[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Rules and Regulations]
[Pages 6874-6879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3334]


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NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES

45 CFR Part 1156


Nondiscrimination on the Basis of Age

AGENCY: National Endowment for the Arts, National Foundation on the 
Arts and the Humanities.

ACTION: Final rule.

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SUMMARY: The National Endowment for the Arts (NEA) is the Federal 
grantmaking agency that Congress created to support the visual, 
literary, design and performing arts, to benefit all Americans. The 
NEA's mission is to foster the excellence, diversity and vitality of 
the arts in the United States and to broaden public access to the arts. 
The NEA is adopting regulations to carry out its responsibilities under 
the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) (the Act). 
The regulations are consistent with and reflect standards and 
procedures included in general government-wide regulations issued by 
the Department of Health and Human Services and published in the 
Federal Register June 12, 1979, 44 FR 33768 (1979).
    The Act of 1975 prohibits discrimination on the basis of age in 
programs and activities receiving Federal financial assistance. The Act 
also permits federally assisted programs and activities, and recipients 
of Federal funds, to continue to use certain age distinctions and 
factors other than age which meet the requirements of the Act and these 
regulations.

DATES: Effective February 11, 1998.

FOR FURTHER INFORMATION CONTACT:
Karen Elias, Deputy General Counsel, (202) 682-5418.

SUPPLEMENTARY INFORMATION:

Background

    The regulations are consistent with and reflect standards and 
procedures included in general government-wide regulations issued by 
the Department of Health and Human Services (HHS) and published in the 
Federal Register June 12, 1979, 44 FR 33768 (1979). The Act prohibits 
discrimination on the basis of age in programs and activities receiving 
Federal financial assistance. The Act also permits federally assisted 
programs and activities, and recipients of Federal funds, to continue 
to use certain age distinctions and factors other than age which meet 
the requirements of the Act and these regulations.
    45 CFR Section 90.31(b) of the HHS government-wide regulations 
required Federal agencies with statutory authority to extend Federal 
financial assistance to issue agency regulations applicable to the 
specific programs and activities administered by that agency. In 
addition to publishing specific regulations consistent with HHS 
government-wide regulations, the following actions are required to be 
taken by the NEA in connection with implementation of the Act.
    (1) An appendix is required to be included in NEA regulations 
listing all age distinctions which appear in federal statutes and 
regulations and effect the agency's programs of financial assistance. A 
review of the National Foundation on the Arts and the Humanities Act of 
1965, as amended, 20 U.S.C. 951 et seq., and NEA regulations reveals no 
statutory age distinctions used by the NEA in the administration of 
agency programs.
    (2) As a second step in the public administration process, the NEA 
must review any age distinctions it imposes on its recipients by 
regulation, policy or administrative practice in order to determine 
whether these distinctions are permissible under the Act. The results 
of this review must be included in a report that the agency shall 
publish, for public comment, in the Federal Register, no later than 12 
months from the date the agency publishes its final regulations. The 
NEA will conduct and publish this review no later than 12 months from 
the date of the publication of its Final Rule.
    (3) The NEA is required to report annually to the Congress through 
HHS on its compliance and enforcement activities. The NEA regularly 
files this report.
    (4) The NEA is required to provide written notices to each 
recipient of the recipient's obligations under the Act, to provide 
technical assistance to the recipients where necessary, and to make 
available educational materials explaining the rights and obligations 
of beneficiaries and recipients.
    (5) The NEA is required to establish a procedure for processing 
complaints of age discrimination. The complaint handling procedure must 
include an initial screening by the NEA and notice to complainants and 
recipients of their rights and obligations in the complaint process. 
All complaints which fall within the coverage of the Act will be 
referred to the agency designated by the Secretary of HHS to manage the 
mediation process.
    (6) The NEA must review the effectiveness of its regulations 30 
months after their effective date. The review is to be published in the 
Federal Register  with an opportunity for public comment.
    The NEA received comments on its proposed rulemaking from the HHS 
Office of Civil Rights. After analyzing the comments received, all 
except for one of HHS's comments have been incorporated into the final 
rule.
    The proposed regulations listed Sections 1156.11 Notice to 
Subrecipients, 1156.12 Self-Evaluation, 1156.13 Information 
Requirements, 1156.15 Complaints, 1156.16 Mediation, 1156.17 
Investigation, and 1156.21 Exhaustion of administrative remedies as 
containing information collection requirements which must be submitted 
to OMB under the Paper Reduction Act of 1980, 44 U.S.C. 5301 et seq. 
(1982). HHS's conclusion that these sections do not contain information 
collection requirements subject to OMB clearance was adopted for the 
reasons listed below.
    Section 3518(c)(1)(B) of the Paper Reduction Act exempts from OMB 
approval, collections of information ``* * * during the conduct of * * 
* (ii) an administrative action or investigation involving an agency 
against specific individuals or entities.'' Therefore, as originally 
stated in the Proposed Regulations, the NEA need not submit Sections 
1156.13, 1156.16, 1156.17 and 1156.21 to OMB for approval since all 
four of these requirements are tied to the agency's authority to 
investigate.
    Moreover, the mandatory self-evaluation requirement contained in 
1156.12 of the proposed regulation requiring recipients to complete a 
self-evaluation was disapproved and invalidated by OMB. NEA will, 
therefore, adopt the approach used in the HHS regulations set forth at 
45 CFR 91.33(b). This approach provides NEA with discretionary 
authority to require a self-evaluation requirement as part of an 
investigation thereby eliminating any Paperwork Reduction Act problems 
because it is discretionary and tied to the authority to investigate.
    Sections 1156.15 and 1156.11 are also not subject to OMB clearance 
because neither provision involves a ``collection of information'' 
within the meaning of the Act. Section 1156.15 provides individuals 
``may file'' complaints and Section 1156.11 requires notice to 
subrecipients of their obligations under the Act and the regulations.

