Archived Information

Reauthorization of the Higher Education Act


Title III -- Institutional Aid

SEC. 301. Title III of the Act is amended--

(1) in section 301--

(A) in subsection (a)--

(i) by redesignating paragraphs (3) through (7) as paragraphs (4) through (8), respectively; and

(ii) by adding a new paragraph (3) to read as follows:

"(3) in order to be competitive and provide a high-quality education for all, institutions must improve their technological capacity and expand their use of technology;

(B) by amending subsection (b) to read as follows:

"(b) PURPOSE.-- It is the purpose of this title to strengthen postsecondary institutions through a program of Federal assistance that helps those institutions provide equal educational opportunity and strong academic programs, and to achieve greater self-sufficiency.";

(2) by amending section 311--

(A) in subsection (a), by striking out "increase their self-sufficiency and";

(B) in subsection (b)--

(i) in paragraph (2)(A), by striking out "or" at the end thereof and inserting in lieu thereof "and"; and

(C) by striking out paragraph (3); and

(D) by adding at the end thereof a new subsection (c) to read as follows:

"(c) AUTHORIZED ACTIVITIES.--(1) Funds awarded under this section shall be used for one or more of the following activities:

"(A) faculty development.

"(B) funds and administrative management.

"(C) development and improvement of academic programs.

"(D) acquisition of equipment for use in strengthening funds management and academic programs.

"(E) joint use of facilities such as libraries and laboratories.

"(F) student services.

"(G) investing in the technological improvement of the institution's administration of funds made available to students under title IV of this Act.

"(H) establishment or improvement of an endowment fund.

"(2) An eligible institution may not use more than 20 percent of its grant under this part for any fiscal year to establish or improve an endowment fund.";

(3) in section 312--

(A) by amending subsection (b) to read as follows--

"(b) ELIGIBLE INSTITUTION.--(1) For the purpose of this part, the term "eligible institution" means--

"(A) an institution of higher education--

"(i) that has an enrollment of needy students as required by subsection (c) of this section;

"(ii) except as provided in section 382(b), the average educational and general expenditures of which are low, per full-time equivalent undergraduate student, in comparison with the average educational and general expenditures, per full-time equivalent undergraduate student, of institutions that offer similar instruction;

"(iii) that is legally authorized to provide, and provides within the State, an educational program for which it awards a bachelor's degree, or that is a junior or community college;

"(iv) that is accredited by a nationally recognized accrediting agency or association determined by the Secretary to be reliable authority as to the quality of training offered or that is, according to such an agency or association, making reasonable progress toward accreditation; and

"(v) that meets such other requirements as the Secretary may prescribe; and

"(B) any branch of any institution of higher education described under subparagraph (A) that by itself satisfies the requirements contained in clauses (i) and (ii) of that subparagraph; and

"(C) the college of the Marshall Islands, the College of Micronesia/Federated States of Micronesia, and Palau Community College.

"(2) For the purposes of this section, the Secretary may consider any institution that applies for funds under this part, that is determined to be eligible for such funds but is not funded, to be eligible to receive funds under this part for a total of three consecutive years following the most recent application for which it was found eligible.

"(3) For the purposes of this part, no historically black college or university that is eligible for, and receives funds under, part B of this title shall be eligible for or may receive funds under this part."; and

(B) by striking out subsection (f);

(4) in section 313--

(A) by amending subsection (b) to read as follows:

"(b) PRIORITY.--In awarding grants under this part, the Secretary shall give priority to applicants who are not already receiving a grant under this part, except that for the purpose of this subsection a grant under subsection (d) and a grant for cooperative arrangements under section 384 shall not be considered a grant under this part.".

(B) by redesignating subsection (c) as subsection (d); and

(C) by adding a new subsection (c) to read as follows:

"(c) LIMITATIONS.--An institution awarded a grant under this part, other than subsection (d), shall not be eligible for another grant under this part for two consecutive years following the completion of the last grant it received under this part.";

(5) by amending section 314 to read as follows:

"APPLICATIONS

"Section 314. (a) APPLICATIONS.--Each eligible institution desiring to receive assistance under this part shall submit an application in accordance with the requirements of section 381.

