[Federal Register Volume 65, Number 55 (Tuesday, March 21, 2000)]
[Proposed Rules]
[Pages 15115-15118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6650]


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DEPARTMENT OF EDUCATION

34 CFR Parts 606, 607, and 608


Developing Hispanic-Serving Institutions Program, Strengthening 
Institutions Program, and Strengthening Historically Black Colleges and 
Universities Program

AGENCY: Department of Education.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to amend the regulations governing the Developing 
Hispanic-Serving Institutions, Strengthening Institutions, and 
Strengthening Historically Black Colleges and Universities Programs to 
incorporate statutory changes made by the Higher Education Amendments 
of 1998 (1998 Amendments). The 1998 Amendments provide that an 
institution's use of grant funds for endowment fund purposes under the 
Developing Hispanic-Serving Institutions, Strengthening Institutions, 
and Strengthening Historically Black Colleges and Universities Programs 
can be subject to appropriate requirements under the Endowment 
Challenge Grant

[[Page 15116]]

Program. These regulations propose amendments to implement the 
statutory changes.

DATES: We must receive your comments on or before May 22, 2000.

ADDRESSES: Address all comments about these proposed regulations to 
Darlene Collins, U.S. Department of Education, 1990 K Street, NW, Room 
6032, Washington, DC 20006-8512. If you prefer to send your comments 
through the Internet, use the following address:

http://www.ed.gov/offices/OPE/HEP/idues/title3a.html

    If you want to comment on the information collection requirements 
you must send your comments to the Office of Management and Budget at 
the address listed in the Paperwork Reduction Act section of this 
preamble. You may also send a copy of these comments to the Department 
representative named in this preamble.

FOR FURTHER INFORMATION CONTACT: Darlene Collins. 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 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMENTARY INFORMATION:  

Invitation to Comment

    We invite you to submit comments regarding these proposed 
regulations. To ensure that your comments have maximum effect in 
developing the final regulations, we urge you to identify clearly the 
specific section or sections of the proposed regulations that each of 
your comments addresses and to arrange your comments in the same order 
as the proposed regulations.
    We invite you to assist us in complying with the specific 
requirements of Executive Order 12866 and its overall requirement of 
reducing regulatory burden that might result from these proposed 
regulations. Please let us know of any further opportunities we should 
take to reduce potential costs or increase potential benefits while 
preserving the effective and efficient administration of the program.
    During and after the comment period, you may inspect all public 
comments about these proposed regulations in 1990 K St. N.W., Room 
6032, Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., 
Eastern time, Monday through Friday of each week except Federal 
holidays.

Assistance to Individuals With Disabilities in Reviewing the 
Rulemaking Record

    On request, we will supply an appropriate aid, such as a reader or 
print magnifier, to an individual with a disability who needs 
assistance to review the comments or other documents in the public 
rulemaking record for these proposed regulations. If you want to 
schedule an appointment for this type of aid, you may call (202) 205-
8113 or (202) 260-9895. If you use a TDD, you may call the Federal 
Information Relay Service at 1-800-877-8339.

Background

    As amended by the 1998 Amendments, sections 311(d)(3), 323(b)(3), 
and 503(c)(3) of the Higher Education Act of 1965, as amended (HEA), 
provide, in effect, that we can subject an institution's use of grant 
funds for endowment fund purposes under the Developing Hispanic 
Serving-Institutions, Strengthening Institutions, and Strengthening 
Historically Black Colleges and Universities Programs to appropriate 
requirements in the Endowment Challenge Grant Program.
    We have implemented the requirements contained in the Endowment 
Challenge Grant Program in 34 CFR part 628. We propose that 
Secs. 628.3, 628.6, 628.10, and 628.41 through 628.47 contain 
appropriate requirements for grantees to follow that wish to use part 
of their grant funds for endowment purposes. However, we believe that 
applicable provisions in three of these sections need revision for 
purposes of clarification and to reflect statutory requirements.
    Based upon questions we received over the years, we propose to 
revise the definition of the term ``endowment fund income'' in 
Sec. 628.6 to clarify that endowment fund income includes fund 
appreciation and retained fund earnings, including interest and 
dividends.
    We propose that the institutional match in Sec. 628.10(a) be 
revised to reflect the statutory requirement that it must be made on at 
least a one-to-one basis. That is, each grant dollar to be used for 
endowment purposes must be matched with at least one non-Federal 
dollar.
    We further propose that when an institution decides to use grant 
funds for endowment fund purposes, unlike the provisions in 
Sec. 628.41, it must immediately match those grant funds with non-
Federal dollars. We believe this latter requirement to be appropriate 
given the grantee institution's flexibility as to when to use its grant 
funds for endowment purposes, and the limited amount of grant funds 
that may be used for that purpose.
    We propose to amend Secs. 606.10, 607.10, and 608.10 to implement 
these requirements by adding a new paragraph (d) relating to the use of 
grant funds by a grantee for establishing or increasing an endowment 
fund.