[[Page 6875]]

    In accordance with HHS's comments, NEA has adopted a section on 
Special Benefits added to Section 1156.7 at (c) permitting a recipient 
to provide special benefits to children or the elderly provided that 
the benefits do not result in the exclusion of persons who are eligible 
to participate in a recipient's program.
    Section 1156.1 was amended to include ``and as required by the 
general age discrimination regulations at 45 CFR Part 90'' where both 
the Act and the general guidelines provide authority for the 
promulgation of regulations.
    Section 1156.2(a) was amended to include the language ``and these 
regulations'' after ``1975.'' The new section now reads ``The Age 
Discrimination Act of 1975 and these regulations apply to any program 
or activity receiving financial assistance from the NEA and to each 
program or activity that receives or benefits from such assistance.''
    Section 1156.3 defining ``action'' was amended to include the 
language ``or the use of any policy, rule, standard or method of 
administration.'' The new section now reads ``action means any act, 
activity, policy, rule, standard or method of administration; or the 
use of any policy, rule, standard, or method of administration.''
    Section 1156.6 on Rules Against Age Discrimination was amended to 
include the language ``[t]he rules stated in this section are limited 
by the exceptions contained in Sec. 1156.7(b) and (c) of these 
regulations.''
    Section 1156.6(b)(1) was amended to include the word ``or'' to 
clarify that either of these effects constitutes a violation.
    Section 1156.11 was amended to include the words ``the Act and'' 
after the word ``under.'' The new section now reads ``When a recipient 
passes on Federal financial assistance from the NEA to subrecipients, 
the recipient shall provide the subrecipients with written notice 
regarding the subrecipient's obligation under the Act and these 
regulations.''
    Section 1156.14 regarding ``Compliance Reviews'' was revised to 
provide requirements consistent with 45 CFR Part 90. The proposed 
regulation limited agency action to compliance reviews and pre-award 
reviews. The language is amended to include ``and other similar 
procedures to investigate and correct violations of the Act and 
regulations.'' This amendment eliminates the limit on the NEA's 
authority to conduct compliance reviews only where the agency has 
reason to believe there may be a violation of the regulations. No 
similar limitation is found in the government-wide regulations.
    Section 1156.15 was amended to include the language ``the Act and'' 
after the language ``prohibited by.'' The second sentence requiring a 
complainant to file a complaint within 180 days from the ``time'' that 
the complainant first had knowledge of an alleged discriminatory act, 
is clarified by stating ``180 days from the date that the complainant 
first had knowledge of the alleged discriminatory act.'' Following 45 
CFR 91.42(b), the language, ``[t]he Endowment will consider the date a 
complaint is filed to be the date upon which the complaint is 
sufficient to be processed'' is added to identify when a complaint will 
be deemed filed for purposes of the 180-day requirement.
    Section 1156.16(a) was amended to include ``promptly,'' after 
``Endowment'' for consistency with Sec. 90.43(c)(3). After the language 
``refer to,'' Section 1156.16(a) was amended to include the language 
``the agency designated by the Secretary of HHS to manage the mediation 
process'' and delete the language ``[f]ederal Mediation Service.''
