contribution: (1) For 3 years after the close of the fiscal year in which the expenditure was liquidated, (2) until the grantee is notified that such records are not needed for program administrative review, or (3) until the grantee is notified of the completion of the Federal fiscal audit, whichever is the latest.

(b) Questioned expenditures. The records pertaining to any claim or expenditure which has been questioned at the time of audit shall be maintained until necessary adjustments have been reviewed and cleared by the Department of Health, Education, and Welfare. $166.77 Disposition of equipment.

(a) Whenever items of equipment, each initially costing $100 or more, in which cost the Federal Government has participated are sold or no longer used for the purpose authorized by the Act, the Federal Government shall be credited with its proportionate share of the value of such equipment, the value being determined on the basis of the sale price in the case of a bona fide sale or on the fair market value in the case of discontinuance of use or diversion for other than a purpose authorized under the Act.

(b) Inventories and records are required to be kept for all items of equipment referred to in paragraph (a) of this section. The grantee is responsible for having available information sufficient for a determination of whether such equipment continues to be used for a purpose provided for under the Act. § 166.78

Reports.

The grantee shall submit the following reports:

(a) A report to be submitted at the conclusion of the project, or, if continuing, at the end of each fiscal year, describing the activities conducted under the project;

(b) A final fiscal report of expenditures incurred under the project containing such information as the Commissioner may require;

(c) A report to be submitted at the conclusion of the project, or, if continuing, at the end of each fiscal year, containing an evaluation of the project in terms of the program objectives;

(d) A copy of any independent evalu=ations of the project, its operation and

objectives, or of any other nature, if obtained; and

(e) Any other reports containing such information in such form as the Commissioner may, from time to time, require in order to carry out his functions under the Act.

§ 166.79 Patents and copyrights.

(a) Any material of a copyrightable nature produced through a project with financial assistance under the Act shall be subject to the copyright policy of the U.S. Office of Education in effect at the time of project approval.

(b) Any material of a patentable nature produced through a project with financial assistance under the Act shall be subject to the provisions of Parts 6 and 8 of this title which are hereby incorporated into the terms and conditions of any approved project.

PART 170-FINANCIAL ASSISTANCE FOR CONSTRUCTION OF HIGHER EDUCATION FACILITIES

Sec. 170.1 170.2

170.3

170.4

170.5

170.6 170.7

Subpart A-General Provisions

Definitions.

Requirement for compliance with labor standards and equal employment opportunity requirements in all construction contracts. Requirement for competitive bidding on contracts for construction and for acquisition and installation of built-in equipment.

Requirement for economical methods of purchase of movable equipment. Fiscal control and fund accounting procedures.

Retention of records.

Determination of costs eligible for
Federal participation.

Subpart B-Grants for Construction of Academic
Facilities

170.11 Institutional eligibility for grants under section 103 of the Act. 170.12 Institutional eligibility for grants under section 104 of the Act. Conditions for grant approval. Submission and processing of Title I applications.

170.13 170.14

170.15 Criteria for standards and methods to determine relative priorities of eligible projects.

170.16 Criteria for standards and methods to determine Federal shares of eligible projects. 170.17 State plans.

(a) "Act" means Public Law 88-204, the Higher Education Facilities Act of 1963, as amended. Unless otherwise indicated, title references are to titles of the Act. All terms defined in the Act shall have the same meaning as given them in the Act. All references to sections are to sections of this part, unless otherwise indicated.

(b) "Academic facilities," as defined in the Act, are further defined and subdivided into the following categories:

(1) "Instructional and library facilities" means all rooms or areas used regularly for instruction of students, for faculty offices, or for library purposes, and service areas (such as storage closets, projection booths, balance rooms, dark rooms, locker and shower rooms, and

private toilets) which adjoin and are used in conjunction with such rooms or areas. A room intended and equipped for any such purposes should be counted in the appropriate category regardless of the building (e.g., administration building, library building, or classroom building) in which it is located.

(2) "Instruction-related facilities" means all rooms or areas (other than instructional and library facilities) which are used for purposes related to the instruction of students, research, or for the general administration of the educational or research programs of an institution of higher education, and service areas (such as storage rooms, private toilets, or control rooms) which adjoin and are used in conjunction with such rooms or areas.

(3) "Related supporting facilities" means all other areas and facilities which are necessary for the utilization, operation and maintenance of "instructional and library facilities" or "instructionrelated facilities," as defined above. This term includes building service areas and circulation areas, and central maintenance and utility facilities which serve more than one building, to the degree that such central facilities are designed and used to serve academic facilities of the two aforementioned categories rather than other, nonacademic, facilities such as dormitories, chapels, or stadiums, or facilities which are excluded from the definition of eligible academic facilities because they are used by ineligible schools or departments.

(c) "Advisory Committee on Graduate Education" means that committee established by section 203 of the Act.

