`[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Proposed Rules]
[Pages 15446-15452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8062]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 41

RIN 1076-AD08


Grants to Tribally Controlled Community Colleges and Navajo 
Community College

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Indian Affairs (BIA) is proposing to revise part 
41 to improve the clarity of the regulations and understanding of the 
public as mandated by Executive Order 12866. The regulations have been 
reorganized and rewritten in plain English.

DATES: Comments must be received on or before June 2, 1997.

ADDRESSES: Mail comments to Joann S. Morris, Director, Office of Indian 
Education Programs, Bureau of Indian Affairs, Department of the 
Interior, 1849 C St. NW, Mail Stop 3512-MIB, Washington, D.C. 20240; 
or, hand deliver them to Room 3512 at the above address. Comments will 
be available for inspection at this address from 9:00 a.m. to 4:00 
p.m., Monday through Friday beginning approximately April 15, 1997.

FOR FURTHER INFORMATION CONTACT: Garry R. Martin, Office of Indian 
Education Programs, Bureau of Indian Affairs at telephone (202) 208-
4871.

SUPPLEMENTARY INFORMATION: The authority to issue rules and regulations 
is vested in the Secretary of the Interior by 5 U.S.C. 301 and sections 
463 and 465 of the Revised Statutes, 25 U.S.C. 2 and 9.
    Publication of the proposed rule by the Department of the Interior 
(Department) provides the public an opportunity to participate in the 
rulemaking process. Interested persons may submit written comments 
regarding the proposed rule to the location identified in the 
``addresses'' section of this document.

Executive Order 12988

    The Department has certified to the Office of Management and Budget 
(OMB) that the proposed rule meets the applicable standards provided in 
sections 3(a) and 3(b)(2) of Executive Order 12988.

Executive Order 12866

    This proposed rule is not a significant regulatory action under 
Executive Order 12866.

Regulatory Flexibility Act

    This proposed rule will not have a significant economic impact on a 
substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.).

Executive Order 12630

    The Department has determined that this proposed rule does not have 
``significant'' takings implications. The proposed rule does not 
pertain to ``taking'' of private property interests, nor does it impact 
private property.

Executive Order 12612

    The Department has determined that this proposed rule does not have 
significant Federalism effects because it pertains solely to Federal-
tribal relations and will not interfere with the roles, rights and 
responsibilities of States.

NEPA Statement

    The Department has determined that this proposed rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment and that no detailed statement is required 
under the National Environmental Policy Act of 1969.

Unfunded Mandates Act of 1995

    This proposed rule imposes no unfunded mandates on any governmental 
or private entity and is in compliance with the provisions of the 
Unfunded Mandates Act of 1995.

Paperwork Reduction Act of 1995

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d), the Department of the Interior has submitted a copy of these 
sections to the Office of Management and Budget (OMB) for its review.
    All information is to be collected annually from each applicant. 
The annual reporting and recordkeeping burden for this collection of 
information is estimated to average 3 hours for each response for 24 
respondents, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. The total 
annual reporting and recordkeeping burden for this collection is 
estimated to be 72 hours.
    Organizations and individuals desiring to submit comments on the 
information collection requirement should direct them to the Office of 
Information and Regulatory Affairs, OMB, Room 10202, New Executive 
Office Building, Washington, D.C. 20503; Attention: Desk Officer for 
the U.S. Department of the Interior.

[[Page 15447]]

    The Department considers comments by the public on this proposed 
collection of information in:
    Evaluating whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    Evaluating the accuracy of the Department's estimate of the burden 
of the proposed collection of information, including the validity of 
the methodology and assumptions used;
    Enhancing the quality, usefulness, and clarity of the information 
to be collected; and
    Minimizing the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other collection techniques or other forms 
of information technology.
    OMB is required to make a decision concerning the collection of 
information contained in these proposed regulations between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment to the OMB is best assured of having its full 
effect if OMB receives it within 30 days of publication. This does not 
affect the deadline for the public to comment to the Bureau of Indian 
Affairs on the proposed regulations.

Drafting Information

    The primary author of this document is Garry R. Martin, Office of 
Indian Education Programs, Bureau of Indian Affairs, Department of the 
Interior.

List of Subjects in 25 CFR Part 41

    Indians--tribally controlled colleges; Indians--educational grants.

