  [Reserved]

                           Schoolwide Programs



Sec. 200.25  Schoolwide programs in general.

    (a) Purpose. (1) The purpose of a schoolwide program is to improve
academic achievement throughout a school so that all students,
particularly the lowest-achieving students, demonstrate proficiency
related to the State's academic standards under Sec. 200.1.
    (2) The improved achievement is to result from improving the entire
educational program of the school.
    (b) Eligibility. (1) A school may operate a schoolwide program if--
    (i) The school's LEA determines that the school serves an eligible
attendance area or is a participating school under section 1113 of the
ESEA; and
    (ii) For the initial year of the schoolwide program--
    (A) The school serves a school attendance area in which not less
than 40 percent of the children are from low-income families; or
    (B) Not less than 40 percent of the children enrolled in the school
are from low-income families.
    (2) In determining the percentage of children from low-income
families under paragraph (b)(1)(ii) of this section, the LEA may use a
measure of poverty that is different from the measure or measures of
poverty used by the LEA to identify and rank school attendance areas for
eligibility and participation under subpart A of this part.
    (c) Participating students and services. A school operating a
schoolwide program is not required to--

[[Page 449]]

    (1) Identify particular children as eligible to participate; or
    (2) As required under section 1120A(b) of the ESEA, provide services
that supplement, and do not supplant, the services participating
children would otherwise receive if they were not participating in a
program under subpart A of this part.
    (d) Supplemental funds. A school operating a schoolwide program must
use funds available under subpart A of this part and under any other
Federal program included under paragraph (e) of this section and Sec.
200.29 only to supplement the total amount of funds that would, in the
absence of the Federal funds, be made available from non-Federal sources
for that school, including funds needed to provide services that are
required by law for children with disabilities and children with limited
English proficiency.
    (e) Consolidation of funds. An eligible school may, consistent with
Sec. 200.29, consolidate and use funds or services under subpart A of
this part, together with other Federal, State, and local funds that the
school receives, to operate a schoolwide program in accordance with
Sec. Sec. 200.25 through 200.29.
    (f) Prekindergarten program. A school operating a schoolwide program
may use funds made available under subpart A of this part to establish
or enhance prekindergarten programs for children below the age of 6,
such as Even Start programs or Early Reading First programs.

(Authority: 20 U.S.C. 6314)

[67 FR 71718, Dec. 2, 2002]



Sec. 200.26  Core elements of a schoolwide program.

    (a) Comprehensive needs assessment. (1) A school operating a
schoolwide program must conduct a comprehensive needs assessment of the
entire school that--
    (i) Is based on academic achievement information about all students
in the school, including all groups under Sec. 200.13(b)(7) and
migratory children as defined in section 1309(2) of the ESEA, relative
to the State's academic standards under Sec. 200.1 to--
    (A) Help the school understand the subjects and skills for which
teaching and learning need to be improved; and
    (B) Identify the specific academic needs of students and groups of
students who are not yet achieving the State's academic standards; and
    (ii) Assesses the needs of the school relative to each of the
components of the schoolwide program under Sec. 200.28.
    (2) The comprehensive needs assessment must be developed with the
participation of individuals who will carry out the schoolwide program
plan.
    (3) The school must document how it conducted the needs assessment,
the results it obtained, and the conclusions it drew from those results.
    (b) Comprehensive plan. Using data from the comprehensive needs
assessment under paragraph (a) of this section, a school that wishes to
operate a schoolwide program must develop a comprehensive plan, in
accordance with Sec. 200.27, that describes how the school will improve
academic achievement throughout the school, but particularly for those
students furthest away from demonstrating proficiency, so that all
students demonstrate at least proficiency on the State's academic
standards.
    (c) Evaluation. A school operating a schoolwide program must--
    (1) Annually evaluate the implementation of, and results achieved
by, the schoolwide program, using data from the State's annual
assessments and other indicators of academic achievement;
    (2) Determine whether the schoolwide program has been effective in
increasing the achievement of students in meeting the State's academic
standards, particularly for those students who had been furthest from
achieving the standards; and
    (3) Revise the plan, as necessary, based on the results of the
evaluation, to ensure continuous improvement of students in the
schoolwide program.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6314)

[67 FR 71718, Dec. 2, 2002]

[[Page 450]]



Sec. 200.27  Development of a schoolwide program plan.

    (a)(1) A school operating a schoolwide program must develop a
comprehensive plan to improve teaching and learning throughout the
school.
    (2) The school must develop the comprehensive plan in consultation
with the LEA and its school support team or other technical assistance
provider under section 1117 of the ESEA.
    (3) The comprehensive plan must--
    (i) Describe how the school will carry out each of the components
under Sec. 200.28;
    (ii) Describe how the school will use resources under subpart A of
this part and from other sources to carry out the components under Sec.
200.28; and
    (iii) Include a list of State and local programs and other Federal
programs under Sec. 200.29 that the school will consolidate in the
schoolwide program.
    (b)(1) The school must develop the comprehensive plan, including the
comprehensive needs assessment, over a one-year period unless--
    (i) The LEA, after considering the recommendations of its technical
assistance providers under section 1117 of the ESEA, determines that
less time is needed to develop and implement the schoolwide program; or
    (ii) The school was operating a schoolwide program on or before
January 7, 2002, in which case the school may continue to operate its
program, but must amend its existing plan to reflect the provisions of
Sec. Sec. 200.25 through 200.29 during the 2002-2003 school year.
    (2) The school must develop the comprehensive plan with the
involvement of parents, consistent with the requirements of section 1118
of the ESEA, and other members of the community to be served and
individuals who will carry out the plan, including--
    (i) Teachers, principals, and administrators, including
administrators of programs described in other parts of Title I of the
ESEA;
    (ii) If appropriate, pupil services personnel, technical assistance
providers, and other school staff; and
    (iii) If the plan relates to a secondary school, students from the
school.
    (3) If appropriate, the school must develop the comprehensive plan
in coordination with other programs, including those carried out under
Reading First, Early Reading First, Even Start, the Carl D. Perkins
Vocational and Technical Education Act of 1998, and the Head Start Act.
    (4) The comprehensive plan remains in effect for the duration of the
school's participation under Sec. Sec. 200.25 through 200.29.
    (c)(1) The schoolwide program plan must be available to the LEA,
parents, and the public.
    (2) Information in the plan must be--
    (i) In an understandable and uniform format, including alternative
formats upon request; and
    (ii) To the extent practicable, provided in a language that the
parents can understand.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6314)

[67 FR 71719, Dec. 2, 2002]



Sec. 200.28  Schoolwide program components.

    A schoolwide program must include the following components:
    (a) Schoolwide reform strategies. The schoolwide program must
incorporate reform strategies in the overall instructional program.
Those strategies must--
    (1) Provide opportunities for all students to meet the State's
proficient and advanced levels of student academic achievement;
    (2)(i) Address the needs of all students in the school, particularly
the needs of low-achieving students and those at risk of not meeting the
State's student academic achievement standards who are members of the
target population of any program included in the schoolwide program; and
    (ii) Address how the school will determine if those needs have been
met;
    (3) Use effective methods and instructional practices that are based
on scientifically based research, as defined in section 9101 of the
ESEA, and that--
    (i) Strengthen the core academic program;
    (ii) Provide an enriched and accelerated curriculum;
    (iii) Increase the amount and quality of learning time, such as
providing an extended school year and before- and

[[Page 451]]

after-school and summer programs and opportunities;
    (iv) Include strategies for meeting the educational needs of
historically underserved populations; and
    (v) Are consistent with, and are designed to implement, State and
local improvement plans, if any.
    (b) Instruction by highly qualified teachers. A schoolwide program
must ensure instruction by highly qualified teachers and provide ongoing
professional development. The schoolwide program must--
    (1) Include strategies to attract highly qualified teachers, as
defined in Sec. 200.56;
    (2)(i) Provide high-quality and ongoing professional development in
accordance with sections 1119 and 9101(34) of the ESEA for teachers,
principals, paraprofessionals and, if appropriate, pupil services
personnel, parents, and other staff, to enable all students in the
school to meet the State's student academic standards; and
    (ii) Align professional development with the State's academic
standards;
    (3) Devote sufficient resources to carry out effectively the
professional development activities described in paragraph (b)(2) of
this section; and
    (4) Include teachers in professional development activities
regarding the use of academic assessments described in Sec. 200.2 to
enable them to provide information on, and to improve, the achievement
of individual students and the overall instructional program.
    (c) Parental involvement. (1) A schoolwide program must involve
parents in the planning, review, and improvement of the schoolwide
program plan.
    (2) A schoolwide program must have a parental involvement policy,
consistent with section 1118(b) of the ESEA, that--
    (i) Includes strategies, such as family literacy services, to
increase parental involvement in accordance with sections 1118(c)
through (f) and 9101(32) of the ESEA; and
    (ii) Describes how the school will provide individual student
academic assessment results, including an interpretation of those
results, to the parents of students who participate in the academic
assessments required by Sec. 200.2.
    (d) Additional support. A schoolwide program school must include
activities to ensure that students who experience difficulty attaining
the proficient or advanced levels of academic achievement standards
required by Sec. 200.1 will be provided with effective, timely
additional support, including measures to--
    (1) Ensure that those students' difficulties are identified on a
timely basis; and
    (2) Provide sufficient information on which to base effective
assistance to those students.
    (e) Transition. A schoolwide program in an elementary school must
include plans for assisting preschool students in the successful
transition from early childhood programs, such as Head Start, Even
Start, Early Reading First, or a preschool program under IDEA or a
State-run preschool program, to the schoolwide program.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6314)

[67 FR 71719, Dec. 2, 2002]



Sec. 200.29  Consolidation of funds in a schoolwide program.

    (a)(1) In addition to funds under subpart A of this part, a school
may consolidate and use in its schoolwide program Federal funds from any
program administered by the Secretary that is included in the most
recent notice published for this purpose in the Federal Register.
    (2) For purposes of Sec. Sec. 200.25 through 200.29, the authority
to consolidate funds from other Federal programs also applies to
services provided to the school with those funds.
    (b)(1) Except as provided in paragraphs (b)(2) and (c) of this
section, a school that consolidates and uses in a schoolwide program
funds from any other Federal program administered by the Secretary--
    (i) Is not required to meet the statutory or regulatory requirements
of that program applicable at the school level; but
    (ii) Must meet the intent and purposes of that program to ensure
that

[[Page 452]]

the needs of the intended beneficiaries of that program are addressed.
    (2) A school that chooses to consolidate funds from other Federal
programs must meet the requirements of those programs relating to--
    (i) Health;
    (ii) Safety;
    (iii) Civil rights;
    (iv) Student and parental participation and involvement;
    (v) Services to private school children;
    (vi) Maintenance of effort;
    (vii) Comparability of services;
    (viii) Use of Federal funds to supplement, not supplant non-Federal
funds in accordance with Sec. 200.25(d); and
    (ix) Distribution of funds to SEAs or LEAs.
    (c) A school must meet the following requirements if the school
consolidates and uses funds from these programs in its schoolwide
program:
    (1) Migrant education. Before the school chooses to consolidate in
its schoolwide program funds received under part C of Title I of the
ESEA, the school must--
    (i) Use these funds, in consultation with parents of migratory
children or organizations representing those parents, or both, first to
meet the unique educational needs of migratory students that result from
the effects of their migratory lifestyle, and those other needs that are
necessary to permit these students to participate effectively in school,
as identified through the comprehensive Statewide needs assessment under
Sec. 200.83; and
    (ii) Document that these needs have been met.
    (2) Indian education. The school may consolidate funds received
under subpart 1 of part A of Title VII of the ESEA if the parent
committee established by the LEA under section 7114(c)(4) of the ESEA
approves the inclusion of these funds.
    (3) Special education. (i) The school may consolidate funds received
under part B of the IDEA.
    (ii) However, the amount of funds consolidated may not exceed the
amount received by the LEA under part B of IDEA for that fiscal year,
divided by the number of children with disabilities in the jurisdiction
of the LEA, and multiplied by the number of children with disabilities
participating in the schoolwide program.
    (iii) The school may also consolidate funds received under section
8003(d) of the ESEA (Impact Aid) for children with disabilities in a
schoolwide program.
    (iv) A school that consolidates funds under part B of IDEA or
section 8003(d) of the ESEA may use those funds for any activities under
its schoolwide program plan but must comply with all other requirements
of part B of IDEA, to the same extent it would if it did not consolidate
funds under part B of IDEA or section 8003(d) of the ESEA in the
schoolwide program.
    (d) A school that consolidates and uses in a schoolwide program
funds under subpart A of this part or from any other Federal program
administered by the Secretary--
    (1) Is not required to maintain separate fiscal accounting records,
by program, that identify the specific activities supported by those
particular funds; but
    (2) Must maintain records that demonstrate that the schoolwide
program, as a whole, addresses the intent and purposes of each of the
Federal programs whose funds were consolidated to support the schoolwide
program.
    (e) Each State must--
    (1) Encourage schools to consolidate funds from other Federal,
State, and local sources in their schoolwide programs; and
    (2) Modify or eliminate State fiscal and accounting barriers so that
schools can easily consolidate funds from other Federal, State, and
local sources in their schoolwide programs.

(Authority: 20 U.S.C. 6314, 1413(a)(s)(D), 6396(b), 7703(d), 7815(c))

[67 FR 71720, Dec. 2, 2002; 68 FR 1008, Jan. 8, 2003]

                       LEA and School Improvement



Sec. 200.30  Local review.

    (a) Each LEA receiving funds under subpart A of this part must use
the results of the State assessment system described in Sec. 200.2 to
review annually the progress of each school served

[[Page 453]]

under subpart A of this part to determine whether the school is making
AYP in accordance with Sec. 200.20.
    (b)(1) In reviewing the progress of an elementary or secondary
school operating a targeted assistance program, an LEA may choose to
review the progress of only the students in the school who are served,
or are eligible for services, under subpart A of this part.
    (2) The LEA may exercise the option under paragraph (b)(1) of this
section so long as the students selected for services under the targeted
assistance program are those with the greatest need for special
assistance, consistent with the requirements of section 1115 of the
ESEA.
    (c)(1) To determine whether schools served under subpart A of this
part are making AYP, an LEA also may use any additional academic
assessments or any other academic indicators described in the LEA's
plan.
    (2)(i) The LEA may use these assessments and indicators--
    (A) To identify additional schools for school improvement or in need
of corrective action or restructuring; and
    (B) To permit a school to make AYP if, in accordance with Sec.
200.20(b), the school also reduces the percentage of a student group not
meeting the State's proficient level of academic achievement by at least
10 percent.
    (ii) The LEA may not, with the exception described in paragraph
(c)(2)(i)(B) of this section, use these assessments and indicators to
reduce the number of, or change the identity of, the schools that would
otherwise be identified for school improvement, corrective action, or
restructuring if the LEA did not use these additional indicators.
    (d) The LEA must publicize and disseminate the results of its annual
progress review to parents, teachers, principals, schools, and the
community.
    (e) The LEA must review the effectiveness of actions and activities
that schools are carrying out under subpart A of this part with respect
to parental involvement, professional development, and other activities
assisted under subpart A of this part.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(a) and (b))

[67 FR 71720, Dec. 2 2002]



Sec. 200.31  Opportunity to review school-level data.

    (a) Before identifying a school for school improvement, corrective
action, or restructuring, an LEA must provide the school with an
opportunity to review the school-level data, including academic
assessment data, on which the proposed identification is based.
    (b)(1) If the principal of a school that an LEA proposes to identify
for school improvement, corrective action, or restructuring believes, or
a majority of the parents of the students enrolled in the school
believe, that the proposed identification is in error for statistical or
other substantive reasons, the principal may provide supporting evidence
to the LEA.
    (2) The LEA must consider the evidence referred to in paragraph
(b)(1) of this section before making a final determination.
    (c) The LEA must make public a final determination of the status of
the school with respect to identification not later than 30 days after
it provides the school with the opportunity to review the data on which
the proposed identification is based.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b)(2))

[67 FR 71721, Dec. 2, 2002]



Sec. 200.32  Identification for school improvement.

    (a)(1)(i) An LEA must identify for school improvement any elementary
or secondary school served under subpart A of this part that fails, for
two consecutive years, to make AYP as defined under Sec. Sec. 200.13
through 200.20.
    (ii) In identifying schools for improvement, an LEA--
    (A) May base identification on whether a school did not make AYP
because it did not meet the annual measurable objectives for the same
subject

[[Page 454]]

or meet the same other academic indicator for two consecutive years; but
    (B) May not limit identification to those schools that did not make
AYP only because they did not meet the annual measurable objectives for
the same subject or meet the same other academic indicator for the same
subgroup under Sec. 200.13(b)(7)(ii) for two consecutive years.
    (2) The LEA must make the identification described in paragraph
(a)(1) of this section before the beginning of the school year following
the year in which the LEA administered the assessments that resulted in
the school's failure to make AYP for a second consecutive year.
    (b)(1) An LEA must treat any school that was in the first year of
school improvement status on January 7, 2002 as a school that is in the
first year of school improvement under Sec. 200.39 for the 2002-2003
school year.
    (2) Not later than the first day of the 2002-2003 school year, the
LEA must, in accordance with Sec. 200.44, provide public school choice
to all students in the school.
    (c)(1) An LEA must treat any school that was identified for school
improvement for two or more consecutive years on January 7, 2002 as a
school that is in its second year of school improvement under Sec.
200.39 for the 2002-2003 school year.
    (2) Not later than the first day of the 2002-2003 school year, the
LEA must--
    (i) In accordance with Sec. 200.44, provide public school choice to
all students in the school; and
    (ii) In accordance with Sec. 200.45, make available supplemental
educational services to eligible students who remain in the school.
    (d) An LEA may remove from improvement status a school otherwise
subject to the requirements of paragraphs (b) or (c) of this section if,
on the basis of assessments the LEA administers during the 2001-2002
school year, the school makes AYP for a second consecutive year.
    (e)(1) An LEA may, but is not required to, identify a school for
improvement if, on the basis of assessments the LEA administers during
the 2001-2002 school year, the school fails to make AYP for a second
consecutive year.
    (2) An LEA that does not identify such a school for improvement,
however, must count the 2001-2002 school year as the first year of not
making AYP for the purpose of subsequent identification decisions under
paragraph (a) of this section.
    (f) If an LEA identifies a school for improvement after the
beginning of the school year following the year in which the LEA
administered the assessments that resulted in the school's failure to
make AYP for a second consecutive year--
    (1) The school is subject to the requirements of school improvement
under Sec. 200.39 immediately upon identification, including the
provision of public school choice; and
    (2) The LEA must count that school year as a full school year for
the purposes of subjecting the school to additional improvement measures
if the school continues to fail to make AYP.

(Authority: 20 U.S.C. 6316)

[67 FR 71721, Dec. 2, 2002, as amended at 73 FR 64510, Oct. 29, 2008]



Sec. 200.33  Identification for corrective action.

    (a) If a school served by an LEA under subpart A of this part fails
to make AYP by the end of the second full school year after the LEA has
identified the school for improvement under Sec. 200.32(a) or (b), or
by the end of the first full school year after the LEA has identified
the school for improvement under Sec. 200.32(c), the LEA must identify
the school for corrective action under Sec. 200.42.
    (b) If a school was subject to corrective action on January 7, 2002,
the LEA must--
    (1) Treat the school as a school identified for corrective action
under Sec. 200.42 for the 2002-2003 school year; and
    (2) Not later than the first day of the 2002-2003 school year--
    (i) In accordance with Sec. 200.44, provide public school choice to
all students in the school;
    (ii) In accordance with Sec. 200.45, make available supplemental
educational services to eligible students who remain in the school; and

[[Page 455]]

    (iii) Take corrective action under Sec. 200.42.
    (c) An LEA may remove from corrective action a school otherwise
subject to the requirements of paragraphs (a) or (b) of this section if,
on the basis of assessments administered by the LEA during the 2001-2002
school year, the school makes AYP for a second consecutive year.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6316)

[67 FR 71721, Dec. 2, 2002]



Sec. 200.34  Identification for restructuring.

    (a) If a school continues to fail to make AYP after one full school
year of corrective action under Sec. 200.42, the LEA must prepare a
restructuring plan for the school and make arrangements to implement the
plan.
    (b) If the school continues to fail to make AYP, the LEA must
implement the restructuring plan no later than the beginning of the
school year following the year in which the LEA developed the
restructuring plan under paragraph (a) of this section.

(Approved by the Office of Management and Budget under control number
1810-0576)

(Authority: 20 U.S.C. 6316(b)(8))

[67 FR 71721, Dec. 2, 2002]



Sec. 200.35  Delay and removal.

    (a) Delay. (1) An LEA may delay, for a period not to exceed one
year, implementation of requirements under the second year of school
improvement, under corrective action, or under restructuring if--
    (i) The school makes AYP for one year; or
    (ii) The school's failure to make AYP is due to exceptional or
uncontrollable circumstances, such as a natural disaster or a
precipitous and unforeseen decline in the financial resources of the LEA
or school.
    (2) The LEA may not take into account a period of delay under
paragraph (a) of this section in determining the number of consecutive
years of the school's failure to make AYP.
    (3) Except as provided in paragraph (b) of this section, the LEA
must subject the school to further actions as if the delay never
occurred.
    (b) Removal. If any school identified for school improvement,
corrective action, or restructuring makes AYP for two consecutive school
years, the LEA may not, for the succeeding school year--
    (1) Subject the school to the requirements of school improvement,
corrective action, or restructuring; or
    (2) Identify the school for improvement.

(Authority: 20 U.S.C. 6316(b))

[67 FR 71721, Dec. 2, 2002]



Sec. 200.36  Communication with parents.

    (a) Throughout the school improvement process, the State, LEA, or
school must communicate with the parents of each child attending the
school.
    (b) The State, LEA, or school must ensure that, regardless of the
method or media used, it provides the information required by Sec. Sec.
200.37 and 200.38 to parents--
    (1) In an understandable and uniform format, including alternative
formats upon request; and
    (2) To the extent practicable, in a language that parents can
understand.
    (c) The State, LEA, or school must provide information to parents--
    (1) Directly, through such means as regular mail or e-mail, except
that if a State does not have access to individual student addresses, it
may provide information to the LEA or school for distribution to
parents; and
    (2) Through broader means of dissemination such as the Internet, the
media, and public agencies serving the student population and their
families.
    (d) All communications must respect the privacy of students and
their families.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316)

[67 FR 71721, Dec. 2, 2002]



Sec. 200.37  Notice of identification for improvement, corrective
action, or restructuring.

    (a) If an LEA identifies a school for improvement or subjects the
school to corrective action or restructuring, the

[[Page 456]]

LEA must, consistent with the requirements of Sec. 200.36, promptly
notify the parent or parents of each child enrolled in the school of
this identification.
    (b) The notice referred to in paragraph (a) of this section must
include the following:
    (1) An explanation of what the identification means, and how the
school compares in terms of academic achievement to other elementary and
secondary schools served by the LEA and the SEA involved.
    (2) The reasons for the identification.
    (3) An explanation of how parents can become involved in addressing
the academic issues that led to identification.
    (4)(i) An explanation of the parents' option to transfer their child
to another public school, including the provision of transportation to
the new school, in accordance with Sec. 200.44.
    (ii) The explanation of the parents' option to transfer must
include, at a minimum, information on the academic achievement of the
school or schools to which the child may transfer.
    (iii) The explanation may include other information on the school or
schools to which the child may transfer, such as--
    (A) A description of any special academic programs or facilities;
    (B) The availability of before- and after-school programs;
    (C) The professional qualifications of teachers in the core academic
subjects; and
    (D) A description of parental involvement opportunities.
    (iv) The explanation of the available school choices must be made
sufficiently in advance of, but no later than 14 calendar days before,
the start of the school year so that parents have adequate time to
exercise their choice option before the school year begins.
    (5)(i) If the school is in its second year of improvement or subject
to corrective action or restructuring, a notice explaining how parents
can obtain supplemental educational services for their child in
accordance with Sec. 200.45.
    (ii) The annual notice of the availability of supplemental
educational services must include, at a minimum, the following:
    (A) The identity of approved providers of those services available
within the LEA, including providers of technology-based or distance-
learning supplemental educational services, and providers that make
services reasonably available in neighboring LEAs.
    (B) A brief description of the services, qualifications, and
demonstrated effectiveness of the providers referred to in paragraph
(b)(5)(ii)(A) of this section, including an indication of those
providers who are able to serve students with disabilities or limited
English proficient students.
    (C) An explanation of the benefits of receiving supplemental
educational services.
    (iii) The annual notice of the availability of supplemental
educational services must be--
    (A) Clear and concise; and
    (B) Clearly distinguishable from the other information sent to
parents under this section.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316)

[67 FR 71721, Dec. 2, 2002, as amended at 73 FR 64510, Oct. 29, 2008]



Sec. 200.38  Information about action taken.

    (a) An LEA must publish and disseminate to the parents of each
student enrolled in the school, consistent with the requirements of
Sec. 200.36, and to the public information regarding any action taken
by a school and the LEA to address the problems that led to the LEA's
identification of the school for improvement, corrective action, or
restructuring.
    (b) The information referred to in paragraph (a) of this section
must include the following:
    (1) An explanation of what the school is doing to address the
problem of low achievement.
    (2) An explanation of what the LEA or SEA is doing to help the
school address the problem of low achievement.

[[Page 457]]

    (3) If applicable, a description of specific corrective actions or
restructuring plans.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b))

[67 FR 71721, Dec. 2, 2002]



Sec. 200.39  Responsibilities resulting from identification for school
improvement.

    (a) If an LEA identifies a school for school improvement under Sec.
200.32--
    (1) The LEA must--
    (i) Not later than the first day of the school year following
identification, with the exception described in Sec. 200.32(f), provide
all students enrolled in the school with the option to transfer, in
accordance with Sec. 200.44, to another public school served by the
LEA; and
    (ii) Ensure that the school receives technical assistance in
accordance with Sec. 200.40; and
    (2) The school must develop or revise a school improvement plan in
accordance with Sec. 200.41.
    (b) If a school fails to make AYP by the end of the first full
school year after the LEA has identified it for improvement under Sec.
200.32, the LEA must--
    (1) Continue to provide all students enrolled in the school with the
option to transfer, in accordance with Sec. 200.44, to another public
school served by the LEA;
    (2) Continue to ensure that the school receives technical assistance
in accordance with Sec. 200.40; and
    (3) Make available supplemental educational services in accordance
with Sec. 200.45.
    (c)(1) Except as provided in paragraph (c)(2) of this section, the
LEA must prominently display on its Web site, in a timely manner to
ensure that parents have current information, the following information
regarding the LEA's implementation of the public school choice and
supplemental educational services requirements of the Act and this part:
    (i) Beginning with data from the 2007-2008 school year and for each
subsequent school year, the number of students who were eligible for and
the number of students who participated in public school choice.
    (ii) Beginning with data from the 2007-2008 school year and for each
subsequent school year, the number of students who were eligible for and
the number of students who participated in supplemental educational
services.
    (iii) For the current school year, a list of supplemental
educational services providers approved by the State to serve the LEA
and the locations where services are provided.
    (iv) For the current school year, a list of available schools to
which students eligible to participate in public school choice may
transfer.
    (2) If the LEA does not have its own Web site, the SEA must include
on the SEA's Web site the information required in paragraph (c)(1) of
this section for the LEA.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b))

[67 FR 71721, Dec. 2, 2002, as amended at 73 FR 64511, Oct. 29, 2008]



Sec. 200.40  Technical assistance.

    (a) An LEA that identifies a school for improvement under Sec.
200.32 must ensure that the school receives technical assistance as the
school develops and implements its improvement plan under Sec. 200.41
and throughout the plan's duration.
    (b) The LEA may arrange for the technical assistance to be provided
by one or more of the following:
    (1) The LEA through the statewide system of school support and
recognition described under section 1117 of the ESEA.
    (2) The SEA.
    (3) An institution of higher education that is in full compliance
with all of the reporting provisions of Title II of the Higher Education
Act of 1965.
    (4) A private not-for-profit organization, a private for-profit
organization, an educational service agency, or another entity with
experience in helping schools improve academic achievement.
    (c) The technical assistance must include the following:
    (1) Assistance in analyzing data from the State assessment system,
and

[[Page 458]]

other examples of student work, to identify and develop solutions to
problems in--
    (i) Instruction;
    (ii) Implementing the requirements for parental involvement and
professional development under this subpart; and
    (iii) Implementing the school plan, including LEA- and school-level
responsibilities under the plan.
    (2) Assistance in identifying and implementing professional
development and instructional strategies and methods that have proved
effective, through scientifically based research, in addressing the
specific instructional issues that caused the LEA to identify the school
for improvement.
    (3) Assistance in analyzing and revising the school's budget so that
the school allocates its resources more effectively to the activities
most likely to--
    (i) Increase student academic achievement; and
    (ii) Remove the school from school improvement status.
    (d) Technical assistance provided under this section must be based
on scientifically based research.

(Authority: 20 U.S.C. 6316(b)(4))

[67 FR 71723, Dec. 2, 2002]



Sec. 200.41  School improvement plan.

    (a)(1) Not later than three months after an LEA has identified a
school for improvement under Sec. 200.32, the school must develop or
revise a school improvement plan for approval by the LEA.
    (2) The school must consult with parents, school staff, the LEA, and
outside experts in developing or revising its school improvement plan.
    (b) The school improvement plan must cover a 2-year period.
    (c) The school improvement plan must--
    (1) Specify the responsibilities of the school, the LEA, and the SEA
serving the school under the plan, including the technical assistance to
be provided by the LEA under Sec. 200.40;
    (2)(i) Incorporate strategies, grounded in scientifically based
research, that will strengthen instruction in the core academic subjects
at the school and address the specific academic issues that caused the
LEA to identify the school for improvement; and
    (ii) May include a strategy for implementing a comprehensive school
reform model described in section 1606 of the ESEA;
    (3) With regard to the school's core academic subjects, adopt
policies and practices most likely to ensure that all groups of students
described in Sec. 200.13(b)(7) and enrolled in the school will meet the
State's proficient level of achievement, as measured by the State's
assessment system, not later than the 2013-2014 school year;
    (4) Establish measurable goals that--
    (i) Address the specific reasons for the school's failure to make
adequate progress; and
    (ii) Promote, for each group of students described in Sec.
200.13(b)(7) and enrolled in the school, continuous and substantial
progress that ensures that all these groups meet the State's annual
measurable objectives described in Sec. 200.18;
    (5) Provide an assurance that the school will spend not less than 10
percent of the allocation it receives under subpart A of this part for
each year that the school is in school improvement status, for the
purpose of providing high-quality professional development to the
school's teachers, principal, and, as appropriate, other instructional
staff, consistent with section 9101(34) of the ESEA, that--
    (i) Directly addresses the academic achievement problem that caused
the school to be identified for improvement;
    (ii) Is provided in a manner that affords increased opportunity for
participating in that professional development; and
    (iii) Incorporates teacher mentoring activities or programs;
    (6) Specify how the funds described in paragraph (c)(5) of this
section will be used to remove the school from school improvement
status;
    (7) Describe how the school will provide written notice about the
identification to parents of each student enrolled in the school;
    (8) Include strategies to promote effective parental involvement at
the school; and

[[Page 459]]

    (9) As appropriate, incorporate activities before school, after
school, during the summer, and during any extension of the school year.
    (d)(1) Within 45 days of receiving a school improvement plan, the
LEA must--
    (i) Establish a peer-review process to assist with review of the
plan;
    (ii) Promptly review the plan;
    (iii) Work with the school to make any necessary revisions; and
    (iv) Approve the plan if it meets the requirements of this section.
    (2) The LEA may condition approval of the school improvement plan
on--
    (i) Inclusion of one or more of the corrective actions specified in
Sec. 200.42; or
    (ii) Feedback on the plan from parents and community leaders.
    (e) A school must implement its school improvement plan immediately
on approval of the plan by the LEA.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b)(3))

[67 FR 71723, Dec. 2, 2002]



Sec. 200.42  Corrective action.

    (a) Definition. ``Corrective action'' means action by an LEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure of a school that led the LEA to
identify the school for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the
school;
    (2) Is designed to increase substantially the likelihood that each
group of students described in Sec. 200.13(b)(7) and enrolled in the
school will meet or exceed the State's proficient levels of achievement
as measured by the State assessment system; and
    (3) Is consistent with State law.
    (b) Requirements. If an LEA identifies a school for corrective
action, in accordance with Sec. 200.33, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with the
option to transfer to another public school in accordance with Sec.
200.44.
    (2) Continue to ensure that the school receives technical assistance
consistent with the requirements of Sec. 200.40.
    (3) Make available supplemental educational services in accordance
with Sec. 200.45.
    (4) Take at least one of the following corrective actions:
    (i) Replace the school staff who are relevant to the school's
failure to make AYP.
    (ii) Institute and fully implement a new curriculum, including the
provision of appropriate professional development for all relevant
staff, that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement
for low-achieving students and of enabling the school to make AYP.
    (iii) Significantly decrease management authority at the school
level.
    (iv) Appoint one or more outside experts to advise the school on--
    (A) Revising the school improvement plan developed under Sec.
200.41 to address the specific issues underlying the school's continued
failure to make AYP and resulting in identification for corrective
action; and
    (B) Implementing the revised improvement plan.
    (v) Extend for that school the length of the school year or school
day.
    (vi) Restructure the internal organization of the school.
    (5) Continue to comply with Sec. 200.39(c).

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b)(7))

[67 FR 71723, Dec. 2, 2002, as amended at 73 FR 78637, Dec. 23, 2008]



Sec. 200.43  Restructuring.

    (a) Definition. ``Restructuring'' means a major reorganization of a
school's governance arrangement by an LEA that--
    (1) Makes fundamental reforms to improve student academic
achievement in the school;
    (2) Has substantial promise of enabling the school to make AYP as
defined under Sec. Sec. 200.13 through 200.20;
    (3) Is consistent with State law;

[[Page 460]]

    (4) Is significantly more rigorous and comprehensive than the
corrective action that the LEA implemented in the school under Sec.
200.42, unless the school has begun to implement one of the options in
paragraph (b)(3) of this section as a corrective action; and
    (5) Addresses the reasons why the school was identified for
restructuring in order to enable the school to exit restructuring as
soon as possible.
    (b) Requirements. If the LEA identifies a school for restructuring
in accordance with Sec. 200.34, the LEA must do the following:
    (1) Continue to provide all students enrolled in the school with the
option to transfer to another public school in accordance with Sec.
200.44.
    (2) Make available supplemental educational services in accordance
with Sec. 200.45.
    (3) Prepare a plan to carry out one of the following alternative
governance arrangements:
    (i) Reopen the school as a public charter school.
    (ii) Replace all or most of the school staff (which may include, but
may not be limited to, replacing the principal) who are relevant to the
school's failure to make AYP.
    (iii) Enter into a contract with an entity, such as a private
management company, with a demonstrated record of effectiveness, to
operate the school as a public school.
    (iv) Turn the operation of the school over to the SEA, if permitted
under State law and agreed to by the State.
    (v) Any other major restructuring of a school's governance
arrangement that makes fundamental reforms, such as significant changes
in the school's staffing and governance, in order to improve student
academic achievement in the school and that has substantial promise of
enabling the school to make AYP. The major restructuring of a school's
governance may include replacing the principal so long as this change is
part of a broader reform effort.
    (4) Provide to parents and teachers--
    (i) Prompt notice that the LEA has identified the school for
restructuring; and
    (ii) An opportunity for parents and teachers to--
    (A) Comment before the LEA takes any action under a restructuring
plan; and
    (B) Participate in the development of any restructuring plan.
    (5) Continue to comply with Sec. 200.39(c).
    (c) Implementation. (1) If a school continues to fail to make AYP,
the LEA must--
    (i) Implement the restructuring plan no later than the beginning of
the school year following the year in which the LEA developed the
restructuring plan under paragraph (b)(3) of this section;
    (ii) Continue to offer public school choice and supplemental
educational services in accordance with Sec. Sec. 200.44 and 200.45;
and
    (iii) Continue to comply with Sec. 200.39(c).
    (2) An LEA is no longer required to carry out the requirements of
paragraph (c)(1) of this section if the restructured school makes AYP
for two consecutive school years.
    (d) Rural schools. On request, the Secretary will provide technical
assistance for developing and carrying out a restructuring plan to any
rural LEA--
    (1) That has fewer than 600 students in average daily attendance at
all of its schools; and
    (2) In which all of the schools have a School Locale Code of 7 or 8,
as determined by the National Center for Education Statistics.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(b)(8))

[67 FR 71723, Dec. 2, 2002, as amended at 73 FR 64511, Oct. 29, 2008; 73
FR 78637, Dec. 23, 2008]



Sec. 200.44  Public school choice.

    (a) Requirements. (1) In the case of a school identified for school
improvement under Sec. 200.32, for corrective action under Sec.
200.33, or for restructuring under Sec. 200.34, the LEA must provide
all students enrolled in the school with the option to transfer to
another public school served by the LEA.
    (2) The LEA must offer this option, through the notice required in
Sec. 200.37, so that students may transfer in the school year following
the school year

[[Page 461]]

in which the LEA administered the assessments that resulted in its
identification of the school for improvement, corrective action, or
restructuring.
    (3) The schools to which students may transfer under paragraph
(a)(1) of this section--
    (i) May not include schools that--
    (A) The LEA has identified for improvement under Sec. 200.32,
corrective action under Sec. 200.33, or restructuring under Sec.
200.34; or
    (B) Are persistently dangerous as determined by the State; and
    (ii) May include one or more public charter schools.
    (4) If more than one school meets the requirements of paragraph
(a)(3) of this section, the LEA must--
    (i) Provide to parents of students eligible to transfer under
paragraph (a)(1) of this section a choice of more than one such school;
and
    (ii) Take into account the parents' preferences among the choices
offered under paragraph (a)(4)(i) of this section.
    (5) The LEA must offer the option to transfer described in this
section unless it is prohibited by State law in accordance with
paragraph (b) of this section.
    (6) Except as described in Sec. Sec. 200.32(d) and 200.33(c), if a
school was in school improvement or subject to corrective action before
January 8, 2002, the State must ensure that the LEA provides a public
school choice option in accordance with paragraph (a)(1) of this section
not later than the first day of the 2002-2003 school year.
    (b) Limitation on State law prohibition. An LEA may invoke the State
law prohibition on choice described in paragraph (a)(5) of this section
only if the State law prohibits choice through restrictions on public
school assignments or the transfer of students from one public school to
another public school.
    (c) Desegregation plans. (1) If an LEA is subject to a desegregation
plan, whether that plan is voluntary, court-ordered, or required by a
Federal or State administrative agency, the LEA is not exempt from the
requirement in paragraph (a)(1) of this section.
    (2) In determining how to provide students with the option to
transfer to another school, the LEA may take into account the
requirements of the desegregation plan.
    (3) If the desegregation plan forbids the LEA from offering the
transfer option required under paragraph (a)(1) of this section, the LEA
must secure appropriate changes to the plan to permit compliance with
paragraph (a)(1) of this section.
    (d) Capacity. An LEA may not use lack of capacity to deny students
the option to transfer under paragraph (a)(1) of this section.
    (e) Priority. (1) In providing students the option to transfer to
another public school in accordance with paragraph (a)(1) of this
section, the LEA must give priority to the lowest-achieving students
from low-income families.
    (2) The LEA must determine family income on the same basis that the
LEA uses to make allocations to schools under subpart A of this part.
    (f) Status. Any public school to which a student transfers under
paragraph (a)(1) of this section must ensure that the student is
enrolled in classes and other activities in the school in the same
manner as all other students in the school.
    (g) Duration of transfer. (1) If a student exercises the option
under paragraph (a)(1) of this section to transfer to another public
school, the LEA must permit the student to remain in that school until
the student has completed the highest grade in the school.
    (2) The LEA's obligation to provide transportation for the student
may be limited under the circumstances described in paragraph (i) of
this section and in Sec. 200.48.
    (h) No eligible schools within an LEA. If all public schools to
which a student may transfer within an LEA are identified for school
improvement, corrective action, or restructuring, the LEA--
    (1) Must, to the extent practicable, establish a cooperative
agreement for a transfer with one or more other LEAs in the area; and
    (2) May offer supplemental educational services to eligible students
under Sec. 200.45 in schools in their first year of school improvement
under Sec. 200.39.
    (i) Transportation. (1) If a student exercises the option under
paragraph

[[Page 462]]

(a)(1) of this section to transfer to another public school, the LEA
must, consistent with Sec. 200.48, provide or pay for the student's
transportation to the school.
    (2) The limitation on funding in Sec. 200.48 applies only to the
provision of choice-related transportation, and does not affect in any
way the basic obligation to provide an option to transfer as required by
paragraph (a) of this section.
    (3) The LEA's obligation to provide transportation for the student
ends at the end of the school year in which the school from which the
student transferred is no longer identified by the LEA for school
improvement, corrective action, or restructuring.
    (j) Students with disabilities and students covered under Section
504 of the Rehabilitation Act of 1973 (Section 504). For students with
disabilities under the IDEA and students covered under Section 504, the
public school choice option must provide a free appropriate public
education as that term is defined in section 602(8) of the IDEA or 34
CFR 104.33, respectively.

(Authority: 20 U.S.C. 6316)

[67 FR 71723, Dec. 2, 2002, as amended at 73 FR 65411, Oct. 29, 2008]



Sec. 200.45  Supplemental educational services.

    (a) Definition. ``Supplemental educational services'' means tutoring
and other supplemental academic enrichment services that are--
    (1) In addition to instruction provided during the school day;
    (2) Specifically designed to--
    (i) Increase the academic achievement of eligible students as
measured by the State's assessment system; and
    (ii) Enable these children to attain proficiency in meeting State
academic achievement standards; and
    (3) Of high quality and research-based.
    (b) Eligibility. (1) Only students from low-income families are
eligible for supplemental educational services.
    (2) The LEA must determine family income on the same basis that the
LEA uses to make allocations to schools under subpart A of this part.
    (c) Requirement. (1) If an LEA identifies a school for a second year
of improvement under Sec. 200.32, corrective action under Sec. 200.33,
or restructuring under Sec. 200.34, the LEA must arrange, consistent
with paragraph (d) of this section, for each eligible student in the
school to receive supplemental educational services from a State-
approved provider selected by the student's parents.
    (2) Except as described in Sec. Sec. 200.32(d) and 200.33(c), if a
school was in school improvement status for two or more consecutive
school years or subject to corrective action on January 7, 2002, the
State must ensure that the LEA makes available, consistent with
paragraph (d) of this section, supplemental educational services to all
eligible students not later than the first day of the 2002-2003 school
year.
    (3) The LEA must, consistent with Sec. 200.48, continue to make
available supplemental educational services to eligible students until
the end of the school year in which the LEA is making those services
available.
    (4)(i) At the request of an LEA, the SEA may waive, in whole or in
part, the requirement that the LEA make available supplemental
educational services if the SEA determines that--
    (A) None of the providers of those services on the list approved by
the SEA under Sec. 200.47 makes those services available in the area
served by the LEA or within a reasonable distance of that area; and
    (B) The LEA provides evidence that it is not otherwise able to make
those services available.
    (ii) The SEA must notify the LEA, within 30 days of receiving the
LEA's request for a waiver under paragraph (c)(4)(i) of this section,
whether it approves or disapproves the request and, if it disapproves,
the reasons for the disapproval, in writing.
    (iii) An LEA that receives a waiver must renew its request for that
waiver on an annual basis.
    (d) Priority. If the amount of funds available for supplemental
educational services is insufficient to provide services to each student
whose parents request these services, the LEA must

[[Page 463]]

give priority to the lowest-achieving students.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316)

[67 FR 71723, Dec. 2, 2002]



Sec. 200.46  LEA responsibilities for supplemental educational services.

    (a) If an LEA is required to make available supplemental educational
services under Sec. 200.39(b)(3), Sec. 200.42(b)(3), or Sec.
200.43(b)(2), the LEA must do the following:
    (1) Provide the annual notice to parents described in Sec.
200.37(b)(5).
    (2) If requested, assist parents in choosing a provider from the
list of approved providers maintained by the SEA.
    (3) Apply fair and equitable procedures for serving students if the
number of spaces at approved providers is not sufficient to serve all
eligible students whose parents request services consistent with Sec.
200.45.
    (4) Ensure that eligible students with disabilities under IDEA and
students covered under Section 504 receive appropriate supplemental
educational services and accommodations in the provision of those
services.
    (5) Ensure that eligible students who have limited English
proficiency receive appropriate supplemental educational services and
language assistance in the provision of those services.
    (6) Not disclose to the public, without the written permission of
the student's parents, the identity of any student who is eligible for,
or receiving, supplemental educational services.
    (b)(1) In addition to meeting the requirements in paragraph (a) of
this section, the LEA must enter into an agreement with each provider
selected by a parent or parents.
    (2) The agreement must--
    (i) Require the LEA to develop, in consultation with the parents and
the provider, a statement that includes--
    (A) Specific achievement goals for the student;
    (B) A description of how the student's progress will be measured;
and
    (C) A timetable for improving achievement;
    (ii) Describe procedures for regularly informing the student's
parents and teachers of the student's progress;
    (iii) Provide for the termination of the agreement if the provider
is unable to meet the goals and timetables specified in the agreement;
    (iv) Specify how the LEA will pay the provider; and
    (v) Prohibit the provider from disclosing to the public, without the
written permission of the student's parents, the identity of any student
who is eligible for, or receiving, supplemental educational services.
    (3) In the case of a student with disabilities under IDEA or a
student covered under Section 504, the provisions of the agreement
referred to in paragraph (b)(2)(i) of this section must be consistent
with the student's individualized education program under section 614(d)
of the IDEA or the student's individualized services under Section 504.
    (4) The LEA may not pay the provider for religious worship or
instruction.
    (c) If State law prohibits an SEA from carrying out one or more of
its responsibilities under Sec. 200.47 with respect to those who
provide, or seek approval to provide, supplemental educational services,
each LEA must carry out those responsibilities with respect to its
students who are eligible for those services.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(e))

[67 FR 71725, Dec. 2, 2002]



Sec. 200.47  SEA responsibilities for supplemental educational services.

    (a) If one or more LEAs in a State are required to make available
supplemental educational services under Sec. 200.39(b)(3), Sec.
200.42(b)(3), or Sec. 200.43(b)(2), the SEA for that State must do the
following:
    (1)(i) In consultation with affected LEAs, parents, teachers, and
other interested members of the public, promote participation by as many
providers as possible.
    (ii) This promotion must include--
    (A) Annual notice to potential providers of--

[[Page 464]]

    (1) The opportunity to provide supplemental educational services;
and
    (2) Procedures for obtaining the SEA's approval to be a provider of
those services; and
    (B) Posting on the SEA's Web site, for each LEA--
    (1) The amount equal to 20 percent of the LEA's Title I, Part A
allocation available for choice-related transportation and supplemental
educational services, as required in Sec. 200.48(a)(2); and
    (2) The per-child amount for supplemental educational services
calculated under Sec. 200.48(c)(1).
    (2) Consistent with paragraph (b) of this section, develop and apply
to potential providers objective criteria.
    (3)(i) Maintain by LEA an updated list of approved providers,
including any technology-based or distance-learning providers, from
which parents may select; and
    (ii) Indicate on the list those providers that are able to serve
students with disabilities or limited English proficient students.
    (4) Consistent with paragraph (c) of this section, develop,
implement, and publicly report on standards and techniques for--
    (i) Monitoring the quality and effectiveness of the services offered
by each approved provider;
    (ii) Withdrawing approval from a provider that fails, for two
consecutive years, to contribute to increasing the academic proficiency
of students receiving supplemental educational services from that
provider; and
    (iii) Monitoring LEAs' implementation of the supplemental
educational services requirements of the Act and this part.
    (5) Ensure that eligible students with disabilities under IDEA and
students covered under Section 504 receive appropriate supplemental
educational services and accommodations in the provision of those
services.
    (6) Ensure that eligible students who have limited English
proficiency receive appropriate supplemental educational services and
language assistance in the provision of those services.
    (b) Standards for approving providers. (1) As used in this section
and in Sec. 200.46, ``provider'' means a non-profit entity, a for-
profit entity, an LEA, an educational service agency, a public school,
including a public charter school, or a private school that--
    (i) Has a demonstrated record of effectiveness in increasing the
academic achievement of students in subjects relevant to meeting the
State's academic content and student achievement standards described
under Sec. 200.1;
    (ii) Is capable of providing supplemental educational services that
are consistent with the instructional program of the LEA and with the
State academic content standards and State student achievement standards
described under Sec. 200.1;
    (iii) Is financially sound; and
    (iv) In the case of--
    (A) A public school, has not been identified under Sec. 200.32,
Sec. 200.33, or Sec. 200.34; or
    (B) An LEA, has not been identified under Sec. 200.50(d) or (e).
    (2) In order for the SEA to include a provider on the State list,
the provider must agree to--
    (i)(A) Provide parents of each student receiving supplemental
educational services and the appropriate LEA with information on the
progress of the student in increasing achievement; and
    (B) This information must be in an understandable and uniform
format, including alternative formats upon request, and, to the extent
practicable, in a language that the parents can understand;
    (ii) Ensure that the instruction the provider gives and the content
the provider uses--
    (A) Are consistent with the instruction provided and the content
used by the LEA and the SEA;
    (B) Are aligned with State academic content and student academic
achievement standards;
    (C) Are of high quality, research-based, and specifically designed
to increase the academic achievement of eligible children; and
    (D) Are secular, neutral, and nonideological; and
    (iii) Meet all applicable Federal, State, and local health, safety,
and civil rights laws.
    (3) In approving a provider, the SEA must consider, at a minimum--

[[Page 465]]

    (i) Information from the provider on whether the provider has been
removed from any State's approved provider list;
    (ii) Parent recommendations or results from parent surveys, if any,
regarding the success of the provider's instructional program in
increasing student achievement; and
    (iii) Evaluation results, if any, demonstrating that the
instructional program has improved student achievement.
    (4) As a condition of approval, a State may not require a provider
to hire only staff who meet the requirements under Sec. Sec. 200.55 and
200.56.
    (c) Standards for monitoring approved providers. To monitor the
quality and effectiveness of services offered by an approved provider in
order to inform the renewal or the withdrawal of approval of the
provider--
    (1) An SEA must examine, at a minimum, evidence that the provider's
instructional program--
    (i) Is consistent with the instruction provided and the content used
by the LEA and the SEA;
    (ii) Addresses students' individual needs as described in students'
supplemental educational services plans under Sec. 200.46(b)(2)(i);
    (iii) Has contributed to increasing students' academic proficiency;
and
    (iv) Is aligned with the State's academic content and student
academic achievement standards; and
    (2) The SEA must also consider information, if any, regarding--
    (i) Parent recommendations or results from parent surveys regarding
the success of the provider's instructional program in increasing
student achievement; and
    (ii) Evaluation results demonstrating that the instructional program
has improved student achievement.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(e))

[67 FR 71725, Dec. 2, 2002, as amended at 73 FR 64511, Oct. 29, 2008]



Sec. 200.48  Funding for choice-related transportation and supplemental
educational services.

    (a) Amounts required. (1) To pay for choice-related transportation
and supplemental educational services required under section 1116 of the
ESEA, an LEA may use--
    (i) Funds allocated under subpart A of this part;
    (ii) Funds, where allowable, from other Federal education programs;
and
    (iii) State, local, or private resources.
    (2) Unless a lesser amount is needed, the LEA must spend an amount
equal to 20 percent of its allocation under subpart A of this part (``20
percent obligation'') to--
    (i) Provide, or pay for, transportation of students exercising a
choice option under Sec. 200.44;
    (ii) Satisfy all requests for supplemental educational services
under Sec. 200.45; or
    (iii) Pay for both paragraph (a)(2)(i) and (ii) of this section,
except that--
    (A) The LEA must spend a minimum of an amount equal to 5 percent of
its allocation under subpart A of this part on transportation under
paragraph (a)(2)(i) of this section and an amount equal to 5 percent of
its allocation under subpart A of this part for supplemental educational
services under paragraph (a)(2)(ii) of this section, unless lesser
amounts are needed to meet the requirements of Sec. Sec. 200.44 and
200.45;
    (B) Except as provided in paragraph (a)(2)(iii)(C) of this section,
the LEA may not include costs for administration or transportation
incurred in providing supplemental educational services, or
administrative costs associated with the provision of public school
choice options under Sec. 200.44, in the amounts required under
paragraph (a)(2) of this section; and
    (C) The LEA may count in the amount the LEA is required to spend
under paragraph (a) of this section its costs for outreach and
assistance to parents concerning their choice to transfer their child or
to request supplemental educational services, up to an amount equal to
0.2 percent of its allocation under subpart 2 of part A of Title I of
the Act.
    (3) If the amount specified in paragraph (a)(2) of this section is
insufficient to pay all choice-related transportation costs, or to meet
the demand for supplemental educational services,

[[Page 466]]

the LEA may make available any additional needed funds from Federal,
State, or local sources.
    (4) To assist an LEA that does not have sufficient funds to make
available supplemental educational services to all students requesting
these services, an SEA may use funds that it reserves under part A of
Title I and part A of Title V of the ESEA.
    (b) Cap on school-level reduction. (1) An LEA may not, in applying
paragraph (a) of this section, reduce by more than 15 percent the total
amount it makes available under subpart A of this part to a school it
has identified for corrective action or restructuring.
    (2) [Reserved]
    (c) Per-child funding for supplemental educational services. For
each student receiving supplemental educational services under Sec.
200.45, the LEA must make available the lesser of--
    (1) The amount of its allocation under subpart A of this part,
divided by the number of students from families below the poverty level,
as counted under section 1124(c)(1)(A) of the ESEA; or
    (2) The actual costs of the supplemental educational services
received by the student.
    (d) Unexpended funds for choice-related transportation and
supplemental educational services. (1)(i) Except as provided in
paragraph (d)(2) of this section, if an LEA does not meet its 20 percent
obligation in a given school year, the LEA must spend the unexpended
amount in the subsequent school year on choice-related transportation
costs, supplemental educational services, or parent outreach and
assistance (consistent with paragraph (a)(2)(iii)(C) of this section).
    (ii) The LEA must spend the unexpended amount under paragraph
(d)(1)(i) of this section in addition to the amount it is required to
spend to meet its 20 percent obligation in the subsequent school year.
    (2) To spend less than the amount needed to meet its 20 percent
obligation, an LEA must--
    (i) Meet, at a minimum, the following criteria:
    (A) Partner, to the extent practicable, with outside groups, such as
faith-based organizations, other community-based organizations, and
business groups, to help inform eligible students and their families of
the opportunities to transfer or to receive supplemental educational
services.
    (B) Ensure that eligible students and their parents have a genuine
opportunity to sign up to transfer or to obtain supplemental educational
services, including by--
    (1) Providing timely, accurate notice as required in Sec. Sec.
200.36 and 200.37;
    (2) Ensuring that sign-up forms for supplemental educational
services are distributed directly to all eligible students and their
parents and are made widely available and accessible through broad means
of dissemination, such as the Internet, other media, and communications
through public agencies serving eligible students and their families;
and
    (3) Providing a minimum of two enrollment ``windows,'' at separate
points in the school year, that are of sufficient length to enable
parents of eligible students to make informed decisions about requesting
supplemental educational services and selecting a provider.
    (C) Ensure that eligible supplemental educational services providers
are given access to school facilities, using a fair, open, and objective
process, on the same basis and terms as are available to other groups
that seek access to school facilities;
    (ii) Maintain records that demonstrate the LEA has met the criteria
in paragraph (d)(2)(i) of this section; and
    (iii) Notify the SEA that the LEA--
    (A) Has met the criteria in paragraph (d)(2)(i) of this section; and
    (B) Intends to spend the remainder of its 20 percent obligation on
other allowable activities, specifying the amount of that remainder.
    (3)(i) Except as provided in paragraph (d)(3)(ii) of this section,
an SEA must ensure an LEA's compliance with paragraph (d)(2)(i) of this
section through its regular monitoring process.
    (ii)(A) In addition to its regular monitoring process, an SEA must
review any LEA that--

[[Page 467]]

    (1) The SEA determines has spent a significant portion of its 20
percent obligation for other activities under paragraph (d)(2)(iii)(B)
of this section; and
    (2) Has been the subject of multiple complaints, supported by
credible evidence, regarding implementation of the public school choice
or supplemental educational services requirements; and
    (B) The SEA must complete its review by the beginning of the next
school year.
    (4)(i) If an SEA determines under paragraph (d)(3) of this section
that an LEA has failed to meet any of the criteria in paragraph
(d)(2)(i) of this section, the LEA must--
    (A) Spend an amount equal to the remainder specified in paragraph
(d)(2)(iii)(B) of this section in the subsequent school year, in
addition to its 20 percent obligation for that year, on choice-related
transportation costs, supplemental educational services, or parent
outreach and assistance; or
    (B) Meet the criteria in paragraph (d)(2)(i) of this section and
obtain permission from the SEA before spending less in that subsequent
school year than the amount required by paragraph (d)(4)(i)(A) of this
section.
    (ii) The SEA may not grant permission to the LEA under paragraph
(d)(4)(i)(B) of this section unless the SEA has confirmed the LEA's
compliance with paragraph (d)(2)(i) of this section for that subsequent
school year.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316)

[67 FR 71725, Dec. 2, 2002, as amended at 73 FR 64512, Oct. 29, 2008; 73
FR 78637, Dec. 23, 2008]



Sec. 200.49  SEA responsibilities for school improvement, corrective
action, and restructuring.

    (a) Transition requirements for public school choice and
supplemental educational services. (1) Except as described in Sec. Sec.
200.32(d) and 200.33(c), if a school was in school improvement or
subject to corrective action on January 7, 2002, the SEA must ensure
that the LEA for that school provides public school choice in accordance
with Sec. 200.44 not later than the first day of the 2002-2003 school
year.
    (2) Except as described in Sec. Sec. 200.32(d) and 200.33(c), if a
school was in school improvement status for two or more consecutive
school years or subject to corrective action on January 7, 2002, the SEA
must ensure that the LEA for that school makes available supplemental
educational services in accordance with Sec. 200.45 not later than the
first day of the 2002-2003 school year.
    (b) State reservation of funds for school improvement. (1) In
accordance with Sec. 200.100(a), an SEA must reserve 2 percent of the
amount it receives under this part for fiscal years 2002 and 2003, and 4
percent of the amount it receives under this part for fiscal years 2004
through 2007, to--
    (i) Support local school improvement activities;
    (ii) Provide technical assistance to schools identified for
improvement, corrective action, or restructuring; and
    (iii) Provide technical assistance to LEAs that the SEA has
identified for improvement or corrective action in accordance with Sec.
200.50.
    (2) Of the amount it reserves under paragraph (b)(1) of this
section, the SEA must--
    (i) Allocate not less than 95 percent directly to LEAs serving
schools identified for improvement, corrective action, and restructuring
to support improvement activities; or
    (ii) With the approval of the LEA, directly provide for these
improvement activities or arrange to provide them through such entities
as school support teams or educational service agencies.
    (3) In providing assistance to LEAs under paragraph (b)(2) of this
section, the SEA must give priority to LEAs that--
    (i) Serve the lowest-achieving schools;
    (ii) Demonstrate the greatest need for this assistance; and
    (iii) Demonstrate the strongest commitment to ensuring that this
assistance will be used to enable the lowest-achieving schools to meet
the progress goals in the school improvement plans under Sec. 200.41.
    (c) Technical assistance. The SEA must make technical assistance
available, through the statewide system of support and improvement
required by section 1117 of the ESEA, to schools

[[Page 468]]

that LEAs have identified for improvement, corrective action, or
restructuring.
    (d) LEA failure. If the SEA determines that an LEA has failed to
carry out its responsibilities with respect to school improvement,
corrective action, or restructuring, the SEA must take the actions it
determines to be appropriate and in compliance with State law.
    (e) Assessment results. (1) The SEA must ensure that the results of
academic assessments administered as part of the State assessment system
in a given school year are available to LEAs before the beginning of the
next school year and in such time as to allow for the identification
described in Sec. 200.32(a)(2).
    (2) The SEA must provide the results described in paragraph (e)(1)
of this section to a school before an LEA may identify the school for
school improvement under Sec. 200.32, corrective action under Sec.
200.33, or restructuring under Sec. 200.34.
    (f) Accountability for charter schools. The accountability
provisions under section 1116 of the ESEA must be overseen for charter
schools in accordance with State charter school law.
    (g) Factors affecting student achievement. The SEA must notify the
Secretary of Education of major factors that have been brought to the
SEA's attention under section 1111(b)(9) of the ESEA that have
significantly affected student academic achievement in schools and LEAs
identified for improvement within the State.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6311 and 6316)

[67 FR 71725, Dec. 2, 2002]



Sec. 200.50  SEA review of LEA progress.