    Section 1156.16(c) was amended to include for clarity the language 
``by the endowment'' after the language ``shall be taken.''
    Section 1156.19(a)(1) provides that cases settled in mediation or 
prior to a hearing will not involve termination of a recipient's 
Federal financial assistance from the NEA. However, a case settled in 
mediation could eventually go to enforcement if the recipient fails to 
abide by the agreement. In addition, a recipient could fail to abide by 
the provisions in a settlement agreement between the NEA and the 
recipient. Section 1156.19(a)(1) also was amended to include the 
language ``unless it is reopened because of a violation of the 
agreement'' to accurately reflect the intent of the provision.
    Section 1156.19(b) is amended to include the language ``or portion 
thereof'' after ``particular program or activity'' to comply with the 
language contained in the statute and in government-wide regulations.
    Section 1156.19(d) was amended to include ``(a)(1)'' for the sake 
of clarity.
    Section 1156.19(d)(2) was amended to include ``(a)(1) after 
1156.19'' for the sake of clarity.
    The last sentence of Section 1156.19(d)(2) was changed from ``[i]f 
a hearing results in a finding against the recipient, the Endowment 
shall continue a deferral until such time as the recipient demonstrates 
that it will operate in a non-discriminatory manner'' to ``[i]f the 
hearing results in a finding against the recipient, the Endowment must 
terminate funds.'' This language was changed because an indefinite 
deferral is not authorized.
    Section 1156.20(a) was amended to include ``any public or nonprofit 
private organization or agency, or State or political subdivision of 
the State'' after ``recipient.''
    Section 1156.20(b)(2) was amended deleting the language ``the 
Endowment's enabling legislation'' and adding the language ``[t]he 
ability to achieve the goals of the Federal statute authorizing the 
program or the activity'' from Sec. 90.48.
    Section 1156.21, Remedial and Affirmative Action by Recipients was 
deleted as repetitive of sections 1156.7 and 1156.19. Section 1156.21 
is now Exhaustion of Administrative Remedies.
    Section 1156.22(b)(3)(iii) was amended to clarify that the 30-day 
notice predicate to filing a civil action must be provided to the 
``Chairperson of the Arts Endowment, the Secretary, the Attorney 
General of the United States, and the recipient.''

Summary of Regulation

    The NEA's regulations are divided into four subparts: Subpart A--
General; Subpart B--Standards for Determining Age Discrimination; 
Subpart C--Responsibilities of Endowment recipients; Subpart D--
Investigation, Conciliation and Enforcement Procedures.
    Subpart A of the regulations explains the purpose of the NEA's age 
discrimination regulations and sets forth general definitions. Section 
1156.3(h) defines the term ``recipient.'' As indicated recipient 
includes 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. Recipient includes any successor, assignee, or transferee 
but excludes the ultimate beneficiary of the assistance. This language 
points out the inapplicability of these regulations to assistance 
programs administered directly by the Federal government to 
beneficiaries. With respect to direct assistance programs, the 
regulations may apply whenever direct aid is provided to an individual 
on conditions that the aid be spent in providing services or benefits 
to others. The general and specific prohibitions against discrimination 
on the basis of age as well as the exceptions to those prohibitions are 
set forth in Subpart B.

