[Federal Register Volume 67, Number 131 (Tuesday, July 9, 2002)]
[Rules and Regulations]
[Pages 45357-45362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16957]


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CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

45 CFR Parts 2510, 2520, 2521, 2522, 2524, 2525, 2526, 2528, and 
2550

RIN 3045-AA32


AmeriCorps Grant Regulations

AGENCY: Corporation for National and Community Service.

ACTION: Final rule.

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SUMMARY: The Corporation for National and Community Service 
(hereinafter the ``Corporation'') is amending several provisions 
relating to the AmeriCorps national service program, including 
requirements for AmeriCorps grants and rules on how AmeriCorps members 
may use the AmeriCorps education award. This final rule will eliminate 
several unnecessary and burdensome requirements in the AmeriCorps 
grants program, and conform the Corporation's regulations to changes in 
law.

DATES: The amendments are effective August 8, 2002.

FOR FURTHER INFORMATION CONTACT: Gary Kowalczyk, Coordinator of 
National Service Programs, Corporation for National and Community 
Service, (202) 606-5000, ext. 340. T.D.D. (202) 565-2799. This is not a 
toll-free number. This final rule may be requested in an alternative 
format for persons with visual impairments.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to the National and Community Service Act of 1990, as 
amended (42 U.S.C. 12501 et seq.), the Corporation makes grants to 
support service performed by AmeriCorps members. In addition, the 
Corporation, through the National Service Trust, provides education 
awards and certain interest payments to AmeriCorps members who 
successfully complete a term of service in an approved national service 
position.
    The Corporation published a proposed rule on March 26, 2002 (67 FR 
13738) with the goal of eliminating several unnecessary and burdensome 
requirements in the AmeriCorps grants program, and conforming the 
Corporation's regulations to changes in law.

Discussion of the Final Rule

    The Corporation received comments from nine individuals and 
organizations in response to the proposed rule. As a general matter, 
only one of the comments the Corporation received resulted in a change 
to the proposed rule. Consequently, other than Sec. 2520.30, the final 
rule is identical to the proposed rule as published on March 26, 2002.

Flexibility in Types of AmeriCorps Activities

    One commenter specifically approved of the Corporation's proposal 
to broaden the circumstances under which AmeriCorps members may engage 
in activities that provide an indirect benefit to their community. The 
Corporation may approve such activities with respect to disaster 
relief, homeland defense, and other compelling community needs.

Eligibility of Religious Organizations for AmeriCorps Grants

    Two commenters specifically endorsed the Corporation's references 
to religious organizations in several lists of types of organizations 
eligible to apply for AmeriCorps grants. A basic purpose of these 
amendments is to clarify that religious organizations are eligible on 
the same basis as any other private nonprofit organization to apply for 
AmeriCorps grants and operate AmeriCorps programs.

Elimination of ``Six Month Rule''

    Five commenters wrote in support of eliminating the ``six month 
rule.'' The final rule, thus, eliminates a requirement under which 
grantees could not select any prospective AmeriCorps member who is or 
was previously employed by a prospective project sponsor within six 
months of the member's enrollment in the program. The commenters agreed 
that there are more effective and efficient ways to ensure that 
grantees are complying with rules against displacement, without 
imposing a blanket ``six month rule.'' By continuing to require 
grantees to show how a proposed project will address unmet needs and by 
enforcing existing rules against displacement, the Corporation can 
ensure that any former employees enrolled as AmeriCorps members will 
perform service that goes well beyond--in both degree and kind--their 
former job duties.

Use of Education Award for Educational Courses Offered by Title IV 
Institutions of Higher Education

    Three commenters supported the Corporation's expansion of the use 
of the education award to allow AmeriCorps members to use their 
education award to pay any current educational expenses at institutions 
of higher education that have entered into program participation 
agreements with the U.S. Department of Education under Title IV of the 
Higher Education Act (HEA).

Refunds to the National Service Trust

    The Corporation received no comments relating to the proposed rule 
on refunds to the National Service Trust.