    For the reasons given in the preamble, part 41 in Chapter I of 
Title 25 of the Code of Federal Regulations is proposed to be revised 
as set forth below:

PART 41--GRANTS TO TRIBALLY CONTROLLED COMMUNITY COLLEGES AND 
NAVAJO COMMUNITY COLLEGE

General Provisions

Sec.
41.1  What does this part cover?
41.2  What terms are used in this part?
41.3  Where do grant funds come from?
41.4  How is the TCCC's annual budget requested?
41.5  What fairness provisions apply to this part?
41.6  How do the requirements of part 276 apply to this part?

Establishing Eligibility

41.10  Who can receive a grant under this part?
41.11  How must grant funds be used?
41.12  How does the Director determine who is eligible for a grant?
41.13  If a TCCC is eligible, when can it receive funding?
41.14  How can a TCCC appeal a finding of ineligibility?
41.15  Is a TCCC's eligibility ever reviewed?

Applying for a Title I Grant

41.20  How can a Title I TCCC apply for a grant?
41.21  How will the TCCC hear if it has received a grant?
41.22  What happens if the Director disapproves an application?
41.23  What additional documentation is required after a grant is 
approved?
41.24  Are there criminal penalties for making false statements on 
an application?

Counting Students and Measuring Progress

41.30  What procedures are used to count students?
41.31  Must TCCCs have standards for measuring progress?

Applying for a Title II Grant

41.40  What is Navajo Community College's grant entitlement?
41.41  How does NCC apply for its grant under Title II?
41.42  What other provisions apply to NCC's grant?

Grant Payments

41.50  What general limitation applies to grant payments?
41.51  How will BIA determine the per capita payment for Title I 
TCCCs?
41.52  What are the per capita payment procedures?
41.53  How must the TCCC handle interest or investment income?
41.54  How is other funding that a TCCC may receive affected by 
funding received under this part?
41.55  What about grant overpayments/underpayments?

Technical and Planning Assistance

41.60  Are there any funds for technical assistance?
41.61  Are planning grants available?
41.62  How can a tribe or tribal entity apply for a planning grant?
41.63  How will a tribe or tribal entity know if it has received a 
planning grant?
41.64  What is required in a study made with a planning grant?
41.65  What will happen to unused planning grant funds?
41.66  What assistance will BIA provide TCCCs in determining their 
needs and costs?

Endowment Funds

41.70  When is a TCCC entitled to receive endowment funds?
41.71  How can a TCCC obtain endowment funds?
41.72  What requirements must an endowment trust fund meet?
41.73  How does a TCCC apply to participate in the endowment 
program?
41.74  What action will the Director take on applications?
41.75  What happens if a TCCC is overpaid under the endowment 
program?
41.76  What assets may a TCCC use to comply with the matching 
requirement?
41.77  How is the value of donated real or personal property 
established?
41.78  What happens if real or personal property that the TCCC uses 
to comply with the matching requirement is sold or disposed of?
41.79  How will BIA match the value of property or capital 
contributions?
41.80  What procedures will BIA follow when there are additional 
funds for the endowment program?

Appeals

41.90  What appeal rights do TCCCs have under this part?

Required Reports

41.95  What reports are required?
41.96  Are there requirements for information collection?

    Authority: 25 U.S.C. 1801-1852; 25 U.S.C. 640a-640c-3

General Provisions


Sec. 41.1  What does this part cover?

    The Congress of the United States has required the Department of 
Interior to provide funding for the establishment, operation, and 
improvement of Tribally Controlled Community Colleges (TCCCs) to ensure 
the growth of educational opportunities for Indian people. This part 
contains procedures for providing funding and technical assistance as 
authorized by the Tribally Controlled Community College Assistance Act 
of 1978 (Act), as amended, and the Navajo Community College Act of 
1971, as amended.


Sec. 41.2  What terms are used in this part?

    Ability to benefit means that a person without a high school 
diploma or its equivalent and whose age is beyond the States compulsory 
attendance law may be admitted conditionally as a special student in an 
educational program. All higher education institutions must establish, 
publish, and apply reasonable standards for the student to benefit 
which will include testing that measures the student's aptitude to 
successfully complete the course in which he/she is enrolled.
    Academic facilities means structures used for classroom 
instruction, program administration and maintenance at an institution 
of higher education. This includes buildings used for academic, 
vocational, and cultural instruction; dormitories; service buildings 
used for storage or utilities essential to the operation of these 
facilities; and the campus grounds.