[[Page 6876]]

As a general rule, under the regulations, no person in the United 
States shall, on the basis of age, be excluded from participation in, 
be denied the benefits of, or be subject to discrimination under any 
program or activity receiving NEA financial assistance.
    The Act contains several exceptions which limit the general 
prohibition against age discrimination. Section 304(b)(1) of the Act 
permits the use of age distinctions which are based on reasonable 
factors other than age. The regulations provide definitions for two 
terms which are essential to an understanding of those exceptions: 
``normal operation'' and ``statutory objective.'' ``Normal operation'' 
means the operation of a program or activity, without significant 
changes that would impair its ability to meet its objectives. 
``Statutory objective'' is defined to mean any purpose which is 
explicitly stated in a Federal statute, State statute or local statute 
or ordinance.
    The regulations establish a four-part test, all parts of which must 
be met for an explicit age distinction to satisfy one of the statutory 
exceptions and to continue in use in a Federally assisted program. This 
four-part test will be used to scrutinize age distinctions which are 
imposed in the administration of NEA assisted programs, but which are 
not explicitly authorized by a Federal, State or local statute.
    Recipients of NEA funds also are permitted to take an action 
otherwise prohibited by the Act, if the action is based on ``reasonable 
factors other than age.'' In that event the action may be taken even 
though it has a disproportionate effect on persons of different ages. 
However, according to the regulations, the factor other than age must 
bear a direct and substantial relationship to the program's normal 
operation or to the achievement of a statutory objective.
    Subpart C sets forth the duties of NEA recipients. NEA recipients 
are responsible for ensuring that their programs and activities are in 
compliance with the Act and NEA regulations. Where an NEA recipient 
passes on financial assistance to subrecipients, the recipient must 
notify subrecipients of their obligations under the regulations. Under 
these regulations, each recipient and each subrecipient could be 
required to complete a written self-evaluation of its compliance with 
the regulations. The self-evaluation must be kept on file for three 
years from its effective date and made available to the public upon 
request.
    Subpart D of the regulations establishes the procedures for 
investigation, conciliation, and enforcement of the Act. This Subpart 
closely reflects the procedural requirements included in HHS's 
government-wide regulations.
    Section 1156.16 requires mediation as an initial step in the 
complaint process. The NEA will refer all complaints of discrimination 
under the Act to the federal agency designated by the Secretary of HHS 
to manage the mediation process. Complainants and recipients are 
required to participate in the effort to reach a mutually satisfactory 
mediated settlement of the complaint. Mediation may last no more than 
60 days from the date the NEA first receives the complaint. The NEA 
will, however, investigate complaints that are unresolved after 
mediation or are reopened because the mediation agreement is violated.
    Finally, the regulations permit the NEA to disburse withheld funds 
to an appropriate alternate recipient. The alternate recipient must be 
in compliance with the regulations and must demonstrate the ability to 
comply with the agency's regulations issued under this Act and to 
achieve the goals of the Federal statute authorizing the program or 
activity.

List of Subjects in 45 CFR Part 1156

    Administrative practice and procedure, Civil rights, 
Discrimination, Grant programs, Investigations, Reporting and 
recordkeeping requirements.

    Dated: February 4, 1998.
Karen Elias,
Deputy General Counsel, National Endowment for the Arts.

    In consideration of the forgoing, part 1156 is hereby added to 
Title 45 of the Code of Federal Regulations to read as set forth below.

PART 1156--NONDISCRIMINATION ON THE BASIS OF AGE

Subpart A--General

Sec.
1156.1  Purpose.
1156.2  Application.
1156.3  Definitions.
1156.4  [Reserved]

Subpart B--Standards for Determining Discriminatory Practices

1156.5  Purpose.
1156.6  Rules against age discrimination.
1156.7  Exceptions to the rules against age discrimination.
1156.8  Burden of proof.

