[Federal Register Volume 65, Number 244 (Tuesday, December 19, 2000)]
[Rules and Regulations]
[Pages 79309-79311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32199]


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DEPARTMENT OF EDUCATION

34 CFR Parts 606, 607, and 608


Developing Hispanic-Serving Institutions Program, Strengthening 
Institutions Program, American Indian Tribally Controlled Colleges and 
Universities Program, and Strengthening Historically Black Colleges and 
Universities Program

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Final regulations.

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SUMMARY: We are amending the regulations governing the Developing 
Hispanic-Serving Institutions, Strengthening Institutions, American 
Indian Tribally Controlled Colleges and Universities, 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 if grantee institutions 
under the Developing Hispanic-Serving Institutions, Strengthening 
Institutions, American Indian Tribally Controlled Colleges and 
Universities, and Strengthening Historically Black Colleges and 
Universities Programs use grant funds to establish or increase 
endowment funds, we can subject that use to appropriate requirements 
under the Endowment Challenge Grant Program. These amendments to the 
regulations implement the statutory changes.

DATES: These regulations are effective January 18, 2001.

FOR FURTHER INFORMATION CONTACT: Darlene Collins, U.S. Department of 
Education, 1990 K Street, NW., Room 6032, 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 
alternative format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 
paragraph.

SUPPLEMEMTARY INFORMATION:

Background

    As amended by the 1998 Amendments, sections 311(d)(1), 
316(c)(3)(A), 323(b)(1), and 503(c)(1) of the Higher Education Act of 
1965, as amended (HEA), authorize grantee institutions under the 
Strengthening Institutions, American Indian Tribally Controlled 
Colleges and Universities, Strengthening Historically Black Colleges 
and Universities, and Developing Hispanic Serving-Institutions Programs 
to use up to 20% of their grants funds to establish or increase 
endowment funds. Amended sections 311(d)(3), 316(c)(3)(C), 323(b)(3), 
and 503(c)(3) of the HEA provide, in effect, that we can subject an 
institution's use of grant funds for that purpose to appropriate 
requirements in the Endowment Challenge Grant Program.
    We implemented the Endowment Challenge Grant Program requirements 
in regulations contained in 34 CFR part 628. In the Federal Register of 
March 21, 2000, (65 FR 15115-15118) we proposed to subject grantees' 
use of grant funds for endowments under the Strengthening Institutions,

[[Page 79310]]

Strengthening Historically Black Colleges and Universities, and 
Developing Hispanic Serving-Institutions Programs to the following 
Endowment Challenge Grant Program regulatory provisions: Secs. 628.3, 
628.6, 628.10, and 628.41 through 628.47.We revised the definition of 
the term ``endowment fund income'' to clarify that endowment fund 
income includes fund appreciation and retained fund interest and 
dividends. We revised the institutional match requirement to reflect 
the statutory requirement that the match 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. Finally, 
if an institution decides to use grant funds for endowment fund 
purposes it must immediately match those grant funds with non-Federal 
dollars.
    These proposals were included in Sec. 606.10(d) for the Developing 
Hispanic-Serving Institutions Program, Sec. 607.10(d) for the 
Strengthening Institutions Program, and Sec. 608.10(d) for the 
Strengthening Historically Black Colleges and Universities Program.

Changes from Proposed Regulations

    On March 21, 2000, we published a notice of proposed rulemaking 
(NPRM) for these programs in the Federal Register (65 FR 15115). No 
comments were received on the proposed regulations. Except for minor 
editorial revisions, including the addition of specific references to 
the American Indian Tribally Controlled Colleges and Universities 
Program to clarify that these provisions are applicable to that 
program, there are no differences between the NPRM and these final 
regulations.

Paperwork Reduction Act of 1995

    These proposed regulations do not contain any information 
collection requirements.

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

    In the NPRM we requested comments on whether the proposed 
regulations would require transmission of information that any other 
agency or authority of the United States gathers or makes available.
    Based on the response to the NPRM and 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 PDF you must have Adobe Acrobat Reader, which is available 
free at either of the previous sites. If you have questions about using 
PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-
888-293-6498; or in the Washington, DC 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: December 12, 2000.
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 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 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 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 under paragraphs (b)(11) or 
(b)(13)(xiii) of this section, it must comply with the provisions of 
Secs. 628.3, 628.6, 628.10 and 628.41 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.

[[Page 79311]]

    (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 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.
[FR Doc. 00-32199 Filed 12-18-00; 8:45 am]
BILLING CODE 4000-01-P