Declaration Sufficient Documentation of Member's Attainment of High 
School Diploma

    Three commenters specifically supported the Corporation's proposal 
to allow self-declaration as sufficient documentation of a member's 
attainment of a high school diploma or its equivalent. The final rule 
provides that an individual's written declaration under penalty of law 
is sufficient to establish this element of eligibility without 
additional documentation.
    One commenter suggested that the Corporation replace the current 
regulations relating to documentation of citizenship, nationality, and 
lawful permanent resident alien status by authorizing grantees to use 
the I-9 to document eligibility for AmeriCorps.

[[Page 45358]]

The I-9--the Immigration and Naturalization Service's Employment 
Eligibility Verification Form--is not, however, an appropriate basis 
for determining eligibility for AmeriCorps. To be eligible to serve in 
AmeriCorps, an individual must be a United States citizen, a United 
States National, or a lawful permanent resident of the United States. 
The categories of eligibility on the I-9 are far more numerous than the 
categories of eligibility for AmeriCorps. Simply having authorization 
to work in the United States is not sufficient to show eligibility for 
AmeriCorps, and using the I-9 to establish eligibility could result in 
ineligible individuals enrolling in AmeriCorps.

Clarification of Statutory List of Prohibited Activities

    One commenter suggested changes to part 2520.30, specifically with 
respect to the regulation as it relates to religious organizations. 
This commenter suggested that the Corporation modify subsection (g) in 
the proposed rule by adding to it the standard from subsection (h)(5), 
such that the end of that section would read ``...unless Corporation 
assistance is not used to support those religious activities.'' The 
commenter believed that this addition would allow religious 
organizations, and their employees and representatives actually 
performing public service, to ``legally and practically participate in 
Corporation programs.'' In addition, this commenter opined that the 
terms ``activities associated with the AmeriCorps program or the 
Corporation'' and ``any form of religious proselytization'' should be 
clarified.
    Addressing the two latter comments first, the Corporation is 
amending the proposed rule to clarify that it applies to activities 
``supported by the AmeriCorps program or the Corporation.'' In 
addition, the Corporation has added a subsection to make clear that 
AmeriCorps members may voluntarily take part in any of the prohibited 
activities on their own time.
    With respect to clarifying the phrase ``any form of religious 
proselytization,'' the Corporation notes that the phrase uses the same 
words as section 132 of the National and Community Service Act. We 
believe that using the precise statutory language is appropriate here. 
Furthermore, we note that an individual may engage in such activities 
on his or her own time.
    With respect to the commenter's first suggestion, the Corporation 
believes that the proposed rule already applies the standard that the 
commenter seeks to reinforce by adding the proposed language. The first 
sentence of part 2520.30 is essentially a definition of what we 
consider to be using Corporation assistance. To the extent that an 
individual participates in activities outside the parameters of that 
definition, those activities would not be considered to be funded using 
Corporation assistance and, consequently, would not be prohibited. 
Nonetheless, the Corporation believes that the changes it is making to 
the proposed rule, as described above, further reinforce the 
distinction between activities funded using Corporation assistance and 
those not.

Elimination of Obsolete References to Palau

    The Corporation received no comments regarding eliminating 
references to Palau, which became independent on October 1, 1994 and is 
no longer eligible as a U.S. Territory for AmeriCorps grants.

Eligibility of Territories for Administrative Funds

    The Corporation received no comments regarding its inclusion of the 
territories as entities eligible to apply for grants under this 
section, in order to comply with the NCSA.

Definition of Institution of Higher Education

    The Corporation received no comments regarding the proposal to 
amend the regulations to conform with the statutory amendments to the 
National and Community Service Act of 1990, as amended.

Other

    One commenter suggested that the Corporation allow members to serve 
for 3 years in AmeriCorps (presumably AmeriCorps*State and *National) 
rather than 2 years. Another commenter suggested that the Corporation 
allow agencies to host more than two cycles of grant funding; reduce 
the minimum number of FTE for a program to be eligible; make the 
education award and living allowance non-taxable income; remove the tax 
burden for student loan interest payments; and allow the education 
award to be transferable to family members. All of these suggestions 
were outside the scope of the proposed rule, and several were outside 
the Corporation's statutory authority. Consequently, the Corporation is 
not responding to these comments at this time.