(d) "Assignable area" means square feet of area in facilities which are designed and available for assignment to specific functional purposes (such as instruction, research, and administration, and including noneligible purposes such as student sleeping rooms, apartments, or chapel rooms). Areas used for general circulation within the building, for public washrooms, for building maintenance and custodial services, or in central maintenance and utility facilities which exist only to support the operation and utilization of other structures on the campus and which are not available for assignment to other specific functional purposes, as illustrated above, shall be classified as nonassignable area.

(e) "Branch campus" means a campus of an institution of higher education which is located in a community different from that in which its parent institution is located. A campus shall not be considered to be located in a community different from that of its parent institution unless it is located beyond a reasonable commuting distance from the parent institution.

(f) "Capacity/enrollment ratio" means the ratio of (1) the square feet of assignable area of instructional and library facilities as defined in paragraph (b)(1) of this section to (2) the total student clock-hour enrollment, at a particular campus of an institution. For purposes of this definition, "student clock-hour enrollment" means the aggregate clock hours (sometimes called contact hours) per week in classes or supervised laboratory or shop work for which all resident students (i.e., students enrolled for credit courses on the campus) are enrolled as of a particular date. Where formally established independent study programs exist, systematically determined equivalents of class or laboratory hours may be included under "student clock-hour enrollment."

(g) "Commissioner" means the U.S. Commissioner of Education or his designee.

(h) "Equipment" means manufactured items which have an extended useful life and are not consumed in use and which have an identity and function which are not lost through incorporation into a different or more complex unit or substance.

For purposes of construction applications under the act, equipment is further subdivided into three categories: built-in building service systems, other built-in equipment, and initial movable equipment.

(1) "Built-in building service systems" means utilities and other machinery necessary for the effective functioning of a building or uniformly distributed through all portions of the building, such as heating and air conditioning systems and machinery, automatic firecontrol systems, public address, time and communication systems.

(2) "Other built-in equipment" means all items other than "built-in building service systems," which are permanently fastened to the building or the grounds, such as: laboratory tables connected permanently to plumbing, and other builtin specialized laboratory equipment;

built-in audiovisual systems in individual classrooms; chalkboards, bulletin boards, and display cabinets fixed to walls; built-in library stacks and counters; carpeting installed in lieu of other finished flooring; and draperies installed in lieu of other light control devices.

(3) "Initial movable equipment" means all items of initial equipment other than built-in equipment, which are necessary and appropriate for the functioning of a particular academic facility for its specific purpose, and will be used solely or primarily in the rooms or areas covered by an application under the Act (as distinguished from items which are appropriate for academic purposes but are not to be used principally within the rooms included in the project). The term does not include books, curricular or program materials, carpets or drapes, or any items of current operating expense such as fuel, supplies, component items such as vacuum tubes which have no function apart from other items in which they are to be incorporated, or manufactured items which are consumed in use or have a short useful life.

(i) "Full-time equivalent number of students" means:

(1) For purposes of determining State allotments, the number of full-time students enrolled in programs which consist wholly or principally of work normally creditable towards a bachelor's or higher degree plus one-third of the number of part-time students enrolled in such programs, plus 40 percent of the number of students enrolled in programs which are not chiefly transferable towards a bachelor's or higher degree plus 28 percent of the remaining number of such students. Student enrollment figures for each fiscal year for the purposes of this computation shall be those contained in the most recent Office of Education survey containing data on opening fall enrollments in higher education.

(2) For purposes of reporting undergraduate enrollment trends and projections in connection with applications for financial assistance for individual institutions under Title I of the Act, the "fulltime equivalent number of students" may be defined for each State by the State commission by specific State plan provision. In the absence of such a definition in the applicable State plan, "fulltime equivalent number of students" for application purposes shall be the total

number of full-time students plus onethird of the number of part-time students. For the purposes of this definition, full-time students are those carrying at least 75 percent of a normal student-hour load.

(j) "Institution of higher education," or "institution," means an educational institution in any State which meets the requirements set forth in section 401(f) of the Act. The term "educational institution" limits the scope of this definition to establishments at which teaching is

conducted.

(k) "Project" means the facilities (all or a portion of one or more structures) which are eligible for grant or loan assistance under a particular title of the Act, and for which grant or loan assistance is requested in a specific grant or loan application. Only facilities located on the same campus and for which the basic construction contracts are to be awarded at approximately the same time may be included in the same project application.

(1) "State commission" means the State agency designated or established in each State pursuant to section 105(a) of the Act.

(m) "State plan" means the document submitted by a State commission and approved by the Commissioner, which sets forth the standards, methods, and administrative procedures whereby the State commission shall review projects proposed by applicants in the State for Federal assistance under Title I of the Act, and shall determine and recommend the relative priority of each such project and the Federal share of the costs eligible for Federal financial participation for each such project.