    (a) State review. (1) An SEA must annually review the progress of
each LEA in its State that receives funds under subpart A of this part
to determine whether--
    (i) The LEA's schools served under this part are making AYP, as
defined under Sec. Sec. 200.13 through 200.20, toward meeting the
State's student academic achievement standards; and
    (ii) The LEA is carrying out its responsibilities under this part
with respect to school improvement, technical assistance, parental
involvement, and professional development.
    (2) In reviewing the progress of an LEA, the SEA may, in the case of
targeted assistance schools served by the LEA, consider the progress
only of the students served or eligible for services under this subpart,
provided the students selected for services in such schools are those
with the greatest need for special assistance, consistent with the
requirements of section 1115 of the ESEA.
    (b) Rewards. If an LEA has exceeded AYP as defined under Sec. Sec.
200.13 through 200.20 for two consecutive years, the SEA may--
    (1) Reserve funds in accordance with Sec. 200.100(c); and
    (2) Make rewards of the kinds described under section 1117 of the
ESEA.
    (c) Opportunity for review of LEA-level data. (1) Before identifying
an LEA for improvement or corrective action, the SEA must provide the
LEA with an opportunity to review the data, including academic
assessment data, on which the SEA has based the proposed identification.
    (2)(i) If the LEA believes that the proposed identification is in
error for statistical or other substantive reasons, the LEA may provide
supporting evidence to the SEA.
    (ii) The SEA must consider the evidence before making a final
determination not later than 30 days after it has provided the LEA with
the opportunity to review the data under paragraph (c)(1) of this
section.
    (d) Identification for improvement. (1)(i) The SEA must identify for
improvement an LEA that, for two consecutive years, including the period
immediately before January 8, 2002, fails to make AYP as defined in the
SEA's plan under section 1111(b)(2) of the ESEA.
    (ii) In identifying LEAs for improvement, an SEA--
    (A) May base identification on whether an LEA did not make AYP
because it did not meet the annual measurable objectives for the same
subject or meet the same other academic indicator for two consecutive
years; but

[[Page 469]]

    (B) May not limit identification to those LEAs that did not make AYP
only because they did not meet the annual measurable objectives for the
same subject or meet the same other academic indicator for the same
subgroup under Sec. 200.13(b)(7)(ii) for two consecutive years.
    (2) The SEA must identify for improvement an LEA that was in
improvement status on January 7, 2002.
    (3)(i) The SEA may identify an LEA for improvement if, on the basis
of assessments the LEA administers during the 2001-2002 school year, the
LEA fails to make AYP for a second consecutive year.
    (ii) An SEA that does not identify such an LEA for improvement,
however, must count the 2001-2002 school year as the first year of not
making AYP for the purpose of subsequent identification decisions under
paragraph (d)(1) of this section.
    (4) The SEA may remove an LEA from improvement status if, on the
basis of assessments the LEA administers during the 2001-2002 school
year, the LEA makes AYP for a second consecutive year.
    (e) Identification for corrective action. After providing technical
assistance under Sec. 200.52(b), the SEA--
    (1) May take corrective action at any time with respect to an LEA
that the SEA has identified for improvement under paragraph (d) of this
section;
    (2) Must take corrective action--
    (i) With respect to an LEA that fails to make AYP, as defined under
Sec. Sec. 200.13 through 200.20, by the end of the second full school
year following the year in which the LEA administered the assessments
that resulted in the LEA's failure to make AYP for a second consecutive
year and led to the SEA's identification of the LEA for improvement
under paragraph (d) of this section; and
    (ii) With respect to an LEA that was in corrective action status on
January 7, 2002; and
    (3) May remove an LEA from corrective action if, on the basis of
assessments administered by the LEA during the 2001-2002 school year, it
makes AYP for a second consecutive year.
    (f) Delay of corrective action. (1) The SEA may delay implementation
of corrective action under Sec. 200.53 for a period not to exceed one
year if--
    (i) The LEA makes AYP for one year; or
    (ii) The LEA's failure to make AYP is due to exceptional or
uncontrollable circumstances, such as a natural disaster or a
precipitous and unforeseen decline in the LEA's financial resources.
    (2)(i) The SEA may not take into account the period of delay
referred to in paragraph (f)(1) of this section in determining the
number of consecutive years the LEA has failed to make AYP; and
    (ii) The SEA must subject the LEA to further actions following the
period of delay as if the delay never occurred.
    (g) Continuation of public school choice and supplemental
educational services. An SEA must ensure that an LEA identified under
paragraph (d) or (e) of this section continues to offer public school
choice in accordance with Sec. 200.44 and supplemental educational
services in accordance with Sec. 200.45.
    (h) Removal from improvement or corrective action status. If an LEA
makes AYP for two consecutive years following identification for
improvement under paragraph (d) or corrective action under paragraph (e)
of this section, the SEA need no longer--
    (1) Identify the LEA for improvement; or
    (2) Subject the LEA to corrective action for the succeeding school
year.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(c))

[67 FR 71727, Dec. 2, 2002, as amended at 73 FR 64512, Oct. 29, 2008]



Sec. 200.51  Notice of SEA action.

    (a) In general. (1) An SEA must--
    (i) Communicate with parents throughout the review of an LEA under
Sec. 200.50; and
    (ii) Ensure that, regardless of the method or media used, it
provides information to parents--
    (A) In an understandable and uniform format, including alternative
formats upon request; and
    (B) To the extent practicable, in a language that parents can
understand.

[[Page 470]]

    (2) The SEA must provide information to the parents of each student
enrolled in a school served by the LEA--
    (i) Directly, through such means as regular mail or e-mail, except
that if an SEA does not have access to individual student addresses, it
may provide information to the LEA or school for distribution to
parents; and
    (ii) Through broader means of dissemination such as the Internet,
the media, and public agencies serving the student population and their
families.
    (3) All communications must respect the privacy of students and
their families.
    (b) Results of review. The SEA must promptly publicize and
disseminate to the LEAs, teachers and other staff, the parents of each
student enrolled in a school served by the LEA, students, and the
community the results of its review under Sec. 200.50, including
statistically sound disaggregated results in accordance with Sec. Sec.
200.2 and 200.7.
    (c) Identification for improvement or corrective action. If the SEA
identifies an LEA for improvement or subjects the LEA to corrective
action, the SEA must promptly provide to the parents of each student
enrolled in a school served by the LEA--
    (1) The reasons for the identification; and
    (2) An explanation of how parents can participate in improving the
LEA.
    (d) Information about action taken. (1) The SEA must publish, and
disseminate to the parents of each student enrolled in a school served
by the LEA and to the public, information on any corrective action the
SEA takes under Sec. 200.53.
    (2) The SEA must provide this information--
    (i) In a uniform and understandable format, including alternative
formats upon request; and
    (ii) To the extent practicable, in a language that parents can
understand.
    (3) The SEA must disseminate the information through such means as
the Internet, the media, and public agencies.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(c))

[67 FR 71727, Dec. 2, 2002]



Sec. 200.52  LEA improvement.

    (a) Improvement plan. (1) Not later than 3 months after an SEA has
identified an LEA for improvement under Sec. 200.50(d), the LEA must
develop or revise an LEA improvement plan.
    (2) The LEA must consult with parents, school staff, and others in
developing or revising its improvement plan.
    (3) The LEA improvement plan must--
    (i) Incorporate strategies, grounded in scientifically based
research, that will strengthen instruction in core academic subjects in
schools served by the LEA;
    (ii) Identify actions that have the greatest likelihood of improving
the achievement of participating children in meeting the State's student
academic achievement standards;
    (iii) Address the professional development needs of the
instructional staff serving the LEA by committing to spend for
professional development not less than 10 percent of the funds received
by the LEA under subpart A of this part for each fiscal year in which
the SEA identifies the LEA for improvement. These funds--
    (A) May include funds reserved by schools for professional
development under Sec. 200.41(c)(5); but
    (B) May not include funds reserved for professional development
under section 1119 of the ESEA;
    (iv) Include specific measurable achievement goals and targets--
    (A) For each of the groups of students under Sec. 200.13(b)(7); and
    (B) That are consistent with AYP as defined under Sec. Sec. 200.13
through 200.20;
    (v) Address--
    (A) The fundamental teaching and learning needs in the schools of
the LEA; and
    (B) The specific academic problems of low-achieving students,
including a determination of why the LEA's previous plan failed to bring
about increased student academic achievement;
    (vi) As appropriate, incorporate activities before school, after
school, during the summer, and during any extension of the school year;
    (vii) Specify the responsibilities of the SEA and LEA under the
plan, including the technical assistance the SEA must provide under
paragraph (b)

[[Page 471]]

of this section and the LEA's responsibilities under section 1120A of
the ESEA; and
    (viii) Include strategies to promote effective parental involvement
in the schools served by the LEA.
    (4) The LEA must implement the improvement plan--including any
revised plan--expeditiously, but not later than the beginning of the
school year following the year in which the LEA administered the
assessments that resulted in the LEA's failure to make AYP for a second
consecutive year and led to the SEA's identification of the LEA for
improvement under Sec. 200.50(d).
    (b) SEA technical assistance. (1) An SEA that identifies an LEA for
improvement under Sec. 200.50(d) must, if requested, provide or arrange
for the provision of technical or other assistance to the LEA, as
authorized under section 1117 of the ESEA.
    (2) The purpose of the technical assistance is to better enable the
LEA to--
    (i) Develop and implement its improvement plan; and
    (ii) Work with schools needing improvement.
    (3) The technical assistance provided by the SEA or an entity
authorized by the SEA must--
    (i) Be supported by effective methods and instructional strategies
grounded in scientifically based research; and
    (ii) Address problems, if any, in implementing the parental
involvement and professional development activities described in
sections 1118 and 1119, respectively, of the ESEA.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6316(c))

[67 FR 71728, Dec. 2, 2002]



Sec. 200.53  LEA corrective action.

    (a) Definition. For the purposes of this section, the term
``corrective action'' means action by an SEA that--
    (1) Substantially and directly responds to--
    (i) The consistent academic failure that caused the SEA to identify
an LEA for corrective action; and
    (ii) Any underlying staffing, curriculum, or other problems in the
LEA;
    (2) Is designed to meet the goal that each group of students
described in Sec. 200.13(b)(7) and enrolled in the LEA's schools will
meet or exceed the State's proficient levels of achievement as measured
by the State assessment system; and
    (3) Is consistent with State law.
    (b) Notice and hearing. Before implementing any corrective action
under paragraph (c) of this section, the SEA must provide notice and a
hearing to the affected LEA--if State law provides for this notice and
hearing--not later than 45 days following the decision to take
corrective action.
    (c) Requirements. If the SEA identifies an LEA for corrective
action, the SEA must do the following:
    (1) Continue to make available technical assistance to the LEA.
    (2) Take at least one of the following corrective actions:
    (i) Defer programmatic funds or reduce administrative funds.
    (ii) Institute and fully implement a new curriculum based on State
and local content and academic achievement standards, including the
provision of appropriate professional development for all relevant staff
that--
    (A) Is grounded in scientifically based research; and
    (B) Offers substantial promise of improving educational achievement
for low-achieving students.
    (iii) Replace the LEA personnel who are relevant to the failure to
make AYP.
    (iv) Remove particular schools from the jurisdiction of the LEA and
establish alternative arrangements for public governance and supervision
of these schools.
    (v) Appoint a receiver or trustee to administer the affairs of the
LEA in place of the superintendent and school board.
    (vi) Abolish or restructure the LEA.
    (vii) In conjunction with at least one other action in paragraph
(c)(2) of this section--
    (A) Authorize students to transfer from a school operated by the LEA
to a higher-performing public school operated by another LEA in
accordance with Sec. 200.44, and

[[Page 472]]

    (B) Provide to these students transportation, or the costs of
transportation, to the other school consistent with Sec. 200.44(h).

(Approved by the Office of Management and Budget under control number
1810-0516)

(Authority: 20 U.S.C. 6316(c)(10))

[67 FR 71728, Dec. 2, 2002]



Sec. 200.54  [Reserved]

            Qualifications Of Teachers And Paraprofessionals



Sec. 200.55  Qualifications of teachers.

    (a) Newly hired teachers in Title I programs. (1) An LEA must ensure
that all teachers hired after the first day of the 2002-2003 school year
who teach core academic subjects in a program supported with funds under
subpart A of this part are highly qualified as defined in Sec. 200.56.
    (2) For the purpose of paragraph (a)(1) of this section, a teacher
teaching in a program supported with funds under subpart A of this part
is--
    (i) A teacher in a targeted assisted school who is paid with funds
under subpart A of this part;
    (ii) A teacher in a schoolwide program school; or
    (iii) A teacher employed by an LEA with funds under subpart A of
this part to provide services to eligible private school students under
Sec. 200.62.
    (b) All teachers of core academic subjects. (1) Not later than the
end of the 2005-2006 school year, each State that receives funds under
subpart A of this part, and each LEA in that State, must ensure that all
public elementary and secondary school teachers in the State who teach
core academic subjects, including teachers employed by an LEA to provide
services to eligible private school students under Sec. 200.62, are
highly qualified as defined in Sec. 200.56.
    (2) A teacher who does not teach a core academic subject--such as
some vocational education teachers--is not required to meet the
requirements in Sec. 200.56.
    (c) Definition. The term ``core academic subjects'' means English,
reading or language arts, mathematics, science, foreign languages,
civics and government, economics, arts, history, and geography.
    (d) Private school teachers. The requirements in this section do not
apply to teachers hired by private elementary and secondary schools.

(Authority: 20 U.S.C. 6319; 7801(11))

[67 FR 71729, Dec. 2, 2002]



Sec. 200.56  Definition of ``highly qualified teacher.''

    A teacher described in Sec. 200.55(a) and (b)(1) is a ``highly
qualified teacher'' if the teacher meets the requirements in paragraph
(a) and paragraph (b), (c), or (d) of this section.
    (a) In general. (1) Except as provided in paragraph (a)(3) of this
section, a teacher covered under Sec. 200.55 must--
    (i) Have obtained full State certification as a teacher, which may
include certification obtained through alternative routes to
certification; or
    (ii)(A) Have passed the State teacher licensing examination; and
    (B) Hold a license to teach in the State.
    (2) A teacher meets the requirement in paragraph (a)(1) of this
section if the teacher--
    (i) Has fulfilled the State's certification and licensure
requirements applicable to the years of experience the teacher
possesses; or
    (ii) Is participating in an alternative route to certification
program under which--
    (A) The teacher--
    (1) Receives high-quality professional development that is
sustained, intensive, and classroom-focused in order to have a positive
and lasting impact on classroom instruction, before and while teaching;
    (2) Participates in a program of intensive supervision that consists
of structured guidance and regular ongoing support for teachers or a
teacher mentoring program;
    (3) Assumes functions as a teacher only for a specified period of
time not to exceed three years; and
    (4) Demonstrates satisfactory progress toward full certification as
prescribed by the State; and
    (B) The State ensures, through its certification and licensure
process, that the provisions in paragraph (a)(2)(ii) of this section are
met.
    (3) A teacher teaching in a public charter school in a State must
meet

[[Page 473]]

the certification and licensure requirements, if any, contained in the
State's charter school law.
    (4) If a teacher has had certification or licensure requirements
waived on an emergency, temporary, or provisional basis, the teacher is
not highly qualified.
    (b) Teachers new to the profession. A teacher covered under Sec.
200.55 who is new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2) At the public elementary school level, demonstrate, by passing a
rigorous State test (which may consist of passing a State certification
or licensing test), subject knowledge and teaching skills in reading/
language arts, writing, mathematics, and other areas of the basic
elementary school curriculum; or
    (3) At the public middle and high school levels, demonstrate a high
level of competency by--
    (i) Passing a rigorous State test in each academic subject in which
the teacher teaches (which may consist of passing a State certification
or licensing test in each of these subjects); or
    (ii) Successfully completing in each academic subject in which the
teacher teaches--
    (A) An undergraduate major;
    (B) A graduate degree;
    (C) Coursework equivalent to an undergraduate major; or
    (D) Advanced certification or credentialing.
    (c) Teachers not new to the profession. A teacher covered under
Sec. 200.55 who is not new to the profession also must--
    (1) Hold at least a bachelor's degree; and
    (2)(i) Meet the applicable requirements in paragraph (b)(2) or (3)
of this section; or
    (ii) Based on a high, objective, uniform State standard of
evaluation in accordance with section 9101(23)(C)(ii) of the ESEA,
demonstrate competency in each academic subject in which the teacher
teaches.
    (d) A special education teacher is a ``highly qualified teacher''
under the Act if the teacher meets the requirements for a ``highly
qualified special education teacher'' in 34 CFR 300.18.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 1401(10); 7801(23))

[67 FR 71729, Dec. 2, 2002, as amended at 73 FR 64513, Oct. 29, 2008]



Sec. 200.57  Plans to increase teacher quality.

    (a) State plan. (1) A State that receives funds under subpart A of
this part must develop, as part of its State plan under section 1111 of
the ESEA, a plan to ensure that all public elementary and secondary
school teachers in the State who teach core academic subjects are highly
qualified not later than the end of the 2005-2006 school year.
    (2) The State's plan must--
    (i) Establish annual measurable objectives for each LEA and school
that include, at a minimum, an annual increase in the percentage of--
    (A) Highly qualified teachers at each LEA and school; and
    (B) Teachers who are receiving high-quality professional development
to enable them to become highly qualified and effective classroom
teachers;
    (ii) Describe the strategies the State will use to--
    (A) Help LEAs and schools meet the requirements in paragraph (a)(1)
of this section; and
    (B) Monitor the progress of LEAs and schools in meeting these
requirements; and
    (iii) Until the SEA fully complies with paragraph (a)(1) of this
section, describe the specific steps the SEA will take to--
    (A) Ensure that Title I schools provide instruction by highly
qualified teachers, including steps that the SEA will take to ensure
that minority children and children from low-income families are not
taught at higher rates than other children by inexperienced,
unqualified, or out-of-field teachers; and
    (B) Evaluate and publicly report the progress of the SEA with
respect to these steps.

[[Page 474]]

    (3) The State's plan may include other measures that the State
determines are appropriate to increase teacher qualifications.
    (b) Local plan. An LEA that receives funds under subpart A of this
part must develop, as part of its local plan under section 1112 of the
ESEA, a plan to ensure that--
    (1) All public elementary and secondary school teachers in the LEA
who teach core academic subjects, including teachers employed by the LEA
to provide services to eligible private school students under Sec.
200.62, are highly qualified not later than the end of the 2005-2006
school year; and
    (2) Through incentives for voluntary transfers, professional
development, recruitment programs, or other effective strategies,
minority students and students from low-income families are not taught
at higher rates than other students by unqualified, out-of-field, or
inexperienced teachers.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6311(b)(8)(C), 6312(c)(1)(I), (L); 6319(a)(2)-(3);
7801(34))

[67 FR 71729, Dec. 2, 2002]



Sec. 200.58  Qualifications of paraprofessionals.

    (a) Applicability. (1) An LEA must ensure that each paraprofessional
who is hired by the LEA and who works in a program supported with funds
under subpart A of this part meets the requirements in paragraph (b) of
this section and, except as provided in paragraph (e) of this section,
the requirements in either paragraph (c) or (d) of this section.
    (2) For the purpose of this section, the term ``paraprofessional''--
    (i) Means an individual who provides instructional support
consistent with Sec. 200.59; and
    (ii) Does not include individuals who have only non-instructional
duties (such as providing technical support for computers, providing
personal care services, or performing clerical duties).
    (3) For the purpose of paragraph (a) of this section, a
paraprofessional working in ``a program supported with funds under
subpart A of this part'' is--
    (i) A paraprofessional in a targeted assisted school who is paid
with funds under subpart A of this part;
    (ii) A paraprofessional in a schoolwide program school; or
    (iii) A paraprofessional employed by an LEA with funds under subpart
A of this part to provide instructional support to a public school
teacher covered under Sec. 200.55 who provides equitable services to
eligible private school students under Sec. 200.62.
    (b) All paraprofessionals. A paraprofessional covered under
paragraph (a) of this section, regardless of the paraprofessional's
hiring date, must have earned a secondary school diploma or its
recognized equivalent.
    (c) New paraprofessionals. A paraprofessional covered under
paragraph (a) of this section who is hired after January 8, 2002 must
have--
    (1) Completed at least two years of study at an institution of
higher education;
    (2) Obtained an associate's or higher degree; or
    (3)(i) Met a rigorous standard of quality, and can demonstrate--
through a formal State or local academic assessment--knowledge of, and
the ability to assist in instructing, as appropriate--
    (A) Reading/language arts, writing, and mathematics; or
    (B) Reading readiness, writing readiness, and mathematics readiness.
    (ii) A secondary school diploma or its recognized equivalent is
necessary, but not sufficient, to meet the requirement in paragraph
(c)(3)(i) of this section.
    (d) Existing paraprofessionals. Each paraprofessional who was hired
on or before January 8, 2002 must meet the requirements in paragraph (c)
of this section no later than January 8, 2006.
    (e) Exceptions. A paraprofessional does not need to meet the
requirements in paragraph (c) or (d) of this section if the
paraprofessional--
    (1)(i) Is proficient in English and a language other than English;
and
    (ii) Acts as a translator to enhance the participation of limited
English proficient children under subpart A of this part; or

[[Page 475]]

    (2) Has instructional-support duties that consist solely of
conducting parental involvement activities.

(Authority: 20 U.S.C. 6319(c)-(f))

[67 FR 71729, Dec. 2, 2002]



Sec. 200.59  Duties of paraprofessionals.

    (a) A paraprofessional covered under Sec. 200.58 may not be
assigned a duty inconsistent with paragraph (b) of this section.
    (b) A paraprofessional covered under Sec. 200.58 may perform the
following instructional support duties:
    (1) One-on-one tutoring for eligible students if the tutoring is
scheduled at a time when a student would not otherwise receive
instruction from a teacher.
    (2) Assisting in classroom management.
    (3) Assisting in computer instruction.
    (4) Conducting parent involvement activities.
    (5) Providing instructional support in a library or media center.
    (6) Acting as a translator.
    (7) Providing instructional support services.
    (c)(1) A paraprofessional may not provide instructional support to a
student unless the paraprofessional is working under the direct
supervision of a teacher who meets the requirements in Sec. 200.56.
    (2) A paraprofessional works under the direct supervision of a
teacher if--
    (i) The teacher plans the instructional activities that the
paraprofessional carries out;
    (ii) The teacher evaluates the achievement of the students with whom
the paraprofessional is working; and
    (iii) The paraprofessional works in close and frequent physical
proximity to the teacher.
    (d) A paraprofessional may assume limited duties that are assigned
to similar personnel who are not working in a program supported with
funds under subpart A of this part--including non-instructional duties
and duties that do not benefit participating students--if the amount of
time the paraprofessional spends on those duties is the same proportion
of total work time as the time spent by similar personnel at the same
school.

(Authority: 20 U.S.C. 6319(g))

[67 FR 71729, Dec. 2, 2002]



Sec. 200.60  Expenditures for professional development.

    (a)(1) Except as provided in paragraph (a)(2) of this section, an
LEA must use funds it receives under subpart A of this part as follows
for professional development activities to ensure that teachers and
paraprofessionals meet the requirements of Sec. Sec. 200.56 and 200.58:
    (i) For each of fiscal years 2002 and 2003, the LEA must use not
less than 5 percent or more than 10 percent of the funds it receives
under subpart A of this part.
    (ii) For each fiscal year after 2003, the LEA must use not less than
5 percent of the funds it receives under subpart A of this part.
    (2) An LEA is not required to spend the amount required in paragraph
(a)(1) of this section for a given fiscal year if a lesser amount is
sufficient to ensure that the LEA's teachers and paraprofessionals meet
the requirements in Sec. Sec. 200.56 and 200.58, respectively.
    (b) The LEA may use additional funds under subpart A of this part to
support ongoing training and professional development, as defined in
section 9101(34) of the ESEA, to assist teachers and paraprofessionals
in carrying out activities under subpart A of this part.

(Authority: 20 U.S.C. 6319(h), (l); 7801(34))

[67 FR 71731, Dec. 2, 2002]



Sec. 200.61  Parents' right to know.

    (a) At the beginning of each school year, an LEA that receives funds
under subpart A of this part must notify the parents of each student
attending a Title I school that the parents may request, and the LEA
will provide the parents on request, information regarding the
professional qualifications of the student's classroom teachers,
including, at a minimum, the following:
    (1) Whether the teacher has met State qualification and licensing
criteria for the grade levels and subject areas in which the teacher
provides instruction.

[[Page 476]]

    (2) Whether the teacher is teaching under emergency or other
provisional status through which State qualification or licensing
criteria have been waived.
    (3) The baccalaureate degree major of the teacher and any other
graduate certification or degree held by the teacher, and the field of
discipline of the certification or degree.
    (4) Whether the child is provided services by paraprofessionals and,
if so, their qualifications.
    (b) A school that participates under subpart A of this part must
provide to each parent--
    (1) Information on the level of achievement of the parent's child in
each of the State academic assessments required under Sec. 200.2;
    (2) Timely notice that the parent's child has been assigned, or has
been taught for four or more consecutive weeks by, a teacher of a core
academic subject who is not highly qualified.
    (c) An LEA and school must provide the notice and information
required under this section--
    (1) In a uniform and understandable format, including alternative
formats upon request; and
    (2) To the extent practicable, in a language that parents can
understand.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6311(h)(6))

[67 FR 71731, Dec. 2, 2002]

          Participation of Eligible Children in Private Schools



Sec. 200.62  Responsibilities for providing services to private school
children.

    (a) After timely and meaningful consultation with appropriate
officials of private schools, an LEA must--
    (1) In accordance with Sec. Sec. 200.62 through 200.67 and section
1120 of the ESEA, provide special educational services or other benefits
under subpart A of this part, on an equitable basis and in a timely
manner, to eligible children who are enrolled in private elementary and
secondary schools; and
    (2) Ensure that teachers and families of participating private
school children participate on a basis equitable to the participation of
teachers and families of public school children receiving these services
in accordance with Sec. 200.65.
    (b)(1) Eligible private school children are children who--
    (i) Reside in participating public school attendance areas of the
LEA, regardless of whether the private school they attend is located in
the LEA; and
    (ii) Meet the criteria in section 1115(b) of the ESEA.
    (2) Among the eligible private school children, the LEA must select
children to participate, consistent with Sec. 200.64.
    (c) The services and other benefits an LEA provides under this
section must be secular, neutral and nonideological.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6315(b); 6320(a))

[67 FR 71732, Dec. 2, 2002]



Sec. 200.63  Consultation.

    (a) In order to have timely and meaningful consultation, an LEA must
consult with appropriate officials of private schools during the design
and development of the LEA's program for eligible private school
children.
    (b) At a minimum, the LEA must consult on the following:
    (1) How the LEA will identify the needs of eligible private school
children.
    (2) What services the LEA will offer to eligible private school
children.
    (3) How and when the LEA will make decisions about the delivery of
services.
    (4) How, where, and by whom the LEA will provide services to
eligible private school children.
    (5) How the LEA will assess academically the services to eligible
private school children in accordance with Sec. 200.10, and how the LEA
will use the results of that assessment to improve Title I services.
    (6) The size and scope of the equitable services that the LEA will
provide to eligible private school children, and, consistent with Sec.
200.64, the proportion of funds that the LEA will allocate for these
services.
    (7) The method or sources of data that the LEA will use under Sec.
200.78 to determine the number of private school children from low-
income families residing in participating public school

[[Page 477]]

attendance areas, including whether the LEA will extrapolate data if a
survey is used.
    (8) The equitable services the LEA will provide to teachers and
families of participating private school children.
    (c)(1) Consultation by the LEA must--
    (i) Include meetings of the LEA and appropriate officials of the
private schools; and
    (ii) Occur before the LEA makes any decision that affects the
opportunity of eligible private school children to participate in Title
I programs.
    (2) The LEA must meet with officials of the private schools
throughout the implementation and assessment of the Title I services.
    (d)(1) Consultation must include--
    (i) A discussion of service delivery mechanisms the LEA can use to
provide equitable services to eligible private school children; and
    (ii) A thorough consideration and analysis of the views of the
officials of the private schools on the provision of services through a
contract with a third-party provider.
    (2) If the LEA disagrees with the views of the officials of the
private schools on the provision of services through a contract, the LEA
must provide in writing to the officials of the private schools the
reasons why the LEA chooses not to use a contractor.
    (e)(1) The LEA must maintain in its records and provide to the SEA a
written affirmation, signed by officials of each private school with
participating children or appropriate private school representatives,
that the required consultation has occurred.
    (2) If the officials of the private schools do not provide the
affirmations within a reasonable period of time, the LEA must submit to
the SEA documentation that the required consultation occurred.
    (f) An official of a private school has the right to complain to the
SEA that the LEA did not--
    (1) Engage in timely and meaningful consultation; or
    (2) Consider the views of the official of the private school.

(Approved by the Office of Management and Budget under control number
1810-0581)

(Authority: 20 U.S.C. 6320(b))

[67 FR 71732, Dec. 2, 2002]



Sec. 200.64  Factors for determining equitable participation of private
school children.

    (a) Equal expenditures. (1) Funds expended by an LEA under subpart A
of this part for services for eligible private school children in the
aggregate must be equal to the amount of funds generated by private
school children from low-income families under paragraph (a)(2) of this
section.
    (2) An LEA must meet this requirement as follows:
    (i)(A) If the LEA reserves funds under Sec. 200.77 to provide
instructional and related activities for public elementary or secondary
school students at the district level, the LEA must also provide from
those funds, as applicable, equitable services to eligible private
school children.
    (B) The amount of funds available to provide equitable services from
the applicable reserved funds must be proportionate to the number of
private school children from low-income families residing in
participating public school attendance areas.
    (ii) The LEA must reserve the funds generated by private school
children under Sec. 200.78 and, in consultation with appropriate
officials of the private schools, may--
    (A) Combine those amounts, along with funds under paragraph
(a)(2)(i) of this section, if appropriate, to create a pool of funds
from which the LEA provides equitable services to eligible private
school children, in the aggregate, in greatest need of those services;
or
    (B) Provide equitable services to eligible children in each private
school with the funds generated by children from low-income families
under Sec. 200.78 who attend that private school.
    (b) Services on an equitable basis. (1) The services that an LEA
provides to eligible private school children must be equitable in
comparison to the services

[[Page 478]]

and other benefits that the LEA provides to public school children
participating under subpart A of this part.
    (2) Services are equitable if the LEA--
    (i) Addresses and assesses the specific needs and educational
progress of eligible private school children on a comparable basis as
public school children;
    (ii) Meets the equal expenditure requirements under paragraph (a) of
section; and
    (iii) Provides private school children with an opportunity to
participate that--
    (A) Is equitable to the opportunity provided to public school
children; and
    (B) Provides reasonable promise of the private school children
achieving the high levels called for by the State's student academic
achievement standards or equivalent standards applicable to the private
school children.
    (3)(i) The LEA may provide services to eligible private school
children either directly or through arrangements with another LEA or a
third-party provider.
    (ii) If the LEA contracts with a third-party provider--
    (A) The provider must be independent of the private school and of
any religious organization; and
    (B) The contract must be under the control and supervision of the
LEA.
    (4) After timely and meaningful consultation under Sec. 200.63, the
LEA must make the final decisions with respect to the services it will
provide to eligible private school children.

(Authority: 20 U.S.C. 6320)

[67 FR 71732, Dec. 2, 2002]



Sec. 200.65  Determining equitable participation of teachers and
families of participating private school children.

    (a)(1) From applicable funds reserved for parent involvement and
professional development under Sec. 200.77, an LEA shall ensure that
teachers and families of participating private school children
participate on an equitable basis in professional development and parent
involvement activities, respectively.
    (2) The amount of funds available to provide equitable services from
the applicable reserved funds must be proportionate to the number of
private school children from low-income families residing in
participating public school attendance areas.
    (b) After consultation with appropriate officials of the private
schools, the LEA must conduct professional development and parent
involvement activities for the teachers and families of participating
private school children either--
    (1) In conjunction with the LEA's professional development and
parent involvement activities; or
    (2) Independently.
    (c) Private school teachers are not covered by the requirements in
Sec. 200.56.

(Authority: 20 U.S.C. 6320(a))

[67 FR 71733, Dec. 2, 2002]



Sec. 200.66  Requirements to ensure that funds do not benefit a private
school.

    (a) An LEA must use funds under subpart A of this part to provide
services that supplement, and in no case supplant, the services that
would, in the absence of Title I services, be available to participating
private school children.
    (b)(1) The LEA must use funds under subpart A of this part to meet
the special educational needs of participating private school children.
    (2) The LEA may not use funds under subpart A of this part for--
    (i) The needs of the private school; or
    (ii) The general needs of children in the private school.

(Authority: 20 U.S.C. 6320(a), 6321(b))

[67 FR 71733, Dec. 2, 2002]



Sec. 200.67  Requirements concerning property, equipment, and supplies
for the benefit of private school children.

    (a) The LEA must keep title to and exercise continuing
administrative control of all property, equipment, and supplies that the
LEA acquires with funds under subpart A of this part for the benefit of
eligible private school children.
    (b) The LEA may place equipment and supplies in a private school for
the period of time needed for the program.

[[Page 479]]

    (c) The LEA must ensure that the equipment and supplies placed in a
private school--
    (1) Are used only for Title I purposes; and
    (2) Can be removed from the private school without remodeling the
private school facility.
    (d) The LEA must remove equipment and supplies from a private school
if--
    (1) The LEA no longer needs the equipment and supplies to provide
Title I services; or
    (2) Removal is necessary to avoid unauthorized use of the equipment
or supplies for other than Title I purposes.
    (e) The LEA may not use funds under subpart A of this part for
repairs, minor remodeling, or construction of private school facilities.

(Authority: 20 U.S.C. 6320(d))

[67 FR 71733, Dec. 2, 2002]



Sec. Sec. 200.68-200.69  [Reserved]

                           Allocations to LEAS



Sec. 200.70  Allocation of funds to LEAs in general.

    (a) The Secretary allocates basic grants, concentration grants,
targeted grants, and education finance incentive grants, through SEAs,
to each eligible LEA for which the Bureau of the Census has provided
data on the number of children from low-income families residing in the
school attendance areas of the LEA (hereinafter referred to as the
``Census list'').
    (b) In establishing eligibility and allocating funds under paragraph
(a) of this section, the Secretary counts children ages 5 to 17,
inclusive (hereinafter referred to as ``formula children'')--
    (1) From families below the poverty level based on the most recent
satisfactory data available from the Bureau of the Census;
    (2) From families above the poverty level receiving assistance under
the Temporary Assistance for Needy Families program under Title IV of
the Social Security Act;
    (3) Being supported in foster homes with public funds; and
    (4) Residing in local institutions for neglected children.
    (c) Except as provided in Sec. Sec. 200.72, 200.75, and 200.100, an
SEA may not change the Secretary's allocation to any LEA that serves an
area with a total census population of at least 20,000 persons.
    (d) In accordance with Sec. 200.74, an SEA may use an alternative
method, approved by the Secretary, to distribute the State's share of
basic grants, concentration grants, targeted grants, and education
finance incentive grants to LEAs that serve an area with a total census
population of less than 20,000 persons.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6333-6337)

[67 FR 71733, Dec. 2, 2002]



Sec. 200.71  LEA eligibility.

    (a) Basic grants. An LEA is eligible for a basic grant if the number
of formula children is--
    (1) At least 10; and
    (2) Greater than two percent of the LEA's total population ages 5 to
17 years, inclusive.
    (b) Concentration grants. An LEA is eligible for a concentration
grant if--
    (1) The LEA is eligible for a basic grant under paragraph (a) of
this section; and
    (2) The number of formula children exceeds--
    (i) 6,500; or
    (ii) 15 percent of the LEA's total population ages 5 to 17 years,
inclusive.
    (c) Targeted grants. An LEA is eligible for a targeted grant if the
number of formula children is--
    (1) At least 10; and
    (2) At least five percent of the LEA's total population ages 5 to 17
years, inclusive.
    (d) Education finance incentive grants. An LEA is eligible for an
education finance incentive grant if the number of formula children is--
    (1) At least 10; and
    (2) At least five percent of the LEA's total population ages 5 to 17
years, inclusive.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6333-6337)

[67 FR 71733, Dec. 2, 2002]

[[Page 480]]



Sec. 200.72  Procedures for adjusting allocations determined by the
Secretary to account for eligible LEAs not on the Census list.

    (a) General. For each LEA not on the Census list (hereinafter
referred to as a ``new'' LEA), an SEA must determine the number of
formula children and the number of children ages 5 to 17, inclusive, in
that LEA.
    (b) Determining LEA eligibility. An SEA must determine basic grant,
concentration grant, targeted grant, and education finance incentive
grant eligibility for each new LEA and re-determine eligibility for the
LEAs on the Census list, as appropriate, based on the number of formula
children and children ages 5 to 17, inclusive, determined in paragraph
(a) of this section.
    (c) Adjusting LEA allocations. An SEA must adjust the LEA
allocations calculated by the Secretary to determine allocations for
eligible new LEAs based on the number of formula children determined in
paragraph (a) of this section.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6333-6337)

[67 FR 71733, Dec. 2, 2002]



Sec. 200.73  Applicable hold-harmless provisions.

    (a) General. (1) Except as authorized under paragraph (c) of this
section and Sec. 200.100(d)(2), an SEA may not reduce the allocation of
an eligible LEA below the hold-harmless amounts established under
paragraph (a)(4) of this section.
    (2) The hold-harmless protection limits the maximum reduction of an
LEA's allocation compared to the LEA's allocation for the preceding
year.
    (3) Except as provided in Sec. 200.100(d), an SEA must apply the
hold-harmless requirement separately for basic grants, concentration
grants, targeted grants, and education finance incentive grants as
described in paragraph (a)(4) of this section.
    (4) Under section 1122(c) of the ESEA, the hold-harmless percentage
varies based on the LEA's proportion of formula children, as shown in
the following table:

------------------------------------------------------------------------
    LEA's number of formula
     children ages 5 to 17,
 inclusive, as a percentage of    Hold-harmless      Applicable grant
    its total population of         percentage           formulas
     children ages 5 to 17,
           inclusive
------------------------------------------------------------------------
(i) 30% or more................              95   Basic Grants,
(ii) 15% or more but less than               90    Concentration Grants,
 30%.                                        85    Targeted Grants, and
(iii) Less than 15%............                    Education Finance
                                                   Incentive Grants.
------------------------------------------------------------------------

    (b) Targeted grants and education finance incentive grants. The
number of formula children used to determine the hold-harmless
percentage is the number before applying the weights described in
section 1125 and section 1125A of the ESEA.
    (c) Adjustment for insufficient funds. If the amounts made available
to the State are insufficient to pay the full amount that each LEA is
eligible to receive under paragraph (a)(4) of this section, the SEA must
ratably reduce the allocations for all LEAs in the State to the amount
available.
    (d) Eligibility for hold-harmless protection. (1) An LEA must meet
the eligibility requirements for a basic grant, targeted grant, or
education finance incentive grant under Sec. 200.71 in order for the
applicable hold-harmless provision to apply.
    (2) An LEA not meeting the eligibility requirements for a
concentration grant under Sec. 200.71 must be paid its hold-harmless
amount for four consecutive years.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6332(c))

[67 FR 71733, Dec. 2, 2002]

[[Page 481]]



Sec. 200.74  Use of an alternative method to distribute grants to
LEAs with fewer than 20,000 total residents.

    (a) For eligible LEAs serving an area with a total census population
of less than 20,000 persons (hereinafter referred to as ``small LEAs''),
an SEA may apply to the Secretary to use an alternative method to
distribute basic grant, concentration grant, targeted grant, and
education finance incentive grant funds.
    (b) In its application, the SEA must--
    (1) Identify the alternative data it proposes to use; and
    (2) Assure that it has established a procedure through which a small
LEA that is dissatisfied with the determination of its grant may appeal
directly to the Secretary.
    (c) The SEA must base its alternative method on population data that
best reflect the current distribution of children from low-income
families among the State's small LEAs and use the same poverty measure
consistently for small LEAs across the State for all Title I, part A
programs.
    (d) Based on the alternative poverty data selected, the SEA must--
    (1) Re-determine eligibility of its small LEAs for basic grants,
concentration grants, targeted grants, and education finance incentive
grants in accordance with Sec. 200.71;
    (2) Calculate allocations for small LEAs in accordance with the
provisions of sections 1124, 1124A, 1125, and 1125A of the ESEA, as
applicable; and
    (3) Ensure that each LEA receives the hold-harmless amount to which
it is entitled under Sec. 200.73.
    (e) The amount of funds available for redistribution under each
formula is the separate amount determined by the Secretary under
sections 1124, 1124A, 1125, and 1125A of the ESEA for eligible small
LEAs after the SEA has made the adjustments required under Sec.
200.72(c).
    (f) If the amount available for redistribution to small LEAs under
an alternative method is not sufficient to satisfy applicable hold-
harmless requirements, the SEA must ratably reduce all eligible small
LEAs to the amount available.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6333-6337)

[67 FR 71733, Dec. 2, 2002]



Sec. 200.75  Special procedures for allocating concentration grant
funds in small States.

    (a) In a State in which the number of formula children is less than
0.25 percent of the national total on January 8, 2002 (hereinafter
referred to as a ``small State''), an SEA may either--
    (1) Allocate concentration grants among eligible LEAs in the State
in accordance with Sec. Sec. 200.72 through 200.74, as applicable; or
    (2) Without regard to the allocations determined by the Secretary--
    (i) Identify those LEAs in which the number or percentage of formula
children exceeds the statewide average number or percentage of those
children; and
    (ii) Allocate concentration grant funds, consistent with Sec.
200.73, among the LEAs identified in paragraph (a)(2)(i) of this section
based on the number of formula children in each of those LEAs.
    (b) If the SEA in a small State uses an alternative method under
Sec. 200.74, the SEA must use the poverty data approved under the
alternative method to identify those LEAs with numbers or percentages of
formula children that exceed the statewide average number or percentage
of those children for the State as a whole.

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6334(b))

[67 FR 71733, Dec. 2, 2002]



Sec. 200.76  [Reserved]

   Procedures for the Within-District Allocation of LEA Program Funds



Sec. 200.77  Reservation of funds by an LEA.

    Before allocating funds in accordance with Sec. 200.78, an LEA must
reserve

[[Page 482]]

funds as are reasonable and necessary to--
    (a) Provide services comparable to those provided to children in
participating school attendance areas and schools to serve--
    (1) Homeless children who do not attend participating schools,
including providing educationally related support services to children
in shelters and other locations where homeless children may live;
    (2) Children in local institutions for neglected children; and
    (3) If appropriate--
    (i) Children in local institutions for delinquent children; and
    (ii) Neglected and delinquent children in community-day school
programs;
    (b) Provide, where appropriate under section 1113(c)(4) of the ESEA,
financial incentives and rewards to teachers who serve students in Title
I schools identified for school improvement, corrective action, and
restructuring for the purpose of attracting and retaining qualified and
effective teachers;
    (c) Meet the requirements for choice-related transportation and
supplemental educational services in Sec. 200.48, unless the LEA meets
these requirements with non-Title I funds;
    (d) Address the professional development needs of instructional
staff, including--
    (1) Professional development requirements under Sec.
200.52(a)(3)(iii) if the LEA has been identified for improvement or
corrective action; and
    (2) Professional development expenditure requirements under Sec.
200.60;
    (e) Meet the requirements for parental involvement in section
1118(a)(3) of the ESEA;
    (f) Administer programs for public and private school children under
this part, including special capital expenses, if any, incurred in
providing services to eligible private school children, such as--
    (1) The purchase and lease of real and personal property (including
mobile educational units and neutral sites);
    (2) Insurance and maintenance costs;
    (3) Transportation; and
    (4) Other comparable goods and services, including non-instructional
computer technicians; and
    (g) Conduct other authorized activities, such as school improvement
and coordinated services.

(Authority: 20 U.S.C. 6313(c)(3) and (4), 6316(b)(10), (c)(7)(iii),
6318(a)(3), 6319(l), 6320, 7279d)

[67 FR 71735, Dec. 2, 2002]



Sec. 200.78  Allocation of funds to school attendance areas and schools.

    (a)(1) An LEA must allocate funds under subpart A of this part to
school attendance areas and schools, identified as eligible and selected
to participate under section 1113(a) or (b) of the ESEA, in rank order
on the basis of the total number of children from low-income families in
each area or school.
    (2)(i) In calculating the total number of children from low-income
families, the LEA must include children from low-income families who
attend private schools.
    (ii) To obtain a count of private school children, the LEA may--
    (A) Use the same poverty data the LEA uses to count public school
children;
    (B)(1) Use comparable poverty data from a survey of families of
private school students that, to the extent possible, protects the
families' identity; and
    (2) Extrapolate data from the survey based on a representative
sample if complete actual data are unavailable;
    (C) Use comparable poverty data from a different source, such as
scholarship applications;
    (D) Apply the low-income percentage of each participating public
school attendance area to the number of private school children who
reside in that school attendance area; or
    (E) Use an equated measure of low income correlated with the measure
of low income used to count public school children.
    (iii) An LEA may count private school children from low-income
families every year or every two years.
    (iv) After timely and meaningful consultation in accordance with
Sec. 200.63, the LEA shall have the final authority in determining the
method used to calculate the number of private school children from low-
income families;
    (3) If an LEA ranks its school attendance areas and schools by grade
span

[[Page 483]]

groupings, the LEA may determine the percentage of children from low-
income families in the LEA as a whole or for each grade span grouping.
    (b)(1) Except as provided in paragraphs (b)(2) and (d) of this
section, an LEA must allocate to each participating school attendance
area or school an amount for each low-income child that is at least 125
percent of the per-pupil amount of funds the LEA received for that year
under part A, subpart 2 of Title I. The LEA must calculate this per-
pupil amount before it reserves funds under Sec. 200.77, using the
poverty measure selected by the LEA under section 1113(a)(5) of the
ESEA.
    (2) If an LEA is serving only school attendance areas or schools in
which the percentage of children from low-income families is 35 percent
or more, the LEA is not required to allocate a per-pupil amount of at
least 125 percent.
    (c) An LEA is not required to allocate the same per-pupil amount to
each participating school attendance area or school provided the LEA
allocates higher per-pupil amounts to areas or schools with higher
concentrations of poverty than to areas or schools with lower
concentrations of poverty.
    (d) An LEA may reduce the amount of funds allocated under this
section to a school attendance area or school if the area or school is
spending supplemental State or local funds for programs that meet the
requirements in Sec. 200.79(b).
    (e) If an LEA contains two or more counties in their entirety, the
LEA must distribute to schools within each county a share of the LEA's
total grant that is no less than the county's share of the child count
used to calculate the LEA's grant.

(Authority: 20 U.S.C. 6313(c), 6320(a) and (c)(1), 6333(c)(2))

[67 FR 71735, Dec. 2, 2002]

                           Fiscal Requirements



Sec. 200.79  Exclusion of supplemental State and local funds from
supplement, not supplant and comparability determinations.

    (a) For the purpose of determining compliance with the supplement
not supplant requirement in section 1120A(b) and the comparability
requirement in section 1120A(c) of the ESEA, a grantee or subgrantee
under subpart A of this part may exclude supplemental State and local
funds spent in any school attendance area or school for programs that
meet the intent and purposes of Title I.
    (b) A program meets the intent and purposes of Title I if the
program either--
    (1)(i) Is implemented in a school in which the percentage of
children from low-income families is at least 40 percent;
    (ii) Is designed to promote schoolwide reform and upgrade the entire
educational operation of the school to support students in their
achievement toward meeting the State's challenging academic achievement
standards that all students are expected to meet;
    (iii) Is designed to meet the educational needs of all students in
the school, particularly the needs of students who are failing, or most
at risk of failing, to meet the State's challenging student academic
achievement standards; and
    (iv) Uses the State's assessment system under Sec. 200.2 to review
the effectiveness of the program; or
    (2)(i) Serves only students who are failing, or most at risk of
failing, to meet the State's challenging student academic achievement
standards;
    (ii) Provides supplementary services designed to meet the special
educational needs of the students who are participating in the program
to support their achievement toward meeting the State's student academic
achievement standards; and
    (iii) Uses the State's assessment system under Sec. 200.2 to review
the effectiveness of the program.
    (c) The conditions in paragraph (b) of this section also apply to
supplemental State and local funds expended under section 1113(b)(1)(D)
and 1113(c)(2)(B) of the ESEA.

(Authority: 20 U.S.C. 6321(b)-(d))

[67 FR 71736, Dec. 2, 2002]

[[Page 484]]



              Subpart B_Even Start Family Literacy Program



Sec. 200.80  Migrant Education Even Start Program definition.

    Eligible participants under the Migrant Education Even Start Program
(MEES) must meet the definitions of a migratory child, a migratory
agricultural worker, or a migratory fisher in Sec. 200.81.

(Authority: 20 U.S.C. 6381a and 20 U.S.C. 6399)

[67 FR 71736, Dec. 2, 2002]



                   Subpart C_Migrant Education Program

    Source: 67 FR 71736, Dec. 2, 2002, unless otherwise noted.



Sec. 200.81  Program definitions.

    The following definitions apply to programs and projects operated
under subpart C of this part:
    (a) Agricultural work means the production or initial processing of
crops, dairy products, poultry, or livestock, as well as the cultivation
or harvesting of trees. It consists of work performed for wages or
personal subsistence.
    (b) Fishing work means the catching or initial processing of fish or
shellfish or the raising or harvesting of fish or shellfish at fish
farms. It consists of work performed for wages or personal subsistence.
    (c) In order to obtain, when used to describe why a worker moved,
means that one of the purposes of the move is to seek or obtain
qualifying work.
    (1) If a worker states that a purpose of the move was to seek any
type of employment, i.e., the worker moved with no specific intent to
find work in a particular job, the worker is deemed to have moved with a
purpose of obtaining qualifying work if the worker obtains qualifying
work soon after the move.
    (2) Notwithstanding the introductory text of this paragraph (c), a
worker who did not obtain qualifying work soon after a move may be
considered to have moved in order to obtain qualifying work only if the
worker states that at least one purpose of the move was specifically to
seek the qualifying work, and--
    (i) The worker is found to have a prior history of moves to obtain
qualifying work; or
    (ii) There is other credible evidence that the worker actively
sought qualifying work soon after the move but, for reasons beyond the
worker's control, the work was not available.
    (d) Migratory agricultural worker means a person who, in the
preceding 36 months, has moved, as defined in paragraph (g), from one
school district to another, or from one administrative area to another
within a State that is comprised of a single school district, in order
to obtain temporary employment or seasonal employment in agricultural
work, including dairy work.
    (e) Migratory child means a child--
    (1) Who is a migratory agricultural worker or a migratory fisher; or
    (2) Who, in the preceding 36 months, in order to accompany or join a
parent, spouse, or guardian who is a migratory agricultural worker or a
migratory fisher--
    (i) Has moved from one school district to another;
    (ii) In a State that is comprised of a single school district, has
moved from one administrative area to another within such district; or
    (iii) As the child of a migratory fisher, resides in a school
district of more than 15,000 square miles, and migrates a distance of 20
miles or more to a temporary residence.
    (f) Migratory fisher means a person who, in the preceding 36 months,
has moved, as defined in paragraph (g), from one school district to
another, or from one administrative area to another within a State that
is comprised of a single school district, in order to obtain temporary
employment or seasonal employment in fishing work. This definition also
includes a person who, in the preceding 36 months, resided in a school
district of more than 15,000 square miles and moved, as defined in
paragraph (g), a distance of 20 miles or more to a temporary residence
in order to obtain temporary employment or seasonal employment in
fishing work.
    (g) Move or Moved means a change from one residence to another
residence that occurs due to economic necessity.

[[Page 485]]

    (h) Personal subsistence means that the worker and the worker's
family, as a matter of economic necessity, consume, as a substantial
portion of their food intake, the crops, dairy products, or livestock
they produce or the fish they catch.
    (i) Qualifying work means temporary employment or seasonal
employment in agricultural work or fishing work.
    (j) Seasonal employment means employment that occurs only during a
certain period of the year because of the cycles of nature and that, by
its nature, may not be continuous or carried on throughout the year.
    (k) Temporary employment means employment that lasts for a limited
period of time, usually a few months, but no longer than 12 months. It
typically includes employment where the employer states that the worker
was hired for a limited time frame; the worker states that the worker
does not intend to remain in that employment indefinitely; or the SEA
has determined on some other reasonable basis that the employment is
temporary. The definition includes employment that is constant and
available year-round only if, within 18 months after the effective date
of this regulation and at least once every three years thereafter, the
SEA documents that, given the nature of the work, of those workers whose
children were previously determined to be eligible based on the State's
prior determination of the temporary nature of such employment (or the
children themselves if they are the workers), virtually no workers
remained employed by the same employer more than 12 months.

(Authority: 20 U.S.C. 6391-6399, 6571)

[73 FR 44123, July 29, 2008]



Sec. 200.82  Use of program funds for unique program function costs.

    An SEA may use the funds available from its State Migrant Education
Program (MEP) to carry out other administrative activities, beyond those
allowable under Sec. 200.100(b)(4), that are unique to the MEP,
including those that are the same or similar to administrative
activities performed by LEAs in the State under subpart A of this part.
These activities include but are not limited to--
    (a) Statewide identification and recruitment of eligible migratory
children;
    (b) Interstate and intrastate coordination of the State MEP and its
local projects with other relevant programs and local projects in the
State and in other States;
    (c) Procedures for providing for educational continuity for
migratory children through the timely transfer of educational and health
records, beyond that required generally by State and local agencies;
    (d) Collecting and using information for accurate distribution of
subgrant funds;
    (e) Development of a statewide needs assessment and a comprehensive
State plan for MEP service delivery;
    (f) Supervision of instructional and support staff;
    (g) Establishment and implementation of a State parent advisory
council; and
    (h) Conducting an evaluation of the effectiveness of the State MEP.

(Authority: 20 U.S.C. 6392, 6571)

[67 FR 71736, Dec. 2, 2002; 68 FR 19152, Apr. 18, 2003]



Sec. 200.83  Responsibilities of SEAs to implement projects through a
comprehensive needs assessment and a comprehensive State plan for

service delivery.

    (a) An SEA that receives a grant of MEP funds must develop and
update a written comprehensive State plan (based on a current statewide
needs assessment that, at a minimum, has the following components:
    (1) Performance targets. The plan must specify--
    (i) Performance targets that the State has adopted for all children
in reading and mathematics achievement, high school graduation, and the
number of school dropouts, as well as the State's performance targets,
if any, for school readiness; and
    (ii) Any other performance targets that the State has identified for
migratory children.
    (2) Needs assessment. The plan must include an identification and
assessment of--

[[Page 486]]

    (i) The unique educational needs of migratory children that result
from the children's migratory lifestyle; and
    (ii) Other needs of migratory students that must be met in order for
migratory children to participate effectively in school.
    (3) Measurable program outcomes. The plan must include the
measurable program outcomes (i.e., objectives) that a State's migrant
education program will produce to meet the identified unique needs of
migratory children and help migratory children achieve the State's
performance targets identified in paragraph (a)(1) of this section.
    (4) Service delivery. The plan must describe the strategies that the
SEA will pursue on a statewide basis to achieve the measurable program
outcomes in paragraph (a)(3) of this section by addressing--
    (i) The unique educational needs of migratory children consistent
with paragraph (a)(2)(i) of this section; and
    (ii) Other needs of migratory children consistent with paragraph
(a)(2)(ii) of this section.
    (5) Evaluation. The plan must describe how the State will evaluate
the effectiveness of its program.
    (b) The SEA must develop its comprehensive State plan in
consultation with the State parent advisory council or, for SEAs not
operating programs for one school year in duration, in consultation with
the parents of migratory children. This consultation must be in a format
and language that the parents understand.
    (c) Each SEA receiving MEP funds must ensure that its local
operating agencies comply with the comprehensive State plan.

(Approved by the Office of Management and Budget under control number
1810-0662)

(Authority: 20 U.S.C. 6396)

[67 FR 71736, Dec. 2, 2002, as amended at 68 FR 19152, Apr. 18, 2003; 73
FR 44124, July 29, 2008]

    Effective Date Note: At 73 FR 44124, July 29, 2008, Sec. 200.83 was
amended. This section contains information collection and recordkeeping
requirements and will not become effective until approval has been given
by the Office of Management and Budget.



Sec. 200.84  Responsibilities of SEAs for evaluating the effectiveness
of the MEP.

    Each SEA must determine the effectiveness of its program through a
written evaluation that measures the implementation and results achieved
by the program against the State's performance targets in Sec.
200.83(a)(1), particularly for those students who have priority for
service as defined in section 1304(d) of the ESEA.

(Approved by the Office of Management and Budget under control number
1810-0662)

(Authority: 20 U.S.C. 6394)

[67 FR 71736, Dec. 2, 2002; 68 FR 19152, Apr. 18, 2003]



Sec. 200.85  Responsibilities of SEAs and operating agencies for
improving services to migratory children.

    While the specific school improvement requirements of section 1116
of the ESEA do not apply to the MEP, SEAs and local operating agencies
receiving MEP funds must use the results of the evaluation carried out
under Sec. 200.84 to improve the services provided to migratory
children.

(Authority: 20 U.S.C. 6394)



Sec. 200.86  Use of MEP funds in schoolwide projects.

    Funds available under part C of Title I of the ESEA may be used in a
schoolwide program subject to the requirements of Sec. 200.29(c)(1).

(Authority: 20 U.S.C. 6396)

[67 FR 71736, Dec. 2, 2002; 68 FR 19152, Apr. 18, 2003]



Sec. 200.87  Responsibilities for participation of children in private
schools.

    An SEA and its operating agencies must conduct programs and projects
under subpart C of this part in a manner consistent with the basic
requirements of section 9501 of the ESEA.

(Authority: 20 U.S.C. 6394)

[[Page 487]]



Sec. 200.88  Exclusion of supplemental State and local funds from
supplement, not supplant and comparability determinations.

    (a) For purposes of determining compliance with the comparability
requirement in section 1120A(c) and the supplement, not supplant
requirement in section 1120A(b) of the ESEA, a grantee or subgrantee
under part C of Title I may exclude supplemental State and local funds
expended in any school attendance area or school for carrying out
special programs that meet the intent and purposes of part C of Title I.
    (b) Before funds for a State and local program may be excluded for
purposes of these requirements, the SEA must make an advance written
determination that the program meets the intent and purposes of part C
of Title I.
    (c) A program meets the intent and purposes of part C of Title I if
it meets the following requirements:
    (1) The program is specifically designed to meet the unique
educational needs of migratory children, as defined in section 1309 of
the ESEA.
    (2) The program is based on performance targets related to
educational achievement that are similar to those used in programs
funded under part C of Title I of the ESEA, and is evaluated in a manner
consistent with those program targets.
    (3) The grantee or subgrantee keeps, and provides access to, records
that ensure the correctness and verification of these requirements.
    (4) The grantee monitors program performance to ensure that these
requirements are met.

(Approved by the Office of Management and Budget under control number
1810-0662)

(Authority 20 U.S.C. 6321(d))

[67 FR 71736, Dec. 2, 2002; 68 FR 19152, Apr. 18, 2003]



Sec. 200.89  MEP allocations; Re-interviewing; Eligibility
documentation; and Quality control.

    (a) Allocation of funds under the MEP for fiscal year (FY) 2006 and
subsequent years. (1) For purposes of calculating the size of MEP
allocations for each SEA for FY 2006 and subsequent years (as well as
for supplemental MEP allocations for FY 2005), the Secretary determines
each SEA's FY 2002 base allocation amount under section 1303(a)(2) and
(b) of the Act by applying, to the counts of eligible migratory children
that the SEA submitted for 2000-2001, the defect rate that the SEA
reports to the Secretary and that the Secretary accepts based on a
statewide retrospective re-interviewing process that the SEA has
conducted.
    (2)(i) The Secretary conditions an SEA's receipt of final FY 2007
and subsequent-year MEP awards on the SEA's completion of a thorough re-
documentation of the eligibility of all children (and the removal of all
ineligible children) included in the State's 2007-2008 MEP child counts.
    (ii) To carry out this re-documentation, an SEA must examine its
rolls of all currently identified migratory children and remove from the
rolls all children it judges to be ineligible based on the types of
problems identified in its statewide retrospective re-interviewing as
causing defective eligibility determinations.
    (b) Responsibilities of SEAs for re-interviewing to ensure the
eligibility of children under the MEP--(1) Retrospective re-
interviewing. (i) As a condition for the continued receipt of MEP funds
in FY 2006 and subsequent years, an SEA that received such funds in FY
2005 but did not implement a statewide re-interviewing process prior to
the enactment of this regulation, as well as an SEA with a defect rate
that is not accepted by the Secretary under paragraph (a)(1) of this
section, or an SEA under a corrective action issued by the Secretary
under paragraph (b)(2)(vii) or (d)(7) of this section, must, within six
months of the effective date of these regulations or as subsequently
required by the Secretary,--
    (A) Conduct a statewide re-interviewing process consistent with
paragraph (b)(1)(ii) of this section; and
    (B) Consistent with paragraph (b)(1)(iii) of this section, report to
the Secretary on the procedures it has employed, its findings, its
defect rate, and corrective actions it has taken or will take to avoid a
recurrence of any problems found.
    (ii) At a minimum, the re-interviewing process must include--

[[Page 488]]

    (A) Selection of a sample of identified migratory children (from the
child counts of a particular year as directed by the Secretary) randomly
selected on a statewide basis to allow the State to estimate the
statewide proportion of eligible migratory children at a 95 percent
confidence level with a confidence interval of plus or minus 5 percent.
    (B) Use of independent re-interviewers (i.e., interviewers who are
neither SEA or local operating agency staff members working to
administer or operate the State MEP nor any other persons who worked on
the initial eligibility determinations being tested) trained to conduct
personal interviews and to understand and apply program eligibility
requirements; and
    (C) Calculation of a defect rate based on the number of sampled
children determined ineligible as a percentage of those sampled children
whose parent/guardian was actually re-interviewed.
    (iii) At a minimum, the report must include--
    (A) An explanation of the sample and procedures used in the SEA's
re-interviewing process;
    (B) The findings of the re-interviewing process, including the
determined defect rate;
    (C) An acknowledgement that, consistent with Sec. 200.89(a), the
Secretary may adjust the child counts for 2000-2001 and subsequent years
downward based on the defect rate that the Secretary accepts;
    (D) A summary of the types of defective eligibility determinations
that the SEA identified through the re-interviewing process;
    (E) A summary of the reasons why each type of defective eligibility
determination occurred; and
    (F) A summary of the corrective actions the SEA will take to address
the identified problems.
    (2) Prospective re-interviewing. As part of the system of quality
controls identified in Sec. 200.89(d), an SEA that receives MEP funds
must, on an annual basis, validate current-year child eligibility
determinations through the re-interview of a randomly selected sample of
children previously identified as migratory. In conducting these re-
interviews, an SEA must--
    (i) Use, at least once every three years, one or more independent
interviewers (i.e., interviewers who are neither SEA or local operating
agency staff members working to administer or operate the State MEP nor
any other persons who worked on the initial eligibility determinations
being tested) trained to conduct personal interviews and to understand
and apply program eligibility requirements;
    (ii) Select a random sample of identified migratory children so that
a sufficient number of eligibility determinations in the current year
are tested on a statewide basis or within categories associated with
identified risk factors (e.g., experience of recruiters, size or growth
in local migratory child population, effectiveness of local quality
control procedures) in order to help identify possible problems with the
State's child eligibility determinations;
    (iii) Conduct re-interviews with the parents or guardians of the
children in the sample. States must use a face-to-face approach to
conduct these re-interviews unless circumstances make face-to-face re-
interviews impractical and necessitate the use of an alternative method
such as telephone re-interviewing;
    (iv) Determine and document in writing whether the child eligibility
determination and the information on which the determination was based
were true and correct;
    (v) Stop serving any children found not to be eligible and remove
them from the data base used to compile counts of eligible children;
    (vi) Certify and report to the Department the results of re-
interviewing in the SEA's annual report of the number of migratory
children in the State required by the Secretary; and
    (vii) Implement corrective actions or improvements to address the
problems identified by the State (including the identification and
removal of other ineligible children in the total population), and any
corrective actions, including retrospective re-interviewing, required by
the Secretary.
    (c) Responsibilities of SEAs to document the eligibility of
migratory children. (1) An SEA and its operating agencies must use the
Certificate of Eligibility

[[Page 489]]

(COE) form established by the Secretary to document the State's
determination of the eligibility of migratory children.
    (2) In addition to the form required under paragraph (a) of this
section, the SEA and its operating agencies must maintain any additional
documentation the SEA requires to confirm that each child found eligible
for this program meets all of the eligibility definitions in Sec.
200.81.
    (3) An SEA is responsible for the accuracy of all the determinations
of the eligibility of migratory children identified in the State.
    (d) Responsibilities of an SEA to establish and implement a system
of quality controls for the proper identification and recruitment of
eligible migratory children. An SEA must establish and implement a
system of quality controls for the proper identification and recruitment
of eligible migratory children on a statewide basis. At a minimum, this
system of quality controls must include the following components:
    (1) Training to ensure that recruiters and all other staff involved
in determining eligibility and in conducting quality control procedures
know the requirements for accurately determining and documenting child
eligibility under the MEP.
    (2) Supervision and annual review and evaluation of the
identification and recruitment practices of individual recruiters.
    (3) A formal process for resolving eligibility questions raised by
recruiters and their supervisors and for ensuring that this information
is communicated to all local operating agencies.
    (4) An examination by qualified individuals at the SEA or local
operating agency level of each COE to verify that the written
documentation is sufficient and that, based on the recorded data, the
child is eligible for MEP services.
    (5) A process for the SEA to validate that eligibility
determinations were properly made, including conducting prospective re-
interviewing as described in paragraph (b)(2).
    (6) Documentation that supports the SEA's implementation of this
quality-control system and of a record of actions taken to improve the
system where periodic reviews and evaluations indicate a need to do so.
    (7) A process for implementing corrective action if the SEA finds
COEs that do not sufficiently document a child's eligibility for the
MEP, or in response to internal State audit findings and
recommendations, or monitoring or audit findings of the Secretary.