Executive Order 12866

    The Corporation has determined that this regulatory action is not a 
``significant'' rule within the meaning of Executive Order 12866 
because it is not likely to result in: (1) An annual effect on the 
economy of $100 million or more, or an adverse and material effect on a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
government or communities; (2) the creation of a serious inconsistency 
or interference with an action taken or planned by another agency; (3) 
a material alteration in the budgetary impacts of entitlement, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) the raising of novel legal or policy issues arising out 
of legal mandates, the President's priorities, or the principles set 
forth in Executive Order 12866.

Regulatory Flexibility Act

    The Corporation has determined that this regulatory action will not 
result in (1) an annual effect on the economy of $100 million or more; 
(2) a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; or (3) significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based enterprises to compete with foreign-based enterprises in 
domestic and export markets. Therefore, the Corporation has not 
performed the initial regulatory flexibility analysis that is required 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) for major 
rules that are expected to have such results.

Other Impact Analyses

    Because the changes do not authorize any information collection 
activity outside the scope of existing regulations, this regulatory 
action is not subject to review and approval under the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3500 et seq.). If the Corporation 
proposes to modify any of the forms used in connection with determining 
eligibility of individuals for payments from the National Service 
Trust, the Corporation will comply with clearance procedures as 
provided under the Paperwork Reduction Act.
    For purposes of Title II of the Unfunded Mandates Reform Act of 
1995, 2 U.S.C. 1531-1538, as well as Executive Order 12875, this 
regulatory action does not contain any federal mandate that may result 
in increased expenditures in either Federal, State, local, or tribal 
governments in the aggregate, or impose an annual burden

[[Page 45359]]

exceeding $100 million on the private sector.

List of Subjects

45 CFR Part 2510

    Grant programs--social programs, Volunteers.

45 CFR Part 2520

    Grant programs--social programs, Volunteers.

45 CFR Part 2521

    Grant programs--social programs, Volunteers.

45 CFR Part 2522

    Grant programs--social programs, Reporting and recordkeeping 
requirements, Volunteers.

45 CFR Part 2524

    Grant programs--social programs, Technical assistance, Volunteers.

45 CFR Part 2525

    Grant programs--social programs, Student aid, Volunteers.

45 CFR Part 2526

    Education, Grant programs--social programs, Student aid, 
Volunteers.

45 CFR Part 2528

    Education, Grant programs--social programs, Student aid, 
Volunteers.

45 CFR Part 2550

    Administrative practice and procedure, Grant programs--social 
programs.

    For the reasons stated in the preamble, the Corporation for 
National and Community Service amends chapter XXV, title 45 of the Code 
of Federal Regulations as follows:

PART 2510--OVERALL PURPOSES AND DEFINITIONS

    1. The authority citation for part 2510 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.


    2. Amend Sec. 2510.20 by revising the definition of ``Institution 
of higher education,'' and by adding the definition ``Subtitle C 
program'' in alphabetical order to read as follows:


Sec. 2510.20  Definitions.

* * * * *
    Institution of higher education. The term institution of higher 
education has the same meaning given the term in section 101 of the 
Higher Education Act of 1965 (20 U.S.C. 1001).
* * * * *
    Subtitle C program. The term subtitle C program means an AmeriCorps 
program authorized and funded under subtitle C of the National and 
Community Service Act of 1990, as amended. (NCSA) (42 U.S.C. 12501 et 
seq.) It does not include demonstration programs, or other AmeriCorps 
programs, funded under subtitle H of the NCSA.
* * * * *

PART 2520--GENERAL PROVISIONS: AMERICORPS SUBTITLE C PROGRAMS

    1. Revise the heading of part 2520 to read as set forth above.

    2. The authority citation for part 2520 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.


    3. Revise Sec. 252.10 to read as follows:


Sec. 2520.10  What is the purpose of the AmeriCorps subtitle C program 
described in parts 2520 through 2524 of this chapter?

