Page images

State commission and to all institutions within the State. Whenever supplemental forms or definitions or data in published reports or publications are to be used in connection with optional State plan standards, the State plan shall include a section setting forth such definitions and supplementary data sources and an appendix illustrating the supplemental State forms.

(h) In no event shall an institution's readiness to admit out-of-State students be considered as a priority factor adverse to such institution and in no event may the nature of the control or sponsorship of the institution, or the fact that construction of the project has commenced, or that part of the cost of a project has been incurred before or under a contract entered into prior to the date of the application, be considered as a priority factor either in favor of, or adverse to, an institution. $ 170.16 Criteria for standards and

methods to determine Federal shares

of eligible projects. (a) Unless the Federal share is specified in the State plan as a uniform percentage of the costs eligible for Federal financial participation, the State plan shall prescribe the standards and methods in accordance with which the State commission shall determine the Federal share of such costs, but in no event may the Federal share of a project exceed the percentage of the eligible project development cost specified by the Act.

(b) Standards and methods for determining the Federal share pursuant to paragraph (a) of this section: (1) Must be objective and simple to apply; (2) may inyolve the use only of data which are to be submitted on the application form prescribed by the Commissioner, required by the State commission to be submitted on supplemental State forms to accompany the application, or contained in reports or publications readily available to the State commission and the institutions of higher education in the State; (3) must be such as will enable an applicant to calculate in advance (on the assumption that sufficient funds will be available to cover all applications) the minimum Federal share of the estimated eligible project development cost which the State commission will certify to the Commissioner if it recommends the project for a Federal grant; and (4) must be consistent with criteria

published by the Commissioner with respect to the determination of relative priorities among projects and be promotive of the purposes of the Act. $ 170.17 State plans.

(a) The Commissioner shall approve a State plan only after he has received satisfactory assurance and explanation regarding the basis on which the State commission submitting the plan meets the requirements of section 105(a) of the Act. A new or revised State plan submitted in accordance with section 105 of the Act shall be submitted on forms or in a format supplied by the Commissioner and shall contain all provisions required by the Commissioner pursuant to section 105 of the Act and other sections of the regulations in this part, together with such additional organizational and administrative information as the Commissioner may request.

(b) All proposed amendments to the State plan shall be submitted to the Commissioner for his approval in such form and in accordance with such instructions as are established for that purpose. Such amendments shall apply uniformly to all applications to be considered together as of any closing date, and, unless otherwise provided in the State plan, shall become effective immediately upon approval by the Commissioner, except that in no event shall any amendment which affects the standards and methods for determining priorities or Federal shares or any amendment providing for an additional closing date or for the change in an existing closing date become effective sooner than 60 days after the date the proposal to make such amendment is received by the Commissioner and 30 days after the date of the Commissioner's approval of the amendments as a part of the State plan: Provided, however, That amendments which are required by amendments of the Act or of these regulations or are designed to implement promptly amendments of the Act or of these regulations may be made effective immediately upon their approval by the Commissioner.

(c) State plan amendments conforming to the provisions in these regulations regarding closing dates and determination of priorities shall be submitted and approved prior to State commission actions on any Title I applications for closing dates later than December 31, 1966.


$ 170.18 Adjustments in amount of

Federal share. For all Title I grants approved after July 1, 1966, the following procedures shall apply:

(a) In any case where the costs eligible for Federal participation, as determined by the final audit, exceed those provided for in the grant agreement for the project, the Federal share entitlement of the applicant shall be limited to that provided by the grant award.

(b) In any case where the costs eligible for Federal participation, as determined by the final audit, are less than those provided for in the grant award, the Commissioner shall redetermine the amount of the Federal share which would have been recommended for the project, based on the lesser eligible cost, under State plan provisions in effect at the time the project was recommended for a grant, if sufficient funds had been available in the State allotment at that time to provide the maximum Federal share provided for by the plan. If such redetermined Federal share entitlement is less than the maximum amount authorized by the grant award the grant shall be reduced accordingly, and any overpayment of Federal funds shall immediately be due to the Government of the United States. If such redetermined Federal share is equal to or greater than the maximum amount of the Federal share authorized by the grant award, the final settlement shall be based on the Federal share amount authorized by the grant award.

