[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Rules and Regulations]
[Pages 70146-70155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32323]



[[Page 70145]]

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Part III





Department of Education





_______________________________________________________________________



34 CFR Parts 606 and 607



Strengthening Institutions Program and Developing Hispanic-Serving 
Institutions Program; Final Rule

  Federal Register / Vol. 64, No. 240 / Wednesday, December 15, 1999 / 
Rules and Regulations  

[[Page 70146]]



DEPARTMENT OF EDUCATION

34 CFR Parts 606 and 607


Strengthening Institutions Program and Developing Hispanic-
Serving Institutions Program

AGENCY: Department of Education.

ACTION: Final regulations.

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

SUMMARY: We amend the regulations governing the Strengthening 
Institutions and Developing Hispanic-Serving Institutions (HSI) 
Programs to conform them to statutory changes made to those programs by 
the Higher Education Amendments of 1998 (1998 Amendments). We have also 
moved the regulations for the HSI Program to a new part. These 
regulations also make technical corrections and changes.

EFFECTIVE DATE: These regulations are effective January 14, 2000.

FOR FURTHER INFORMATION CONTACT: Darlene Collins, U.S. Department of 
Education, 1990 K Street, NW., Washington, DC 20006-8512. Telephone: 
(202) 502-7576. If you use a telecommunications device for the deaf 
(TDD), you may call the Federal Information Relay Service (FIRS) at 1-
800-877-8339.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person.

SUPPLEMENTARY INFORMATION: The Strengthening Institutions Program is 
authorized under title III, part A of the Higher Education Act of 1965 
as amended (HEA). The HSI Program is now authorized under title V of 
the HEA. However, prior to the 1998 Amendments, it was also authorized 
under title III, part A of the HEA. Accordingly, because the HSI 
Program was moved from title III to title V of the HEA, we moved the 
regulations governing the program from part 607 to a new part, part 
606. However, new part 606 either contains regulatory provisions 
already included in part 607 or statutory changes made to the HSI 
Program by the 1998 Amendments.
    The 1998 Amendments made several other changes to the HEA with 
regard to those two programs that require conforming changes to the 
regulations for the two programs. These statutory amendments 
incorporated in the regulations in part 606 include:
     Expanding the specific allowable activities, and
     Providing that an institution that receives a five-year 
individual grant under the HSI Program is not eligible to receive an 
additional development grant until two years after the date on which 
the five-year grant terminates.
    The statutory amendments incorporated in the regulations in part 
607 include:
     Expanding the specific allowable activities, and
     Extending from one year to two years the period that a 
previous grantee must sit out before it can receive another individual 
development grant.
    The 1998 Amendments also created several new programs under the 
Strengthening Institutions Program umbrella. These programs provide 
grants to Indian Tribal Colleges and Universities, Alaska Native-
serving institutions, and Native Hawaiian-serving institutions. Grants 
made to these institutions under these programs are subject to the 
requirements in part 607. However, to implement these programs, part 
607 is further amended to incorporate the following statutory 
provisions that:
     Authorize grants to Tribal Colleges and Universities to 
plan, develop, and carry out approved program activities.
     Define the terms ``Indian'', ``Indian Tribe'' and ``Tribal 
College or University''.
     Allow the Secretary to waive the needy student eligibility 
requirement if the applicant is a Tribal College or University.
     List activities that Tribal Colleges and Universities may 
carry out under a grant.
     Provide that no Tribal College or University that receives 
funds under the Indian Tribal Colleges and Universities Program may 
concurrently receive other grant funds under the Strengthening 
Institutions Program, Strengthening Historically Black Colleges and 
Universities Program, or Strengthening Historically Black Graduate 
Institutions Program.
     Require a five-year plan for improving the assistance 
provided by the Tribal College or University to Indian students, 
increasing the rates at which Indian secondary school students enroll 
in higher education, and increasing overall postsecondary retention 
rates for Indian students.
     Authorize grants to assist Alaska Native-serving and 
Native Hawaiian-serving institutions of higher education to plan, 
develop and carry out approved program activities.
     Define the terms ``Alaska Native'', ``Alaska Native-
serving Institution'' and ``Native Hawaiian-serving institution''.
     List activities that Alaska Native-serving institutions of 
higher education and Native Hawaiian-serving institutions of higher 
education may carry out under a grant.
     Provide that no Alaska Native-serving institution or 
Native Hawaiian-serving institution that receives funds under the 
programs specifically serving those institutions may concurrently 
receive other grant funds under the Strengthening Institutions Program, 
Strengthening Historically Black Colleges and Universities Program, or 
Strengthening Historically Black Graduate Institutions Program.
     Require a five-year plan for improving the assistance 
provided by the Alaska Native-serving institution or the Native 
Hawaiian-serving institution to Alaska Native students or Native 
Hawaiian students.

Intergovernmental Review

    This program is subject to the requirements of Executive Order 
12372 and the regulations in 34 CFR part 79. The objective of the 
Executive order is to foster an intergovernmental partnership and a 
strengthened federalism by relying on processes developed by State and 
local government for coordination and review of proposed Federal 
financial assistance.
    In accordance with the order, we intend this document to provide 
early notification of the Department's specific plans and actions for 
this program.

Assessment of Education Impact

    Based on our review, we have determined that these final 
regulations do not require transmission of information that any other 
agency or authority of the United States gathers or makes available.

Electronic Access to This Document

    You may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or Adobe 
Portable Document Format (PDF) on the Internet at either of the 
following sites:

http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html

To use the PDF you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the PDF, call the U.S. Government Printing 
Office (GPO), toll free, at 1-888-293-6498; or in the Washington, D.C. 
area at (202) 512-1530.

    Note: The official version of this document is the document 
published in the Federal Register. Free Internet access to the 
official edition of the Federal Register and the Code of Federal 
Regulations is available on GPO Access at: http://
www.access.gpo.gov/nara/index.html

[[Page 70147]]

Waiver of Proposed Rulemaking

    It is the practice of the Secretary to offer interested parties the 
opportunity to comment on proposed regulations in accordance with the 
Administrative Procedure Act (5 U.S.C. 553). However, since these 
changes merely incorporate statutory amendments into the regulations 
and do not implement substantive policy, public comment could have no 
effect. Therefore, the Secretary has determined pursuant to 5 U.S.C. 
553(b)(B) that public comment on the regulations is unnecessary and 
contrary to the public interest.

List of Subjects in 34 CFR Parts 606 and 607

    Colleges and universities, Grant programs--education, Reporting and 
recordkeeping requirements.

    Dated: December 8, 1999.
A. Lee Fritschler,
Assistant Secretary, Office of Postsecondary Education.

