quire and comply with such provisions as the Commissioner may from time to time find necessary to assure the correctness and verification of such reports.

§ 404.4

Rules and regulations of licensing agency; general.

(a) The State agency shall submit with its application rules and regulations which it has issued or proposes to promulgate immediately upon approval of its application. In the event proposed rules and regulations are submitted, the licensing agency shall within a reasonable time after the approval of its application, submit a copy of the promulgated regulations. Such rules and regulations shall contain adequate provisions to enable the licensing agency to carry out its responsibilities under the act and this part, and to assure the conduct of the program and the operation of each vending stand in accordance with the act, this part, and the regulations and conditions of the departments and agencies in control of the maintenance, operation, and protection of Federal property, including the conditions contained in the permits, as well as all applicable State laws, local ordinances and regulations.

(b) Such rules and regulations and amendments thereto shall be filed or published in accordance with State law.

(c) Such rules and regulations shall include provisions adequate to insure that the right, title to, and interest in each vending stand used in the program and the stock will be vested in accordance with the laws of the State in only the following:

(1) The licensing agency;

(2) Its nominee, subject to the conditions specified in § 404.9(b); and

(3) The operator.

The decision whether title may be vested in the operator rests with each State.

(d) Notwithstanding the provisions of paragraph (c) of this section, any right, title to or interest which existed on June 30, 1955, in stock, may continue so long

as:

(1) The interest is with respect to the stock of a stand established under the program prior to July 1, 1955, and

(2) The operator was licensed in the program (whether or not for the operation of the vending stand in question) prior to July 1, 1955.

86-096-68-36

§ 404.5

Rules and regulations; ownership by operators.

If a State decides that title may be vested in the operator, the rules and regulations shall specify:

(a) That a written agreement shall be entered into with each operator who is to have such ownership, such agreement containing in full the terms and conditions governing such ownership in accordance with criteria in the State agency's regulations, any applicable Federal regulations and the terms and conditions of the permit.

(b) Reasonable criteria to govern the determination as to the circumstances under which title may be so vested. Such criteria shall contain reasonable provisions to enable an operator to purchase vending stand equipment. No individual may be denied the opportunity to become an operator because of his inability to purchase the vending stand equipment or the initial stock.

(c) Whether the operator-owner or licensing agency shall be required to maintain the vending stand in good repair and in an attractive condition and replace worn-out or obsolete equipment; and if the former, provide that upon his failure to do so, the licensing agency may make or cause to be made, the necessary maintenance, replacement, or repairs and make equitable arrangements for reimbursement.

(d) That where the operator owns such equipment and is required to maintain the vending stand in good repair and in an attractive condition and replace worn-out or obsolete equipment or agrees to purchase additional new equipment, service charges for such purposes shall be equitably reduced, and the method for determining such amount.

(e) That the State licensing agency shall retain a first option to repurchase such equipment, and in the event the operator dies, or for any other reason ceases to be a licensee or transfers to another vending stand, ownership of such equipment shall become vested in the licensing agency subject to an obligation on its part to pay to such operator or his estate, the fair value therein as determined in accordance with its regulations.

(f) That the operator, his personal representative or next of kin shall be entitled to an opportunity for a fair hearing with respect to the determination of the amount to be paid by the licensing

agency for an operator's ownership in the equipment.

(g) The method to be used in determining the fair value of the operator's ownership in the equipment.

§ 404.6 Rules and regulations; issuance and conditions of licenses.

The rules and regulations of the licensing agency shall further provide:

(a) Objective criteria for licensing qualified applicants, including a provision for giving preference to blind persons who are in need of employment and have resided for at least 1 year in the State in which the stand is to be located. Such criteria shall also include provisions to assure that licenses will be issued only to persons who are determined by the licensing agency to be:

(1) Blind;

(2) Citizens of the United States; (3) At least 21 years of age; and (4) Certified by the State vocational rehabilitation agency as qualified to operate a vending stand.

(b) For the issuance of licenses for an indefinite period but subject to termination if, after affording the operator an opportunity for a fair hearing, the licensing agency finds that the vending stand is not being operated in accordance with its rules and regulations, the terms and conditions of the permit, or the agreement with the operator.

(c) For the assignment to the operator of the income from vending machines within reasonable proximity to and in direct competition with the vending stand. (If a vending machine vends articles of a type authorized by the permit and is so located that it attracts customers who would otherwise patronize the vending stand, such machine shall be considered to be in reasonable proximity to and in direct competition with the stand.)

(d) The policies to govern the duties, supervision, transfer and financial participation of the operators.

§ 404.7 Rules and regulations; hearings.

The rules and regulations shall specify the procedure whereby the licensing agency affords an opportunity for a fair hearing to each operator (or to his personal representative or next of kin in cases described in § 404.5 (f)) dissatisfied with any action arising from the operation or administration of the vending stand program.