"(b) ADDITIONAL INFORMATION.--An application under subsection (a) shall also include--

"(1) a 5-year plan for improving the assistance provided by such institution to students; and
"(2) measurable goals for the institution's proposed activities, including a plan of how the applicant intends to achieve those goals.

"(c) PRIORITY.--The Secretary shall give priority to applications that strengthen the technological capabilities of eligible institutions as determined by the Secretary.";

(6) by repealing sections 315 and 316(B);

(7) in section 321(4), by inserting " technological capabilities,"after "academic resources,";

(8) in section 323--

(A) in subsection (a)--

(i) by striking out "section 360(a)(2)" and inserting in lieu thereof "section 390(a)(2)";

(ii) by redesignating paragraph (12) as paragraph (14); and

(iii) by inserting after paragraph (11) new paragraphs (12) and (13) to read as follows:

"(12) Investing in the technological improvement of the institution's administration of funds made available to students under to title IV of this Act.

"(13) Establishing or improving an endowment fund."; and

(B) in subsection (b), by amending paragraph (3) to read as follows:

"(3)(A) An institution may not use more than 20 percent of its grant under this part for any fiscal year to establish or improve an endowment fund.

"(B) In order for an institution to use its funds under this part to establish or improve an endowment fund, it shall provide an institutional match, using non-Federal funds, that is at least equal to one dollar of institutional funds for every one dollar of the grant funds.";

(9) by amending section 324(f) to read as follows:

"(f) SPECIAL MERGER RULE.--(1)(A) An institution otherwise eligible to apply for a grant under this part in any fiscal year prior to the fiscal year 1986, shall remain eligible even if such institution has merged with another institution of higher education that is not so eligible.

"(B) An institution eligible to apply for a grant under this part that merges with an institution eligible to apply for a grant under parts A or D shall, for purposes of being funded under this title, be considered as a single institution.";

(10) by amending section 325(c) to read as follows:

"(c) GOALS.--An application for a grant under this part shall describe measurable goals for the institution's proposed activities, including a plan of how the applicant intends to achieve those goals.";

(11) in section 326--

(A) by amending subsection (a)(2) to read as follows:

"(2) No grant in excess of $500,000 may be made under this section unless the postgraduate institution provides an assurance that 50 percent of the cost of the purposes for which the grant is made will be paid from non-Federal sources, except that the institution shall not be required to match the first $500,000 of its award from the Secretary.";

(B) in subsection (c)--

(i) an the end of paragraph (1), by adding "and"; and

(ii) at the end of paragraph (2), by striking out the semi-colon and all through the end of paragraph (3) and inserting in lieu thereof a period;

(C) in subsection (e), by amending paragraph (1) to read as follows:

"(1) IN GENERAL.--Independent professional or graduate institutions and programs eligible for grants under subsection (a) include--

"(A) Morehouse School of Medicine;

"(B) Meharry Medical School;

"(C) Charles R. Drew Postgraduate Medical School;

"(D) Clark-Atlanta University;

"(E) Tuskegee University qualified graduate program;

"(F) Xavier University qualified graduate program;

"(G) Southern University qualified graduate program;

"(H) Texas Southern University qualified graduate program;

"(I) Florida A&M University qualified graduate program;

"(J) North Carolina Central University qualified graduate program;

"(K) Morgan State University qualified graduate program;

"(L) Hampton University qualified graduate program;

"(M) Alabama A&M qualified graduate program;

"(N) North Carolina A&T State University qualified graduate program;

"(O) University of Maryland Eastern Shore qualified graduate program;

"(P) Jackson State qualified graduate program; and

"(Q) any professional or graduate institution or program that meets the requirements of this section."; and

(D) in subsection (f)--

(i) in paragraph (2)--

(I) in the matter before subparagraph (A), by inserting "but not to exceed $19,606,000" after "$12,000,000"; and