(c) The Commissioner may from time to time, after award of the grant and prior to final settlement, adjust the grant amount to take into account any reductions of eligible project development cost which occur or are identified subsequent to the award of the grant. $ 170.19 Payment of grant funds on

approved projects. The commissioner shall provide for payment of grant funds for approved projects pursuant to such methods as he determines will best make the funds available as needed and eliminate unnecessary expense to the Federal Government. Subpart C-Grants for Construction

of Graduate Academic Facilities $ 170.41 Eligibility for grants.

Grants for construction of academic facilities from funds appropriated under

Title II of the Act may be made only to assist institutions of higher education and cooperative graduate center boards in the construction of such academic facilities, including facilities essential to their operation, as will be dedicated to the provision of graduate education. $ 170.42 Submission of applications.

Applications covered by this subpart may be submitted by institutions of higher education or by cooperative graduate center boards as defined in section 401 (i) of the Act. Such applications shall be submitted at such time and in such manner as may be prescribed by the Commissioner and will be processed by the staff of the Office of Education in the order of their receipt. Upon the completion of such processing as is appropriate, each application will be submitted to the advisory committee at its next meeting. $ 170.43 Advisory Committee.

The advisory committee on graduate education established pursuant to section 203 of the Act shall review all applications submitted in the light of the criteria set forth in $ 170.44 and shall make recommendations to the Commissioner for the approval or disapproval, in whole or in part, of each such application. $ 170.44 Criteria for evaluating applica

tions. In determining whether, to what extent and in what order to approve applications consideration shall be given, but not limited to, the following factors which are not necessarily listed in the order of their importance:

(a) The extent to which the program or programs to be assisted by the proposed construction will contribute toward the establishment or development of a graduate school or cooperative graduate center of excellence, or the extent to which such program or programs will contribute toward the improvement of an existing graduate school or cooperative graduate center.

(b) The extent to which the proposed construction will increase the capacity of the institution to supply highly qualified personnel critically needed by the community, industry, government, research, and teaching,

(c) The extent to which the proposed construction will assist in attaining a wider distribution throughout the United

States of graduate schools and cooper ing agency desiring a loan for the conative graduate centers.

struction of academic facilities shall sub(d) The capability of the applicant to mit an application for such assistance, in give full financial support to its programs the manner and containing the informagenerally, and specifically to the pro tion specified by the Commissioner. gram or programs of graduate education

$ 170.53 Special terms and conditions. to be assisted by the proposed construction.

Before approving a loan the Commis(e) The extent to which the program

sioner will require: or programs to be assisted by the pro (a) Satisfactory evidence that the apposed construction are likely to draw to plicant has or will have a fee simple or the institution both graduate students such other estate or interest in the facili. and faculty of a high level of compe

ties and site, including access thereto, tence.

sufficient in the opinion of the Commis(f) The adequacy of applicant's exist

sioner to assure undisturbed use and posing academic facilities with respect to the session for the purpose of the construcpresent demands made on them and the tion and operation of the facilities for demands that can reasonably be expected

not less than 75 years from the date of to be made on them in the foreseeable application. future, with particular reference to the (b) Satisfactory evidence of the abiladequacy of those facilities, if any, avail ity of the applicant to comply with the able for the conduct of the program or

appropriate terms and conditions for reprograms to be assisted by the proposed payment of the loan. construction.

(c) Satisfactory evidence that the ap(g) The extent to which the proposed plicant has the necessary legal authority construction would contribute signifi to finance, construct, and maintain the cantly to the increase in both or either proposed facilities, to apply for and rethe quantity or quality of graduate edu ceive the proposed loan, and to pledge or cation in a relatively wide geographical mortgage any assets or revenues to be area.

given as security for the proposed loan. $ 170.45 Special terms and conditions.