    For the reasons discussed in the preamble, the Secretary amends 
title 34 of the Code of Federal Regulations by adding a new part 606 
and amending part 607 as follows:
    1. A new part 606 is added to read as follows:

PART 606--DEVELOPING HISPANIC-SERVING INSTITUTIONS PROGRAM

Subpart A--General

Sec.
606.1  What is the Developing Hispanic-Serving Institutions Program?
606.2  What institutions are eligible to receive a grant under the 
Developing Hispanic-Serving Institutions Program?
606.3  What is an enrollment of needy students?
606.4  What are low educational and general expenditures?
606.5  How does an institution apply to be designated an eligible 
institution?
606.6  What regulations apply?
606.7  What definitions apply?
606.8  What is a comprehensive development plan and what must it 
contain?
606.9  What are the type, duration, and limitations in the awarding 
of grants under this part?
606.10  What activities may and may not be carried out under a 
grant?

Subpart B--How Does an Institution Apply for a Grant?

606.11  What must be included in individual development grant 
applications?
606.12  What must be included in cooperative arrangement grant 
applications?
606.13  How many applications for a development grant may an 
institution submit?

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

606.20  How does the Secretary choose applications for funding?
606.21  What are the selection criteria for planning grants?
606.22  What are the selection criteria for development grants?
606.23  What special funding consideration does the Secretary 
provide?
606.24  How does the Secretary use an applicant's performance under 
a previous development grant when awarding a development grant?
606.25  What priority does the Secretary use in awarding cooperative 
arrangement grants?

Subpart D--What Conditions Must a Grantee Meet?

606.30  What are allowable costs and what are the limitations on 
allowable costs?
606.31  How does a grantee maintain its eligibility?

    Authority: 20 U.S.C. 1101 et seq., unless otherwise noted.

Subpart A--General


Sec. 606.1  What is the Developing Hispanic-Serving Institutions 
Program?

    The purpose of the Developing Hispanic-Serving Institutions Program 
is to provide grants to eligible institutions of higher education to--
    (a) Expand educational opportunities for, and improve the academic 
attainment of, Hispanic students; and
    (b) Expand and enhance the academic offerings, program quality, and 
institutional stability of colleges and universities that are educating 
the majority of Hispanic college students and helping large numbers of 
Hispanic students and other low-income individuals complete 
postsecondary degrees.

(Authority: 20 U.S.C. 1101)


Sec. 606.2  What institutions are eligible to receive a grant under the 
Developing Hispanic-Serving Institutions Program?

    (a) An institution of higher education is eligible to receive a 
grant under this part if--
    (1) At the time of application, it has an enrollment of 
undergraduate full-time equivalent students that is at least 25 percent 
Hispanic students;
    (2) It provides assurances that not less than 50 percent of its 
Hispanic students are low-income individuals;
    (3) It has an enrollment of needy students as described in 
Sec. 606.3(a), unless the Secretary waives this requirement under 
Sec. 606.3(b);
    (4) It has low average educational and general expenditures per 
full-time equivalent undergraduate student as described in 
Sec. 606.4(a), unless the Secretary waives this requirement under 
Sec. 606.4(c);
    (5) It is legally authorized by the State in which it is located to 
be a junior college or to provide an educational program for which it 
awards a bachelor's degree; and
    (6) It is accredited or preaccredited by a nationally recognized 
accrediting agency or association that the Secretary has determined to 
be a reliable authority as to the quality of education or training 
offered.
    (b) A branch campus of a Hispanic-Serving institution is eligible 
to receive a grant under this part if--
    (1) The institution as a whole meets the requirements of paragraph 
(a) of this section; and
    (2) The branch satisfies the requirements of paragraphs (a)(1), 
(a)(2), (a)(3), and (a)(4) of this section.
    (c)(1) An institution that receives a grant under the Strengthening 
Institutions Program (34 CFR part 607) or the Strengthening 
Historically Black Colleges and Universities Program (34 CFR part 608) 
for a particular fiscal year is not eligible to receive a grant under 
this part for that same fiscal year, and may not relinquish its grant 
under those programs to secure a grant under this part.
    (2) A Hispanic-Serving institution under this part may not 
concurrently receive grant funds under the Strengthening Institutions 
Program, Strengthening Historically Black Colleges and Universities 
Program, or Strengthening Historically Black Graduate Institutions 
Program.

(Authority: 20 U.S.C. 1101a and 1101d)


Sec. 606.3  What is an enrollment of needy students?

    (a) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 606.2(a)(3), an applicant institution has an enrollment 
of needy students if in the base year--
    (1) At least 50 percent of its degree students received student 
financial assistance under one or more of the following programs: 
Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, 
Federal Work-Study, and Federal Perkins Loan; or
    (2) The percentage of its undergraduate degree students who were 
enrolled on at least a half-time basis and received Federal Pell Grants 
exceeded the median percentage of undergraduate degree students who 
were enrolled on at least a half-time basis and received Federal Pell 
Grants at comparable institutions that offer similar instruction.
    (b) The Secretary may waive the requirement contained in paragraph 
(a) of this section if the institution demonstrates that--

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    (1) The State provides more than 30 percent of the institution's 
budget and the institution charges not more than $99.00 for tuition and 
fees for an academic year;
    (2) At least 30 percent of the students served by the institution 
in the base year were students from low-income families;
    (3) The institution substantially increases the higher education 
opportunities for low-income students who are also educationally 
disadvantaged, underrepresented in postsecondary education, or minority 
students;
    (4) The institution substantially increases the higher education 
opportunities for individuals who reside in an area that is not 
included in a ``metropolitan statistical area'' as defined by the 
Office of Management and Budget and who are unserved by other 
postsecondary institutions; or
    (5) The institution will, if granted the waiver, substantially 
increase the higher education opportunities for Hispanic Americans.
    (c) For the purpose of paragraph (b) of this section, the Secretary 
considers ``low-income'' to be an amount which does not exceed 150 
percent of the amount equal to the poverty level as established by the 
United States Bureau of the Census.
    (d) Each year, the Secretary notifies prospective applicants of the 
low-income figures through a notice published in the Federal Register.

(Authority: 20 U.S.C. 1101a and 1103a)


Sec. 606.4  What are low educational and general expenditures?