    Authority: 20 U.S.C. 6391-6399, 6571, 7844(d); 18 U.S.C. 1001.

[73 FR 44124, July 29, 2008]

    Effective Date Note: At 73 FR 44124, July 29, 2008, Sec. 200.89 was
added. This section contains information collection and recordkeeping
requirements and will not become effective until approval has been given
by the Office of Management and Budget.



 Subpart D_Prevention and Intervention Programs for Children and Youth
        Who are Neglected, Delinquent, or At-Risk of Dropping Out

    Source: 67 FR 71736, Dec. 2, 2002, unless otherwise noted.



Sec. 200.90  Program definitions.

    (a) The following definitions apply to the programs authorized in
part D, subparts 1 and 2 of Title I of the ESEA:
    Children and youth means the same as ``children'' as that term is
defined in Sec. 200.103(a).
    (b) The following definitions apply to the programs authorized in
part D, subpart 1 of Title I of the ESEA:
    Institution for delinquent children and youth means, as determined
by the SEA, a public or private residential facility that is operated
primarily for the care of children and youth who--
    (1) Have been adjudicated to be delinquent or in need of
supervision; and
    (2) Have had an average length of stay in the institution of at
least 30 days.
    Institution for neglected children and youth means, as determined by
the SEA, a public or private residential facility, other than a foster
home, that is operated primarily for the care of children and youth
who--
    (1) Have been committed to the institution or voluntarily placed in
the institution under applicable State law

[[Page 490]]

due to abandonment, neglect, or death of their parents or guardians; and
    (2) Have had an average length of stay in the institution of at
least 30 days.
    Regular program of instruction means an educational program (not
beyond grade 12) in an institution or a community day program for
neglected or delinquent children that consists of classroom instruction
in basic school subjects such as reading, mathematics, and vocationally
oriented subjects, and that is supported by non-Federal funds. Neither
the manufacture of goods within the institution nor activities related
to institutional maintenance are considered classroom instruction.
    (c) The following definitions apply to the local agency program
authorized in part D, subpart 2 of Title I of the ESEA:
    Immigrant children and youth and limited English proficiency have
the same meanings as the term ``immigrant children'' is defined in
section 3301 of the ESEA and the term ``limited English proficient'' is
defined in section 9101 of the ESEA, except that the terms
``individual'' and ``children and youth'' used in those definitions mean
``children and youth'' as defined in this section.
    Locally operated correctional facility means a facility in which
persons are confined as a result of a conviction for a criminal offense,
including persons under 21 years of age. The term also includes a local
public or private institution and community day program or school not
operated by the State that serves delinquent children and youth.
    Migrant youth means the same as ``migratory child'' as that term is
defined in Sec. 200.81(d).

(Authority: 20 U.S.C. 6432, 6454, 6472, 7801)



Sec. 200.91  SEA counts of eligible children.

    To receive an allocation under part D, subpart 1 of Title I of the
ESEA, an SEA must provide the Secretary with a count of children and
youth under the age of 21 enrolled in a regular program of instruction
operated or supported by State agencies in institutions or community day
programs for neglected or delinquent children and youth and adult
correctional institutions as specified in paragraphs (a) and (b) of this
section.
    (a) Enrollment. (1) To be counted, a child or youth must be enrolled
in a regular program of instruction for at least--
    (i) 20 hours per week if in an institution or community day program
for neglected or delinquent children; or
    (ii) 15 hours per week if in an adult correctional institution.
    (2) The State agency must specify the date on which the enrollment
of neglected or delinquent children is determined under paragraph (a)(1)
of this section, except that the date specified must be--
    (i) Consistent for all institutions or community day programs
operated by the State agency; and
    (ii) Represent a school day in the calendar year preceding the year
in which funds become available.
    (b) Adjustment of enrollment. The SEA must adjust the enrollment for
each institution or community day program served by a State agency by--
    (1) Multiplying the number determined in paragraph (a) of this
section by the number of days per year the regular program of
instruction operates; and
    (2) Dividing the result of paragraph (b)(1) of this section by 180.
    (c) Date of submission. The SEA must annually submit the data in
paragraph (b) of this section no later than January 31.

(Approved by the Office of Management and Budget under control number
1810-0060)

(Authority: 20 U.S.C. 6432)



Sec. Sec. 200.92-200.99  [Reserved]



                      Subpart E_General Provisions

    Source: 67 FR 71738, Dec. 2, 2002, unless otherwise noted.



Sec. 200.100  Reservation of funds for school improvement, State
administration, and the State academic achievement awards program.

    A State must reserve funds for school improvement, State
administration, and State academic achievement awards as follows:

[[Page 491]]

    (a) School improvement. (1) To carry out school improvement
activities authorized under sections 1116 and 1117 of the ESEA, an SEA
must first reserve--
    (i) Two percent from the sum of the amounts allocated to the State
under section 1002(a) of the ESEA for fiscal years 2002 and 2003; and
    (ii) Four percent from the sum of the amounts allocated to the State
under section 1002(a) of the ESEA for fiscal year 2004 and succeeding
years.
    (2) In reserving funds under paragraph (a)(1) of this section, a
State may not reduce the sum of the allocations an LEA receives under
section 1002(a) of the ESEA below the sum of the allocations the LEA
received under section 1002(a) for the preceding fiscal year.
    (3) If funds under section 1002(a) are insufficient in a given
fiscal year to implement both paragraphs (a)(1) and (2) of this section,
a State is not required to reserve the full amount required under
paragraph (a)(1) of this section.
    (b) State administration. (1) An SEA may reserve for State
administrative activities authorized in sections 1004 and 1903 of the
ESEA no more than the greater of--
    (i) One percent from each of the amounts allocated to the State or
Outlying Area under section 1002(a), (c), and (d) of the ESEA; or
    (ii) $400,000 ($50,000 for the Outlying Areas).
    (2)(i) An SEA reserving $400,000 under paragraph (b)(1)(ii) of this
section must reserve proportionate amounts from each of the amounts
allocated to the State or Outlying Area under section 1002(a), but is
not required to reserve proportionate amounts from section 1002(a), (c),
and (d) of the ESEA.
    (ii) If an SEA reserves funds from the amounts allocated to the
State or Outlying Area under section 1002(c) or (d) of the ESEA, the SEA
may not reserve from those allocations more than the amount the SEA
would have reserved if it had reserved proportionate amounts from
section 1002(a), (c), and (d) of the ESEA.
    (3) If the sum of the amounts allocated to all the States under
section 1002(a), (c), and (d) of the ESEA is greater than
$14,000,000,000, an SEA may not reserve more than one percent of the
amount the State would receive if $14,000,000,000 had been allocated
among the States under section 1002(a), (c), and (d) of the ESEA.
    (4) An SEA may use the funds it has reserved under paragraph (b) of
this section to perform general administrative activities necessary to
carry out, at the State level, any of the programs authorized under
Title I, parts A, C, and D of the ESEA.
    (c) State academic achievement awards program. To operate the State
academic achievement awards program authorized under section 1117(b)(1)
and (c)(2)(A) of the ESEA, an SEA may reserve up to five percent of the
excess amount the State receives under section 1002(a) of the ESEA when
compared to the amount the State received under section 1002(a) of the
ESEA in the preceding fiscal year.
    (d) Reservations and hold-harmless. In reserving funds under
paragraphs (b) and (c) of this section, an SEA may--
    (1) Proportionately reduce each LEA's total allocation received
under section 1002(a) of the ESEA while ensuring that no LEA receives in
total less than the hold-harmless percentage under Sec. 200.73(a)(4),
except that, when the amount remaining is insufficient to pay all LEAs
the hold-harmless amount provided in Sec. 200.73, the SEA shall ratably
reduce each LEA's hold-harmless allocation to the amount available; or
    (2) Proportionately reduce each LEA's total allocation received
under section 1002(a) of the ESEA even if an LEA's total allocation
falls below its hold-harmless percentage under Sec. 200.74(a)(3).

(Approved by the Office of Management and Budget under control numbers
1810-0620 and 1810-0622)

(Authority: 20 U.S.C. 6303, 6304, 6317(c)(2)(A))



Sec. Sec. 200.101-200.102  [Reserved]



Sec. 200.103  Definitions.

    The following definitions apply to programs operated under this
part:
    (a) Children means--
    (1) Persons up through age 21 who are entitled to a free public
education through grade 12; and

[[Page 492]]

    (2) Preschool children below the age and grade level at which the
agency provides free public education.
    (b) Fiscal year means the Federal fiscal year--a period beginning on
October 1 and ending on the following September 30--or another 12-month
period normally used by the SEA for record-keeping.
    (c) Student with a disability means child with a disability, as
defined in section 602(3) of the IDEA.

(Authority: 20 U.S.C. 6315, 6571)

[67 FR 71738, Dec. 2, 2002, as amended at 72 FR 17781, Apr. 9, 2007]



Sec. Sec. 200.104-200.109  [Reserved]



PART 206_SPECIAL EDUCATIONAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE
ENGAGED IN MIGRANT AND OTHER SEASONAL FARMWORK_HIGH SCHOOL EQUIVALENCY

PROGRAM AND COLLEGE ASSISTANCE MIGRANT PROGRAM--Table of Contents



                            Subpart A_General

Sec.
206.1 What are the special educational programs for students whose
          families are engaged in migrant and other seasonal farmwork?
206.2 Who is eligible to participate as a grantee?
206.3 Who is eligible to participate in a project?
206.4 What regulations apply to these programs?
206.5 What definitions apply to these programs?

Subpart B_What Kinds of Activities Does the Secretary Assist Under These
                                Programs?

206.10 What types of services may be provided?
206.11 What types of CAMP services must be provided?

                Subpart C_How Does One Apply for a Grant?

206.20 What must be included in an application?

     Subpart D_How Does the Secretary Make a Grant to an Applicant?

206.30 How does the Secretary evaluate an application?
206.31 How does the Secretary evaluate points for prior experience for
          HEP and CAMP service delivery?

           Subpart E_What Conditions Must Be Met by a Grantee?

206.40 What restrictions are there on expenditures?

    Authority: 20 U.S.C. 1070d-2, unless otherwise noted.

    Source: 46 FR 35075, July 6, 1981, unless otherwise noted.



                            Subpart A_General



Sec. 206.1  What are the special educational programs for students
whose families are engaged in migrant and other seasonal farmwork?

    (a) High School Equivalency Program. The High School Equivalency
Program (HEP) is designed to assist persons who are eligible under Sec.
206.3--to obtain the equivalent of a secondary school diploma and
subsequently to gain employment or be placed in an institution of higher
education (IHE) or other postsecondary education or training.
    (b) College Assistance Migrant Program. The College Assistance
Migrant Program (CAMP) is designed to assist persons who are eligible
under Sec. 206.3--who are enrolled or are admitted for enrollment on a
full-time basis in the first academic year at an IHE.

(Authority: 20 U.S.C. 1070d-2(a))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992]



Sec. 206.2  Who is eligible to participate as a grantee?

    (a) Eligibility. An IHE or a private nonprofit organization may
apply for a grant to operate a HEP or CAMP project.
    (b) Cooperative planning. If a private nonprofit organization other
than an IHE applies for a HEP or a CAMP grant, that agency must plan the
project in cooperation with an IHE and must propose to operate the
project, or

[[Page 493]]

in the case of a HEP grant, some aspects of the project, with the
facilities of that IHE.

(Authority: 20 U.S.C. 1070d-2(a))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987]



Sec. 206.3  Who is eligible to participate in a project?

    (a) General. To be eligible to participate in a HEP or a CAMP
project--
    (1) A person, or his or her immediate family member, must have spent
a minimum of 75 days during the past 24 months as a migrant or seasonal
farmworker; or
    (2) The person must have participated (with respect to HEP within
the last 24 months), or be eligible to participate, in programs under 34
CFR part 200, subpart C (Title I--Migrant Education Program) or 20 CFR
part 633 (Employment and Training Administration, Department of Labor--
Migrant and Seasonal Farmworker Programs).
    (b) Special HEP qualifications. To be eligible to participate in a
HEP project, a person also must--
    (1) Not have earned a secondary school diploma or its equivalent;
    (2) Not be currently enrolled in an elementary or secondary school;
    (3) Be 16 years of age or over, or beyond the age of compulsory
school attendance in the State in which he or she resides; and
    (4) Be determined by the grantee to need the academic and supporting
services and financial assistance provided by the project in order to
attain the equivalent of a secondary school diploma and to gain
employment or be placed in an IHE or other postsecondary education or
training.
    (c) Special CAMP qualifications. To be eligible to participate in a
CAMP project, a person also must--
    (1) Be enrolled or be admitted for enrollment as a full-time student
at the participating IHE;
    (2) Not be beyond the first academic year of a program of study at
the IHE, as determined under the standards of the IHE; and
    (3) Be determined by the grantee to need the academic and supporting
services and financial assistance provided by the project in order to
complete an academic program of study at the IHE.

(Authority: 20 U.S.C. 1070d-2(a))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992; 75 FR 65769, Oct. 26, 2010]



Sec. 206.4  What regulations apply to these programs?

    The following regulations apply to HEP and CAMP:
    (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).
    (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 84 (Governmentwide Requirements for Drug-Free
Workplace (Financial Assistance)).
    (7) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace
(Grants)).
    (8) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (9) 34 CFR part 97 (Protection of Human Subjects).
    (10) 34 CFR part 98 (Student Rights in Research, Experimental
Programs, and Testing).
    (11) 34 CFR part 99 (Family Educational Rights and Privacy).
    (b) The regulations in this part 206.

(Authority: 20 U.S.C. 1070d-2(a))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992; 58 FR 11539, Feb. 26, 1993; 75 FR 65770, Oct.
26, 2010]



Sec. 206.5  What definitions apply to these programs?

    (a) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR 77.1(c) (EDGAR, Definitions):
    Applicant

[[Page 494]]

    Application
    Elementary school
    EDGAR
    Facilities
    Minor remodeling
    Nonprofit
    Private
    Project
    Public
    Secondary school
    Secretary
    State
    (b) Definitions in the grants administration regulations. The
following terms used in this part are defined in 34 CFR part 74
(Administration of Grants):
    Budget
    Equipment
    Grant
    Grantee
    Supplies
    (c) Program definitions. The following additional definitions apply
specifically to HEP and CAMP:
    (1) Act means the Higher Education Act of 1965, as amended.
    (2) Agricultural activity means:
    (i) Any activity directly related to the production of crops, dairy
products, poultry, or livestock;
    (ii) Any activity directly related to the cultivation or harvesting
of trees; or
    (iii) Any activity directly related to fish farms.
    (3) Farmwork means any agricultural activity, performed for either
wages or personal subsistence, on a farm, ranch, or similar
establishment.
    (4) Full-time, with respect to an individual, means a student who is
carrying a full-time academic workload, as defined in 34 CFR part 690
(regulations for the Pell Grant Program).
    (5) Immediate family member means one or more of the following:
    (i) A spouse.
    (ii) A parent, step-parent, adoptive parent, foster parent, or
anyone with guardianship.
    (iii) Any person who--
    (A) Claims the individual as a dependent on a Federal income tax
return for either of the previous two years, or
    (B) Resides in the same household as the individual, supports that
individual financially, and is a relative of that individual.
    (6) Institution of higher education means an educational institution
that:
    (i) Is in a State;
    (ii) Is authorized by that State to provide a program of education
beyond secondary school;
    (iii) Is a public or nonprofit institution;
    (iv) Admits as a regular student only a person who:
    (A) Has a secondary school diploma;
    (B) Has the recognized equivalent of a secondary school diploma; or
    (C) Is beyond the age of compulsory school attendance in that State
and has the ability to benefit from the training offered by the
institution;
    (v) Provides:
    (A) An educational program for which it awards a bachelor's degree;
or
    (B) At least a two-year program that is acceptable for full credit
toward a bachelor's degree;
    (vi)(A) Is accredited by a nationally recognized accrediting agency
or association;
    (B) Has satisfactorily assured the Secretary that it will meet the
accreditation standards of a nationally recognized accrediting agency or
association within a reasonable time considering the resources available
to the institution, the period of time, if any, it has operated, and its
effort to meet accreditation standards; or
    (C) Has its credits accepted on transfer by at least three
accredited institutions on the same basis as those institutions accept
transfer credits from fully accredited institutions.
    (7) Migrant farmworker means a seasonal farmworker--as defined in
paragraph (c)(8) of this section--whose employment required travel that
precluded the farmworker from returning to his or her domicile
(permanent place of residence) within the same day.
    (8) Seasonal farmworker means a person whose primary employment was
in farmwork on a temporary or seasonal basis (that is, not a constant
year-round activity) for a period of at least 75 days within the past 24
months.
    (d) Other definitions. For purposes of determining program
eligibility under Sec. 206.3(a)(2), the definitions in 34 CFR 200.81
(Title I--Migrant Education Program) and 20 CFR 633.104 (Employment

[[Page 495]]

and Training Administration, Department of Labor--Migrant and Seasonal
Farmworker Programs) apply.

(Authority: 20 U.S.C. 1070d-2(a))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992; 75 FR 65770, Oct. 26, 2010]



Subpart B_What Kinds of Activities Does the Secretary Assist Under These
                                Programs?



Sec. 206.10  What types of services may be provided?

    (a) General. A grantee may use funds under HEP or CAMP to support
approved projects designed to provide academic and supporting services
and financial assistance to eligible participants as described in Sec.
206.3.
    (b) Types of services--(1) HEP projects. A HEP project may provide
the following types of services to assist participants in obtaining the
equivalent of a secondary school diploma, and as needed, to assure the
success of the participants in meeting the project's objectives and in
succeeding at the secondary school level and beyond:
    (i) Recruitment services to reach persons who are eligible under
Sec. 206.3 (a) and (b).
    (ii) Educational services that provide instruction designed to help
students pass an examination and obtain a certificate that meets the
guidelines for high school equivalency established by the State in which
the project is located.
    (iii) Supportive services that include the following:
    (A) Personal, vocational, and academic counseling;
    (B) Placement services designed to place students in a university,
college, or junior college program (including preparation for college
entrance examinations), or in military services or career positions; and
    (C) Health services.
    (iv) Information concerning and assistance in obtaining available
student financial aid.
    (v) Stipends for high school equivalency program participants.
    (vi) Housing for those enrolled in residential programs.
    (vii) Exposure to cultural events, academic programs, and other
educational and cultural activities usually not available to migrant
youth.
    (viii) Other essential supportive services, (such as transportation
and child care) as needed, to ensure the success of eligible students.
    (ix) Other activities to improve persistence and retention in
postsecondary education.
    (2) CAMP projects. A CAMP project may provide the following types of
services to assist the participants in meeting the project's objectives
and in succeeding in an academic program of study at the IHE:
    (i) Outreach and recruitment services to reach persons who are
eligible under Sec. 206.3 (a) and (c).
    (ii) Supportive and instructional services to improve placement,
persistence, and retention in postsecondary education, including:
    (A) Personal, academic, career economic education, or personal
finance counseling as an ongoing part of the program;
    (B) Tutoring and academic-skillbuilding instruction and assistance;
    (C) Assistance with special admissions;
    (D) Health services; and
    (E) Other services as necessary to assist students in completing
program requirements.
    (iii) Assistance in obtaining student financial aid that includes,
but is not limited to, the following:
    (A) Stipends.
    (B) Scholarships.
    (C) Student travel.
    (D) Career-oriented work-study.
    (E) Books and supplies.
    (F) Tuition and fees.
    (G) Room and board.
    (H) Other assistance necessary to assist students in completing
their first year of college or university.
    (iv) Housing support for students living in institutional facilities
and commuting students.
    (v) Exposure to cultural events, academic programs, and other
activities not usually available to migrant youth.
    (vi) Internships.

[[Page 496]]

    (vii) Other essential supportive services (such as transportation
and child care) as necessary to ensure the success of eligible students.
    (c) The health services, and other financial support services
provided to participating students must:
    (1) Be necessary to ensure their participation in the HEP or CAMP;
and
    (2) Not detract, because of the amount, from the basic educational
services provided under those programs.

(Authority: 20 U.S.C. 1070d-2(b) and (c))

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992; 75 FR 65770, Oct. 26, 2010]



Sec. 206.11  What types of CAMP services must be provided?

    (a) In addition to the services provided in Sec. 206.10(b)(2), CAMP
projects must provide follow-up services for project participants after
they have completed their first year of college.
    (b) Follow-up services may include--
    (1) Monitoring and reporting the academic progress of students who
participated in the project during their first year of college and their
subsequent years in college;
    (2) Referring these students to on- or off-campus providers of
counseling services, academic assistance, or financial aid, and
coordinating those services, assistance, and aid with other non-program
services, assistance, and aid, including services, assistance, and aid
provided by community-based organizations, which may include mentoring
and guidance; and
    (3) For students attending two-year institutions of higher
education, encouraging the students to transfer to four-year
institutions of higher education, where appropriate, and monitoring the
rate of transfer of those students.
    (c) Grantees may not use more than 10 percent of funds awarded to
them for follow-up services.

(Authority: 20 U.S.C. 1070d-2(c))

[57 FR 60407, Dec. 18, 1992, as amended at 75 FR 65770, Oct. 26, 2010]



                Subpart C_How Does One Apply for a Grant?



Sec. 206.20  What must be included in an application?

    In applying for a grant, an applicant shall:
    (a) Follow the procedures and meet the requirements stated in
subpart C of 34 CFR part 75 (EDGAR-Direct Grant Programs);
    (b) Submit a grant application that:
    (1) Covers a period of five years unless extraordinary circumstances
warrant a shorter period; and
    (2) Includes an annual budget of not less than $180,000;
    (c) Include a management plan that contains:
    (1) Assurances that the staff has a demonstrated knowledge of and
will be sensitive to the unique characteristics and needs of the migrant
and seasonal farmworker population; and
    (2) Provisions for:
    (i) Staff inservice training;
    (ii) Training and technical assistance;
    (iii) Staff travel;
    (iv) Student travel;
    (v) Interagency coordination; and
    (vi) Project evaluation; and
    (d) Provide the following assurances:
    (1) The grantee will develop and implement a plan for identifying,
informing, and recruiting eligible participants who are most in need of
the academic and supporting services and financial assistance provided
by the project.
    (2) The grantee will develop and implement a plan for identifying
and using the resources of the participating IHE and the community to
supplement and enhance the services provided by the project.

(Authority: 20 U.S.C. 1070d-2(a) and (d)-(f))

(Approved by the Office of Management and Budget under control number
1810-0055)

[46 FR 35075, July 6, 1981, as amended at 52 FR 24920, July 1, 1987; 57
FR 60407, Dec. 18, 1992; 75 FR 65770, Oct. 26, 2010]

[[Page 497]]



     Subpart D_How Does the Secretary Make a Grant to an Applicant?



Sec. 206.30  How does the Secretary evaluate an application?

    The Secretary evaluates an application under the procedures in 34
CFR part 75.

(Authority: 20 U.S.C. 1070d-2(a) and (e))

[62 FR 10403, Mar. 6, 1997]



Sec. 206.31  How does the Secretary evaluate points for prior
experience for HEP and CAMP service delivery?

    (a) In the case of an applicant for a HEP award, the Secretary
considers the applicant's experience in implementing an expiring HEP
project with respect to--
    (1) Whether the applicant served the number of participants
described in its approved application;
    (2) The extent to which the applicant met or exceeded its funded
objectives with regard to project participants, including the targeted
number and percentage of--
    (i) Participants who received a general educational development
(GED) credential; and
    (ii) GED credential recipients who were reported as entering
postsecondary education programs, career positions, or the military; and
    (3) The extent to which the applicant met the administrative
requirements, including recordkeeping, reporting, and financial
accountability under the terms of the previously funded award.
    (b) In the case of an applicant for a CAMP award, the Secretary
considers the applicant's experience in implementing an expiring CAMP
project with respect to--
    (1) Whether the applicant served the number of participants
described in its approved application;
    (2) The extent to which the applicant met or exceeded its funded
objectives with regard to project participants, including the targeted
number and percentage of participants who--
    (i) Successfully completed the first year of college; and
    (ii) Continued to be enrolled in postsecondary education after
completing their first year of college; and
    (3) The extent to which the applicant met the administrative
requirements, including recordkeeping, reporting, and financial
accountability under the terms of the previously funded award.

(Authority: 20 U.S.C. 1070d-2(e))

[75 FR 65770, Oct. 26, 2010]



           Subpart E_What Conditions Must Be Met by a Grantee?



Sec. 206.40  What restrictions are there on expenditures?

    Funds provided under HEP or CAMP may not be used for construction
activities, other than minor construction-related activities such as the
repair or minor remodeling or alteration of facilities.

(Authority: Sec. 418A(a); 20 U.S.C. 1070d-2)



PART 222_IMPACT AID PROGRAMS--Table of Contents



                            Subpart A_General

Sec.
222.1 What is the scope of this part?
222.2 What definitions apply to this part?
222.3 How does a local educational agency apply for assistance under
          section 8002 or 8003 of the Act?
222.4 How does the Secretary determine when an application is timely
          filed?
222.5 When may a local educational agency amend its application?
222.6 Which applications does the Secretary accept?
222.7 What information may a local educational agency submit after the
          application deadline?
222.8 What action must an applicant take upon a change in its boundary,
          classification, control, governing authority, or identity?
222.9 What records must a local educational agency maintain?
222.10 How long must a local educational agency retain records?
222.11 How does the Secretary recover overpayments?
222.12 What overpayments are eligible for forgiveness under section 8012
          of the Act?
222.13 What overpayments are not eligible for forgiveness under section
          8012 of the Act?
222.14 What requirements must a local educational agency meet for an
          eligible overpayment to be forgiven in whole or part?
222.15 How are the filing deadlines affected by requests for other forms
          of relief?

[[Page 498]]

222.16 What information and documentation must an LEA submit for an
          eligible overpayment to be considered for forgiveness?
222.17 How does the Secretary determine undue financial hardship and
          serious harm to a local educational agency's educational
          program?
222.18 What amount does the Secretary forgive?
222.19 What other statutes and regulations apply to this part?

  Subpart B_Payments for Federal Property Under Section 8002 of the Act

222.20 What definitions apply to this subpart?
222.21 What requirements must a local educational agency meet concerning
          Federal acquisition of real property within the local
          educational agency?
222.22 How does the Secretary treat compensation from Federal activities
          for purposes of determining eligibility and payments?
222.23 How does a local educational agency determine the aggregate
          assessed value of its eligible Federal property for its
          section 8002 payment?
222.24-222.29 [Reserved]

   Subpart C_Payments for Federally Connected Children Under Section
                       8003(b) and (e) of the Act

222.30 What is ``free public education''?
222.31 To which local educational agencies does the Secretary make basic
          support payments under section 8003(b) of the Act?
222.32 Upon what information is a local educational agency's basic
          support payment based?
222.33 When must an applicant make its first or only membership count?
222.34 If an applicant makes a second membership count, when must that
          count be made?
222.35 How does a local educational agency count the membership of its
          federally connected children?
222.36 What minimum number of federally connected children must a local
          educational agency have to receive a payment on behalf of
          those children under section 8003(b) and (e)?
222.37 How does the Secretary calculate the average daily attendance of
          federally connected children?
222.38 What is the maximum basic support payment that a local
          educational agency may receive under section 8003(b)?
222.39 How does a State educational agency identify generally comparable
          local educational agencies for local contribution rate
          purposes?
222.40 How does a local educational agency select a local contribution
          rate based on generally comparable local educational agencies?
222.41 How does a State educational agency compute local contribution
          rates based upon generally comparable local educational
          agencies?
222.42-222.49 [Reserved]

     Subpart D_Payments Under Section 8003(d) of the Act for Local
       Educational Agencies That Serve Children With Disabilities

222.50 What definitions apply to this subpart?
222.51 Which children may a local educational agency count for payment
          under section 8003(d) of the Act?
222.52 What requirements must a local educational agency meet to receive
          a payment under section 8003(d)?
222.53 What restrictions and requirements apply to the use of funds
          provided under section 8003(d)?
222.54 What supplement-not-supplant requirement applies to this subpart?
222.55 What other statutes and regulations are applicable to this
          subpart?
222.56-222.59 [Reserved]

 Subpart E_Additional Assistance for Heavily Impacted Local Educational
                Agencies Under Section 8003(f) of the Act

222.60 What are the scope and purpose of these regulations?
222.61 What data are used to determine a local educational agency's
          eligibility and payment under section 8003(f) of the Act?
222.62 Which local educational agencies are eligible to apply for an
          additional payment under section 8003(f)?
222.63 What other requirements must a local educational agency meet in
          order to be eligible for financial assistance under section
          8003(f)(2)(A)?
222.64 What other requirements must a local educational agency meet in
          order to be eligible for financial assistance under section
          8003(f)(2)(B)?
222.65 How may a State aid program affect a local educational agency's
          eligibility for assistance under section 8003(f)?
222.66 How does the Secretary determine whether a fiscally independent
          local educational agency is making a reasonable tax effort?
222.67 What tax rates does the Secretary use if real property is
          assessed at different percentages of true value?
222.68 What tax rates does the Secretary use if two or more different
          classifications of real property are taxed at different rates?

[[Page 499]]

222.69 What tax rates may the Secretary use if substantial local
          revenues are derived from local tax sources other than real
          property taxes?
222.70 How does the Secretary determine whether a fiscally dependent
          local educational agency is making a reasonable tax effort?
222.71 What information must be provided by the State educational
          agency?
222.72 How does the Secretary determine a maximum payment for local
          educational agencies that are eligible for financial
          assistance under section 8003(f)(2)(A) and Sec. 222.63?
222.73 How does the Secretary determine a maximum payment for local
          educational agencies that are eligible for financial
          assistance under section 8003(f)(2)(B) and Sec. 222.64?
222.74 How does the Secretary identify generally comparable local
          educational agencies for purposes of section 8003(f)?
222.75 How does the Secretary compute the average per pupil expenditure
          of generally comparable local educational agencies under this
          subpart?
222.76 What does the Secretary do if appropriation levels are
          insufficient to pay in full the amounts calculated under
          Sec. Sec. 222.72 and 222.73?
222.77-222.79 [Reserved]

   Subpart F_Payments to Local Educational Agencies for Children With
          Severe Disabilities Under Section 8003(g) of the Act

222.80 What definitions apply to this subpart?
222.81 What requirements must a local educational agency meet to be
          eligible for a payment under section 8003(g) of the Act?
222.82 How does the Secretary calculate the total amount of funds
          available for payments under section 8003(g)?
222.83 How does an eligible local educational agency apply for a payment
          under section 8003(g)?
222.84 How does the Secretary calculate payments under section 8003(g)
          for eligible local educational agencies?
222.85 How may a local educational agency use funds that it receives
          under section 8003(g)?

 Subpart G_Special Provisions for Local Educational Agencies That Claim
                    Children Residing on Indian Lands

                                 General

222.90 What definitions apply to this subpart?
222.91 What requirements must a local educational agency meet to receive
          a payment under section 8003 of the Act for children residing
          on Indian lands?
222.92 What additional statutes and regulations apply to this subpart?
222.93 [Reserved]

                     Indian Policies and Procedures

222.94 What provisions must be included in a local educational agency's
          Indian policies and procedures?
222.95 How are Indian policies and procedures reviewed to ensure
          compliance with the requirements in section 8004(a) of the
          Act?
222.96-222.101 [Reserved]

     Indian Policies and Procedures Complaint and Hearing Procedures

222.102 Who may file a complaint about a local educational agency's
          Indian policies and procedures?
222.103 What must be included in a complaint?
222.104 When does the Assistant Secretary consider a complaint received?
222.105-222.107 [Reserved]
222.108 What actions must be taken upon receipt of a complaint?
222.109 When may a local educational agency reply to a complaint?
222.110 What are the procedures for conducting a hearing on a local
          educational agency's Indian policies and procedures?
222.111 What is the authority of the hearing examiner in conducting a
          hearing?
222.112 What procedures are followed after the hearing?
222.113 What are the responsibilities of the Assistant Secretary after
          the hearing?

  Withholding and Related Procedures for Indian Policies and Procedures

222.114 How does the Assistant Secretary implement the provisions of
          this subpart?
222.115 When does the Assistant Secretary withhold payments from a local
          educational agency under this subpart?
222.116 How are withholding procedures initiated under this subpart?
222.117 What procedures are followed after the Assistant Secretary
          issues a notice of intent to withhold payments?
222.118 How are withholding hearings conducted in this subpart?
222.119 What is the effect of withholding under this subpart?
222.120 When is a local educational agency exempt from withholding of
          payments?
222.121 How does the affected Indian tribe or tribes request that
          payments to a local educational agency not be withheld?
222.122 What procedures are followed if it is determined that the local
          educational agency's funds will not be withheld under this
          subpart?
222.123-222.129 [Reserved]

[[Page 500]]

Subpart H [Reserved]

Subpart I_Facilities Assistance and Transfers Under Section 8008 of the
                                   Act

222.140 What definitions apply to this subpart?
222.141 For what types of projects may the Secretary provide assistance
          under section 8008 of the Act?
222.142 What terms and conditions apply to minimum school facilities
          operated under section 8008 by another agency?
222.143 What terms and conditions apply to the transfer of minimum
          school facilities?
222.144-222.149 [Reserved]

 Subpart J_Impact Aid Administrative Hearings and Judicial Review Under
                         Section 8011 of the Act

222.150 What is the scope of this subpart?
222.151 When is an administrative hearing provided to a local
          educational agency?
222.152 When may a local educational agency request reconsideration of a
          determination?
222.153 How must a local educational agency request an administrative
          hearing?
222.154 How must written submissions under this subpart be filed?
222.155 When and where is an administrative hearing held?
222.156 How is an administrative hearing conducted?
222.157 What procedures apply for issuing or appealing an administrative
          law judge's decision?
222.158 What procedures apply to the Secretary's review of an initial
          decision?
222.159 When and where does a party seek judicial review?

         Subpart K_Determinations Under Section 8009 of the Act

222.160 What are the scope and purpose of this subpart?
222.161 How is State aid treated under section 8009 of the Act?
222.162 What disparity standard must a State meet in order to be
          certified and how are disparities in current expenditures or
          revenues per pupil measured?
222.163 What proportion of Impact Aid funds may a State take into
          consideration upon certification?
222.164 What procedures does the Secretary follow in making a
          determination under section 8009?
222.165 What procedures does the Secretary follow after making a
          determination under section 8009?
222.166-222.169 [Reserved]

Appendix to Subpart K--Determinations Under Section 8009 of the Act--
          Methods of Calculations for Treatment of Impact Aid Payments
          Under State Equalization Programs

  Subpart L_Impact Aid Discretionary Construction Grant Program Under
                       Section 8007(b) of the Act

                                 General

222.170 What is the purpose of the Impact Aid Discretionary Construction
          grant program (Section 8007(b) of the Act)?
222.171 What LEAs may be eligible for Discretionary Construction grants?
222.172 What activities may an LEA conduct with funds received under
          this program?
222.173 What activities will not receive funding under a Discretionary
          Construction grant?
222.174 What prohibitions apply to these funds?
222.175 What regulations apply to recipients of funds under this
          program?
222.176 What definitions apply to this program?

                               Eligibility

222.177 What eligibility requirements must an LEA meet to apply for an
          emergency grant under the first priority?
222.178 What eligibility requirements must an LEA meet to apply for an
          emergency grant under the second priority?
222.179 Under what circumstances may an ineligible LEA apply on behalf
          of a school for an emergency grant under the second priority?
222.180 What eligibility requirements must an LEA meet to apply for a
          modernization grant under the third priority?
222.181 What eligibility requirements must an LEA meet to apply for a
          modernization grant under the fourth priority?
222.182 Under what circumstances may an ineligible LEA apply on behalf
          of a school for a modernization grant under the fourth
          priority?

                        How To Apply for a Grant

222.183 How does an LEA apply for a grant?
222.184 What information must an application contain?
222.185 What additional information must be included in an emergency
          grant application?
222.186 What additional information must be included in a modernization
          grant application?
222.187 Which year's data must an SEA or LEA provide?

                           How Grants Are Made

222.188 What priorities may the Secretary establish?
222.189 What funding priority does the Secretary give to applications?

[[Page 501]]

222.190 How does the Secretary rank and select applicants?
222.191 What is the maximum award amount?
222.192 What local funds may be considered as available for this
          project?
222.193 What other limitations on grant amounts apply?
222.194 Are ``in-kind'' contributions permissible?

             Conditions and Requirements Grantees Must Meet

222.195 How does the Secretary make funds available to grantees?
222.196 What additional construction and legal requirements apply?

    Authority: 20 U.S.C. 7701-7714, unless otherwise noted.

    Source: 60 FR 50778, Sept. 29, 1995, unless otherwise noted.



                            Subpart A_General



Sec. 222.1  What is the scope of this part?

    The regulations in this part govern the provision of financial
assistance under title VIII of the Elementary and Secondary Education
Act of 1965 (ESEA) to local educational agencies (LEAs) in areas
affected by Federal activities.

(Authority: 20 U.S.C. 7701-7714)



Sec. 222.2  What definitions apply to this part?

    (a)(1) The following terms defined in section 8013 of the Act apply
to this part:

Armed forces
Average per-pupil expenditure
Construction
Current expenditures
Indian lands
Local contribution percentage
Low-rent housing
School facilities

    (2) The following term defined in Sec. 222.30 applies to this part:

Free public education

    (b) The following terms defined in section 14101 of the ESEA
(General Provisions) also apply to this part:

Average daily attendance (ADA)
Child
County
Department
Outlying area
Parent
Secretary
State
State educational agency (SEA)

    (c) In addition, the following definitions apply to this part:
    Act means title VIII of the Elementary and Secondary Education Act
of 1965 (ESEA), as amended.
    Applicant means any LEA that files an application for financial
assistance under section 8002, 8003, or 8006 of the Act and the
regulations in this part implementing those provisions. Except as
provided in section 8005(d)(4) of the Act, an SEA may be an applicant
for assistance under section 8003 only if the SEA directly operates and
maintains facilities for providing free public education for the
children it claims in its application.


(Authority: 20 U.S.C. 7705 and 7713(9))

    Application means a complete and signed application in the form
approved by the Secretary, filed by an applicant.


(Authority: 20 U.S.C. 7705)

    Federally connected children means children described in sections
8003(a)(1) and 8010(c)(2) of the Act.


(Authority: 20 U.S.C. 7703(a)(1) and 7710(c)(2))

    Federal property. (1) The term means--
    (i) Federal property described in section 8013; and
    (ii) Ships that are owned by the United States and whose home ports
are located upon Federal property described in this definition.
    (2) Notwithstanding paragraph (1) of this definition, for the
purpose of section 8002 the term does not include--
    (i) Any real property that the United States does not own in fee
simple, except for Indian lands described in section 8013(7), and
transferred property described in section 8002(d); and
    (ii) Real property described in section 8002(c) (real property with
respect to which payments are being made under section 13 of the
Tennessee Valley Authority Act of 1933).


(Authority: 20 U.S.C. 7702(c) and (d), and 7713(5) and (7))


[[Page 502]]


    Fiscally dependent LEA means an LEA that does not have the final
authority to determine the amount of revenue to be raised from local
sources for current expenditure purposes.


(Authority: 20 U.S.C. 7702(b)(2) and 7703(f))

    Fiscally independent LEA means an LEA that has the final authority
to determine the amount of revenue to be raised from local sources for
current expenditure purposes within the limits established by State law.


(Authority: 20 U.S.C. 7702(b)(2) and 7703(f))

    Local educational agency (LEA) is defined in section 8013(9). Except
for an SEA qualifying under section 8005(d)(4), the term includes an SEA
only so long as--
    (1) The SEA directly operates and maintains the facilities for
providing free public education for the children it claims in its
application;
    (2) The children claimed by the SEA actually are attending those
State-operated facilities; and
    (3) The SEA does not, through a tuition arrangement, contract, or by
any other means, pay another entity to operate and maintain facilities
for those children.


(Authority: 20 U.S.C. 7705(d)(4) and 7713(9))

    Local real property tax rate for current expenditure purposes. (1)
For a fiscally independent LEA, the term means the entire tax levied on
real property within the LEA, if all but a de minimis amount of the
total proceeds from the tax levy are available to that LEA for current
expenditures (as defined in section 8013).
    (2) For a fiscally dependent LEA, the term means the following:
    (i) The entire tax levied by the general government on real property
if all but a de minimis amount of the total proceeds from that tax levy
are available to the LEA for current expenditures (as defined in section
8013);
    (ii) That portion of a local real property tax rate designated by
the general government for current expenditure purposes (as defined in
section 8013); or
    (iii) If no real property tax levied by the general government meets
the criteria in paragraphs (2)(i) or (ii) of this definition, an imputed
tax rate that the Secretary determines by--
    (A) Dividing the total local real property tax revenue available for
current expenditures of the general government by the total revenue from
all local sources available for current expenditures of the general
government;
    (B) Multiplying the figure obtained in paragraph (2)(iii)(A) of this
definition by the revenue received by the LEA for current expenditures
(as defined in section 8013) from the general government; and
    (C) Dividing the figure obtained in paragraph (2)(iii)(B) of this
definition by the total current actual assessed value of all real
property in the district.
    (3) The term does not include any portion of a tax or revenue that
is restricted to or dedicated for any specific purpose other than
current expenditures (as defined in section 8013).


(Authority: 20 U.S.C. 7702(b)(2) and 7703(f))

    Membership means the following:
    (1)(i) The definition given to the term by State law; or
    (ii) If State law does not define the term, the number of children
listed on an LEA's current enrollment records on its survey date(s).
    (2) The term includes children for whom the applicant is responsible
for providing a free public education, but who are attending schools
other than those operated by the applicant under a tuition arrangement
described in paragraph (4) of the definition of ``free public
education'' in Sec. 222.30.
    (3) The term does not include children who--
    (i) Have never attended classes in schools of the LEA or of another
educational entity with which the LEA has a tuition arrangement;
    (ii) Have permanently left the LEA;
    (iii) Otherwise have become ineligible to attend classes there; or
    (iv) Attend the schools of the applicant LEA under a tuition
arrangement with another LEA that is responsible for providing them a
free public education.


(Authority: 20 U.S.C. 7703 and 8801(1))

    Parent employed on Federal property. (1) The term means the
following:

[[Page 503]]

    (i) An employee of the Federal Government who reports to work on, or
whose place of work is located on, Federal property.
    (ii) A person not employed by the Federal Government but who spends
more than 50 percent of his or her working time on Federal property
(whether as an employee or self-employed) when engaged in farming,
grazing, lumbering, mining, or other operations that are authorized by
the Federal Government, through a lease or other arrangement, to be
carried out entirely or partly on Federal property.
    (iii) A proportion, to be determined by the Secretary, based on
persons working on commingled Federal and non-Federal properties other
than those persons covered under paragraph (1)(ii) of this definition.
    (2) The term does not include a person who reports to work at a work
station not on Federal property but spends more than 50 percent of his
working time on Federal property providing services to operations or
activities authorized to be carried out on Federal property.


(Authority: 20 U.S.C. 7701 and 7703)

    Real property. (1) The term means--
    (i) Land; and
    (ii) Improvements (such as buildings and appurtenances to those
buildings, railroad lines, utility lines, pipelines, and other permanent
fixtures), except as provided in paragraph (2).
    (2) The term does not include--
    (i) Improvements that are classified as personal property under
State law; or
    (ii) Equipment and movable machinery, such as motor vehicles,
movable house trailers, farm machinery, rolling railroad stock, and
floating dry docks, unless that equipment or movable machinery is
classified as real property or subject to local real property taxation
under State law.


(Authority: 20 U.S.C. 7702 and 7713(5))

    Revenues derived from local sources. (1) The term means--
    (i) Tax funds derived from real estate; and
    (ii) Other taxes or receipts that are received from the county, and
any other local tax or miscellaneous receipts.
    (2)(i) For the purpose of paragraph (1)(i) of this definition, the
term tax funds derived from real estate means--
    (A) Locally received funds that are derived from local taxation of
real property;
    (B) Tax funds that are received on account of Wherry-Spence housing
projects (12 U.S.C. 1702 et seq.) located on private property; and
    (C) All local real property tax funds that are received from either
the county or the State, serving as a collecting agency, and that are
returned to the LEA for expenditure by that agency.
    (ii) The term does not include--
    (A) Any payments under this Act or the Johnson-O'Malley Act (25
U.S.C. 452);
    (B) Tax payments that are received on account of Wherry-Spence
housing projects located on federally owned property; or
    (C) Local real property tax funds that are received by the State and
distributed to LEAs on a per-pupil or formula basis.


(Authority: 20 U.S.C. 7713(11))

    State aid means any contribution, no repayment of which is expected,
made by a State to or on behalf of an LEA within the State for the
support of free public education.


(Authority: 20 U.S.C. 7703)

    Uniformed services means the United States Army, Navy, Air Force,
Marine Corps, Coast Guard, National Oceanic and Atmospheric
Administration, and Public Health Service.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(a)(1); 37 U.S.C. 101)



Sec. 222.3  How does a local educational agency apply for assistance
under section 8002 or 8003 of the Act?

    An LEA must meet the following application requirements to be
considered for a payment under section 8002 or 8003:
    (a) Except as provided in paragraphs (b) and (d) of this section, on
or before January 31 of the fiscal year for which the LEA seeks
assistance under section

[[Page 504]]

8002, or the fiscal year preceding the fiscal year for which the LEA
seeks assistance under section 8003, the LEA must--
    (1) File with the Secretary a complete and signed application for
payment under section 8002 or 8003; and
    (2) Certify to the Secretary that it will file, and file, a copy of
the application referred to in paragraph (a) of this section with its
SEA.
    (b)(1) If any of the following events that give rise to eligibility
for payment occur after the filing deadline in paragraph (a)(1) of this
section, an LEA must file a complete and signed application within the
time limits required by paragraph (b)(2) of this section:
    (i) The United States Government initiates or reactivates a Federal
activity, or acquires real property.
    (ii) The United States Congress enacts new legislation.
    (iii) A reorganization of school districts takes place.
    (iv) Property, previously determined by the Secretary not to be
Federal property, is determined in writing by the Secretary to be
Federal property.
    (2) Except as provided in paragraph (d) of this section, within 60
days after the applicable event occurs but not later than September 30
of the fiscal year for which the LEA seeks assistance under section
8002, or of the fiscal year preceding the fiscal year for which the LEA
seeks assistance under section 8003, the LEA must--
    (i) File an application, as permitted by paragraph (b)(1) of this
section, with the Secretary; and
    (ii) File a copy of that application with its SEA.
    (c)(1) If the SEA wishes to notify the Secretary of any
inconsistencies or other concerns with an LEA's application, the SEA
must do so--
    (i) For an application subject to the filing deadlines in paragraph
(a)(1) of this section, on or before February 15 of the fiscal year for
which the LEA seeks assistance under section 8002, or of the fiscal year
preceding the fiscal year for which the LEA seeks assistance under
section 8003; and
    (ii) On or before fifteen days following the date by which an
application subject to the filing deadlines in paragraph (b) of this
section must be filed.
    (2) The Secretary does not process for payment a timely filed
application until any concerns timely raised by the SEA are resolved. If
the Secretary does not receive comments or notification from the SEA by
the applicable deadline set forth in paragraph (c)(1) of this section,
the Secretary assumes that the data and statements in the application
are, to the best of the SEA's knowledge, true, complete, and correct.
    (d) If a filing date in this section falls on a Saturday, Sunday, or
Federal holiday, the deadline for filing is the next succeeding business
day.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7705)



Sec. 222.4  How does the Secretary determine when an application is
timely filed?

    (a) To be timely filed under Sec. 222.3, an application must be
received by the Secretary, or mailed, on or before the applicable filing
date.
    (b) An applicant must show one of the following as proof of mailing:
    (1) A legibly dated U.S. Postal Service postmark.
    (2) A legible mail receipt with the date of mailing stamped by the
U.S. Postal Service.
    (3) A dated shipping label, invoice, or receipt from a commercial
carrier.
    (4) Any other proof of mailing acceptable to the Secretary.
    (c) If an application is mailed through the U.S. Postal Service, the
Secretary does not accept either of the following as proof of mailing:
    (1) A private metered postmark.
    (2) A mail receipt that is not dated by the U.S. Postal Service.


(Authority: 20 U.S.C. 7705)

    Note to paragraph (b)(1): The U.S. Postal Service does not uniformly
provide a dated postmark. Before relying on this method, an applicant
should check with its local post office.

[62 FR 35412, July 1, 1997]

[[Page 505]]



Sec. 222.5  When may a local educational agency amend its application?

    (a) An LEA may amend its application following any of the events
described in Sec. 222.3(b)(1) by submitting a written request to the
Secretary and a copy to its SEA no later than the earlier of the
following events:
    (1) The 60th day following the applicable event.
    (2) By the end of the Federal fiscal year--
    (i) For which assistance is sought under section 8002; or
    (ii) Preceding the fiscal year for which the LEA seeks assistance
under section 8003.
    (b) The LEA also may amend its application no later than the end of
the Federal fiscal year for which assistance is sought under section
8002 or of the fiscal year preceding the fiscal year for which the LEA
seeks assistance under section 8003--
    (1) For an adjustment to its payment based on data obtained from a
second membership count; or
    (2) For an adjustment to its payment based on actual satisfactory
data regarding eligible Federal properties or federally connected
children if those data were not available at the time the LEA filed its
application.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7705)



Sec. 222.6  Which applications does the Secretary accept?

    (a) The Secretary accepts or approves for payment any otherwise
approvable application under section 8002 or 8003 that is timely filed
with the Secretary in accordance with Sec. Sec. 222.3, 222.4, and
222.5, as applicable.
    (b)(1) Except as provided in paragraph (b)(2) of this section, the
Secretary does not accept or approve for payment any application under
section 8002 or 8003 that is not timely filed with the Secretary.
    (2) The Secretary accepts and approves for payment any otherwise
approvable application filed within 60 days of the applicable filing
date established in Sec. 222.3, but reduces the payment based on the
application by 10 percent of the amount that would have been paid if the
application had been filed by the applicable filing date established in
that section.

(Authority: 20 U.S.C. 7705)



Sec. 222.7  What information may a local educational agency submit
after the application deadline?

    (a) General. Except as indicated in paragraph (b) of this section,
the Secretary does not consider information submitted by an applicant
after the deadlines prescribed in this subpart for submission of
applications and amendments to applications.
    (b) Information solicited by the Secretary. The Secretary may
solicit from an applicant at any time additional information to process
an application.

(Authority: 20 U.S.C. 7702, 7703, 7705, 7706)



Sec. 222.8  What action must an applicant take upon a change in its
boundary, classification, control, governing authority, or identity?

    (a) Any applicant that is a party to an annexation, consolidation,
deconsolidation, merger, or other similar action affecting its
boundaries, classification, control, governing authority, or identity
must provide the following information to the Secretary as soon as
practicable:
    (1) A description of the character and extent of the change.
    (2) The effective date of the change.
    (3) Full identification of all predecessor and successor LEAs.
    (4) Full information regarding the disposition of the assets and
liabilities of all predecessor LEAs.
    (5) Identification of the governing body of all successor LEAs.
    (6) The name and address of each authorized representative
officially designated by the governing body of each successor LEA for
purposes of the Act.
    (b) If a payment is made under section 8002 or 8003 to an LEA that
has ceased to be a legally constituted entity during the regular school
term due to an action described in paragraph (a) of this section, the
LEA may retain that payment if--
    (1) An adjustment is made in the payment of a successor LEA to
account for the payment to the predecessor LEA; or

[[Page 506]]

    (2)(i) The payment amount does not exceed the amount the predecessor
LEA would have been eligible to receive if the change in boundaries or
organization had not taken place; and
    (ii) A successor LEA is not an eligible applicant.
    (c) A predecessor LEA receiving any portion of a payment under
section 8002 or 8003 that exceeds the amount allowed by paragraph
(b)(2)(i) of this section must return the excessive portion to the
Secretary, unless the Secretary determines otherwise under section 8012
of the Act.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7702 and 7703)



Sec. 222.9  What records must a local educational agency maintain?

    Except as otherwise provided in Sec. 222.10--
    (a) An LEA must maintain adequate written records to support the
amount of payment it received under the Act for any fiscal year;
    (b) On request, the LEA must make its records available to the
Secretary for the purpose of examination or audit; and
    (c) Each applicant must submit such reports and information as the
Secretary may require to determine the amount that the applicant may be
paid under the Act.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 1232f, 7702, 7703, 7704, 7706)



Sec. 222.10  How long must a local educational agency retain records?

    An LEA must retain the records described in Sec. 222.9 until the
later of--
    (a) Three years after the last payment for a fiscal year; or
    (b) If the records have been questioned on Federal audit or review,
until the question is finally resolved and any necessary adjustments to
payments have been made.

(Authority: 20 U.S.C. 1232f, 7702, 7703, 7704, 7706)



Sec. 222.11  How does the Secretary recover overpayments?

    Except as otherwise provided in Sec. Sec. 222.12-222.18, the
Secretary adjusts for and recovers overpayments as follows:
    (a) If the Secretary determines that an LEA has received a payment
in excess of what it should have received under the Act and this part,
the Secretary deducts the amount of the overpayment from subsequent
payments for which the LEA is eligible under the Act.
    (b)(1) If the LEA is not eligible for subsequent payments under the
Act, the LEA must promptly refund the amount of the overpayment to the
Secretary.
    (2) If the LEA does not promptly repay the amount of the overpayment
or promptly enter into a repayment agreement with the Secretary, the
Secretary may use the procedures in 34 CFR part 30 to offset that amount
against payments from other Department programs or, under the
circumstances permitted in part 30, to request that another agency
offset the debt.

(Authority: 20 U.S.C. 1226a-1, 7702, 7703, 7706, 7712)

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35412, July 1, 1997]



Sec. 222.12  What overpayments are eligible for forgiveness under
section 8012 of the Act?

    (a) The Secretary considers as eligible for forgiveness under
section 8012 of the Act (``eligible overpayment'') any overpayment
amount that is more than an LEA was eligible to receive for a particular
fiscal year under Public Law 81-874, Public Law 81-815, or the Act
(except for the types of overpayments listed in Sec. 222.13), and
that--
    (1) Remains owing on or after July 31, 1997;
    (2) Is the subject of a written request for forgiveness filed by the
LEA before July 31, 1997; or
    (3) Is the subject of a pending, timely written request for an
administrative hearing or reconsideration, and has not previously been
reviewed under Sec. Sec. 222.12-222.18.

[[Page 507]]

    (b) The Secretary applies Sec. Sec. 222.14-222.18 in forgiving, in
whole or part, an LEA's obligation to repay an eligible overpayment that
resulted from error either by the LEA or the Secretary.

(Authority: 20 U.S.C. 7712)

[62 FR 35412, July 1, 1997]



Sec. 222.13  What overpayments are not eligible for forgiveness under
section 8012 of the Act?

    The Secretary does not consider the following overpayments to be
eligible for forgiveness under section 8012 of the Act:
    (a) Any overpayment under section 7 of Public Law 81-874 or section
16 of Public Law 81-815.
    (b) An amount received by an LEA, as determined under section
8003(g) of the Act (payments to LEAs for certain federally connected
children with severe disabilities, implemented in subpart F of this
part), that exceeds the LEA's maximum basic support payment under
section 8003(b) of the Act.
    (c) Any overpayment caused by an LEA's failure to expend or account
for funds properly in accordance with the following laws and
regulations:
    (1) Section 8003(d) of the Act (implemented in subpart D of this
part) or section 3(d)(2)(C) of Public Law 81-874 for certain federally
connected children with disabilities.
    (2) Section 8003(g) of the Act.

(Authority: 20 U.S.C. 7712)

[62 FR 35413, July 1, 1997]



Sec. 222.14  What requirements must a local educational agency meet
for an eligible overpayment to be forgiven in whole or part?

    The Secretary forgives an eligible overpayment, in whole or part as
described in Sec. 222.18, if--
    (a) An LEA submits to the Department's Impact Aid Program office a
written request for forgiveness by the later of--
    (1) Thirty days from the LEA's initial receipt of a written notice
of the overpayment; or
    (2) September 2, 1997;
    (b) The LEA submits to the Department's Impact Aid Program office
the information and documentation described in Sec. 222.16 by the
deadlines described in paragraph (a) of this section, or other time
limit established in writing by the Secretary due to lack of
availability of the information and documentation; and
    (c) The Secretary determines under Sec. 222.17 that--
    (1) In the case either of an LEA's or the Department's error,
repayment of the LEA's total eligible overpayments will result in an
undue financial hardship on the LEA and seriously harm the LEA's
educational program; or
    (2) In the case of the Department's error, determined on a case-by-
case basis, repayment would be manifestly unjust (``manifestly unjust
repayment exception'').

[62 FR 35413, July 1, 1997]



Sec. 222.15  How are the filing deadlines affected by requests for
other forms of relief?

    Unless the Secretary (or the Secretary's delegatee) extends the
applicable time limit in writing--
    (a) A request for forgiveness of an overpayment under Sec. 222.14
does not extend the time within which an applicant must file a request
for an administrative hearing under Sec. 222.151; and
    (b) A request for an administrative hearing under Sec. 222.151, or
for reconsideration under Sec. 222.152, does not extend the time within
which an applicant must file a request for forgiveness under Sec.
222.14.

(Authority: 20 U.S.C. 7712)

[62 FR 35413, July 1, 1997]



Sec. 222.16  What information and documentation must an LEA submit
for an eligible overpayment to be considered for forgiveness?

    (a) Every LEA requesting forgiveness must submit, within the time
limits established under Sec. 222.14(b), the following information and
documentation for the fiscal year immediately preceding the date of the
forgiveness request (``preceding fiscal year''):
    (1) A copy of the LEA's annual financial report to the State.
    (2) The LEA's local real property tax rate for current expenditure
purposes, as described in Sec. 222.17(b).
    (3) The average local real property tax rate of all LEAs in the
State.

[[Page 508]]

    (4) The average per pupil expenditure (APPE) of the LEA, calculated
by dividing the LEA's aggregate current expenditures by the total number
of children in average daily attendance for whom the LEA provided a free
public education.
    (5) The APPE of the State, as defined in section 8013 of the ESEA.
    (b) An LEA requesting forgiveness under Sec. 222.14(c)(2)
(manifestly unjust repayment exception), or Sec. 222.17(a)(3) (no
present or prospective ability to repay), also must submit written
information and documentation in specific support of its forgiveness
request under those provisions within the time limits established under
Sec. 222.14(b).

(Authority: 20 U.S.C. 7712)

[62 FR 35413, July 1, 1997]



Sec. 222.17  How does the Secretary determine undue financial hardship
and serious harm to a local educational agency's educational program?

    (a) The Secretary determines that repayment of an eligible
overpayment will result in undue financial hardship on an LEA and
seriously harm its educational program if the LEA meets the requirements
in paragraph (a)(1), (2), or (3) of this section.
    (1) An LEA other than an LEA described in paragraphs (a)(2) and (3)
of this section meets the requirements of paragraph (a) of this section
if--
    (i) The LEA's eligible overpayments on the date of its request total
at least $10,000;
    (ii) The LEA's local real property tax rate for current expenditure
purposes, for the preceding fiscal year, is equal to or higher than the
State average local real property tax rate for that preceding fiscal
year; and
    (iii) The LEA's average per pupil expenditure (APPE) (as described
in Sec. 222.16(a)(4)) for the preceding fiscal year is lower than the
State APPE (as described in Sec. 222.16(a)(5)) for that preceding
fiscal year.
    (2) The following LEAs qualify under paragraph (a) of this section
if they meet the requirements in paragraph (a)(1)(i) of this section and
their APPE (as described in Sec. 222.16(a)(4)) for the preceding fiscal
year does not exceed 125 percent of the State APPE (as described in
Sec. 222.16(a)(5)) for that preceding fiscal year:
    (i) An LEA with boundaries that are the same as a Federal military
installation.
    (ii) Other LEAs with no local real property tax revenues, or with
minimal local real property tax revenues per pupil due to substantial
amounts of Federal property in the LEA as compared with the average
amount of those revenues per pupil for all LEAs in the State.
    (3) An LEA qualifies under paragraph (a) of this section if neither
the successor nor the predecessor LEA has the present or prospective
ability to repay the eligible overpayment.
    (b) The Secretary uses the following methods to determine a tax rate
for the purposes of paragraph (a)(1)(ii) of this section:
    (1) If an LEA is fiscally independent, the Secretary uses actual tax
rates if all the real property in the taxing jurisdiction of the LEA is
assessed at the same percentage of true value. In the alternative, the
Secretary computes a tax rate for fiscally independent LEAs by using the
methods described in Sec. Sec. 222.67-222.69.
    (2) If an LEA is fiscally dependent, the Secretary imputes a tax
rate using the method described in Sec. 222.70(b).

(Authority: 20 U.S.C. 7712)

[62 FR 35413, July 1, 1997]



Sec. 222.18  What amount does the Secretary forgive?

    For an LEA that meets the requirements of Sec. 222.14(a) (timely
filed forgiveness request) and Sec. 222.14(b) (timely filed information
and documentation), the Secretary forgives an eligible overpayment as
follows:
    (a) Forgiveness in whole. The Secretary forgives the eligible
overpayment in whole if the Secretary determines that the LEA meets--
    (1) The requirements of Sec. 222.17 (undue financial hardship), and
the LEA's current expenditure closing balance for the LEA's fiscal year
immediately preceding the date of its forgiveness request (``preceding
fiscal year'') is ten percent or less of its total current expenditures
(TCE) for that year; or

[[Page 509]]

    (2) The manifestly unjust repayment exception in Sec. 222.14(c)(2).
    (b) Forgiveness in part. (1) The Secretary forgives the eligible
overpayment in part if the Secretary determines that the LEA meets the
requirements of Sec. 222.17 (undue financial hardship), and the LEA's
preceding fiscal year's current expenditure closing balance is more than
ten percent of its TCE for that year.
    (2) For an eligible overpayment that is forgiven in part, the
Secretary--
    (i) Requires the LEA to repay the amount by which the LEA's
preceding fiscal year's current expenditure closing balance exceeded ten
percent of its preceding fiscal year's TCE (``calculated repayment
amount''); and
    (ii) Forgives the difference between the calculated repayment amount
and the LEA's total overpayments.
    (3) For the purposes of this section, ``current expenditure closing
balance'' means an LEA's closing balance before any revocable transfers
to non-current expenditure accounts, such as capital outlay or debt
service accounts.

