times to work wherever it is in preparation or progress, and the contractor shall provide proper facilities for such access and inspection.

(m) That the facility will be operated and maintained in accordance with the minimum standards prescribed by the appropriate State regulatory agency for the maintenance and operation of such facilities.

(n) That the grantee will incorporate, or cause to be incorporated, into construction contracts paid for in whole or in part with funds obtained from the Federal Government under this subpart, such provisions on nondiscrimination in employment as are required by and pursuant to Executive Order No. 11246, and that the grantee will otherwise comply with requirements prescribed by and pursuant to such order.

(0) That, for a period of not less than 20 years after the completion of construction of the project, it will be used as a public or other nonprofit workshop or rehabilitation facility.

(p) That the applicant will conform to all the regulations of this subpart. § 402.23 Approval of State agency.

(a) The applicant shall be responsible for securing the advice and assistance of the appropriate State vocational rehabilitation agency or agencies. Each application shall be reviewed by the appropriate State vocational rehabilitation agency or agencies for approval. Approved applications shall be forwarded to the regional representative for Vocational Rehabilitation Administration review for approval.

(b) The approval by the State vocational rehabilitation agency or agencies shall contain or be accompanied by a statement indicating the relationship of the project to the purposes and priorities established in the State workshops and rehabilitation facilities plan, and the manner and extent to which the project will increase the scope and effectiveness of rehabilitation programs within the State with specific reference to the program of the State agency or agencies.

(c) Each applicant shall be notified In writing of the action on the application. Where applications are disapproved by the State agency, the applicant shall be notified by the State agency, giving the reasons for disapproval, and the State agency shall forward a copy of its letter to the Vocational Rehabilitation Administration.

§ 402.24 Amendment to an approved

application.

Any amendment to an approved application resulting in a substantial change, shall be processed in the same manner as original applications. No such changes shall be put into effect without the approval of the Commissioner.

§ 402.25 Distribution of funds.

Federal funds available for construc tion projects will be distributed initially each year to each region on the basis of population. Opportunity will be given for the submittal of approvable applications from within each State. Funds may be redistributed from time to time during the year if they are not to be used within the region.

§ 402.26 Factors considered in evaluating proposals.

In approving applications, the Commissioner will give consideration to the availability of workshops and rehabilitation facilities and other pertinent factors. With respect to rehabilitation facilities, preference will be given to those which are primarily vocationally oriented, as contrasted with those which are primarily medically oriented.

§ 402.27 Federal financial participation. (a) The amount of a grant with respect to any construction project shall be equal to the same percentage of the cost of the project as the Federal share which would be applicable in the case of a rehabilitation facility (as defined in sec. 625 (g) of the Public Health Service Act, 42 U.S.C. 2910(g)) in the same location.

(b) Federal funds will be available for the following types of expenditures under projects approved by the Commissioner: (1) Costs of construction contracts; (2) architects' fees; (3) acquisition of land; (4) acquisition of existing buildings; (5) site survey and soil investigation; (6) supervision and inspection at the site; (7) fixed equipment; (8) movable equipment; and (9) other costs specifically approved in the application.

(c) Federal funds shall not be available for the costs of off-site improvements.

§ 402.28 Construction payments.

Payments will be made on the basis of a certification by a qualified individual as to the amounts due the applicant for

the cost of work performed and materials and equipment furnished. Such certification shall be based on adequate inspections to determine that the work has been performed upon a project or purchases have been made in accordance with the approved plans and specifications. Payments shall be made at periodic intervals consistent with the construction progress of the project. In extraordinary circumstances when necessary to maintain construction progress, advance payments may be made. Final payment shall not be made until after the completion of the project. § 402.29 Construction standards.

Approved projects shall be constructed according to general standards of construction and equipment for workshops and rehabilitation facilities prescribed by the Commissioner under this program. Applicable State and local rules and regulations must be observed. The Commissioner's standards must be followed where they exceed any State and local codes and regulations.

§ 402.30 Recovery: good cause for other use of facility.