    (a)(1) Except as provided in paragraph (b) of this section, for the 
purpose of Sec. 606.2(a)(2), an applicant institution's average 
educational and general expenditures per full-time equivalent 
undergraduate student in the base year must be less than the average 
educational and general expenditures per full-time equivalent 
undergraduate student in that year of comparable institutions that 
offer similar instruction.
    (2) For the purpose of paragraph (a)(1) of this section, the 
Secretary determines the average educational and general expenditure 
per full-time equivalent undergraduate student for institutions with 
graduate students that do not differentiate between graduate and 
undergraduate educational and general expenditures by discounting the 
graduate enrollment using a factor of 2.5 times the number of graduate 
students.
    (b) Each year, the Secretary notifies prospective applicants 
through a notice in the Federal Register of the average educational and 
general expenditures per full-time equivalent undergraduate student at 
comparable institutions that offer similar instruction.
    (c) The Secretary may waive the requirement contained in paragraph 
(a) of this section, if the Secretary determines, based upon persuasive 
evidence provided by the institution, that--
    (1) The institution's failure to satisfy the criteria in paragraph 
(a) of this section was due to factors which, if used in determining 
compliance with those criteria, distorted that determination; and
    (2) The institution's designation as an eligible institution under 
this part is otherwise consistent with the purposes of this part.
    (d) For the purpose of paragraph (c)(1) of this section, the 
Secretary considers that the following factors may distort an 
institution's educational and general expenditures per full-time 
equivalent undergraduate student--
    (1) Low student enrollment;
    (2) Location of the institution in an unusually high cost-of-living 
area;
    (3) High energy costs;
    (4) An increase in State funding that was part of a desegregation 
plan for higher education; or
    (5) Operation of high cost professional schools such as medical or 
dental schools.

(Authority: 20 U.S.C. 1101a and 1103a)


Sec. 606.5  How does an institution apply to be designated an eligible 
institution?

    (a) An institution applies to the Secretary to be designated an 
eligible institution under this part by first submitting an application 
to the Secretary in the form, manner, and time established by the 
Secretary. The application must contain--
    (1) The information necessary for the Secretary to determine 
whether the institution satisfies the requirements of Secs. 606.2, 
606.3(a), and 606.4(a);
    (2) Any waiver request under Secs. 606.3(b) and 606.4(c); and
    (3) Information or explanations justifying any requested waiver.
    (b) An institution that wishes to receive a grant under this part 
must submit, as part of its application for that grant, an assurance 
that when it submits its application--
    (1) Its enrollment of undergraduate full-time equivalent students 
is at least 25 percent Hispanic students; and
    (2) Not less than 50 percent of its Hispanic students are low-
income individuals.

(Authority: 20 U.S.C. 1101a and 1103)


Sec. 606.6  What regulations apply?

    The following regulations apply to the Developing Hispanic-Serving 
Institutions Program:
    (a) The Education Department General Administrative Regulations 
(EDGAR) as follows:
    (1) 34 CFR part 74 (Administration of Grants to Institutions of 
Higher Education, Hospitals, and Nonprofit Organizations).
    (2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 
75.128(a)(2) and 75.129(a) in the case of applications for cooperative 
arrangements.
    (3) 34 CFR part 77 (Definitions that Apply to Department 
Regulations).
    (4) 34 CFR part 79 (Intergovernmental Review of Department of 
Education Programs and Activities).
    (5) 34 CFR part 82 (New Restrictions on Lobbying).
    (6) 34 CFR part 85 (Governmentwide Debarment and Suspension 
(Nonprocurement) and Governmentwide Requirements for Drug-Free 
Workplace (Grants)).
    (7) 34 CFR part 86 (Drug-Free Schools and Campuses).
    (b) The regulations in this part 606.

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.7  What definitions apply?

    (a) Definitions in EDGAR. The terms used in this part are defined 
in 34 CFR 77.1:

EDGAR
Fiscal year
Grant
Grantee
Grant period
Nonprofit
Private
Project period
Public
Secretary
State

    (b) The following definitions also apply to this part:
    Accredited means the status of public recognition which a 
nationally recognized accrediting agency or association grants to an 
institution which meets certain established qualifications and 
educational standards.
    Activity means an action that is incorporated into an 
implementation plan designed to meet one or more objectives. An 
activity is a part of a project and has its own budget that is approved 
to carry out the objectives of that subpart.
    Base year means the second fiscal year preceding the fiscal year 
for which an institution seeks a grant under this part.
    Branch campus means a unit of a college or university that is

[[Page 70149]]

geographically apart from the main campus of the college or university 
and independent of that main campus. The Secretary considers a unit of 
a college or university to be independent of the main campus if the 
unit--
    (1) Is permanent in nature;
    (2) Offers courses for credit and programs leading to an associate 
or bachelor's degree; and
    (3) Is autonomous to the extent that it has--
    (i) Its own faculty and administrative or supervisory organization; 
and
    (ii) Its own budgetary and hiring authority.
    Comparable institutions that offer similar instruction means 
institutions that are being compared with an applicant institution and 
that fall within one of the following four categories--
    (1) Public junior or community colleges;
    (2) Private nonprofit junior or community colleges;
    (3) Public institutions that offer an educational program for which 
they offer a bachelor's degree; or
    (4) Private nonprofit institutions that offer an educational 
program for which they offer a bachelor's degree.
    Cooperative arrangement means an arrangement to carry out allowable 
grant activities between an institution eligible to receive a grant 
under this part and another eligible or ineligible institution of 
higher education, under which the resources of the cooperating 
institutions are combined and shared to better achieve the purposes of 
this part and avoid costly duplication of effort.
    Degree student means a student who enrolls at an institution for 
the purpose of obtaining the degree, certificate, or other recognized 
educational credential offered by that institution.
    Developmental program and services means new or improved programs 
and services, beyond those regularly budgeted, specifically designed to 
improve the self sufficiency of the school.
    Educational and general expenditures means the total amount 
expended by an institution of higher education for instruction, 
research, public service, academic support (including library 
expenditures), student services, institutional support, scholarships 
and fellowships, operation and maintenance expenditures for the 
physical plant, and any mandatory transfers which the institution is 
required to pay by law.
    Educationally disadvantaged means a college student who requires 
special services and assistance to enable them to succeed in higher 
education. The phrase includes, but is not limited to, students who 
come from--
    (1) Economically disadvantaged families;
    (2) Limited English proficiency families;
    (3) Migrant worker families; or
    (4) Families in which one or both of their parents have dropped out 
of secondary school.
    Federal Pell Grant Program means the grant program authorized by 
title IV-A-1 of the HEA.
    Federal Perkins Loan Program, formerly called the National Direct 
Student Loan Program, means the loan program authorized by title IV-E 
of the HEA.
    Federal Supplemental Education Opportunity Grant Program means the 
grant program authorized by title IV-A-3 of the HEA.
    Federal Work-Study Program means the part-time employment program 
authorized under title IV-C of the HEA.
    Full-time equivalent students means the sum of the number of 
students enrolled full-time at an institution, plus the full-time 
equivalent of the number of students enrolled part time (determined on 
the basis of the quotient of the sum of the credit hours of all part-
time students divided by 12) at such institution.
    HEA means the Higher Education Act of 1965, as amended.
    Hispanic student means a person of Mexican, Puerto Rican, Cuban, 
Central or South American, or other Spanish culture or origin, 
regardless of race.
    Institution of higher education means an educational institution 
defined in section 101 of the HEA.
    Junior or community college means an institution of higher 
education--
    (1) That admits as regular students persons who are beyond the age 
of compulsory school attendance in the State in which the institution 
is located and who have the ability to benefit from the training 
offered by the institution;
    (2) That does not provide an educational program for which it 
awards a bachelor's degree (or an equivalent degree); and
    (3) That--
    (i) Provides an educational program of not less than 2 years that 
is acceptable for full credit toward such a degree; or
    (ii) Offers a 2-year program in engineering, mathematics, or the 
physical or biological sciences, designed to prepare a student to work 
as a technician or at the semiprofessional level in engineering, 
scientific, or other technological fields requiring the understanding 
and application of basic engineering, scientific, or mathematical 
principles of knowledge.
    Low-income individual means an individual from a family whose 
taxable income for the preceding year did not exceed 150 percent of an 
amount equal to the poverty level determined by using criteria of 
poverty established by the Bureau of the Census.
    Minority student means a student who is an Alaska Native, American 
Indian, Asian-American, Black (African-American), Hispanic American, 
Native Hawaiian, or Pacific Islander.
    Nationally recognized accrediting agency or association means an 
accrediting agency or association that the Secretary has recognized to 
accredit or preaccredit a particular category of institution in 
accordance with the provisions contained in 34 CFR part 603. The 
Secretary periodically publishes a list of those nationally recognized 
accrediting agencies and associations in the Federal Register.
    Operational programs and services means the regular, ongoing 
budgeted programs and services at an institution.
    Preaccredited means a status that a nationally recognized 
accrediting agency or association, recognized by the Secretary to grant 
that status, has accorded an unaccredited institution that is 
progressing toward accreditation within a reasonable period of time.
    Project means all the funded activities under a grant.
    Self-sufficiency means the point at which an institution is able to 
survive without continued funding under the Developing Hispanic-Serving 
Institutions Program.
    Underrepresented means proportionate representation as measured by 
degree recipients, that is less than the proportionate representation 
in the general population--
    (1) As indicated by--
    (i) The most current edition of the Department's Digest of 
Educational Statistics;
    (ii) The National Research Council's Doctorate Recipients from 
United States Universities; or
    (iii) Other standard statistical references, as announced annually 
in the Federal Register notice inviting applications for new awards 
under this program; or
    (2) As documented by national survey data submitted to and accepted 
by the Secretary on a case-by-case basis.