Subpart C--Responsibilities of Endowment Recipients

1156.9  [Reserved].
1156.10  General responsibilities.
1156.11  Notice to subrecipients.
1156.12  Self-evaluation.
1156.13  Information requirements.

Subpart D--Investigation, Conciliation, and Enforcement Procedures

1156.14  Compliance reviews.
1156.15  Complaints.
1156.16  Mediation.
1156.17  Investigation.
1156.18  Prohibition against intimidation or retaliation.
1156.19  Compliance procedure.
1156.20  Alternate funds disbursal procedure.
1156.21  Exhaustion of administrative remedies.

    Authority: 42 U.S.C. 6101 et seq.; 45 CFR part 90.

Subpart A--General


Sec. 1156.1  Purpose.

    The purpose of this part is to implement the Age Discrimination Act 
of 1975 (``Act''), as amended, and as required by the general age 
discrimination regulations at 45 CFR part 90. The Age Discrimination 
Act of 1975, as amended, is designed to prohibit discrimination on the 
basis of age in programs or activities receiving Federal financial 
assistance. The Act also permits federally assisted programs and 
activities, and recipients of Federal funds to continue to use certain 
age distinctions and factors other than age which meet the requirements 
of the Act and the regulations in this part.


Sec. 1156.2  Application.

    (a) The Age Discrimination Act of 1975 and the regulations in this 
part apply to any program or activity receiving financial assistance 
from the National Endowment for the Arts and to each program or 
activity that receives or benefits from such assistance.
    (b) The Age Discrimination Act of 1975 does not apply to:
    (1) Any age distinction contained in that part of Federal, State, 
or local statute or ordinance adopted by an elected general purpose 
legislative body which:
    (i) Provides benefits or assistance to persons based on age; or
    (ii) Establishes criteria for participation in age-related terms; 
or
    (iii) Describes intended beneficiaries or target groups in age 
related terms.
    (2) Any employment practice of any employer, employment agency, 
labor organization, or any labor-management joint apprenticeship 
training program, except for any program or activity receiving Federal 
financial assistance for public service employment under the Job 
Training Partnership Act (JTPA).


Sec. 1156.3  Definitions.

    As used in the regulation in this part, the term:

[[Page 6877]]

    (a) Act means the Age Discrimination Act of 1975, as amended (Title 
III of Pub. L. 94-135).
    (b) Action means any act, activity, policy, rule, standard, or 
method of administration; or the use of any policy, rule, standard, or 
method of administration.
    (c) Age means how old a person is or the number of elapsed years 
from the date of a person's birth.
    (d) Age distinction means any action using age or any age-related 
term.
    (e) Age-related term means a word or words which necessarily imply 
a particular age or range of ages (for example, ``children,'' 
``adult,'' ``older person,'' but not ``student'').
    (f) 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 the agency provides or otherwise makes available 
assistance in the form of:
    (1) Funds;
    (2) Services of Federal personnel; or
    (3) Real and personal property including:
    (i) Transfers or leases of property for less than fair market value 
or for reduced consideration; and
    (ii) 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.
    (g) Normal operation means the operation of a program or activity 
without significant changes that would impair its ability to meet its 
objectives.
    (h) 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. Recipient includes any successor, assignee, 
or transferee, but excludes the ultimate beneficiary of the assistance.
    (i) 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.
    (j) Sub-recipient means any of the entities in the definition of 
recipient to which a recipient extends or passes on Federal financial 
assistance and has all the duties of a recipient in the regulations in 
this part.
    (k) Endowment means the National Endowment for the Arts.
    (l) Chairperson means the Chairperson of the National Endowment for 
the Arts.
    (m) Secretary means the Secretary of the Department of Health and 
Human Services.
    (n) United States means the fifty States, the District of Columbia, 
Puerto Rico, the Virgin Islands, American Somoa, Guam, Wake Island, the 
Canal Zone, the Federated States of Micronesia and the Republic of 
Palau, the Northern Marianas, and the territories and possessions of 
the United States.