    Example: An LEA that timely requests forgiveness has two
overpayments of which portions remain owing on the date of its request--
one of $200,000 and one of $300,000. Its preceding fiscal year's closing
balance is $250,000 (before a revocable transfer to a capital outlay or
debt service account); and 10 percent of its TCE for the preceding
fiscal year is $150,000.
    The Secretary calculates the amount that the LEA must repay by
determining the amount by which the preceding fiscal year's closing
balance exceeds 10 percent of the preceding year's TCE. This calculation
is made by subtracting 10 percent of the LEA's TCE ($150,000) from the
closing balance ($250,000), resulting in a difference of $100,000 that
the LEA must repay. The Secretary then totals the eligible overpayment
amounts ($200,000 + $300,000), resulting in a total amount of $500,000.
The Secretary subtracts the calculated repayment amount ($100,000) from
the total of the two overpayment balances ($500,000), resulting in
$400,000 that the Secretary forgives.

(Authority: 20 U.S.C. 7712)

[62 FR 35414, July 1, 1997]



Sec. 222.19  What other statutes and regulations apply to this part?

    (a) The following Federal statutes and regulations on
nondiscrimination apply to assistance under this part:
    (1) The provisions of title VI of the Civil Rights Act of 1964 (Pub.
L. 88-352) (prohibition of discrimination on the basis of race, color or
national origin), and the implementing regulations (34 CFR part 100).

(Authority: 42 U.S.C. 2000d--2000d-4)

    (2) The provisions of title IX of the Education Amendments of 1972
(Pub. L. 92-318) (prohibition of discrimination on the basis of sex),
and the implementing regulations (34 CFR part 106).

(Authority: 20 U.S.C. 1681-1683)

    (3) The provisions of section 504 of the Rehabilitation Act of 1973
(Pub. L. 93-112) (prohibition of discrimination on the basis of
disability), and the implementing regulations (34 CFR part 104).

(Authority: 29 U.S.C. 794)

    (4) The provisions of title II of the Americans with Disabilities
Act of 1990 (Pub. L. 101-336) (prohibition of discrimination on basis of
disability), and any implementing regulations.

(Authority: 42 U.S.C. 12101-12213)

    (5) The provisions of the Age Discrimination Act of 1975 (Pub. L.
94-135) (prohibition of age discrimination), and any implementing
regulations.

(Authority: 42 U.S.C. 6101)

    (b) The following Education Department General Administrative
Regulations (EDGAR):
    (1) Subparts A, E, F, and Sec. Sec. 75.900 and 75.910 of 34 CFR
part 75 (Direct Grant Programs) for payments under sections 8003(d)
(payments for federally connected children with disabilities), 8007
(construction), and 8008 (school facilities), except for the following:
    (i) Section 75.603 does not apply to payments under section 8007
(construction) or section 8008 (school facilities).
    (ii) Section 75.605 does not apply to payments under section 8007
(construction).
    (iii) Sections 75.600-602, 75.604, and 75.606-617 apply to payments
under section 8007 (construction) only to the extent that funds received
under that section are used for major renovations or to construct new
school facilities.
    (2) 34 CFR part 77 (Definitions that Apply to Department
Regulations).

[[Page 510]]

    (3) 34 CFR part 80 (Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments), for payments
under sections 8003(d) (payments for federally connected children with
disabilities), 8007 (construction), and 8008 (school facilities).
    (4) 34 CFR part 82 (New Restrictions on Lobbying).
    (5) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-free Workplace
(Grants)).

(Authority: 20 U.S.C. 1221e-3)

[60 FR 50778, Sept. 29, 1995. Redesignated at 62 FR 35412, July 1, 1997]



  Subpart B_Payments for Federal Property Under Section 8002 of the Act



Sec. 222.20  What definitions apply to this subpart?

    In addition to the terms referenced or defined in Sec. 222.2, the
following definitions apply to this subpart:
    Acquisition or acquired by the United States. (1) The term means--
    (i) The receipt or taking by the United States of ownership in fee
simple of real property by condemnation, exchange, gift, purchase,
transfer, or other arrangement;
    (ii) The receipt by the United States of real property as trustee
for the benefit of individual Indians or Indian tribes; or
    (iii) The imposition by the United States of restrictions on sale,
transfer, or exchange of real property held by individual Indians or
Indian tribes.
    (2) The definition of ``acquisition'' in 34 CFR 77.1(c) (Definitions
that Apply to Department Regulations) of this title does not apply to
this subpart.

(Authority: 20 U.S.C. 7702)

    Assessed value. For the purpose of determining eligibility under
section 8002(a)(1) and Sec. 222.21, the following definition applies:
    (1) The term means the value that is assigned to real property, for
the purpose of generating local real property tax revenues for current
expenditures (as defined in section 8013 of the Act), by a State or
local official who is legally authorized to determine that assessed
value.
    (2) The term does not include--
    (i) A value assigned to tax-exempt real property;
    (ii) A value assigned to real property for the purpose of generating
other types of revenues, such as payments in lieu of taxes (PILOTs);
    (iii) Fair market value, or a percentage of fair market value, of
real property unless that value was actually used to generate local real
property tax revenues for current expenditures (as defined in section
8013); or
    (iv) A value assigned to real property in a condemnation or other
court proceeding, or a percentage of that value, unless that value was
actually used to generate local real property tax revenues for current
expenditures (as defined in section 8013).

(Authority: 20 U.S.C. 7702(a)(1))

    Eligible Federal property. (1) The term means ``Federal property''
as defined in Sec. 222.2(c) for section 8002, which meets the following
additional requirements:
    (i) The United States has acquired the Federal property since 1938;
and
    (ii) The Federal property was not acquired by exchange for other
Federal property that the United States owned within the school district
before 1939.
    (2) In addition, for local educational agencies (LEAs) that are
eligible under Sec. 222.21(a)(2), the term also means land acquired by
the United States Forest Service between 1915 and 1990.

(Authority: 20 U.S.C. 7702)



Sec. 222.21  What requirements must a local educational agency meet
concerning Federal acquisition of real property within the local

educational agency?

    (a) For an LEA with an otherwise approvable application to be
eligible to receive financial assistance under section 8002 of the Act,
the LEA must meet the requirements in subpart A of this part and Sec.
222.22. In addition, unless otherwise provided by statute as meeting the
requirements in section 8002(a)(1)(C), the LEA must document--

[[Page 511]]

    (1) That the United States owns or has acquired ``eligible Federal
property'' within the LEA, that has an aggregate assessed value of 10
percent or more of the assessed value of--
    (i) All real property in that LEA, based upon the assessed values of
the eligible Federal property and of all real property (including that
Federal property) on the date or dates of acquisition of the eligible
Federal property; or
    (ii) All real property in the LEA as assessed in the first year
preceding or succeeding acquisition, whichever is greater, only if--
    (A) The assessment of all real property in the LEA is not made at
the same time or times that the Federal property was so acquired and
assessed; and
    (B) State law requires an assessment be made of property so
acquired; or
    (2)(i) That, as demonstrated by written evidence from the United
States Forest Service satisfactory to the Secretary, the LEA contains
between 20,000 and 60,000 acres of land that has been acquired by the
United States Forest Service between 1915 and 1990; and
    (ii) That the LEA serves a county chartered by State law in 1875 or
1890.
    (b) ``Federal property'' described in section 8002(d) (certain
transferred property) is considered to be owned by the United States for
the purpose of paragraph (a) of this section.
    (c) If, during any fiscal year, the United States sells, transfers,
is otherwise divested of ownership of, or relinquishes an interest in or
restriction on, eligible Federal property, the Secretary redetermines
the LEA's eligibility for the following fiscal year, based upon the
remaining eligible Federal property, in accordance with paragraph (a) of
this section. This paragraph does not apply to a transfer of real
property by the United States described in section 8002(d).
    (d) Except as provided under paragraph (a)(2) of this section, the
Secretary's determinations and redeterminations of eligibility under
this section are based on the following documents:
    (1) For a new section 8002 applicant or newly acquired eligible
Federal property, only upon--
    (i) Original records as of the time(s) of Federal acquisition of
real property, prepared by a legally authorized official, documenting
the assessed value of that real property;
    (ii) Facsimiles, such as microfilm, or other reproductions of those
records; or
    (iii) If the documents specified in paragraphs (d)(1)(i) and (ii)
are unavailable, other records that the Secretary determines to be
appropriate and reliable for establishing eligibility under section
8002(a)(1) of the Act, such as Federal agency records or local
historical records.
    (2) For a redetermination of an LEA's eligibility under section
8002(a)(1), only upon--
    (i) Records described in paragraph (d)(1) of this section; or
    (ii) Department records.
    (e) The Secretary does not base the determination or redetermination
of an LEA's eligibility under this section upon secondary documentation
that is in the nature of an opinion, such as estimates, certifications,
or appraisals.

(Authority: 20 U.S.C. 7702(a)(1))

[60 FR 50778, Sept. 29, 1995, as amended at 73 FR 70575, Nov. 20, 2008]



Sec. 222.22  How does the Secretary treat compensation from Federal
activities for purposes of determining eligibility and payments?

    (a) An LEA with an otherwise approvable application is eligible to
receive assistance under section 8002 for a fiscal year only if the LEA
meets the requirements in subpart A of these regulations and Sec.
222.21, and is not substantially compensated, for the loss in revenue
resulting from Federal ownership of real property by increases in
revenue accruing to the LEA during the previous fiscal year from Federal
activities with respect to the eligible Federal property in the LEA.
    (b) The Secretary considers that an LEA is substantially compensated
by increases in revenue from Federal activities with respect to the
eligible Federal property if--
    (1) The LEA received new or increased revenue during the preceding
fiscal year that is generated directly from the eligible Federal
property or activities in or on that property; and

[[Page 512]]

    (2) The revenue described in paragraph (b)(1) of this section equals
or exceeds the maximum payment amount under section 8002(b) for the
fiscal year for which the LEA seeks assistance.
    (c) If an LEA described in paragraph (a) of this section received
revenue described in paragraph (b)(1) of this section during the
preceding fiscal year that is less than the maximum payment amount
calculated under section 8002(b)(2) for the fiscal year for which the
LEA seeks assistance, the Secretary reduces that maximum payment amount
by the amount of that revenue received by the LEA.
    (d) For purposes of this section, the amount of revenue that an LEA
receives during the previous fiscal year from activities conducted on
Federal property does not include the following:
    (1) Payments received by the agency from the Secretary of Defense to
support--
    (i) The operation of a domestic dependent elementary or secondary
school; or
    (ii) The provision of a free public education to dependents of
members of the Armed Forces residing on or near a military installation.
    (2) Federal payments-in-lieu-of-taxes (PILOTs or PILTs), including
PILTs for Federal entitlement lands authorized by Public Law 97-258, 31
U.S.C. 6901-6906.

(Authority: 20 U.S.C. 7702(a)(2) and (b)(1)(A))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35414, July 1, 1997]



Sec. 222.23  How does a local educational agency determine the
aggregate assessed value of its eligible Federal property for its

section 8002 payment?

    (a) General. A local educational agency (LEA) determines the
aggregate assessed value of its eligible Federal property for its
section 8002 payment as follows:
    (1) A local official who is responsible for assessing the value of
real property located in the jurisdiction of the LEA in order to levy a
property tax makes the determination of the section 8002 aggregate
assessed value, based on estimated assessed values (EAVs) for the
eligible Federal property in the jurisdiction.
    (2) The local official first categorizes the types of expected uses
of the eligible Federal property in each Federal installation or area
(e.g., Federal forest) based on the highest and best uses of taxable
properties adjacent to the eligible Federal property (adjacent
properties), and allocates a portion of the acres of the eligible
Federal property to each of those expected uses, in accordance with
paragraph (b) of this section.
    (3) For each category of expected use of the eligible Federal
property identified in accordance with paragraph (a)(2) of this section
for each Federal installation or area, the local official then
determines a base value in accordance with paragraphs (c) and (d) of
this section.
    (4) The local official next determines a section 8002 EAV for each
category of expected use of the eligible Federal property in each
Federal installation or area. The official determines that EAV by
adjusting the base value for that category established in accordance
with paragraph (a)(3) of this section, by any percentage, ratio, index,
or other factor that the official would use to determine the assessed
value (as defined in Sec. 222.20) of the eligible Federal property to
generate local real property tax revenues for current expenditures if
that eligible Federal property were taxable. (This process is
illustrated in Example 8 and Table 8-2 at the end of this section.)
    (5) The local official then determines a total section 8002 EAV for
each Federal installation or area in the LEA by adding together the
assessed values determined pursuant to paragraph (a)(4) of this section
for all property use categories of eligible Federal property in that
Federal installation or area.
    (6) The local official determines a section 8002 aggregate assessed
value for the LEA as follows:
    (i) If the LEA contains a single Federal installation or area with
eligible Federal property, the total section 8002 EAV determined
pursuant to paragraph (a)(5) of this section constitutes the section
8002 aggregate assessed value for the LEA.

[[Page 513]]

    (ii) If the LEA contains more than one Federal installation or area
with eligible Federal property, the local official calculates the
section 8002 aggregate assessed value for all of the eligible Federal
property in the LEA by adding together the section 8002 total EAVs
determined pursuant to paragraph (a)(5) of this section for all Federal
installations and areas containing eligible Federal property within the
LEA. (This process is illustrated in Example 8 and Table 8-2 at the end
of this section.)
    (b) Categorizing expected uses. (1) The local official categorizes
the expected uses of the eligible Federal property, in accordance with
paragraph (a)(2) of this section, by--
    (i) Identifying the tax assessment classifications that represent
the highest and best uses of the taxable adjacent property (e.g.,
residential, commercial, agricultural); and
    (ii) Determining the relative proportions of taxable adjacent
properties, based on acreage, that are devoted to each of those tax
assessment classifications that represent the highest and best uses of
the taxable adjacent property (e.g., agricultural--50 percent;
residential--40 percent; commercial--10 percent).
    (2) The local official then determines the allocation of each of
those expected uses to the eligible Federal property acres by
multiplying each of the proportions determined under paragraph
(b)(1)(ii) of this section by the total acres of the eligible Federal
property in that Federal installation or area.
    (c) Determining the base value for expected use categories. The
local official determines a base value for each category of expected use
of the eligible Federal property in accordance with paragraph (a)(3) of
this section as follows:
    (1) The local official first identifies the taxable-use portion of
the eligible Federal property acres in each expected use category as
follows:
    (i) The local official allocates a proportion (percentage) of the
eligible Federal property acres identified for each expected use
category under paragraph (b)(2) of this section to expected non-assessed
or tax-exempt uses, such as public open space, schools, churches, and
roads. The local official bases these proportions on the actual non-
assessed or tax-exempt uses for each category of taxable property in the
entire tax jurisdiction(s) where the selected taxable adjacent
properties are located.
    (ii) The local official then determines the number of acres
attributable to non-assessed or tax-exempt uses for each expected use
category by multiplying the non-assessed or tax-exempt proportions
identified in paragraph (c)(1)(i) of this section by the number of acres
in each expected-use category determined pursuant to paragraph (b)(2) of
this section.

    Example 1 (Allocation of Proportion of Eligible Federal Property to
Non-Assessed or Tax-exempt Uses): The eligible Federal property (1,000
acres) is surrounded by properties that are classified for tax purposes
according to their highest and best uses as residential (40 percent) and
agricultural (60 percent) property. For the residential category (400
acres), the local official determines that approximately 20 percent
would be devoted to non-assessed or tax-exempt uses, such as roads,
parks, churches, and schools. The local official multiplies that
proportion (.20) by the number of eligible Federal acres allocated to
the residential category (400 acres) to determine the number of eligible
Federal acres (80 acres) that likely would not be assessed for taxation
or would be tax-exempt if the Federal Government no longer owned that
property, as illustrated in the chart at the end of this example (Table
1-1). The local official follows a similar process for the proportion of
the eligible Federal property the official allocated to agricultural
use.

[[Page 514]]



 Table 1-1--Proportion of Residential Category of Section 8002 Eligible
      Federal Property Allocated to Non-Assessed or Tax-exempt Uses
------------------------------------------------------------------------
                                                        Eligible Federal
                                                        acres allocated
                                        Allocated       to expected use
                                        proportion      category (Col. 2
                                        (percent)          x acres in
                                                          expected use
                                                           category)
(1)                                               (2)                (3)
------------------------------------------------------------------------
      Residential portion of eligible Federal property (400 acres)
------------------------------------------------------------------------
Allocated by local official for                    20                 80
 non-assessed or tax-exempt uses..
Allocated for taxable residential                  80                320
 use..............................
                                   -------------------------------------
    Total.........................                100                400
------------------------------------------------------------------------

    (iii) The local official then calculates the number of acres
attributable to taxable use for each expected use category by
subtracting the number of acres attributable to non-assessed or tax-
exempt uses determined under paragraph (c)(1)(ii) of this section from
the total number of acres of eligible Federal property in that use
category identified in paragraph (b)(2) of this section.
    (2) For the taxable use portion determined under paragraph
(c)(1)(iii) of this section for each expected use category, the local
official then calculates a base value as follows:
    (i) The local official selects from each expected use category
identified pursuant to paragraph (b)(1)(i) of this section a minimum
sample size of 10 taxable adjacent properties that represent the highest
and best uses of the taxable adjacent properties. The official
identifies the value that is recorded on the assessment records for each
selected taxable adjacent property before any adjustment, ratio,
percentage, or other factor is applied to establish a taxable (assessed)
value. If at least three but fewer than 10 taxable adjacent properties
are selected in an identified use category, the local official
calculates a per acre value for each adjacent property and then
identifies which of those properties has the lowest per-acre value. The
official replicates that adjacent property's value and acreage as many
times as needed until the combination of actual and replicated adjacent
properties reaches ten in number. In extremely rare circumstances, the
Secretary may permit the local official to select fewer than three
parcels in a tax classification if doing so is determined by the
Secretary to be necessary and reasonable and there is an insufficient
number of adjacent taxable properties to replicate. In those extremely
rare circumstances, the local official establishes the base value of the
eligible Federal property using the average per acre value of the
selected adjacent property or properties.
    Example 2a (Minimum Sample Size of Adjacent Properties): The
eligible Federal property is surrounded by properties that are
classified for tax purposes as residential, commercial, and agricultural
property. The local official selects at least 10 taxable adjacent
parcels from each of the residential and agricultural property
classifications as the basis for valuing the eligible Federal property.
    In the commercial classification, however, only six taxable adjacent
properties are selected. The lowest per-acre-valued parcel, Parcel A, is
valued at $6,000 per acre. As illustrated in Table 2-1, the local
official selects all six of the commercial taxable adjacent properties,
and then replicates Parcel A's value and acreage four more times to
reach the minimum number of ten properties for that classification.
    Example 2b (Use of Fewer Than Three Adjacent Taxable Properties in
Extremely Rare Circumstances): There are three golf courses in an LEA,
one on eligible Federal property and the other two on taxable property
adjacent to the eligible Federal property. Under the local tax
classification scheme, there is a separate tax category for golf
courses. Since there are only two adjacent taxable properties in that
tax classification in the taxing jurisdiction, the LEA seeks permission
to establish the base value for the golf course on the eligible Federal
property using the average per-acre value of the two adjacent taxable
golf courses. After verifying the facts, the Secretary determines that
extremely rare circumstances exist within the meaning

[[Page 515]]

of Sec. 222.23(c)(2)(i) and grants the LEA's request.
    (ii) The local official then calculates an average per-acre value
for the taxable portion of each expected use category by totaling the
values (following application of any adjustment factors, if relevant)
and acres of the actual and any replicated adjacent properties and then
dividing the total value by the total number of acres in those
properties, as illustrated in the following chart (Table 2-1).

                 Table 2-1--Average Per-Acre Value of Minimum Sample Size of Adjacent Properties
----------------------------------------------------------------------------------------------------------------
                              Selected adjacent properties--
                                commercial classification              Value           Acres      Value per acre
                         (1)....................................             (2)          (3)                (4)
----------------------------------------------------------------------------------------------------------------
1......................  Parcel A...............................        $150,000           25             $6,000
2......................  Parcel B...............................       1,200,000           30             40,000
3......................  Parcel C...............................         750,000             .25       3,000,000
4......................  Parcel D...............................       1,000,000           40             25,000
5......................  Parcel E...............................         500,000            5            100,000
6......................  Parcel F...............................         250,000             .5          500,000
7......................  Replicated Parcel A....................         150,000           25              6,000
8......................  Replicated Parcel A....................         150,000           25              6,000
9......................  Replicated Parcel A....................         150,000           25              6,000
10.....................  Replicated Parcel A....................         150,000           25              6,000
                        ----------------------------------------------------------------------------------------
                            Total...............................       4,450,000          200.75              NA
                        ----------------------------------------------------------------------------------------
                                                    Average value/acre
                                               (TOTAL Col. 2/TOTAL Col. 3)                             22,166.87
----------------------------------------------------------------------------------------------------------------

    (iii) The local official then multiplies the average per-acre value
calculated under paragraph (c)(2)(ii) of this section by the number of
acres of eligible Federal property in the taxable portion of that
expected-use category, determined in accordance with paragraph (b)(2) of
this section to calculate the base value for that category.
    (d) Additional procedures for determining base values. The local
official applies the following additional procedures in determining a
base value for each category of expected use of the eligible Federal
property, in accordance with paragraph (a)(3) of this section:
    (1) The local official determines base values on a three-year cycle,
as follows:
    (i) The local official allocates expected uses to the eligible
Federal property in accordance with paragraph (b)(2) of this section and
selects taxable adjacent properties in accordance with paragraph
(c)(2)(i) of this section once every three years (base year).
    (ii) For each of the following two application years, the local
official uses the same allocation of expected uses of the eligible
Federal property and the same taxable adjacent parcels selected for the
base year, but updates the values and acreages of the selected taxable
adjacent parcels.
    (iii) If a previously selected taxable adjacent property becomes
unsuitable for determining the base value for the expected-use category
because that property has changed assessment classification, become tax-
exempt, or undergone a change in character from the time that the
property was selected for the base year, the local official substitutes
a similar taxable adjacent property from the same expected-use category
(assessment classification) in accordance with the requirements in
paragraph (c)(2)(i) of this section.
    Example 3 (Three-Year Cycle for Selected Adjacent Properties): For
the fiscal year (FY) 2010 section 8002 application, the local official
selects 15 residential taxable adjacent properties to use as the basis
for valuing a portion of the eligible Federal property, and provides the
value and acreages of each of those properties for the previous year
(2009). The local official must use those same properties for the
following two application years (2011 and 2012), assuming that those
properties retain the same assessment classification, remain taxable,
and do not undergo a change in the original character upon which their
selection was based. For each of those following two years, the local
official updates the values and acreages of each selected residential
taxable adjacent property

[[Page 516]]

based on the preceding year's tax data (2010 and 2011, respectively).
    However, during that two-year period, one of the residential taxable
adjacent properties changes in character because the residential
improvement is destroyed. That change to the original character makes
the property unsuitable to include in the selected group of residential
taxable adjacent properties for the remaining two years of the three-
year period. Accordingly, the local official substitutes a residential
taxable adjacent property that is similar to the originally selected
property (i.e., an improved residential adjacent property of similar
value and size) to retain the same number and variety of taxable
adjacent properties in that expected-use category as originally
selected.
    (2)(i) When selecting taxable adjacent properties for the base year
in accordance with paragraph (c)(2)(i) of this section, the local
official may include taxable adjacent properties that are recent sales
(as defined in paragraph (e)(3) of this section), among other taxable
adjacent properties, up to the following proportion:
[GRAPHIC] [TIFF OMITTED] TR20NO08.006

    Example 4 (Proportion of Recent Sales in Assessment Classification):
Beginning with the most recent year for which data are available (2007),
the local official determines that 40 taxable agricultural properties
sold or otherwise transferred ownership in that tax jurisdiction during
the three most recent years for which data are available (2005 through
2007) and that there were 500 taxable agricultural properties during
2007 (the most recent year for which data are available). (If a
particular property sold more than once during the three most recent
years for which data are available, the local official counts each
sale.) The local official determines the proportion of sales for taxable
agricultural property as follows:
[GRAPHIC] [TIFF OMITTED] TR20NO08.007

    (ii) The local official determines the number of recent sales the
official may include with other selected taxable adjacent properties for
that expected use category as follows:
[GRAPHIC] [TIFF OMITTED] TR20NO08.008


[[Page 517]]



If the resulting number is a fraction, the local official rounds down to
the next smaller whole number to determine the maximum number of recent
sales that the official may include for that expected use category.
    Example 5 (Number of Recent Sales Local Official May Use To
Determine the Base Value for Each Expected Use Category of Eligible
Federal Property): The eligible section 8002 Federal property in the LEA
is a federally owned forest. Based on the highest and best uses of
taxable adjacent properties, three expected use categories (assessment
classifications) of properties surround that forest: Residential,
commercial, and agricultural. After identifying and excluding a non-
assessed or tax-exempt proportion for each expected use category of the
eligible Federal property, in accordance with paragraphs (a)(3) and
(c)(1) of this section, the local official selects 10 taxable adjacent
properties each for the residential and commercial use categories, and
20 taxable adjacent properties for the agricultural use category to
determine the base value for the taxable portion of each expected use
category of the eligible Federal property.
    During the three most recent years for which data are available, 10
percent of the residential properties in the tax jurisdiction were sold,
six percent of the commercial properties were sold, and eight percent of
the agricultural properties were sold. As illustrated in the following
chart, of the 10 residential adjacent properties selected, the local
official may select only one recent sale (10 percent (.10) x 10
residential adjacent properties = one) to use in determining the base
value for that expected use category of the eligible Federal property.
    For the commercial classification, six percent of the taxable
properties in the tax jurisdiction were recent sales. As illustrated in
the following chart, the local official may not select any recent sales
for that expected-use category because six percent (.06) of the 10
selected commercial adjacent properties is less than one whole number,
and rounding down therefore results in 0 (six percent (.06) x 10
commercial adjacent properties =.6 of a property).
    Finally, as illustrated in the following chart, for the 20 selected
agricultural adjacent properties, the local official may use one recent
sale for that expected-use category, because eight percent (.08) of the
20 properties equals 1.6 properties (eight percent (.08) x 20
agricultural adjacent properties = 1.6) and rounding down to the nearest
whole number results in one property.

   Table 5-1--Number of Recent Sales Local Official May Use To Determine the Base Value for Each Expected Use
                                      Category of Eligible Federal Property
----------------------------------------------------------------------------------------------------------------
                                                                    Residential     Commercial     Agricultural
----------------------------------------------------------------------------------------------------------------
1. Percent (proportion) of recent sales for expected use               10% (.10)        6% (.06)        8% (.08)
 category.......................................................
2. Total selected adjacent properties...........................              10              10              20
3. Row 1 x Row 2................................................             1.0              .6             1.6
4. Number of ``recent sales'' local official may include among                 1               0               1
 other taxable adjacent properties in determining a base value
 for the expected use category of the eligible Federal property.
----------------------------------------------------------------------------------------------------------------

    (e) Definitions. The following terms used in this section are
defined as follows:
    (1) Adjacent means next to or close to the eligible Federal property
as follows:
    (i) In most cases, the term adjacent means the closest taxable
parcels within the LEA.
    (ii) The term adjacent means properties farther away from the
eligible Federal property than described in paragraph (e)(1)(i) of this
section only if the Secretary determines that it is necessary and
reasonable to use those more distant properties to determine the EAV of
eligible Federal property.
    (iii) The Secretary considers the term adjacent to mean properties
farther than two miles from the perimeter of the eligible Federal
property or outside the LEA only in extremely rare circumstances
determined by the Secretary.
    Example 6 (Extremely Rare Circumstances): A very small LEA consists
predominantly of non-taxable and tax-exempt property including eligible
Federal property. The small taxable portion of the LEA is
topographically dissimilar from the Federal property and classified for
tax purposes differently than the eligible Federal property most likely
would be if it were on the tax rolls, in the opinion of the local
official. Based on these facts, the LEA asserts that there are no
suitable adjacent taxable properties and requests permission to use
taxable properties in the adjoining LEA. After verifying the facts, the
Secretary determines that extremely rare circumstances exist within the
meaning of

[[Page 518]]

Sec. 222.23(e)(1)(iii) and grants the LEA's request.
    In an LEA bordering on the Pacific Ocean, the entire coastline is
taken up by the eligible Federal property. Based on the absence of
taxable oceanfront property in the LEA, the LEA seeks permission to use
taxable oceanfront property in the adjoining LEA. After verifying the
facts, the Secretary determines that extremely rare circumstances exist
within the meaning of Sec. 222.23(e)(1)(iii) and grants the LEA's
request.
    (2)(i) Highest and best use of adjacent property is determined based
on a highest and best use standard in accordance with State or local law
or guidelines of general applicability, if available, that is not used
exclusively for the eligible Federal property and includes any
improvements on that property to the extent consistent with those laws
or guidelines. To the extent that State or local law or guidelines of
general applicability are not available, highest and best use generally
must be based on the current use of the taxable adjacent property
(including any improvements).
    (ii) In determining the highest and best use, the local official--
    (A) Also may consider the most developed and profitable use for
which the taxable adjacent property is physically adaptable, but only if
that use is legally permissible and financially feasible, and for which
there is a need or demand in the near future;
    (B) May not base the highest and best use of taxable adjacent
property on potential uses that are speculative or remote; and
    (C) Must consider the extent to which the eligible Federal property
is physically adaptable for those expected uses and the extent to which
those uses would be needed if the property were not in Federal
ownership.
    Example 7 (Determining the Highest and Best Use of Taxable Adjacent
Properties as the Basis for EAV): If a Federal installation to be valued
is bordered by residential and commercial/industrial properties, the
local official takes into consideration those various highest and best
uses (residential and commercial/industrial) in determining the EAV of
the eligible Federal property as described in paragraphs (a) and
(c)(2)(i) of this section.
    Under that process, using acres, the local official first determines
the relative proportions of adjacent properties devoted to each of those
highest and best uses. For example, the local official determines that
the highest and best uses of the adjacent properties are residential (60
percent) and commercial/industrial (40 percent). However, before
allocating the acres of the eligible Federal property (1,000 acres) to
those uses as described in paragraphs (a)(2) and (b) of this section,
the local official must consider whether the Federal property is
adaptable for and there is a need for those uses, in accordance with
paragraph (e)(2)(ii)(B) of this section.
    For example, if the Federal property is hilly and rocky or contains
a large area of marshland, it may not be practical for the property to
be developed primarily as residential property. Using his or her
professional judgment, the local official may decide that it would be
more appropriate to designate 50 percent of the acres as vacant or
woodland or some other taxable classification that would indicate that
improvements would likely not be located on that property. This may also
affect the proportion of the property that would be designated as
commercial/industrial because some of those commercial/industrial uses
would support the area designated for residential use. Thus, the local
official designates the remaining 50 percent of the acres as 20 percent
residential and 30 percent commercial/industrial.
    After the local official determines the appropriate proportions of
expected uses, the official then multiplies those proportions by the
total number of eligible Federal acres (1,000) to determine the number
of eligible Federal acres in each expected use category, resulting in
the following: residential (20 percent or 200 acres), vacant (50 percent
or 500 acres), and commercial/industrial (30 percent or 300 acres). The
local official then determines the base value for the taxable use
portion of each expected use category under paragraph (c)(2) of this
section, beginning by selecting a sample of properties that represents
the highest and best uses of the taxable adjacent properties.
    In selecting the sample, the local official must consider whether
the Federal property would support the same degree of development as the
taxable adjacent properties selected (e.g., density, size, and
improvements) and whether there would be a need for that type and degree
of development in the near future. The local official then makes any
necessary adjustments to the sample.
    (3) Recent sales or recently sold means taxable properties that have
transferred ownership within the three most recent years for which data
are available.
    Example 8 (Calculation of Section 8002 EAV for Eligible Federal
Property): Two different Federal properties are located within an LEA--a
Federal forest (100 eligible acres) and a naval facility (1,000 eligible
acres). Based on the highest and best uses of taxable adjacent
properties, and as described more specifically below, the local official
establishes an EAV for the eligible Federal property in the LEA of
$92,577,000 in the base year of a three-year cycle. That EAV is based on
categorizing the Federal forest as 100 percent (100 acres) woodland
expected use and the naval facility as 60 percent (600 acres)
residential expected use and 40 percent (400 acres) commercial/
industrial expected use.
    The taxing jurisdiction determines the assessed value for taxable
property by multiplying the value of the property by a single

[[Page 519]]

assessment ratio applicable to the property's assessment category. In
this case, the applicable assessment ratios are: Woodland property--30
percent of the property's value; residential property--60 percent of the
property's value; and commercial/industrial property--75 percent of the
property's value.
    Federal forest (100 eligible Federal acres). The local official
first determines the type of expected-use categories (assessment
classifications) and respective proportions to use in valuing the
eligible Federal property, based on the highest and best use of the
taxable adjacent properties. In this case, the local official
categorizes 100 percent of the Federal forest as being in the woodland
use category (assessment classification) based on the highest and best
use of taxable adjacent properties. The local official multiplies that
proportion by the total number of eligible Federal acres (100), to
determine the number of Federal acres attributable to the woodland use
category (100 acres).
    The local official then determines a base value for each category of
expected use of the eligible Federal property as described in paragraphs
(a)(3), (c), and (d) of this section. The official first determines the
taxable-use portion for each expected use category, as described in
paragraph (c)(1) of this section, by excluding the proportion of the
total area of each use category of the eligible Federal property that
the official determines should be allocated to non-assessed or tax-
exempt uses.
    Based on the general proportion of non-assessed or tax-exempt uses
for woodland property, the local official allocates 10 percent of the
woodland acres for non-assessed or tax-exempt purposes, and multiplies
that proportion by the total number of acres of eligible Federal
property categorized as woodland (100 acres), resulting in 10 acres
attributable to a non-assessed or tax-exempt proportion of woodland. The
local official then subtracts that non-assessed or tax-exempt portion
(10 acres) from the total acres of eligible Federal property in that
expected-use category (100 acres), resulting in 90 acres attributable to
the taxable portion of the woodland expected-use category.
    The local official then selects a sample of taxable adjacent
properties from the expected use category (woodland), as described in
paragraphs (c)(2) and (d) of this section, and uses that sample to
establish a base value for that category. The sample includes the
minimum required number of taxable adjacent properties (generally at
least 10) from the woodland category. In addition, in selecting that
sample of properties, the local official uses only the allowable
proportion of recent sales, calculated as described in paragraph (d)(2)
of this section. In selecting the specific taxable adjacent properties
that make up that sample and that reflect the highest and best uses of
the adjacent taxable properties in accordance with paragraph (c)(2)(i)
of this section, the local official also considers whether the Federal
property is adaptable for and whether there would be a need for those
specific types of properties, such as in size and improvements, in
accordance with paragraph (e)(2)(ii)(B) of this section.
    The local official calculates the average value per acre ($1,000) of
the selected sample of taxable adjacent woodland properties. The local
official then multiplies the number of acres attributable to the taxable
portion of the woodland expected use category (90 acres) by the average
value per acre ($1,000) of the selected taxable woodland adjacent
properties, resulting in a base value for the woodland use category of
the Federal forest of $90,000.
    The local official then determines the section 8002 EAV for the
Federal forest as described in paragraph (a)(4) of this section by
multiplying the base value established for the woodland portion of the
property ($90,000) by 30 percent (the assessment ratio for woodland
property), resulting in a section 8002 EAV of $27,000 for the Federal
forest.
    Naval facility (1,000 total eligible Federal acres).
    The local official first determines the type of expected-use
categories (assessment classifications) and respective proportions to
use in valuing the eligible Federal property. For the naval facility,
the local official determines that the relative mix of taxable adjacent
properties, based on their highest and best uses, is 60 percent
residential and 40 percent commercial/industrial. The local official
multiplies those proportions by the total eligible Federal acres in the
naval facility (1,000), resulting in 600 acres (60 percent x 1,000 acres
= 600 acres) to be valued as residential expected use and 400 acres (40
percent x 1,000 acres = 400 acres) to be valued as commercial/industrial
expected use.
    The local official then determines a base value for each of those
expected use categories of the eligible Federal property. For the
residential expected-use category, the local official allocates 20
percent for non-assessed or tax-exempt uses, and multiplies that
proportion by the number of eligible Federal acres allocated to that
expected-use category (600 acres), resulting in 120 acres allocated to
non-assessed or tax-exempt uses. The local official excludes those 120
acres by subtracting them from the total number of residential acres
(600 acres), resulting in 480 acres allocated to taxable residential
uses for the residential portion of the eligible Federal property in the
naval facility.
    For the commercial/industrial expected-use category, the local
official allocates 15 percent for non-assessed or tax-exempt uses, and
multiplies that proportion by the number of eligible Federal acres
allocated to that

[[Page 520]]

expected-use category (400 acres), resulting in 60 acres allocated to
non-assessed or tax-exempt uses. The local official excludes those 60
acres by subtracting them from the total number of commercial/industrial
acres (400 acres), resulting in 340 acres allocated to taxable
commercial/industrial uses for the commercial/industrial portion of the
eligible Federal property in the naval facility.
    The local official then selects a sample of taxable adjacent
properties from each identified use category, as described in paragraphs
(c)(2) and (d) of this section, which the official uses to establish a
base value for each of those expected-use categories. That sample
includes the minimum required number of taxable adjacent properties
(generally at least 10) for each expected use category. In addition, in
selecting the sample of properties, the official uses only the allowable
proportion of recent sales, calculated as described in paragraph (d)(2)
of this section.
    In considering whether the specific group of taxable adjacent
properties selected reflects the highest and best uses of the adjacent
taxable properties in accordance with paragraph (c)(2)(i) of this
section, the local official also considers whether the Federal property
is adaptable for and whether there would be a need for those specific
types of properties, in accordance with paragraph (e)(2)(ii)(B) of this
section.
    For example, if the official selects 10 residential parcels that are
all small, such as one quarter (.25) of an acre or less, and uses those
parcels to determine an EAV for a large area of Federal property, the
result may exaggerate what would likely happen to that property if it
were available for development. If the official uses only these small
parcels (e.g., .25 acres each) for the 480 acres allocated to taxable
residential uses for the residential portion of the eligible Federal
property, the official would be projecting that approximately 1,920
small residential lots would be developed on that Federal property (.25
x 480 = 1,920) if the property were no longer in Federal ownership. The
Department believes that it would be extremely unlikely that 480 acres
of the property would develop into this number of residential
properties. This outcome would not reflect the local official's best
judgment of the reasonable development of the property. To avoid this
inappropriate result, the official would identify other taxable adjacent
parcels of varying sizes to provide a more accurate picture of how the
Federal property would be developed if it were on the tax rolls.
    Similarly, with respect to improvements, if the local official
selected taxable adjacent properties that all were improved parcels, the
official would be projecting that all of the 480 acres allocated to
taxable residential uses for the residential portion of the eligible
Federal property would be improved. If the residential taxable adjacent
parcels are a mixture of improved and unimproved properties, that
projection also may be speculative based on the number of improvements
that reasonably would be needed for the current and any expected new
population. If the assumption is not reasonable that the entire 480
acres would be improved, then the local official would make adjustments
accordingly in the sample of taxable adjacent properties by adding some
unimproved residential parcels to the sample.
    For the portion of the naval facility allocated to taxable
residential use, the local official calculates the average per-acre
value ($100,000) of the selected sample of residential adjacent
properties as described in paragraph (c)(2)(ii) of this section. The
local official then multiplies the number of acres allocated to the
taxable residential portion (480 acres) by the average value per acre
($100,000) of the sample of residential adjacent properties to determine
the base value ($48,000,000) for that portion of the eligible Federal
property, as described in paragraph (c)(2)(iii) of this section. The
local official determines a section 8002 EAV for that residential
portion by multiplying the $48 million by 60 percent (assessment ratio
for residential property), resulting in $28,800,000 as described in
paragraph (a)(4) of this section.
    Similarly, for the portion of the naval facility allocated to
taxable commercial/industrial use, the local official calculates an
aggregate per acre value ($250,000) of the selected sample of
commercial/industrial taxable adjacent properties as described in
paragraph (c)(2)(ii) of this section. The local official then multiplies
the number of eligible Federal property acres allocated to the taxable
commercial/industrial portion (340 acres) by the average value per acre
of the selected commercial/industrial adjacent properties ($250,000) to
determine the base value for that portion of the eligible Federal
property ($85,000,000), as described in paragraph (c)(2)(iii) of this
section. The local official determines a section 8002 EAV for that
commercial/industrial portion by multiplying the $85,000,000 by 75
percent (the assessment ratio for commercial/industrial property),
resulting in $63,750,000 as described in paragraph (a)(4) of this
section.
    The local official then calculates the total section 8002 EAV for
the entire naval facility as described in paragraph (a)(5) of this
section by adding the figures for the residential portion ($28,800,000)
and the commercial/ industrial portion ($63,750,000), resulting in a
total section 8002 EAV for the entire naval facility of $92,550,000.
    Total section 8002 property in the LEA. Finally, the local official
determines the aggregate section 8002 assessed value for the LEA as
described in paragraph (a)(6) of this section by adding the section 8002
EAV for the Federal forest ($27,000), and the total section 8002 EAV for
the naval facility

[[Page 521]]

($92,550,000), resulting in an aggregate assessed value of $92,577,000.
    This entire process is illustrated in Tables 8-1 and 8-2 below:

 Table 8-1--Allocation of Section 8002 Eligible Federal Property to Non-Taxable and Taxable Uses for Determining
                                                   Base Values
----------------------------------------------------------------------------------------------------------------
                                   Proportion of
                                     eligible       Total acres                        Acres           Acres
                                      Federal      allocated to     Proportion     allocated to    allocated to
 Tax classifications of adjacent     property      property use    allocated to    non-assessed    taxable uses
 properties based on highest and   allocated to     categories     non-assessed    or tax-exempt    and used to
            best use               property use      (Col. 2 x     or tax-exempt  uses (Col. 4 x  determine base
                                    categories       eligible     uses (percent)      Col. 3)     values (Col. 3
                                     (percent)        acres)                                         - Col. 5)
(1)                                          (2)             (3)             (4)             (5)             (6)
----------------------------------------------------------------------------------------------------------------
                                       Federal Forest (100 eligible acres)
----------------------------------------------------------------------------------------------------------------
Woodland........................             100             100              10              10              90
                                 -------------------------------------------------------------------------------
    Subtotal....................  ..............             100  ..............              10              90
----------------------------------------------------------------------------------------------------------------
                                      Naval Facility (1,000 eligible acres)
----------------------------------------------------------------------------------------------------------------
Residential.....................              60             600              20             120             480
Commercial/industrial...........              40             400              15              60             340
                                 -------------------------------------------------------------------------------
    Subtotal....................             100           1,000  ..............             180             820
                                 -------------------------------------------------------------------------------
        Total...................  ..............           1,100  ..............             190             910
----------------------------------------------------------------------------------------------------------------


Table 8-2--Calculation of Section 8002 Base Values, Section 8002 Estimated Assessed Values (EAVs), and Aggregate
                                                 Assessed Value
----------------------------------------------------------------------------------------------------------------
                                   Federal acres  Average value/   Base value of
                                   allocated for      acre of        eligible       Assessment     Section 8002
   Classification of adjacent       taxable use       taxable         Federal          ratio         EAVs and
             parcels                (Table 7-1,      adjacent     property (Col.     (percent)       aggregate
                                      Col. 6)         parcels       3 x Col. 4)                   assessed value
(1)                                          (2)             (3)             (4)             (5)             (6)
----------------------------------------------------------------------------------------------------------------
             Federal Forest (90 eligible acres allocated for taxable use (see Table 7-1, column 6))
----------------------------------------------------------------------------------------------------------------
Woodland........................              90          $1,000         $90,000              30         $27,000
                                 -------------------------------------------------------------------------------
    Subtotal....................              90  ..............          90,000          27,000
----------------------------------------------------------------------------------------------------------------
         Naval Facility (820 eligible Federal acres allocated for taxable use (see Table 6-1, column 6))
----------------------------------------------------------------------------------------------------------------
Residential.....................             480         100,000      48,000,000              60      28,800,000
Commercial/Industrial...........             340         250,000      85,000,000              75      63,750,000
                                 -------------------------------------------------------------------------------
    Subtotal....................             820  ..............     133,000,000  ..............      92,550,000
                                 -------------------------------------------------------------------------------
        Total (Aggregate          ..............  ..............     133,090,000  ..............      92,577,000
         Assessed Value)........
----------------------------------------------------------------------------------------------------------------


[[Page 522]]


(Authority: 20 U.S.C. 7702)

[73 FR 70575, Nov. 20, 2008]

    Effective Date Note: At 73 FR 70575, Nov. 20, 2008, Sec. 222.23 was
revised. This section contains information collection and recordkeeping
requirements and will not become effective until approval has been given
by the Office of Management and Budget.



Sec. Sec. 222.24-222.29  [Reserved]



   Subpart C_Payments for Federally Connected Children Under Section
                       8003(b) and (e) of the Act



Sec. 222.30  What is ``free public education''?

    In addition to the terms defined in Sec. 222.2, the following
definition applies to this part:
    Free public education. (1) The term means education that is
provided--
    (i) At public expense;
    (ii)(A) As the complete elementary or secondary educational program
as determined under State law through grade 12; and
    (B) Preschool education, whether or not included as elementary
education by State law;
    (iii) In a school of the local educational agency (LEA) or under a
tuition arrangement with another LEA or other educational entity; and
    (iv) Under public supervision and direction, except with respect to
children with disabilities.
    (2) For the purpose of paragraph (1)(i) of this definition,
education is provided at public expense if--
    (i) There is no tuition charge to the child or the child's parents;
and
    (ii) Federal funds, other than funds under the Act, do not provide a
substantial portion of the educational program.
    (3) For the purpose of paragraph (1)(ii) of this definition, the
complete elementary or secondary educational program is the program
recognized by the State as meeting all requirements for elementary or
secondary education for the children claimed and, except for preschool
education, does not include a program that provides only--
    (i) Supplementary services or instruction; or
    (ii) A portion of the required educational program.
    (4) For the purpose of paragraph (1)(iii) of this definition, a
tuition arrangement must--
    (i) Satisfy all applicable legal requirements in the State; and
    (ii) Genuinely reflect the applicant LEA's responsibility to provide
a free public education to the children claimed under section 8003.
    (5) For the purpose of paragraph (1)(iv) of this definition,
education provided under public supervision and direction means
education that is provided--
    (i) In a school of the applicant LEA or another LEA; or
    (ii) By another educational entity, over which the applicant LEA, or
other public agency, exercises authority with respect to the significant
aspects of the educational program for the children claimed. The
Secretary considers significant aspects of the educational program to
include administrative decisions relating to teachers, instruction, and
curriculum.

(Authority: 20 U.S.C. 7703, 7709, 7713(6))



Sec. 222.31  To which local educational agencies does the Secretary
make basic support payments under section 8003(b) of the Act?

    The Secretary makes payments to an LEA with an otherwise approvable
application for children claimed under section 8003(b) of the Act if--
    (a) The LEA meets the requirements in subpart A of these regulations
and this subpart; and
    (b)(1) The LEA is responsible under applicable State or Federal law
for providing a free public education to those children;
    (2) The LEA is providing a free public education to those children;
and
    (3) The State provides funds for the education of those children on
the same basis as all other public school children in the State, unless
permitted otherwise under section 8009 of the Act.

(Authority: 20 U.S.C. 7703 and 7709)



Sec. 222.32  Upon what information is a local educational agency's
basic support payment based?

    (a) The Secretary determines an LEA's payment under section 8003(b)

[[Page 523]]

on the basis of information in the LEA's application, including
information regarding the membership of federally connected children.
    (b) The LEA must supply information in its application regarding its
federally connected membership on the basis of any count described in
Sec. Sec. 222.33 through 222.35.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703 and 7705)



Sec. 222.33  When must an applicant make its first or only membership
count?

    (a)(1) An applicant must select a day in the current school year as
the survey date for making the first membership count, which must be no
earlier than the fourth day of the regular school year and on or before
January 31.
    (2) The applicant must use the same survey date for all schools in
the LEA.
    (b) As of the survey date, the applicant must--
    (1) Count the membership of its federally connected children; and
    (2) Count the total membership of its children--both federally
connected and non-federally connected.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703, 7705, 7706)



Sec. 222.34  If an applicant makes a second membership count, when
must that count be made?

    (a)(1) The applicant may, but is not required to, make a second
count of membership.
    (2) If the applicant chooses to make a second count of membership,
the applicant must select a day after January 31, but no later than May
14, as the survey date for making the second membership count, and make
that count in accordance with Sec. 222.33(b).
    (3) The applicant must use the same survey date for the second
membership count for all schools in the LEA.
    (b) The applicant may use the information obtained from a second
membership count to amend its application for assistance as described in
Sec. 222.5(b)(1).

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703 and 7705)



Sec. 222.35  How does a local educational agency count the membership
of its federally connected children?

    An applicant counts the membership of its federally connected
children by using one or both of the following methods:
    (a) Parent-pupil survey. An applicant may conduct a parent-pupil
survey to count the membership of its federally connected children,
which must be counted as of the survey date.
    (1) The applicant shall conduct a parent-pupil survey by providing a
form to a parent of each pupil enrolled in the LEA to substantiate the
pupil's place of residence and the parent's place of employment. A
parent-pupil survey form must include the following:
    (i) Pupil enrollment information (this information may also be
obtained from school records), including--
    (A) Name of pupil;
    (B) Date of birth of the pupil; and
    (C) Name of public school and grade of the pupil.
    (ii) Pupil residence and parent employment information, including--
    (A) Address of the pupil's residence (or other location information
for that residence, such as legal description), including the name of
the Federal facility if the pupil's residence is on Federal property;
and
    (B) Name (as it appears on the employer's payroll record) of the
parent (mother, father, legal guardian or other person standing in loco
parentis) who is employed on Federal property and with whom the pupil
resides (unless the parent is a member of the uniformed services on
active duty);
    (C) Name and address of the Federal property on which the parent is
employed (or other location information, such as legal description),
unless the parent is a member of the uniformed services on active duty;
    (D) If the parent is a member of the uniformed services on active
duty, the name, rank, and branch of service of that parent;

[[Page 524]]

    (E) If the parent is a civilian employed on a Federal vessel, the
name of the vessel, hull number, and name of the controlling agency;
    (F) The signature of the parent supplying the information and the
date of such signature; and
    (G) The name of the parent's employer and the employer's address (or
other location information, such as legal description), unless a parent
is a member of the uniformed services on active duty.
    (2) An LEA may accept a parent-pupil survey form, or a parent-pupil
survey form that is signed by a person other than a parent, only under
unusual circumstances. In those instances, the parent-pupil survey form
must show why the parent did not sign the survey form, and when, how,
and from whom the residence and employment information was obtained.
    (b) Source check. (1) An applicant may count the membership of its
federally connected children by using a source check to substantiate a
pupil's place of residence or parent's place of employment on the survey
date.
    (2) A source check is a form provided--
    (i) To a parent's employer, on which the employer certifies as to
the place of employment of a parent of a pupil claimed;
    (ii) To a housing official, on which the official certifies as to
the residence of each pupil claimed; or
    (iii) To a tribal official, on which the official certifies as to
the residence of each pupil claimed residing on Indian lands over which
that tribal official has jurisdiction.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703 and 7706)



Sec. 222.36  What minimum number of federally connected children must
a local educational agency have to receive a payment on behalf of

those children under section 8003(b) and (e)?

    (a) Except as provided in paragraph (d) of this section, an LEA is
eligible to receive a payment under section 8003(b) (basic support and
learning opportunity threshold) and (e) (hold harmless) for a fiscal
year only if the total number of its eligible federally connected
children for whom it provided a free public education for the preceding
fiscal year was--
    (1) At least 400 who were in average daily attendance (ADA); or
    (2) At least 3 percent of the total number of children in ADA.
    (b) Except as provided in paragraph (d) of this section, an
applicant LEA is eligible to receive a payment under section 8003 for a
fiscal year on behalf of federally connected children described in
section 8003(a)(1)(F) or (G) only if the total number of those children
for whom it provided a free public education for the preceding fiscal
year was at least--
    (1) 1,000 in ADA; or
    (2) 10 percent of the total number of children in ADA.
    (c) Children described in paragraph (b) of this section are counted
for the purposes of paragraph (a) of this section only if the applicant
LEA is eligible to receive a payment on behalf of those children under
section 8003.
    (d) This section does not apply to hold harmless payments under
section 8003(e) for fiscal year 1995.

(Authority: 20 U.S.C. 7703(a)(3) and (b)(1)(B))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35415, July 1, 1997]



Sec. 222.37  How does the Secretary calculate the average daily
attendance of federally connected children?

    (a) This section describes how the Secretary computes the ADA of
federally connected children for each category in section 8003 to
determine an applicant's payment.
    (b) If an LEA is in a State that collects actual ADA data for
purposes of distributing State aid for education, the Secretary
calculates the ADA of that LEA's federally connected children for the
current fiscal year payment as follows:
    (1) Except as provided in paragraph (b)(3) of this section--
    (i) By dividing the ADA of all the LEA's children for the second
preceding fiscal year by the LEA's total membership on its survey date
for the second preceding fiscal year (or, in the case of an LEA that
conducted two membership counts in the second preceding fiscal year, by
the average of

[[Page 525]]

the LEA's total membership on the two survey dates); and
    (ii) By multiplying the figure determined in paragraph (b)(1)(i) of
this section by the LEA's total membership of federally connected
children in each subcategory described in section 8003 and claimed in
the LEA's application for the current fiscal year payment (or, in the
case of an LEA that conducts two membership counts, by the average of
the LEA's total membership of federally connected children in each
subcategory on the two survey dates).
    (2)(i) For purposes of this section, actual ADA means raw ADA data
that have not been weighted or adjusted to reflect higher costs for
specific types of students for purposes of distributing State aid for
education.
    (ii) If an LEA provides a program of free public summer school,
attendance data for the summer session are included in the LEA's ADA
figure in accordance with State law or practice.
    (iii) An LEA's ADA count includes attendance data for children for
whom it makes tuition arrangements with other educational entities.
    (3) Attendance data are not counted for any child--
    (i) Who is not physically present at school for the daily minimum
time period required by the State, unless the child is--
    (A) Participating via telecommunication or correspondence course
programs that meet State standards; or
    (B) Being served by a State-approved homebound instruction program
for the daily minimum time period appropriate for the child; or
    (ii) Attending the applicant's schools under a tuition arrangement
with another LEA.
    (c) If an LEA is in a State that does not collect ADA data for
purposes of distributing State aid for education, the LEA or SEA shall
submit data necessary for the Secretary to calculate the ADA of the
LEA's federally connected children as follows:
    (1) If an LEA is in a State that formerly collected ADA data for
purposes of distributing State aid for education, the SEA may submit the
total ADA and total membership data for the State for each of the last
three fiscal years that ADA data were collected. The Secretary uses
these data to calculate the ADA of the LEA's federally connected
children by--
    (i) Dividing the total ADA data by the total membership data for
each of the three fiscal years and averaging the results; and
    (ii) Multiplying the average determined in paragraph (c)(1)(i) of
this section by the LEA's total membership of federally connected
children as described in paragraph (b)(1)(ii) of this section.
    (2) An LEA may submit attendance data based on sampling conducted
during the previous fiscal year. The sampling must include attendance
data for all children for at least 30 school days. The data must be
collected during at least three periods evenly distributed throughout
the school year. Each collection period must consist of at least five
consecutive school days. The Secretary uses these data to calculate the
ADA of the LEA's federally connected children by--
    (i) Determining the ADA of all children in the sample;
    (ii) Dividing the figure obtained in paragraph (c)(2)(i) of this
section by the LEA's total membership for the previous fiscal year; and
    (iii) Multiplying the figure determined in paragraph (c)(2)(ii) of
this section by the LEA's total membership of federally connected
children for the current fiscal year, as described in paragraph
(b)(1)(ii) of this section.
    (3) If an LEA is in a State that distributes State aid for education
based on data similar to attendance data, the SEA may request that the
Secretary use those data to calculate the ADA of the LEA's federally
connected children. If the Secretary determines that those data are, in
effect, equivalent to attendance data, the Secretary allows use of the
requested data and determines the method by which the ADA of the LEA's
federally connected children will be calculated.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703, 7706, 7713)

[[Page 526]]



Sec. 222.38  What is the maximum basic support payment that a local
educational agency may receive under section 8003(b)?

    The maximum basic support payment that an LEA may receive under
section 8003(b) for any fiscal year is the sum of its total weighted
student units under section 8003(a)(2) for the federally connected
children eligible to be counted as the basis for payment, multiplied by
the greater of one of the following:
    (a) One-half of the State average per pupil expenditure for the
third fiscal year preceding the fiscal year for which the LEA seeks
assistance.
    (b) One-half of the national average per pupil expenditure for the
third fiscal year preceding the fiscal year for which the LEA seeks
assistance.
    (c) The comparable local contribution rate (LCR) determined in
accordance with Sec. Sec. 222.39-222.41.
    (d) The State average per pupil expenditure multiplied by the local
contribution percentage as defined in section 8013(8) of the Act.

(Authority: 20 U.S.C. 7703 (a), (b) and (c))



Sec. 222.39  How does a State educational agency identify generally
comparable local educational agencies for local contribution rate

purposes?

    (a) To identify generally comparable LEAs within its State for LCR
purposes, the State educational agency (SEA) for that State shall use
data from the third fiscal year preceding the fiscal year for which the
LCR is being computed to group all of its LEAs, including all applicant
LEAs, as follows:
    (1) Grouping by grade span/legal classification alone. Divide all
LEAs into groups that serve the same grade span and then subdivide the
grade span groups by legal classification, if the Secretary considers
this classification relevant and sufficiently different from grade span
within the State. As an alternative grade-span division, after
consultation with the applicant LEAs in the State, divide all LEAs into
elementary, secondary, or unified grade-span groups, as appropriate,
within the State.
    (2) Grouping by grade span/legal classification and size. (i) Divide
all LEAs into groups by grade span (or the alternative grade-span groups
described in paragraph (a)(1)) of this section and legal classification,
if relevant and sufficiently different from grade span and size.
    (ii) List all LEAs within each group in descending order by size as
measured by ADA, placing the LEA with the largest ADA at the top of the
list. A State that does not tabulate actual annual ADA shall use the
same formula for establishing ADA for the purpose of ranking LEAs by
size as the Department has approved for the purpose of calculating
payments under section 8003 for applicant LEAs in the State.
    (iii) After consultation with the applicant LEAs in the State,
divide each group into either two subgroups or three subgroups.
    (iv) To determine the subgroups, divide each list at the point(s)
that will result in as nearly equal numbers of LEAs in each subgroup as
possible, so that no group is more than one LEA larger than any other
group.
    (3) Grouping by grade span/legal classification and location. Divide
all LEAs into groups by grade span (or the alternative grade-span groups
described in paragraph (a)(1) of this section) and, if relevant and
sufficiently different from grade span and location, legal
classification; then subdivide these groups by location, as determined
by placement inside or outside a metropolitan statistical area (MSA) as
defined by the U.S. Bureau of the Census. The Department will supply
SEAs with lists of MSA classifications for their LEAs, and only the
classifications on those lists will be recognized by the Department for
the purposes of these regulations.
    (4) Grouping by grade span/legal classification, size, and location.
(i) Divide all LEAs into groups by grade span (or the alternative grade-
span groups described in paragraph (a)(1) of this section) and, if
relevant and sufficiently different from grade span, size, and location,
legal classification; then subdivide these groups by size (into two or
three subgroups for each grade span, as described in paragraph (a)(2) of
this section); and further subdivide these groups by location (inside or
outside an MSA).

[[Page 527]]

    (ii) In using both the size and location factors, the SEA shall
subdivide according to the size factor before the location factor.
    (b) After applying the following restrictions, the SEA shall compute
an LCR according to the provisions of Sec. 222.41 for each group of
generally comparable LEAs identified under paragraph (a) of this
section, as follows:
    (1) The SEA shall not, when computing an LCR, include the following
``significantly impacted'' LEAs in any group of generally comparable
LEAs:
    (i) Any LEA having--in the third fiscal year preceding the fiscal
year for which the LCR is being computed--20 percent or more of its ADA
composed of children identified under section 8003(a)(1)(A)-(C).
    (ii) Any LEA having--in the third fiscal year preceding the fiscal
year for which the LCR is being computed--50 percent or more of its ADA
composed of children identified under section 8003(a)(1)(A)-(G) who were
eligible under Sec. 222.36 to be counted as the basis for payment under
section 8003.
    (2) The SEA may not compute an LCR for any group that contains fewer
than 10 LEAs.
    (c)(1) For an applicant LEA that satisfies the requirements
contained in paragraph (c)(3) of this section, the SEA, in consultation
with the LEA, may select a subgroup of 10 or more generally comparable
LEAs from the group identified under paragraph (a)(2) of this section
that includes the applicant LEA.
    (2) An LEA that otherwise meets either of the requirements of
paragraph (c)(3) of this section but serves a different span of grades
from all other LEAs in its State (and therefore cannot match any group
of generally comparable LEAs under paragraph (a)(2) of this section)
must be matched, for purposes of this paragraph (c) only, to a group
using legal classification and size as measured by ADA. The group
identified using legal classification and size will be the applicant's
group under paragraph (a)(2) of this section for purposes of this
paragraph (c) only.
    (3) In order to qualify under paragraph (c) (1) or (2) of this
section, an applicant LEA must either--
    (i)(A) Be located entirely on Federal land; and
    (B) Be raising either no local revenues or an amount of local
revenues the Secretary determines to be minimal; or
    (ii)(A) Be located in a State where State aid makes up no more than
40 percent of the State average per pupil expenditure in the third
fiscal year preceding the fiscal year for which the LCR is being
computed;
    (B) In its application, have federally connected children identified
under section 8003(a)(1)(A)-(C) equal to at least 20 percent of its
total ADA; and
    (C) In its application, have federally connected children identified
under section 8003(a)(1)(A)-(G) who were eligible under Sec. 222.36 to
be counted as the basis for payment under section 8003 equal to at least
50 percent of its total ADA.
    (4) In the case of an applicant LEA that meets either of the
requirements contained in paragraph (c)(3) of this section, the SEA, in
consultation with the LEA, may select 10 or more generally comparable
LEAs that share one or more common factors of general comparability with
the eligible applicant LEA, as follows:
    (i)(A) The SEA must consider one or more generally accepted,
objectively defined factors that affect the applicant's cost of
educating its children. Examples of such cost-related factors include
location inside or outside an MSA, sparsity of population, an unusually
large geographical area, economically depressed area, low-income
families, children with disabilities, neglected or delinquent children,
low-achieving children, children with limited English proficiency, and
minority children.
    (B) The SEA may not consider cost-related factors that can be varied
at the discretion of the applicant LEA or its generally comparable LEAs
or factors dependent on the wealth of the applicant LEA or its generally
comparable LEAs. Examples of factors that may not be considered include
special alternative curricular programs, pupil-teacher ratio, and per
pupil expenditures.