(II) in subparagraph (B), by striking out "(e)(1)." at the end thereof and inserting in lieu thereof "(e)(1); and"; and

(ii) by adding a new paragraph (3) at the end thereof to read as follows

"(3) any amount appropriated in excess of $19,606,000 shall be available--

"(A) for the purpose of making grants in equal amounts not to exceed $500,000, to institutions or programs described in paragraph (Q) of subsection (e)(1); and

"(B) secondly for the purpose of making grants to institutions or programs described in subparagraphs (A) through (Q) of subsection (e)(1).";

(12) by amending part C to read as follows--

"PART C -- HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING
"FINDINGS

"SEC. 331.The Congress finds that--

"(1) a significant part of the Federal mission in education has been to attain equal opportunity in higher education for low-income, educationally disadvantaged Americans and African Americans;
"(2) the Nation's historically Black colleges and universities have played a prominent role in American history and have an unparalleled record of fostering the development of African American youth by recognizing their potential, enhancing their academic and technical skills, and honing their social and political skills through higher education;
"(3) the academic and residential facilities on the campuses of all historically Black colleges and universities have suffered from neglect or deferred maintenance and are in need of capital improvements in order to provide appropriate settings for learning and social development through higher education;
"(4) due to their small enrollments, limited endowments, and other financial factors normally considered by lenders in construction financing, historically Black colleges and universities lack access to the sources of funding necessary to undertake the necessary capital improvements through borrowing and bond financing;
"(5) despite their track record of long-standing and remarkable institutional longevity and viability, historically Black colleges and universities lack the financial resources necessary to gain access to traditional sources of capital financing, such as bank loans and bond financing; and
"(6) Federal assistance to facilitate low-cost capital basis for historically Black colleges and universities will enable such colleges and universities to continue and expand their educational mission and enhance their significant role in American higher education.

"DEFINITIONS

"SEC. 332. For the purposes of this part:

"(1) The term "eligible institution" means a "part B institution" as that term is defined in section 322(2) of the Higher Education Act of 1965.

"(2) The term "loan" means a loan made to an eligible institution under the provisions of this part and pursuant to an agreement with the Secretary.

"(3) The term "qualified bond" means any obligation issued by the designated bonding authority at the direction of the Secretary, the net proceeds of which are loaned to an eligible institution for the purposes described in section 333(b).

"(4) The term "funding" means any payment under this part from the Secretary to the eligible institution or its assignee in fulfillment of the insurance obligations of the Secretary pursuant to an agreement under section 333.

"(5)(A) The term "capital project" means, subject to section 334(b), the repair, renovation, or, in exceptional circumstances, the construction or acquisition, of--

"(i) any classroom facility, library, laboratory facility, dormitory (including dining facilities) or other facility customarily used by colleges and universities for instructional or research purposes or for housing students, faculty, and staff;

"(ii)(I) facilities for administration of educational programs and student centers or student unions, so long as no more that 5 percent of the loan proceeds are used for facilities that are owned, leased, managed or operated by a private business, that, in return for such use, makes a payment to the college or university.

"(II) maintenance, storage, or utility facilities essential to the operation of a capital project;

"(III) facilities designed to provide primarily outpatient care of students and faculty; or

"(IV) other essential service facilities;

"(iii) instructional equipment, research instrumentation, and capital equipment or fixtures related to facilities described in clause (i);

"(iv) any other facility, equipment or fixture that is essential to the maintaining of accreditation of the member institution by a nationally recognized accrediting agency or association; and

"(v) any real property or interest therein underlying facilities described in clauses (i), (ii), or (iv).

"(B) The term "capital project" shall not include--

"(i) any facility intended primarily for events for which admission is to be charged to the general public;

"(ii) any gymnasium or other facility specially designed for athletic or recreational activities, other than for an academic course in physical education or where the Secretary finds that the physical integration of such facilities with other "capital projects" included under this part is required to carry out the objectives of this part;

"(iii) any facility used, or to be used, for sectarian instruction or as a place for religious worship; or

"(iv) any facility that (although not a facility described in the preceding clause) is used, or to be used, primarily in connection with any part of the program of a school or department of divinity.

