§ 200.307 - Program income.

§ 200.307 Program income.

(a) General. Non-Federal entities are The recipient or subrecipient is encouraged to earn income to defray program costs where when appropriate.

(b) Cost of generating program income. If authorized by Federal regulations or the Federal award, costs incidental to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.

(c) Governmental revenues. Taxes, special assessments, levies, fines, and other such revenues raised by a non-Federal entity are not program income unless the revenues are specifically identified in the Federal award or Federal awarding agency regulations as program income.

(d) Property. Proceeds from the sale of real property, equipment, or supplies are not program income; such proceeds will be handled in accordance with the requirements of the Property Standards §§ 200.311, 200.313, and 200.314, or as specifically identified in Federal statutes, regulations, or the

Program income must be used for the original purpose of the Federal award. Program income earned during the period of performance may only be used for costs incurred during the period of performance or allowable closeout costs. See § 200.472(b). Program income must be expended prior to requesting additional Federal funds. Program income exceeding amounts specified in the Federal award may be added to or deducted from the total allowable costs in accordance with the terms and conditions of the Federal award.

(

e

b)Use of program income.

If the Federal awarding agency does not specify in its regulations or

There are three methods of applying program income: deduction; addition; and cost-sharing. The Federal agency should specify what program income method(s) will be used in the terms and conditions of the Federal award

, or give prior approval for how program income is to be used, paragraph (e)(1) of this section must apply. For Federal awards made to IHEs and nonprofit research institutions,

. The deduction method will be used if the Federal

awarding

agency does not specify

in its regulations or the terms and conditions of the Federal award how program income is to be used, paragraph (e)(2) of this section must apply. In specifying alternatives to paragraphs (e)(1) and (2) of this section, the Federal awarding

a method for applying program income. When no program income method is specified in the Federal award, prior approval is required to use the addition or cost sharing methods. However, the addition method will be used when no method is specified for awards made to institutions of higher education (IHE) and nonprofit research institutions. In specifying alternatives to the deduction and addition methods, the Federal agency may distinguish between income earned by the recipient and income earned by subrecipients

and paragraphs

as well as between the sources, kinds, or amounts of income.

When the Federal awarding agency authorizes the approaches in

(

e)(2) and (3) of this section, program income in excess of any amounts specified must also be deducted from expenditures.(

1)Deduction.

Ordinarily program

Program income

must be

is deducted from the total allowable costs

to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project

, reducing the overall total amount of the Federal award.

(2) Addition.

With prior approval of the Federal awarding agency (except for IHEs and nonprofit research institutions, as described in this paragraph (e)) program income may be added to the Federal award by the Federal agency and the non-Federal entity. The program income must be used for the purposes and under the conditions

Program income is added to the total allowable costs, increasing the overall total amount of the Federal award.

(3) Cost sharing

or matching. With prior approval of the Federal awarding agency, program income may be

. Program income is used to meet the Federal award's cost sharing

or matching

requirement

of the Federal award

.

The amount of the Federal award remains the same.(f

(c) Income after the period of performance. There are no

Federal

requirements governing the disposition of program income earned after the end of the period of performance

for

of the Federal award

,

unless stipulated in the Federal

awarding

agency regulations or the terms and conditions of the Federal award

provide otherwise

. The Federal

awarding

agency may negotiate agreements with recipients regarding appropriate uses of income earned after the end of the period of performance as part of the

grant

closeout process. See

also

§ 200.344.

(

g) License fees and royalties. Unless the Federal statute, regulations, or terms and conditions for the Federal award provide otherwise, the non-Federal entity is not accountable to the Federal awarding agency with respect to program income earned from license fees and royalties

d) Cost of generating program income. If authorized by Federal regulations or the Federal award, costs incidental to generating program income may be deducted from gross income to determine program income, provided these costs have not been charged to the Federal award.

(e) Not considered program income. The following are not considered program income unless specified in Federal statutes, regulations, or the terms and conditions of the Federal award:

(1) Governmental revenues. Taxes, special assessments, levies, fines, and similar revenues the recipient or subrecipient raised.

(2) Property. Proceeds from the sale of real property, equipment, or supplies. The proceeds must be handled in accordance with the requirements of the Property Standards of §§ 200.311, 200.313, 200.314, or as explicitly identified in Federal statutes, regulations, or the terms and conditions of the Federal award.

(3) License fees and royalties. License fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions made under

a

the Federal award subject to

which

37 CFR part 401

is applicable

.