    The purpose of the AmeriCorps subtitle C program is to provide 
financial assistance under subtitle C of the National and Community 
Service Act to support AmeriCorps programs that address educational, 
public safety, human, or environmental needs through national and 
community service, and to provide AmeriCorps education awards to 
participants in such programs.

    4. Revise Sec. 2520.20 to read as follows:


Sec. 2520.20  What types of service activities are allowed for 
AmeriCorps subtitle C programs supported under parts 2520 through 2524 
of this chapter?

    (a) Except as provided in paragraph (b) of this section, the 
service must either provide a direct benefit to the community where it 
is performed, or involve the supervision of participants or volunteers 
whose service provides a direct benefit to the community where it is 
performed. Moreover, the approved AmeriCorps activities must result in 
a specific identifiable service or improvement that otherwise would not 
be provided and that does not duplicate the routine functions of 
workers or displace paid employees. Programs must develop service 
opportunities that are appropriate to the skill levels of participants 
and that provide a demonstrable, identifiable benefit that the 
community values.
    (b) In certain circumstances, some activities may not provide a 
direct benefit to the communities in which the service is performed. 
Such activities may include, but are not limited to, clerical work and 
research. However, a participant may engage in such activities only if 
the performance of the activity is incidental to the program's 
provision of service that does provide a direct benefit to the 
community in which the service is performed, or if the Corporation 
approves such activities in connection with disaster relief, homeland 
defense, or other compelling community needs.

    5. Revise Sec. 2520.30 to read as follows:


Sec. 2520.30  What activities are prohibited in AmeriCorps subtitle C 
programs?

    (a) While charging time to the AmeriCorps program, accumulating 
service or training hours, or otherwise performing activities supported 
by the AmeriCorps program or the Corporation, staff and members may not 
engage in the following activities:
    (1) Attempting to influence legislation;
    (2) Organizing or engaging in protests, petitions, boycotts, or 
strikes;
    (3) Assisting, promoting, or deterring union organizing;
    (4) Impairing existing contracts for services or collective 
bargaining agreements;
    (5) Engaging in partisan political activities, or other activities 
designed to influence the outcome of an election to any public office;
    (6) Participating in, or endorsing, events or activities that are 
likely to include advocacy for or against political parties, political 
platforms, political candidates, proposed legislation, or elected 
officials;
    (7) Engaging in religious instruction, conducting worship services, 
providing instruction as part of a program that includes mandatory 
religious instruction or worship, constructing or operating facilities 
devoted to religious instruction or worship, maintaining facilities 
primarily or inherently devoted to religious instruction or worship, or 
engaging in any form of religious proselytization;
    (8) Providing a direct benefit to--
    (i) A business organized for profit;
    (ii) A labor union;
    (iii) A partisan political organization;
    (iv) A nonprofit organization that fails to comply with the 
restrictions contained in section 501(c)(3) of the Internal Revenue 
Code of 1986 except that nothing in this section shall be construed to 
prevent participants from engaging in advocacy activities undertaken at 
their own initiative; and
    (v) An organization engaged in the religious activities described 
in paragraph (g) of this section, unless Corporation assistance is not 
used to support those religious activities; and
    (9) Such other activities as the Corporation may prohibit.
    (b) Individuals may exercise their rights as private citizens and 
may

[[Page 45360]]

participate in the activities listed above on their initiative, on non-
AmeriCorps time, and using non-Corporation funds. Individuals should 
not wear the AmeriCorps logo while doing so.

PART 2521--ELIGIBLE AMERICORPS SUBTITLE C PROGRAM APPLICANTS AND 
TYPES OF GRANTS AVAILABLE FOR AWARD

    1. Revise the heading of part 2521 to read as set forth above.

    2. The authority citation for part 2521 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.


    3. Amend Sec. 2521.10 by revising the section heading and paragraph 
(a) to read as follows:


Sec. 2521.10  Who may apply to receive an AmeriCorps subtitle C grant?