[[Page 528]]

    (ii) The SEA must apply the factor or factors of general
comparability recommended under paragraph (c)(4)(i)(A) of this section
in one of the following ways in order to identify 10 or more generally
comparable LEAs for the eligible applicant LEA, none of which may be
significantly impacted LEAs:
    (A) The SEA identifies all of the LEAs in the group to which the
eligible applicant LEA belongs under paragraph (a)(2) of this section
that share the recommended factor or factors. If the subgroup containing
the eligible applicant LEA includes at least 10 other LEAs (excluding
significantly impacted LEAs), it will be the eligible applicant LEA's
new group of generally comparable LEAs. The LCR for the eligible
applicant LEA shall be computed using the data for all of the LEAs in
the subgroup except the eligible applicant LEA.

    Example. An eligible applicant LEA contains a designated
economically depressed area, and the SEA recommends ``economically
depressed area'' as an additional factor of general comparability. From
the group of LEAs under paragraph (a)(2) of this section that includes
the eligible applicant LEA, the SEA identifies two subgroups, those LEAs
that contain a designated economically depressed area and those that do
not. The entire subgroup identified by the SEA that includes the
eligible applicant LEA is that LEA's new group of generally comparable
LEAs if it contains at least 10 LEAs.

    (B) After the SEA identifies all of the LEAs in the group that the
eligible applicant LEA belongs to under paragraph (a)(2) of this section
that share the recommended factor or factors, the SEA then
systematically orders all of the LEAs in the group that includes the
eligible applicant LEA. The SEA may further divide the ordered LEAs into
subgroups by using logical division points (e.g., the median, quartiles,
or standard deviations) or a continuous interval of the ordered LEAs
(e.g., a percentage or a numerical range). If the subgroup containing
the eligible applicant LEA includes at least 10 other LEAs (excluding
significantly impacted LEAs), it will be the eligible applicant LEA's
new group of generally comparable LEAs. The LCR for the eligible
applicant LEA shall be computed using the data for all of the LEAs in
the subgroup except the eligible applicant LEA.

    Example 1. An eligible applicant LEA serves an unusually high
percentage of children with disabilities, and the SEA recommends
``proportion of children with disabilities'' as an additional
comparability factor. From the group of LEAs under paragraph (a)(2) of
this section that includes the eligible applicant LEA, the SEA lists the
LEAs in descending order according to the percentage of children with
disabilities enrolled in each of the LEAs. The SEA divides the list of
LEAs into four groups containing equal numbers of LEAs. The group
containing the eligible applicant LEA is that LEA's new group of
generally comparable LEAs if it contains at least 10 LEAs.
    Example 2. An eligible applicant LEA serves an unusually high
percentage of minority children, and the SEA recommends ``proportion of
minority children'' as an additional comparability factor. From the
group of LEAs under paragraph (a)(2) of this section that includes the
eligible applicant LEA, the SEA lists the LEAs in descending order
according to the percentage of minority children enrolled in each of the
LEAs. The SEA chooses from the list of LEAs the 15 LEAs whose
percentages of minority children are closest to the eligible applicant
LEA's. These 15 LEAs will be the eligible applicant LEA's new group of
generally comparable LEAs.

    (C) The SEA may recommend and apply more than one factor of general
comparability in selecting a new group of 10 or more generally
comparable LEAs for the eligible applicant LEA. If the subgroup
containing the eligible applicant LEA includes at least 10 other LEAs
(excluding significantly impacted LEAs), it will be the eligible
applicant LEA's new group of generally comparable LEAs. The LCR for the
eligible applicant LEA shall be computed using the data from all of the
LEAs in the subgroup except the eligible applicant LEA.

    Example. An eligible applicant LEA is very sparsely populated and
serves an unusually high percentage of children with limited English
proficiency. The SEA recommends ``sparsity of population'' and
``proportion of children with limited English proficiency'' as
additional comparability factors. From the group of LEAs under paragraph
(a)(2) of this section that includes the eligible applicant LEA, the SEA
identifies all LEAs that are sparsely populated. The SEA further
subdivides the sparsely populated LEAs into two groups, those that serve
an unusually high percentage of children with limited English

[[Page 529]]

proficiency and those that do not. The subgroup of at least 10 sparsely
populated LEAs that serve a high percentage of children with limited
English proficiency is the eligible applicant LEA's new group of
generally comparable LEAs.

    (4)(i) Using the new group of generally comparable LEAs selected
under paragraph (c)(4) of this section, the SEA shall compute the LCR
for the eligible applicant LEA according to the provisions of Sec.
222.41.
    (ii) The SEA shall submit the resulting LCR to the Secretary and
provide the Secretary a description of the additional factor or factors
of general comparability and the data used to identify the new group of
generally comparable LEAs.
    (iii) The Secretary reviews the data submitted by the SEA, and
accepts the LCR for the purpose of use under section 8003(b)(1)(C)(iii)
in determining the LEA's maximum payment under section 8003 if the
Secretary determines that it meets the purposes and requirements of the
Act and this part.
    (d) This section does not apply to applicant LEAs located in--
    (1) Puerto Rico;
    (2) Wake Island;
    (3) Guam;
    (4) American Samoa;
    (5) Any outlying area; and
    (6) Any State in which there is only one LEA.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(b)(1)(C)(iii))



Sec. 222.40  How does a local educational agency select a local
contribution rate based on generally comparable local educational

agencies?

    (a) In selecting an LCR based upon generally comparable LEAs, an LEA
shall use the following steps:
    (1) Step 1. The LEA shall select the factor or factors in Sec.
222.39 the LEA wishes to use as the basis for general comparability.
    (2) Step 2. Using State-supplied data, the LEA shall identify within
the State the entire group of LEAs (containing at least 10 LEAs
exclusive of significantly impacted LEAs described in Sec.
222.39(b)(1)) that matches the factor or factors selected in Step 1 and
that contains the applicant LEA or would contain the applicant LEA if it
were not significantly impacted.
    (3) Step 3. The LEA shall recommend to the Secretary the LCR, which
the SEA has computed according to the provisions of Sec. 222.39, based
on the group identified in Step 2.
    (b) A significantly impacted LEA described in Sec. 222.39(b)(1)
may--
    (1) Apply for assistance under this program; and
    (2) Under the generally comparable LEA method, recommend for itself
the LCR of any group in which it would be included based on grade span/
legal classification, size, location, or a combination of these factors,
if it were not excluded as significantly impacted in Sec. 222.39(b)(1).

    Example. An LEA applies for assistance under section 8003 and wishes
to recommend to the Secretary an LCR based on generally comparable LEAs
within its State.

                   1. Characteristics of Applicant LEA

    The grade span of the applicant LEA is kindergarten through grade 8
(K-8). In the applicant's State, legal classification of LEAs is based
on grade span, and thus does not act to further subdivide groups of
LEAs.
    The ADA of the applicant LEA is above the median ADA of LEAs serving
only K-8 in the State.
    The applicant LEA is located outside an MSA.

        2. Characteristics of Other LEAs Serving Same Grade Span

    The SEA of the applicant's State groups all LEAs in its State
according to the factors in Sec. 222.39.
    (a) The SEA identifies the following groups:
    (i) One hundred and one LEAs serve only K-8. The SEA has identified
a group of 50 LEAs having an ADA above the median ADA for the group of
101, one LEA having an ADA at the median, and a group of 50 LEAs having
an ADA below the median ADA; and according to Sec. 222.39(a)(2)(i), the
SEA considers 51 LEAs to have an ADA below the median ADA.
    (ii) Of the 101 LEAs in the group, the SEA has identified a group of
64 LEAs as being inside an MSA and a group of 37 LEAs as being outside
an MSA.
    (iii) Among the group of 50 LEAs having an ADA above the median, the
SEA has identified a group of 35 LEAs as being inside an MSA and a group
of 15 LEAs as being outside an MSA.
    (iv) Among the group of 51 LEAs having an ADA at or below the
median, the SEA has

[[Page 530]]

identified a group of 29 LEAs as being inside an MSA and 22 LEAs as
being outside an MSA.
    (v) One LEA has 20 percent of its ADA composed of children
identified under section 8003(a)(1)(A)-(C) and, therefore, must be
excluded from any group it falls within before the SEA computes an LCR
for the group. The LEA has an ADA below the median ADA and is located
outside an MSA.
    (b) On the basis of Sec. 222.41, the SEA computes the LCR for each
group of generally comparable LEAs that the SEA has identified.

                3. Selection of Generally Comparable LEAs

    The applicant LEA selects the group of generally comparable LEAs
matching the factor or factors it wishes to use as the basis for general
comparability. Under the requirements of Sec. 222.39, the applicant LEA
must begin with the group that includes all LEAs with its grade span,
and, if relevant and sufficiently different, legal classification. In
this case, grade span and legal classification happen to be the same.
Thus, the group would include 100 LEAs, after excluding the one
significantly impacted LEA. The applicant LEA then has several options:
    (a) Option 1. The applicant LEA may select as its group of generally
comparable LEAs on which to base its recommended LCR the entire group of
100 LEAs serving K-8, after excluding the one significantly impacted
LEA. The applicant LEA then recommends to the Secretary as its LCR the
rate computed for this group by the SEA.
    (b) Option 2. Instead of selecting the group of 100, the applicant
LEA may select as its generally comparable group only those LEAs within
the 101 (the significantly impacted LEA must be included initially for
the purpose of determining the median ADA) that have an ADA above the
median ADA, that is, the group of 50. The applicant LEA then recommends
to the Secretary as its LCR the rate computed for the group by the SEA.
    (c) Option 3. Instead of selecting either of the groups described in
Options 1 and 2, the applicant LEA may select as its generally
comparable group only those LEAs within the 100 that are outside an MSA;
that is, the group of 36, after excluding the one significantly impacted
LEA. The applicant LEA then recommends to the Secretary as its LCR the
rate computed for this group by the SEA.
    (d) Option 4. Instead of selecting any of the groups described in
Options 1, 2, and 3, the applicant LEA may select as its generally
comparable group only those LEAs that both have an ADA above the median
ADA for the 101 and are outside an MSA; that is, the group of 15. The
applicant LEA then recommends to the Secretary as its LCR the rate
computed for this group by the SEA. However, as provided in Sec.
222.39(b)(2), if the SEA were to have identified fewer than 10 LEAs
under any factor or combination of factors, the SEA would not have
computed a rate for such a group. Therefore, an applicant LEA included
in such a group would not be able to use this factor or combination of
factors in recommending its LCR to the Secretary. The significantly
impacted LEA described in Sec. 222.39(b)(1), while included for
determining the median ADA, is excluded from the computation of any
group's LCR. However, the significantly impacted LEA may recommend for
itself the LCR of any group it matches in grade span/legal
classification, size, location, or a combination of these factors, (that
is, in the case of the significantly impacted LEA referred to in this
example, below the median ADA and outside an MSA), provided the group
contains at least 10 LEAs that are not significantly impacted.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(b)(1)(C)(iii) and 7703(f)(3)(A)(i)(II) and
(III))



Sec. 222.41  How does a State educational agency compute local
contribution rates based upon generally comparable local educational

agencies?

    Except as otherwise specified in the Act, the SEA, subject to the
Secretary's review and approval, shall compute an LCR for each group of
generally comparable LEAs within its State that was identified using the
factors in Sec. 222.39, as follows:
    (a)(1) The SEA shall compile the aggregate local current
expenditures of the comparable LEAs in each group for the third fiscal
year preceding the fiscal year for which the LCR is being computed.
    (2) For purposes of this section, the SEA shall consider only those
aggregate current expenditures made by the generally comparable LEAs
from revenues derived from local sources. No State or Federal funds may
be included.
    (b) The SEA shall compile the aggregate number of children in ADA to
whom the generally comparable LEAs in each group provided a free public
education during the third fiscal year preceding the fiscal year for
which the LCR is being computed.
    (c) The SEA shall divide--
    (1) The aggregate current expenditures determined under paragraph
(a) of this section by;

[[Page 531]]

    (2) The aggregate number of children determined under paragraph (b)
of this section.
    (d) The SEA shall submit the resulting figure as the ``comparable
LCR'' to be used by the Secretary under section 8003(b)(1)(C)(iii) in
determining the LEA's maximum payment amount under section 8003.

(Authority: 20 U.S.C. 7703(b)(1)(C)(iii))



Sec. Sec. 222.42-222.49  [Reserved]



     Subpart D_Payments Under Section 8003(d) of the Act for Local
       Educational Agencies That Serve Children With Disabilities



Sec. 222.50  What definitions apply to this subpart?

    In addition to the terms referenced or defined in Sec. 222.2, the
following definitions in 20 U.S.C. 1401 or 34 CFR Sec. 77.1 apply to
this subpart:
    Children with disabilities means children--
    (1)(i) With mental retardation, hearing impairments including
deafness, speech or language impairments, visual impairments including
blindness, serious emotional disturbance, orthopedic impairments,
autism, traumatic brain injury, other health impairments, or specific
learning disabilities; and
    (ii) Who, by reason thereof, need special education and related
services.
    (2) The term children with disabilities for children aged 3 to 5,
inclusive, may, at a State's discretion, include children--
    (i) Experiencing developmental delays, as defined by the State and
as measured by appropriate diagnostic instruments and procedures, in one
or more of the following areas: physical development, cognitive
development, communication development, social or emotional development,
or adaptive development; and
    (ii) Who, by reason thereof, need special education and related
services.
    Children with specific learning disabilities means children who have
a disorder in one or more of the basic psychological processes involved
in understanding or in using language, spoken or written, which disorder
may manifest itself in imperfect ability to listen, think, speak, read,
write, spell, or do mathematical calculations. These disorders include
conditions such as perceptual disabilities, brain injury, minimal brain
dysfunction, dyslexia, and developmental aphasia. This term does not
include children who have learning problems which are primarily the
result of visual, hearing, or motor disabilities, of mental retardation,
of emotional disturbance, or of environmental, cultural, or economic
disadvantage.
    Free appropriate public education means special education and
related services that--
    (1) Have been provided at public expense, under public supervision
and direction, and without charge;
    (2) Meet the standards of the State educational agency;
    (3) Include an appropriate preschool, elementary, or secondary
school education in the State involved; and
    (4) Are provided in conformity with the individualized education
program (IEP) required under section 1414(a)(5) of the Individuals with
Disabilities Education Act.
    Individualized education program (IEP) means--
    (1) A written statement for each child with a disability developed
in any meeting by a representative of the LEA or an intermediate
educational unit who shall be qualified to provide, or supervise the
provision of, specially designed instruction to meet the unique needs of
children with disabilities, the teacher, the parents or guardian of the
child, and whenever appropriate, the child, which statement must
include--
    (i) A statement of the present levels of educational performance of
the child;
    (ii) A statement of annual goals, including short-term instructional
objectives;
    (iii) A statement of the specific educational services to be
provided to the child, and the extent to which the child will be able to
participate in regular educational programs;
    (iv) A statement of the needed transition services for students
beginning no later than age 16 and annually thereafter (and, when
determined appropriate for the individual, beginning at

[[Page 532]]

age 14 or younger), including, when appropriate, a statement of the
interagency responsibilities or linkages (or both) before the student
leaves the school setting;
    (v) The projected date for initiation and anticipated duration of
these services; and
    (vi) Appropriate objective criteria and evaluation procedures and
schedules for determining, on at least an annual basis, whether
instructional objectives are being achieved.
    (2) In the case where a participating agency, other than the
educational agency, fails to provide agreed upon services, the
educational agency shall reconvene the IEP team to identify alternative
strategies to meet the transition objectives.
    Intermediate educational unit means any public authority, other than
an LEA, that is under the general supervision of a State educational
agency, that is established by State law for the purpose or providing
free public education on a regional basis, and that provides special
education and related services to children with disabilities within that
State.
    Preschool means the educational level from a child's birth to the
time at which the State provides elementary education.
    Related services means transportation and those developmental,
corrective, and other supportive services (including speech pathology
and audiology, psychological services, physical and occupational
therapy, recreation, including therapeutic recreation, social work
services, counseling services, including rehabilitation counseling, and
medical services, except that medical services must be for diagnostic
and evaluation purposes only) as may be required to assist a child with
a disability to benefit from special education, and includes the early
identification and assessment of disabling conditions in children.
    Special education means specially designed instruction, at no cost
to parents or guardians, to meet the unique needs of a child with a
disability, including--
    (1) Instruction conducted in the classroom, in the home, in
hospitals and institutions, and in other settings; and
    (2) Instruction in physical education.

(Authority: 20 U.S.C. 1401, 7703, 7705, 7713; 37 U.S.C. 101)



Sec. 222.51  Which children may a local educational agency count for
payment under section 8003(d) of the Act?

    (a) Except as provided in paragraph (b)(2) of this section, the
children described in sections 8003(a)(1)(A)(ii), (a)(1)(B), (a)(1)(C),
and (a)(1)(D) of the Act who are eligible for services under the
provisions of the Individuals with Disabilities Education Act (20 U.S.C.
1400 et seq.) may be counted by the local educational agency (LEA) for
the purpose of computing a payment under section 8003(d).
    (b)(1) An LEA may count a child or children described in paragraph
(a) of this section who attend private schools or residential programs
if the LEA has placed or referred the child or children in accordance
with the provisions of section 613 of the Individuals with Disabilities
Education Act, 20 U.S.C. 1400 et seq. and 34 CFR part 300, subparts C
and D.
    (2) Children who are placed in private schools by their parents may
not be counted under section 8003(d), but may participate in public
school programs that use section 8003(d) funds.

(Authority: 20 U.S.C. 1400 et seq. and 7703(d))



Sec. 222.52  What requirements must a local educational agency meet
to receive a payment under section 8003(d)?

    To receive a payment under section 8003(d), an eligible LEA shall--
    (a) State in its application the number of federally connected
children with disabilities it claims for a payment under section
8003(d);
    (b) Have in effect a written IEP for each federally connected child
with disabilities claimed for a payment under section 8003(d); and
    (c) Meet the requirements of subparts A and C of the regulations in
this part.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 1400 et seq. and 7703)

[[Page 533]]



Sec. 222.53  What restrictions and requirements apply to the use of
funds provided under section 8003(d)?

    (a) An LEA shall use funds provided under section 8003(d) in
accordance with the provisions of section 8003(d)(2) and 34 CFR part
300.
    (b) Obligations and expenditures of section 8003(d) funds may be
incurred in either of the two following ways:
    (1) An LEA may obligate or expend section 8003(d) funds for the
fiscal year for which the funds were appropriated.
    (2) An LEA may reimburse itself for obligations or expenditures of
local and general State aid funds for the fiscal year for which the
section 8003(d) funds were appropriated.
    (c) An LEA shall use its section 8003(d) funds for the following
types of expenditures:
    (1) Expenditures that are reasonably related to the conduct of
programs or projects for the free appropriate public education of
federally connected children with disabilities. These expenditures may
include program planning and evaluation but may not include construction
of school facilities.
    (2) Acquisition cost (net invoice price) of equipment required for
the free appropriate public education of federally connected children
with disabilities.
    (i) If section 8003(d) funds are used for the acquisition of any
equipment described in this paragraph (c)(2) of this section, the fair
market value of any financial advantage realized through rebates,
discounts, bonuses, free pieces of equipment used in a program or
project for the free appropriate public education of federally connected
children with disabilities, or other circumstances, is not an allowable
expenditure and may not be credited as an expenditure of those funds.
    (ii) Funds awarded under the provisions of section 8003(d) may be
used to acquire equipment for the free appropriate public education of
the federally connected children with disabilities only if title to the
equipment would be in the applicant agency.
    (d) An LEA shall account for the use of section 8003(d) funds as
follows:
    (1) By recording, for each fiscal year, the receipt (or credit) of
section 8003(d) funds separately from other funds received under the
Act, i.e., on a line item basis in the general fund account or in a
separate account; and
    (2) By demonstrating that, for each fiscal year, the amount of
expenditures for special education and related services provided to the
federally connected children with disabilities is at least equal to the
amount of section 8003(d) funds received or credited for that fiscal
year. This is done as follows:
    (i) For each fiscal year determine the amount of an LEA's
expenditures for special education and related services provided to all
children with disabilities.
    (ii) The amount determined in paragraph (d)(2)(i) of this section is
divided by the average daily attendance (ADA) of the total number of
children with disabilities the LEA served during that fiscal year.
    (iii) The amount determined in paragraph (d)(2)(ii) of this section
is then multiplied by the total ADA of the LEA's federally connected
children with disabilities claimed by the LEA for that fiscal year.
    (3) If the amount of section 8003(d) funds the LEA received (or was
credited) for the fiscal year exceeds the amount obtained in paragraph
(d)(2)(iii) of this section, an overpayment equal to the excess section
8003(d) funds is established. This overpayment may be reduced or
eliminated to the extent that the LEA can demonstrate that the average
per pupil expenditure for special education and related services
provided to federally connected children with disabilities exceeded its
average per pupil expenditure for serving non-federally connected
children with disabilities.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(d))



Sec. 222.54  What supplement-not-supplant requirement applies to this
subpart?

    Funds provided under section 8003(d) may not supplant any State
funds that were or would have been available to the LEA for the free
appropriate public education of children counted under section 8003(d).

[[Page 534]]

    (a) No section 8003(d) funds may be paid to an LEA whose per pupil
State aid for federally connected children with disabilities, either
general State aid or special education State aid, has been or would be
reduced as a result of eligibility for or receipt of section 8003(d)
funds, whether or not a State has a program of State aid that meets the
requirements of section 8009 of the Act and subpart K of the regulations
in this part.
    (1) A reduction in the per pupil amount of State aid for children
with disabilities, including children counted under section 8003(d),
from that received in a previous year raises a presumption that
supplanting has occurred.
    (2) The LEA may rebut this presumption by demonstrating that the
reduction was unrelated to the receipt of section 8003(d) funds.
    (b) In any State in which there is only one LEA, all funds for
programs for children with disabilities other than funds from Federal
sources are considered by the Secretary to be local funds.

(Authority: 20 U.S.C. 7703(d))



Sec. 222.55  What other statutes and regulations are applicable to this
subpart?

    Local educational agencies receiving funds under section 8003(d) are
subject to the requirements of the Individuals with Disabilities
Education Act, and related regulations (20 U.S.C. 1401 et seq. and 34
CFR part 300).

(Authority: 20 U.S.C. 1401 et seq., 6314, and 7703(d))



Sec. Sec. 222.56-222.59  [Reserved]



 Subpart E_Additional Assistance for Heavily Impacted Local Educational
                Agencies Under Section 8003(f) of the Act



Sec. 222.60  What are the scope and purpose of these regulations?

    The regulations in this subpart implement section 8003(f) of the
Act, which provides financial assistance, in addition to payments under
sections 8003(b) and 8003(d) of the Act, to certain heavily impacted
local educational agencies (LEAs) that meet all relevant eligibility
requirements.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.61  What data are used to determine a local educational
agency's eligibility and payment under section 8003(f) of the Act?

    (a) Computations and determinations made with regard to an LEA's
eligibility (Sec. Sec. 222.61-222.71) and payment (Sec. Sec. 222.72-
222.73) under section 8003(f) are based on the LEA's final student and
financial data for the fiscal year for which it seeks assistance and, in
certain cases, final financial data for the preceding and second
preceding fiscal years of the LEAs determined under Sec. Sec. 222.39-
222.41 or Sec. 222.74 to be generally comparable to the applicant LEA
(``generally comparable LEAs'').
    (b) For purposes of this subpart, level of education means average
per pupil expenditure amount.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.62  Which local educational agencies are eligible to apply for
an additional payment under section 8003(f)?

    Local educational agencies that are eligible to apply for additional
assistance under section 8003(f) include those that have--
    (a)(1) A tax effort equal to at least 95 percent of the average tax
rate of generally comparable LEAs identified under Sec. Sec. 222.39-
222.41 or 222.74; and
    (2)(i) Federally connected children equal to at least 50 percent of
the total number of children in average daily attendance (ADA) if a
section 8003(b) payment is received on behalf of children described in
section 8003(a)(1)(F)-(G); or
    (ii) Federally connected children equal to at least 40 percent of
the total number of children in ADA if a section 8003(b) payment is not
received on behalf of children described in section 8003(a)(1)(F)-(G);
    (b)(1) A tax effort equal to at least 125 percent of the average tax
rate of generally comparable LEAs identified under Sec. Sec. 222.39-
222.41; and
    (2) Federally connected children equal to at least 35 percent of the
total number of children in ADA;
    (c) The same boundaries as those of a Federal military installation;
or

[[Page 535]]

    (d) Current expenditures that are not reasonably comparable to those
of generally comparable LEAs identified under Sec. Sec. 222.39-222.41
because unusual geographical factors affect the applicant LEAs' current
expenditures necessary to maintain a level of education equivalent to
that of generally comparable LEAs.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.63  What other requirements must a local educational agency
meet in order to be eligible for financial assistance under

section 8003(f)(2)(A)?

    Subject to Sec. 222.65, an LEA described in Sec. 222.62(a), (b),
or (c) is eligible for financial assistance under section 8003(f)(2)(A)
if the Secretary determines that the LEA meets all of the following
requirements:
    (a) The LEA is eligible for a basic support payment under section
8003(b).
    (b) The LEA timely applies for assistance under section 8003(f) and
meets all of the other application and eligibility requirements of
subparts A and C of these regulations.
    (c) The LEA is exercising due diligence in availing itself of
revenues derived from State and other sources and, except for an LEA
described in Sec. 222.62(c), is making a reasonable tax effort in
accordance with the requirements of Sec. Sec. 222.66-222.71.
    (d) The eligibility of the LEA for State aid and the amount of State
aid are determined on a basis no less favorable than that for other LEAs
in the State.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.64  What other requirements must a local educational agency
meet in order to be eligible for financial assistance under

section 8003(f)(2)(B)?

    Subject to Sec. 222.65, an LEA described in Sec. 222.62(d) is
eligible for financial assistance under section 8003(f)(2)(B) if the
Secretary determines that the LEA meets all of the following
requirements--
    (a) The LEA complies with the requirements of Sec. 222.63(a)-(d).
    (b)(1) As part of its section 8003(f) application, the LEA provides
the Secretary with documentation that demonstrates that the LEA is
unable to provide a level of education equivalent to that provided by
its generally comparable LEAs because--
    (i) The applicant's current expenditures are affected by unusual
geographical factors; and
    (ii) As a result, those current expenditures are not reasonably
comparable to the current expenditures of its generally comparable LEAs.
    (2) The LEA's application must include--
    (i) A specific description of the unusual geographical factors on
which the applicant is basing its request for compensation under this
section and objective data demonstrating that the applicant is more
severely affected by these factors than any other LEA in its State;
    (ii) Objective data demonstrating the specific ways in which the
unusual geographical factors affect the applicant's current expenditures
so that they are not reasonably comparable to the current expenditures
of its generally comparable LEAs;
    (iii) Objective data demonstrating the specific ways in which the
unusual geographical factors prevent the applicant from providing a
level of education equivalent to that provided by its generally
comparable LEAs; and
    (iv) Any other information that the Secretary may require to make an
eligibility determination under this section.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))



Sec. 222.65  How may a State aid program affect a local educational
agency's eligibility for assistance under section 8003(f)?

    The Secretary determines that an LEA is not eligible for financial
assistance under section 8003(f) if--
    (a) The LEA is in a State that has an equalized program of State aid
that meets the requirements of section 8009; and
    (b) The State, in determining the LEA's eligibility for or amount of
State aid, takes into consideration the LEA's payment under section
8003(f).

(Authority: 20 U.S.C. 7703(f))

[[Page 536]]



Sec. 222.66  How does the Secretary determine whether a fiscally
independent local educational agency is making a reasonable tax effort?

    (a) To determine whether a fiscally independent LEA, as defined in
Sec. 222.2(c), is making a reasonable tax effort as required by Sec.
222.63 or Sec. 222.64, the Secretary compares the LEA's local real
property tax rates for current expenditure purposes (referred to in this
part as ``tax rates''), as defined in Sec. 222.2(c), with the tax rates
of its generally comparable LEAs.
    (b) For purposes of this section, the Secretary uses--
    (1) Actual tax rates if all the real property in the LEA and its
generally comparable LEAs is assessed at the same percentage of true
value; or
    (2) Tax rates computed under Sec. Sec. 222.67-222.69.
    (c) The Secretary determines that an LEA described in Sec.
222.62(a) or (d) is making a reasonable tax effort if--
    (1) The LEA's tax rate is equal to at least 95 percent of the
average tax rate of its generally comparable LEAs;
    (2) Each of the LEA's tax rates for each classification of real
property is equal to at least 95 percent of each of the average tax
rates of its generally comparable LEAs for the same classification of
property;
    (3) The LEA taxes all of its real property at the maximum rates
allowed by the State, if those maximum rates apply uniformly to all LEAs
in the State; or
    (4) The LEA has no taxable real property.
    (d) The Secretary determines that an LEA described in Sec.
222.62(b) is making a reasonable tax effort if--
    (1) The LEA's tax rate is equal to at least 125 percent of the
average tax rate of its generally comparable LEAs;
    (2) Each of the LEA's tax rates for each classification of real
property is equal to at least 125 percent of each of the average tax
rates of its generally comparable LEAs for the same classification of
property;
    (3) The LEA taxes all of its real property at the maximum rates
allowed by the State, if those maximum rates apply uniformly to all LEAs
in the State; or
    (4) The LEA has no taxable real property.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.67  What tax rates does the Secretary use if real property
is assessed at different percentages of true value?

    If the real property of an LEA and its generally comparable LEAs
consists of one classification of property but the property is assessed
at different percentages of true value in the different LEAs, the
Secretary determines whether the LEA is making a reasonable tax effort
under Sec. 222.66(c)(1) or (d)(1) by using tax rates computed by--
    (a) Multiplying the LEA's actual tax rate for real property by the
percentage of true value assigned to that property for tax purposes; and
    (b) Performing the computation in paragraph (a) of this section for
each of its generally comparable LEAs and determining the average of
those computed tax rates.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))



Sec. 222.68  What tax rates does the Secretary use if two or more
different classifications of real property are taxed at different

rates?

    If the real property of an LEA and its generally comparable LEAs
consists of two or more classifications of real property taxed at
different rates, the Secretary determines whether the LEA is making a
reasonable tax effort under Sec. 222.66(c)(1) or (2) or Sec.
222.66(d)(1) or (2) by using one of the following:
    (a) Actual tax rates for each of the classifications of real
property.
    (b) Tax rates computed in accordance with Sec. 222.67 for each of
the classifications of real property.
    (c) Tax rates computed by--
    (1) Determining the total true value of all real property in the LEA
by dividing the assessed value of each classification of real property
in the LEA by the percentage of true value assigned to that property for
tax purposes and aggregating the results;
    (2) Determining the LEA's total revenues derived from local real
property taxes for current expenditures (as defined in section 8013);

[[Page 537]]

    (3) Dividing the amount determined in paragraph (c)(2) of this
section by the amount determined in paragraph (c)(1) of this section;
and
    (4) Performing the computations in paragraphs (c)(1), (2), and (3)
of this section for each of the generally comparable LEAs and
determining the average of their computed tax rates.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))



Sec. 222.69  What tax rates may the Secretary use if substantial local
revenues are derived from local tax sources other than real property

taxes?

    (a) In a State in which a substantial portion of revenues for
current expenditures for educational purposes is derived from local tax
sources other than real property taxes, the State educational agency
(SEA) may request that the Secretary take those revenues into account in
determining whether an LEA in that State is making a reasonable tax
effort under Sec. 222.66.
    (b) If, based upon the request of an SEA, the Secretary determines
that it is appropriate to take the revenues described in paragraph (a)
of this section into account in determining whether an LEA in that State
is making a reasonable tax effort under Sec. 222.66, the Secretary uses
tax rates computed by--
    (1) Dividing the assessed value of each classification of real
property in the LEA by the percentage of true value assigned to that
property for tax purposes and aggregating the results;
    (2) Determining the LEA's total revenues derived from local tax
sources for current expenditures (as defined in section 8013);
    (3) Dividing the amount determined in paragraph (b)(2) of this
section by the amount determined in paragraph (b)(1) of this section;
and
    (4) Performing the computations in paragraphs (b)(1), (2), and (3)
of this section for each of the generally comparable LEAs and
determining the average of those computed tax rates.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))



Sec. 222.70  How does the Secretary determine whether a fiscally
dependent local educational agency is making a reasonable tax effort?

    (a) If an LEA is fiscally dependent, as defined in Sec. 222.2(c),
the Secretary compares the LEA's imputed local tax rate, calculated
under paragraph (b) of this section, with the average tax rate of its
generally comparable LEAs, calculated under paragraph (c) of this
section, to determine whether the LEA is making a reasonable tax effort.
    (b) The Secretary imputes a local tax rate for a fiscally dependent
LEA by--
    (1) Dividing the assessed value of each classification of real
property within the boundaries of the general government by the
percentage of true value assigned to that property for tax purposes and
aggregating the results;
    (2) Determining the amount of locally derived revenues made
available by the general government for the LEA's current expenditures
(as defined in section 8013); and
    (3) Dividing the amount determined in paragraph (b)(2) of this
section by the amount determined in paragraph (b)(1) of this section.
    (c) The Secretary performs the computations in paragraph (b) of this
section for each of the fiscally dependent generally comparable LEAs and
the computations in Sec. Sec. 222.67-222.69, whichever is applicable,
for each of the fiscally independent generally comparable LEAs and
determines the average of all those tax rates.
    (d) The Secretary determines that a fiscally dependent LEA described
in Sec. 222.62 (a) or (d) is making a reasonable tax effort if its
imputed local tax rate is equal to at least 95 percent of the average
tax rate of its generally comparable LEAs.
    (e) The Secretary determines that a fiscally dependent LEA described
in Sec. 222.62(b) is making a reasonable tax effort if its imputed
local tax rate is equal to at least 125 percent of the average tax rate
of its generally comparable LEAs.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))

[[Page 538]]



Sec. 222.71  What information must be provided by the State educational
agency?

    The SEA of any State with an LEA applying for assistance under
section 8003(f) shall provide the Secretary with relevant information
necessary to determine whether the LEA is making a reasonable tax effort
under Sec. Sec. 222.67-222.70, whichever is applicable.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(f))



Sec. 222.72  How does the Secretary determine a maximum payment for
local educational agencies that are eligible for financial assistance

under section 8003(f)(2)(A) and Sec. 222.63?

    (a) Except as otherwise provided in paragraphs (b) through (c) of
this section or Sec. 222.76, the Secretary determines a maximum payment
under section 8003(f)(2)(A) for an eligible LEA by--
    (1) First calculating the greater of--
    (i) The State average per pupil expenditure (APPE) or the national
APPE;
    (ii) The APPE of generally comparable LEAs identified under
Sec. Sec. 222.39-222.41; or
    (iii) The APPE of three generally comparable LEAs identified under
Sec. 222.74;
    (2) Next subtracting from the amount calculated in paragraph (a)(1)
of this section the average State aid per pupil amount received by the
LEA;
    (3) Multiplying the amount calculated in paragraph (a)(2) of this
section by the total number of federally connected students in ADA who
are eligible for basic support payments under section 8003(b);
    (4) In the case of an LEA whose tax rate is at least 95 percent but
less than 100 percent of the average tax rate of its generally
comparable LEAs, reducing the amount calculated in paragraph (a)(3) of
this section by the percentage that the average tax rate of its
generally comparable LEAs exceeds the tax rate of the LEA; and
    (5) Subtracting from the amount calculated in paragraph (a)(3), or
paragraph (a)(4) of this section, the total amount of payments received
by the eligible LEA under sections 8003 (b) and (d) for the fiscal year
for which a payment is being determined under section 8003(f).
    (b) For the first step of the computations described in paragraph
(a) of this section, the Secretary calculates a maximum payment under
section 8003(f)(2)(A) for an eligible LEA described in Sec. 222.62 (b)
or (c) by multiplying the national APPE by .70, except that the
resulting amount may not exceed 125 percent of the State APPE.
    (c) For the fourth step of the computations described in paragraph
(a) of this section, generally comparable LEAs for reasonable tax effort
purposes are the LEAs whose APPE is identified in Sec. 222.72(a)(1)
except that for applicant LEAs for whom the national APPE is identified,
all LEAs in the applicant's State will be used as generally comparable
LEAs for reasonable tax effort purposes.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.73  How does the Secretary determine a maximum payment for
local educational agencies that are eligible for financial assistance

under section 8003(f)(2)(B) and Sec. 222.64?

    Except as otherwise provided in paragraphs (b) and (c) of this
section and Sec. 222.76, the Secretary determines a maximum payment
under section 8003(f)(2)(B) for an eligible LEA as follows:
    (a) The Secretary increases the eligible LEA's local contribution
rate (LCR) for section 8003(b) payment purposes up to the amount the
Secretary determines will compensate the applicant for the increase in
its current expenditures necessitated by the unusual geographical
factors identified under Sec. 222.64(b)(2), but no more than is
necessary to allow the applicant to provide a level of education
equivalent to that provided by its generally comparable LEAs.
    (b) The increase in the LCR referred to in paragraph (a) of this
section may not exceed the per pupil share (computed with regard to all
children in ADA), as determined by the Secretary, of the increased
current expenditures necessitated by the unusual geographical factors
identified under Sec. 222.64(b)(2).

[[Page 539]]

    (c) In the case of an LEA whose tax rate is at least 95 percent but
less than 100 percent of the average tax rate of its generally
comparable LEAs, reducing the amount calculated in paragraph (a) of this
section by the percentage that the average tax rate of its generally
comparable LEAs exceeds the tax rate of the LEA.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.74  How does the Secretary identify generally comparable
local educational agencies for purposes of section 8003(f)?

    (a) Except as otherwise provided in paragraph (b) of this section,
the Secretary identifies generally comparable LEAs for purposes of this
subpart in accordance with the LCR procedures described in Sec. Sec.
222.39-222.41.
    (b) For applicant LEAs described in Sec. 222.62(a), to identify the
three generally comparable LEAs referred to in Sec. 222.72(a)(1)(iii),
the Secretary uses the following procedures:
    (1) The Secretary asks the SEA of the applicant LEA to identify
generally comparable LEAs in the State by first following the directions
in Sec. 222.39(a)(4), using data from the preceding fiscal year. The
SEA then removes from the resulting list any LEAs that are significantly
impacted, as described in Sec. 222.39(b)(1), except the applicant LEA.
    (2) If the remaining LEAs are not in rank order by total ADA, the
SEA shall list them in that order.
    (3) The LEA may then select as its generally comparable LEAs, for
purposes of section 8003(f) only, three LEAs from the list that are
closest to it in size as determined by total ADA (e.g., the next three
larger LEAs, the next three smaller, the next two larger and the next
one smaller, or the next one larger and the next two smaller).

(Authority: 20 U.S.C. 7703(f))



Sec. 222.75  How does the Secretary compute the average per pupil
expenditure of generally comparable local educational agencies under

this subpart?

    The Secretary computes APPE under this subpart by--
    (a) Dividing the sum of the total current expenditures for the
preceding fiscal year for the identified generally comparable LEAs by
the sum of the total ADA of those LEAs for the same fiscal year and
performing this calculation again using data for the second preceding
year; and
    (b) Increasing or decreasing the APPE for the preceding fiscal year
by the percentage the APPE of the generally comparable LEAs increased or
decreased from the second preceding fiscal year to the preceding fiscal
year.

(Authority: 20 U.S.C. 7703(f))



Sec. 222.76  What does the Secretary do if appropriation levels are
insufficient to pay in full the amounts calculated under

Sec. Sec. 222.72 and 222.73?

    Payments under section 8003(f) for eligible LEAs will be ratably
reduced if the funds available for assistance under that section are
insufficient to pay the full amounts determined under Sec. Sec. 222.72
and 222.73.

(Authority: 20 U.S.C. 7703(f))



Sec. Sec. 222.77-222.79  [Reserved]



   Subpart F_Payments to Local Educational Agencies for Children With
          Severe Disabilities Under Section 8003(g) of the Act

    Source: 62 FR 35415, July 1, 1997, unless otherwise noted.



Sec. 222.80  What definitions apply to this subpart?

    (a) The definitions in Sec. Sec. 222.2 and 222.50 apply to this
subpart.
    (b) In addition, the following term applies to this subpart:
    Children with severe disabilities means children with disabilities
who because of the intensity of their physical, mental, or emotional
problems need highly specialized education, social, psychological, and
medical services in order to maximize their full potential for useful
and meaningful participation in society and for self-fulfillment. The
term includes those children with disabilities with severe emotional
disturbance (including schizophrenia), autism, severe and profound
mental retardation, and those who have two or more

[[Page 540]]

serious disabilities such as deaf-blindness, mental retardation and
blindness, and cerebral-palsy and deafness.

(Authority: 20 U.S.C. 1400 et seq., 7703(g))



Sec. 222.81  What requirements must a local educational agency meet
to be eligible for a payment under section 8003(g) of the Act?

    An LEA is eligible for a payment under section 8003(g) of the Act if
it--
    (a) Is eligible for and receives a payment under section 8003(d) of
the Act for children identified in paragraph (b) of this section and
meets the requirements of Sec. Sec. 222.52 and 222.83(b) and (c); and
    (b) Incurs costs of providing a free appropriate public education to
at least two children with severe disabilities whose educational program
is being provided by an entity outside the schools of the LEA, and who
each have a parent on active duty in the uniformed services.

(Authority: 20 U.S.C. 1400 et seq., 7703(a), (d), (g))



Sec. 222.82  How does the Secretary calculate the total amount of funds
available for payments under section 8003(g)?

    (a) In any fiscal year in which Federal funds other than funds
available under the Act are provided to an LEA to meet the purposes of
the Act, the Secretary--
    (1) Calculates the sum of the amount of other Federal funds provided
to an LEA to meet the purposes of the Act and the amount of the payment
that the LEA received for that fiscal year under section 8003(b) of the
Act; and
    (2) Determines whether the sum calculated under paragraph (a)(1) of
this section exceeds the maximum basic support payment for which the LEA
is eligible under section 8003(b), and, if so, subtracts from the amount
of any payment received under section 8003(b), any amount in excess of
the maximum basic support payment for which the LEA is eligible.
    (b) The sum of all excess amounts determined in paragraph (a)(2) of
this section is available for payments under section 8003(g) to eligible
LEAs.

(Authority: 20 U.S.C. 7703(b), (g))



Sec. 222.83  How does an eligible local educational agency apply for a
payment under section 8003(g)?

    (a) In fiscal years in which funds are available for payments under
section 8003(g) of the Act, the Secretary provides notice to all
potentially eligible LEAs that funds will be available.
    (b) An LEA applies for a payment under section 8003(g) by submitting
to the Secretary documentation detailing the total costs to the LEA of
providing a free appropriate public education to the children identified
in Sec. 222.81, during the LEA's preceding fiscal year, including the
following:
    (1) For the costs of the outside entity providing the educational
program for those children, copies of all invoices, vouchers, tuition
contracts, and other similar documents showing the signature of an
official or authorized employee of the outside entity; and
    (2) For any additional costs (such as transportation) of the LEA
related to providing an educational program for those children in an
outside entity, copies of invoices, check receipts, contracts, and other
similar documents showing the signature of an official or authorized
employee of the LEA.
    (c) An LEA applying for a payment must submit to the Secretary the
information required under paragraph (b) of this section within 60 days
of the date of the notice that funds will be available.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7703(g)(2))



Sec. 222.84  How does the Secretary calculate payments under
section 8003(g) for eligible local educational agencies?

    For any fiscal year in which the Secretary has determined, under
Sec. 222.82, that funds are available for payments under section
8003(g) of the Act, the Secretary calculates payments to eligible LEAs
under section 8003(g) as follows:
    (a) For each eligible LEA, the Secretary subtracts an amount equal
to that portion of the payment the LEA received under section 8003(d) of
the Act for that fiscal year, attributable to children described in
Sec. 222.81, from the LEA's total costs of providing a free

[[Page 541]]

appropriate public education to those children, as submitted to the
Secretary pursuant to Sec. 222.83(b). The remainder is the amount that
the LEA is eligible to receive under section 8003(g).
    (b) If the total of the amounts for all eligible LEAs determined in
paragraph (a) of this section is equal to or less than the amount of
funds available for payment as determined in Sec. 222.82, the Secretary
provides each eligible LEA with the entire amount that it is eligible to
receive, as determined in paragraph (a) of this section.
    (c) If the total of the amounts for all eligible LEAs determined in
paragraph (a) of this section exceeds the amount of funds available for
payment as determined in Sec. 222.82, the Secretary ratably reduces
payments under section 8003(g) to eligible LEAs.
    (d) If the total of the amounts for all eligible LEAs determined in
paragraph (a) of this section is less than the amount of funds available
for payment as determined in Sec. 222.82, the Secretary pays the
remaining amount to LEAs under section 8003(d). An LEA that receives
such a payment shall use the funds for expenditures in accordance with
the requirements of section 8003(d) and subpart D of this part.

(Authority: 20 U.S.C. 7703 (d) and (g))



Sec. 222.85  How may a local educational agency use funds that it
receives under section 8003(g)?

    An LEA that receives a payment under section 8003(g) of the Act
shall use the funds for reimbursement of costs reported in the
application that it submitted to the Secretary under Sec. 222.83(b).

(Authority: 20 U.S.C. 7703(g)(2))



 Subpart G_Special Provisions for Local Educational Agencies That Claim
                    Children Residing on Indian Lands

                                 General



Sec. 222.90  What definitions apply to this subpart?

    In addition to the definitions in Sec. 222.2, the following
definitions apply to this subpart:
    Indian children means children residing on Indian lands who are
recognized by an Indian tribe as being affiliated with that tribe.
    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 under the
Alaska Native Claims Settlement Act (85 Stat. 688), which is recognized
as eligible for the special programs and services provided by the United
States to Indians because of their status as Indians.

(Authority: 20 U.S.C. 7713, 7881, 7938, 8801)



Sec. 222.91  What requirements must a local educational agency meet to
receive a payment under section 8003 of the Act for children residing

on Indian lands?

    To receive a payment under section 8003 of the Act for children
residing on Indian lands, a local educational agency (LEA) must--
    (a) Meet the application and eligibility requirements in section
8003 and subparts A and C of these regulations;
    (b) Develop and implement policies and procedures in accordance with
the provisions of section 8004(a) of the Act; and
    (c) Include in its application for payments under section 8003--
    (1) An assurance that the LEA established these policies and
procedures in consultation with and based on information from tribal
officials and parents of those children residing on Indian lands who are
Indian children; and
    (2) A copy of the policies and procedures or documentation that the
LEA has received a waiver in accordance with the provisions of section
8004(c).

(Authority: 20 U.S.C. 7703(a), 7704(a), (c), and (d)(2))



Sec. 222.92  What additional statutes and regulations apply to this
subpart?

    (a) The following statutes and regulations apply to LEAs that claim
children residing on Indian lands for payments under section 8003:
    (1) The General Education Provisions Act (GEPA) in 20 U.S.C. 1221 et
seq., unless otherwise noted.
    (2) Other relevant regulations in this part.

[[Page 542]]

    (b) The following statutes, rules, and regulations do not apply to
any hearing proceedings under this subpart:
    (1) Administrative Procedure Act.
    (2) Federal Rules of Civil Procedure.
    (3) Federal Rules of Evidence.
    (4) GEPA, part E.
    (5) 34 CFR part 81.

(Authority: 20 U.S.C. 1221 et seq. unless otherwise noted, 7703, and
7704)



Sec. 222.93  [Reserved]

                     Indian Policies and Procedures



Sec. 222.94  What provisions must be included in a local educational
agency's Indian policies and procedures?

    (a) An LEA's Indian policies and procedures (IPPs) must include a
description of the specific procedures for how the LEA will--
    (1) Give the tribal officials and parents of Indian children an
opportunity to comment on whether Indian children participate on an
equal basis with non-Indian children in the education programs and
activities provided by the LEA;
    (2) Assess the extent to which Indian children participate on an
equal basis with non-Indian children served by the LEA;
    (3) Modify, if necessary, its education program to ensure that
Indian children participate on an equal basis with non-Indian children
served by the LEA;
    (4) Disseminate relevant applications, evaluations, program plans
and information related to the education programs of the LEA in
sufficient time to allow the tribes and parents of Indian children an
opportunity to review the materials and make recommendations on the
needs of the Indian children and how the LEA may help those children
realize the benefits of the LEA's education programs and activities;
    (5) Gather information concerning Indian views, including those
regarding the frequency, location, and time of meetings;
    (6) Notify the Indian parents and tribes of the locations and times
of meetings;
    (7) Consult and involve tribal officials and parents of Indian
children in the planning and development of the LEA's education programs
and activities; and
    (8) Modify the IPPs if necessary, based upon the results of any
assessment described in paragraph (b) of this section.
    (b) Tribes and parents of Indian children may assess the
effectiveness of their input regarding the participation of Indian
children in the LEA's education programs and activities and the
development and implementation of the IPPs, and share the results of
that assessment with the LEA.

(Authority: 20 U.S.C. 7704)



Sec. 222.95  How are Indian policies and procedures reviewed to ensure
compliance with the requirements in section 8004(a) of the Act?

    (a) The Director of the Impact Aid Program (Director) periodically
reviews applicant LEAs' IPPs to ensure that they comply with the
provisions of section 8004(a) and Sec. 222.94.
    (b) If the Director determines either that the LEA's IPPs do not
comply with the minimum standards of section 8004(a), or that the IPPs
have not been implemented in accordance with Sec. 222.94, the Director
provides the LEA with written notification of the deficiencies related
to its IPPs and requires that the LEA take appropriate action.
    (c) An LEA shall make the necessary changes within 60 days of
receipt of written notification from the Director.
    (d) If the LEA fails to make the necessary adjustments or changes
within the prescribed period of time, the Director may withhold all
payments that the LEA is eligible to receive under section 8003.
    (e) Each LEA that has developed IPPs shall review those IPPs
annually to ensure that they--
    (1) Comply with the provisions in section 8004(a); and
    (2) Are implemented by the LEA in accordance with Sec. 222.94.
    (f) If an LEA determines that its IPPs do not meet the requirements
in paragraphs (e) (1) and (2) of this section, the LEA shall amend its
IPPs to conform with those requirements within 60 days of its
determination.

[[Page 543]]

    (g) An LEA that amends its IPPs shall, within 30 days, send a copy
of the amended IPPs to--
    (1) The Director for approval; and
    (2) The affected tribe or tribes.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7704 (a) and (d)(2))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35416, July 1, 1997]



Sec. Sec. 222.96-222.101  [Reserved]

     Indian Policies and Procedures Complaint and Hearing Procedures



Sec. 222.102  Who may file a complaint about a local educational
agency's Indian policies and procedures?

    (a) Only a tribal chairman or an authorized designee for a tribe
that has students attending an LEA's schools may file a written
complaint with the Assistant Secretary for Elementary and Secondary
Education (Assistant Secretary) regarding any action of the LEA pursuant
to, or relevant to, section 8004(a) and Sec. 222.94.
    (b) If a tribe files a complaint through a designee, the tribe shall
acknowledge in writing in the complaint that the designee is authorized
to act on its behalf.

(Authority: 20 U.S.C. 7704(e)(1))



Sec. 222.103  What must be included in a complaint?

    For purposes of this subpart, a complaint is a signed statement that
includes--
    (a) An allegation that an LEA has failed to develop and implement
IPPs in accordance with section 8004(a);
    (b) Information that supports the allegation;
    (c) A specific request for relief; and
    (d) A statement describing what steps the tribe has taken to resolve
with the LEA the matters on which the complaint is based.

(Authority: 20 U.S.C. 7704(e)(1))



Sec. 222.104  When does the Assistant Secretary consider a complaint
received?

    (a) The Assistant Secretary considers a complaint to have been
received only after the Assistant Secretary determines that the
complaint--
    (1) Satisfies the requirements in Sec. Sec. 222.102 and 222.103;
and
    (2) Is in writing and signed by the tribal chairman or the tribe's
authorized designee.
    (b) If the Assistant Secretary determines that a complaint fails to
meet the requirements in Sec. Sec. 222.102-222.103, the Assistant
Secretary notifies the tribe or its designee in writing that the
complaint has been dismissed for purposes of invoking the hearing
procedures in Sec. Sec. 222.102-222.113.
    (c) Any notification that a complaint has been dismissed includes
the reasons why the Assistant Secretary determined that the complaint
did not meet the requirements in Sec. Sec. 222.102 and 222.103.
    (d) Notification that a complaint has been dismissed does not
preclude other efforts to investigate or resolve the issues raised in
the complaint, including the filing of an amended complaint.

(Authority: 20 U.S.C. 7704(e)(1))



Sec. Sec. 222.105-222.107  [Reserved]



Sec. 222.108  What actions must be taken upon receipt of a complaint?

    Within 10 working days of receipt of a complaint, the Secretary or
his designee--
    (a) Designates a hearing examiner to conduct a hearing;
    (b) Designates a time for the hearing that is no more than 30 days
after the designation of a hearing examiner;
    (c) Designates a place for the hearing that, to the extent possible,
is--
    (1) Near the LEA; or
    (2) At another location convenient to the tribe and the LEA, if it
is determined that there is good cause to designate another location;
    (d) Notifies the tribe and the LEA of the time, place, and nature of
the hearing; and
    (e) Transmits copies of the complaint to the LEA and the affected
tribe or tribes.

(Authority: 20 U.S.C. 7704(e))

[[Page 544]]



Sec. 222.109  When may a local educational agency reply to a complaint?

    An LEA's reply to the charges in the complaint must be filed with
the hearing examiner within 15 days of the date the LEA receives a copy
of the notice and complaint described in Sec. 222.108 (d) and (e) from
the hearing examiner.

(Authority: 20 U.S.C. 7704(e))



Sec. 222.110  What are the procedures for conducting a hearing on a
local educational agency's Indian policies and procedures?

    Hearings on IPP complaints filed by an Indian tribe or tribes
against an LEA are conducted as follows:
    (a) The hearing must be open to the public.
    (b) Parties may be represented by counsel.
    (c)(1) Each party may submit oral and written testimony that is
relevant to the issues in the proceeding and make recommendations
concerning appropriate remedial actions.
    (2) A party may object to evidence it considers to be irrelevant or
unduly repetitious.
    (d) No party shall communicate orally or in writing with the hearing
examiner or the Assistant Secretary on matters under review, except
minor procedural matters, unless all parties to the complaint are
given--
    (1) Timely and adequate notice of the communication; and
    (2) Reasonable opportunity to respond.
    (e) For each document that a party submits, the party shall--
    (1) File one copy for inclusion in the record of the proceeding; and
    (2) Provide a copy to each of the other parties to the proceeding.
    (f) Each party shall bear only its own costs in the proceeding.

(Authority: 20 U.S.C. 7704(e))



Sec. 222.111  What is the authority of the hearing examiner in
conducting a hearing?

    The hearing examiner is authorized to conduct a hearing under
section 8004(e) and Sec. Sec. 222.109-222.113 as follows:
    (a) The hearing examiner may--
    (1) Clarify, simplify, or define the issues or consider other
matters that may aid in the disposition of the complaint;
    (2) Direct the parties to exchange relevant documents or
information; and
    (3) Examine witnesses.
    (b) The hearing examiner--
    (1) Regulates the course of proceedings and conduct of the parties;
    (2) Arranges for the preparation of a transcript of each hearing and
provides one copy to each party;
    (3) Schedules the submission of oral and documentary evidence;
    (4) Receives, rules on, excludes, or limits evidence;
    (5) Establishes and maintains a record of the proceeding, including
any transcripts referenced above;
    (6) Establishes reasonable rules governing public attendance at the
proceeding; and
    (7) Is bound by all applicable statutes and regulations and may
neither waive them nor rule them invalid.

(Authority: 20 U.S.C. 7704(e))



Sec. 222.112  What procedures are followed after the hearing?

    (a) Each party may submit to the hearing examiner additional
evidence that is relevant to the issues raised at the hearing, within
the time period and in the manner specified by the hearing examiner.
    (b) Within 30 days after the hearing, the hearing examiner--
    (1) Makes, on the basis of the record, written findings of fact and
recommendations concerning any appropriate remedial action that should
be taken;
    (2) Submits those findings and recommendations, along with the
hearing record, to the Assistant Secretary; and
    (3) Sends a copy of those findings and recommendations to each
party.
    (c)(1) Each party may file with the Assistant Secretary comments on
the hearing examiner's findings and recommendations.
    (2) The comments must be received by the Assistant Secretary within
10 days after the party receives a copy of the hearing examiner's
findings and recommendations.

(Authority: 20 U.S.C. 7704(e))

[[Page 545]]



Sec. 222.113  What are the responsibilities of the Assistant
Secretary after the hearing?

    (a) Within 30 days after receiving the entire hearing record and the
hearing examiner's findings and recommendations, the Assistant Secretary
makes, on the basis of the record, a written determination that
includes--
    (1) Any appropriate remedial action that the LEA must take;
    (2) A schedule for completing any remedial action; and
    (3) The reasons for the Assistant Secretary's decision.
    (b) After completing the final determination required by paragraph
(a) of this section, the Assistant Secretary sends the parties a copy of
that determination.
    (c) The Assistant Secretary's final determination under paragraph
(a) of this section is the final action of the Department concerning the
complaint and is subject to judicial review.

(Authority: 20 U.S.C. 7704(e))

  Withholding and Related Procedures for Indian Policies and Procedures

    Source: 62 FR 35416, July 1, 1997, unless otherwise noted.



Sec. 222.114  How does the Assistant Secretary implement the provisions
of this subpart?

    The Assistant Secretary implements section 8004 of the Act and this
subpart through such actions as the Assistant Secretary determines to be
appropriate, including the withholding of funds in accordance with
Sec. Sec. 222.115-222.122, after affording the affected LEA, parents,
and Indian tribe or tribes an opportunity to present their views.

(Authority: 20 U.S.C. 7704 (d)(2), (e) (8)-(9))



Sec. 222.115  When does the Assistant Secretary withhold payments
from a local educational agency under this subpart?

    Except as provided in Sec. 222.120, the Assistant Secretary
withholds payments to an LEA if--
    (a) The Assistant Secretary determines it is necessary to enforce
the requirements of section 8004 of the Act or this subpart; or
    (b) After a hearing has been conducted under section 8004(e) of the
Act and Sec. Sec. 222.102-222.113 (IPP hearing)--
    (1) The LEA rejects the final determination of the Assistant
Secretary; or
    (2) The LEA fails to implement the required remedy within the time
established and the Assistant Secretary determines that the required
remedy will not be undertaken by the LEA even if the LEA is granted a
reasonable extension of time.

(Authority: 20 U.S.C. 7704 (a), (b), (d)(2), (e)(8)-(9))



Sec. 222.116  How are withholding procedures initiated under this
subpart?

    (a) If the Assistant Secretary decides to withhold an LEA's funds,
the Assistant Secretary issues a written notice of intent to withhold
the LEA's payments.
    (b) In the written notice, the Assistant Secretary--
    (1) Describes how the LEA failed to comply with the requirements at
issue; and
    (2)(i) Advises an LEA that has participated in an IPP hearing that
it may request, in accordance with Sec. 222.117(c), that its payments
not be withheld; or
    (ii) Advises an LEA that has not participated in an IPP hearing that
it may request a withholding hearing in accordance with Sec.
222.117(d).
    (c) The Assistant Secretary sends a copy of the written notice of
intent to withhold payments to the LEA and the affected Indian tribe or
tribes by certified mail with return receipt requested.

(Authority: 20 U.S.C. 7704 (a), (b), (d)(2), and (e) (8)-(9))



Sec. 222.117  What procedures are followed after the Assistant
Secretary issues a notice of intent to withhold payments?

    (a) The withholding of payments authorized by section 8004 of the
Act is conducted in accordance with section 8004 (d)(2) or (e)(8)-(9) of
the Act and the regulations in this subpart.
    (b) An LEA that receives a notice of intent to withhold payments
from the Assistant Secretary is not entitled to

[[Page 546]]

an Impact Aid hearing under the provisions of section 8011 of the Act
and subpart J of this part.
    (c) After an IPP hearing. (1) An LEA that rejects or fails to
implement the final determination of the Assistant Secretary after an
IPP hearing has 10 days from the date of the LEA's receipt of the
written notice of intent to withhold funds to provide the Assistant
Secretary with a written explanation and documentation in support of the
reasons why its payments should not be withheld. The Assistant Secretary
provides the affected Indian tribe or tribes with an opportunity to
respond to the LEA's submission.
    (2) If after reviewing an LEA's written explanation and supporting
documentation, and any response from the Indian tribe or tribes, the
Assistant Secretary determines to withhold an LEA's payments, the
Assistant Secretary notifies the LEA and the affected Indian tribe or
tribes of the withholding determination in writing by certified mail
with return receipt requested prior to withholding the payments.
    (3) In the withholding determination, the Assistant Secretary states
the facts supporting the determination that the LEA failed to comply
with the legal requirements at issue, and why the provisions of Sec.
222.120 (provisions governing circumstances when an LEA is exempt from
the withholding of payments) are inapplicable. This determination is the
final decision of the Department.
    (d) An LEA that has not participated in an IPP hearing. (1) An LEA
that has not participated in an IPP hearing has 30 days from the date of
its receipt of the Assistant Secretary's notice of intent to withhold
funds to file a written request for a withholding hearing with the
Assistant Secretary. The written request for a withholding hearing
must--
    (i) Identify the issues of law and facts in dispute; and
    (ii) State the LEA's position, together with the pertinent facts and
reasons supporting that position.
    (2) If the LEA's request for a withholding hearing is accepted, the
Assistant Secretary sends written notification of acceptance to the LEA
and the affected Indian tribe or tribes and forwards to the hearing
examiner a copy of the Assistant Secretary's written notice, the LEA's
request for a withholding hearing, and any other relevant documents.
    (3) If the LEA's request for a withholding hearing is rejected, the
Assistant Secretary notifies the LEA in writing that its request for a
hearing has been rejected and provides the LEA with the reasons for the
rejection.
    (4) The Assistant Secretary rejects requests for withholding
hearings that are not filed in accordance with the time for filing
requirements described in paragraph (d)(1) of this section. An LEA that
files a timely request for a withholding hearing, but fails to meet the
other filing requirements set forth in paragraph (d)(1) of this section,
has 30 days from the date of receipt of the Assistant Secretary's
notification of rejection to submit an acceptable amended request for a
withholding hearing.
    (e) If an LEA fails to file a written explanation in accordance with
paragraph (c) of this section, or a request for a withholding hearing or
an amended request for a withholding hearing in accordance with
paragraph (d) of this section, the Secretary proceeds to take
appropriate administrative action to withhold funds without further
notification to the LEA.

(Authority: 20 U.S.C. 7704 (a), (b), (d)(2), and (e) (8)-(9))



Sec. 222.118  How are withholding hearings conducted in this subpart?