Sec. 1156.4  [Reserved]

Subpart B--Standards for Determining Discriminatory Practices


Sec. 1156.5  Purpose.

    The purpose of this subpart is to set forth the prohibitions 
against age discrimination and the exceptions to those prohibitions.


Sec. 1156.6  Rules against age discrimination.

    The rules stated in this section are limited by the exceptions 
contained in Sec. 1156.7 (b) and (c).
    (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 which 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) The specific forms of age discrimination listed in paragraph 
(b) of this section do not necessarily constitute a complete list of 
discriminatory actions.


Sec. 1156.7  Exceptions to the rules against age discrimination.

    (a) Normal operation or statutory objective of any program or 
activity. A recipient is permitted to take an action otherwise 
prohibited by Sec. 1156.6 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, if:
    (1) Age is used as a measure or approximation of one or more other 
characteristics; and
    (2) The other characteristic(s) 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; and
    (3) The other characteristic(s) can be reasonably measured or 
approximated by the use of age; and
    (4) The other characteristic(s) are impractical to measure directly 
on an individual basis.
    (b) Reasonable factors other than age. A recipient is permitted to 
take an action otherwise prohibited by Sec. 1156.6 which 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.
    (c) Remedial and affirmative action by recipients. If a recipient 
operating a program which serves the elderly or children in addition to 
persons of other ages, provides special benefits to the elderly or to 
children the provision of those benefits shall be presumed to be 
voluntary affirmative action provided that it does not have the effect 
of excluding otherwise eligible persons from participation in the 
program.


Sec. 1156.8  Burden of proof.

    The recipient of Federal financial assistance bears the burden of 
proving that an age distinction or other action falls within the 
exceptions outlined in Sec. 1156.7.

Subpart C--Responsibilities of Endowment Recipients


Sec. 1156.9  [Reserved]


Sec. 1156.10  General responsibilities.

    A recipient has primary responsibility to ensure that its programs 
and activities are in compliance with the Age Discrimination Act, to 
take steps to eliminate violations of the Act, and to provide notice to 
beneficiaries of its programs and activities concerning protection 
against discrimination provided by the Act and the regulations in this 
part. A recipient also has responsibility to maintain records, provide 
information, and to afford access to its records to the Endowment to 
the extent required to determine whether it is in compliance with the 
Act.

[[Page 6878]]

Sec. 1156.11  Notice to subrecipients.

    Where a recipient passes on Federal financial assistance from the 
Endowment to subrecipients, the recipient shall provide the 
subrecipients with written notice regarding the subrecipient's 
obligations under the Act and the regulations in this part.


Sec. 1156.12  Self-evaluation.

    (a) Each recipient employing the equivalent of 15 or more full time 
employees may be required to complete a written self-evaluation, in a 
manner specified by the responsible Endowment official during the 
course of an investigation, of any age distinction imposed in its 
program or activity receiving Federal financial assistance from the 
Endowment to assess the recipient's compliance with the Act.
    (b) Each recipient shall take corrective and remedial action 
whenever a self-evaluation indicates a violation of the Act.
    (c) Each recipient shall make the self-evaluation available on 
request to the Endowment and to the public for a period of three years 
following its completion.


Sec. 1156.13  Information requirements.

    Each recipient shall:
    (a) Make available to the Endowment, upon request, information 
necessary to determine whether the recipient is complying with the 
regulations in this part.
    (b) Permit reasonable access by the Endowment to the books, 
accounts and other recipient facilities and sources of information to 
the extent necessary to determine whether the recipient is in 
compliance with the Act.

Subpart D--Investigation, Conciliation, and Enforcement Procedures


Sec. 1156.14   Compliance reviews.

    The Endowment may conduct compliance reviews, pre-award reviews and 
other similar procedures in order to investigate and correct violations 
of the Act and regulations. The Endowment may conduct these reviews in 
the absence of a compliant against the recipient. In the event a 
compliance review or pre-award review indicates a violation of the 
regulations in this part, the Endowment will attempt to achieve 
voluntary compliance with the Act. If voluntary compliance cannot be 
achieved, enforcement efforts will proceed as described in 
Sec. 1156.19.