(Authority: 20 U.S.C. 1101 et seq.; OMB Directive No. 15)


Sec. 606.8  What is a comprehensive development plan and what must it 
contain?

    (a) A comprehensive development plan is an institution's strategy 
for achieving growth and self-sufficiency by strengthening its--

[[Page 70150]]

    (1) Academic programs;
    (2) Institutional management; and
    (3) Fiscal stability.
    (b) The comprehensive development plan must include the following:
    (1) An analysis of the strengths, weaknesses, and significant 
problems of the institution's academic programs, institutional 
management, and fiscal stability.
    (2) A delineation of the institution's goals for its academic 
programs, institutional management, and fiscal stability, based on the 
outcomes of the analysis described in paragraph (b)(1) of this section.
    (3) Measurable objectives related to reaching each goal and 
timeframes for achieving the objectives.
    (4) Methods and resources that will be used to institutionalize 
practices and improvements developed under the proposed project.
    (5) Its five year plan to improve its services to Hispanic and 
other low-income students.

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.9  What are the type, duration, and limitations in the 
awarding of grants under this part?

    (a)(1) Under this part, the Secretary may award planning grants and 
two types of development grants, individual development grants and 
cooperative arrangement development grants.
    (2) Planning grants may be awarded for a period not to exceed one 
year.
    (3) Either type of development grant may be awarded for a period of 
five years.
    (b)(1) An institution that received an individual development grant 
of five years may not subsequently receive another individual 
development grant for a period of two years from the date on which the 
five-year grant terminates.
    (2) A cooperative arrangement grant is not considered to be an 
individual development grant under paragraph (b)(1) of this section.

(Authority: 20 U.S.C. 1101c and 1103c)


Sec. 606.10  What activities may and may not be carried out under a 
grant?

    (a) Planning grants. Under a planning grant, a grantee shall 
formulate--
    (1) A comprehensive development plan described in Sec. 606.8; and
    (2) An application for a development grant.
    (b) Development grants--allowable activities. Under a development 
grant, except as provided in paragraph (c) of this section, a grantee 
shall carry out activities that implement its comprehensive development 
plan and hold promise for strengthening the institution. Activities 
that may be carried out include, but are not limited to--
    (1) Purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes.
    (2) Construction, maintenance, renovation, and improvement in 
classrooms, libraries, laboratories, and other instructional 
facilities.
    (3) Support of faculty exchanges, faculty development, curriculum 
development, academic instruction, and faculty fellowships to assist in 
attaining advanced degrees in the fellow's field of instruction.
    (4) Purchase of library books, periodicals, and other educational 
materials, including telecommunications program material.
    (5) Tutoring, counseling, and student service programs designed to 
improve academic success.
    (6) Funds management, administrative management, and acquisition of 
equipment for use in strengthening funds management.
    (7) Joint use of facilities, such as laboratories and libraries.
    (8) Establishing or improving a development office to strengthen or 
improve contributions from alumni and the private sector.
    (9) Establishing or improving an endowment fund, provided the 
grantee uses no more than 20 percent of its grant funds for this 
purpose and at least matches those grant funds with non-Federal funds.
    (10) Creating or improving facilities for Internet or other 
distance learning academic instruction capabilities, including purchase 
or rental of telecommunications technology equipment or services.
    (11) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in public elementary or secondary 
schools.
    (12) Establishing community outreach programs that will encourage 
elementary school and secondary school students to develop the academic 
skills and the interest to pursue postsecondary education.
    (13) Expanding the number of Hispanic and other underrepresented 
graduate and professional students that can be served by the 
institution by expanding courses and institutional resources.
    (14) Other activities that contribute to carrying out the purposes 
of this program.
    (c) Development grants--unallowable activities. A grantee may not 
carry out the following activities or pay the following costs under a 
development grant:
    (1) Activities that are not included in the grantee's approved 
application.
    (2) Activities that are inconsistent with any State plan for higher 
education that is applicable to the institution, including, but not 
limited to, a State plan for desegregation of higher education.
    (3) Activities or services that relate to sectarian instruction or 
religious worship.
    (4) Activities provided by a school or department of divinity. For 
the purpose of this provision, a ``school or department of divinity'' 
means an institution, or a department of an institution, whose program 
is specifically for the education of students to prepare them to become 
ministers of religion or to enter into some other religious vocation or 
to prepare them to teach theological subjects.
    (5) Developing or improving non-degree or non-credit courses other 
than basic skills development courses.
    (6) Developing or improving community-based or community services 
programs, unless the program provides academic-related experiences or 
academic credit toward a degree for degree students, or, unless it is a 
program or services to encourage elementary and secondary school 
students to develop the academic skills and the interest to pursue 
postsecondary education.
    (7) Purchase of standard office equipment, such as furniture, file 
cabinets, bookcases, typewriters, or word processors.
    (8) Payment of any portion of the salary of a president, vice 
president, or equivalent officer who has college-wide administrative 
authority and responsibility at an institution to fill a position under 
the grant such as project coordinator or activity director.
    (9) Costs of organized fund-raising, including financial campaigns, 
endowment drives, solicitation of gifts and bequests, and similar 
expenses incurred solely to raise capital or obtain contributions.
    (10) Costs of student recruitment such as advertisements, 
literature, and college fairs.
    (11) Services to high school students, unless they are services to 
encourage such students to develop the skills and the interest to 
pursue postsecondary education.
    (12) Instruction in the institution's standard courses as indicated 
in the institution's catalog.
    (13) Costs for health and fitness programs, transportation, and day 
care services.