(a) If, within 20 years after completion of any construction project for which funds have been paid under this section, the workshop or rehabilitation facility shall cease to be a public or other nonprofit workshop or rehabilitation facility, the United States shall be entitled to recover from the applicant or other owner of the workshop or facility the amount bearing the same ratio to the then value (as determined by agreement of the parties or by action brought in the U.S. district court for the district in which such workshop or facility is situated) of the workshop or facility, as the amount of the Federal participation bore to the cost of construction of such workshop or facility.

(b) In determining whether there is good cause for releasing the applicant or other owner of the facility from its obligation, the Commissioner shall take into consideration the extent to which:

(1) The facility will be devoted by the applicant or other owner to use for another public or nonprofit purpose which will promote the purpose of the act; or

(2) There are reasonable assurances that for the remainder of the 20-year period other public or nonprofit facilities not previously utilized for the purpose for which the facility was constructed

Initial staffing grants authorized in section 12(f) of the act shall be made for the purpose of paying part of the costs of compensation of the initial professional and technical staff of any public or nonprofit workshop or rehabilitation facility constructed after November 8, 1965.

§ 402.41 Professional and technical staff.

Professional and technical staff for purposes of this section shall include such staff as workshop directors, placement specialists, foremen, floor supervisors, vocational instructors, physicians, nurses, psychologists, social workers, vocational evaluators, vocational counselors, physical therapists, occupational therapists, speech and hearing pathologists, administrators, special educators, business managers, medical record librarians, aides in professional fields, and staff in such other positions as the Commissioner may approve.

§ 402.42 Construction of workshops or rehabilitation facilities.

Initial staffing grants may be made only with respect to operation of a workshop or rehabilitation facility following construction. Preference shall be given to the staffing of workshops and rehabilitation facilities constructed with assistance under Subpart C of this part. Where the workshop or facility was in operation prior to construction, an initial staffing grant shall be made only for additional staff which enables the workshop or facility to provide new services or extend existing services to a substantially increased number of clients. Remodeling, renovation or alteration of existing rehabilitation facilities and workshops shall be extensive enough to indicate clearly the addition of new services or the extension of existing services to a substantially increased number of clients. If the requirements for a grant are met in each instance, there shall be no maximum number of initial staffing grants for which a workshop or facility may be eligible.

The application for initial staffing grants may be made prior to the commencement of operation of a workshop or rehabilitation facility or during the 15-month period following the commencement of operation of the workshop or rehabilitation facility. Applications shall be in the form and detail required by the Commissioner. The project application shall include (a) a narrative description of the workshop's or rehabilitation facility's existing program services and staff, (b) a list of job titles and job specifications of staff positions for which assistance is requested, (c) estimates of salary needs for initial 15 months of assistance and for the following 3-year period, (d) a financial statement for the most recent year of operation, (e) a narrative description of the need for personnel, (f) a narrative description of the related construction project, (g) evidence of new services or of the extension of services to an additional number of clients, (h) a description of the workshop's or rehabilitation facility's plans for assuming the full cost of staffing at the termination of the grant, (i) in the case of a grant for a private, nonprofit workshop, assurance that applicable Federal and State wage and hour standards will be observed or, in the case of a grant for a workshop operated by a State, county or municipal government, assurance that the workshop will comply with wage and hour standards specified by the Commissioner, which will be at least equal to those imposed by the Federal Fair Labor Standards Act, (j) assurance that the workshop or rehabilitation facility meets safety standards specified by the Commissioner, (k) assurance that salaries are commensurate with the duties performed, (1) proposed starting date for the staffing project, (m) an agreement to make such financial and administrative reports and to keep such records and accounts as the Commissioner may require and to make such records and accounts available for audit purposes, and (n) such other information as the Commissioner may require. Initial staffing grant applications may be submitted either in conjunction with a construction grant application or independently.

§ 402.44 Approval of State agency.