    (a) Appointment of hearing examiner. Upon receipt of a request for a
withholding hearing that meets the requirements of Sec. 222.117(d), the
Assistant Secretary requests the appointment of a hearing examiner.
    (b) Time and place of the hearing. Withholding hearings under this
subpart are held at the offices of the Department in Washington, DC, at
a time fixed by the hearing examiner, unless the hearing examiner
selects another place based upon the convenience of the parties.
    (c) Proceeding. (1) The parties to the withholding hearing are the
Assistant Secretary and the affected LEA. An affected Indian tribe is
not a party, but,

[[Page 547]]

at the discretion of the hearing examiner, may participate in the
hearing and present its views on the issues relevant to the withholding
determination.
    (2) The parties may introduce all relevant evidence on the issues
stated in the LEA's request for withholding hearing or other issues
determined by the hearing examiner during the proceeding. The Assistant
Secretary's notice of intent to withhold, the LEA's request for a
withholding hearing, and all amendments and exhibits to those documents,
must be made part of the hearing record.
    (3) Technical rules of evidence, including the Federal Rules of
Evidence, do not apply to hearings conducted under this subpart, but the
hearing examiner may apply rules designed to assure production of the
most credible evidence available, including allowing the cross-
examination of witnesses.
    (4) Each party may examine all documents and other evidence offered
or accepted for the record, and may have the opportunity to refute facts
and arguments advanced on either side of the issues.
    (5) A transcript must be made of the oral evidence unless the
parties agree otherwise.
    (6) Each party may be represented by counsel.
    (7) The hearing examiner is bound by all applicable statutes and
regulations and may neither waive them nor rule them invalid.
    (d) Filing requirements. (1) All written submissions must be filed
with the hearing examiner by hand-delivery, mail, or facsimile
transmission. The Secretary discourages the use of facsimile
transmission for documents longer than five pages.
    (2) If agreed upon by the parties, a party may serve a document upon
the other party by facsimile transmission.
    (3) The filing date for a written submission under this subpart is
the date the document is--
    (i) Hand-delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (4) A party filing by facsimile transmission is responsible for
confirming that a complete and legible copy of the document was timely
received by the hearing examiner.
    (5) Any party filing a document by facsimile transmission must file
a follow-up hard copy by hand-delivery or mail within a reasonable
period of time.
    (e) Procedural rules. (1) If the hearing examiner determines that no
dispute exists as to a material fact or that the resolution of any
disputes as to material facts would not be materially assisted by oral
testimony, the hearing examiner shall afford each party an opportunity
to present its case--
    (i) In whole or in part in writing; or
    (ii) In an informal conference after affording each party sufficient
notice of the issues to be considered.
    (2) With respect to withholding hearings involving a dispute as to a
material fact the resolution of which would be materially assisted by
oral testimony, the hearing examiner shall afford to each party--
    (i) Sufficient notice of the issues to be considered at the hearing;
    (ii) An opportunity to present witnesses on the party's behalf; and
    (iii) An opportunity to cross-examine other witnesses either orally
or through written interrogatories.
    (f) Decision of the hearing examiner. (1) The hearing examiner--
    (i) Makes written findings and an initial withholding decision based
upon the hearing record; and
    (ii) Forwards to the Secretary, and mails to each party and to the
affected Indian tribe or tribes, a copy of the written findings and
initial withholding decision.
    (2) A hearing examiner's initial withholding decision constitutes
the Secretary's final withholding decision without any further
proceedings unless--
    (i) Either party to the withholding hearing, within 30 days of the
date of its receipt of the initial withholding decision, requests the
Secretary to review the decision and that request is granted; or
    (ii) The Secretary otherwise determines, within the time limits
stated in paragraph (g)(2)(ii) of this section, to review the initial
withholding decision.

[[Page 548]]

    (3) When an initial withholding decision becomes the Secretary's
final decision without any further proceedings, the Department notifies
the parties and the affected Indian tribe or tribes of the finality of
the decision.
    (g) Administrative appeal of an initial decision. (1)(i) Any party
may request the Secretary to review an initial withholding decision.
    (ii) A party must file this request for review within 30 days of the
party's receipt of the initial withholding decision.
    (2) The Secretary may--
    (i) Grant or deny a timely request for review of an initial
withholding decision; or
    (ii) Otherwise determine to review the decision, so long as that
determination is made within 45 days of the date of receipt of the
initial decision by the Secretary.
    (3) The Secretary mails to each party and the affected Indian tribe
or tribes, by certified mail with return receipt requested, written
notice of--
    (i) The Secretary's action granting or denying a request for review
of an initial decision; or
    (ii) The Secretary's determination to review an initial decision.
    (h) Secretary's review of an initial withholding decision. (1) When
the Secretary reviews an initial withholding decision, the Secretary
notifies each party and the affected Indian tribe or tribes in writing,
by certified mail with return receipt requested, that it may file a
written statement or comments; and
    (2) Mails to each party and to the affected Indian tribe or tribes,
by certified mail with return receipt requested, written notice of the
Secretary's final withholding decision.

(Authority: 20 U.S.C. 7704)



Sec. 222.119  What is the effect of withholding under this subpart?

    (a) The withholding provisions in this subpart apply to all payments
that an LEA is otherwise eligible to receive under section 8003 of the
Act for any fiscal year.
    (b) The Assistant Secretary withholds funds after completion of any
administrative proceedings under Sec. Sec. 222.116-222.118 until the
LEA documents either compliance or exemption from compliance with the
requirements in section 8004 of the Act and this subpart.

(Authority: 20 U.S.C. 7704 (a), (b), (d)(2), (e) (8)-(9))



Sec. 222.120  When is a local educational agency exempt from
withholding of payments?

    Except as provided in paragraph (d)(2) of this section, the
Assistant Secretary does not withhold payments to an LEA under the
following circumstances:
    (a) The LEA documents that it has received a written statement from
the affected Indian tribe or tribes that the LEA need not comply with
section 8004 (a) and (b) of the Act, because the affected Indian tribe
or tribes is satisfied with the provision of educational services by the
LEA to the children claimed on the LEA's application for assistance
under section 8003 of the Act.
    (b) The Assistant Secretary receives from the affected Indian tribe
or tribes a written request that meets the requirements of Sec. 222.121
not to withhold payments from an LEA.
    (c) The Assistant Secretary, on the basis of documentation provided
by the LEA, determines that withholding payments during the course of
the school year would substantially disrupt the educational programs of
the LEA.
    (d)(1) The affected Indian tribe or tribes elects to have
educational services provided by the Bureau of Indian Affairs under
section 1101(d) of the Education Amendments of 1978.
    (2) For an LEA described in paragraph (d)(1) of this section, the
Secretary recalculates the section 8003 payment that the LEA is
otherwise eligible to receive to reflect the number of students who
remain in attendance at the LEA.

(Authority: 20 U.S.C. 7703(a), 7704(c), (d)(2) and (e)(8))



Sec. 222.121  How does the affected Indian tribe or tribes request
that payments to a local educational agency not be withheld?

    (a) The affected Indian tribe or tribes may submit to the Assistant
Secretary a formal request not to withhold payments from an LEA.

[[Page 549]]

    (b) The formal request must be in writing and signed by the tribal
chairman or authorized designee.

(Authority: 20 U.S.C. 7704 (d)(2) and (e)(8))



Sec. 222.122  What procedures are followed if it is determined that the
local educational agency's funds will not be withheld under this

subpart?

    If the Secretary determines that an LEA's payments will not be
withheld under this subpart, the Assistant Secretary notifies the LEA
and the affected Indian tribe or tribes, in writing, by certified mail
with return receipt requested, of the reasons why the payments will not
be withheld.

(Authority: 20 U.S.C. 7704 (d)-(e))



Sec. Sec. 222.123-222.129  [Reserved]

Subpart H [Reserved]



Subpart I_Facilities Assistance and Transfers Under Section 8008 of the
                                   Act



Sec. 222.140  What definitions apply to this subpart?

    In addition to the terms referenced or defined in Sec. 222.2, the
following definitions apply to this subpart:
    Minimum school facilities means those school facilities for which
the Secretary may provide assistance under this part as follows:
    (1) The Secretary, after consultation with the State educational
agency and the local educational agency (LEA), considers these
facilities necessary to support an educational program--
    (i) For the membership of students residing on Federal property to
be served at normal capacity; and
    (ii) In accordance with applicable Federal and State laws and, if
necessary or appropriate, common practice in the State.
    (2) The term includes, but is not restricted to--
    (i) Classrooms and related facilities; and
    (ii) Machinery, utilities, and initial equipment, to the extent that
these are necessary or appropriate for school purposes.
    Providing assistance means constructing, leasing, renovating,
remodeling, rehabilitating, or otherwise providing minimum school
facilities.

(Authority: 20 U.S.C. 7708)



Sec. 222.141  For what types of projects may the Secretary provide
assistance under section 8008 of the Act?

    The types of projects for which the Secretary may provide assistance
under section 8008 of the Act during any given year include, but are not
restricted to, one or more of the following:
    (a)(1) Emergency repairs to existing facilities for which the
Secretary is responsible under section 8008.
    (2) As used in this section, the term emergency repairs means those
repairs necessary--
    (i) For the health and safety of persons using the facilities;
    (ii) For the removal of architectural barriers to the disabled; or
    (iii) For the prevention of further deterioration of the facilities.
    (b) Renovation of facilities for which the Secretary is responsible
under section 8008 to meet the standards of minimum school facilities in
exchange for an LEA or another appropriate entity accepting transfer of
the Secretary's interest in them under Sec. 222.143.
    (c) Provision of temporary facilities on Federal property pending
emergency repairs.
    (d) Construction of replacement minimum school facilities when more
cost-effective than renovation and when the replacement facilities are
to be transferred to local ownership under Sec. 222.143.

(Authority: 20 U.S.C. 7708)



Sec. 222.142  What terms and conditions apply to minimum school
facilities operated under section 8008 by another agency?

    When minimum school facilities are provided under section 8008, the
Secretary may--
    (a) Arrange for the operation of the facilities by an agency other
than the Department;
    (b) Establish terms and conditions for the operation of the
facilities; and
    (c) Require the operating agency to submit assurances and enter into
other

[[Page 550]]

arrangements that the Secretary specifies.

(Authority: 20 U.S.C. 7708)



Sec. 222.143  What terms and conditions apply to the transfer of
minimum school facilities?

    When the Secretary transfers to an LEA or other appropriate entity
(transferee) facilities that have been used to carry out the purposes of
section 10 of Pub. L. 81-815 or section 8008, the Secretary establishes
appropriate terms and conditions for the transfer including that it be--
    (a) Without charge; and
    (b) Consented to by the transferee.

(Authority: 20 U.S.C. 7708)



Sec. Sec. 222.144-222.149  [Reserved]



 Subpart J_Impact Aid Administrative Hearings and Judicial Review Under
                         Section 8011 of the Act



Sec. 222.150  What is the scope of this subpart?

    (a) Except as provided in paragraph (b) of this section, the
regulations in this subpart govern all Impact Aid administrative
hearings under section 8011(a) of the Act and requests for
reconsideration.
    (b) Except as otherwise indicated in this part, the regulations in
this subpart do not govern the following administrative hearings:
    (1) Subpart G, Sec. Sec. 222.90-222.122 (Indian policies and
procedures tribal complaint and withholding hearings.
    (2) Subpart K, Sec. 222.165 (hearings concerning determinations
under section 8009 of the Act).

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35418, July 1, 1997]



Sec. 222.151  When is an administrative hearing provided to a local
educational agency?

    (a) Any local educational agency (LEA) that is adversely affected by
the Secretary's (or the Secretary's delegatee's) action or failure to
act upon the LEA's application under the Act or Pub. L. 81-874 is
entitled to an administrative hearing in accordance with this subpart.
    (b) An applicant is entitled to an administrative hearing under this
subpart only if--
    (1) The applicant files a written request for an administrative
hearing within 30 days of its receipt of written notice of the adverse
action; and
    (2) The issues of fact or law specified in the hearing request are
material to the determination of the applicant's rights and are not
committed wholly to the discretion of the Secretary.

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35418, July 1, 1997]



Sec. 222.152  When may a local educational agency request
reconsideration of a determination?

    (a)(1) An LEA may request reconsideration of any determination made
by the Secretary (or the Secretary's delegatee) under the Act or Pub. L.
81-874, either in addition to or instead of requesting an administrative
hearing under Sec. 222.151.
    (2) A request for reconsideration, or actual reconsideration by the
Secretary (or the Secretary's delegatee), does not extend the time
within which an applicant must file a request for an administrative
hearing under Sec. 222.151, unless the Secretary (or the Secretary's
delegatee) extends that time limit in writing.
    (b) The Secretary's (or the Secretary's delegatee's) consideration
of a request for reconsideration is not prejudiced by a pending request
for an administrative hearing on the same matter, or the fact that a
matter has been scheduled for a hearing. The Secretary (or the
Secretary's delegatee) may, but is not required to, postpone the
administrative hearing due to a request for reconsideration.
    (c) The Secretary (or the Secretary's delegatee) may reconsider any
determination under the Act or Pub. L. 81-874 concerning a particular
party unless the determination has been the subject of an administrative
hearing

[[Page 551]]

under this part with respect to that party.

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35418, July 1, 1997]



Sec. 222.153  How must a local educational agency request an
administrative hearing?

    An applicant requesting a hearing in accordance with this subpart
must--
    (a)(1) If it mails the hearing request, address it to the Secretary,
c/o Director, Impact Aid Program, 600 Independence Ave., SW, Portals
4200, Washington, DC 20202-6244; or
    (2) If it hand-delivers the hearing request, deliver it to the
Director, Impact Aid Program, Portals Building, Room 4200, 1250 Maryland
Avenue, SW, Washington DC;
    (b) Clearly specify in its written hearing request the issues of
fact and law to be considered; and
    (c) Furnish a copy of its hearing request to its State educational
agency (SEA) (unless the applicant is an SEA).

(Authority: 20 U.S.C. 7711(a))



Sec. 222.154  How must written submissions under this subpart be filed?

    (a) All written submissions under this subpart must be filed by
hand-delivery, mail, or facsimile transmission. The Secretary
discourages the use of facsimile transmission for documents longer than
five pages.
    (b) If agreed upon by the parties, a party may serve a document upon
the other party or parties by facsimile transmission.
    (c) The filing date for a written submission under this subpart is
the date the document is--
    (1) Hand-delivered;
    (2) Mailed; or
    (3) Sent by facsimile transmission.
    (d) A party other than the Department filing by facsimile
transmission is responsible for confirming that a complete and legible
copy of the document was received by the Department, including by the
administrative law judge (ALJ).
    (e) Any party filing a document by facsimile transmission must file
a follow-up hard copy by hand-delivery or mail within a reasonable
period of time.

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.155  When and where is an administrative hearing held?

    Administrative hearings under this subpart are held at the offices
of the Department in Washington, DC, at a time fixed by the ALJ, unless
the ALJ selects another place based upon the convenience of the parties.

(Authority: 20 U.S.C. 7711(a))



Sec. 222.156  How is an administrative hearing conducted?

    Administrative hearings under this subpart are conducted as follows:
    (a) The administrative hearing is conducted by an ALJ appointed
under 5 U.S.C. 3105, who issues rules of procedure that are proper and
not inconsistent with this subpart.
    (b) The parties may introduce all relevant evidence on the issues
stated in the applicant's request for hearing or on other issues
determined by the ALJ during the proceeding. The application in question
and all amendments and exhibits must be made part of the hearing record.
    (c) Technical rules of evidence, including the Federal Rules of
Evidence, do not apply to hearings conducted under this subpart, but the
ALJ may apply rules designed to assure production of the most credible
evidence available, including allowing the cross-examination of
witnesses.
    (d) Each party may examine all documents and other evidence offered
or accepted for the record, and may have the opportunity to refute facts
and arguments advanced on either side of the issues.
    (e) A transcript must be made of the oral evidence unless the
parties agree otherwise.
    (f) Each party may be represented by counsel.
    (g) The ALJ is bound by all applicable statutes and regulations and
may

[[Page 552]]

neither waive them nor rule them invalid.

(Authority: 5 U.S.C. 556 and 3105; 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.157  What procedures apply for issuing or appealing an
administrative law judge's decision?

    (a) Decision. (1) The ALJ--
    (i) Makes written findings and an initial decision based upon the
hearing record; and
    (ii) Forwards to the Secretary, and mails to each party, a copy of
the written findings and initial decision.
    (2) An ALJ's initial decision constitutes the Secretary's final
decision without any further proceedings unless--
    (i) A party, within the time limits stated in paragraph (b)(1)(ii)
of this section, requests the Secretary to review the decision and that
request is granted; or
    (ii) The Secretary otherwise determines, within the time limits
stated in paragraph (b)(2)(ii) of this section, to review the initial
decision.
    (3) When an initial decision becomes the Secretary's final decision
without any further proceedings, the Department's Office of Hearings and
Appeals notifies the parties of the finality of the decision.
    (b) Administrative appeal of an initial decision. (1)(i) Any party
may request the Secretary to review an initial decision.
    (ii) A party must file such a request for review within 30 days of
the party's receipt of the initial decision.
    (2) The Secretary may--
    (i) Grant or deny a timely request for review of an initial
decision; or
    (ii) Otherwise determine to review the decision, so long as that
determination is made within 45 days of the date of receipt of the
initial decision.
    (3) The Secretary mails to each party written notice of--
    (i) The Secretary's action granting or denying a request for review
of an initial decision; or
    (ii) The Secretary's determination to review an initial decision.

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.158  What procedures apply to the Secretary's review of an
initial decision?

    When the Secretary reviews an initial decision, the Secretary--
    (a) Notifies the applicant in writing that it may file a written
statement or comments; and
    (b) Mails to each party written notice of the Secretary's final
decision.

(Authority: 20 U.S.C. 7711(a))

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.159  When and where does a party seek judicial review?

    If an LEA or a State that is aggrieved by the Secretary's final
decision following an administrative hearing proceeding under this
subpart wishes to seek judicial review, the LEA or State must, within 60
days after receiving notice of the Secretary's final decision, file with
the United States Court of Appeals for the circuit in which that LEA or
State is located a petition for review of the final agency action, in
accordance with section 8011(b) of the Act.

(Authority: 20 U.S.C. 7711(b))



         Subpart K_Determinations Under Section 8009 of the Act



Sec. 222.160  What are the scope and purpose of this subpart?

    (a) Scope. This subpart applies to determinations made by the
Secretary under section 8009 of the Act.
    (b) Purpose. The sole purpose of the regulations in this subpart is
to implement the provisions of section 8009. The definitions and
standards contained in this subpart apply only with respect to section
8009 and do not establish definitions and standards for any other
purpose.

(Authority: 20 U.S.C. 7709)

[[Page 553]]



Sec. 222.161  How is State aid treated under section 8009 of the Act?

    (a) General rules. (1) A State may take into consideration payments
under sections 8002 and 8003(b) of the Act (including hold harmless
payments calculated under section 8003(e)) in allocating State aid if
that State has a State aid program that qualifies under Sec. 222.162,
except as follows:
    (i) Those payments may be taken into consideration for each affected
local educational agency (LEA) only in the proportion described in Sec.
222.163.
    (ii) A State may not take into consideration that portion of an
LEA's payment that is generated by the portion of a weight in excess of
one under section 8003(a)(2)(B) of the Act (children residing on Indian
lands) or payments under section 8003(d) of the Act (children with
disabilities), section 8003(f) of the Act (heavily impacted LEAs) and
section 8003(g) of the Act (LEAs with high concentrations of children
with severe disabilities).
    (iii) A State may not take into consideration increases in payment
under the following subsections of section 3(d) of Pub. L. 81-874:
    (A) Section 3(d)(2)(B) (increase for heavily impacted LEAs).
    (B) Section 3(d)(2)(C) (increase for children with disabilities and
children with specific learning disabilities).
    (C) Section 3(d)(2)(D) (increase for children residing on Indian
lands).
    (D) Section 3(d)(3)(B)(ii) (increase for unusual geographical
factors).
    (2) No State aid program may qualify under this subpart if a court
of that State has determined by final order, not under appeal, that the
program fails to equalize expenditures for free public education among
LEAs within the State or otherwise violates law, and if the court's
order provides that the program is no longer in effect.
    (3) No State, whether or not it has an equalization program that
qualifies under Sec. 222.162, may, in allocating State aid, take into
consideration an LEA's eligibility for payments under the Act if that
LEA does not apply for and receive those payments.
    (4) Any State that takes into consideration payments under the Act
in accordance with the provisions of section 8009 in allocating State
aid to LEAs must reimburse any LEA for any amounts taken into
consideration for any fiscal year to the extent that the LEA did not in
fact receive payments in those amounts during that fiscal year.
    (5) A State may not take into consideration payments under the Act
or under Public Law 874 before the State's State aid program has been
certified by the Secretary.
    (b) Data for determinations. (1) Except as provided in paragraph
(b)(2) of this section, determinations under this subpart requiring the
submission of financial or school population data must be made on the
basis of final data for the second fiscal year preceding the fiscal year
for which the determination is made if substantially the same program
was then in effect.
    (2)(i) If the Secretary determines that the State has substantially
revised its State aid program, the Secretary may certify that program
for any fiscal year only if--
    (A) The Secretary determines, on the basis of projected data, that
the State's program will meet the disparity standard described in Sec.
222.162 for the fiscal year for which the determination is made; and
    (B) The State provides an assurance to the Secretary that, if final
data do not demonstrate that the State's program met that standard for
the fiscal year for which the determination is made, the State will pay
to each affected LEA the amount by which the State reduced State aid to
the LEA.
    (ii) Data projections submitted by a State must set forth the
assumptions upon which the data projections are founded, be accompanied
by an assurance as to their accuracy, and be adjusted by actual data for
the fiscal year of determination that must be submitted to the Secretary
as soon as these data are available.
    (c) Definitions. The following definitions apply to this subpart:
    Current expenditures means the total charges incurred for the
benefit of the school year in an elementary (including pre-kindergarten)
or secondary school program. ``Current expenditures'' does not include--
    (1) Expenditures for capital outlay;

[[Page 554]]

    (2) Expenditures for debt service for capital outlay;
    (3) Expenditures from State sources for special cost differentials
of the type specified in Sec. 222.162(c)(2);
    (4) Expenditures of revenues from local or intermediate sources that
are designated for special cost differentials of the type specified in
Sec. 222.162(c)(2);
    (5) Expenditures of funds received by the agency under sections 8002
and 8003(b) (including hold harmless payments calculated under section
8003(e)) or under Pub. L. 81-874 that are not taken into consideration
under the State aid program and exceed the proportion of those funds
that the State would be allowed to take into consideration under Sec.
222.163; or
    (6) Expenditures of funds received by the agency under Pub. L. 81-
874 that were not taken into consideration under the State aid program
and exceed the proportion of funds the State was permitted to take into
consideration under that law.
    Equalize expenditures means to meet the standard set forth in Sec.
222.162.
    Local tax revenues means compulsory charges levied by an LEA or by
an intermediate school district or other local governmental entity on
behalf of an LEA for current expenditures for educational services.
``Local tax revenues'' include the proceeds of ad valorem taxes, sales
and use taxes, income taxes and other taxes. Where a State funding
formula requires a local contribution equivalent to a specified mill tax
levy on taxable real or personal property or both, ``local tax
revenues'' include any revenues recognized by the State as satisfying
that local contribution requirement.
    Local tax revenues covered under a State equalization program means
``local tax revenues'' as defined in paragraph (c) of this section
contributed to or taken into consideration in a State aid program
subject to a determination under this subpart, but excluding all
revenues from State and Federal sources.
    Revenue means an addition to assets that does not increase any
liability, does not represent the recovery of an expenditure, does not
represent the cancellation of certain liabilities without a
corresponding increase in other liabilities or a decrease in assets, and
does not represent a contribution of fund capital in food service or
pupil activity funds. Furthermore, the term ``revenue'' includes only
revenue for current expenditures.
    State aid means any contribution, no repayment for which is
expected, made by a State to or on behalf of LEAs within the State for
current expenditures for the provision of free public education.
    Total local tax revenues means all ``local tax revenues'' as defined
in paragraph (c) of this section, including tax revenues for education
programs for children needing special services, vocational education,
transportation, and the like during the period in question but excluding
all revenues from State and Federal sources.

(Authority: 20 U.S.C. 7709)

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.162  What disparity standard must a State meet in order to be
certified and how are disparities in current expenditures or revenues

per pupil measured?

    (a) Percentage disparity limitation. The Secretary considers that a
State aid program equalizes expenditures if the disparity in the amount
of current expenditures or revenues per pupil for free public education
among LEAs in the State is no more than 25 percent. In determining the
disparity percentage, the Secretary disregards LEAs with per pupil
expenditures or revenues above the 95th or below the 5th percentile of
those expenditures or revenues in the State. The method for calculating
the percentage of disparity in a State is in the appendix to this
subpart.
    (b)(1) Weighted average disparity for different grade level groups.
If a State requests it, the Secretary will make separate disparity
computations for different groups of LEAs in the State that have similar
grade levels of instruction.
    (2) In those cases, the weighted average disparity for all groups,
based on the proportionate number of pupils in each group, may not be
more than the percentage provided in paragraph (a) of

[[Page 555]]

this section. The method for calculating the weighted average disparity
percentage is set out in the appendix to this subpart.
    (c) Per pupil figure computations. In calculating the current
expenditures or revenue disparities under this section, computations of
per pupil figures are made on one of the following bases:
    (1) The per pupil amount of current expenditures or revenue for an
LEA is computed on the basis of the total number of pupils receiving
free public education in the schools of the agency. The total number of
pupils is determined in accordance with whatever standard measurement of
pupil count is used in the State.
    (2) If a State aid program uses ``weighted pupil,'' ``classroom,''
``instructional unit,'' or another designated measure of need in
determining allocations of State aid to take account of special cost
differentials, the computation of per pupil revenue or current
expenditures may be made on those bases. The two allowable categories of
special cost differentials are--
    (i) Those associated with pupils having special educational needs,
such as children with disabilities, economically disadvantaged children,
non-English speaking children, and gifted and talented children; and
    (ii) Those associated with particular types of LEAs such as those
affected by geographical isolation, sparsity or density of population,
high cost of living, or special socioeconomic characteristics within the
area served by an LEA.
    (d) Revenues and current expenditures included in determinations.
All revenues or current expenditures must be included for each LEA in
the State in determining the percentage of disparity under paragraph (a)
of this section.

(Authority: 20 U.S.C. 7709)

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.163  What proportion of Impact Aid funds may a State take into
consideration upon certification?

    (a) Provision of law. Section 8009(d)(1)(B) provides that, upon
certification by the Secretary, in allocating State aid a State may
consider as local resources funds received under sections 8002 and
8003(b) (including hold harmless payments calculated under section
8003(e)) and Pub. L. 81-874 only in proportion to the share that local
tax revenues covered under a State equalization program are of total
local tax revenues. Determinations of proportionality must be made on a
case-by-case basis for each LEA affected and not on the basis of a
general rule to be applied throughout a State.

(Authority: 20 U.S.C. 7709)

    (b) Computation of proportion. (1) In computing the share that local
tax revenues covered under a State equalization program are of total
local tax revenues for an LEA with respect to a program qualifying under
Sec. 222.162, the proportion is obtained by dividing the amount of
local tax revenues covered under the equalization program by the total
local tax revenues attributable to current expenditures for free public
education within that LEA.
    (2) In cases where there are no local tax revenues for current
expenditures and the State provides all of those revenues on behalf of
the LEA, the State may consider up to 100 percent of the funds received
under the Act by that LEA in allocating State aid.

(Authority: 20 U.S.C. 7709(d)(1)(B))

    (c) Application of proportion to Impact Aid payments. Except as
provided in Sec. 222.161(a)(1)(ii) and (iii), the proportion
established under this section (or a lesser proportion) for any LEA
receiving payments under sections 8002 and 8003(b) (including hold
harmless payments calculated under section 8003(e)) and Pub. L. 81-874
may be applied by a State to actual receipts of those payments or
payments under Pub. L. 81-874.

(Authority: 20 U.S.C. 7709(d)(1)(B))



Sec. 222.164  What procedures does the Secretary follow in making a
determination under section 8009?

    (a) Initiation. (1) A proceeding under this subpart leading to a
determination by the Secretary under section 8009 may be initiated--
    (i) By the State educational agency (SEA) or other appropriate
agency of the State;
    (ii) By an LEA; or

[[Page 556]]

    (iii) By the Secretary, if the Secretary has reason to believe that
the State's action is in violation of section 8009.
    (2) Whenever a proceeding under this subpart is initiated, the party
initiating the proceeding shall give adequate notice to the State and
all LEAs in the State and provide them with a complete copy of the
submission initiating the proceeding. In addition, the party initiating
the proceeding shall notify the State and all LEAs in the State of their
right to request from the Secretary, within 30 days of the initiation of
a proceeding, the opportunity to present their views to the Secretary
before the Secretary makes a determination.
    (b) Submission. (1) A submission by a State or LEA under this
section must be made in the manner requested by the Secretary and must
contain the information and assurances as may be required by the
Secretary in order to reach a determination under section 8009 and this
subpart.
    (2)(i) A State in a submission shall--
    (A) Demonstrate how its State aid program comports with Sec.
222.162; and
    (B) Demonstrate for each LEA receiving funds under the Act that the
proportion of those funds that will be taken into consideration comports
with Sec. 222.163.
    (ii) The submission must be received by the Secretary no later than
120 calendar days before the beginning of the State's fiscal year for
the year of the determination, and must include (except as provided in
Sec. 222.161(c)(2)) final second preceding fiscal year disparity data
enabling the Secretary to determine whether the standard in Sec.
222.162 has been met. The submission is considered timely if received by
the Secretary on or before the filing deadline or if it bears a U.S.
Postal Service postmark dated on or before the filing deadline.
    (3) An LEA in a submission must demonstrate whether the State aid
program comports with section 8009.
    (4) Whenever a proceeding is initiated under this subpart, the
Secretary may request from a State the data deemed necessary to make a
determination. A failure on the part of a State to comply with that
request within a reasonable period of time results in a summary
determination by the Secretary that the State aid program of that State
does not comport with the regulations in this subpart.
    (5) Before making a determination under section 8009, the Secretary
affords the State, and all LEAs in the State, an opportunity to present
their views as follows:
    (i) Upon receipt of a timely request for a predetermination hearing,
the Secretary notifies all LEAs and the State of the time and place of
the predetermination hearing.
    (ii) Predetermination hearings are informal and any LEA and the
State may participate whether or not they requested the predetermination
hearing.
    (iii) At the conclusion of the predetermination hearing, the
Secretary holds the record open for 15 days for the submission of post-
hearing comments. The Secretary may extend the period for post-hearing
comments for good cause for up to an additional 15 days.
    (iv) Instead of a predetermination hearing, if the party or parties
requesting the predetermination hearing agree, they may present their
views to the Secretary exclusively in writing. In such a case, the
Secretary notifies all LEAs and the State that this alternative
procedure is being followed and that they have up to 30 days from the
date of the notice in which to submit their views in writing. Any LEA or
the State may submit its views in writing within the specified time,
regardless of whether it requested the opportunity to present its views.
    (c) Determinations. The Secretary reviews the participants'
submissions and any views presented at a predetermination hearing under
paragraph (b)(5) of this section, including views submitted during the
post-hearing comment period. Based upon this review, the Secretary
issues a written determination setting forth the reasons for the
determination in sufficient detail to enable the State or LEAs to
respond. The Secretary affords reasonable notice of a determination
under this subpart and the opportunity for a

[[Page 557]]

hearing to the State or any LEA adversely affected by the determination.

(Approved by the Office of Management and Budget under control number
1810-0036)

(Authority: 20 U.S.C. 7709)

    Note to paragraph (b)(2) of this section: The U.S. Postal Service
does not uniformly provide a dated postmark. Before relying on this
method, an applicant should check with its local post office.

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35419, July 1, 1997]



Sec. 222.165  What procedures does the Secretary follow after making a
determination under section 8009?

    (a) Request for hearing. (1) A State or LEA that is adversely
affected by a determination under section 8009 and this subpart and that
desires a hearing regarding that determination must submit a written
request for a hearing within 30 days of receipt of the determination.
The time within which a request must be filed may not be extended unless
the Secretary, or the Secretary's delegatee, extends the time in writing
at the time notice of the determination is given.
    (2) A request for a hearing in accordance with this section must
specify the issues of fact and law to be considered.
    (3) If an LEA requests a hearing, it must furnish a copy of the
request to the State. If a State requests a hearing, it must furnish a
copy of the request to all LEAs in the State.
    (b) Right to intervene. Any LEA or State that is adversely affected
by a determination shall have the right of intervention in the hearing.
    (c) Time and place of hearing. The hearing is held at a time and
place fixed by the Secretary or the Secretary's delegatee (with due
regard to the mutual convenience of the parties).
    (d) Counsel. In all proceedings under this section, all parties may
be represented by counsel.
    (e) Proceedings. (1) The Secretary refers the matter in controversy
to an administrative law judge (ALJ) appointed under 5 U.S.C. 3105.
    (2) The ALJ is bound by all applicable statutes and regulations and
may neither waive them nor rule them invalid.
    (f) Filing requirements. (1) Any written submission under this
section must be filed by hand-delivery, mail, or facsimile transmission.
The Secretary discourages the use of facsimile transmission for
documents longer than five pages.
    (2) If agreed upon by the parties, service of a document may be made
upon the other party by facsimile transmission.
    (3) The filing date for a written submission under this section is
the date the document is--
    (i) Hand-delivered;
    (ii) Mailed; or
    (iii) Sent by facsimile transmission.
    (4) A party filing by facsimile transmission is responsible for
confirming that a complete and legible copy of the document was received
by the Department.
    (5) Any party filing a document by facsimile transmission must file
a follow-up hard copy by hand-delivery or mail within a reasonable
period of time.
    (g) Procedural rules. (1) If, in the opinion of the ALJ, no dispute
exists as to a material fact the resolution of which would be materially
assisted by oral testimony, the ALJ shall afford each party to the
proceeding an opportunity to present its case--
    (i) In whole or in part in writing; or
    (ii) In an informal conference after affording each party sufficient
notice of the issues to be considered.
    (2) With respect to hearings involving a dispute as to a material
fact the resolution of which would be materially assisted by oral
testimony, the ALJ shall afford the following procedures to each party:
    (i) Sufficient notice of the issues to be considered at the hearing.
    (ii) An opportunity to make a record of the proceedings.
    (iii) An opportunity to present witnesses on the party's behalf.
    (iv) An opportunity to cross-examine other witnesses either orally
or through written interrogatories.
    (h) Decisions. (1) The ALJ--
    (i) Makes written findings and an initial decision based upon the
hearing record; and
    (ii) Forwards to the Secretary, and mails to each party, a copy of
the written findings and initial decision.

[[Page 558]]

    (2) Appeals to the Secretary and the finality of initial decisions
under section 8009 are governed by Sec. Sec. 222.157(b), 222.158, and
222.159 of subpart J of this part.

(Authority: 20 U.S.C. 7709)

    (i) Corrective action. (1) Within 30 days after a determination by
the Secretary that a State has been in violation of section 8009 unless
the determination is timely appealed by the State, the State shall
provide satisfactory written assurances that it will undertake
appropriate corrective action if necessary.
    (2) A State found by the Secretary to have been in violation of
section 8009 following a hearing shall provide, within 30 days after
disposal of the hearing request (such as by a final decision issued
under this subpart or withdrawal of the hearing request), satisfactory
assurances that it is taking corrective action, if necessary.
    (3) At any time during a hearing under this subpart, a State may
provide the Secretary appropriate assurances that it will undertake
corrective action if necessary. The Secretary or the ALJ, as applicable,
may stay the proceedings pending completion of corrective action.

(Authority: 20 U.S.C. 7709)

[60 FR 50778, Sept. 29, 1995, as amended at 62 FR 35420, July 1, 1997]



Sec. Sec. 222.166-222.169  [Reserved]



  Sec. Appendix to Subpart K of Part 222--Determinations Under Section
  8009 of the Act--Methods of Calculations for Treatment of Impact Aid
               Payments Under State Equalization Programs

    The following paragraphs describe the methods for making certain
calculations in conjunction with determinations made under the
regulations in this subpart. Except as otherwise provided in the
regulations, these methods are the only methods that may be used in
making these calculations.
    1. Determinations of disparity standard compliance under Sec.
222.162(b)(1).
    (a) The determinations of disparity in current expenditures or
revenue per pupil are made by--
    (i) Ranking all LEAs having similar grade levels within the State on
the basis of current expenditures or revenue per pupil for the second
preceding fiscal year before the year of determination;
    (ii) Identifying those LEAs in each ranking that fall at the 95th
and 5th percentiles of the total number of pupils in attendance in the
schools of those LEAs; and
    (iii) Subtracting the lower current expenditure or revenue per pupil
figure from the higher for those agencies identified in paragraph (ii)
and dividing the difference by the lower figure.
    Example: In State X, after ranking all LEAs organized on a grade 9-
12 basis in order of the expenditures per pupil for the fiscal year in
question, it is ascertained by counting the number of pupils in
attendance in those agencies in ascending order of expenditure that the
5th percentile of student population is reached at LEA A with a per
pupil expenditure of $820, and that the 95th percentile of student
population is reached at LEA B with a per pupil expenditure of $1,000.
The percentage disparity between the 95th and 5th percentile LEAs is 22
percent ($1,000-$820 = $180/$820). The program would meet the disparity
standard for fiscal years before fiscal year 1998 but would not for
subsequent years.
    (b) In cases under Sec. 222.162(b), where separate computations are
made for different groups of LEAs, the disparity percentage for each
group is obtained in the manner described in paragraph (a) above. Then
the weighted average disparity percentage for the State as a whole is
determined by--
    (i) Multiplying the disparity percentage for each group by the total
number of pupils receiving free public education in the schools in that
group;
    (ii) Summing the figures obtained in paragraph (b)(i); and
    (iii) Dividing the sum obtained in paragraph (b)(ii) by the total
number of pupils for all the groups.

                                 Example
------------------------------------------------------------------------

------------------------------------------------------------------------
Group 1 (grades 1-6), 80,000 pupilsx18.00%=....................   14,400
Group 2 (grades 7-12), 100,000 pupilsx22.00%=..................   22,000
Group 3 (grades 1-12), 20,000 pupilsx35.00%=...................    7,000
                                                                --------
    Total 200,000 pupils.......................................   43,400
    43,400/200,000=21.70% Disparity
------------------------------------------------------------------------

    2. Determinations under Sec. 222.163(b) as to maximum proportion of
payments under the Act that may be taken into consideration by a State
under an equalization program. The proportion that local tax revenues
covered under a State equalization program are of total local tax
revenues for a particular LEA shall be obtained by dividing: (a) The
amount of local tax revenues covered under the equalization program by
(b) the total local tax revenues

[[Page 559]]

attributable to current expenditures within the LEA. Local revenues that
can be excluded from the proportion computation are those received from
local non-tax sources such as interest, bake sales, gifts, donations,
and in-kind contributions.

                                Examples

    Example 1. State A has an equalization program under which each LEA
is guaranteed $900 per pupil less the LEA contribution based on a
uniform tax levy. The LEA contribution from the uniform tax levy is
considered under the equalization program. LEA X contributes the
proceeds of the uniform tax levy, $700 per pupil, and the State
contributes the $200 difference. No other local tax revenues are applied
to current expenditures for education by LEA X. The percentage of funds
under the Act that may be taken into consideration by State A for LEA X
is 100 percent ($700/$700). If LEA X receives $100 per pupil in payments
under the Act, $100 per pupil may be taken into consideration by State A
in determining LEA X's relative financial resources and needs under the
program. LEA X is regarded as contributing $800 and State A would now
contribute the $100 difference.
    Example 2. The initial facts are the same as in Example 1, except
that LEA X, under a permissible additional levy outside the equalization
program, raises an additional $100 per pupil not covered under the
equalization program. The permissible levy is not included in local tax
revenues covered under the equalization program but it is included in
total local tax revenues. The percentage of payments under the Act that
may be taken into consideration is 87.5 percent ($700/$800). If LEA X
receives $100 per pupil in payments under the Act, $87.50 per pupil may
be taken into consideration. LEA X is now regarded as contributing
$787.50 per pupil under the program and State A would now contribute
$112.50 per pupil as the difference.
    Example 3. State B has an equalization program under which each LEA
is guaranteed $900 per pupil for contributing the equivalent of a two
mill tax levy. LEA X contributes $700 per pupil from a two mill tax levy
and an additional $500 per pupil from local interest, bake sales, in-
kind contributions, and other non-tax local sources. The percentage of
funds under the Act that may be taken into consideration by State A for
LEA X is 100 percent ($700/$700). The local revenue received from
interest, bake sales, in-kind contributions and other non-tax local
revenues are excluded from the computation since they are from non-tax
sources. If LEA X receives $100 per pupil in payments under the Act,
$100 per pupil may be taken into consideration by State A in determining
LEA X's relative financial resources and needs under the program. LEA X
is regarded as contributing $800 and State A would now contribute the
$100 difference.
    Example 4. State C has an equalization program in which each
participating LEA is guaranteed a certain per pupil revenue at various
levels of tax rates. For an eight mill rate the guarantee is $500, for
nine mills $550, for 10 mills $600. LEA X levies a 10 mill rate and
realizes $300 per pupil. Furthermore, it levies an additional 10 mills
under a local leeway option realizing another $300 per pupil. The $300
proceeds of the local leeway option are not included in local tax
revenues covered under the equalization program, but they are included
in total local tax revenues. The percentage of payments under the Act
that may be taken into consideration is 50 percent ($300/$600). If LEA X
receives $100 per pupil in payments under the Act, $50 per pupil may be
taken into consideration. LEA X may be regarded as contributing $350 per
pupil under the program and State B would now contribute $250 as the
difference.
    Example 5. The initial facts are the same as in Example 4, except
that LEA Y in State C, while taxing at the same 10 mill rate for both
the equalization program and leeway allowance as LEA X, realizes $550
per pupil for each tax. As with LEA X, the percentage of payments under
the Act that may be taken into consideration for LEA Y is 50 percent
(550/1100). If LEA Y receives $150 per pupil in payments under the Act,
then up to $75 per pupil normally could be taken into consideration.
However, since LEA Y would have received only $50 per pupil in State
aid, only $50 of the allowable $75 could be taken into consideration.
Thus, LEA Z may be regarded as contributing $600 per pupil under the
program and State B would not contribute any State aid.



  Subpart L_Impact Aid Discretionary Construction Grant Program Under
                       Section 8007(b) of the Act

    Source: 69 FR 12235, Mar. 15, 2004, unless otherwise noted.

                                 General



Sec. 222.170  What is the purpose of the Impact Aid Discretionary
Construction grant program (Section 8007(b) of the Act)?

    The Impact Aid Discretionary Construction grant program provides
competitive grants for emergency repairs and modernization of school
facilities to certain eligible local educational

[[Page 560]]

agencies (LEAs) that receive formula Impact Aid funds.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.171  What LEAs may be eligible for Discretionary Construction
grants?

    (a) Applications for these grants are considered in four funding
priority categories. The specific requirements for each priority are
detailed in Sec. Sec. 222.177 through 222.182.
    (b)(1) Generally, to be eligible for an emergency construction
grant, an LEA must--
    (i) Enroll a high proportion (at least 40 percent) of federally
connected children in average daily attendance (ADA) who reside on
Indian lands or who have a parent on active duty in the U.S. uniformed
services;
    (ii) Have a school that enrolls a high proportion of one of these
types of students;
    (iii) Be eligible for funding for heavily impacted LEAs under
section 8003(b)(2) of the Act; or
    (iv) Meet the specific numeric requirements regarding bonding
capacity.
    (2) The Secretary must also consider such factors as an LEA's total
assessed value of real property that may be taxed for school purposes,
its availability and use of bonding capacity, and the nature and
severity of the emergency.
    (c)(1) Generally, to be eligible for a modernization construction
grant, an LEA must--
    (i) Be eligible for Impact Aid funding under either section 8002 or
8003 of the Act;
    (ii) Be eligible for funding for heavily impacted LEAs under section
8003(b)(2) of the Act;
    (iii) Enroll a high proportion (at least 40 percent) of federally
connected children in ADA who reside on Indian lands or who have a
parent on active duty in the U.S. uniformed services;
    (iv) Have a school that enrolls a high proportion of one of these
types of students; or
    (v) Meet the specific numeric requirements regarding bonding
capacity.
    (2) The Secretary must also consider such factors as an LEA's total
assessed value of real property that may be taxed for school purposes,
its availability and use of bonding capacity, and the nature and
severity of its need for modernization funds.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.172  What activities may an LEA conduct with funds received
under this program?

    (a) An LEA may use emergency grant funds received under this program
only to repair, renovate, alter, and, in the limited circumstances
described in paragraph (c) of this section, replace a public elementary
or secondary school facility used for free public education to ensure
the health and safety of students and personnel, including providing
accessibility for the disabled as part of a larger project.
    (b) An LEA may use modernization grant funds received under this
program only to renovate, alter, retrofit, extend, and, in the limited
circumstances described in paragraph (c) of this section, replace a
public elementary or secondary school facility used for free public
education to provide school facilities that support a contemporary
educational program for the LEA's students at normal capacity, and in
accordance with the laws, standards, or common practices in the LEA's
State.
    (c)(1) An emergency or modernization grant under this program may be
used for the construction of a new school facility but only if the
Secretary determines--
    (i) That the LEA holds title to the existing facility for which
funding is requested; and
    (ii) In consultation with the grantee, that partial or complete
replacement of the facility would be less expensive or more cost-
effective than improving the existing facility.
    (2) When construction of a new school facility is permitted,
emergency and modernization funds may be used only for a new school
facility that is used for free public education. These funds may be used
for the--
    (i) Construction of instructional, resource, food service, and
general or administrative support areas, so long as they are a part of
the instructional facility; and

[[Page 561]]

    (ii) Purchase of initial equipment or machinery, and initial utility
connections.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.173  What activities will not receive funding under a
Discretionary Construction grant?

    The Secretary does not fund the following activities under a
Discretionary Construction grant:
    (a) Improvements to facilities for which the LEA does not have full
title or other interest, such as a lease-hold interest.
    (b) Improvements to or repairs of school grounds, such as
environmental remediation, traffic remediation, and landscaping, that do
not directly involve instructional facilities.
    (c) Repair, renovation, alteration, or construction for stadiums or
other facilities that are primarily used for athletic contests,
exhibitions, and other events for which admission is charged to the
general public.
    (d) Improvements to or repairs of teacher housing.
    (e) Except in the limited circumstances as provided in Sec.
222.172(c), when new construction is permissible, acquisition of any
interest in real property.
    (f) Maintenance costs associated with any of an LEA's school
facilities.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.174  What prohibitions apply to these funds?

    Grant funds under this program may not be used to supplant or
replace other available non-Federal construction money. These grant
funds may be used for emergency or modernization activities only to the
extent that they supplement the amount of construction funds that would,
in the absence of these grant funds, be available to a grantee from non-
Federal funds for these purposes.

    Example 1. ``Supplanting.'' An LEA signs a contract for a $300,000
roof replacement and plans to use its capital expenditure fund to pay
for the renovation. Since the LEA already has non-Federal funds
available for the roof project, it may not now use a grant from this
program to pay for the project or replace its own funds in order to
conserve its capital fund.
    Example 2. ``Non-supplanting.'' The LEA from the example of
supplanting that has the $300,000 roof commitment has also received a
$400,000 estimate for the replacement of its facility's heating,
ventilation, and air conditioning (HVAC) system. The LEA has not made
any commitments for the HVAC system because it has no remaining funds
available to pay for that work. Since other funds are not available, it
would not be supplanting if the LEA received an emergency grant under
this program to pay for the HVAC system.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.175  What regulations apply to recipients of funds under this
program?

    The following regulations apply to the Impact Aid Discretionary
Construction program:
    (a) The Education Department General Administrative Regulations
(EDGAR) as follows:
    (1) 34 CFR part 75 (Direct Grant Programs) except for 34 CFR
Sec. Sec. 75.600 through 75.617.
    (2) 34 CFR part 77 (Definitions that Apply to Department
Regulations).
    (3) 34 CFR part 79 (Intergovernmental Review of Department of
Education Programs and Activities).
    (4) 34 CFR part 80 (Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments).
    (5) 34 CFR part 81 (General Education Provisions Act--Enforcement).
    (6) 34 CFR part 82 (New Restrictions on Lobbying).
    (7) 34 CFR part 84 (Governmentwide Requirements for Drug-Free
Workplace (Financial Assistance)).
    (8) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement)).
    (b) The regulations in 34 CFR part 222.

(Authority: 20 U.S.C. 1221e-3)



Sec. 222.176  What definitions apply to this program?

    (a) In addition to the terms referenced in 34 CFR 222.2, the
following definitions apply to this program:
    Bond limit means the cap or limit that a State may impose on an
LEA's capacity for bonded indebtedness. For applicants in States that
place no limit

[[Page 562]]

on an LEA's capacity for bonded indebtedness, the Secretary shall
consider the LEA's bond limit to be 10 percent of its total assessed
valuation.
    Construction means
    (1) Preparing drawings and specifications for school facilities;
    (2) Repairing, renovating, or altering school facilities;
    (3) Extending school facilities as described in Sec. 222.172(b);
    (4) Erecting or building school facilities, as described in Sec.
222.172(c); and
    (5) Inspections or supervision related to school facilities
projects.
    Emergency means a school facility condition that is so injurious or
hazardous that it either poses an immediate threat to the health and
safety of the facility's students and staff or can be reasonably
expected to pose such a threat in the near future. These conditions can
include deficiencies in the following building features: a roof;
electrical wiring; a plumbing or sewage system; heating, ventilation, or
air conditioning; the need to bring a school facility into compliance
with fire and safety codes, or providing accessibility for the disabled
as part of a larger project.
    Level of bonded indebtedness means the amount of long-term debt
issued by an LEA divided by the LEA's bonding capacity.
    Minimal capacity to issue bonds means that the total assessed value
of real property in an LEA that may be taxed for school purposes is at
least $25,000,000 but not more than $50,000,000.
    Modernization means the repair, renovation, alteration, or extension
of a public elementary or secondary school facility in order to support
a contemporary educational program for an LEA's students in normal
capacity, and in accordance with the laws, standards, or common
practices in the LEA's State.
    No practical capacity to issue bonds means that the total assessed
value of real property in an LEA that may be taxed for school purposes
is less than $25,000,000.
    School facility means a building used to provide free public
education, including instructional, resource, food service, and general
or administrative support areas, so long as they are a part of the
facility.
    Total assessed value per student means the assessed valuation of
real property per pupil (AVPP), unless otherwise defined by an LEA's
State.
    (b) The following terms used in this subpart are defined or
referenced in 34 CFR 77.1:

Applicant
Application
Award
Contract
Department
EDGAR
Equipment
Fiscal year
Grant
Grantee
Project
Public
Real property
Recipient

(Authority: 20 U.S.C. 7707(b) and 1221e-3)

                               Eligibility



Sec. 222.177  What eligibility requirements must an LEA meet to apply
for an emergency grant under the first priority?

    An LEA is eligible to apply for an emergency grant under the first
priority of section 8007(b) of the Act if it--
    (a) Is eligible to receive formula construction funds for the fiscal
year under section 8007(a) of the Act;
    (b)(1) Has no practical capacity to issue bonds;
    (2) Has minimal capacity to issue bonds and has used at least 75
percent of its bond limit; or
    (3) Is eligible to receive funds for the fiscal year for heavily
impacted districts under section 8003(b)(2) of the Act; and
    (c) Has a school facility emergency that the Secretary has
determined poses a health or safety hazard to students and school
personnel.

(Authority: 20 U.S.C. 7707(b))

[[Page 563]]



Sec. 222.178  What eligibility requirements must an LEA meet to apply
for an emergency grant under the second priority?

    Except as provided in Sec. 222.179, an LEA is eligible to apply for
an emergency grant under the second priority of section 8007(b) of the
Act if it--
    (a) Is eligible to receive funds for the fiscal year under section
8003(b) of the Act;
    (b)(1) Enrolls federally connected children living on Indian lands
equal to at least 40 percent of the total number of children in average
daily attendance (ADA) in its schools; or
    (2) Enrolls federally connected children with a parent in the U.S.
uniformed services equal to at least 40 percent of the total number of
children in ADA in its schools;
    (c) Has used at least 75 percent of its bond limit;
    (d) Has an average per-student assessed value of real property
available to be taxed for school purposes that is below its State
average; and
    (e) Has a school facility emergency that the Secretary has
determined poses a health or safety hazard to students and school
personnel.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.179  Under what circumstances may an ineligible LEA apply on
behalf of a school for an emergency grant under the second priority?

    An LEA that is eligible to receive section 8003(b) assistance for
the fiscal year but that does not meet the other eligibility criteria
described in Sec. 222.178(a) or (b) may apply on behalf of a school
located within its geographic boundaries for an emergency grant under
the second priority of section 8007(b) of the Act if--
    (a) The school--
    (1) Enrolls children living on Indian lands equal to at least 40
percent of the total number of children in ADA; or
    (2) Enrolls children with a parent in the U.S. uniformed services
equal to at least 40 percent of the total number of children in ADA;
    (b) The school has a school facility emergency that the Secretary
has determined poses a health or safety hazard to students and school
personnel;
    (c) The LEA has used at least 75 percent of its bond limit; and
    (d) The LEA has an average per-student assessed value of real
property available to be taxed for school purposes that is below its
State average.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.180  What eligibility requirements must an LEA meet to apply
for a modernization grant under the third priority?

    An LEA is eligible to apply for a modernization grant under the
third priority of section 8007(b) of the Act if it--
    (a) Is eligible to receive funds for the fiscal year under section
8002 or 8003(b) of the Act;
    (b)(1) Has no practical capacity to issue bonds;
    (2) Has minimal capacity to issue bonds and has used at least 75
percent of its bond limit; or
    (3) Is eligible to receive funds for the fiscal year for heavily
impacted districts under section 8003(b)(2) of the Act; and
    (c) Has facility needs resulting from the presence of the Federal
Government, such as the enrollment of federally connected children, the
presence of Federal property, or an increase in enrollment due to
expanded Federal activities, housing privatization, or the acquisition
of Federal property.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.181  What eligibility requirements must an LEA meet to apply
for a modernization grant under the fourth priority?

    An LEA is eligible to apply for a modernization grant under the
fourth priority of section 8007(b) of the Act if it--
    (a)(1) Is eligible to receive funds for the fiscal year under
section 8003(b) of the Act; and
    (i) Enrolls children living on Indian lands equal to at least 40
percent of the total number of children in ADA in its schools; or
    (ii) Enrolls children with a parent in the U.S. uniformed services
equal to at least 40 percent of the total number of children in ADA in
its schools; or

[[Page 564]]

    (2) Is eligible to receive assistance for the fiscal year under
section 8002 of the Act;
    (b) Has used at least 75 percent of its bond limit;
    (c) Has an average per-student assessed value of real property
available to be taxed for school purposes that is below its State
average; and
    (d) Has facility needs resulting from the presence of the Federal
Government, such as the enrollment of federally connected children, the
presence of Federal property, or an increase in enrollment due to
expanded Federal activities, housing privatization, or the acquisition
of Federal property.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.182  Under what circumstances may an ineligible LEA apply on
behalf of a school for a modernization grant under the fourth priority?

    An LEA that is eligible to receive a payment under Title VIII for
the fiscal year but that does not meet the other eligibility criteria
described in Sec. 222.181 may apply on behalf of a school located
within its geographic boundaries for a modernization grant under the
fourth priority of section 8007(b) of the Act if--
    (a) The school--
    (1) Enrolls children living on Indian lands equal to at least 40
percent of the total number of children in ADA; or
    (2) Enrolls children with a parent in the U.S. uniformed services
equal to at least 40 percent of the total number of children in ADA;
    (b) The LEA has used at least 75 percent of its bond limit;
    (c) The LEA has an average per-student assessed value of real
property available to be taxed for school purposes that is below its
State average; and
    (d) The school has facility needs resulting from the presence of the
Federal Government, such as the enrollment of federally connected
children, the presence of Federal property, or an increase in enrollment
due to expanded Federal activities, housing privatization, or the
acquisition of Federal property.

(Authority: 20 U.S.C. 7707(b))

                        How To Apply for a Grant



Sec. 222.183  How does an LEA apply for a grant?

    (a) To apply for funds under this program, an LEA may submit only
one application for one educational facility for each competition.
    (b) An application must--
    (1) Contain the information required in Sec. Sec. 222.184 through
222.186, as applicable, and in any application notice that the Secretary
may publish in the Federal Register; and
    (2) Be timely filed in accordance with the provisions of the
Secretary's application notice.

(Approved by the Office of Management and Budget under control number
1810-0657)

(Authority: 20 U.S.C. 7707(b))

[60 FR 50778, Sept. 29, 1995, as amended at 76 FR 23713, Apr. 28, 2011]



Sec. 222.184  What information must an application contain?

    An application for an emergency or modernization grant must contain
the following information:
    (a) The name of the school facility the LEA is proposing to repair,
construct, or modernize.
    (b)(1) For an applicant under section 8003(b) of the Act, the number
of federally connected children described in section 8003(a)(1) enrolled
in the school facility, as well as the total enrollment in the facility,
for which the LEA is seeking a grant; or
    (2) For an applicant under section 8002 of the Act, the total
enrollment, for the preceding year, in the LEA and in the school
facility for which the LEA is seeking a grant, based on the fall State
count date.
    (c) The identification of the LEA's interest in, or authority over,
the school facility involved, such as an ownership interest or a lease
arrangement.
    (d) The original construction date of the school facility that the
LEA proposes to renovate or modernize.
    (e) The dates of any major renovations of that school facility and
the areas of the school covered by the renovations.

[[Page 565]]

    (f) The proportion of Federal acreage within the geographic
boundaries of the LEA.
    (g) Fiscal data including the LEA's--
    (1) Maximum bonding capacity;
    (2) Amount of bonded debt;
    (3) Total assessed value of real property available to be taxed for
school purposes;
    (4) State average assessed value per pupil of real property
available to be taxed for school purposes;
    (5) Local real property tax levy, in mills or dollars, used to
generate funds for capital expenditures; and
    (6) Sources and amounts of funds available for the proposed project.
    (h) A description of the need for funds and the proposed project for
which a grant under this subpart L would be used, including a cost
estimate for the project.
    (i) Applicable assurances and certifications identified in the
approved grant application package.

(Approved by the Office of Management and Budget under control number
1810-0657)

(Authority: 20 U.S.C. 7707(b))



Sec. 222.185  What additional information must be included in an
emergency grant application?

    In addition to the information specified in Sec. 222.184, an
application for an emergency grant must contain the following:
    (a) A description of the deficiency that poses a health or safety
hazard to occupants of the facility.
    (b) A description of how the deficiency adversely affects the
occupants and how it will be repaired.
    (c) A statement signed by an appropriate local official, as defined
below, that the deficiency threatens the health and safety of occupants
of the facility or prevents the use of the facility. An appropriate
local official may include a local building inspector, a licensed
architect, or a licensed structural engineer. An appropriate local
official may not include a member of the applicant LEA's staff.

(Approved by the Office of Management and Budget under control number
1810-0657)

(Authority: 20 U.S.C. 7707(b))



Sec. 222.186  What additional information must be included in a
modernization grant application?

    In addition to the information specified in Sec. 222.184, an
application for a modernization grant must contain a description of--
    (a) The need for modernization; and
    (b) How the applicant will use funds received under this program to
address the need referenced in paragraph (a) of this section.

(Approved by the Office of Management and Budget under control number
1810-0657)

(Authority: 20 U.S.C. 7707(b))



Sec. 222.187  Which year's data must an SEA or LEA provide?

    (a) Except as provided in paragraph (b) of this section, the
Secretary will determine eligibility under this discretionary program
based on student and fiscal data for each LEA from the fiscal year
preceding the fiscal year for which the applicant is applying for funds.
    (b) If satisfactory fiscal data are not available from the preceding
fiscal year, the Secretary will use data from the most recent fiscal
year for which data that are satisfactory to the Secretary are
available.

(Authority: 20 U.S.C. 7707(b))

                           How Grants Are Made



Sec. 222.188  What priorities may the Secretary establish?

    In any given year, the Secretary may assign extra weight for certain
facilities systems or emergency and modernization conditions by
identifying the systems or conditions and their assigned weights in a
notice published in the Federal Register.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.189  What funding priority does the Secretary give to
applications?

    (a) Except as provided in paragraph (b) of this section, the
Secretary gives funding priority to applications in the following order:
    (1) First priority is given to applications described under Sec.
222.177 and, among those applicants for emergency grants, priority is
given to applications based on a rank order of the application quality
factors referenced in

[[Page 566]]

Sec. 222.190, including the severity of the emergency.
    (2) After all eligible first-priority applications are funded,
second priority is given to applications described under Sec. Sec.
222.178 and 222.179 and, among those applicants for emergency grants,
priority is given to applications based on a rank order of the
application quality factors referenced in Sec. 222.190, including the
severity of the emergency.
    (3) Third priority is given to applications described under Sec.
222.180 and, among those applicants for modernization grants, priority
is given to applications based on a rank order of the application
quality factors referenced in Sec. 222.190, including the severity of
the need for modernization.
    (4) Fourth priority is given to applications described under
Sec. Sec. 222.181 and 222.182 and, among those applicants for
modernization grants, priority is given to applications based on a rank
order of the application quality factors referenced in Sec. 222.190,
including the severity of the need for modernization.
    (b)(1) The Secretary makes awards in each priority described above
until the Secretary is unable to make an approvable award in that
priority.
    (2) If the Secretary is unable to fund a full project or a viable
portion of a project, the Secretary may continue to fund down the list
of high-ranking applicants within a priority.
    (3) The Secretary applies any remaining funds to awards in the next
priority.
    (4) If an applicant does not receive an emergency or modernization
grant in a fiscal year, the Secretary will, subject to the availability
of funds and to the priority and award criteria, consider that
application in the following year along with the next fiscal year's pool
of applications.

    Example: The first five applicants in priority one have been funded.
Three hundred thousand dollars remain available. Three unfunded
applications remain in that priority. Application 6 requires a
minimum of $500,000, application 7 requires $400,000, and
application 8 requires $300,000 for a new roof and $150,000 for
related wall and ceiling repairs. Applicant 8 agrees to accept
the remaining $300,000 since the roof upgrade can be separated into a
viable portion of applicant 8's total project. Applications
6 and 7 will be retained for consideration in the next
fiscal year and will compete again with that fiscal year's pool of
applicants. Applicant 8 will have to submit a new application
in the next fiscal year if it wishes to be considered for the unfunded
portion of the current year's application.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.190  How does the Secretary rank and select applicants?

    (a) To the extent that they are consistent with these regulations
and section 8007(b) of the Act, the Secretary will follow grant
selection procedures that are specified in 34 CFR 75.215 through 75.222.
In general these procedures are based on the authorizing statute, the
selection criteria, and any priorities or other applicable requirements
that have been published in the Federal Register.
    (b) In the event of ties in numeric ranking, the Secretary may
consider as tie-breaking factors: the severity of the emergency or the
need for modernization; for applicants under section 8003 of the Act,
the numbers of federally connected children who will benefit from the
project; or for applicants under section 8002 of the Act, the numbers of
children who will benefit from the project; the AVPP compared to the
LEA's State average; and available resources or non-Federal funds
available for the grant project.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.191  What is the maximum award amount?

    (a) Subject to any applicable contribution requirements as described
in Sec. Sec. 222.192 and 222.193, the procedures in 34 CFR 75.231
through 75.236, and the provisions in paragraph (b) of this section, the
Secretary may fund up to 100 percent of the allowable costs in an
approved grantee's proposed project.
    (b) An award amount may not exceed the difference between--
    (1) The cost of the proposed project; and
    (2) The amount the grantee has available or will have available for
this purpose from other sources, including local, State, and other
Federal funds.