[[Page 15448]]

    Academic term means a semester, quarter, trimester, or other period 
that the TCCC refers to as a division of its academic year.
    Academic year means a period established by a tribal college as the 
annual period of operation of its education programs.
    Act means Title I and Title II of the Tribally Controlled Community 
College Assistance Act of 1978, Public Law 95-471; 92 Stat. 1325, 25 
U.S.C. 1801 et seq., as amended.
    Assistant Secretary means the Assistant Secretary--Indian Affairs 
or his/her designee.
    BIA means the Bureau of Indian Affairs, U.S. Department of the 
Interior.
    Director means the Director, Office of Indian Education Programs 
(OIEP), Bureau of Indian Affairs or his/her designee.
    Endowment fund means an interest bearing account established by a 
TCCC that:
    (1) Is exempt from taxation;
    (2) Is maintained for the purpose of generating income for the 
support of the TCCC; and
    (3) May include real and personal property (buildings, land, and 
money).
    Indian means a person who is a member of an Indian tribe and is 
eligible to receive services from the Secretary of the Interior because 
of his/her status as an Indian.
    Indian student count (ISC) means a number equal to the total number 
of Indian students enrolled in each TCCC, determined on the basis of 
the quotient of the sum of the credit hours of all the Indian students 
enrolled, divided by twelve (full-time equivalency). The total (ISC) is 
then divided by two (semesters) or three (quarters) to determine the 
annual (ISC) which is used as the basis for fund distribution.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community, including any Alaskan native village or 
regional or village corporation as defined in, or established pursuant 
to, the Alaskan Native Claims Settlement Act, which is recognized as 
eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.
    Institution of higher education means an institution of higher 
education as defined by section 1201(a) of the Higher Education Act of 
1965, except clause (2) of that section will not be applicable.
    Per capita payment means the payment derived by dividing the amount 
appropriated by Congress by the sum of all ISC's and then multiplying 
the quotient by the ISC for each TCCC.
    Personal property means property of any kind except real property. 
It may be tangible--having physical existence, or intangible--having no 
physical existence such as patents, inventions, and copyrights.
    Real property means land, land improvements, structures, and 
appendages thereto, excluding removable personal property, machinery 
and equipment.
    Regular student means a person who has a high school diploma or GED 
and is enrolled in an educational program.
    Satisfactory progress means that the student is making sufficient 
advancement in his/her field of study in accordance with the standards 
of the college.
    Secretary means the Secretary of the Interior, or his/her 
authorized representative.
    Third week means the period beginning with the registration date as 
published by the college for each academic session and ending 21 
calendar days later.
    Title I means Title I of the Tribally Controlled Community College 
Assistance Act of 1978, which governs grants to tribally controlled 
community colleges other than NCC.
    Title II means Title II of the Tribally Controlled Community 
College Assistance Act of 1978, which governs grants to NCC.
    Tribally controlled community college (TCCC) means an institution 
of higher education that is formally controlled, sanctioned, or 
chartered by the governing body of an Indian tribe or tribes, except 
that no more than one institution will be recognized with respect to 
any single tribe.
    Unused funds means the amount of funds provided to a TCCC under 
this part that has not been obligated or expended by the TCCC by the 
end of the fiscal year for which funds were received.


Sec. 41.3  Where do grant funds come from?

    Grant funds are subject to the availability of appropriations and 
may be drawn from:
    (a) General administrative appropriations to the Secretary; or
    (b) Not more than 5 percent of the funds appropriated to carry out 
Secs. 41.50-41.55.


Sec. 41.4  How is the TCCC's annual budget requested?

    The annual budget request for TCCCs must be identified separately 
in the BIA Budget justifications. Funds appropriated for grants under 
this part must not be commingled with other appropriations historically 
expended by the BIA.


Sec. 41.5  What fairness provisions apply to this part?

    (a) Services or assistance provided to Indians by TCCCs aided under 
this part must be provided in a fair and uniform manner.
    (b) No TCCC may deny admission to any Indian student because he/she 
is or is not a member of a specific Indian tribe.


Sec. 41.6  How do the requirements of part 276 apply to this part?

    Except as otherwise provided in this part, a TCCC must comply with 
part 276 of this Title, subject to express waiver of specific 
inappropriate provisions of part 276 that may be granted by the 
Assistant Secretary after request and justification by the TCCC.

Establishing Eligibility


Sec. 41.10  Who can receive a grant under this part?