(a) The applicant shall be responsible for securing the advice and assistance of the appropriate State vocational reha

bilitation agency or agencies. Each application shall be reviewed by the appropriate State vocational rehabilitation agency or agencies for approval. Approved applications shall be forwarded to the regional representative for Vocational Rehabilitation Administration review for approval.

(b) The approval by the State vocational rehabilitation agency or agencies shall contain or be accompanied by a statement indicating the relationship of the project to the purposes and priorities established in the State workshops and rehabilitation facilities plan and shall indicate the manner and extent to which the project will increase the scope and effectiveness of rehabilitation programs within the State with specific reference to the program of the vocational rehabilitation agency.

(c) Each applicant shall be notified in writing of the action on the application. Where an application is disapproved by the State agency, the applicant shall be notified by the State agency, giving the reasons for disapproval, and the State agency shall forward a copy of its letter to the Vocational Rehabilitation Administration.

§ 402.45 Federal financial participation.

The amount of Federal financial participation under an initial staffing grant shall be related directly to the date of the commencement of the operation of the workshop or rehabilitation facility. The date of commencement of operation of a workshop or rehabilitation facility shall be that date on which the first client is admitted for services after the completion of the related construction project or such earlier date after completion of such project as is specified in the approved application for the initial staffing grant. A grant shall not exceed 75 per centum of eligible compensation costs (including salary and fringe benefits) for the period ending with the close of the 15th month following the month in which such operation commenced, 60 per centum of such costs for the first year thereafter, 45 per centum of such costs for the second year thereafter, and 30 per centum of such costs for the third year thereafter.

§ 402.46 Payments.

Payment of the Federal share of the costs of the initial staffing project shall be made quarterly, or for such other period as the Commissioner may determine, as

If for any reason the grantee discontinues an approved project, the grantee shall notify the regional representative and the State agency in writing, giving the reasons for termination, an accounting of funds granted for the project, and other pertinent information. The grant may be terminated, in whole or in part, at any time at the discretion of the Commissioner. The grantee and the State agency will be given prompt notice of the termination, including the reasons therefor. Such termination shall not affect obligations incurred prior to the termination of the grant. Upon termination or completion of a project, the proportion of unexpended funds attributable to the Federal grant shall be refunded. Subpart E-Workshop Improvement Grants

AUTHORITY: The provisions of this Subpart E issued under sec. 7(b), 68 Stat. 658, 29 U.S.C. 37(b).

§ 402.50 Purpose.

Workshop improvement grants authorized in section 13(b) of the act shall be made for paying part of the cost of projects for workshops to analyze, improve, and increase their professional services to the handicapped, their business management or any other part of their operations affecting their capability to provide employment and services for the handicapped.

§ 402.51 Eligible applicants.

Any public or other nonprofit workshop which has been in operation for at least 12 months (or an organization directly responsible for operation of such a workshop) shall be eligible to apply for a workshop improvement grant. Every application shall demonstrate a reasonable expectation that the grant will enable the workshop to make substantial progress towards meeting the standards of the Commissioner developed with the advice of the National Policy and Performance Council. In the case of workshops already meeting such standards of the Commissioner, the application shall demonstrate a reasonable expectation that the grant will make possible substantial improvement in the services of the workshop.

§ 402.52 Applications.

Applications for workshop improvement grants may be made at any time. Applications shall be made in the form and detail required by the Commissioner. The project application shall include (a) a detailed description of existing needs for improvement; (b) a statement of the extent to which the workshop improvement grant will make possible such improvement; (c) a proposed project budget; (d) in the case of a grant for a private, nonprofit workshop, assurance that applicable Federal and State wage and hour standards will be observed or, in the case of a grant for a workshop operated by a State, county or municipal government, assurance that the workshop will comply with wage and hour standards specified by the Commissioner, which will be at least equal to those imposed by the Federal Fair Labor Standards Act; (e) assurance that the workshop meets safety standards prescribed by regulations of the Secretary of Labor; (f) an agreement to make such administrative and financial reports and to keep such records and accounts as the Commissioner may require and to make such records and accounts available for audit purposes; (g) a description of plans for maintaining the improvement after the expiration of the period of Federal assistance; and (h) such other information as the Commissioner may require. Applications for grants for salary assistance shall also include (i) a description of how existing staff are and will be utilized; (j) description of qualifications and utilization of additional staff; and (k) assurance that salaries of staff assisted through the grant will be commensurate with the duties performed. § 402.53 Technical assistance consultation.