"(6) The term "interest" includes accredited value or any other payment constituting interest on an obligation.

"(7) The term "outstanding", when used with respect to bonds, shall not include bonds the payment of which shall have been provided for by the irrevocable deposit in trust of obligations maturing as to principal and interest in such amounts and at such times as will ensure the availability of sufficient moneys to make payments on such bonds.

"(8) The term "designated bonding authority" means the private, for-profit corporation selected by the Secretary for the purpose of issuing taxable construction bonds in furtherance of the purposes of this part.

"(9) The term "Advisory Board" means the Advisory Board established by section 337 of this part.

"FEDERAL INSURANCE FOR BONDS

"SEC. 333. (a) GENERAL RULE.--Subject to the limitations in section 334, the Secretary is authorized to enter into insurance agreements to provide financial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth in subsections (b), (c), and (d).

"(b) RESPONSIBILITIES OF THE DESIGNATED BONDING AUTHORITY.--The Secretary may not enter into an insurance agreement described in subsection (a) unless the Secretary designates a qualified bonding authority and the designated bonding authority agrees in such agreement to--

"(1) use the proceeds of the qualified bonds, less costs of issuance not to exceed 2 percent of the principal amount thereof, to make loans to eligible institutions or for deposit into an escrow account for repayment of the bonds;

"(2) provide in each loan agreement with respect to a loan that not less than 95 percent of the proceeds of the loan will be used--

"(A) to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital project;

"(B) to refinance an obligation the proceeds of which were used to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital project;

"(3)(A) charge such interest on loans, and provide for such a schedule of repayments of loans, as will, upon the timely repayment of the loans, provide adequate and timely funds for the payment of principal and interest on the bonds; and

"(B) require that any payment on a loan expected to be necessary to make a payment of principal and interest on the bonds be due not less than 60 days prior to the date of the payment on the bonds for which such loan payment is expected to be needed;

"(4) prior to the making of any loan, provide for a credit review of the institution receiving the loan and assure the Secretary that, on the basis of such credit review, it is reasonable to anticipate that the institution receiving the loan will be able to repay the loan in a timely manner pursuant to the terms thereof;

"(5) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in a funding under the insurance agreement, the institution obligated on such loan shall repay the Secretary, upon terms to be determined by the Secretary, for such funding;

"(6) assign any loans to the Secretary, upon the demand of the Secretary, if a delinquency on such loan has required a funding under the insurance agreement;

"(7) in the event of a delinquency on a loan, engage in such collection efforts as the Secretary shall require for a period of not less than 45 days prior to requesting a funding under the insurance agreement;

"(8) establish an escrow account--

"(A) into which each eligible institution shall deposit 10 percent of the proceeds of any loan made under this part, with each eligible institution required to maintain in the escrow account an amount equal to 10 percent of the outstanding principal of all loans made to such institution under this part; and

"(B) the balance of which--

(i) shall be available to the Secretary to pay principal and interest on the bonds in the event of delinquency in loan repayment; and

(ii) shall be used to return to an eligible institution an amount equal to any remaining portion of such institution's 10 percent deposit of loan proceeds following scheduled repayment of such institution's loan;

"(9) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in amounts being withdrawn from the escrow account to pay principal and interest on bonds, subsequent payments on such loan shall be available to replenish such escrow account;

"(10) comply with limitations set forth in section 334 of this part; and

"(11) make loans only to eligible institutions under this part in accordance with regulations prescribed by the Secretary to ensure that loans are fairly allocated among as many eligible institutions as possible, consistent with making loans of amounts that will permit capital projects of sufficient size and scope to significantly contribute to the educational program of the eligible institutions.

"(c) ADDITIONAL AGREEMENT PROVISIONS.--Any insurance agreement described in subsection (a) of this section shall provide as follows:

"(1) The payment of principal and interest on bonds shall be insured by the Secretary until such time as such bonds have been retired or canceled.

"(2) The Federal liability for delinquencies and default for bonds guaranteed under this part shall only become effective upon the exhaustion of all the funds held in the escrow account described in subsection (b)(8).