(Authority: 20 U.S.C. 7707(b))

[[Page 567]]



Sec. 222.192  What local funds may be considered as available for this
project?

    To determine the amount of local funds that an LEA has available
under Sec. 222.191(b)(2) for a project under this program, the
Secretary will consider as available all LEA funds that may be used for
capital expenditures except $100,000 or 10 percent of the average annual
capital expenditures of the applicant for the three previous fiscal
years, whichever is greater. The Secretary will not consider capital
funds that an LEA can demonstrate have been committed through signed
contracts or other written binding agreements but have not yet been
expended.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.193  What other limitations on grant amounts apply?

    (a) Except as provided in paragraph (b) of this section and Sec.
222.191, the amount of funds provided under an emergency grant or a
modernization grant awarded to an eligible LEA is subject to the
following limitations:
    (1) The award amount may not be more than 50 percent of the total
cost of an approved project.
    (2) The total amount of grant funds may not exceed four million
dollars during any four-year period.

    Example: An LEA that is awarded four million dollars in the first
year may not receive any additional funds for the following three years.

    (b) Emergency or modernization grants to LEAs with no practical
capacity to issue bonds as defined in Sec. 222.176 are not subject to
the award limitations described in paragraph (a) of this section.

(Authority: 20 U.S.C. 7707(b))



Sec. 222.194  Are ``in-kind'' contributions permissible?

    (a) LEAs that are subject to the applicable matching requirement
described in Sec. 222.193(a) may use allowable third party in-kind
contributions as defined below to meet the requirements.
    (b) Third party in-kind contributions mean property or services that
benefit this grant program and are contributed by non-Federal third
parties without charge to the grantee or by a cost-type contractor under
the grant agreement.
    (c) Subject to the limitations of 34 CFR 75.564(c)(2) regarding
indirect costs, the provisions of 34 CFR 80.24 govern the allowability
and valuation of in-kind contributions, except that it is permissible
for a third party to contribute real property to a grantee for a project
under this program, so long as no Federal funds are spent for the
acquisition of real property.

(Authority: 20 U.S.C. 7707(b))

             Conditions and Requirements Grantees Must Meet



Sec. 222.195  How does the Secretary make funds available to grantees?

    The Secretary makes funds available to a grantee during a project
period using the following procedure:
    (a) Upon final approval of the grant proposal, the Secretary
authorizes a project period of up to 60 months based upon the nature of
the grant proposal and the time needed to complete the project.
    (b) The Secretary then initially makes available to the grantee 10
percent of the total award amount.
    (c) After the grantee submits a copy of the emergency or
modernization contract approved by the grantee's governing board, the
Secretary makes available 80 percent of the total award amount to a
grantee.
    (d) The Secretary makes available up to the remaining 10 percent of
the total award amount to the grantee after the grantee submits a
statement that--
    (1) Details any earnings, savings, or interest;
    (2) Certifies that--
    (i) The project is fully completed; and
    (ii) All the awarded funds have been spent for grant purposes; and
    (3) Is signed by the--
    (i) Chairperson of the governing board;
    (ii) Superintendent of schools; and
    (iii) Architect of the project.

(Authority: 20 U.S.C. 7707(b))

[[Page 568]]



Sec. 222.196  What additional construction and legal requirements apply?

    (a) Except as provided in paragraph (b) of this section, a grantee
under this program must comply with--
    (1) The general construction legal requirements identified in the
grant application assurances;
    (2) The prevailing wage standards in the grantee's locality that are
established by the Secretary of Labor in accordance with the Davis-Bacon
Act (40 U.S.C. 276a, et seq.); and
    (3) All relevant Federal, State, and local environmental laws and
regulations.
    (b) A grantee that qualifies for a grant because it enrolls a high
proportion of federally connected children who reside on Indian lands is
considered to receive a grant award primarily for the benefit of Indians
and must therefore comply with the Indian preference requirements of
section 7(b) of the Indian Self-Determination Act.

(Authority: 20 U.S.C. 7707(b) and 1221e-3)



PART 225_CREDIT ENHANCEMENT FOR CHARTER SCHOOL FACILITIES
PROGRAM--Table of Contents



                            Subpart A_General

Sec.
225.1 What is the Credit Enhancement for Charter School Facilities
          Program?
225.2 Who is eligible to receive a grant?
225.3 What regulations apply to the Credit Enhancement for Charter
          School Facilities Program?
225.4 What definitions apply to the Credit Enhancement for Charter
          School Facilities Program?

             Subpart B_How Does the Secretary Award a Grant?

225.10 How does the Secretary evaluate an application?
225.11 What selection criteria does the Secretary use in evaluating an
          application for a Credit Enhancement for Charter Schools
          Facilities grant?
225.12 What funding priority may the Secretary use in making a grant
          award?

           Subpart C_What Conditions Must Be Met by a Grantee?

225.20 When may a grantee draw down funds?
225.21 What are some examples of impermissible uses of reserve account
          funds?

    Authority: 20 U.S.C. 7223, unless otherwise noted.

    Source: 70 FR 15003, Mar. 24, 2005, unless otherwise noted.



                            Subpart A_General



Sec. 225.1  What is the Credit Enhancement for Charter School
Facilities Program?

    (a) The Credit Enhancement for Charter School Facilities Program
provides grants to eligible entities to assist charter schools in
obtaining facilities.
    (b) Grantees use these grants to do the following:
    (1) Assist charter schools in obtaining loans, bonds, and other debt
instruments for the purpose of obtaining, constructing, and renovating
facilities.
    (2) Assist charter schools in obtaining leases of facilities.
    (c) Grantees may demonstrate innovative credit enhancement
initiatives while meeting the program purposes under paragraph (b) of
this section.
    (d) For the purposes of these regulations, the Credit Enhancement
for Charter School Facilities Program includes grants made under the
Charter School Facilities Financing Demonstration Grant Program.

(Authority: 20 U.S.C. 7223)



Sec. 225.2  Who is eligible to receive a grant?

    The following are eligible to receive a grant under this part:
    (a) A public entity, such as a State or local governmental entity;
    (b) A private nonprofit entity; or
    (c) A consortium of entities described in paragraphs (a) and (b) of
this section.

(Authority: 20 U.S.C. 7223a; 7223i(2))



Sec. 225.3  What regulations apply to the Credit Enhancement for
Charter School Facilities Program?

    The following regulations apply to the Credit Enhancement for
Charter School Facilities Program:
    (a) The Education Department General Administrative Regulations
(EDGAR) as follows:

[[Page 569]]

    (1) 34 CFR part 74 (Administration of Grants and Agreements with
Institutions of Higher Education, Hospitals, and other Non-Profit
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).
    (6) 34 CFR part 81 (General Educational Provisions Act--
Enforcement).
    (7) 34 CFR part 82 (New Restrictions on Lobbying).
    (8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free
Workplace (Grants)).
    (9) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement)).
    (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 225.

(Authority: 20 U.S.C. 1221e-3; 1232)



Sec. 225.4  What definitions apply to the Credit Enhancement for
Charter School Facilities Program?

    (a) Definitions in the Act. The following term used in this part is
defined in section 5210 of the Elementary and Secondary Education Act of
1965, as amended by the No Child Left Behind Act of 2001:

Charter school

    (b) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR 77.1:

Acquisition
Applicant
Application
Award
Department
EDGAR
Facilities
Grant
Grantee
Nonprofit
Private
Project
Public
Secretary

(Authority: 20 U.S.C. 7221(i)(1); 7223d)



             Subpart B_How Does the Secretary Award a Grant?



Sec. 225.10  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the
criteria in Sec. 225.11.
    (b) The Secretary awards up to 100 points for these criteria.
    (c) The maximum possible score for each criterion is indicated in
parentheses.

(Authority: 20 U.S.C. 7223; 1232)



Sec. 225.11  What selection criteria does the Secretary use in
evaluating an application for a Credit Enhancement for Charter

School Facilities grant?

    The Secretary uses the following criteria to evaluate an application
for a Credit Enhancement for Charter School Facilities grant:
    (a) Quality of project design and significance. (35 points) In
determining the quality of project design and significance, the
Secretary considers--
    (1) The extent to which the grant proposal would provide financing
to charter schools at better rates and terms than they can receive
absent assistance through the program;
    (2) The extent to which the project goals, objectives, and timeline
are clearly specified, measurable, and appropriate for the purpose of
the program;
    (3) The extent to which the project implementation plan and
activities, including the partnerships established, are likely to
achieve measurable objectives that further the purposes of the program;
    (4) The extent to which the project is likely to produce results
that are replicable;
    (5) The extent to which the project will use appropriate criteria
for selecting charter schools for assistance and for determining the
type and amount of assistance to be given;

[[Page 570]]

    (6) The extent to which the proposed activities will leverage
private or public-sector funding and increase the number and variety of
charter schools assisted in meeting their facilities needs more than
would be accomplished absent the program;
    (7) The extent to which the project will serve charter schools in
States with strong charter laws, consistent with the criteria for such
laws in section 5202(e)(3) of the Elementary and Secondary Education Act
of 1965; and
    (8) The extent to which the requested grant amount and the project
costs are reasonable in relation to the objectives, design, and
potential significance of the project.
    (b) Quality of project services. (15 points) In determining the
quality of the project services, the Secretary considers--
    (1) The extent to which the services to be provided by the project
reflect the identified needs of the charter schools to be served;
    (2) The extent to which charter schools and chartering agencies were
involved in the design of, and demonstrate support for, the project;
    (3) The extent to which the technical assistance and other services
to be provided by the proposed grant project involve the use of cost-
effective strategies for increasing charter schools' access to
facilities financing, including the reasonableness of fees and lending
terms; and
    (4) The extent to which the services to be provided by the proposed
grant project are focused on assisting charter schools with a likelihood
of success and the greatest demonstrated need for assistance under the
program.
    (c) Capacity. (35 points) In determining an applicant's business and
organizational capacity to carry out the project, the Secretary
considers--
    (1) The amount and quality of experience of the applicant in
carrying out the activities it proposes to undertake in its application,
such as enhancing the credit on debt issuances, guaranteeing leases, and
facilitating financing;
    (2) The applicant's financial stability;
    (3) The ability of the applicant to protect against unwarranted risk
in its loan underwriting, portfolio monitoring, and financial
management;
    (4) The applicant's expertise in education to evaluate the
likelihood of success of a charter school;
    (5) The ability of the applicant to prevent conflicts of interest,
including conflicts of interest by employees and members of the board of
directors in a decision-making role;
    (6) If the applicant has co-applicants (consortium members),
partners, or other grant project participants, the specific resources to
be contributed by each co-applicant (consortium member), partner, or
other grant project participant to the implementation and success of the
grant project;
    (7) For State governmental entities, the extent to which steps have
been or will be taken to ensure that charter schools within the State
receive the funding needed to obtain adequate facilities; and
    (8) For previous grantees under the charter school facilities
programs, their performance in implementing these grants.
    (d) Quality of project personnel. (15 points) In determining the
quality of project personnel, the Secretary considers--
    (1) The qualifications of project personnel, including relevant
training and experience, of the project manager and other members of the
project team, including consultants or subcontractors; and
    (2) The staffing plan for the grant project.

(Approved by the Office of Management and Budget under control number
1855-0007)

(Authority: 20 U.S.C. 7223; 1232)



Sec. 225.12  What funding priority may the Secretary use in making a
grant award?

    (a) The Secretary may award up to 15 additional points under a
competitive priority related to the capacity of charter schools to offer
public school choice in those communities with the greatest need for
this choice based on--
    (1) The extent to which the applicant would target services to
geographic areas in which a large proportion or number of public schools
have been identified for improvement, corrective action, or
restructuring under Title I

[[Page 571]]

of the Elementary and Secondary Education Act of 1965, as amended by the
No Child Left Behind Act of 2001;
    (2) The extent to which the applicant would target services to
geographic areas in which a large proportion of students perform below
proficient on State academic assessments; and
    (3) The extent to which the applicant would target services to
communities with large proportions of students from low-income families.
    (b) The Secretary may elect to--
    (1) Use this competitive priority only in certain years; and
    (2) Consider the points awarded under this priority only for
proposals that exhibit sufficient quality to warrant funding under the
selection criteria in Sec. 225.11.

(Approved by the Office of Management and Budget under control number
1855-0007)

(Authority: 20 U.S.C. 7223; 1232)



           Subpart C_What Conditions Must Be Met by a Grantee?



Sec. 225.20  When may a grantee draw down funds?

    (a) A grantee may draw down funds after it has signed a performance
agreement acceptable to the Department of Education and the grantee.
    (b) A grantee may draw down and spend a limited amount of funds
prior to reaching an acceptable performance agreement provided that the
grantee requests to draw down and spend a specific amount of funds and
the Department of Education approves the request in writing.

(Authority: 20 U.S.C. 7223d)



Sec. 225.21  What are some examples of impermissible uses of reserve
account funds?

    (a) Grantees must not use reserve account funds to--
    (1) Directly pay for a charter school's construction, renovation,
repair, or acquisition; or
    (2) Provide a down payment on facilities in order to secure loans
for charter schools. A grantee may, however, use funds to guarantee a
loan for the portion of the loan that would otherwise have to be funded
with a down payment.
    (b) In the event of a default of payment to lenders or contractors
by a charter school whose loan or lease is guaranteed by reserve account
funds, a grantee may use these funds to cover defaulted payments that
are referenced under paragraph (a)(1) of this section.

(Authority: 20 U.S.C. 7223d)



PART 226_STATE CHARTER SCHOOL FACILITIES INCENTIVE PROGRAM--Table of
Contents



                            Subpart A_General

Sec.
226.1 What is the State Charter School Facilities Incentive program?
226.2 Who is eligible to receive a grant?
226.3 What regulations apply to the State Charter School Facilities
          Incentive program?
226.4 What definitions apply to the State Charter School Facilities
          Incentive program?

             Subpart B_How Does the Secretary Award a Grant?

226.11 How does the Secretary evaluate an application?
226.12 What selection criteria does the Secretary use in evaluating an
          application for a State Charter School Facilities Incentive
          program grant?
226.13 What statutory funding priority does the Secretary use in making
          a grant award?
226.14 What other funding priorities may the Secretary use in making a
          grant award?

           Subpart C_What Conditions Must Be Met by a Grantee?

226.21 How may charter schools use these funds?
226.22 May grantees use grant funds for administrative costs?
226.23 May charter schools use grant funds for administrative costs?

    Authority: 20 U.S.C. 1221e-3; 7221d(b), unless otherwise noted.

    Source: 70 FR 75909, Dec. 21, 2005, unless otherwise noted.

[[Page 572]]



                            Subpart A_General



Sec. 226.1  What is the State Charter School Facilities Incentive
program?

    (a) The State Charter School Facilities Incentive program provides
grants to States to help charter schools pay for facilities.
    (b) Grantees must use these grants to--
    (1) Establish new per-pupil facilities aid programs for charter
schools;
    (2) Enhance existing per-pupil facilities aid programs for charter
schools; or
    (3) Administer programs described under paragraphs (b)(1) and (2) of
this section.

(Authority: 20 U.S.C. 7221d(b))



Sec. 226.2  Who is eligible to receive a grant?

    States are eligible to receive grants under this program.

(Authority: 20 U.S.C. 7221(b))



Sec. 226.3  What regulations apply to the State Charter School
Facilities Incentive program?

    The following regulations apply to the State Charter School
Facilities Incentive program:
    (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 Non-Profit
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).
    (6) 34 CFR part 81 (General Education Provisions Act--Enforcement).
    (7) 34 CFR part 82 (New Restrictions on Lobbying).
    (8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free
Workplace (Financial Assistance)).
    (9) 34 CFR part 85 (Governmentwide Debarment and Suspension
(Nonprocurement)).
    (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 226.

(Authority: 20 U.S.C. 1221e-3; 7221d(b))



Sec. 226.4  What definitions apply to the State Charter School
Facilities Incentive program?

    (a) Definitions in the statute. The following term used in this part
is defined in section 5210 of the Elementary and Secondary Education Act
of 1965, as amended (ESEA):

Charter school

    (b) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR 77.1:

Applicant
Application
Award
Department
EDGAR
Facilities
Grant
Grantee
Project
Public
Secretary

    (c) Other definition. The following definition also applies to this
part:
    Construction means--
    (1) Preparing drawings and specifications for school facilities
projects;
    (2) Repairing, renovating, or altering school facilities;
    (3) Extending school facilities;
    (4) Erecting or building school facilities; and
    (5) Inspections or supervision related to school facilities.

(Authority: 20 U.S.C. 7221d(b); 7221i(1))



             Subpart B_How Does the Secretary Award a Grant?



Sec. 226.11  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application on the basis of the
criteria in

[[Page 573]]

Sec. 226.12 and the competitive preference priorities in Sec. 226.13
and Sec. 226.14.
    (b) The Secretary informs applicants of the maximum possible score
for each criterion and competitive preference priority in the
application package or in a notice published in the Federal Register.

(Authority: 20 U.S.C. 7221d(b))



Sec. 226.12  What selection criteria does the Secretary use in
evaluating an application for a State Charter School Facilities

Incentive program grant?

    The selection criteria for this program are as follows:
    (a) Need for facility funding. (1) The need for per-pupil charter
school facility funding in the State.
    (2) The extent to which the proposal meets the need to fund charter
school facilities on a per-pupil basis.
    (b) Quality of plan. (1) The likelihood that the proposed grant
project will result in the State either retaining a new per-pupil
facilities aid program or continuing to enhance such a program without
the total amount of assistance (State and Federal) declining over a
five-year period.
    (2) The flexibility charter schools have in their use of facility
funds for the various authorized purposes.
    (3) The quality of the plan for identifying charter schools and
determining their eligibility to receive funds.
    (4) The per-pupil facilities aid formula's ability to target
resources to charter schools with the greatest need and the highest
proportions of students in poverty.
    (5) For projects that plan to reserve funds for evaluation, the
quality of the applicant's plan to use grant funds for this purpose.
    (6) For projects that plan to reserve funds for technical
assistance, dissemination, or personnel, the quality of the applicant's
plan to use grant funds for these purposes.
    (c) The grant project team. (1) The qualifications, including
relevant training and experience, of the project manager and other
members of the grant project team, including employees not paid with
grant funds, consultants, and subcontractors.
    (2) The adequacy and appropriateness of the applicant's staffing
plan for the grant project.
    (d) The budget. (1) The extent to which the requested grant amount
and the project costs are reasonable in relation to the objectives,
design, and potential significance of the proposed grant project.
    (2) The extent to which the costs are reasonable in relation to the
number of students served and to the anticipated results and benefits.
    (3) The extent to which the non-Federal share exceeds the minimum
percentages (which are based on the percentages under section
5205(b)(2)(C) of the ESEA), particularly in the initial years of the
program.
    (e) State experience. The experience of the State in addressing the
facility needs of charter schools through various means, including
providing per-pupil aid, access to State loan or bonding pools, and the
use of Qualified Zone Academy Bonds.

(Approved by the Office of Management and Budget under control number
1855-0012)

(Authority: 20 U.S.C. 7221d(b))



Sec. 226.13  What statutory funding priority does the Secretary use in
making a grant award?

    The Secretary shall award additional points under a competitive
preference priority regarding:
    (a) Periodic Review and Evaluation. The State provides for periodic
review and evaluation by the authorized public chartering agency of each
charter school at least once every five years unless required more
frequently by State law, to determine whether the charter school is
meeting the terms of the school's charter and is meeting or exceeding
the student academic performance requirements and goals for charter
schools as set forth under State law or the school's charter.
    (b) Number of High-Quality Charter Schools. The State has
demonstrated progress in increasing the number of high-quality charter
schools that are held accountable in the terms of the schools' charters
for meeting clear and measurable objectives for the educational progress
of the students attending the schools, in the period prior

[[Page 574]]

to the period for which the State applies for a grant under this
competition.
    (c) One Authorized Public Chartering Agency Other than an LEA, or an
Appeals Process. The State--
    (1) Provides for one authorized public chartering agency that is not
a local educational agency (LEA), such as a State chartering board, for
each individual or entity seeking to operate a charter school pursuant
to State law; or
    (2) In the case of a State in which LEAs are the only authorized
public chartering agencies, allows for an appeals process for the denial
of an application for a charter school.
    (d) High Degree of Autonomy. The State ensures that each charter
school has a high degree of autonomy over the charter school's budgets
and expenditures.

(Approved by the Office of Management and Budget under control number
1855-0012)

(Authority: 20 U.S.C. 7221b; 7221d(b))



Sec. 226.14  What other funding priorities may the Secretary use in making
a grant award?

    (a) The Secretary may award points to an application under a
competitive preference priority regarding the capacity of charter
schools to offer public school choice in those communities with the
greatest need for this choice based on--
    (1) The extent to which the applicant would target services to
geographic areas in which a large proportion or number of public schools
have been identified for improvement, corrective action, or
restructuring under title I of the ESEA;
    (2) The extent to which the applicant would target services to
geographic areas in which a large proportion of students perform poorly
on State academic assessments; and
    (3) The extent to which the applicant would target services to
communities with large proportions of low-income students.
    (b) The Secretary may award points to an application under a
competitive preference priority for applicants that have not previously
received a grant under the program.
    (c) The Secretary may elect to consider the points awarded under
these priorities only for proposals that exhibit sufficient quality to
warrant funding under the selection criteria in Sec. 226.12 of this
part.

(Approved by the Office of Management and Budget under control number
1855-0012)

(Authority: 20 U.S.C. 7221d(b))



           Subpart C_What Conditions Must Be Met by a Grantee?



Sec. 226.21  How may charter schools use these funds?

    (a) Charter schools that receive grant funds through their State
must use the funds for facilities. Except as provided in paragraph (b)
of this section, allowable expenditures include:
    (1) Rent.
    (2) Purchase of building or land.
    (3) Construction.
    (4) Renovation of an existing school facility.
    (5) Leasehold improvements.
    (6) Debt service on a school facility.
    (b) Charter schools may not use these grant funds for purchasing
land when they have no immediate plans to construct a building on that
land.

(Authority: 20 U.S.C. 7221d(b))



Sec. 226.22  May grantees use grant funds for administrative costs?

    State grantees may use up to five percent of their grant award for
administrative expenses that include: indirect costs, evaluation,
technical assistance, dissemination, personnel costs, and any other
costs involved in administering the State's per-pupil facilities aid
program.

(Authority: 20 U.S.C. 7221d(b))



Sec. 226.23  May charter schools use grant funds for administrative
costs?

    (a) Except as provided in paragraph (b) of this section, charter
school subgrantees may use grant funds for administrative costs that are
necessary and reasonable for the proper and efficient performance and
administration of this Federal grant. This use of funds, as well as
indirect costs and rates,

[[Page 575]]

must comply with EDGAR and the Office of Management and Budget Circular
A-87 (Cost Principles for State, Local, and Indian Tribal Governments).
    (b) Consistent with the requirements in 34 CFR 75.564(c)(2), any
charter school subgrantees that use grant funds for construction
activities may not be reimbursed for indirect costs for those
activities.

(Authority: 20 U.S.C. 1221e-3; 7221d(b))



PART 230_INNOVATION FOR TEACHER QUALITY--Table of Contents



                  Subpart A_Troops-to-Teachers Program

Sec.
230.1 What is the Troops-to-Teachers program?
230.2 What definitions apply to the Troops-to-Teacher program?
230.3 What criteria does the Secretary use to select eligible
          participants in the Troops-to-Teachers program?

Subpart B [Reserved]

    Authority: 20 U.S.C. 1221e-3, 3474, and 6671-6684, unless otherwise
noted.

    Source: 70 FR 38021, July 1, 2005, unless otherwise noted.



                  Subpart A_Troops-to-Teachers Program



Sec. 230.1  What is the Troops-to-Teacher program?

    Under the Troops-to-Teachers program, the Secretary of Education
transfers funds to the Department of Defense for the Defense Activity
for Non-Traditional Education Support (DANTES) to provide assistance,
including a stipend of up to $5,000, to an eligible member of the Armed
Forces so that he or she can obtain certification or licensing as an
elementary school teacher, secondary school teacher, or vocational/
technical teacher and become a highly qualified teacher by demonstrating
competency in each of the subjects he or she teaches. In addition, the
program helps the individual find employment in a high-need local
educational agency or public charter school. In lieu of a stipend,
DANTES may pay a bonus of $10,000 to a participant who agrees to teach
in a high-need school.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6671-6677)



Sec. 230.2  What definitions apply to the Troops-to-Teacher program?

    As used in this subpart--
    Act means the Elementary and Secondary Education Act of 1965, as
amended.
    Children from families with incomes below the poverty line means the
updated data on the number of children ages 5 through 17 from families
with incomes below the poverty line provided by the Department of
Commerce that the Secretary uses to allocate funds in a given year to
local educational agencies under Title I, Part A of the Act.
    High-Need Local Educational Agency as used in section 2304(a) of the
Act means a local educational agency--
    (1) That serves not fewer than 10,000 children from families with
incomes below the poverty line;
    (2) For which not less than 20 percent of the children served by the
agency are from families with incomes below the poverty line; or
    (3) For which 10 percent or more but less than 20 percent of the
children served by the agency are from families with incomes below the
poverty line and that assigns all teachers funded by the Troops-to-
Teachers program to a high-need school as defined in section 2304(d)(3)
of the Act for the duration of their service commitment under the Act.
    Public Charter School means a charter school as defined in section
5210(1) of the Act.

(Authority: 20 U.S.C. 1221e-3, 3474, and 6672(c)(1))



Sec. 230.3  What criteria does the Secretary use to select eligible
participants in the Troops-to-Teacher program?

    (a) The Secretary establishes the following criteria for the
selection of eligible participants in the Troops-to-Teachers program in
the following order:
    (1) First priority is given to eligible service members who are not
employed as an elementary or secondary school teacher at the time that
they enter

[[Page 576]]

into a participation agreement with the Secretary under section 2304(a)
of the Act, which requires participants to teach in a high-need local
educational agency or public charter school for at least three years,
who will be selected in the following order:
    (i) Those who agree to obtain certification to teach science,
mathematics, or special education and who agree to teach in a ``high-
need school'' as defined in section 2304(d)(3) of the Act.
    (ii) Those who agree to obtain certification to teach another
subject or subjects and who agree to teach in a ``high-need school'' as
defined in section 2304(d)(3) of the Act.
    (iii) Those who agree to obtain certification to teach science,
mathematics, or special education or obtain certification to teach at
the elementary school level.
    (iv) All other eligible applicants.
    (2) After all eligible first-priority participants are selected,
second priority is given to eligible service members who are employed as
an elementary or secondary school teacher at the time that they enter
into a new participation agreement with the Secretary under section
2304(a) of the Act, which requires participants to teach in a high-need
local educational agency or public charter school for at least three
years, who will be selected in the following order:
    (i) Those who agree to obtain certification to teach science,
mathematics or special education rather than the subjects they currently
teach and who agree to teach in a ``high-need school'' as defined in
section 2304(d)(3) of the Act.
    (ii) Those who agree to obtain certification to teach another
subject or subjects and who agree to teach in a ``high-need school'' as
defined in section 2304(d)(3) of the Act.
    (iii) Those who agree to obtain certification to teach science,
mathematics, or special education rather than the subjects they
currently teach.
    (iv) All others seeking assistance necessary to be deemed ``highly
qualified'' by their State within the meaning of section 9101(23) of the
Act.
    (b) [Reserved]

(Authority: 20 U.S.C. 1221e-3, 3474, and 6672(c)(1)).

Subpart B [Reserved]



PART 237_CHRISTA MCAULIFFE FELLOWSHIP PROGRAM--Table of Contents



                            Subpart A_General

Sec.
237.1 What is the Christa McAuliffe Fellowship Program?
237.2 Who is eligible to apply under the Christa McAuliffe Fellowship
          Program?
237.3 How are awards distributed?
237.4 In what amount are fellowships awarded?
237.5 For what purposes may a fellow use an award?
237.6 What priorities may the Secretary establish?
237.7 What regulations apply?
237.8 What definitions apply?

               Subpart B_How Does One Apply for an Award?

237.10 How does an individual apply for a fellowship?

                   Subpart C_How Are Fellows Selected?

237.20 What are statewide panels?
237.21 What are the responsibilities of a statewide panel?

            Subpart D_What Conditions Must Be Met by Fellows?

237.30 What is the duration of a fellowship?
237.31 May a fellowship be awarded for two consecutive years?
237.32 What records and reports are required from fellows?
237.33 What is the service requirement for a fellowship?
237.34 What are the requirements for repayment of the fellowship?

    Authority: 20 U.S.C. 1113-1113e.

    Source: 52 FR 26466, July 14, 1987, unless otherwise noted.



                            Subpart A_General



Sec. 237.1  What is the Christa McAuliffe Fellowship Program?

    The Christa McAuliffe Fellowship Program (CMFP) is designed to
reward excellence in teaching by encouraging outstanding teachers to
continue their education, to develop innovative programs, to consult
with or assist LEAs, private schools, or private school systems, and to
engage in other educational activities that will improve

[[Page 577]]

the knowledge and skills of teachers and the education of students.

(Authority: 20 U.S.C. 1113, 1113b)



Sec. 237.2  Who is eligible to apply under the Christa McAuliffe
Fellowship Program?

    An individual is eligible to apply for a Christa McAuliffe
Fellowship if the individual at the time of application:
    (a)(1) Is a citizen or national of the United States;
    (2) Is a permanent resident of the United States;
    (3) Provides evidence from the Immigration and Naturalization
Service that the individuals is in the Unites Stated for other than a
temporary purpose with the intention of becoming a citizen or permanent
resident; or
    (4) Is a permanent resident of the Commonwealth of Puerto Rico,
Guam, the Virgin Islands, American Samoa, the Trust Territory of the
Pacific Islands, or the Northern Mariana Islands;
    (b) Is a full-time teacher in a public or private elementary or
secondary school; and
    (c) Is eligible for a fellowship under 34 CFR 75.60.

(Authority: 20 U.S.C. 1113b, 1113d(a))

[52 FR 26466, July 14, 1987, as amended at 57 FR 30342, July 8, 1992]



Sec. 237.3  How are awards distributed?

    (a) Except as provided in section 563(a)(3) of the Act, the
Secretary awards one national teacher fellowship under this part to an
eligible teacher in each of the following:
    (1) Each congressional district in each of the fifty States.
    (2) The District of Columbia.
    (3) The Commonwealth of Puerto Rico.
    (4) Guam.
    (5) The Virgin Islands.
    (6) American Samoa.
    (7) The Northern Mariana Islands.
    (8) The Trust Territory of the Pacific Islands (Republic of Palau).
    (b)(1) If the conditions stated in section 563(a)(3) of the Act
apply, the Secretary publishes an alternative distribution of fellowship
under this part that:
    (i) Will permit fellowship awards at the level stated in Sec.
237.4; and
    (ii) Is geographically equitable as determined by the Secretary.
    (2) The Secretary sends a notice of this distribution to each of the
statewide panels established under Sec. 237.20.
    (c)(1) If a State fails to meet the applicable filing deadlines for
fellowship recommendations established under this program, the Secretary
does not make awards in that State.
    (2) In redistributing any returned or unused funds from a State, the
Secretary takes into consideration, but is not limited to, the following
factors:
    (i) The amount of funds available for redistribution.
    (ii) The number of States that request additional funds.
    (iii) The number of States that are willing to match fellowship
funds.
    (iv) The requirements in Sec. 237.4(b) relating to minimum awards.

(Authority: 20 U.S.C. 1113b(a))

[52 FR 26466, July 14, 1987, as amended at 54 FR 10966, Mar. 15, 1989]



Sec. 237.4  In what amounts are fellowships awarded?

    (a) Maximum award. A fellowship awarded under this part may not
exceed the national average salary of public school teachers in the most
recent year for which satisfactory data are available, as determined by
the Secretary. The Secretary urges statewide panels to award fellowships
in the maximum amount.
    (b) Minimum award. Except as provided in paragraph (c) of this
section, a fellowship awarded under this part may not be less than half
the national average salary of public school teachers in the most recent
year for which satisfactory data are available, as determined by the
Secretary.
    (c) Partial award. If, after awarding one or more fellowships that
meet the requirements of paragraphs (a) and (b) of this section, a State
has insufficient funds for a maximum or minimum award, the State may
make one partial award that may be less than the minimum award.

(Authority: 20 U.S.C. 1113b(a)(2))

[54 FR 10966, Mar. 15, 1989]

[[Page 578]]



Sec. 237.5  For what purposes may a fellow use an award?

    Christa McAuliffe fellows may use fellowships awarded under this
part for projects to improve education including:
    (a) Sabbaticals for study or research directly associated with
objectives of this part, or academic improvement of the fellows.
    (b) Consultation with or assistance to LEAs, private schools, or
private school systems other than those with which the fellow is
employed or associated.
    (c) Development of special innovative programs.
    (d) Model teacher programs and staff development.

(Authority: 20 U.S.C. 1113b(b))



Sec. 237.6  What priorities may the Secretary establish?

    (a) The Secretary may annually establish, as a priority, one or more
of the projects listed in Sec. 237.5.
    (b) The Secretary announces any annual priorities in a notice
published in the Federal Register.

(Authority: 20 U.S.C. 1113d(a))



Sec. 237.7  What regulations apply?

    The following regulations apply to the Christa McAuliffe Fellowship
Program:
    (a) The Education Department General Administrative Regulations
(EDGAR) in 34 CFR 75.60 and 75.61 (regarding the ineligibility of
certain individuals to receive assistance) and part 77 (Definitions That
Apply to Department Regulations.
    (b) The regulations in this part 237.

(Authority: 20 U.S.C. 1113d(a))

[52 FR 26466, July 14, 1987, as amended at 57 FR 30342, July 8, 1992]



Sec. 237.8  What definitions apply?

    (a) The following definitions apply to terms used in this part:
    Act means the Higher Education Act of 1965, as amended.
    Fellow means a fellowship recipient under this part.
    Fellowship means an award made to a person under this part.
    (b) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR 77.1:

Department
EDGAR
Elementary school
Local educational agency
Private
Public
Secondary school
Secretary
State educational agency

(Authority: 20 U.S.C. 1113d(a))



               Subpart B_How Does One Apply for an Award?



Sec. 237.10  How does an individual apply for a fellowship?

    (a) To apply for a fellowship under this part, an individual must
submit an application containing a proposal for a fellowship project as
described in Sec. 237.5, indicating the extent to which the applicant
wishes to continue current teaching duties.
    (b) The application shall provide this application to the
appropriate LEA for comment prior to submission to the statewide panel
for the State within which the proposal project is to be conducted as
described in Sec. 237.20.
    (c) The applicant shall submit the application to the statewide
panel within the deadline established by the panel.

(Authority: 20 U.S.C. 1113c, 1113d(a))



                   Subpart C_How Are Fellows Selected?



Sec. 237.20  What are the statewide panels?

    (a) Recipients of Christa McAuliffe Fellowships in each State are
selected by a seven-member statewide panel appointed by the chief State
elected official, acting in consultation with the State educational
agency (SEA), or by an existing panel designated by the chief State
elected official and approved by the Secretary.
    (b) The statewide panel must be representative of school
administrators, teachers, parents, and institutions of higher education.

(Authority: 20 U.S.C. 1113c)

[[Page 579]]



Sec. 237.21  What are the responsibilities of a statewide panel?

    (a) Each statewide panel has the responsibility for:
    (1) Establishing its own operating procedures regarding the
fellowship selection process; and
    (2) Disseminating information and application materials to the LEAs,
private schools, and private school systems regarding the fellowship
competition.
    (b) Each panel may impose reasonable administrative requirements for
the submission, handling, and processing of applications.
    (c) Each statewide panel must consult with the appropriate LEA in
evaluating proposals from applicants.
    (d) In their applications to the statewide panel, individuals must
include:
    (1) Two recommendations from teaching peers;
    (2) A recommendation from the principal; and
    (3) A recommendation from the superintendent on the quality of the
proposal and its educational benefit.
    (e) A statewide panel may establish additional criteria, consistent
with the Act, for the award of fellowships in its area as it considers
appropriate.
    (f) A statewide panel shall submit to the Secretary its selections
for recipients of fellowships under this part within the schedule
established by the Secretary.

(Authority: 20 U.S.C. 1113d)



            Subpart D_What Conditions Must Be Met by Fellows?



Sec. 237.30  What is the duration of a fellowship?

    An individual may receive a Christa McAuliffe Fellowship under this
program for up to 12 months.

(Authority: 20 U.S.C. 1113d(a))



Sec. 237.31  May a fellowship be awarded for two consecutive years?

    A Christa McAuliffe fellow may not receive an award for any two
consecutive years.

(Authority: 20 U.S.C. 1113b(a)(2))



Sec. 237.32  What records and reports are required from fellows?

    Each fellow shall keep any records and submit any reports that are
required by the Secretary.

(Authority: 20 U.S.C. 1113d(a))



Sec. 237.33  What is the service requirement for a fellowship?

    (a) Except as provided in paragraph (b) of this section, a fellow
must return to a teaching position in the fellow's current LEA, private
school, or private school system for at least two years following the
completion of the fellowship.
    (b) In the case of extenuating circumstances (for example, temporary
disability), a fellow has a five-year period in which to fulfill the
two-year teaching requirement in paragraph (a) of this section.

(Authority: 20 U.S.C. 1113b(a)(2), 1113d)

[54 FR 10966, Mar. 15, 1989]



Sec. 237.34  What are the requirements for repayment of the fellowship?

    (a) If a fellow does not carry out the activities described in the
approved application or does not comply with Sec. 237.33, the fellow
shall make repayment in accordance with this section.
    (b) The Secretary prorates the amount a fellow is required to repay
based on the length of time the fellow carried out the fellowship
activities, and held a teaching position in accordance with Sec. 237.33
compared to the length of time that would have been involved if the
fellow has fully met these requirements.

(Authority: 20 U.S.C. 1113e)



PART 263_INDIAN EDUCATION DISCRETIONARY GRANT PROGRAMS--Table of Contents



               Subpart A_Professional Development Program

Sec.
263.1 What is the Professional Development program?
263.2 Who is eligible to apply under the Professional Development
          program?
263.3 What definitions apply to the Professional Development program?

[[Page 580]]

263.4 What training costs may a Professional Development program
          include?
263.5 What priority is given to certain projects and applicants?
263.6 How does the Secretary evaluate applications for the Professional
          Development program?
263.7 What are the requirements for a leave of absence?
263.8 What are the payback requirements?
263.9 When does payback begin?
263.10 What are the payback reporting requirements?

       Subpart B_Demonstration Grants for Indian Children Program

263.20 What definitions apply to the Demonstration Grants for Indian
          Children program?
263.21 What priority is given to certain projects and applicants?

    Authority: 20 U.S.C. 7441 and 7442, unless otherwise noted.

    Source: 68 FR 43640, July 24, 2003, unless otherwise noted.



               Subpart A_Professional Development Program



Sec. 263.1  What is the Professional Development program?

    (a) The Professional Development program provides grants to eligible
entities to--
    (1) Increase the number of qualified Indian individuals in
professions that serve Indian people;
    (2) Provide training to qualified Indian individuals to become
teachers, administrators, teacher aides, social workers, and ancillary
educational personnel; and
    (3) Improve the skills of qualified Indian individuals who serve in
the education field.
    (b) The Professional Development program requires individuals who
receive training to--
    (1) Perform work related to the training received under the program
and that benefits Indian people, or to repay all or a prorated part of
the assistance received under the program; and
    (2) Report to the Secretary on the individual's compliance with the
work requirement.

(Authority: 20 U.S.C. 7442)



Sec. 263.2  Who is eligible to apply under the Professional
Development program?

    (a) In order to be eligible for either pre-service or in-service
training programs, an applicant must be an eligible entity which means--
    (1) An institution of higher education, including an Indian
institution of higher education;
    (2) A State educational agency in consortium with an institution of
higher education;
    (3) A local educational agency in consortium with an institution of
higher education;
    (4) An Indian tribe or Indian organization in consortium with an
institution of higher education; or
    (5) A Bureau of Indian Affairs (Bureau)-funded school.
    (b) Bureau-funded schools are eligible applicants for--
    (1) An in-service training program; and
    (2) A pre-service training program when the Bureau-funded school
applies in consortium with an institution of higher education that is
accredited to provide the coursework and level of degree required by the
project.
    (c) Eligibility of an applicant requiring a consortium with any
institution of higher education, including Indian institutions of higher
education, requires that the institution of higher education be
accredited to provide the coursework and level of degree required by the
project.

(Authority: 20 U.S.C. 7442)



Sec. 263.3  What definitions apply to the Professional Development program?

    The following definitions apply to the Professional Development
program:
    Bureau-funded school means a Bureau school, a contract or grant
school, or a school for which assistance is provided under the Tribally
Controlled Schools Act of 1988.
    Department means the U.S. Department of Education.
    Dependent allowance means costs for the care of minor children under
the age of 18 who reside with the training participant and for whom the
participant has responsibility. The term does

[[Page 581]]

not include financial obligations for payment of child support required
of the participant.
    Expenses means tuition and required fees; health insurance required
by the institution of higher education; room, personal living expenses,
and board at or near the institution; dependent allowance; and
instructional supplies.
    Full course load means the number of credit hours that the
institution requires of a full-time student.
    Full-time student means a student who--
    (1) Is a degree candidate for a baccalaureate or graduate degree;
    (2) Carries a full course load; and
    (3) Is not employed for more than 20 hours a week.
    Good standing means a cumulative grade point average of at least 2.0
on a 4.0 grade point scale in which failing grades are computed as part
of the average, or another appropriate standard established by the
institution.
    Graduate degree means a post-baccalaureate degree awarded by an
institution of higher education beyond the undergraduate level.
    Indian means an individual who is--
    (1) A member of an Indian tribe or band, as membership is defined by
the Indian tribe or band, including any tribe or band terminated since
1940, and any tribe or band recognized by the State in which the tribe
or band resides;
    (2) A descendant of a parent or grandparent who meets the
requirements of paragraph (1) of this definition;
    (3) Considered by the Secretary of the Interior to be an Indian for
any purpose;
    (4) An Eskimo, Aleut, or other Alaska Native; or
    (5) A member of an organized Indian group that received a grant
under the Indian Education Act of 1988 as it was in effect October 19,
1994.
    Indian institution of higher education means an accredited college
or university within the United States cited in section 532 of the
Equity in Educational Land-Grant Status Act of 1994, any other
institution that qualifies for funding under the Tribally Controlled
College or University Assistance Act of 1978, and the Navajo Community
College, authorized in the Navajo Community College Assistance Act of
1978.
    Indian organization means an organization that--
    (1) Is legally established--
    (i) By tribal or inter-tribal charter or in accordance with State or
tribal law; and
    (ii) With appropriate constitution, by-laws, or articles of
incorporation;
    (2) Has as its primary purpose the promotion of the education of
Indians;
    (3) Is controlled by a governing board, the majority of which is
Indian;
    (4) If located on an Indian reservation, operates with the sanction
or by charter of the governing body of that reservation;
    (5) Is neither an organization or subdivision of, nor under the
direct control of, any institution of higher education; and
    (6) Is not an agency of State or local government.
    Induction services means services provided after the participant
completes his or her training program and includes, at a minimum, these
activities:
    (1) Mentoring, coaching, and consultation services for the
participant to improve performance,
    (2) Access to research materials and information on teaching and
learning,
    (3) Periodic assessment of, and feedback sessions on, the
participant's performance, provided in coordination with the
participant's supervisor,
    (4) Periodic meetings or seminars for participants to enhance
collaboration, feedback, and peer networking and support.
    In-service training means professional activities and opportunities
designed to enhance the skills and abilities of individuals in their
current areas of employment.
    Institution of higher education means an accredited college or
university within the United States that awards a baccalaureate or post-
baccalaureate degree.
    Participant means an Indian individual who is being trained under
the Professional Development program.
    Payback means work-related service or cash reimbursement to the
Department of Education for the training received under the Professional
Development program.

[[Page 582]]

    Pre-service training means training to Indian individuals to prepare
them to meet the requirements for licensing or certification in a
professional field requiring at least a baccalaureate degree.
    Professional development activities means in-service training
offered to enhance the skills and abilities of individual participants.
    Secretary means the Secretary of the Department of Education or an
official or employee of the Department acting for the Secretary under a
delegation of authority.
    Stipend means that portion of an award that is used for room and
board and personal living expenses.

    Note: Only full-time students are eligible for stipends.

    Undergraduate degree means a baccalaureate (bachelor's) degree
awarded by an institution of higher education.

(Authority: 20 U.S.C. 7442 and 7491)



Sec. 263.4  What training costs may a Professional Development program
include?

    (a) A Professional Development program may include, as training
costs, assistance to either--
    (1) Fully finance a student's educational expenses; or
    (2) Supplement other financial aid--including Federal funding other
than loans--for meeting a student's educational expenses.
    (b) The Secretary announces the expected maximum amounts for
stipends and other costs--including training costs--in the annual
application notice published in the Federal Register.

(Authority: 20 U.S.C. 7442)



Sec. 263.5  What priority is given to certain projects and applicants?

    (a) The Secretary awards a total of 5 points to an application
submitted by an Indian tribe, Indian organization, or an Indian
institution of higher education that is eligible to participate in the
Professional Development program. A consortium application of eligible
entities that meets the requirements of 34 CFR 75.127 through 75.129 of
EDGAR and includes an Indian tribe, Indian organization or Indian
institution of higher education will be considered eligible to receive
the 5 priority points. The consortium agreement, signed by all parties,
must be submitted with the application in order to be considered as a
consortium application.
    (b) The Secretary awards a total of 5 points to an application
submitted by a consortium of eligible applicants that includes a tribal
college or university and that designates that tribal college or
university as the fiscal agent for the application. The consortium
application of eligible entities must meet the requirements of 34 CFR
75.127 through 75.129 of EDGAR to be considered eligible to receive the
5 priority points. These competitive preference points are in addition
to the 5 competitive preference points that may be given under paragraph
(a) of this section. The consortium agreement, signed by all parties,
must be submitted with the application in order to be considered as a
consortium application.
    (c) The Secretary may give absolute preference reserving all or a
portion of the funds available for new awards under the Professional
Development program, to only those applications that meet one of the
following priorities selected for a fiscal year. The Secretary announces
the absolute priority selected in the annual application notice
published in the Federal Register.
    (1) Pre-Service training for teachers. This priority provides
support and training to Indian individuals to complete a pre-service
education program that enables these individuals to meet the
requirements for full State certification or licensure as a teacher
through--
    (i) Training that leads to a bachelor's degree in education before
the end of the award period; or
    (ii) For States allowing a degree in a specific subject area,
training that leads to a bachelor's degree in the subject area as long
as the training meets the requirements for full State teacher
certification or licensure; or
    (iii) Training in a current or new specialized teaching assignment
that requires at least a bachelor's degree and in which a documented
teacher shortage exists; and
    (iv) One-year induction services after graduation, certification, or
licensure,

[[Page 583]]

provided during the award period to graduates of the pre-service program
while they are completing their first year of work in schools with
significant Indian student populations.

    Note to paragraph (c)(1):
    In working with various institutions of higher education and State
certification/licensure requirements, we found that States requiring a
degree in a specific subject area (e.g., specialty areas or teaching at
the secondary level) generally require a Master's degree or fifth-year
requirement before an individual can be certified or licensed as a
teacher. These students would be eligible to participate as long as
their training meets the requirements for full State certification or
licensure as a teacher.

    (2) Pre-service administrator training. This priority provides--
    (i) Support and training to Indian individuals to complete a
master's degree in education administration that is provided before the
end of the award period and that allows participants to meet the
requirements for State certification or licensure as an education
administrator; and
    (ii) One year of induction services, during the award period, to
participants after graduation, certification, or licensure, while they
are completing their first year of work as administrators in schools
with significant Indian student populations.

(Authority: 20 U.S.C. 7442 and 7473)



Sec. 263.6  How does the Secretary evaluate applications for the
Professional Development program?

    The following criteria, with the total number of points available in
parenthesis, are used to evaluate an application for a new award:
    (a) Need for project (5) points. In determining the need for the
proposed project, the Secretary considers the following:
    (1) The extent to which the proposed project will prepare personnel
in specific fields in which shortages have been demonstrated; and
    (2) The extent to which specific gaps or weaknesses in local
capacity to provide, improve, or expand services that address the needs
of the community or region have been identified and will be addressed by
the proposed project, including the nature and magnitude of those gaps
or weaknesses.
    (b) Significance (10) points. In determining the significance of the
proposed project, the Secretary considers the following:
    (1) The potential contribution of the proposed project to increase
effective strategies for teaching and student achievement;
    (2) The likelihood that the proposed project will build local
capacity to provide, improve, or expand services that address the needs
of the target population; and
    (3) The likelihood that the proposed project will result in system
change or improvement.
    (c) Quality of the project design (15) points. The Secretary
considers the following factors in determining the quality of the design
of the proposed project:
    (1) The extent to which the goals, objectives, and outcomes to be
achieved by the proposed project are clearly specified and measurable;
    (2) The extent to which the design of the proposed project reflects
up-to-date knowledge from scientifically-based research and effective
practices on how to improve teaching and learning to support student
proficiency in meeting rigorous academic standards;
    (3) The extent to which performance feedback and continuous
improvement of participant performance are integral to the design of the
proposed project; and
    (4) The extent to which the proposed project will establish linkages
with other appropriate agencies and organizations providing educational
services to the population of students to be served by the participants.
    (d) Quality of project services (15) points. The Secretary considers
the following factors:
    (1) The extent to which the services to be provided by the proposed
project reflect up-to-date knowledge of scientifically-based research
and effective practice;
    (2) The extent to which the training or professional development
services to be provided by the proposed project are of sufficient
quality, intensity, and duration to lead to improvements in the
achievement of students as measured

[[Page 584]]

against rigorous academic standards; and
    (3) The extent to which the services to be provided by the proposed
project involve the collaboration of appropriate partners for maximizing
the effectiveness of the training and project services provided.
    (e) Quality of project personnel (15) points. The Secretary
considers the following factors when determining the quality of the
personnel who will carry out the proposed project:
    (1) The qualifications, including relevant training and experience,
of the project director;
    (2) The qualifications, including relevant training and experience,
of key project personnel; and
    (3) The qualifications, including relevant training and experience,
of project consultants or subcontractors.
    (f) Adequacy of resources (10) points. In determining the adequacy
of support for the proposed project, the Secretary considers the
following factors:
    (1) The relevance and demonstrated commitment of each partner in the
proposed project to the implementation and success of the project;
    (2) The extent to which the costs are reasonable in relation to the
design of the program, program objectives, number of persons to be
served, and the anticipated results and benefits; and
    (3) The potential for the incorporation of project purposes,
activities, or benefits into the ongoing program of the agency or
organization at the end of Federal funding.
    (g) Quality of the management plan (15) points. In determining the
quality of the management plan for the proposed project, the Secretary
considers the following factors:
    (1) The adequacy of procedures for ensuring feedback and continuous
improvement in the performance of program participants in meeting the
needs of the population they are to serve;
    (2) The adequacy of the management plan to achieve the objectives of
the proposed project during the award period, including clearly defined
responsibilities, timelines, and milestones for accomplishing project
tasks; and
    (3) The extent to which the time commitments of the project director
and other key personnel are appropriate and adequate to meet the
objectives of the proposed project.
    (h) Quality of the project evaluation (15) points. In determining
the quality of the evaluation, the Secretary considers the following
factors:
    (1) The extent to which the methods of evaluation are thorough,
feasible, and appropriate to the context within which the project
operates and the effectiveness of project implementation strategies;
    (2) The extent to which the methods of evaluation will provide
performance feedback on participants and permit periodic assessment of
progress toward achieving the intended outcomes; and
    (3) The extent to which the methods of evaluation include the use of
objective output measures that are directly related to the intended
outcomes of the project and will produce both quantitative and
qualitative data to the extent possible.

(Approved by the Office of Management and Budget under control number
1810-0580)

(Authority: 20 U.S.C. 7442)



Sec. 263.7  What are the requirements for a leave of absence?

    (a) A participant shall submit a written request for a leave of
absence to the project director not less than 30 days prior to
withdrawal or completion of a grading period, unless an emergency
situation has occurred and the project director chooses to waive the
prior notification requirement.
    (b) The project director may approve a leave of absence, for a
period not longer than one academic year, provided a training
participant has successfully completed at least one academic year.
    (c) The project director permits a leave of absence only if the
institution of higher education certifies that the training participant
is eligible to resume his or her course of study at the end of the leave
of absence.

(Approved by the Office of Management and Budget under control number
1810-0580)

(Authority: 20 U.S.C. 7442)

[[Page 585]]



Sec. 263.8  What are the payback requirements?

    (a) Individuals receiving assistance under the Professional
Development program are required to--
    (1) Sign an agreement, at the time of selection for training, to
meet the provisions of the payback requirement; and
    (2) Perform work related to the training received and that benefits
Indian people; or
    (3) Repay all or a prorated part of the assistance received.
    (b) The period of time required for a work-related payback is
equivalent to the total period of time for which training was actually
received under the Professional Development program.
    (c) The cash payback required shall be equivalent to the total
amount of funds received and expended for training received under these
programs and may be prorated based on any approved work-related service
the participant performs.

(Approved by the Office of Management and Budget under control number
1810-0580)

(Authority: 20 U.S.C. 7442)



Sec. 263.9  When does payback begin?

    (a) For all participants who complete their training under the
Professional Development program, payback shall begin within six months
from the date of completion of the training.
    (b) For participants who do not complete their training under the
Professional Development program, payback shall begin within six months
from the date the fellow leaves the Professional Development program,
unless he or she continues as a full-time student without interruption,
in a program leading to a degree in an accredited institution of higher
education.
    (1) If the participant leaves the Professional Development program,
but plans to continue his or her education as a full-time student, the
Secretary may defer the payback requirement until the participant has
completed his or her educational program. Written requests for deferment
shall be submitted to the Secretary within 30 days of leaving the
Professional Development program and shall provide the following
information--
    (i) The name of the accredited institution the student will be
attending;
    (ii) A copy of the letter of admission from the institution;
    (iii) The degree being sought; and
    (iv) The projected date of completion.
    (2) After approval by the Secretary for deferment of the payback
provision on the basis of continuing as a full-time student, former
participants are required to submit to the Secretary a status report
from an academic advisor or other authorized representative of the
institution of higher education, showing verification of enrollment and
status, after every grading period.

(Approved by the Office of Management and Budget under control number
1810-0580)

(Authority: 20 U.S.C. 7442)



Sec. 263.10  What are the payback reporting requirements?

    (a) Notice of intent. Participants shall submit to the Secretary,
within 30 days of completion of their training program, a written notice
of intent to complete a work-related or cash payback, or to continue in
a degree program as a full-time student.
    (b) Work-related payback. If the participant proposes a work-related
payback, the written notice of intent shall include information
explaining how the work-related service is related to the training
received and how it benefits Indian people.
    (1) For work-related service, the Secretary shall review each
participant's payback plan to determine if the work-related service is
related to the training received and that it benefits Indian people. The
Secretary approves the payback plan if a determination is made that the
work-related service to be performed is related to the training received
and benefits Indian people, meets all applicable statutory and
regulatory requirements, and is otherwise appropriate.
    (2) The payback plan for work-related service shall identify where,
when, the type of service, and for whom the work will be performed.
    (3) A participant shall notify the Secretary in writing of any
change in the work-related service being performed within 30 days of
such change.

[[Page 586]]

    (4) For work-related payback, individuals shall submit a status
report every six months beginning from the date the work-related service
is to begin. The reports shall include a certification from the
participant's employer that the service(s) have been performed without
interruption.
    (5) For participants that initiate, but cannot complete, a work-
related payback, the payback reverts to a cash payback that is prorated
based upon the amount of time the work-related payback has been
completed.
    (c) Cash payback. If a cash payback is to be made, the Department
will contact the participant to establish an appropriate schedule for
payments.

(Approved by the Office of Management and Budget under control number
1810-0580)

(Authority: 20 U.S.C. 7442)



       Subpart B_Demonstration Grants for Indian Children Program



Sec. 263.20  What definitions apply to the Demonstration Grants for
Indian Children program?

    The following definitions apply to the Demonstration Grants for
Indian Children program:
    Federally supported elementary or secondary school for Indian
students means an elementary or secondary school that is operated or
funded, through a contract or grant, by the Bureau of Indian Affairs.
    Indian means an individual who is--
    (1) A member of an Indian tribe or band, as membership is defined by
the Indian tribe or band, including any tribe or band terminated since
1940, and any tribe or band recognized by the State in which the tribe
or band resides;
    (2) A descendant of a parent or grandparent who meets the
requirements described in paragraph (1) of this definition;
    (3) Considered by the Secretary of the Interior to be an Indian for
any purpose;
    (4) An Eskimo, Aleut, or other Alaska Native; or
    (5) A member of an organized Indian group that received a grant
under the Indian Education Act of 1988 as it was in effect October 19,
1994.
    Indian institution of higher education means an accredited college
or university within the United States cited in section 532 of the
Equity in Educational Land-Grant Status Act of 1994, any other
institution that qualifies for funding under the Tribally Controlled
College or University Assistance Act of 1978, and the Navajo Community
College, authorized in the Navajo Community College Assistance Act of
1978.
    Indian organization means an organization that:
    (1) Is legally established:
    (i) By tribal or inter-tribal charter or in accordance with State or
tribal law; and
    (ii) With appropriate constitution, by-laws, or articles of
incorporation;
    (2) Has as its primary purpose the promotion of the education of
Indians;
    (3) Is controlled by a governing board, the majority of which is
Indian;
    (4) If located on an Indian reservation, operates with the sanction
or by charter of the governing body of that reservation;
    (5) Is neither an organization or subdivision of, nor under the
direct control of, any institution of higher education; and
    (6) Is not an agency of State or local government.
    Professional development activities means in-service training
offered to enhance the skills and abilities of individuals that may be
part of, but not exclusively, the activities provided in a Demonstration
Grants for Indian Children program.

(Authority: 20 U.S.C. 7441)



Sec. 263.21  What priority is given to certain projects and applicants?

    (a) The Secretary awards a total of 5 competitive preference
priority points to an application that presents a plan for combining two
or more of the activities described in section 7121(c) of the Act over a
period of more than one year.
    (b) The Secretary awards a total of 5 competitive preference
priority points to an application submitted by an Indian tribe, Indian
organization, or Indian institution of higher education that is eligible
to participate in the Demonstration Grants for Indian Children program.
A consortium of eligible

[[Page 587]]

entities that meets the requirements of 34 CFR 75.127 through 75.129 of
EDGAR and includes an Indian tribe, Indian organization, or Indian
institution of higher education will be considered eligible to receive
the five (5) priority points. The consortium agreement, signed by all
parties, must be submitted with the application in order to be
considered as a consortium application. These competitive preference
points are in addition to the 5 competitive preference points that may
be given under paragraph (a) of this section.
    (c) The Secretary may give absolute preference reserving all or a
portion of the funds available for new awards under the Demonstration
Grants for Indian Children program, to only those applications that meet
one or more of the following priorities selected for a fiscal year. The
Secretary announces the absolute priority selected in the annual
application notice published in the Federal Register.
    (1) School readiness projects that provide age appropriate
educational programs and language skills to three- and four-year-old
Indian students to prepare them for successful entry into school at the
kindergarten school level.
    (2) Early childhood and kindergarten programs, including family-
based preschool programs, emphasizing school readiness and parental
skills.
    (3) College preparatory programs for secondary school students
designed to increase competency and skills in challenging subject
matters, including math and science, to enable Indian students to
successfully transition to postsecondary education.

(Authority: 20 U.S.C. 7441 and 7473)



PART 270_DESEGREGATION OF PUBLIC EDUCATION--Table of Contents



Sec.
270.1 What are the Desegregation of Public Education Programs?
270.2 What regulations apply to these programs?
270.3 What definitions apply to these programs?
270.4 What types of projects are funded under these programs?
270.5 What stipends and related reimbursements are authorized under
          these programs?
270.6 What limitation is imposed on providing race and national origin
          desegregation assistance under these programs?

    Authority: 42 U.S.C. 2000c-2000c-2, 2000-5, unless otherwise noted.

    Source: 52 FR 24963, July 1, 1987, unless otherwise noted.



Sec. 270.1  What are the Desegregation of Public Education Programs?

    The Desegregation of Public Education Programs provide grants to
projects that help public school districts and personnel in the
preparation, adoption, and implementation of plans for the desegregation
of public schools and in the development of effective methods of coping
with special educational problems occasioned by desegregation.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



Sec. 270.2  What regulations apply to these programs?

    The following regulations apply to these programs:
    (a) The Education Department General Administrative Regulations
(EDGAR) in 34 CFR part 74 (Administration of Grants), part 75 (Direct
Grant Programs), part 77 (Definitions That Apply to Department
Regulations), part 78 (Education Appeal Board), and part 79
(Intergovernmental Review of Department of Education Programs and
Activities), except that 34 CFR 75.200 through 75.217 (relating to the
evaluation and competitive review of grants) do not apply to grants
awarded under 34 CFR part 271 and 34 CFR 75.232 (relating to the cost
analysis) does not apply to grants under 34 CFR part 272.
    (b) The regulations in this part and in 34 CFR parts 271 and 272.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



Sec. 270.3  What definitions apply to these programs?

    In addition to the definitions in 34 CFR 77.1, the following
definitions apply to the regulations in this part:
    Desegregation assistance means the provision of technical assistance
(including training) in the areas of race, sex, and national origin
desegregation

[[Page 588]]

of public elementary and secondary schools.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)

    Desegregation assistance areas means the areas of race, sex, and
national origin desegregation.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)

    Desegregation Assistance Center means a regional desegregation
technical assistance and training center funded under 34 CFR part 272.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)

    Limited English proficiency has the same meaning under this part as
the same term defined in 34 CFR 500.4 of the General Provisions
regulations for the Bilingual Education Program.

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

    National origin desegregation means the assignment of students to
public schools and within those schools without regard to their national
origin, including providing students of limited English proficiency with
a full opportunity for participation in all educational programs.

(Authority: 42 U.S.C. 2000c(b))

    Public school means any elementary or secondary educational
institution operated by a State, subdivision of a State, or governmental
agency within a State, or operated wholly or predemoninantly from or
through the use of governmental funds or property, or funds or property
derived from governmental sources.

(Authority: 42 U.S.C. 2000c(c))

    Public school personnel means school board members and persons who
are employed by or who work in the schools of a responsible governmental
agency, as that term is defined in this section.

(Authority: 42 U.S.C. 2000c(c); 2000c-2000c-2, 2000c-5)

    Race desegregation means the assignment of students to public
schools and within those schools without regard to their race including
providing students with a full opportunity for participation in all
educational programs regardless of their race. ``Race desegregation''
does not mean the assignment of students to public schools to correct
conditions of racial separation that are not the result of State or
local law or official action.

(Authority: 42 U.S.C. 2000c(b))

    Responsible governmental agency means any school board, State,
municipality, school district, or other governmental unit legally
responsible for operating a public school or schools.