§ 404.8 Rules and regulations; set aside of funds.

The rules and regulations of the licensing agency shall specify the extent to which funds are to be set aside or caused to be set aside from the proceeds of the operation of the vending stands and that in no case will the amounts to be set aside exceed a reasonable amount as determined by the Commissioner. Funds may be set aside only for the purposes of:

(a) Maintenance and replacement of equipment;

(b) The purchase of new equipment; (c) Management services;

(d) Assuring a fair minimum of return to operators of vending stands; and the rules and regulations of the licensing agency shall set out the method of determining the charge for each of the above listed purposes. Such method will be designed to prevent, so far as is practicable, a greater charge for any purpose than is reasonably required for that purpose. The rules and regulations shall further provide that adequate records will be maintained to support the reasonableness of the charges for each of the purposes listed in this section.

§ 404.9 Use of servicing arrangement.

(a) The licensing agency may enter into an agreement whereby another agency or organization undertakes to furnish services. Such agreement shall be in writing and contain provisions which:

(1) Clearly insure the retention by the licensing agency of full responsibility for the management and operation of all phases of the program;

(2) Specify the type and extent of the services to be provided under such agreement;

(3) Provide that no charges will be collected from operators except as specified in such agreement;

(4) Specify that such other agency or organization may not be allowed to exercise any function with respect to funds for the purchase of new equipment or for assuring a fair minimum of return to operators, except to collect and hold solely for disposition in accordance with the order of the licensing agency any charges authorized for those purposes by the licensing agency; and

(5) Specify that only the licensing agency shall have control with respect to selection, placement, financial partic

ipation and termination of the operators and the preservation, utilization and disposition of program assets.

(b) If the licensing agency permits any agency or organization other than an operator to hold any right, title to, or interest in vending stands or stock, the arrangement shall be one permitted by State law and shall specify in writing that all such right, title to, or interest is held as the nominee of the licensing agency for program purposes and subject to the paramount right of the licensing agency to direct and control the , use, transfer, and disposition of such vending stands or stock.

: § 404.10

Agreements with State vocational rehabilitation agencies.

In the event that the licensing agency is not also the State vocational rehabilitation agency, the licensing agency shall enter into a cooperative agreement with the State vocational rehabilitation agency with respect to providing vocational rehabilitation services to blind persons who are in need of such services. § 404.11 Approval of application for

designation as licensing agency.

When the Commissioner determines that the application and rules and regulations (or proposed rules and regula' tions) indicate a plan of program operIations which will stimulate and enlarge = the economic opportunities for the blind I and meet the other requirements of the act and of this part, he shall approve the application and shall designate the I applying agency as the State licensing agency.

§ 404.12

Permit for establishment of vending stands.

Prior to the establishment of each vending stand, the designated State licensing agency shall submit and have approved, in accordance with regulations of the department or agency in control of the maintenance, operation, and protection of the Federal property (or procedures of the person in control of other property), an application for a permit setting forth the exact location, the amount of space to be occupied, the type of shelter and/or equipment, the types of items of merchandise to be offered for sale at each vending stand, including the number, location, and types of vending machines and other terms and conditions desired to be included in the permit.

§ 404.13 Maintenance and repair of vending stands.

The licensing agency shall maintain (or cause to be maintained) all vending stands in good repair and in an attractive condition and shall replace or cause to be replaced wornout and obsolete equipment as required to insure the continued successful operation of the stand. § 404.14 Revocation of designation as licensing agency.

The Secretary shall revoke the designation of any licensing agency if he finds after affording such agency an opportunity for a hearing, as hereinafter provided, that, in the administration of the program, there is a failure on the part of such agency to comply substantially with the provisions of the act or of this part.

§ 404.15 Revocation of designation as licensing agency; procedures.

(a) If the Commissioner has reason to believe that, in the administration of the program, there is a failure on the part of any licensing agency to comply substantially with the act and this part, he shall so inform such agency in writing, setting forth, in detail, the areas in which there is such failure and giving it a reasonable opportunity to comply.

(b) If, after the lapse of a reasonable time, the Commissioner is of the opinion that such failure to comply still continues and that the licensing agency is not taking the necessary steps to comply, he shall offer to such agency, by reasonable notice in writing thereto and to the chief executive of the State, an opportunity for a hearing before the Secretary (or person designated by the Secretary) to determine whether there is a failure on the part of such agency to comply substantially with the provisions of the act and of this part.

(c) If it is thereupon determined that there is a failure on the part of such agency to comply substantially with the act and this part, appropriate written notice shall be given to such agency and to the chief executive of the State revoking said agency's designation as licensing agency effective 90 days from the date of such notice.