"(3) The Secretary shall create a letter of credit authorizing the Department of the Treasury to disburse funds to the designated bonding authority or its assignee.

"(4) The letter of credit shall be drawn upon in the amount determined by paragraph (5) of this subsection upon the certification of the designated bonding authority to the Secretary or the Secretary's designee that there is a delinquency on 1 or more loans and there are insufficient funds available from loan repayments and the escrow account to make a scheduled payment of principal and interest on the bonds.

"(5) Upon receipt by the Secretary or the Secretary's designee of the certification described in paragraph (4) of this subsection, the designated bonding authority may draw a funding under the letter of credit in an amount equal to--

"(A) the amount required to make the next scheduled payment of principal and interest on the bonds, less

"(B) the amount available to the designated bonding authority from loan repayments and the escrow account.

"(6) All funds provided under the letter of credit shall be paid to the designated bonding authority within 2 business days following receipt of the certification described in paragraph (4).

"(d) FULL FAITH AND CREDIT PROVISIONS.--Subject to section 333(c)(1), the full faith and credit of the United States is pledged to the payment of all funds which may be required to be paid under the provisions of this section.

"(e) BOND SALES.--Notwithstanding any other provision of law, qualified bonds guaranteed under this part may be sold to any party that offers terms that the Secretary determines in his discretion are in the best interests of the eligible institution.

"LIMITATIONS ON FEDERAL INSURANCE FOR BONDS ISSUED BY THE DESIGNATED BONDING AUTHORITY

"SEC. 334. (a) LIMIT ON AMOUNT.--(1) At no time shall the aggregate principal amount of outstanding bonds insured under this part together with any accrued unpaid interest thereon exceed $375,000,000, of which--

"(A) not more than $250,000,000 shall be used for loans to eligible institutions that are private historically Black colleges and universities; and

"(B) not more than $125,000,000 shall be used for loans to eligible institutions which are historically Black public colleges and universities.

"(2) For purposes of paragraphs (1)(A) and (B), Lincoln University of Pennsylvania is an historically Black public institution. No institution of higher education that has received assistance under section 8 of the Act of March 2, 1867 (20 U.S.C. 123) shall be eligible to receive assistance under this part.

"(b) LIMITATION ON CREDIT AUTHORITY.--The authority of the Secretary to issue letters of credit and insurance under this part is effective only to the extent provided in advance by appropriations Acts.

"(c) RELIGIOUS ACTIVITY PROHIBITION.--No loan may be made under this part for any educational program, activity or service related to sectarian instruction or religious worship or provided by a school or department of divinity or to an institution in which a substantial portion of its functions is subsumed in a religious mission.

"(d) DISCRIMINATION PROHIBITION.--No loan may be made to an institution under this part if the institution discriminates on account of race, color, religion, national origin, sex (to the extent provided in title IX of the Education Amendments of 1972), age, or disabling condition; except that the prohibition with respect to religion shall not apply to an institution which is controlled by or which is closely identified with the tenets of a particular religious organization if the application of this section would not be consistent with the religious tenets of such organization.

"AUTHORITY OF THE SECRETARY

"SEC. 335. In the performance of, and with respect to, the functions vested in the Secretary by this part, the Secretary--

"(1) may sue and be sued in any court of record of a State having general jurisdiction or in any district court of the United States, and such district courts shall have jurisdiction of civil actions arising under this part without regard to the amount in controversy, and any action instituted under this section by or against the Secretary shall survive notwithstanding any change in the person occupying the office of the Secretary or any vacancy in such office;

"(2)(A) may foreclose on any property and bid for and purchase at any foreclosure, or any other sale, any property in connection with which the Secretary has been assigned a loan pursuant to this part; and

"(B) in the event of such an acquisition, notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of , lease, and otherwise deal with, such property, except that--

"(i) such action shall not preclude any other action by the Secretary to recover any deficiency in the amount of a loan assigned to the Secretary; and

"(ii) any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;

"(3) may sell, exchange, or lease real or personal property and securities or obligations; and

"(4) may include in any contract such other covenants, conditions, or provisions necessary to ensure that the purposes of this part will be achieved.