    (a) States (including Territories), subdivisions of States, Indian 
tribes, public or private nonprofit organizations (including religious 
organizations and labor organizations), and institutions of higher 
education are eligible to apply for AmeriCorps subtitle C grants. 
However, the fifty States, the District of Columbia and Puerto Rico 
must first receive Corporation authorization for the use of a State 
Commission or alternative administrative or transitional entity 
pursuant to part 2550 of this chapter in order to be eligible.
* * * * *

    4. Amend Sec. 2521.20 as follows:
    a. By revising the section heading, paragraph (a)(2)(ii) and the 
first sentence of paragraph (b)(2)(ii);
    b. Removing paragraph (c); and
    c. Redesignating paragraphs (d) and (e) as paragraphs (c) and (d) 
respectively.
    The revisions read as follows:


Sec. 2521.20  What types of AmeriCorps subtitle C program grants are 
available for award?

* * * * *
    (a) * * *
    (2) * * *
    (ii) Subdivisions of States, Indian Tribes, public or private 
nonprofit organizations (including religious organizations and labor 
organizations), and institutions of higher education may apply either 
to a State or directly to the Corporation for planning grants.
* * * * *
    (b) * * *
    (2) * * *
    (ii) Subdivisions of States, Indian Tribes, public or private 
nonprofit organizations (including religious organizations and labor 
organizations), and institutions of higher education may apply either 
to a State or directly to the Corporation for operational grants. * * *
* * * * *

    5. Amend Sec. 2521.30 by revising the section heading, the 
introductory text, paragraph (b)(1), footnote 1 to paragraph (b)(1), 
and the first sentence of paragraph (b)(3) to read as follows:


Sec. 2521.30  How will AmeriCorps subtitle C program grants be awarded?

    In any fiscal year, the Corporation will award AmeriCorps subtitle 
C program grants as follows:
* * * * *
    (b) * * *
    (1) One percent of available funds will be distributed to the U.S. 
Territories \1\ that have applications approved by the Corporation 
according to a population-based formula.\2\
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    \1\ The United States Virgin Islands, Guam, American Samoa, and 
the Commonwealth of the Northern Mariana Islands.
    \2\ The amount allotted as a grant to each such territory or 
possession is equal to the ratio of each such Territory's population 
to the population of all such territories multiplied by the amount 
of the one percent set-aside.
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* * * * *
    (3) The Corporation will use any funds available under this part 
remaining after the award of the grants described in paragraphs (a) and 
(b) (1) and (2) of this section to make direct competitive grants to 
subdivisions of States, Indian tribes, public or private nonprofit 
organizations (including religious organizations and labor 
organizations), institutions of higher education, and Federal agencies. 
* * *
* * * * *

PART 2522--AMERICORPS PARTICIPANTS, PROGRAMS, AND APPLICANTS

    1. The authority citation for part 2522 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.

    2. Amend Sec. 2522.100 by revising the section heading and the 
first sentence of the introductory text, removing the period at the end 
of the penultimate sentence of paragraph (g)(1) and adding a semicolon 
in its place, and removing the last sentence of paragraph (g)(1) to 
read as follows:


Sec. 2522.100  What are the minimum requirements that AmeriCorps 
subtitle C grantees must meet?

    Although a wide range of programs may be eligible to apply for and 
receive support from the Corporation, all AmeriCorps subtitle C 
programs must meet certain minimum program requirements. * * *
* * * * *

    3. Amend Sec. 2522.200 by redesignating paragraphs (b) through (d) 
as paragraphs (c) through (e) respectively, adding a new paragraph (b), 
and revising the heading of the newly designated paragraph (e) to read 
as follows:


Sec. 2522.200  What are the eligibility requirements for an AmeriCorps 
participant?

* * * * *
    (b) Written declaration regarding high school diploma sufficient 
for enrollment. For purposes of enrollment, if an individual provides a 
written declaration under penalty of law that he or she meets the 
requirements in paragraph (a) of this section relating to high school 
education, a program need not obtain additional documentation of that 
fact.
* * * * *
    (e) Secondary documentation of citizenship or immigration status. * 
* *
* * * * *

PART 2524--AMERICORPS TECHNICAL ASSISTANCE AND OTHER SPECIAL GRANTS

    1. The authority citation for part 2524 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.

    2. Amend Sec. 2524.10 by revising paragraph (a) introductory text 
to read as follows:


Sec. 2524.10  For what purposes will technical assistance and training 
funds be made available?