The Commissioner may require that a technical assistance consultation precede the award of any workshop improvement grant in the amount of $5,000 or more. Such consultation shall be performed by a consultant acceptable to both the Commissioner and the appropriate State agency.

§ 402.54 Review by State agency.

(a) The applicant shall be responsible for securing the advice and assistance of the appropriate State vocational rehabilitation agency or agencies. Each application shall be reviewed by the ap

propriate State vocational rehabilitation agency or agencies prior to forwarding to the regional representative for Vocational Rehabilitation Administration review for approval.

(b) The State vocational rehabilitation agency or agencies shall indicate its : recommendations for approval or disapproval, which shall contain or be accompanied by a statement indicating the relationship of the project to the pur: poses and priorities established in the State workshops and rehabilitation facilities plan and shall indicate the manner and extent to which the project will increase the scope and effectiveness of rehabilitation programs within the State with specific reference to the program of the vocational rehabilitation agency. (c) Each applicant shall be notified in writing of the action on the application, by the Vocational Rehabilitation Administration.

§ 402.55 Federal financial participation.

Federal financial participation shall be available for the following types of expenditures under approved projects: (a) Staff salary assistance (including fringe benefits) in the employment of additional staff; (b) staff development activities, including educational leave; (c) studies by a recognized expert or consultant concerning the professional or business practices within the workshop; (d) purchase or rental of equipment; and (e) other forms of assistance to workshops to carry out the purposes of this subpart as may be approved in the application. Federal financial participation shall not be available to pay Ecosts of acquiring, constructing, expanding, remodeling or altering any building. Federal participation shall not exceed 90 per centum of the total project cost. § 402.56 Grant awards.

All grant awards shall be in writing, shall set forth the amount of funds granted, and shall constitute for such amounts the encumbrance of Federal funds available for such purpose on the date of the award. The initial award = shall also specify the project period (not in excess of 3 years) for which support is contemplated if the activity is satisfactorily carried out and Federal funds are available. For continuation support, grantees must make separate application in the form and detail prescribed by the = Commissioner.

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§ 402.57 Distribution of funds.

Federal funds available for workshop improvement grants will be distributed initially each year to each region on the basis of population, with a view to making grants available for workshops in each State. Funds may be redistributed from time to time during the year if they are not to be used within the region.

§ 402.58 Payments.

Payments of the Federal share of the cost of the workshop improvement project shall be made quarterly, or for such other period as the Commissioner may determine, as an advance for estimated costs or as reimbursement to the grantee. The initial payment shall be made shortly after the application has been approved.

The grantee shall submit to the regional representative and to the State agency periodic activity reports describing the effect of the grants in improving the workshop. Financial, administrative and activity reports shall be submitted in the form and at the intervals prescribed by the Commissioner.

§ 402.60 Termination.

If for any reason the grantee discontinues an approved project, the grantee shall notify the regional representative and the State agency in writing, giving the reasons for termination, an accounting of funds granted for the project, and other pertinent information. The grant may be terminated, in whole or in part, at any time at the discretion of the Commissioner. The grantee and the State agency will be given prompt notice of the termination, including the reasons therefor. Such termination shall not affect obligations incurred prior to the termination of the grant. Upon termination or completion of a project, the proportion of unexpended funds attributable to the Federal grant shall be refunded.

Subpart F-Technical Assistance to Workshops

AUTHORITY: The provisions of this Subpart F issued under sec. 7(b), 68 Stat. 658, 29 U.S.C. 37(b).

§ 402.65 Furnishing of technical assist

ance.

Technical assistance authorized in section 13(c) of the act will be furnished,