"HBCU CAPITAL FINANCING ADVISORY BOARD

"SEC. 336. (a) ESTABLISHMENT AND PURPOSE.--There is established within the Department of Education, the Historically Black College and Universities Capital Financing Advisory Board (hereinafter in this part referred to as the "Advisory Board") which shall provide advice and counsel to the Secretary and the designated bonding authority as to the most effective and efficient means of implementing construction financing on African American college campuses, and advise the Congress of the United States regarding the progress made in implementing this part. The Advisory Board shall meet with the Secretary at least twice each year to advise him as to the capital needs of historically Black colleges and universities, how those needs can be met through the program authorized by this part, and what additional steps might be taken to improve the operation and implementation of the construction financing program.

"(b) BOARD MEMBERSHIP.--(1) COMPOSITION.--The Advisory Board shall be appointed by the Secretary and shall be composed of 9 members as follows:

"(A) The Secretary or the Secretary's designee.

"(B) Three members who are presidents of private historically Black colleges and universities.

"(C) Two members who are presidents of public historically Black colleges and universities.

"(D) The president of the United Negro College Fund, Inc.

"(E) The president of the National Association for Equal Opportunity in Higher Education.

"(F) The executive director of the White House Initiative on historically Black colleges and universities.

"(2) TERMS.--The term of office of each member appointed under paragraphs (1)(B) and (1)(C) shall be 3 years, except that--

"(A) of the members first appointed pursuant to paragraphs (1)(B) and (1)(C), 2 shall be appointed for terms of 1 year, and 3 shall be appointed for terms of 2 years.

"(B) members appointed to fill a vacancy occurring before the expiration of a term of a member shall be appointed to serve the remainder of that term; and

"(C) a member may continue to serve after the expiration of a term until a successor is appointed.

"MINORITY BUSINESS ENTERPRISE UTILIZATION.

"SEC. 337. To the maximum extent feasible in the implementation of the purposes of this part, minority business persons, including bond underwriters and credit enhancers, bond counsel, marketers, accountants, advisors, construction contractors, and managers should be utilized.

"CONTINUED MONITORING OF INSTITUTIONAL AWARDS UNDER THE ENDOWMENT CHALLENGE GRANTS PROGRAM

"SEC. 338. The Secretary shall, as appropriate, continue to monitor awards to recipients under part C, the Endowment Challenge Grants program, of this title as it was in effect prior to the enactment of the Higher Education Act Amendments Act of 1997.";

(13) in section 351--

(A) in subsection (a), in the second sentence, by striking out from "under this title if", through the end thereof, and inserting in lieu thereof--

"under this title only if the Secretary determines that--

"(1) the application meets the requirements of subsection (b);

"(2) the applicant is eligible for assistance in accordance with the part of this title under which the assistance is sought; and

"(3) the applicant's performance goals are sufficiently rigorous as to meet the purposes of this title and the performance objectives and indicators for this title established by the Secretary pursuant to the Government Performance and Results Act.";

(B) in subsection (b)--

(i) by amending paragraph (3) to read as follows:

"(3) set forth the applicant's--

"(A) objective, quantifiable, and measurable performance goals to be achieved by the activities supported by the grant, which shall be expressed in a manner consistent with the performance indicators established by the Secretary under subsection (f); and

"(B) policies and procedures for evaluating the effectiveness of its activities in reaching those performance goals;"; and

(ii) in paragraph (5), by--

(I) inserting "and the Government Performance and Results Act" after "under this title; and

(II) striking out "objectives for which the funds were awarded" and inserting in lieu thereof "the performance goals described in its application";

(iii) in paragraph (7), at the end thereof, by striking out "and";

(iv) by redesignating paragraph (8) as paragraph (9); and

(v) by adding a new paragraph (8) to read as follows:

"(8) a description of how the applicant will coordinate use of the grant funds with other Federal institutional assistance to meet the goals set forth in its application and its comprehensive development plan; and"; and

(C) by adding new subsections (e), (f), and (g) to read as follows:

"(e) LIMITATION ON MULTIPLE GRANTS.--Any institution, that is otherwise eligible to receive a grant under one or more of parts A, B, D, or E, may not be funded under more than one of those parts in any fiscal year.