    A TCCC may receive grants if it:
    (a) Was established or otherwise sanctioned or chartered by 
resolution, ordinance, or other official action of the governing body 
of an Indian tribe or tribes;
    (b) Is governed by a board of directors or a board of trustees a 
majority of whom are Indians;
    (c) Adheres to a philosophy, plan of operation, and stated goals 
that are designed to meet Indian needs;
    (d) Has been in operation for more than one year and has a majority 
of students who are Indians;
    (e) Admits as regular students persons who have a certificate of 
graduation from a school providing secondary education; or a recognized 
equivalent of such a certificate, i.e., General Education Development 
(GED); or who are beyond the compulsory school attendance age for the 
State in which the institution is located and who have the ability to 
benefit from the training offered by the institution;
    (f) Provides an educational program resulting in certificates, 
associate, baccalaureate, and graduate degrees;
    (g) Is a nonprofit and nonsectarian institution;
    (h) Is accredited by a nationally recognized accreditation agency 
or association or, if not accredited:
    (1) The Secretary has determined that there is satisfactory 
assurance that the TCCC will meet the standards of an accreditation 
agency or association within a reasonable time; or
    (2) The TCCC's credits are accepted, on transfer, by not less than 
three accredited institutions for credit on the same basis as if 
transferred from an accredited institution.

[[Page 15449]]

Sec. 41.11  How must grant funds be used?

    Grants made under this part must be used for the general operating 
costs of the TCCC to defray, at the determination of the TCCC, 
expenditures for academic, educational, and administrative purposes, 
and for the operation and maintenance of the college. Funds provided 
under this part must not be used in connection with religious worship 
or sectarian instruction.


Sec. 41.12  How does the Director determine who is eligible for a 
grant?

    A TCCC may receive grants under this part only after the Director 
makes a positive determination of eligibility as provided in this 
section.
    (a) The governing body of a tribe or tribes that sponsor a TCCC 
wishing to receive a grant must submit a resolution requesting to the 
Director.
    (b) Within 30 days of receiving the resolution referred to in 
paragraph (a) of this section, the Director will designate a study 
team. Within 60 days the study team must complete an eligibility study 
to determine whether there is justification for maintaining a college 
for the tribe(s). The Director will submit a summary of the study and 
the decision to:
    (1) The tribal governing body or bodies requesting the study; and
    (2) The board of directors, regents, or trustees of the college.
    (c) The eligibility study will give consideration to the following 
factors:
    (1) The existence of a college;
    (2) Financial feasibility determination based upon an ISC that will 
support a TCCC;
    (3) Low levels of tribal matriculation in and graduation from other 
post-secondary educational institutions;
    (4) Tribal, linguistic, or cultural differences;
    (5) Relative isolation from other post-secondary institutions due 
to factors such as climate, roads, topography, etc.;
    (6) Availability of alternate education sources in the service 
area;
    (7) Proposed curriculum appropriate for Indian post-secondary 
education;
    (8) Demonstrated adherence to a plan of operation, philosophy, or 
goals designed to meet the needs of Indians;
    (9) Instructors' qualifications (their degrees and evidence of 
expertise in their fields of teaching);
    (10) Administrative and support staffs' ability to sustain the 
teaching faculty and operation and maintenance of the facility;
    (11) Ability to account for the funds made available under the Act 
and use them efficiently; and
    (12) Adherence to the requirements of Sec. 41.10.


Sec. 41.13  If a TCCC is eligible, when can it receive funding?

    If the Director finds a TCCC eligible and the TCCC complies with 
section 41.7 of the Act, the TCCC will be eligible for funding 
beginning with the next fiscal year.


Sec. 41.14  How can a TCCC appeal a finding of ineligibility?

    If the Director finds a TCCC ineligible, he/she must notify the 
tribe within 60 days. The tribe may file a notice of appeal with the 
Assistant Secretary under Sec. 41.90. A negative determination will not 
prevent a tribe from requesting another eligibility study, but the 
application for a new study will not be accepted sooner than one year 
from the date of the original determination.


Sec. 41.15  Is a TCCC's eligibility ever reviewed?

    Yes. The Director annually reviews the eligibility status of each 
TCCC. If he/she determines that a TCCC eligible under Sec. 41.12 no 
longer meets the criteria under which the original determination of 
eligibility was granted, he/she must promptly notify the TCCC in 
writing. That determination is grounds for rejection of a TCCC's 
application for a grant. Any TCCC receiving this notification may 
appeal the Director's determination under Sec. 41.90.

Applying for a Title I Grant


Sec. 41.20  How can a Title I TCCC apply for a grant?