[[Page 70151]]

    (14) Student activities such as entertainment, cultural, or social 
enrichment programs, publications, social clubs, or associations.
    (15) Activities that are operational in nature rather than 
developmental in nature.

(Authority: 20 U.S.C. 1101 et seq.)

Subpart B--How Does an Institution Apply for a Grant?


Sec. 606.11  What must be included in individual development grant 
applications?

    In addition to the information needed by the Secretary to determine 
whether the institution should be awarded a grant under the funding 
criteria contained in subpart C, an application for a development grant 
must include--
    (a) The institution's comprehensive development plan;
    (b) A description of the relationship of each activity for which 
grant funds are requested to the relevant goals and objectives of its 
plan;
    (c) A description of any activities that were funded under previous 
development grants awarded under the Developing Hispanic-Serving 
Institutions Program that expired within five years of when the 
development grant will begin and the institution's justification for 
not completing the activities under the previous grant, if applicable;
    (d) If the applicant is applying to carry out more than one 
activity--
    (1) A description of those activities that would be a sound 
investment of Federal funds if funded separately;
    (2) A description of those activities that would be a sound 
investment of Federal funds only if funded with the other activities; 
and
    (3) A ranking of the activities in preferred funding order.

(Approved by the Office of Management and Budget under control 
number 1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.12  What must be included in cooperative arrangement grant 
applications?

    (a)(1) Institutions applying for a cooperative arrangement grant 
shall submit only one application for that grant regardless of the 
number of institutions participating in the cooperative arrangement.
    (2) The application must include the names of each participating 
institution, the role of each institution, and the rationale for each 
eligible participating institution's decision to request grant funds as 
part of a cooperative arrangement rather than as an individual grantee.
    (b) If the application is for a development grant, the application 
must contain--
    (1) Each participating institution's comprehensive development 
plan;
    (2) The information required under Sec. 606.11; and
    (3) An explanation from each eligible participating institution of 
why participation in a cooperative arrangement grant rather than 
performance under an individual grant will better enable it to meet the 
goals and objectives of its comprehensive development plan at a lower 
cost.
    (4) The name of the applicant for the group that is legally 
responsible for--
    (i) The use of all grant funds; and
    (ii) Ensuring that the project is carried out by the group in 
accordance with Federal requirements. (Approved by the Office of 
Management and Budget under control number 1840-0114)

(Authority: 20 U.S.C. 1103 and 1103e)


Sec. 606.13  How many applications for a development grant may an 
institution submit?

    In any fiscal year, an institution of higher education may--
    (a) Submit an application for an individual development grant; and
    (b) Be part of a cooperative arrangement application.

(Authority: 20 U.S.C. 1101 et seq.)

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


Sec. 606.20  How does the Secretary choose applications for funding?

    (a) The Secretary evaluates an application on the basis of the 
criteria in--
    (1) Sections 606.21 and 606.23 for a planning grant; and
    (2) Sections 606.22, 606.23, 600.24, and 606.25 for a development 
grant.
    (b)(1) The Secretary awards up to 100 points for the criteria in 
Sec. 606.21 and up to 100 points for the criteria in Sec. 606.22.
    (2) The maximum possible score for each complete criterion is in 
parentheses.
    (c)(1) The Secretary considers funding an application for a 
planning grant that scores at least 50 points under Sec. 606.21.
    (2) The Secretary considers funding an application for a 
development grant that--
    (i) Scores at least 50 points under Sec. 606.22;
    (ii) Is submitted with a comprehensive development plan that 
satisfies all the elements required of such a plan under Sec. 606.8; 
and
    (iii) In the case of an application for a cooperative arrangement 
grant, demonstrates that the grant will enable each eligible 
participant to meet the goals and objectives of its comprehensive 
development plan better and at a lower cost than if each eligible 
participant were funded individually.

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.21  What are the selection criteria for planning grants?

    The Secretary uses the following criteria to evaluate an 
application to determine whether the applicant will produce a good 
comprehensive development plan and a fundable application:
    (a) Design of the planning process. (Total: 60 points) The 
Secretary reviews each application to determine the quality of the 
planning process that the applicant will use to develop a comprehensive 
development plan and an application for a development grant based on 
the extent to which--
    (1) The planning process is clearly and comprehensively described 
and based on sound planning practice (15 points);
    (2) The president or chief executive officer, administrators and 
other institutional personnel, students, and governing board members 
systematically and consistently will be involved in the planning 
process (15 points);
    (3) The applicant will use its own resources to help implement the 
project (10 points); and
    (4) The planning process is likely to achieve its intended results 
(20 points).
    (b) Key personnel. (Total: 20 points) The Secretary reviews each 
application to determine the quality of key personnel to be involved in 
the project based on the extent to which--
    (1) The past experience and training of key personnel such as the 
project coordinator and persons who have key roles in the planning 
process are suitable to the tasks to be performed (10 points); and
    (2) The time commitments of key personnel are adequate (10 points).
    (c) Project Management. (Total: 15 points) The Secretary reviews 
each application to determine the quality of the plan to manage the 
project effectively based on the extent to which--
    (1) The procedures for managing the project are likely to ensure 
effective and efficient project implementation (10 points); and
    (2) The project coordinator has sufficient authority, including 
access to the president or chief executive officer, to conduct the 
project effectively (5 points).
    (d) Budget. (Total: 5 points) The Secretary reviews each 
application to

[[Page 70152]]

determine the extent to which the proposed project costs are necessary 
and reasonable. (Approved by the Office of Management and Budget under 
control number 1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.22  What are the selection criteria for development grants?