    (a) To the extent appropriate and necessary, the Corporation may 
make technical assistance available to States, Indian tribes, labor 
organizations, religious organizations, organizations operated by young 
adults, organizations serving economically disadvantaged individuals, 
and other entities eligible to apply for assistance under parts 2521 
and 2522 of this chapter that desire--
* * * * *

PART 2525--NATIONAL SERVICE TRUST: PURPOSE AND DEFINITIONS

    1. The authority citation for part 2525 continues to read as 
follows:

    Authority: 42 U.S.C. 12601-12604.

    2. Amend Sec. 2525.20 by revising the definition ``Current 
educational expenses'' and by adding the definitions ``Educational 
expenses'' and ``Period of enrollment'' in alphabetical order to read 
as follows:

[[Page 45361]]

Sec. 2525.20  Definitions.

* * * * *
    Current educational expenses. The term current educational expenses 
means the cost of attendance, or other costs attributable to an 
educational course offered by an institution of higher education that 
has in effect a program participation agreement under Title IV of the 
Higher Education Act, for a period of enrollment that begins after an 
individual enrolls in an approved national service position.
* * * * *
    Educational expenses at a Title IV institution of higher education. 
The term educational expenses means--
    (1) Cost of attendance as determined by the institution; or
    (2) Other costs at a title IV institution of higher education 
attributable to a non-title IV educational course as follows:
    (i) Tuition and fees normally assessed a student for a course or 
program of study by the institution, including costs for rental or 
purchase of any books or supplies required of all students in the same 
course of study;
    (ii) For a student engaged in a course of study by correspondence, 
only tuition and fees and, if required, books, and supplies;
    (iii) For a student with a disability, an allowance (as determined 
by the institution) for those expenses related to the student's 
disability, including special services, personal assistance, 
transportation, equipment, and supplies that are reasonably incurred 
and not provided for by other assisting agencies; and
    (iv) For a student engaged in a work experience under a cooperative 
education program or course, an allowance for reasonable costs 
associated with such employment (as determined by the institution).
* * * * *
    Period of enrollment. Period of enrollment means the period that 
the title IV institution has established for which institutional 
charges are generally assessed (i.e., length of the student's course, 
program, or academic year.)
* * * * *

PART 2526--ELIGIBILITY FOR AN EDUCATION AWARD

    1. The authority citation for part 2526 continues to read as 
follows:

    Authority: 42 U.S.C. 12601-12604.

    2. Amend Sec. 2526.10 by redesignating paragraphs (c) and (d) as 
paragraphs (d) and (e) respectively, and adding a new paragraph (c) to 
read as follows:


Sec. 2526.10  Who is eligible to receive an education award from the 
National Service Trust?

* * * * *
    (c) Written declaration regarding high school diploma sufficient 
for disbursement. For purposes of disbursing an education award, if an 
individual provides a written declaration under penalty of law that he 
or she meets the requirements in paragraph (b) of this section relating 
to high school education, no additional documentation is needed.
* * * * *

PART 2528--USING AN EDUCATION AWARD

    1. The authority citation for part 2528 continues to read as 
follows:

    Authority: 42 U.S.C. 12601-12604.

    2. Amend Sec. 2528.10 by revising paragraph (a)(2) to read as 
follows:


Sec. 2528.10  For what purposes may an education award be used?

    (a) * * *
    (2) To pay all or part of the current educational expenses at an 
institution of higher education in accordance with Secs. 2528.30 
through 2528.50;
* * * * *
    3. Amend Sec. 2528.30 by revising the section heading, paragraph 
(a) introductory text, and paragraphs (a)(2)(iii), (a)(2)(iv), and 
(a)(2)(v) to read as follows:


Sec. 2528.30  What steps are necessary to use an education award to pay 
all or part of the current educational expenses at an institution of 
higher education?