Sec. 1156.15   Complaints.

    (a) Any person, individually or as a member of a class or on behalf 
of others, may file a complaint with the Endowment, alleging 
discrimination prohibited by the Act and the regulations in this part 
based on an action occurring on or after July 1, 1979. A complainant 
shall file a complaint within 180 days from the date that the 
complainant first had knowledge of the alleged act of discrimination. 
However, for good cause, the Endowment may extend this time limit. The 
Endowment will consider the date a complaint is filed to be the date 
upon which the complaint is sufficient to be processed.
    (b) Complaints must include a written statement identifying the 
parties involved, describing the alleged violation, and stating the 
date on which the complainant first had knowledge of the alleged 
violation. Complaints must be signed by the complainant. The Endowment 
will return any complaint that does not contain the necessary 
information, that is not signed by the complainant, or that is not 
within the Endowment's jurisdiction for any other reason. The Endowment 
will provide an explanation for all such returned complaints.
    (c) The Endowment will attempt to facilitate the filing of 
complaints wherever possible, including taking the following measures:
    (1) Widely disseminating information regarding the obligations of 
recipients under the Act and the regulations in this part.
    (2) 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.
    (3) Notifying the complainant and the recipient (or their 
representatives) of their right to contact the Endowment for 
information and assistance regarding the complaint resolution process.


Sec. 1156.16   Mediation.

    (a) Referral of complaints for mediation. The Endowment will 
promptly refer all complaints to the agency designated by the Secretary 
of HHS to manage the mediation process that:
    (1) Fall within the jurisdiction of the regulations in this part; 
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 make 
an informal judgment that an agreement is not possible. There must be 
at least one meeting with the mediator before the Endowment will accept 
a judgment that an agreement is not possible. However, the recipient 
and the complainant need not meet with the mediator at the same time.
    (c) If the complainant and recipient reach a mutually satisfactory 
resolution of the complaint during the mediation period, they shall 
reduce the agreement to wiring. The mediator shall send a copy of the 
settlement to the Endowment. No further action shall be taken by the 
Endowment based on that complaint unless it appears that the 
complainant or the recipient has failed to comply with the agreement.
    (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) Not more than 60 days after the Endowment receives the 
complaint, the mediator shall return a still unresolved complaint to 
the Endowment for initial investigation. The mediator may return a 
complaint at any time before the end of the 60-day period if it appears 
that the complaint cannot be resolved through mediation. The mediator 
may extend this 60-day period, provided the Endowment concurs, for not 
more than 30 days, if the mediator determines that resolution is likely 
to occur within such period.


Sec. 1156.16  Investigation.

    (a) Informal investigation. (1) The Endowment will investigate 
complaints that are unresolved after mediation or are reopened because 
of a violation of a mediation agreement.
    (2) As part of the initial investigation, the Endowment will use 
informal fact-finding methods, including joint or separate discussions 
with the complainant and the recipient to establish the facts, and, if 
possible, resolve the complaint to the mutual satisfaction of the 
parties. The Endowment may seek the assistance of any involved State 
program agency.
    (3) The Endowment will put any agreement in writing and have it 
signed by the parties and an authorized official at the Endowment.
    (4) The settlement shall not affect the operation of any other 
enforcement effort of the Endowment, including compliance reviews and 
investigation of other complaints which may involve the recipient.
    (5) The settlement is not a finding of discrimination against a 
recipient.
    (b) Formal investigation, conciliation, and hearing. If the 
Endowment cannot

[[Page 6879]]

resolve the complaint during the early stages of the investigation, it 
shall:
    (1) Complete the investigation of the complaint.
    (2) Attempt to achieve voluntary compliance satisfactory to the 
Endowment, if the investigation indicates a violation.
    (3) Arrange for enforcement as described in Sec. 1156.19, if 
necessary.


Sec. 1156.18  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
    (b) Cooperates in any mediation, investigation, hearing, or other 
part of the Endowment's investigation, conciliation and enforcement 
process.