(d) If, before the expiration of such 90 days, the Secretary (or person designated by him) determines that the licensing agency is taking the necessary steps to comply, he may postpone the

effective date of such revocation for such time as he deems necessary for the best interest of the program.

(e) If, prior to the effective date of such revocation, the Secretary (or person designated by him) finds that there is no longer a failure on the part of the licensing agency to comply substantially with the provisions of the act and of this part, he shall so notify the agency and the chief executive of the State, in which event the revocation of the designation shall not become effective.

§ 404.16 Revocation of designation as licensing agency; effect.

(a) Effective upon the receipt of the notice of revocation of a State agency's designation as licensing agency, in accordance with § 404.15(c), the licensing agency's authority to issue licenses to blind persons for the operation of vending stands on Federal and other property under the act and this part shall be suspended, except upon special authorization by the Commissioner.

(b) After the effective date of the revocation of a State agency's designation as licensing agency, such agency shall have no authority to issue licenses to blind persons for the operation of vending stands under the act and this part.

(c) If, at the expiration of 60 days from the effective date of a revocation of a State agency's designation as licensing agency, no other agency in the State is designated, pursuant to the provisions of the act and this part, as licensing agency, all licenses issued by the agency whose designation has been revoked shall terminate.

Subpart A-Grants

§ 405.1 Purpose.

Special project grants are authorized for the purpose of paying part of the cost of carrying out a program of research and study of the personnel practices and current and projected personnel needs in the field of correctional rehabilitation and of the availability and adequacy of the educational and training resources for persons in, or preparing to enter such field. This would include but not be limited to the availability of educational opportunities for persons in, or preparing to enter, such field, the adequacy of the existing curriculum and teaching methods and practices involved in the preparation of persons to work in this field, the effectiveness of present methods of recruiting personnel for such field and the extent to which personnel in the field are utilized in the manner which makes the best use of their qualifications § 405.2 Eligible grantees; application.

(a) Grants may be made to one or more organizations. For this purpose. the term "organization" means a nongovernmental agency, organization, or commission, composed of representatives of leading professional associations, organizations, or agencies active in the field of corrections.

(b) Application shall be made in the form and detail required by the Commissioner of Vocational Rehabilitation. Applications for initial grants shall be submitted, not later than December 31, 1965, to the Assistant Commissioner, Research and Training, Vocational Rehabilitation Administration, DHEW, Washington, D.C., 20201, who processes them for submission to the National Advisory Council on Correctional Manpower and Training. The applicant may be requested to submit further information either before or after consideration of a project by the Council. All projects which meet the requirements for a grant are submitted to the Council which makes recommendations to the Commissioner. The Commissioner then determines the action to be taken with respect to each project and informs the applicant accordingly. In the case of approval, the applicant is advised of the amount and method of payment and the period to which the grant is to be applied. Separate application shall be made for continuation support.

§ 405.3 Grant conditions.

Grants under this part shall be subject to the following terms and conditions:

(a) The grantee organization will undertake and conduct, or if more than one organization is to receive grants, such organizations have agreed among themselves to undertake and conduct, a coordinated program of research into and study of all aspects of the resources, needs, and practices referred to in § 405.1;

(b) The research and study shall be completed not later than 3 years from the inauguration date specified in the approved application or applications;

(c) The grantee will file annual reports with the Secretary of Health, Education, and Welfare, the Commissioner of Vocational Rehabilitation, the Congress, the Governors of the several States and the President, among others the grantee may select; and the grantee will similarly file the final report; and

(d) Such other terms and conditions as the Commissioner of Vocational Rehabilitation may specify.

§ 405.4 Financial participation.

Federal financial participation shall be available in expenditures specified in the approved budget. The grantee organization or organizations is authorized to accept additional financial support from private or other public sources to assist in carrying on the project authorized by this part.

Subpart B-National Advisory Council on Correctional Manpower and Training

§ 405.6 Appointment and composition.

The National Advisory Council on Correctional Manpower and Training shall consist of the Secretary of Health, Education, and Welfare (or his designee) as Chairman and 12 members, not otherwise in the regular full-time employ of the United States, appointed without regard to civil service laws by the Secretary after consultation with the Attorney General of the United States. The appointed members shall be leaders in fields concerned with correctional rehabilitation or in public affairs. In selecting persons for appointment to the Council, consideration shall be given to such factors, among others, as (a) familiarity with correctional manpower problems, and

The Council shall consider all applications for grants under Subpart A of this part and make recommendations with respect to approval of applications for and the amount of such grants. § 405.9 Per diem payments.

Appointed members of the Council, while attending meetings or conferences thereof or otherwise serving on business of the Council, shall be entitled to receive compensation at a rate to be fixed by the Secretary of Health, Education, and Welfare, but not exceeding $100 per day, including travel time, and, while so serving away from their homes or regular places of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b-2) for persons in the Government service employed intermittently.