    The Secretary uses the following criteria to evaluate applications 
for development grants:
    (a) Quality of the applicant's comprehensive development plan. 
(Total: 30 points) The extent to which--
    (1) The strengths, weaknesses, and significant problems of the 
institution's academic programs, institutional management, and fiscal 
stability are clearly and comprehensively analyzed and result from a 
process that involved major constituencies of the institution. (12 
points);
    (2) The goals for the institution's academic programs, 
institutional management, and fiscal stability are realistic and based 
on comprehensive analysis. (5 points);
    (3) The objectives stated in the plan are measurable, related to 
institutional goals, and, if achieved, will contribute to the growth 
and self-sufficiency of the institution (5 points);
    (4) The plan clearly and comprehensively describes the methods and 
resources the institution will use to institutionalize practice and 
improvements developed under the proposed project, including, in 
particular, how operational costs for personnel, maintenance, and 
upgrades of equipment will be paid with institutional resources (8 
points).
    (b) Quality of activity objectives. (Total: 10 points) The extent 
to which the objectives for each activity are--
    (1) Realistic and defined in terms of measurable results (5 
points); and
    (2) Directly related to the problems to be solved and to the goals 
of the comprehensive development plan (5 points).
    (c) Quality of implementation strategy. (Total: 25 points) The 
extent to which--
    (1) The implementation strategy for each activity is comprehensive 
(10 points);
    (2) The rationale for the implementation strategy for each activity 
is clearly described and is supported by the results of relevant 
studies or projects (10 points); and
    (3) The timetable for each activity is realistic and likely to be 
attained (5 points).
    (d) Quality of key personnel. (Total: 10 points) The extent to 
which--
    (1) The past experience and training of key professional personnel 
are directly related to the stated activity objectives (7 points); and
    (2) The time commitment of key personnel is realistic (3 points).
    (e) Quality of project management plan. (Total: 10 points) The 
extent to which--
    (1) Procedures for managing the project are likely to ensure 
efficient and effective project implementation (5 points); and
    (2) The project coordinator and activity directors have sufficient 
authority to conduct the project effectively, including access to the 
president or chief executive officer (5 points).
    (f) Quality of evaluation plan. (Total: 10 points) The extent to 
which--
    (1) The data elements and the data collection procedures are 
clearly described and appropriate to measure the attainment of activity 
objectives and to measure the success of the project in achieving the 
goals of the comprehensive development plan (5 points); and
    (2) The data analysis procedures are clearly described and are 
likely to produce formative and summative results on attaining activity 
objectives and measuring the success of the project on achieving the 
goals of the comprehensive development plan (5 points).
    (g) Budget. (Total: 5 points) The extent to which the proposed 
costs are necessary and reasonable in relation to the project's 
objectives and scope. (Approved by the Office of Management and Budget 
under control number 1840-0114)

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.23  What special funding consideration does the Secretary 
provide?

    (a) If funds are available to fund only one additional planning 
grant and each of the next fundable applications has received the same 
number of points under Sec. 606.21, the Secretary awards additional 
points, up to a maximum of two points, to any of those applicants 
that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at similar type institutions; (one point) or
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student which are less than the average expenditure for 
library materials per full-time equivalent enrolled student at similar 
type institutions. (one point)
    (b) If funds are available to fund only one additional development 
grant and each of the next fundable applications has received the same 
number of points under Sec. 606.22, the Secretary will award additional 
points, up to a maximum of three points, to any of those applicants 
that--
    (1) Has an endowment fund of which the current market value, per 
full-time equivalent enrolled student, is less than the average current 
market value of the endowment funds, per full-time equivalent enrolled 
student, at comparable institutions that offer similar instruction; 
(one point)
    (2) Has expenditures for library materials per full-time equivalent 
enrolled student that are less than the average expenditures for 
library materials per full-time equivalent enrolled student at 
comparable institutions that offer similar instruction (one point); or
    (3) Propose to carry out one or more of the following activities--
    (i) Faculty development;
    (ii) Funds and administrative management;
    (iii) Development and improvement of academic programs;
    (iv) Acquisition of equipment for use in strengthening management 
and academic programs;
    (v) Joint use of facilities; and
    (vi) Student services. (one point)
    (c) As used in this section, an ``endowment fund'' does not include 
any fund established or supported under 34 CFR part 628.
    (d) Each year, the Secretary provides prospective applicants with 
the average market value of endowment funds and the average expenditure 
of library materials per full-time equivalent student.
    (e) The Secretary gives priority to each application that contains 
satisfactory evidence that the applicant has entered into or will enter 
into a collaborative arrangement with at least one local educational 
agency or community-based organization to provide that agency or 
organization with assistance (from funds other than funds provided 
under this part) in--
    (1) Reducing the dropout rates of Hispanic students;
    (2) Improving rates of academic achievement of Hispanic students; 
and
    (3) Increasing the rates at which Hispanic high school graduates 
enroll in higher education.

(Authority: 20 U.S.C. 1101 et seq.)

[[Page 70153]]

Sec. 606.24  How does the Secretary use an applicant's performance 
under a previous development grant when awarding a development grant?

    (a)(1) In addition to evaluating an application under the selection 
criteria in Sec. 606.22, the Secretary evaluates an applicant's 
performance under any previous development grant awarded under the 
Developing Hispanic-Serving Institutions Program that expired within 
five years of the year when the development grant will begin.
    (2) The Secretary evaluates whether the applicant fulfilled, or is 
making substantial progress toward fulfilling, the goals and objectives 
of the previous grant, including, but not limited to, the applicant's 
success in institutionalizing practices developed and improvements made 
under the grant.
    (3) The Secretary bases the evaluation of the applicant's 
performance on information contained in--
    (i) Performance and evaluation reports submitted by the applicant;
    (ii) Audit reports submitted on behalf of the applicant; and
    (iii) Other information obtained by the Secretary, including 
reports prepared by the Department.
    (b) If the Secretary initially determines that the applicant did 
not fulfill the goals and objectives of a previous grant or is not 
making substantial progress towards fulfilling those goals and 
objectives, the Secretary affords the applicant the opportunity to 
respond to that initial determination.
    (c) If the Secretary determines that the applicant did not fulfill 
the goals and objectives of a previous grant or is not making 
substantial progress towards fulfilling those goals and objectives, the 
Secretary may--
    (1) Decide not to fund the applicant; or
    (2) Fund the applicant but impose special grant terms and 
conditions, such as specific reporting and monitoring requirements.

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.25  What priority does the Secretary use in awarding 
cooperative arrangement grants?

    Among applications for cooperative arrangement grants, the 
Secretary gives priority to proposed cooperative arrangements that are 
geographically and economically sound, or will benefit the institutions 
applying for the grant.