    (a) Required information. Before disbursing an amount from an 
education award to pay all or part of the current educational expenses 
at an institution of higher education, the Corporation must receive--
* * * * *
    (2) * * *
    (iii) If an individual who has used an education award withdraws or 
otherwise fails to complete the period of enrollment for which the 
education award was provided, the institution of higher education will 
ensure an appropriate refund to the Corporation of the unused portion 
of the education award under its own published refund policy, or if it 
does not have one, provide a pro-rata refund to the Corporation of the 
unused portion of the education award;
    (iv) Individuals using education awards to pay for the current 
educational expenses at that institution do not comprise more than 15 
percent of the institution's total student population;
    (v) The amount requested will be used to pay all or part of the 
individual's cost of attendance or other educational expenses 
attributable to a course offered by the institution;
* * * * *

    4. Amend Sec. 2528.50 by revising paragraph (a) to read as follows:


Sec. 2528.50  What happens if an individual withdraws or fails to 
complete the period of enrollment in an institution of higher education 
for which the Corporation has disbursed all or part of that 
individual's education award?

    (a)(1) If an individual for whom the Corporation has disbursed 
education award funds withdraws or otherwise fails to complete a period 
of enrollment, an institution of higher education that receives a 
disbursement of education award funds from the Corporation must provide 
a refund to the Corporation in an amount determined under that 
institution's published refund requirements.
    (2) If an institution for higher education does not have a 
published refund policy, the institution must provide a pro-rata refund 
to the Corporation of the unused portion of the education award.
* * * * *

    5. Amend Sec. 2528.60 by revising paragraph (a)(2)(iii) to read as 
follows:


Sec. 2528.60  What steps are necessary to use an education award to pay 
expenses incurred in participating in an approved school-to-work 
program?

    (a) * * *
    (2) * * *
    (iii) If an individual who has used an education award withdraws or 
otherwise fails to complete the period of enrollment for which the 
education award was provided, the school-to-work program will ensure an 
appropriate refund to the Corporation of the unused portion of the 
education award under its own published refund policy, or if it does 
not have one, provide a pro-rata refund to the Corporation of the 
unused portion of the education award.
* * * * *

    6. Amend Sec. 2528.70 by revising paragraph (a) to read as follows:


Sec. 2528.70  What happens if an individual withdraws or fails to 
complete the period of enrollment in an approved school-to-work program 
for which the Corporation has disbursed all or part of that 
individual's education award?

    (a)(1) If an individual for whom the Corporation has disbursed 
education award funds withdraws or otherwise

[[Page 45362]]

fails to complete a period of enrollment, an approved school-to-work 
program that receives a disbursement of education award funds from the 
Corporation must provide a refund to the Corporation determined under 
that program's published refund policy.
    (2) If a school-to-work program does not have a published refund 
policy, the program must provide a pro-rata refund to the Corporation 
of the unused portion of the education award.
* * * * *

PART 2550--REQUIREMENTS AND GENERAL PROVISION FOR STATE 
COMMISSIONS, ALTERNATIVE ADMINISTRATIVE ENTITIES AND TRANSITIONAL 
ENTITIES

    1. The authority citation for part 2550 continues to read as 
follows:

    Authority: 42 U.S.C. 12501 et seq.

    2. Amend Sec. 2550.10 by revising paragraph (c) to read as follows:


Sec. 2550.10  What is the purpose of this part?

* * * * *
    (c) The Corporation will distribute grants of between $125,000 and 
$750,000 to States to cover the Federal share of operating the State 
Commissions, AAEs, or Transitional Entities.
* * * * *

    3. Amend Sec. 2550.20 by revising paragraph (k) to read as follows:


Sec. 2550.20  Definitions.

* * * * *
    (k) State. As used in this part, the term State refers to each of 
the 50 States, the District of Columbia, the Commonwealth of Puerto 
Rico, the United States Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands.
* * * * *

    Dated: July 2, 2002.
Gary Kowalczyk,
Director of Planning and Program Integration.
[FR Doc. 02-16957 Filed 7-8-02; 8:45 am]
BILLING CODE 6050-$$-P