Sec. 1156.19  Compliance procedure.

    (a) The Endowment may enforce the Act and the regulations in this 
part through:
    (1) Termination of a recipient's Federal financial assistance from 
the Endowment under the program or activity involved where the 
recipient has violated the Act and the regulations in this part. 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. Therefore, a case which is settled in 
mediation, or prior to a hearing, will not involve termination of a 
recipient's Federal financial assistance from the Endowment unless it 
is reopened because of a violation of the agreement.
    (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 the regulations in this part.
    (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 the regulations in this part.
    (b) The Endowment will limit any termination under paragraph (a)(1) 
of this section to the particular recipient and particular program or 
activity or portion thereof that the Endowment finds in violation of 
the regulations in this part. The Endowment will not base any part of a 
termination on a finding with respect to any program or activity of the 
recipient which does not receive Federal financial assistance from the 
Endowment.
    (c) The Endowment will not take action under paragraph (a) of this 
section until:
    (1) The Chairperson has advised the recipient of its failure to 
comply with the Act and the regulations in this part and has determined 
that voluntary compliance cannot be obtained.
    (2) Thirty days have elapsed after the Chairperson has sent a 
written report of the circumstances and grounds of the action to the 
committees of the Congress having legislative jurisdiction over the 
Federal program or activity involved. The Chairperson will file a 
report whenever any action is taken under paragraph (a) of this 
section.
    (d) The Chairperson also may defer granting new Federal financial 
assistance from the Endowment to a recipient when a hearing under 
paragraph (a)(1) of this section is initiated.
    (1) New Federal financial assistance from the Endowment includes 
all assistance for which the Endowment requires an application or 
approval, including renewal or continuation of existing activities, or 
authorization of new activities, during the deferral period. New 
Federal financial assistance from the Endowment does not include 
assistance approved prior to the beginning of a termination hearing 
under paragraph (a)(1) of this section or increases in funding as a 
result of changed computation of formula awards.
    (2) The Endowment will not begin a deferral until the recipient has 
received a notice of an opportunity for a hearing under paragraph 
(a)(1) of this section. The Endowment will not continue a deferral 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 the Chairperson. The Endowment will not continue a 
deferral for more than 30 days after the close of the hearing, unless 
the hearing results in a finding against the recipient. If the hearing 
results in a finding against the recipient, the Endowment must 
terminate funds.


Sec. 1156.20  Alternate funds disbursal procedure.

    (a) When the endowment withholds funds from a recipient under the 
regulations in this part, the Chairperson may disburse the withheld 
funds directly to an alternate recipient otherwise eligible for 
Endowment support: any public or nonprofit private organization or 
agency, or State or political subdivision of the State.
    (b) The Chairperson will require any alternate recipient to 
demonstrate:
    (1) The ability to comply with the regulations in this part; and
    (2) The ability to achieve the goals of the Federal statute 
authorizing the program or the activity.


Sec. 1156.21  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) 180 days have elapsed since the complainant filed the complaint 
and the Endowment has made no finding with regard to the complaint; or
    (2) The Endowment issues a finding in favor of the recipient.
    (b) If the Endowment fails to make a finding within 180 days or 
issues a finding in favor of the recipient, the Endowment will:
    (1) Promptly advise the complainant if either of the conditions of 
paragraph (a) of this section has been met;
    (2) Advise the complainant of his or her right to bring a civil 
action for injunctive relief that will effect the purpose of the Act;
    (3) Inform the complainant:
    (i) That the complainant may bring a civil action only in the 
United States district court for the district in which the recipient is 
located 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 the complainant must demand these costs in the 
complaint;
    (iii) That before commencing the action the complainant shall give 
30 days notice by registered mail to the Chairperson of the Endowment, 
the Secretary, the Attorney General of the United States, and the 
recipient;
    (iv) That the notice must state: the alleged violation of the Act; 
the relief requested; the court in which the complainant is bringing 
the action; and whether or not the 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.

[FR Doc. 98-3334 Filed 2-10-98; 8:45 am]
BILLING CODE 7535-01-M