"(f) PERFORMANCE INDICATORS.--The Secretary shall publish indicators for a variety of programmatic activities authorized under this title, such as transfer persistence and graduation rates, faculty development, and institutional management, which grantees shall report on and use in evaluating the effectiveness of their activities under this title that are associated with their performance goals under subsection (b)(3) for such activities.

"(g) CONTINUATION GRANTS.--The Secretary shall make continuation awards for the second and succeeding years only after determining that the grantee is making sufficient progress toward achieving its performance goals.";

(14) in section 352--

(A) in subsection (a)--

(i) in paragraph (5), at the end thereof, by striking out "or";

(ii) by redesignating paragraph (6) as paragraph (7); and

(iii) by inserting after paragraph (5) a new paragraph (6) to read as follows:

"(6) that is a tribally controlled community college as defined in the Tribally Controlled Community College Act of 1978, as amended; or"; and

(B) in subsection (b)--

(i) by inserting "(A)" after the paragraph designation "(1)"; and

(ii) by inserting at the end of paragraph (1)(A) a new paragraph (B) to read as follows:

"(B) In making a waiver determination under subparagraph (A), the Secretary may consider one or more of the following factors as distorting an institution's educational and general expenditures per full-time equivalent undergraduate student:

"(i) low student enrollment.

"(ii) the location of the institution in an unusually high cost-of-living area.

"(iii) high energy costs.

"(iv) an increase in State funding that was part of a desegregation plan for higher education.

"(v) the operation of high cost professional schools such as medical or dental schools; and

"(vi) the institution's status as a tribally controlled community college.";

(15) by adding a new section 355 to read as follows:

"CONTINUATION AWARDS

"SEC. 355. CONTINUATION AWARDS.--The Secretary shall make continuation awards under this title for the second and succeeding years of a grant only after determining that the recipient is making satisfactory progress in carrying out the grant.";

(16) in section 356--

(A) by amending subsection (a) to read as follows:

"(a) ASSISTANCE ELIGIBILITY.--Each institution that the Secretary determines to be an institution eligible to receive a grant under either parts A, B, D, and E of this title may be eligible for waivers in accordance with subsection (b).";

(17) by adding a new section 359 to read as follows:

"ENDOWMENT FUND

"SEC. 359. DEFINITION. --As used in this title the term 'endowment fund' means a fund established by State law, by an institution of higher education, or by a foundation that is exempt from taxation and is maintained for the purpose of generating income for the support of the institution, but which shall not include real estate."; and

(18) in section 360--

(A) by amending subsection (a) to read as follows--

"(a) AUTHORIZATIONS.--(1) There are authorized to be appropriated $60,000,000 for fiscal year 1999 and such sums as may be necessary for each of the four succeeding fiscal years to carry out part A.

"(2)(A) There are authorized to be appropriated $124,000,000 for fiscal year 1999 and such sums as may be necessary for each of the four succeeding fiscal years to carry out part B, except for section 326.

"(B) There are authorized to be appropriated $25,000,000 for fiscal year 1999 and such sums as may be necessary for each of the four succeeding fiscal years to carry out section 326.

"(3) There are authorized to be appropriated such sums as may be necessary for each of fiscal years 1999 through 2002 to carry out part C.

"(4) There are authorized to be appropriated $24,000,000 for fiscal year 1999 and such sums as may be necessary for each of the four succeeding to carry out part D.

"(5) There are authorized to be appropriated $5,000,000 in fiscal year 1999 and such sums as may be necessary for each of the four succeeding to carry out part E.