(Authority: 20 U.S.C. 1101 et seq.)

Subpart D--What Conditions Must a Grantee Meet?


Sec. 606.30  What are allowable costs and what are the limitations on 
allowable costs?

    (a) Allowable costs. Except as provided in paragraphs (b) and (c) 
of this section, a grantee may expend grant funds for activities that 
are related to carrying out the allowable activities included in its 
approved application.
    (b) Supplement and not supplant. Grant funds shall be used so that 
they supplement and, to the extent practical, increase the funds that 
would otherwise be available for the activities to be carried out under 
the grant and in no case supplant those funds.
    (c) Limitations on allowable costs. A grantee may not use an 
indirect cost rate to determine allowable costs under its grant.

(Authority: 20 U.S.C. 1101 et seq.)


Sec. 606.31  How does a grantee maintain its eligibility?

    (a) A grantee shall maintain its eligibility under the requirements 
in Sec. 606.2, except for Sec. 606.2(a)(3) and (4), for the duration of 
the grant period.
    (b) The Secretary reviews an institution's application for a 
continuation award to ensure that--
    (1) The institution continues to meet the eligibility requirements 
described in paragraph (a) of this section; and
    (2) The institution is making substantial progress toward achieving 
the objectives described in its grant application including, if 
applicable, the institution's success in institutionalizing practices 
and improvements developed under the grant.

(Authority: 20 U.S.C. 1101 et seq.)

PART 607--STRENGTHENING INSTITUTIONS PROGRAM

    2. The authority citation for part 607 continues to read as 
follows:

    Authority: 20 U.S.C. 1057-1059c, 1066-1069f, unless otherwise 
noted.

    3. Section 607.2 is amended by revising paragraphs (c), (d), and 
(e); and by adding new paragraphs (f) and (g) to read as follows:


Sec. 607.2  What institutions are eligible to receive a grant under the 
Strengthening Institutions Program?

* * * * *
    (c) For the purpose of paragraphs (e)(2) and (f)(2) of this 
section, an institution's enrollment consists of a head count of its 
entire student body.
    (d) A tribal college or university may receive a grant authorized 
under section 316 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section, 
other than Sec. 607.2(a)(3), and
    (2)(i) It meets the definition of the term ``tribally controlled 
college or university'' in section 2 of the Tribally Controlled College 
or University Assistance Act of 1978; or
    (ii) It is listed in the Equity in Educational Land Grant Status 
Act of 1994.
    (e) An Alaska Native-serving institution may receive a grant under 
section 317 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section; 
and
    (2) It has, at the time of application, an enrollment of 
undergraduate students that is at least 20 percent Alaska Native 
students.
    (f) A Native Hawaiian-serving institution may receive a grant 
authorized under section 317 of the HEA if--
    (1) It satisfies the requirements of paragraph (a) of this section; 
and
    (2) It has, at the time of application, an enrollment of 
undergraduate students that is at least 10 percent Native Hawaiian 
students.
    (g)(1) An institution that qualifies for a grant under the 
Strengthening Historically Black Colleges and Universities Program (34 
CFR part 608) or the Developing Hispanic-Serving Institutions Program 
(34 CFR part 606) and receives a grant under either of these programs 
for a particular fiscal year is not eligible to receive a grant under 
this part for the same fiscal year.
    (2) A tribal college or university that receives a grant under 
section 316 of the HEA or an Alaska Native or Native Hawaiian-serving 
institution that receives a grant under section 317 of the HEA may not 
concurrently receive other grant funds under the Strengthening 
Institutions Program, Strengthening Historically Black Colleges and 
Universities Program, or Strengthening Historically Black Graduate 
Institutions Program.
    4. Section 607.3 is amended by removing the word ``or'' at the end 
of paragraph (b)(5); redesignating paragraph (b)(6) as paragraph 
(b)(7); and adding a new paragraph (b)(6) to read as follows:


Sec. 607.3  What is an enrollment of needy students?

* * * * *
    (b) * * *
    (6) It is a tribal college or university; or
* * * * *
    5. Section 607.7 is amended by:
    A. Revising paragraph (b);
    B. Redesignating paragraph (c) as paragraph (e);

[[Page 70154]]

    C. adding new paragraphs (c) and (d);
    D. Rmoving the definitions of ``College Work-Study Program'', 
``Pell Grant Program'', ``Perkins Loan Program'', ``Special Needs 
Program'', and ``Supplemental Education Opportunity Grant'' from newly 
designated paragraph (e);
    E. Revising the definition of ``Institution of higher education'' 
in newly designated paragraph (e); and
    F. Adding, in alphabetical order, new definitions of ``Federal Pell 
Grant Program'', ``Federal Perkins Loan Program'', ``Federal 
Supplemental Education Opportunity Grant Program'', ``Federal Work-
Study Program'', and ``Low-income individual'' in newly redesignated 
paragraph (e).
    The revisions and additions read as follows:


Sec. 607.7  What definitions apply?

* * * * *
    (b) The following term used in this part is defined in section 312 
of the HEA:

Endowment fund

    (c) The following terms used in this part are defined in section 
316 of the HEA:

Indian
Indian tribe
Tribal college or university

    (d) The following terms used in this part are defined in section 
317 of the HEA:

Alaska Native
Alaska Native-serving institution
Native Hawaiian
Native Hawaiian-serving institution

    (e) * * *
    Federal Pell Grant Program means the grant program authorized by 
title IV-A-1 of the HEA.
    Federal Perkins Loan Program, formerly called the National Direct 
Student Loan Program, means the loan program authorized by title IV-E 
of the HEA.
    Federal Supplemental Education Opportunity Grant Program means the 
grant program authorized by title IV-A-3 of the HEA.
    Federal Work-Study Program means the part-time employment program 
authorized under title IV-C of the HEA.
* * * * *
    Institution of higher education means an educational institution 
defined in section 101 of the HEA.
* * * * *
    Low-income individual means an individual from a family whose 
taxable income for the preceding year did not exceed 150 percent of an 
amount equal to the poverty level determined by using criteria of 
poverty established by the Bureau of Census.
* * * * *
    6. Section 607.8(b) is amended by adding paragraphs (b)(5) and 
(b)(6) to read as follows:


Sec. 607.8  What is a comprehensive development plan and what must it 
contain?

* * * * *
    (b) * * *
    (5) For a grant under section 316 of the HEA to a tribal college or 
university, its five-year plan for improving its services to Indian 
students, increasing the rates at which Indian secondary school 
students enroll in higher education, and increasing overall 
postsecondary retention rates for Indian students.
    (6) For a grant under section 317 of the HEA to an Alaska Native-
serving institution or to a Native Hawaiian-serving institution, its 
five-year plan for improving its services to Alaska Native or Native 
Hawaiian students, respectively.
    7. Section 607.9 is amended by revising paragraph (b) to read as 
follows:


Sec. 607.9  What are the type, duration and limitations in the awarding 
of grants under this part?