    A TCCC that has received a positive eligibility study determination 
under Sec. 41.12 is entitled to apply for grants under this part. A 
TCCC must complete an application and file it with the Director before 
July 1 of the year preceding the academic year for which a grant is 
requested. The application must:
    (a) Be submitted on the approved form;
    (b) Include a college catalog;
    (c) Provide a proposed budget showing total expected operating 
expenses of all programs to which the information applies;
    (d) Include a description of accounting procedures; and
    (e) Include a statement that the TCCC will not deny admission to 
any Indian solely on the basis of not being a member of the tribe that 
has established and operates the TCCC.


Sec. 41.21  How will the TCCC hear if it has received a grant?

    Within 60 days of receiving an application, the Director will 
review all supporting documents, make a decision, and notify the 
applicant in writing of the decision.


Sec. 41.22  What happens if the Director disapproves an application?

    (a) If the Director disapproves an application, he/she must send 
the applicant written notification that includes the specific reasons 
for disapproval. The applicant will then have 30 days to amend or 
supplement the application and submit it for reconsideration.
    (b) A TCCC may appeal the disapproval of its original grant 
proposal or its amended application by following the procedures in 
Sec. 41.90.


Sec. 41.23  What additional documentation is required after a grant is 
approved?

    A grant award under an approved application must be supported by a 
grant agreement, signed by a BIA Grants Officer, that includes the 
application and provisions required by Secs. 41.5 and 41.6 and section 
111 of the Act.


Sec. 41.24  Are there criminal penalties for making false statements on 
an application?

    Yes. It's a crime under section 1001 of Title 18, U.S. Code, for a 
person to submit, or cause to be submitted, any false information to 
the BIA in connection with any application, report, or other document 
on which Federal financial assistance or any other payment of Federal 
funds is based. Punishment for violations under 18 U.S.C. Sec. 1001 is 
a fine of not more than $10,000 or imprisonment for not more than 5 
years, or both.

Counting Students and Measuring Progress


Sec. 41.30  What procedures are used to count students?

    The following Indian Student Count (ISC) procedure must be used by 
all Title I TCCCs:
    (a) The number is calculated on the basis of Indian students who 
are enrolled at the conclusion of the third week, or the equivalent 
thereof, of each academic term;
    (b) Credits earned by non-Indian students cannot be counted towards 
the computation of the ISC for funding under the Act;
    (c) Credits earned in classes offered during a summer term are 
counted toward the computation of the ISC in the succeeding fall term;
    (d) Credit hours converted from CEU's are counted toward the 
computation of the ISC;
    (e) The formula for conversion of CEU's to credit hours will be: 15 
contact hours for one semester credit hour, 10 contact hours for one 
quarter credit

[[Page 15450]]

hour. The non-credit activity must meet the standards established by 
the TCCC to claim the CEU credits toward computation of the ISC.
    (f) Credit hours can be counted for students who are making 
satisfactory progress under Sec. 41.31 in accordance with the standards 
and practices of the TCCC.
    (g) Students accepted for enrollment under the ``ability to 
benefit'' clause as special students will be credited and counted the 
same as students who have a certificate of graduation (or a recognized 
equivalent of such a certificate, i.e., GED) from an accredited post-
secondary school if the student has:
    (1) Passed an admission test that measures the student's aptitude 
to complete his or her educational program successfully;
    (2) Successfully completed a remedial or developmental program 
prescribed by the institution that does not exceed one academic year. 
Note: Credits earned before successful completion of the prescribed 
program cannot be included in the TCCC's ISC; or
    (3) Received a GED before the earlier of:
    (i) The student's certification or graduation; or
    (ii) The end of the first year of the course of study.
    (h) Credits earned specific to obtaining the GED cannot be included 
in the institution's Indian student count.


Sec. 41.31  Must TCCCs have standards for measuring progress?

    Yes. TCCCs must establish, publish, and apply reasonable standards 
for satisfactory progress by students pursuing degree or certificate 
programs.

Applying for a Title II Grant


Sec. 41.40  What is Navajo Community College's grant entitlement?

    (a) Navajo Community College (NCC) is entitled to an annual grant 
based upon the amount of the Congressional appropriation for 
administration, academic instruction, development, student services, 
and operations and maintenance.
    (b) A separate annual budget request for NCC must be identified in 
the BIA budget justification. Funds appropriated for grants under this 
part must not be commingled with other appropriations that BIA has 
historically spent for programs and projects normally provided on the 
Navajo Reservation for Navajo beneficiaries.


Sec. 41.41  How does NCC apply for its grant under Title II?

    (a) NCC must submit an application statement by July 1 each year. 
The statement must include:
    (1) A description of NCC's curriculum (which may be in the form of 
a college catalog or similar publication);
    (2) A proposed budget showing the total expected operating expenses 
of educational programs; and
    (3) The expected revenue from all sources for that academic year.
    (b) The chief executive officer of the NCC must certify the 
authenticity of the application and submit documentation that a copy of 
the application was submitted to the Navajo Tribe.