(Authority: 42 U.S.C. 2000c-2)

    School board means any agency or agencies that administer a system
of one or more public schools and any other agency that is responsible
for the assignment of students to or within that system.

(Authority: 42 U.S.C. 2000c(d))

    Sex desegregation means the assignment of students to public schools
and within those schools without regard to their sex including providing
students with a full opportunity for participation in all educational
programs regardless of their sex.

(Authority: 42 U.S.C. 2000c(b))



Sec. 270.4  What types of projects are funded under these programs?

    The Secretary may fund--
    (a) State Educational Agency (SEAs) projects; and
    (b) Desegregation Assistance Centers (DACs).

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



Sec. 270.5  What stipends and related reimbursements are authorized
under these programs?

    (a) The recipient of an award under 34 CFR parts 271 and 272 may
pay:
    (1) Stipends to public school personnel who participate in technical
assistance or training activities funded under these parts for the
period of their attendance, if the person to whom the stipend is paid
receives no other compensation for that period; or
    (2) Reimbursement to a responsible governmental agency that pays
substitutes for public school personnel who:
    (i) Participate in technical assistance or training activities
funded under these parts; and

[[Page 589]]

    (ii) Are being compensated by that responsible governmental agency
for the period of their attendance.
    (b) A recipient may pay the stipends and reimbursements described in
this section only if it demonstrates that the payment of these costs is
necessary to the success of the technical assistance or training
activity, and will not exceed 20 percent of the total award.
    (c) If a recipient is authorized by the Secretary to pay stipends or
reimbursements (or any combination of these payments), the recipient
shall determine the conditions and rates for these payments in
accordance with appropriate State policies, or in the absence of State
Policies, in accordance with local policies.
    (d) A recipient of a grant under 34 CFR parts 271 and 272 may pay a
travel allowance described in these parts only to a person who
participates in a technical assistance or training activity.
    (e) If the participant does not complete the entire scheduled
activity, the recipient may pay the participant's transportation to his
or her residence or place of employment only if the participant left the
training activity because of circumstances not reasonably within his or
her control.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



Sec. 270.6  What limitation is imposed on providing race and
national origin desegregation assistance under these programs?

    (a) Except as provided in paragraph (b) of this section, a recipient
of a grant for race or national origin desegregation assistance under
these programs may not use funds to assist in the development or
implementation of activities or the development of curriculum materials
for the direct instruction of students to improve their academic and
vocational achievement levels.
    (b) A recipient of a grant for national origin desegregation
assistance under these programs may use funds to assist in the
development and implementation of activities or the development of
curriculum materials for the direct instructional of students of limited
English proficiency, to afford these students a full opportunity to
participate in all educational programs.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



PART 271_STATE EDUCATIONAL AGENCY DESEGREGATION PROGRAM--Table of
Contents



                            Subpart A_General

Sec.
271.1 What is the State Educational Agency Desegregation Program?
271.2 Who is eligible to apply for assistance under this program?
271.3 What regulations apply to this program?
271.4 What definitions apply to this program?

Subpart B_What Kinds of Activities Does the Secretary Assist Under This
                                Program?

271.10 What types of projects may be funded?
271.11 Who may receive desegregation assistance under this program?

              Subpart C_How Does an SEA Apply for a Grant?

271.20 What conditions must an applicant meet to obtain funding?

             Subpart D_How Does the Secretary Make a Grant?

271.30 How does the Secretary evaluate an application?
271.31 How does the Secretary determine the amount of the grant?

    Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5, unless otherwise noted.

    Source: 52 FR 24964, July 1, 1987, unless otherwise noted.



                            Subpart A_General



Sec. 271.1  What is the State Educational Agency Desegregation Program?

    This program provides grants to State educational agencies (SEAs) to
enable them to provide technical assistance (including training) at the
request of school boards and other responsible governmental agencies in
the preparation, adoption, and implementation of plans for the
desegregation of public schools and in the development

[[Page 590]]

of effective methods of coping with special educational problems
occasioned by desegregation.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)



Sec. 271.2  Who is eligible to apply for assistance under this program?

    An SEA is eligible to apply for a grant under this program. An SEA
shall submit one application to provide technical assistance in one,
two, or all three of the desegregation assistance areas, as defined in
34 CFR 270.3.

(Authority: 42 U.S.C. 2000c-2)



Sec. 271.3  What regulations apply to this program?

    The following regulations apply to the SEA program:
    (a) The regulations in 34 CFR part 270.
    (b) The regulations in this part.

(Authority: 42 U.S.C. 2000c-2)



Sec. 271.4  What definitions apply to this program?

    The definitions in 34 CFR 270.3 apply to the SEA program

(Authority: 42 U.S.C. 2000c-2)



Subpart B_What Kinds of Activities Does the Secretary Assist Under This
                                Program?



Sec. 271.10  What types of projects may be funded?

    The Secretary awards grants to SEAs for projects offering technical
assistance (including training) to school boards and other responsible
governmental agencies, at their request, for desegregation assistance in
the preparation, adoption, and implementation of desegregation plans.
Desegregation assistance may include, among other activities:
    (a) Dissemination of information regarding effective methods of
coping with special educational problems occasioned by desegregation;
    (b) Assistance and advice in coping with these problems; and
    (c) Training designed to improve the ability of teachers,
supervisors, counselors, parents, community members, and other
elementary or secondary school personnel to deal effectively with
special educational problems occasioned by desegregation.

(Authority: 42 U.S.C.3000c-2)



Sec. 271.11  Who may receive desegregation assistance under this program?

    (a) A grantee may provide assistance only if the assistance is
requested by a responsible governmental agency (other than the SEA) in
its State.
    (b) A grantee may provide assistance only to the following persons:
    (1) Public school personnel.
    (2) Students enrolled in public schools, parents of those students,
and other community members.

(Authority: 42 U.S.C. 2000c-2)



              Subpart C_How Does an SEA Apply for a Grant?



Sec. 271.20  What conditions must an applicant meet to obtain funding?

    To obtain funding under this program:
    (a) An applicant must demonstrate its leadership in facilitating
desegregation (in each of the desegregation assistance areas for which
it has applied) as indicated by policies and procedures adopted by the
SEA to assist in the desegregation process;
    (b) The applicant's project director must have access to the Chief
State School Officer;
    (c) The applicant must have a plan of the steps that it has taken or
would take to inform the LEAs it will serve, public school personnel,
students, and parents of the desegregation assistance available;
    (d) The applicant must have familiarity with the desegregation-
related needs and problems of the school boards and other responsible
governmental agencies in its State;
    (e) The assistance to be provided by the applicant must be designed
to meet the desegregation needs (in each of the desegregation assistance
areas for which it has applied) within its State;
    (f) The applicant must identify specific desegregation problems that
would be addressed by its proposed project;
    (g) The applicant must have a plan for coordination with other
related desegregation programs in its State, that

[[Page 591]]

will prevent duplication of assistance when a responsible governmental
agency requests assistance from both the SEA and the DAC or other
program;
    (h) The applicant must provide a plan of operation for the proposed
project that includes:
    (1) An effective plan of management that ensures proper and
efficient administration of the project;
    (2) A clear description of how the objectives of the project relate
to the purposes of the program;
    (3) The way the applicant plans to use its resources and personnel
to achieve each objective; and
    (4) How the applicant will ensure that project participants who are
otherwise eligible to participate are selected without regard to race,
national origin, color, sex, age, or handicapping condition.
    (i) The applicant must have familiarity with materials used in
providing technical assistance and training in each of the desegregation
assistance areas for which it has applied;
    (j) The key personnel the applicant plans to use on the project must
be qualified, as determined by:
    (1) The experience and training of the project director and other
key personnel; and
    (2) The time that the project director and other key personnel will
devote to the project to ensure its success;
    (k) The applicant, as part of its nondiscriminatory employment
practices, shall ensure that its personnel are selected for employment
without regard to race, color, national origin, gender, age or
handicapping condition.
    (l) The project must have an adequate budget to support the project
activities, and costs must be reasonable in relation to the objectives
of the project; and
    (m) The applicant must have an evaluation plan that includes methods
of evaluation that are appropriate for the project and, to the extent
possible, are objective and produce data that are quantifiable.

(Approved by the Office of Management and Budget under control number
1810-0030)

(Authority: 42 U.S.C. 2000c-2)



             Subpart D_How Does the Secretary Make a Grant?



Sec. 271.30  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application submitted under this part
on the basis of the requirements in Sec. 271.20.
    (b) The Secretary identifies those applications that satisfactorily
address each of the factors included in Sec. 271.20.
    (c) The Secretary notifies an SEA whose application does not
satisfactorily address each of the requirements in Sec. 271.20 and
permits the SEA to amend its application. If the amended application
meets each of the requirements of Sec. 271.20, the Secretary approves
it for funding.

(Authority: 42 U.S.C. 2000c-2)



Sec. 271.31  How does the Secretary determine the amount of the grant?

    The Secretary awards a grant to each SEA whose application meets the
requirements of Sec. 271.20. The Secretary determines the amount of a
grant, pursuant to the cost analysis under 34 CFR 75.232, on the basis
of:
    (a) The amount of funds available for all grants under this part;
    (b) The magnitude of the expected needs of responsible governmental
agencies for desegregation assistance and the cost of providing that
assistance to meet those needs, in the State for which an application is
approved, as compared with the magnitude of the expected needs for
desegregation assistance, and the cost of providing it, in all States
for which applications are approved for funding;
    (c) The size and the racial or ethnic diversity of the student
population of the State;
    (d) The extent to which the applicant will effectively and
efficiently use funds awarded to it, including, if relevant,
consideration of its previous use of funds awarded under this program;
and
    (e) Any other information concerning desegregation problems and
proposed activities that the Secretary finds relevant in the applicant's
State.

(Authority: 42 U.S.C. 2000c-2)

[[Page 592]]



PART 272_DESEGREGATION ASSISTANCE CENTER PROGRAM--Table of Contents



                            Subpart A_General

Sec.
272.1 What is the Desegregation Assistance Center Program?
272.2 Who is eligible to receive a grant under this program?
272.3 What regulations apply to this program?
272.4 What definitions apply to this program?

 Subpart B_What Kinds of Activities Does the Secretary Fund Under This
                                Program?

272.10 What types of projects may be funded?
272.11 Who may receive desegregation assistance under this program?
272.12 What geographic regions do the DACs serve?

Subpart C [Reserved]

             Subpart D_How Does the Secretary Make a Grant?

272.30 What criteria does the Secretary use to make a grant?
272.31 How does the Secretary evaluate an application for a grant?
272.32 How does the Secretary determine the amount of a grant?

    Subpart E_What Conditions Must Be Met by a Recipient of a Grant?

272.40 What conditions must be met by a recipient of a grant?

    Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5, unless otherwise noted.

    Source: 52 FR 24965, July 1, 1987, unless otherwise noted.



                            Subpart A_General



Sec. 272.1  What is the Desegregation Assistance Center Program?

    This program provides financial assistance to operate regional
Desegregation Assistance Centers (DACs), to enable them to provide
technical assistance (including training) at the request of school
boards and other responsible governmental agencies in the preparation,
adoption, and implementation of plans for the desegregation of public
schools, and in the development of effective methods of copying with
special educational problems occasioned by desegregation.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.2  Who is eligible to receive a grant under this program?

    A public agency (other than a State educational agency or a school
board) or private, nonprofit organization is eligible to receive a grant
under this program.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.3  What regulations apply to this program?

    The following regulations apply to the DAC program:
    (a) The regulations in 34 CFR part 270.
    (b) The regulations in this part.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.4  What definitions apply to this program?

    The definitions in 34 CFR 270.3 apply to the DAC program.

(Authority: 42 U.S.C. 2000c-2)



 Subpart B_What Kinds of Activities Does the Secretary Fund Under This
                                Program?



Sec. 272.10  What types of projects may be funded?

    (a) The Secretary may award funds to DACs for projects offering
technical assistance (including training) to school boards and other
responsible governmental agencies, at their request, for assistance in
the preparation, adoption, and implementation of desegregation plans.
    (b) A project must provide technical assistance in all three of the
desegregation assistance areas, as defined in 34 CFR 270.3.
    (c) Desegregation assistance may include, among other activities:
    (1) Dissemination of information regarding effective methods of
coping with special educational problems occasioned by desegregation;
    (2) Assistance and advice in coping with these problems; and
    (3) Training designed to improve the ability of teachers,
supervisors, counselors, parents, community members,

[[Page 593]]

and other elementary or secondary school personnel to deal effectively
with special educational problems occasioned by desegregation.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.11  Who may receive desegregation assistance under this
program?

    (a) The recipient of a grant under this part may provide assistance
only if requested by school boards and other responsible governmental
agencies located in its geographical service area.
    (b) The recipient may provide assistance only to the following
persons:
    (1) Public school personnel.
    (2) Students enrolled in public schools, parents of those students,
and other community members.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.12  What geographic regions do the DACs serve?

    The Secretary awards a grant to provide race, sex, and national
origin desegregation assistance under this program in each of the
following geographic regions:
    (a) Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island,
Vermont.
    (b) New York, New Jersey, Puerto Rico, Virgin Islands.
    (c) Delaware, District of Columbia, Maryland, Pennsylvania,
Virginia, West Virginia.
    (d) Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, Tennessee.
    (e) Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin.
    (f) Arkansas, Louisiana, New Mexico, Oklahoma, Texas.
    (g) Iowa, Kansas, Missouri, Nebraska.
    (h) Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming.
    (i) Arizona, California, Nevada.
    (j) Alaska, American Samoa, Guam, Hawaii, Idaho, Northern Mariana
Islands, Oregon, Trust Territory of the Pacific Islands, Washington.

(Authority: 42 U.S.C. 2000c-2000c-2, 2000c-5)

Subpart C [Reserved]



             Subpart D_How Does the Secretary Make a Grant?



Sec. 272.30  What criteria does the Secretary use to make a grant?

    The Secretary uses the following criteria to evaluate applications
for DAC grants.
    (a) Mission and strategy. (30 points) The Secretary reviews each
application to determine the extent to which the applicant understands
effective practices for addressing problems in each of the desegregation
assistance areas, including the extent to which the applicant:
    (1) Understands the mission of the proposed DAC;
    (2) Is familiar with relevant research, theory, materials, and
training models;
    (3) Is familiar with the types of problems that arise in each of the
desegregation assistance areas;
    (4) Is familiar with relevant strategies for technical assistance
and training; and
    (5) Is familiar with the desegregation needs of responsible
governmental agencies in its designated region.
    (b) Organizational capability. (15 points) The Secretary reviews
each application to determine the ability of the applicant to sustain a
long-term, high-quality, and coherent program of technical assistance
and training, including the extent to which the applicant:
    (1) Demonstrates the commitment to provide the services of
appropriate faculty or staff members from its organization;
    (2) Selects project staff with an appropriate mixture of scholarly
and practitioner backgrounds; and
    (3) Has had past successes in rendering technical assistance and
training in the desegregation assistance areas, including collaborating
with other individuals and organizations.
    (c) Plan of operation. (25 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 design of the project is of high quality;
    (2) The plan of management ensures proper and efficient
administration of the project;

[[Page 594]]

    (3) The applicant plans to use its resources and personnel
effectively to achieve each objective; and
    (4) The applicant will ensure that project participants who are
otherwise eligible to participate are selected without regard to race,
color, national origin, sex, age, or handicapping condition.
    (d) Quality of key personnel. (15 points)
    (1) The Secretary reviews each application to determine the
qualifications of the key personnel that the applicant plans to use on
the project, including:
    (i) The qualifications of the project director;
    (ii) The qualifications of the other key personnel to be used 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; and
    (ii) 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 for the project is adequate to support the project
activities; and
    (2) Costs 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 evaluation plan for the
project, including the extent to which the 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.

(Approved by the Office of Management and Budget under control number
1810-0517)

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.31  How does the Secretary evaluate an application for a grant?

    (a) The Secretary evaluates the application on the basis of the
criteria in Sec. 272.30.
    (b) The Secretary selects the highest ranking application for each
geographical service area to receive a grant.

(Authority: 42 U.S.C. 2000c-2)



Sec. 272.32  How does the Secretary determine the amount of a grant?

    The Secretary determines the amount of a grant on the basis of:
    (a) The amount of funds available for all grants under this part;
    (b) A cost analysis of the project (that shows whether the applicant
will achieve the objectives of the project with reasonable efficiency
and economy under the budget in the application), by which the
Secretary:
    (1) Verifies the cost data in the detailed budget for the project;
    (2) Evaluates specific elements of costs; and
    (3) Examines costs to determine if they are necessary, reasonable,
and allowable under applicable statutes and regulations;
    (c) The magnitude of the expected needs or responsible governmental
agencies for desegregation assistance in the geographic region, and the
cost of providing that assistance to meet those needs, as compared with
the magnitude of the expected needs for desegregation assistance, and
the cost of providing it, in all geographic regions for which
applications are approved for funding;
    (d) The size and the racial or ethnic diversity of the student
population of the geographic region for which the DAC will provide
services; and
    (e) Any other information concerning desegregation problems and
proposed

[[Page 595]]

activities that the Secretary finds relevant in the applicant's
geographic region.

(Authority: 42 U.S.C. 2000c-2)



    Subpart E_What Conditions Must Be Met by a Recipient of a Grant?



Sec. 272.40  What conditions must be met by a recipient of a grant?

    A recipient of a grant under this part must:
    (a) Operate a DAC in the geographic region to be served;
    (b) Have a full-time project director; and
    (c) Coordinate assistance in its geographic region with appropriate
SEAs funded under 34 CFR part 271. As part of this coordination, the
recipient shall develop plans to prevent duplication of assistance when
a responsible governmental agency requests assistance from both the DAC
and the appropriate SEA.

(Authority: 42 U.S.C. 2000c-2)



PART 280_MAGNET SCHOOLS ASSISTANCE PROGRAM--Table of Contents



                            Subpart A_General

Sec.
280.1 What is the Magnet Schools Assistance Program?
280.2 Who is eligible to apply for a grant?
280.3 What regulations apply to this program?
280.4 What definitions apply to this program?

 Subpart B_What Types of Projects Does the Secretary Assist Under This
                                Program?

280.10 What types of projects does the Secretary assist?

                Subpart C_How Does One Apply for a Grant?

280.20 How does one apply for a grant?

             Subpart D_How Does the Secretary Make a Grant?

280.30 How does the Secretary evaluate an application?
280.31 What selection criteria does the Secretary use?
280.32 How is priority given to applicants?
280.33 How does the Secretary select applications for new grants with
          funds appropriated in excess of $75 million?

           Subpart E_What Conditions Must Be Met by a Grantee?

280.40 What costs are allowable?
280.41 What are the limitations on allowable costs?

    Authority: 20 U.S.C. 7231-7231j, unless otherwise noted.



                            Subpart A_General



Sec. 280.1  What is the Magnet Schools Assistance Program?

    The Magnet Schools Assistance Program provides grants to eligible
local educational agencies (LEAs) or consortia of LEAs for use in magnet
schools that are part of an approved desegregation plan and that are
designed to bring students from different social, economic, ethnic and
racial backgrounds together. The purposes of the program are to support,
through financial assistance to eligible LEAs or consortia of LEAs--
    (a) The elimination, reduction, or prevention of minority group
isolation in elementary and secondary schools with substantial portions
of minority students, which shall include assisting in the efforts of
the United States to achieve voluntary desegregation in public schools;
    (b) The development and implementation of magnet school projects
that will assist LEAs in achieving systemic reforms and providing all
students the opportunity to meet challenging State academic content
standards and student academic achievement standards;
    (c) The development and design of innovative educational methods and
practices that promote diversity and increase choices in public
elementary schools and public secondary schools and public educational
programs;
    (d) Courses of instruction within magnet schools that will
substantially strengthen the knowledge of academic subjects and the
attainment of tangible and marketable vocational, technological, and
professional skills of students attending such schools;
    (e) Improvement of the capacity of LEAs, including through
professional development, to continue operating

[[Page 596]]

magnet schools at a high performance level after Federal funding for the
magnet schools is terminated; and
    (f) Ensuring that all students enrolled in the magnet school
programs have equitable access to high quality education that will
enable the students to succeed academically and continue with
postsecondary education or productive employment.

(Authority: 20 U.S.C. 7231)

[51 FR 20414, June 4, 1986, as amended at 60 FR 14865, Mar. 20, 1995; 69
FR 4996, Feb. 2, 2004]



Sec. 280.2  Who is eligible to apply for a grant?

    (a) An LEA or consortia of LEAs is eligible to receive assistance
under this part if the LEA or consortia of LEAs meets any of the
following requirements:
    (1) The LEA or consortia of LEAs is implementing a plan undertaken
pursuant to a final order of a court of the United States, or a court of
any State, or any other State agency or official of competent
jurisdiction, and the order requires the desegregation of minority group
segregated children or faculty in the elementary and secondary schools
of that agency or those agencies.
    (2) The LEA or consortia of LEAs adopted and is implementing on
either a voluntary basis or as required under title VI of the Civil
Rights Act of 1964--or will adopt and implement if assistance is made
available under this part--a plan that has been approved by the
Secretary as adequate under title VI.
    (b) The Secretary approves a voluntary plan under paragraph (a)(2)
of this section only if he determines that for each magnet school for
which funding is sought, the magnet school will reduce, eliminate, or
prevent minority group isolation within the period of the grant award,
either in the magnet school or in a feeder school, as appropriate.

(Authority: 20 U.S.C. 7231c)

[50 FR 21191, May 22, 1985, as amended at 54 FR 19508, May 5, 1989; 57
FR 61508, Dec. 24, 1992; 60 FR 14865, Mar. 20, 1995; 69 FR 4996, Feb. 2,
2004; 75 FR 9780, Mar. 4. 2010]



Sec. 280.3  What regulations apply to this program?

    The following regulations apply to the Magnet Schools Assistance
Program:
    (a) The Education Department General Administrative Regulations
(EDGAR), 34 CFR parts 75 (Direct grant programs), 77 (Definitions apply
to Department regulations), 79 (Intergovernmental Review of Department
of Education programs and activities), 80 (Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments), and 85 (Governmentwide Debarment and Suspension
(Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace
(Grants)).
    (b) The regulations in this part.

(Authority: 20 U.S.C. 7231-7231j)

[50 FR 21191, May 22, 1985, as amended at 54 FR 19508, May 5, 1989; 69
FR 4996, Feb. 2, 2004]



Sec. 280.4  What definitions apply to this program?

    (a) Definitions in EDGAR. The following terms used in this part are
defined in 34 CFR part 77:

Applicant
Application
Budget
EDGAR
Elementary school
Equipment
Facilities
Fiscal year
Local educational agency
Project
Secondary school
Secretary
State

    (b) Definitions that apply to this program. The following
definitions also apply to this part:
    Act means the Elementary and Secondary Education Act of 1965 as
amended by title V, Part C of the No Child Left Behind Act of 2001, Pub.
L. 107-110 (20 U.S.C. 7231-7231j).
    Desegregation, in reference to a plan, means a plan for the
reassignment of children or faculty to remedy the illegal separation of
minority group children or faculty in the schools of an LEA or a plan
for the reduction, elimination, or prevention of minority group
isolation in one or more of the schools of an LEA.

[[Page 597]]

    Feeder school means a school from which students are drawn to attend
a magnet school.
    Magnet school means a public elementary school, public secondary
school, public elementary education center, or public secondary
education center that offers a special curriculum capable of attracting
substantial numbers of students of different racial backgrounds.
    Minority group means the following:
    (1) American Indian or Alaskan Native. A person having origins in
any of the original peoples of North America, and who maintains cultural
identification through tribal affiliation or community recognition.
    (2) Asian of Pacific Islander. A person having origins in any of the
original peoples of the Far East, Southeast Asia, the Indian
subcontinent, or the Pacific Islands. This area includes, for example,
China, India, Japan, Korea, the Philippine Islands, and Samoa.
    (3) Black (Not of Hispanic Origin). A person having origins in any
of the black racial groups of Africa.
    (4) Hispanic. A person of Mexican, Puerto Rican, Cuban, Central or
South American, or other Spanish culture or origin, regardless of race.
    Special curriculum means a course of study embracing subject matter
or a teaching methodology that is not generally offered to students of
the same age or grade level in the same LEA or consortium of LEAs, as
the students to whom the special curriculum is offered in the magnet
schools. This term does not include:
    (1) A course of study or a part of a course of study designed solely
to provide basic educational services to handicapped students or to
students of limited English-speaking ability;
    (2) A course of study or a part of a course of study in which any
student is unable to participate because of his or her limited English-
speaking ability;
    (3) A course of study or a part of a course of study in which any
student is unable to participate because of his or her limited financial
resources; or
    (4) A course of study or a part of a course of study that fails to
provide for a participating student's meeting the requirements for
completion of elementary or secondary education in the same period as
other students enrolled in the applicant's schools.

(Authority: 20 U.S.C. 7231-7231j)

[50 FR 21191, May 22, 1985, as amended at 51 FR 20414, June 4, 1986; 54
FR 19508 and 19509, May 5, 1989; 57 FR 61509, Dec. 24, 1992; 60 FR
14865, Mar. 20, 1995; 69 FR 4996, Feb. 2, 2004; 75 FR 9780, Mar. 4,
2010]



 Subpart B_What Types of Projects Does the Secretary Assist Under This
                                Program?



Sec. 280.10  What types of projects does the Secretary assist?

    (a) The Secretary funds applications proposing projects in magnet
schools that are part of an approved desegregation plan and that are
designed to bring students from different social, economic, ethnic, and
racial backgrounds together.
    (b) For the purposes of this part, an approved desegregation plan is
a desegregation plan described in Sec. 280.2 (a) or (b).
    (c) In the case of a desegregation plan described in Sec.
280.2(a)(1), any modification to that plan must be approved by the
court, agency, or official that approved the plan.

(Authority: 20 U.S.C. 7203)

[50 FR 21191, May 22, 1985, as amended at 51 FR 20414, June 4, 1986; 54
FR 19508 and 19509, May 5, 1989]



                Subpart C_How Does One Apply for a Grant?



Sec. 280.20  How does one apply for a grant?

    (a) Each eligible LEA or consortium of LEAs that desires to receive
assistance under this part shall submit an annual application to the
Secretary.
    (b) In its application, the LEA or consortium of LEAs shall provide
assurances that it--
    (1) Will use funds made available under this part for the purposes
specified in section 5301(b) of the Act;
    (2) Will employ highly qualified teachers in the courses of
instruction assisted under this part;
    (3) Will not engage in discrimination based upon race, religion,
color, national origin, sex, or disability in the hiring, promotion, or
assignment of

[[Page 598]]

employees of the agency or other personnel for whom the agency has any
administrative responsibility;
    (4) Will not engage in discrimination based upon race, religion,
color, national origin, sex, or disability in the assignment of students
to schools or to courses of instruction within schools of the agency,
except to carry out the approved desegregation plan;
    (5) Will not engage in discrimination based upon race, religion,
color, national origin, sex, or disability in designing or operating
extracurricular activities for students;
    (6) Will carry out a high-quality education program that will
encourage greater parental decisionmaking and involvement; and
    (7) Will give students residing in the local attendance area of the
proposed magnet school program equitable consideration for placement in
the program, consistent with desegregation guidelines and the capacity
of the applicant to accommodate students.
    (c) In addition to the assurances listed in paragraph (b) of this
section, the LEA or consortium of LEAs shall provide such other
assurances as the Secretary determines necessary to carry out the
provisions of this part.
    (d) Upon request, the LEA or consortium of LEAs shall submit any
information that is necessary for the Assistant Secretary for Civil
Rights to determine whether the assurances required in paragraphs (b)
(3), (4), and (5) of this section will be met.
    (e) An LEA or consortium of LEAs that has an approved desegregation
plan shall submit each of the following with its application:
    (1) A copy of the plan.
    (2) An assurance that the plan is being implemented as approved.
    (f) An LEA or consortium of LEAs that does not have an approved
desegregation plan shall submit each of the following with its
application:
    (1) A copy of the plan the LEA or consortium of LEAs is submitting
for approval.
    (2) A copy of a school board resolution or other evidence of final
official action adopting and implementing the plan, or agreeing to adopt
and implement it upon the award of assistance under this part.
    (3) Evidence that the plan is a desegregation plan as defined in
Sec. 280.4(b).
    (4) For an LEA or consortium of LEAs that seeks assistance for
existing magnet schools--
    (i) Enrollment numbers and percentages, for minority and non-
minority group students, for each magnet school for which funding is
sought and each feeder school--
    (A) For the school year prior to the creation of each magnet school;
    (B) For the school year in which the application is submitted; and
    (C) For each of the school years of the proposed grant cycle (i.e.,
projected enrollment figures); and
    (ii) Districtwide enrollment numbers and percentages for minority
group students in the LEA's or consortium of LEAs' schools, for grade
levels involved in the applicant's magnet schools (e.g., K-6, 7-9, 10-
12)--
    (A) For the school year prior to the creation of each magnet school;
    (B) For the school year in which the application is submitted; and
    (C) For each of the school years of the proposed grant cycle (i.e.,
projected enrollment figures).
    (5) For an LEA or consortium of LEAs that seeks assistance for new
magnet schools--
    (i) Enrollment numbers and percentages, for minority and non-
minority group students, for each magnet school for which funding is
sought and for each feeder school--
    (A) For the school year in which the application is submitted; and
    (B) For each of the school years of the proposed grant cycle (i.e.,
projected enrollment figures); and
    (ii) Districtwide numbers and percentages of minority group students
in the LEA's or consortium of LEAs' schools, for the grade levels
involved in the applicant's magnet schools (e.g., K-6, 7-9, 10-12)--
    (A) For the school year in which the application is submitted; and
    (B) For each of the school years of the proposed grant cycle (i.e.,
projected enrollment figures).
    (g) An applicant that does not have an approved desegregation plan,
and demonstrates that it cannot provide some portion of the information
requested under paragraphs (f)(4) and (5)

[[Page 599]]

of this section, may provide other information (in lieu of that portion
of the information not provided in response to paragraphs (f)(4) and (5)
of this section) to demonstrate that the creation or operation of its
proposed magnet school would reduce, eliminate, or prevent minority
group isolation in the applicant's schools.
    (h) After reviewing the information provided in response to
paragraph (f)(4) or (5) of this section, or as provided under paragraph
(g) of this section, the Secretary may request other information, if
necessary (e.g., demographic data concerning the attendance areas in
which the magnet schools are or will be located), to determine whether
to approve an LEA's or consortium of LEAs' plan.
    (i) In addition to including the assurances required by this
section, an LEA or consortium of LEAs shall describe in its
application--
    (1) How the applicant will use assistance made available under this
part to promote desegregation, including how the proposed magnet school
programs will increase interaction among students of different social,
economic, ethnic, and racial backgrounds;
    (2) How and to what extent the assistance will increase student
academic achievement in instructional areas offered;
    (3) How the LEA or consortium of LEAs will continue the magnet
schools program after assistance under this part is no longer available,
including, if applicable, why magnet schools previously established or
supported with Magnet Schools Assistance Program grant funds cannot be
continued without the use of funds under this part;
    (4) How assistance will be used to--
    (i) Improve student academic achievement for all students attending
the magnet school programs; and
    (ii) Implement services and activities that are consistent with
other programs under the Act and other statutes, as appropriate; and
    (5) What criteria will be used in selecting students to attend the
proposed magnet schools program.

(Approved by the Office of Management and Budget under control number
1855-0011)

(Authority: 20 U.S.C. 7231d)

[50 FR 21191, May 22, 1985, as amended at 54 FR 19508, May 5, 1989; 57
FR 61509, Dec. 24, 1992; 60 FR 14865, Mar. 20, 1995; 69 FR 4997, Feb. 2,
2004; 75 FR 9780, Mar. 4, 2010]



             Subpart D_How Does the Secretary Make a Grant?



Sec. 280.30  How does the Secretary evaluate an application?

    (a) The Secretary evaluates an application under the procedures in
34 CFR part 75 and this part.
    (b) To evaluate an application for a new grant the Secretary may
use--
    (1) Selection criteria established under 34 CFR 75.209;
    (2) Selection criteria in Sec. 280.31;
    (3) Selection criteria established under 34 CFR 75.210; or
    (4) Any combination of criteria from paragraphs (b)(1), (b)(2), and
(b)(3) of this section.
    (c) The Secretary indicates in the application notice published in
the Federal Register the specific criteria that the Secretary will use
and how points for the selection criteria will be distributed.
    (d) The Secretary evaluates an application submitted under this part
on the basis of criteria described in paragraph (c) of this section and
the priority factors in Sec. 280.32.
    (e) The Secretary awards up to 100 points for the extent to which an
application meets the criteria described in paragraph (c) of this
section.
    (f) The Secretary then awards up to 30 additional points based upon
the priority factors in Sec. 280.32.

(Approved by the Office of Management and Budget under control number
1855-0011)

(Authority: 20 U.S.C. 7231-7231j)

[72 FR 10607, Mar. 9, 2007]



Sec. 280.31  What selection criteria does the Secretary use?

    The Secretary may use the following selection criteria in evaluating
each application:

[[Page 600]]

    (a) Plan of operation. (1) The Secretary reviews each application to
determine the quality of the plan of operation for the project.
    (2) The Secretary determines the extent to which the applicant
demonstrates--
    (i) The effectiveness of its management plan to ensure proper and
efficient administration of the project;
    (ii) The effectiveness of its plan to attain specific outcomes
that--
    (A) Will accomplish the purposes of the program;
    (B) Are attainable within the project period;
    (C) Are measurable and quantifiable; and
    (D) For multi-year projects, can be used to determine the project's
progress in meeting its intended outcomes;
    (iii) The effectiveness of its plan for utilizing its resources and
personnel to achieve the objectives of the project, including how well
it utilizes key personnel to complete tasks and achieve the objectives
of the project;
    (iv) How it will ensure equal access and treatment for eligible
project participants who have been traditionally underrepresented in
courses or activities offered as part of the magnet school, e.g., women
and girls in mathematics, science or technology courses, and disabled
students; and
    (v) The effectiveness of its plan to recruit students from different
social, economic, ethnic, and racial backgrounds into the magnet
schools.
    (b) Quality of personnel. (1) The Secretary reviews each application
to determine the qualifications of the personnel the applicant plans to
use on the project.
    (2) The Secretary determines the extent to which--
    (i) The project director (if one is used) is qualified to manage the
project;
    (ii) Other key personnel are qualified to manage the project;
    (iii) Teachers who will provide instruction in participating magnet
schools are qualified to implement the special curriculum of the magnet
schools; and
    (iv) The applicant, as part of its nondiscriminatory employment
practices will ensure that its personnel are selected for employment
without regard to race, religion, color, national origin, sex, age, or
disability.
    (3) To determine personnel qualifications the Secretary considers
experience and training in fields related to the objectives of the
project, including the key personnel's knowledge of and experience in
curriculum development and desegregation strategies.
    (c) Quality of project design. (1) The Secretary reviews each
application to determine the quality of the project design.
    (2) The Secretary determines the extent to which each magnet school
for which funding is sought will--
    (i) Foster interaction among students of different social, economic,
ethnic, and racial backgrounds in classroom activities, extracurricular
activities, or other activities in the magnet schools (or, if
appropriate, in the schools in which the magnet school programs
operate);
    (ii) Address the educational needs of the students who will be
enrolled in the magnet schools;
    (iii) Carry out a high quality educational program that will
substantially strengthen students' reading skills or knowledge of
mathematics, science, history, geography, English, foreign languages,
art, music, or vocational, technological, and professional skills;
    (iv) Encourage greater parental decisionmaking and involvement; and
    (v) Improve the racial balance of students in the applicant's
schools by reducing, eliminating, or preventing minority group isolation
in its schools.
    (d) Budget and resources. The Secretary reviews each application to
determine the adequacy of the resources and the cost-effectiveness of
the budget for the project, including--
    (1) The adequacy of the facilities that the applicant plans to use;
    (2) The adequacy of the equipment and supplies that the applicant
plans to use; and
    (3) The adequacy and reasonableness of the budget for the project in
relation to the objectives of the project.
    (e) Evaluation plan. The Secretary determines the extent to which
the evaluation plan for the project--

[[Page 601]]

    (1) Includes methods that are appropriate for the project;
    (2) Will determine how successful the project is in meeting its
intended outcomes, including its goals for desegregating its students
and increasing student achievement; and
    (3) Includes methods that are objective and that will produce data
that are quantifiable.
    (f) Commitment and capacity. (1) The Secretary reviews each
application to determine whether the applicant is likely to continue the
magnet school activities after assistance under this part is no longer
available.
    (2) The Secretary determines the extent to which the applicant--
    (i) Is committed to the magnet schools project; and
    (ii) Has identified other resources to continue support for the
magnet school activities when assistance under this program is no longer
available.

(Approved by the Office of Management and Budget under control number
1855-0011)

(Authority: 20 U.S.C. 7231-7231j)

[57 FR 61509, Dec. 24, 1992, as amended at 60 FR 14866, Mar. 20, 1995;
69 FR 4997, Feb. 2, 2004; 72 FR 10607, Mar. 9, 2007]



Sec. 280.32  How is priority given to applicants?

    (a) How priority is given. In addition to the points awarded under
Sec. 280.31, the Secretary gives priority to the factors listed in
paragraphs (b) through (d) of this section by awarding additional points
for these factors. The Secretary indicates in the application notice
published in the Federal Register how these additional points will be
distributed.
    (b) Need for assistance. The Secretary evaluates the applicant's
need for assistance under this part, by considering--
    (1) The costs of fully implementing the magnet schools project as
proposed;
    (2) The resources available to the applicant to carry out the
project if funds under the program were not provided;
    (3) The extent to which the costs of the project exceed the
applicant's resources; and
    (4) The difficulty of effectively carrying out the approved plan and
the project for which assistance is sought, including consideration of
how the design of the magnet school project--e.g., the type of program
proposed, the location of the magnet school within the LEA--impacts on
the applicant's ability to successfully carry out the approved plan.
    (c) New or revised magnet schools projects. The Secretary determines
the extent to which the applicant proposes to carry out new magnet
schools projects or significantly revise existing magnet schools
projects.
    (d) Selection of students. The Secretary determines the extent to
which the applicant proposes to select students to attend magnet schools
by methods such as lottery, rather than through academic examination.

(Authority: 20 U.S.C. 7231e))

[57 FR 61510, Dec. 24, 1992, as amended at 60 FR 14866, Mar. 20, 1995;
63 FR 8020, Feb. 17, 1998; 69 FR 4997, Feb. 2, 2004]



Sec. 280.33  How does the Secretary select applications for new
grants with funds appropriated in excess of $75 million?

    (a) In selecting among applicants for funds appropriated for this
program in excess of $75 million, the Secretary first identifies those
remaining applicants that did not receive funds under this program in
the last fiscal year of the previous funding cycle.
    (b) The Secretary then awards ten additional points to each
applicant identified under paragraph (a) of this section.

(Authority: 20 U.S.C. 7231j)

[54 FR 19509, May 5, 1989, as amended at 69 FR 4997, Feb. 2, 2004]



           Subpart E_What Conditions Must Be Met by a Grantee?



Sec. 280.40  What costs are allowable?

    An LEA or consortium of LEAs may use funds received under this part
for the following activities:
    (a) Planning and promotional activities directly related to the
development, expansion, continuation, or enhancement of academic
programs and services offered at magnet schools, though planning
activities are subject to the restrictions in Sec. 280.41(a) and do

[[Page 602]]

not include activities described under paragraph (f) of this section.
    (b) The acquisition of books, materials, and equipment (including
computers) and the maintenance and operation of materials, equipment and
computers. Any books, materials or equipment purchased with grant funds
must be:
    (1) Necessary for the conduct of programs in magnet schools; and
    (2) Directly related to improving student academic achievement based
on the State's challenging academic content standards and student
academic achievement standards or directly related to improving student
reading skills or knowledge of mathematics, science, history, geography,
English, foreign languages, art, or music, or to improving vocational,
technological, or professional skills.
    (c) The payment or subsidization of the compensation of elementary
and secondary school teachers:
    (1) Who are highly qualified;
    (2) Who are necessary to conduct programs in magnet schools; and
    (3) Whose employment is directly related to improving student
academic achievement based on the State's challenging academic content
standards and student academic achievement standards or directly related
to improving student reading skills or knowledge of mathematics,
science, history, geography, English, foreign languages, art, or music,
or to improving vocational, technological, or professional skills.
    (d) The payment or subsidization of the compensation of
instructional staff, where applicable, who satisfy the requirements of
paragraphs (c)(2) and (3) of this section.
    (e) With respect to a magnet school program offered to less than the
entire school population, for instructional activities that--
    (1) Are designed to make available the special curriculum of the
magnet school program to students enrolled in the school, but not in the
magnet school program; and
    (2) Further the purposes of the program.
    (f) Activities, which may include professional development, that
will build the recipient's capacity to operate magnet school programs
once the grant period has ended.
    (g) Activities to enable the LEA or consortium of LEAs to have more
flexibility in the administration of a magnet school program in order to
serve students attending a school who are not enrolled in a magnet
school program.
    (h) Activities to enable the LEA or consortium of LEAs to have
flexibility in designing magnet schools for students in all grades.

(Authority: 20 U.S.C. 7231f)

[51 FR 20414, June 4, 1986, as amended at 54 FR 19509, May 5, 1989; 60
FR 14866, Mar. 20, 1995; 69 FR 4997, Feb. 2, 2004]



Sec. 280.41  What are the limitations on allowable costs?

    An LEA or consortium of LEAs that receives assistance under this
part may not--
    (a) Expend for planning more than 50 percent of the funds received
for the first fiscal year, and 15 percent of the funds received for the
second or the third fiscal year;
    (b) Use funds for transportation; or
    (c) Use funds for any activity that does not augment academic
improvement.

(Authority: 20 U.S.C. 7231g, 7231h(b))

[60 FR 14866, Mar. 20, 1995, as amended at 69 FR 4997, Feb. 2, 2004]



PART 299_GENERAL PROVISIONS--Table of Contents



                   Subpart A_Purpose and Applicability

Sec.
299.1 What are the purpose and scope of these regulations?
299.2 What general administrative regulations apply to ESEA programs?

                      Subpart B_Selection Criteria

299.3 What priority may the Secretary establish for activities in an
          Empowerment Zone or Enterprise Community?

     Subpart C_Consolidation of State and Local Administrative Funds

299.4 What requirements apply to the consolidation of State and local
          administrative funds?

[[Page 603]]

                      Subpart D_Fiscal Requirements

299.5 What maintenance of effort requirements apply to ESEA programs?

       Subpart E_Services to Private School Students and Teachers

299.6 What are the responsibilities of a recipient of funds for
          providing services to children and teachers in private
          schools?
299.7 What are the factors for determining equitable participation of
          children and teachers in private schools?
299.8 What are the requirements to ensure that funds do not benefit a
          private school?
299.9 What are the requirements concerning property, equipment, and
          supplies for the benefit of private school children and
          teachers?

                     Subpart F_Complaint Procedures

299.10 What complaint procedures shall an SEA adopt?
299.11 What items are included in the complaint procedures?
299.12 How does an organization or individual file a complaint?

    Authority: 20 U.S.C. 1221e-3(a)(1), 6511(a), and 7373(b), unless
otherwise noted.

    Source: 62 FR 28252, May 22, 1997, unless otherwise noted.



                   Subpart A_Purpose and Applicability



Sec. 299.1  What are the purpose and scope of these regulations?

    (a) This part establishes uniform administrative rules for programs
in titles I through XIII of the Elementary and Secondary Education Act
of 1965, as amended (ESEA). As indicated in particular sections of this
part, certain provisions apply only to a specific group of programs.
    (b) If an ESEA program does not have implementing regulations, the
Secretary implements the program under the authorizing statute, and, to
the extent applicable, title XIV of ESEA, the General Education
Provisions Act, the regulations in this part, and the Education
Department General Administrative Regulations (34 CFR parts 74 through
86) that are not inconsistent with specific statutory provisions of
ESEA.

(Authority: 20 U.S.C. 1221e-3(a)(1))



Sec. 299.2  What general administrative regulations apply to ESEA
programs?

    With regard to the applicability of Education Department General
Administrative Regulations (EDGAR) in part 80 to the ESEA programs
except for title VIII programs (Impact Aid) (in addition to any other
specific implementing regulations):
    (a) 34 CFR part 80 (Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments) applies to
State, local, and Indian tribal governments under direct grant programs
(as defined in 34 CFR 75.1(b)), and programs under title XI of ESEA.
    (b) 34 CFR part 80 also applies to State, local, and Indian tribal
governments under all other programs under the ESEA and to programs
under title III of the Goals 2000: Educate America Act (title III of
Goals 2000), unless a State formally adopts its own written fiscal and
administrative requirements for expending and accounting for all funds
received by State educational agencies (SEAs) and local educational
agencies (LEAs) under the ESEA and title III of Goals 2000. If a State
adopts its own alternative requirements, the requirements must be
available for inspection upon the request of the Secretary or the
Secretary's representatives and must--
    (1) Be sufficiently specific to ensure that funds received under
ESEA and title III of Goals 2000 are used in compliance with all
applicable statutory and regulatory provisions;
    (2) Ensure that funds received for programs under ESEA and title III
of Goals 2000 are spent only for reasonable and necessary costs of
operating those programs; and
    (3) Ensure that funds received under ESEA and title III of Goals
2000 are not used for general expenses required to carry out other
responsibilities of State or local governments.

    Note: 34 CFR 222.13 indicates which EDGAR provisions apply to title
VIII programs (Impact Aid).
    Note: To meet the first of the three standards, alternative State
provisions must, among other things, ensure that costs are allocable to
a particular cost objective.

(Authority: 20 U.S.C. 1221e-3(a)(1))

[[Page 604]]



                      Subpart B_Selection Criteria



Sec. 299.3  What priority may the Secretary establish for activities
in an Empowerment Zone or Enterprise Community?

    For any ESEA discretionary grant program, the Secretary may
establish a priority, as authorized by 34 CFR 75.105(b), for projects
that will--
    (a) Use a significant portion of the program funds to address
substantial problems in an Empowerment Zone, including a Supplemental
Empowerment Zone, or an Enterprise Community designated by the United
States Department of Housing and Urban Development or the United States
Department of Agriculture; and
    (b) Contribute to systemic educational reform in such an Empowerment
Zone, including a Supplemental Empowerment Zone, or such an Enterprise
Community, and are made an integral part of the Zone or Community's
comprehensive community revitalization strategies.

(Authority: 20 U.S.C. 2831(a))



     Subpart C_Consolidation of State and Local Administrative Funds



Sec. 299.4  What requirements apply to the consolidation of State and
local administrative funds?

    An SEA may adopt and use its own reasonable standards in determining
whether--
    (a) The majority of its resources for administrative purposes comes
from non-Federal sources to permit the consolidation of State
administrative funds in accordance with section 14201 of the Act; and
    (b) To approve an LEA's consolidation of its administrative funds in
accordance with section 14203 of the Act.

(Authority: 20 U.S.C. 8821 and 8823)



                      Subpart D_Fiscal Requirements



Sec. 299.5  What maintenance of effort requirements apply to ESEA
programs?

    (a) General. An LEA receiving funds under an applicable program
listed in paragraph (b) of this section may receive its full allocation
of funds only if the SEA finds that either the combined fiscal effort
per student or the aggregate expenditures of State and local funds with
respect to the provision of free public education in the LEA for the
preceding fiscal year was not less than 90 percent of the combined
fiscal effort per student or the aggregate expenditures for the second
preceding fiscal year.
    (b) Applicable programs. This subpart is applicable to the following
programs:
    (1) Part A of title I (Improving Basic Programs Operated by Local
Educational Agencies).
    (2) Title II (Eisenhower Professional Development Program) (other
than section 2103 and part C of this title).
    (3) Subpart 2 of part A of title III (State and Local Programs for
School Technology Resources).
    (4) Part A of title IV (Safe and Drug-Free Schools and Communities)
(other than section 4114).
    (c) Meaning of ``preceding fiscal year''. For purposes of
determining if the requirement of paragraph (a) of this section is met,
the ``preceding fiscal year'' means the Federal fiscal year, or the 12-
month fiscal period most commonly used in a State for official reporting
purposes, prior to the beginning of the Federal fiscal year in which
funds are available for obligation by the Department.

    Example: For fiscal year 1995 funds that are first made available on
July 1, 1995, if a State is using the Federal fiscal year, the
``preceding fiscal year'' is Federal fiscal year 1994 (which began on
October 1, 1993 and ended September 30, 1994) and the ``second preceding
fiscal year'' is Federal fiscal year 1993 (which began on October 1,
1992). If a State is using a fiscal year that begins on July 1, 1995,
the ``preceding fiscal year'' is the 12-month period ending on June 30,
1994, and the ``second preceding fiscal year'' is the period ending on
June 30, 1993.

    (d) Expenditures. (1) In determining an LEA's compliance with
paragraph (a) of this section, the SEA shall consider only the LEA's
expenditures from State and local funds for free public education. These
include expenditures for administration, instruction, attendance and
health services, pupil transportation services, operation and
maintenance of plant, fixed charges, and net

[[Page 605]]

expenditures to cover deficits for food services and student body
activities.
    (2) The SEA may not consider the following expenditures in
determining an LEA's compliance with the requirements in paragraph (a)
of this section:
    (i) Any expenditures for community services, capital outlay, debt
service or supplemental expenses made as a result of a Presidentially
declared disaster.
    (ii) Any expenditures made from funds provided by the Federal
Government.

(Authority: 20 U.S.C. 8891)



       Subpart E_Services to Private School Students and Teachers



Sec. 299.6  What are the responsibilities of a recipient of funds
for providing services to children and teachers in private schools?

    (a) General. An agency or consortium of agencies receiving funds
under an applicable program listed in paragraph (b) of this section,
after timely and meaningful consultation with appropriate private school
officials (in accordance with the statute), shall provide special
educational services or other benefits under this subpart on an
equitable basis to eligible children who are enrolled in private
elementary and secondary schools, and to their teachers and other
educational personnel.
    (b) Applicable programs. This subpart is applicable to the following
programs:
    (1) Part C of title I (Migrant Education).
    (2) Title II (Professional Development) (other than section 2103 and
part C of this title).
    (3) Title III (Technology for Education) (other than part B of this
title) (Star Schools).
    (4) Part A of title IV (Safe and Drug-Free Schools and Communities)
(other than section 4114).
    (5) Title VI (Innovative Education Program Strategies).
    (6) Title VII (Bilingual Education).
    (c) Provisions not applicable. Sections 75.650 and 76.650 through
76.662 of title 34 of the Code of Federal Regulations (participation of
students enrolled in private schools) do not apply to programs listed in
paragraph (b) of this section.

(Authority: 20 U.S.C. 8893)



Sec. 299.7  What are the factors for determining equitable participation
of children and teachers in private schools?

    (a) Equal expenditures. (1) Expenditures of funds made by an agency
or consortium of agencies under a program listed in Sec. 299.6 (b) for
services for eligible private school children and their teachers and
other educational personnel must be equal on a per-pupil basis to the
amount of funds expended for participating public school children and
their teachers and other educational personnel, taking into account the
number and educational needs of those children and their teachers and
other educational personnel.
    (2) Before determining equal expenditures under paragraph (a)(1) of
this section, an agency or consortium of agencies shall pay for the
reasonable and necessary administrative costs of providing services to
public and private school children and their teachers and other
educational personnel from the agency's or consortium of agencies' total
allocation of funds under the applicable ESEA program.
    (b) Services on an equitable basis. (1) The services that an agency
or consortium of agencies provides to eligible private school children
and their teachers and other educational personnel must also be
equitable in comparison to the services and other benefits provided to
public school children and their teachers or other educational personnel
participating in a program under this subpart.
    (2) Services are equitable if the agency or consortium of agencies--
    (i) Addresses and assesses the specific needs and educational
progress of eligible private school children and their teachers and
other educational personnel on a comparable basis to public school
children and their teachers and other educational personnel;
    (ii) Determines the number of students and their teachers and other
educational personnel to be served on an equitable basis;

[[Page 606]]

    (iii) Meets the equal expenditure requirements under paragraph (a)
of this section; and
    (iv) Provides private school children and their teachers and other
educational personnel with an opportunity to participate that--
    (A) Is equitable to the opportunity and benefits provided to public
school children and their teachers and other educational personnel; and
    (B) Provides reasonable promise of participating private school
children meeting challenging academic standards called for by the
State's student performance standards and of private school teachers and
other educational personnel assisting their students in meeting high
standards.
    (3) The agency or consortium of agencies shall make the final
decisions with respect to the services to be provided to eligible
private school children and their teachers and the other educational
personnel.
    (c) If the needs of private school children, their teachers and
other educational personnel are different from the needs of children,
teachers and other educational personnel in the public schools, the
agency or consortium of agencies shall provide program benefits for the
private school children, teachers, and other educational personnel that
are different from the benefits it provides for the public school
children and their teachers and other educational personnel.

(Authority: 20 U.S.C. 8893)



Sec. 299.8  What are the requirements to ensure that funds do not
benefit a private school?

    (a) An agency or consortium of agencies shall use funds under a
program listed in Sec. 299.6(b) to provide services that supplement,
and in no case supplant, the level of services that would, in the
absence of services provided under that program, be available to
participating children and their teachers and other educational
personnel in private schools.
    (b) An agency or consortium of agencies shall use funds under a
program listed in Sec. 299.6(b) to meet the special educational needs
of participating children who attend a private school and their teachers
and other educational personnel, but may not use those funds for--
    (1) The needs of the private school; or
    (2) The general needs of children and their teachers and other
educational personnel in the private school.

(Authority: 20 U.S.C. 8893)



Sec. 299.9  What are the requirements concerning property, equipment,
and supplies for the benefit of private school children and teachers?

    (a) A public agency must keep title to, and exercise continuing
administrative control of, all property, equipment, and supplies that
the public agency acquires with funds under a program listed in Sec.
299.6(b) for the benefit of eligible private school children and their
teachers and other educational personnel.
    (b) The public agency may place equipment and supplies in a private
school for the period of time needed for the program.
    (c) The public agency shall ensure that the equipment and supplies
placed in a private school--
    (1) Are used only for proper purposes of the program; and
    (2) Can be removed from the private school without remodeling the
private school facility.
    (d) The public agency must remove equipment and supplies from a
private school if--
    (1) The equipment and supplies are no longer needed for the purposes
of the program; or
    (2) Removal is necessary to avoid unauthorized use of the equipment
or supplies for other than the purposes of the program.
    (e) No funds may be used for repairs, minor remodeling, or
construction of private school facilities.
    (f) For the purpose of this section, the term public agency includes
the agency or consortium of agencies.

(Authority: 20 U.S.C. 8893)



                     Subpart F_Complaint Procedures



Sec. 299.10  What complaint procedures shall an SEA adopt?

    (a) General. An SEA shall adopt written procedures, consistent with
State law, for--

[[Page 607]]

    (1) Receiving and resolving any complaint from an organization or
individual that the SEA or an agency or consortium of agencies is
violating a Federal statute or regulation that applies to an applicable
program listed in paragraph (b) of this section;
    (2) Reviewing an appeal from a decision of an agency or consortium
of agencies with respect to a complaint; and
    (3) Conducting an independent on-site investigation of a complaint
if the SEA determines that an on-site investigation is necessary.
    (b) Applicable programs. This subpart is applicable to the following
programs:
    (1) Part A of title I (Improving Basic Programs Operated by Local
Educational Agencies).
    (2) Part B of title I (Even Start Family Literacy Programs) (other
than the federally administered direct grants for Indian tribes and
tribal organizations, children of migratory workers, Statewide family
literacy initiatives, and a prison that house women and children).
    (3) Part C of title I (Migrant Education).
    (4) Part D of title I (Children and Youth Who Are Neglected,
Delinquent, or At Risk of Dropping Out).
    (5) Title II (Eisenhower Professional Development Program) (other
than section 2103 and part C of this title).
    (6) Subpart 2 of part A of title III (State and Local Programs for
School Technology Resources).
    (7) Part A of title IV (Safe and Drug-Free Schools and Communities)
(other than section 4114).
    (8) Title VI (Innovative Education Program Strategies).
    (9) Part C of title VII (Emergency Immigrant Education)

(Approved by the Office of Management and Budget under OMB control
number 1810-0591)

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)



Sec. 299.11  What items are included in the complaint procedures?

    An SEA shall include the following in its complaint procedures:
    (a) A reasonable time limit after the SEA receives a complaint for
resolving the complaint in writing, including a provision for carrying
out an independent on-site investigation, if necessary.
    (b) An extension of the time limit under paragraph (a) of this
section only if exceptional circumstances exist with respect to a
particular complaint.
    (c) The right for the complainant to request the Secretary to review
the final decision of the SEA, at the Secretary's discretion. In matters
involving violations of section 14503 (participation of private school
children), the Secretary will follow the procedures in section 14505(b).

(Approved by the Office of Management and Budget under OMB control
number 1810-0591)

    (d) A requirement for LEAs to disseminate, free of charge, adequate
information about the complaint procedures to parents of students, and
appropriate private school officials or representatives.

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)



Sec. 299.12  How does an organization or individual file a complaint?

    An organization or individual may file a written signed complaint
with an SEA. The complaint must be in writing and signed by the
complainant, and include--
    (a) A statement that the SEA or an agency or consortium of agencies
has violated a requirement of a Federal statute or regulation that
applies to an applicable program; and
    (b) The facts on which the statement is based and the specific
requirement allegedly violated.

(Approved by the Office of Management and Budget under OMB control
number 1810-0591)

(Authority: 20 U.S.C. 1221e-3(a)(1), 8895)

[[Page 609]]



                              FINDING AIDS




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

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 611]]



                    Table of CFR Titles and Chapters




                      (Revised as of July 1, 2014)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 612]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 613]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)

[[Page 614]]

    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
     XCVII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)

[[Page 615]]

      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)

[[Page 616]]

        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

[[Page 617]]

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 618]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

[[Page 619]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 620]]

        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)

[[Page 621]]

        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)

[[Page 622]]

      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)

[[Page 623]]

         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799) 
                [Reserved]
            Subtitle C--Regulations Relating to Education
        XI  National Institute for Literacy (Parts 1100--1199)
       XII  National Council on Disability (Parts 1200--1299)

[[Page 624]]

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)

[[Page 625]]

       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)

[[Page 626]]

         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)

[[Page 627]]

       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)

[[Page 628]]

        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)

[[Page 629]]

         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 631]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of July 1, 2014)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     22, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 632]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I

[[Page 633]]

Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 634]]

  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV

[[Page 635]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V

[[Page 636]]

Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI

[[Page 637]]

  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII

[[Page 638]]

National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV

[[Page 639]]

Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II

[[Page 640]]

Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 641]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2009 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2009

34 CFR
                                                                   74 FR
                                                                    Page
Subtitle A
99.31 (a)(2) note and (d) corrected..................................401
99.67 (a) introductory text correctly amended........................401
Chapter II
Chapter Policy statement.............................58436, 59688, 65618

                                  2010

34 CFR
                                                                   75 FR
                                                                    Page
Subtitle A
5 Revised; eff. 7-14-10............................................33510
Chapter II
Chapter Policy statement..........3375, 4464, 12004, 16668, 18407, 28714
206.3 (a)(1) amended; (a)(2) revised...............................65769
206.4 (a)(6) and (7) redesignated as (a)(7) and (8); new (a)(6), 
        (9), (10) and (11) added...................................65770
206.5 (c)(5), (6) and (7) redesignated as (c)(6), (7) and (8); new 
        (c)(5) added; new (c)(7) and (d) amended; new (c)(8) 
        revised....................................................65770
206.10 (b)(2)(vi) redesignated as (b)(2)(vii); (b)(1)(ix) and new 
        (2)(vi) added; (b)(1)(iii)(B), (v), (viii), (2)(ii) 
        introductory text, (A), (iv) and new (vii) amended.........65770
206.11 (b)(1) and (2) amended; (b)(3) added........................65770
206.20 (b)(2) amended..............................................65770
206.31 Added.......................................................65770
280.2 (b) revised; interim..........................................9780
    Regulation at 75 FR 9780 comment period reopened...............21506
280.4 (b) amended; interim..........................................9780
    Regulation at 75 FR 9780 comment period reopened...............21506
280.20 (g) revised; interim.........................................9780
    Regulation at 75 FR 9780 comment period reopened...............21506

                                  2011

34 CFR
                                                                   76 FR
                                                                    Page
Subtitle A
99.3 Amended.......................................................75641
99.31 (a)(6)(iii) removed; (a)(6)(ii) redesignated as new 
        (a)(6)(iii); new (a)(6)(ii) added; new (a)(6)(iii) 
        introductory text, (C) introductory text, (4) and (iv) 
        revised....................................................75641
99.33 (e) removed..................................................75642

[[Page 642]]

99.35 (a)(2), (b) and authority citation revised; (a)(3) added.....75642
99.37 (c) revised; (d) redesignated as (e); new (d) added..........75642
99.61 Revised......................................................75642
99.62 Revised......................................................75643
99.64 (a), (b) and authority citation revised......................75643
99.65 (a) revised..................................................75643
99.66 Revised......................................................75643
99.67 Revised......................................................75643
Subtitle B
Chapter II
Chapter II Policy statement..........................23487, 32073, 59036
222 Technical correction...........................................31855
222.183 (a) revised; Examples 1, 2 and 3 removed...................23713

                                  2012

34 CFR
                                                                   77 FR
                                                                    Page
Subtitle A
36 Authority citation revised......................................60049
36.1 Authority citation revised....................................60049
36.2 Table I and authority citation revised........................60049
77 Authority citation added........................................18679
77.1 (c) amended...................................................18679
85 Removed.........................................................18679
104 Policy statement...............................................14972
Chapter II
Chapter II Policy statement.....................4663, 4674, 44475, 58301
280.2 Regulation at 75 FR 9780 confirmed...........................67574
280.4 Regulation at 75 FR 9780 confirmed...........................67574
280.20 Regulation at 75 FR 9780 confirmed..........................67574

                                  2013

34 CFR
                                                                   78 FR
                                                                    Page
Subtitle A
Policy statement......................................9815, 18682, 47980
    Policy statement; correction...................................54588
75 Policy statement................................................57066
75.110 Added.......................................................49352
75.135 Undesignated center heading and section added...............49352
75.209 Revised.....................................................49353
75.210 Introductory text and (c)(2)(xvi) revised; (c)(2)(xxiv) 
        through (xxix), (h)(2)(viii) through (xii) and (i) added 
                                                                   49353
75.250 Revised.....................................................49353
75.251 Heading revised; (c) added..................................49354
75.253 (b) through (e) redesignated as (c) through (f); (a)(2) and 
        new (f) revised; new (b) added.............................49354
75.266 Added.......................................................49354
75.590 Revised.....................................................49354
75.708 Heading and (a) revised; (b) redesignated as (e); new (b), 
        (c) and (d) added..........................................49354
77 Authority citation revised......................................49355
77.1 (c) amended...................................................49355
Chapter II
Chapter II Policy statement..........................41694, 53964, 79613

                                  2014

   (Regulations published from January 1, 2014, through July 1, 2014)

34 CFR
                                                                   79 FR
                                                                    Page
Subtitle A
Chapter I
Policy statement...................................................17035
Chapter II
Policy statement............................................17035, 34428


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