(d) Satisfactory assurances that the

project for which the loan is requested is Before approving a Title II grant the related to a plan for development of the Commissioner will require:

institution, branch campus or coopera(a) Satisfactory evidence that the ap tive graduate center for which it will be plicant has or will have a fee simple or constructed, and is associated with either such other estate or interest in the facill a planned increase in student enrollment ties and site, including access thereto, or a planned improvement in the instrucsufficient in the opinion of the Commis tional programs offered by the institusioner to assure undisturbed use and pos tion, branch campus or cooperative gradsession for the purpose of the construc uate center. tion and operation of the faciütles for (e) Satisfactory assurance that the not less than 75 years from the date of applicant will not mortgage to others the application.

facility to be constructed with the as(b) Satisfactory evidence that the ap sistance of the loan during the life of plicant has the necessary legal authority the loan. to finance, construct, and maintain the

$ 170.54 Determination of nonavailaproposed facilities, and to apply for and

bility of equally as favorable terms receive the proposed grant.

and conditions. Subpart D-Loans for Construction

No loan will be made unless the Comof Academic Facilities

missioner finds that the applicant is un

able to secure the amount of such loan $ 170.51 Eligibility for loans.

from other sources upon terms and conLoans may be made only for construc

ditions equally as favorable as the terms tion of academic facilities for institutions

and conditions applicable to loans unof higher education or for cooperative

der this part. For the purpose of makgraduate centers.

ing such determination, the applicant $ 170.52 Submission of applications. shall be required to comply with such

Each institution, cooperative graduate procedures as the Commissioner may center board or higher education build establish, including, where deemed nec


essary, public advertising for bids from legal memorandum or opinion of bond other sources.

counsel will be required with respect to

the legality of the proposed bond or note $ 170.55 Forms of evidence of indebted.

issue, the legal authority to offer the is

sue and secure it by the proposed collatThe evidences of indebtedness shall be

eral, and the legality of the issue upon in such form as may be prescribed by the

delivery. "Bond Counsel" means either Commissioner.

a law firm or individual lawyer, thor§ 170.56 Security for loans.

oughly experienced in the financing of

construction projects by the issuance All loans shall be secured in a manner

of bonds, and whose approving opinions which the Commissioner finds sufficient

have previously been accepted by purto reasonably assure repayment. The

chasers of bonds offered at public sales. security may be one or a combination of

In addition, where the borrower is & the following:

public institution or agency, the pro(a) A first mortgage on the facilities

posed bond counsel shall be a recognized and site thereof.

bond counsel in the municipal field. The (b) Negotiable stocks or bonds of a

legal memorandum or opinion to be proquality and value acceptable to the

vided by such an acceptable bond counsel Commissioner.

in each case generally shall be as follows: (c) A pledge of unrestricted and un

(a) A memorandum by bond counsel, encumbered income from an endowment

submitted with the loan application, or other trust funds acceptable to the

stating that there is or will be authority Commissioner.

to finance, construct, maintain the proj. (d) A pledge of a specified portion of

ect, and to issue the proposed obligations annual general or special revenues

and to pledge or mortgage the assets of the institution, acceptable to the

and/or revenues offered to secure the Commissioner.

loan, citing the basis for such authority. (e) Full faith and credit (tax sup

(b) A preliminary approving opinion ported) obligations of a State or local

of bond counsel, submitted at the time public body.

the applicant proposes to advertise for (f) Such other types of security as the construction bids for the project, to the Commissioner may find acceptable in effect that when the bonds or notes despecific instances.

scribed in the loan agreement are sold $ 170.57 Length and maturity of loans.

and delivered they will comply with the

applicable provisions of the loan agree(a) The maximum repayment pe

ment and will be valid and binding obliriod for loans under Title III of the Act

gations of the issuer and will be payable shall be 30 years, except where the Com

in accordance with thei. terms. missioner finds that a longer repayment

(c) The final approving opinion of period is required in order for the loan to

bond counsel, delivered at the same time be feasible.

as the delivery of the bonds or notes, (b) Substantially level total annual

stating that the bonds or notes (1) are installments of principal and interest,

those described in the loan agreement sufficient to amortize the loan from

and the authorizing proceedings, (2) the third year through the final year of

have been duly authorized, sold, and dethe life of the loan, will be required un

livered to the Commissioner, and (3) less otherwise authorized by the Com

constitute the valid and binding oblimissioner.

gations of the issuer payable in accord(c) Loans maturing in less than 30

ance with their terms. years, or loans which do not mature serially, may be considered by the Com

§ 170.59 Determination of priorities for missioner in order to fit the loan into

loan approvals. an applicant's total financial plan.