Sec. 41.42  What other provisions apply to NCC's grant?

    (a) The grant award must be evidenced by a grant agreement signed 
by the Director, incorporating the grant application and the provisions 
required by Secs. 41.5 and 41.6.
    (b) Overpayments of grants under this part may be recovered as 
provided by Sec. 41.55.
    (c) Payments to NCC under this part will not disqualify NCC from 
applying for or receiving grants or contracts under any other Federal 
programs for which it may qualify.

Grant Payments


Sec. 41.50  What general limitation applies to grant payments?

    A grant under this part for any academic year is subject to the 
availability of appropriations and the provision that no grant can 
exceed the total cost of the education program provided by the TCCC.


Sec. 41.51  How will BIA determine the per capita payment for Title I 
TCCCs?

    The per capita payment to each Title I TCCC will be determined by 
establishing an amount per Indian Student Count (ISC). The per capita 
payment is the Title I appropriation for the year divided by the total 
previous year's ISC.


Sec. 41.52  What are the per capita payment procedures?

    (a) The Director will authorize payments in the appropriated amount 
for each TCCC with an approved application. Payments will be computed 
as follows:
    (1) By October 15 or no later than 14 days after appropriations 
become available, whichever comes first, BIA will allot 95 percent of 
the funds to each TCCC based on the prior year's certified ISC.
    (2) BIA will pay the balance of any grant to which a grantee is 
entitled paid no later than January 1 of the fiscal year, subject to 
availability of funds.
    (b) By July 1, the TCCC must inform the Director in writing of the 
amount of any funds not expected to be obligated by the end of the 
fiscal year. The Director will reallocate the unused funds to other 
TCCCs based on their ISC for that year.


Sec. 41.53  How must the TCCC handle interest or investment income?

    (a) Any interest or investment income that accrues on these funds 
after they are paid to the TCCC will become the property of the TCCC 
and will not affect other funding.
    (b) The TCCC must spend all interest or investment income by the 
close of the fiscal year following the fiscal year in which the income 
accrues.
    (c) Funds may only be invested in obligations of the United States 
or in obligations or securities that are guaranteed or insured by the 
United States.


Sec. 41.54  How is other funding that a TCCC may receive affected by 
funding received under this part?

    (a) Payments to Title I TCCCs under this part will not disqualify 
the TCCC from applying for or receiving grants or contracts under any 
other Federal programs for which it may qualify.
    (b) A TCCC receiving funds for programs under the Snyder Act of 
November 2, 1921, will not:
    (1) Have its funding altered;
    (2) Be denied a contract for Snyder Act funds under the Indian 
Self-Determination and Education Assistance Act; or
    (3) Be denied contract support to administer those funds.
    (c) Eligibility for payment under this part will not, by itself, 
make a TCCC ineligible to receive Federal financial assistance under 
the Higher Education Act of 1965 or any other programs that benefit 
institutions of higher education, community colleges, or post-secondary 
educational institutions.
    (d) Notwithstanding any provision of law, funds provided under this 
part to the TCCCs will be treated as nonfederal, private funds of the 
TCCC for purposes of any provision of Federal law that requires 
nonfederal funds for a project.


Sec. 41.55  What about grant overpayments/underpayments?

    If the Director finds that a Title I TCCC receiving funds under 
this part has been overpayed or underpaid, he/she must promptly notify 
the TCCC of the grant overpayment or underpayment. An adjustment will 
be made in the current fiscal year, if funds are available. If funds 
are not available,

[[Page 15451]]

the grant adjustment will be made in the next fiscal year from the 
amount appropriated for the Title I TCCCs.

Technical and Planning Assistance


Sec. 41.60  Are there any funds for technical assistance?

    (a) To apply for technical assistance and if funds are available, 
the TCCC should submit a written request to the Director for program 
development. Technical assistance funds will be provided to all 
eligible TCCCs on an equal payment basis.
    (b) The Director may distribute technical assistance funds with the 
initial payment in accordance with Sec. 41.52, or may award them to an 
organization that the TCCC designates. If the TCCC wishes to have its 
funds awarded to an organization, the TCCC must notify the Director in 
its annual application on or before July 1 of every year.
    (c) If the Director denies a request for technical assistance, the 
Director will notify the TCCC in writing, including the specific reason 
for the denial.