* * * * *
    (b)(1) An institution that received an individual development grant 
of five years may not subsequently receive another individual 
development grant for a period of two years from the date on which the 
five-year grant period terminates.
    (2) A cooperative arrangement grant is not considered to be an 
individual development grant under paragraph (b)(1) of this section.
    8. Section 607.10 is amended by:
    A. Revising paragraph (b)(1) introductory text;
    B. Removing the word ``or'' at the end of paragraph (b)(7);
    C. Redesignating paragraph (b)(8) as paragraph (b)(13);
    D. Adding new paragraphs (b)(8) through (12) and (b)(14);
    E. Revising the introductory text in newly designated paragraph 
(b)(13) and paragraphs (b)(13)(ii), (v), and (viii);
    F. Removing the word ``and'' at the end of newly designated 
paragraph (b)(13)(vii);
    G. Adding new paragraphs (b)(13)(ix) through (xiii); and
    H. Revising paragraphs (c)(6) and (11).
    The revisions and additions read as follows:


Sec. 607.10  What activities may and may not be carried out under a 
grant?

* * * * *
    (b) * * *
    (1) Faculty exchanges, faculty fellowships, and faculty development 
that provide faculty with the skills and knowledge needed to--
* * * * *
    (8) Purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes;
    (9) Construction, maintenance, renovation, and improvement in 
classrooms, libraries, laboratories, and other instructional 
facilities, including the integration of computer technology into 
institutional facilities to create smart buildings;
    (10) Establishing or improving a development office to strengthen 
or improve contributions from alumni and the private sector;
    (11) Establishing or improving an endowment fund, provided a 
grantee uses no more than 20 percent of its grant funds for this 
purpose and at least matches those grant funds with non-Federal funds;
    (12) Creating or improving facilities for Internet or other 
distance learning academic instruction capabilities, including purchase 
or rental of telecommunications technology equipment or services;
    (13) For grants authorized under section 316 of the HEA to tribal 
colleges or universities--
* * * * *
    (ii) Construction, maintenance, renovation, and improvement in 
classroom, library, laboratory, and other instructional facilities, 
including purchase or rental of telecommunications technology equipment 
or services;
* * * * *
    (v) Purchase of library books, periodicals, microfilm, and other 
educational materials, including telecommunications program materials;
* * * * *
    (viii) Academic tutoring and counseling programs and student 
support services designed to improve academic services;
    (ix) Academic instruction in disciplines in which Indians are 
underrepresented;
    (x) Establishing or improving a development office to strengthen or 
improve contributions from the alumni and the private sector;
    (xi) Establishing or enhancing a program of teacher education 
designed to qualify students to teach in elementary schools or 
secondary schools, with a particular emphasis on teaching Indian 
children and youth, that shall include, as part of such program, 
preparation for teacher certification;

[[Page 70155]]

    (xii) Establishing community outreach programs that encourage 
Indian elementary school and secondary school students to develop the 
academic skills and the interest to pursue postsecondary education; and
    (xiii) Establishing or improving an endowment fund, provided a 
grantee uses no more than 20 percent of its grant funds for this 
purpose and at least matches those grant funds with non-Federal funds; 
or
    (14) For grants authorized under section 317 of the HEA to Alaska 
Native-serving institutions and Native Hawaiian-serving institutions--
    (i) Purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes;
    (ii) Renovation and improvement in classroom, library, laboratory, 
and other instructional facilities;
    (iii) Support of faculty exchanges, faculty development, and 
faculty fellowships to assist in attaining advanced degrees in the 
faculty's field of instruction;
    (iv) Curriculum development and academic instruction;
    (v) Purchase of library books, periodicals, microfilm, and other 
educational materials;
    (vi) Funds and administrative management, and acquisition of 
equipment for use in strengthening funds management;
    (vii) Joint use of facilities such as laboratories and libraries;
    (viii) Academic tutoring and counseling programs and student 
support services.
    (c) * * *
    (6) Developing or improving community-based or community services 
programs, unless the program provides academic-related experiences or 
academic credit toward a degree for degree students, or unless it is an 
outreach program that encourages Indian elementary school and secondary 
school students to develop the academic skills and the interest to 
pursue postsecondary education.
* * * * *
    (11) Services to high school students, unless they are part of a 
program to encourage Indian students to develop the academic skills and 
the interest to pursue postsecondary education.
* * * * *
    9. Section 607.11 is amended by revising paragraphs (c) and (d); 
and removing paragraph (e) to read as follows:


Sec. 607.11  What must be included in individual development grant 
applications?

* * * * *
    (c) A description of any activities that were funded under previous 
development grants awarded under the Strengthening Institutions Program 
that expired within five years of when the development grant will begin 
and the institution's justification for not completing the activities 
under the previous grant, if applicable; and
    (d) If the applicant is applying to carry out more than one 
activity--
    (1) A description of those activities that would be a sound 
investment of Federal funds if funded separately;
    (2) A description of those activities that would be a sound 
investment of Federal funds only if funded with the other activities; 
and
    (3) A ranking of the activities in preferred funding order.
    10. Section 607.13 is amended by revising the introductory text and 
paragraph (a) to read as follows:


Sec. 607.13  How many applications for a development grant may an 
institution submit?

    In any fiscal year, an institution of higher education that meets 
the eligibility requirements under sections 311, 316, and 317 of the 
HEA may--
    (a) Submit an application for a development grant authorized under 
sections 311, 316, and 317 of the HEA; and
* * * * *
    11. Section 607.20 is amended by revising paragraphs (a)(2) and 
(b)(1) to read as follows:


Sec. 607.20  How does the Secretary choose applications for funding?

    (a) * * *
    (2) Sections 607.22, 607.23, 607.24, and 607.25 for a development 
grant.
    (b)(1) With regard to applicants that satisfy the requirements of 
paragraph (d) of this section, for each fiscal year, the Secretary 
awards individual development grants to applicants that are not 
individual development grantees under this part, before the Secretary 
awards an individual development grant to any applicant that is an 
individual grantee under this part.
* * * * *


Sec. 607.23   [Amended]

    12. Section 607.23 is amended by removing the words ``is less than 
the average expenditure'', and adding, in their place, ``are less than 
the average expenditures'' in paragraph (b)(2); and by removing 
paragraph (e).


Sec. 607.24   [Amended]

    13. Section 607.24 is amended by removing the words ``Strengthening 
Institutions and Special Needs Programs'', and adding, in their place 
``the Strengthening Institutions Program'' in paragraph (a)(1).

[FR Doc. 99-32323 Filed 12-14-99; 8:45 am]
BILLING CODE 4000-01-U