§ 170.2 Requirement for compliance with labor standards and equal employment opportunity requirements in all construction contracts. The Commissioner shall not approve any application for a grant or loan under the Act except upon adequate assurance that:

(a) Construction contracts for the construction covered by the application will provide that all laborers and mechanics employed by contractors or subcontractors in the performance of work on construction assisted by such grant or loan will be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance

with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5), and will receive overtime compensation in accordance with and subject to the provisions of the Contract Work Hours Standards Act (Public Law 87-581), unless a waiver is granted by the Commissioner pursuant to section 403(a) of the Act; and

(b) All applicable provisions for equal opportunity in employment, pursuant to Executive Order 11246, will be included in all construction contracts covered by the application, and all other requirements, imposed by or pursuant to that Executive order, will be complied with. § 170.3 competitive bidding on contracts for construction and for acquisition and installation of built-in equipment.

Requirement for

(a) All contracting for new construction, and all orders for the acquisition and installation of built-in equipment not covered by general construction contracts, shall be on a fixed price basis. Contracts for new construction and for acquisition and installation of built-in equipment shall be awarded on the basis of competitive bidding obtained by public advertising (Provided, however, That for applications approved prior to the publication of these regulations, the competitive bidding requirement may be satisfied by obtaining three or more bids).

(b) Except where the Commissioner specifically approves alternative contracting procedures due to special problems or conditions, all contracting for rehabilitation, renovation, remodeling, conversion, or improvement of existing structures shall be undertaken in accordance with the provisions of paragraph (a) of this section.

(c) The concurrence of the Commissioner (including concurrence in any provision for prequalification of bidders) shall be obtained before advertising for bids and before awarding any contract for construction or for acquisition and installation of built-in equipment for which grant or loan assistance under the Act is requested. § 170.4

Requirement for economical methods of purchase of movable equipment.

All movable initial equipment, the cost of which is to be charged to a project covered by a grant or loan application under the Act, shall be procured in an economical manner consistent with

sound business practice, in accordance with such instructions as the Commissioner may from time to time prescribe.

§ 170.5

Fiscal control and fund accounting procedures.

(a) State commissions. Each State plan shall contain specific information regarding fiscal control and fund acE counting procedures, as required by the Commissioner to insure proper disbursement of and accounting for Federal #funds which may be paid to the State commission for expenses for the proper and efficient administration of the State plan.

(b) Institutions, cooperative graduate center boards, and higher education building agencies. Applicants and, where applicable, their building agencies, shall maintain adequate and separate accounting and fiscal records and accounts of all funds provided from any source to pay the cost of construction (including necessary site acquisition and equipment) covered by the grant or loan application, and audit or inspection of such records by authorized representatives of the Federal Government shall be permitted and facilitated by applicants at any reasonable time.

§ 170.6 Retention of records.

(a) State commissions. (1) Accounts and documents supporting expenditures for expenses of State commissions shall be maintained until the State commission is notified of completion of Federal audits for the Federal fiscal year concerned.

(2) Where the State commission purchases equipment items costing $50 or more per unit, for use in the administration of the State plan, inventories and other records supporting accountability for such items shall be maintained until the State commission is notified of the completion of the review and audit by the Department of Health, Education, and Welfare covering the disposition of such equipment.

(3) State commissions shall establish a complete case file on each Title I application received; inform applicants of official actions and determinations, by letter or similar type of correspondence, and shall retain records regarding each case for at least 2 years after final action with respect to the application is taken by the State commission. In addition, each State commission shall maintain a full record of all hearings on appeals pursuant to section 105 (a) (5) of the Act,

and all proceedings by which it establishes relative priorities and recommended Federal shares for eligible projects considered as of each specified closing date and shall retain such records for at least 3 years.

(b) Institutions, cooperative graduate center boards, and higher education building agencies. All accounting records relating to approved projects, including bank deposit slips, cancelled checks and other supporting documents, purchase orders and contract awards (or microfilm copies thereof), shall be retained intact by the applicant and, where applicable, by the applicant's building agency, for audit or inspection by authorized representatives of the Federal Government for a period of 3 years after completion of the project or until the applicant is notified of completion of the Government's audit, whichever is later. § 170.7 Determination of costs eligible for Federal participation.

Determination of costs eligible for Federal participation will be based for each individual project, whether application is made under Title I, II, or III of the Act, upon: (1) The date on which a given cost item was incurred or contracted for; (2) whether the cost is an allowable "development cost," as defined in section 401(c) of the Act, and has been incurred in accordance with the requirements set forth in these regulations; (3) the portion of the proposed facility which is eligible under the type of assistance for which the application is submitted; and (4) the amount of any financial assistance under any other Federal program which the applicant has obtained or is assured of obtaining for the project.

(a) In connection with a Title I grant for an institution other than a public community college or a public technical institute, awarded prior to July 1, 1966, for structures, or portions thereof, which are not especially designed for instruction or research in the natural or physical sciences, mathematics, modern foreign languages, or engineering, or for use as a library-any cost which was incurred before, or under a contract entered into before, November 8, 1965, shall be excluded from the eligible development cost.

(b) For a project for which an application was filed for the first time (under any title of the Act) on or after April 1, 1965, and prior to July 1, 1966, the