Sec. 41.61  Are planning grants available?

    Yes, subject to specific appropriations. If money is appropriated, 
BIA may approve a planning grant for a tribe or a tribal entity to 
conduct planning activities for establishing a TCCC.


Sec. 41.62  How can a tribe or tribal entity apply for a planning 
grant?

    Each applicant for a planning grant must submit an application 
using standard form (SF) 424 in accordance with OMB Circular No. A-110. 
The Director will consider each application in order of receipt for 
each fiscal year.


Sec. 41.63  How will a tribe or tribal entity know if it has received a 
planning grant?

    The Director will notify the grant applicant whether the 
application has been approved or disapproved within 60 days of its 
receipt. No more than five grants, not to exceed $15,000 each, will be 
awarded each fiscal year.


Sec. 41.64  What is required in a study made with a planning grant?

    (a) The planning study must contain:
    (1) Information pertaining to the potential number of tribal 
members interested in enrolling;
    (2) An assessment of post-secondary educational opportunities on or 
near the Indian reservation;
    (3) Information concerning facilities usage;
    (4) A review of tribal and BIA funds spent on in-service training;
    (5) The estimated tribal financial contribution toward the 
operation of a TCCC;
    (6) Relative isolation factors;
    (7) Tribal member enrollments at other post-secondary institutions 
in the service area; and
    (8) Curriculum needs.
    (b) The results of the planning study must be submitted within 60 
days after completion to:
    (1) The Director;
    (2) The tribal governing body or bodies requesting the planning 
grants; and
    (3) The board of directors, regents, or trustees of the TCCC.


Sec. 41.65  What will happen to unused planning grant funds?

    Any unallocated funds appropriated in a fiscal year for planning 
grants will be distributed to the Title I colleges according to the 
procedures in Sec. 41.52.


Sec. 41.66  What assistance will BIA provide TCCCs in determining their 
needs and costs?

    The Secretary, in consultation with the National Center for 
Education Statistics, will establish a data collection system to obtain 
accurate information on the needs and costs of operation and 
maintenance of TCCCs.

Endowment Funds


Sec. 41.70  When is a TCCC entitled to receive endowment funds?

    A TCCC is entitled to receive endowment funds if the TCCC:
    (a) Has received operational funds during the fiscal year in which 
application for an endowment fund is made; and
    (b) Has not been awarded a grant under section 331 of the Higher 
Education Amendments of 1986, Endowment Challenge Grants, (20 U.S.C. 
1065a) during the same fiscal year.


Sec. 41.71  How can a TCCC obtain endowment funds?

    To obtain endowment funds, a TCCC must establish a trust fund as 
required by Sec. 41.72 and apply to the Director under Sec. 41.73.


Sec. 41.72  What requirements must an endowment trust fund meet?

    A TCCC desiring to receive a grant under this section must enter an 
agreement with the Secretary to establish and maintain a trust fund 
that:
    (a) Meets the requirements of section 302(b)(1) of the Tribally 
Controlled Community College Assistance Act, as amended;
    (b) Provides for the deposit in the fund of:
    (1) Any Federal capital contributions;
    (2) A TCCC capital contribution in an amount (or of a value) equal 
to half the amount of each Federal capital contribution; and
    (3) Any earnings of the deposited funds.
    (c) Provides that deposited funds will accumulate interest at a 
rate not less than that of similar funds deposited at the institution 
for the same period of time;
    (d) Provides that if a TCCC withdraws any of its capital 
contribution, an amount of Federal contribution equal to twice the 
amount (or value) of each withdrawal will be withdrawn and returned to 
the Secretary for redistribution;
    (e) Provides that no private person may benefit from the net 
earnings of the trust fund;
    (f) Provides a description of recordkeeping procedures for the 
expenditure of accumulated interest; and
    (g) Provides that interest deposited in the trust fund may be 
periodically withdrawn and used to defray any expenses associated with 
the operation of the TCCC.


Sec. 41.73  How does a TCCC apply to participate in the endowment 
program?

    BIA will notify TCCCs when funding is available for the endowment 
program. Upon receiving this notice, the TCCC must submit a signed 
letter to the Director certifying its intent to participate in the 
program and identifying the amount (or value of) funds/property 
available for matching purposes.


Sec. 41.74  What action will the Director take on applications?

    (a) The Director will review each request made under Sec. 41.73. If 
the Director approves the request, BIA will match on a two-for-one 
basis the amount identified by the TCCC, up to a maximum of $750,000 in 
matching funds per TCCC.
    (b) If the request is disapproved, the Director must notify the 
TCCC in writing, identifying the specific reasons for the disapproval 
and advising the TCCC of its right to appeal.