Clarity of the Regulations

    Executive Order 12866 and the President's Memorandum of June 1, 
1998 on ``Plain Language in Government Writing'' require each agency to 
write regulations that are easy to understand.
    The Secretary invites comments on how to make these proposed 
regulations easier to understand, including answers to questions such 
as the following:

     Are the requirements in the proposed regulations 
clearly stated?
     Do the proposed regulations contain technical terms or 
other wording that interferes with their clarity?
     Does the format of the proposed regulations (grouping 
and order of sections, use of headings, paragraphing, etc.) aid or 
reduce their clarity?
     Would the proposed regulations be easier to understand 
if we divided them into more (but shorter) sections? (A ``section'' 
is preceded by the symbol ``Sec. '' and a numbered heading; for 
example, Sec. 608.10 What activities may be carried out under a 
grant?)
     Could the description of the proposed regulations in 
the SUPPLEMENTARY INFORMATION section of this preamble be more 
helpful in making the proposed regulations easier to understand? If 
so, how?
     What else could we do to make the proposed regulations 
easier to understand?
     Send any comments that concern how the Department could 
make these proposed regulations easier to understand to the person 
listed in the ADDRESSES section of the preamble.

Regulatory Flexibility Act Certification

    The Secretary certifies that these proposed regulations would not 
have a significant economic impact on a substantial number of small 
entities. These proposed regulations would affect small institutions of 
higher education using grant funds for endowment fund purposes under 
the Developing Hispanic-Serving Institutions, Strengthening 
Institutions, or Strengthening Historically Black Colleges and 
Universities Programs. However, the regulations implement statutory 
amendments applicable to the award of grant funds under these programs 
and are not expected to have a significant economic impact on the 
institutions affected.

Paperwork Reduction Act of 1995

    These proposed regulations do not contain any information 
collection requirements.

[[Page 15117]]

Intergovernmental Review

    These programs are subject to Executive Order 12372 and the 
regulations in 34 CFR part 79. One of the objectives in the Executive 
order is to foster an intergovernmental partnership and a strengthened 
federalism. The Executive order relies on processes developed by State 
and local governments for coordination and review of proposed Federal 
financial assistance.
    This document provides early notification of our specific plans and 
actions for these programs.

Assessment of Educational Impact

    The Secretary particularly requests comments on whether these 
proposed regulations would 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


(Catalog of Federal Domestic Assistance Numbers: 84.031S, 84.031A, 
and 84.031B)

List of Subjects in 34 CFR Parts 606, 607, and 608

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

    Dated: March 13, 2000.
A. Lee Fritschler,
Assistant Secretary, Office of Postsecondary Education.
    For the reasons discussed in the preamble, the Secretary proposes 
to amend title 34 of the Code of Federal Regulations by amending parts 
606, 607, and 608 as follows:

PART 606--DEVELOPING HISPANIC-SERVING INSTITUTIONS PROGRAM

    1. The authority citation for part 606 continues to read as 
follows:

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

    2. Section 606.10 is amended by adding a new paragraph (d) to read 
as follows:


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

* * * * *
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund, it must comply with the 
provisions of Secs. 628.3, 628.6, 628.10, and 628.41 through 628.47 of 
this chapter with regard to the use of those funds, except--
    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus;
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use any of 
its grant funds for endowment purposes, it must match those grant funds 
immediately with non-Federal funds when it places those funds into its 
endowment fund.

PART 607--STRENGTHENING INSTITUTIONS PROGRAM

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

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

    4. Section 607.10 is amended by adding a new paragraph (d) to read 
as follows:


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

* * * * *
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund, it must comply with the 
provisions of Secs. 628.3, 628.6, 628.10 and 628.41 through 628.47 of 
this chapter with regard to the use of those funds, except--
    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For the purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus;
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use any of 
its grant funds for endowment purposes, it must match those grant funds 
immediately with non-Federal funds when it places those funds into its 
endowment fund.

PART 608-STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES 
PROGRAM

    5. The authority citation for part 608 continues to read as 
follows:

    Authority: 20 U.S.C. 1060 through 1063a, 1063c, 1066, 1068, 
1069c, 1069d, and 1069f, unless otherwise noted.

    6. Section 608.10 is amended by adding a new paragraph (d) to read 
as follows:


Sec. 608.10  What activities may be carried out under a grant?

* * * * *
    (d) Endowment funds. If a grantee uses part of its grant funds to 
establish or increase an endowment fund, it is subject to the 
provisions of Secs. 628.3, 628.6, 628.10 and 628.41 through 628.47 of 
this chapter with regard to the use of those funds, except--
    (1) The definition of the term ``endowment fund income'' in 
Sec. 628.6 of this chapter does not apply. For purposes of this 
paragraph (d), ``endowment fund income'' means an amount equal to the 
total value of the fund, including fund appreciation and retained 
interest and dividends, minus the endowment fund corpus;
    (2) Instead of the requirement in Sec. 628.10(a) of this chapter, 
the grantee institution must match each dollar of Federal grant funds 
used to establish or increase an endowment fund with one dollar of non-
Federal funds; and
    (3) Instead of the requirements in Sec. 628.41(a)(3) through (a)(5) 
and the introductory text in Sec. 628.41(b) and Sec. 628.41(b)(2) and 
(b)(3) of this chapter, if a grantee institution decides to use

[[Page 15118]]

any of its grant funds for endowment purposes, it must match those 
grant funds immediately with non-Federal funds when it places those 
funds into its endowment fund.

[FR Doc. 00-6650 Filed 3-20-00; 8:45 am]
BILLING CODE 4000-01-U