00-6650. 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.

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 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: [phone]. 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 [phone] or [phone]. 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 §§ 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 § 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 § 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 § 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 §§ 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 “§ ” and a numbered heading; for example, § 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.

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 [phone].

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:

§ 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 §§ 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 § 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 § 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 § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 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:

§ 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 §§ 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 § 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 § 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 § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 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:

§ 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 §§ 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 § 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 § 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 § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 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.