Sec. 41.75  What happens if a TCCC is overpaid under the endowment 
program?

    The Director must notify a TCCC if an overpayment has been made. 
The TCCC must then return the excess funds.


Sec. 41.76  What assets may a TCCC use to comply with the matching 
requirement?

    To comply with the matching requirement, a TCCC, may use:
    (a) Funds available from any private or tribal source; and

[[Page 15452]]

    (b) Any real or personal property received as a donation or a gift 
on or after October 30, 1990, to the extent of its fair market value as 
determined by the Secretary.


Sec. 41.77  How is the value of donated real or personal property 
established?

    (a) The fair market value of donated real or personal property must 
be established by a qualified appraiser. The Secretary or his/her 
authorized representative must review and approve the appraisal.
    (b) The fair market value of property at the time it is presented 
to the Federal appraiser will be the amount that will be used for 
matching purposes regardless of future changes in value.


Sec. 41.78  What happens if real or personal property that the TCCC 
uses to comply with the matching requirement is sold or disposed of?

    If any real or personal property that the TCCC uses to comply with 
the matching requirement is sold or otherwise disposed of, the proceeds 
must be deposited in the established endowment trust account. The 
deposited proceeds and will not again be considered for Federal capital 
contribution purposes.


Sec. 41.79  How will BIA match the value of property or capital 
contributions?

    (a) From the amount appropriated, the Secretary will allocate to 
each eligible TCCC:
    (1) An amount for a Federal capital contribution equal to twice the 
value of the property or the amount that the TCCC demonstrates is 
committed as a capital contribution; except,
    (2) The maximum amount allocated to any TCCC for any fiscal year 
cannot exceed $750,000.
    (b) If in any fiscal year the appropriated amount is insufficient 
to allocate to each TCCC an amount equal to twice the value, then the 
allocated amount to each TCCC will be reduced pro rata.


Sec. 41.80  What procedures will BIA follow when there are additional 
funds for the endowment program?

    (a) The Director, after satifying the unmet endowment, will notify 
all eligible TCCCs of the amount of the remaining funds.
    (b) Within 60 days of the date of notification of extra funds, an 
eligible TCCC may submit an application.
    (c) After Congress appropriates funds, the Director must notify 
eligible TCCCs of the amount available under this part.

Appeals


Sec. 41.90  What appeal rights do TCCCs have under this part?

    (a) A TCCC has the right to appeal any adverse decision made by the 
Director to the Assistant Secretary by filing a written notice of 
appeal with the Assistant Secretary within 30 days of receipt of the 
adverse decision.
    (b) Within 30 days of receiving a notice of appeal, the Assistant 
Secretary, or designated representative, must conduct a hearing at 
which the TCCC may present evidence and offer arguments in support of 
its appeal.
    (c) Within 30 days after the hearing, the Assistant Secretary must 
issue a written ruling on the appeal including the reasons for that 
ruling that confirms, modifies, or reverses the Director's decision. 
The ruling of the Assistant Secretary is final.

Required Reports


Sec. 41.95  What reports are required?

    (a) Each Title I TCCC must conduct an ISC report at the conclusion 
of the third week, or equivalent, of each academic term and then submit 
the report to the Director by the designated due date.
    (b) Each college receiving grants under this part must submit an 
annual report to the Director by January 1 in accordance with the 
reporting procedures of OMB approved Form No. 1076-0105, Annual Report.
    (c) The Director must conduct an evaluation of each new TCCC during 
the second year of funding. Periodic evaluations of established TCCCs 
will be conducted. The evaluation will take the form of:
    (1) A review of the TCCC's continued adherence to the elements of 
the eligibility study,
    (2) A review of Indian student enrollment,
    (3) A review of its CPA audit report to determine compliance with 
recommendations; and,
    (4) A review of the accreditation status.


Sec. 41.96  Are there requirements for information collection?

    The Standard Form 424 and attachments prescribed by that circular 
are approved by OMB under 44 U.S.C. 3501 et seq. These sections 
describe types of information that would satisfy the application 
requirements of Circular A-110 for this grant program. The information 
collection requirement contained in this part has been approved by the 
Office of Management and Budget under the Paperwork Reduction Act of 
1995, 44 U.S.C. 3507(d), and assigned clearance number 1076-0018.

    Dated: March 20, 1997.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 97-8062 Filed 3-31-97; 8:45 am]
BILLING CODE 4310-02-P`