Loan applications shall be processed (d) In no case shall a loan repayment in such order and according to such period exceed the estimated useful life standards and methods as the Commisof the facilities to be constructed with

sioner may determine. Such standards the assistance of the loan.

and methods shall be developed as may 8 170.58 Bond counsel opinion.

be necessary and appropriate to en

courage distribution of the available loan At appropriate stages in the loan ap funds in accordance with actual needs plication and development procedure, a and may include establishment of clos

ing dates for consideration of applica- $ 170.64 Investment of idle constructions and for determination of priorities. tion funds. $ 170.60 Loan agreement.

Where the moneys on deposit in the

construction fund exceed the estimated For project applications which meet disbursements for the project for the all requirements of the Act and of the next 90 days, the borrower shall, if perregulations governing the administra mitted by State or local law, direct the tion of the Act, and upon approval by depository bank to invest such excess the Commissioner together with a reser funds in direct obligations of the U.S. vation of Federal funds, a loan offer will Government, or obligations the principal be prepared by the Commissioner and

of and interest on which are guaranteed sent to the applicant. The loan offer by the U.S. Government, which shall will set forth the pertinent terms and

mature not later than eighteen (18) conditions for the loan, and will be con

months from the date of such investment. ditioned upon the fulfillment of these terms and conditions. The accepted loan

$ 170.65 Disposal of balance remaining offer will constitute the Loan Agreement

in the construction fund. between the Commissioner and the ap The balance of moneys remaining in plicant for the partial financing of the the construction fund at the completion construction of the approved project. of construction shall be disposed of in

accordance with the provisions of the $ 170.61 Loan closing.

loan agreement. Loan closing shall be accomplished at such time as may be determined by the PART 171-FINANCIAL ASSISTANCE Commissioner.

FOR ACQUISITION OF EQUIPMENT $ 170.62 Interim financing.


INSTRUCTION IN INSTITUTIONS OF If necessary. the applicant shall ar

HIGHER EDUCATION range for Interim financing, subject to the approval of the Commissioner, to Sec. cover the cost of construction pending

171.1 Definitions.

171.2 the loan closing. Where the Commis

Institutional eligibility.

171.3 Conditions for grant approval. sioner finds that an applicant is unable

171.4 Submission and processing of apputo secure necessary interim financing on

cations. reasonable terms, he may provide for


Criteria for standards and methods to

determine relative priorities advances against the approved loan.


eligible projects. $ 170.63 Construction fund.

171.6 Criteria for standards and methods

to determine Federal shares of The proceeds of the sale of the bonds

eligible projects. or notes, any interim advances against

171.7 Fiscal control and fund accounting the approved loans, and all other moneys


171.8 Retention of records. to be used in paying for the construction

171.9 State plans. of which the project is a part, shall be 171.10 Requirement for economical methods deposited into a separate bank account

of purchase. to be maintained in a bank of the ap

171.11 Determination of costs eligible for

Federal participation. plicant's choice and to be known as the

171.12 Payment of grant funds on approved Construction Fund. All expenditures

projects. for the construction shall be made from

AUTHORITY: The provisions of this Part 171 this fund. Accounting for this fund Issued under secs. 601 through 609, 801 shall be in accordance with generally through 803; 79 Stat. 1261-1266, 1269–1270; accepted accounting principles. When 20 U.S.C. 1121-1129, 1141-1143. necessary and appropriate, the Com- SOURCE: The provisions of this Part 171 apmissioner may approve other arrange

pear at 31 F.R. 4795, Mar. 22, 1966, unless ments for the deposit of construction

otherwise noted. funds and the construction fund ac. & 171.1 Definitions. counting, provided such arrangements As used in this part: provide adequate accountability for the (a) “Act" means Public Law 89–329, total construction receipts and expendi- the Higher Education Act of 1965. Untures.

less otherwise indicated, title references

« PreviousContinue »