"(6) There are authorized to be appropriated $7,500,000 for fiscal year 1999 and such sums as may be necessary for each of the four succeeding to carry out part F."; and

(B) by adding a new subsection (f) to read as follows:

"(f) ADMINISTRATIVE RESERVATIONS.--(1) In any fiscal year beginning after September 30, 1998, from the amounts appropriated for each part under this title, the Secretary may use no more than one and one half percent of such amounts to obtain qualified readers and staff to review applications, to increase the level of oversight and monitoring, and to provide technical assistance to potential applicants and current grantees.

"(2) In any fiscal year beginning after September 30, 1998, from the amounts appropriated under this title, the Secretary may use no more than one half of one percent of such amounts to support impact studies.";

(19) in part D--

(A) by redesignating part D as part G; and

(B) by redesignating sections 351, 352, 353, 354, 355, 356, 357, 358, 359 and 360 as sections 381, 382, 383, 384, 385, 386, 387, 388, 389, and 390, respectively; and

(20) by adding new parts D, E, and F to read as follows:

"PART D-STRENGTHENING HISPANIC-SERVING INSTITUTIONS
"FINDINGS; PURPOSE

"SEC. 351. (a) FINDINGS.--The Congress finds that: [To be added.]

"(b) PURPOSE.--It is the purpose of this part to improve the academic quality, technological capacity, institutional management, and fiscal stability of eligible Hispanic-serving institutions of higher education in order to strengthen their ability to make a substantial contribution to the higher education resources of the Nation.

"PROGRAM AUTHORIZED

"SEC. 352.(a) IN GENERAL.--From the sums available for this part under section 390(a)(4) for any fiscal year, the Secretary may award grants to Hispanic-serving institutions of higher education that have an application approved under section 356 in order to assist such institution to plan, develop, and implement activities that promise to strengthen the institution.

"(b) DURATION.--Grants under this part shall not exceed five years.

"(c) LIMITATIONS.--Hispanic-serving institutions awarded a grant under this part, other than under section 355, shall not be eligible for another grant under this part for two consecutive years following the completion of the last grant it received under this part.

"(d) SPECIAL CONSIDERATION.--In making awards under this part the Secretary shall give special consideration to any Hispanic-serving institution--

"(1) that has endowment funds (other than any endowment fund built under section 332 of this Act as in effect on September 30, 1986, and under part B) the market value of which, per full-time equivalent student, is less than the average current market value of the endowment funds, per full-time equivalent student (other than any endowment fund built under section 332 of this Act as in effect on September 30, 1986, and under part B) at similar institutions; and

"(2) that has expenditures, per full-time equivalent student, for library materials that is less than the average of the expenditures for library materials, per full-time equivalent student, by other similarly situated institutions.

"DEFINITIONS

"SEC. 353.(a) IN GENERAL.--The definitions of terms in section 312(a), (c), (d), and (e) of this Act shall apply in this part, as appropriate.

"(b) PROGRAM SPECIFIC DEFINITIONS.--For the purposes of this part, the term 'Hispanic-serving institution' means an institution of higher education that--

"(1) is an eligible institution under section 312(b);

"(2) at the time of the application, has an enrollment of undergraduate full-time equivalent students that is at least 25 percent Hispanic students; and

"(3) provides an assurance that not less that 50 percent of its Hispanic students are low-income individuals who are first generation college students.

"AUTHORIZED ACTIVITIES

"SEC. 354. (a) USE OF FUNDS.--Funds awarded under section 352(a) shall be used by Hispanic-serving institutions for one or more of the following:

"(1) acquisition of scientific or laboratory equipment for educational purposes, including research and instructional purposes.

"(2) the renovation and improvement of classroom, library, laboratory, and other instructional facilities.

"(3) the support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in their field of instruction.

"(4) curriculum development and academic instruction.

"(5) the acquisition of library books, periodicals, microfilm, and other educational materials.

"(6) funds and administrative management, and the acquisition of equipment for use in strengthening funds management.

"(7) joint use of facilities such as libraries and laboratories.

"(8) academic tutoring and counseling programs and student support services.

"(9) establishment or improvement of an endowment fund.

"(10) investing in the technological improvement of the institution's administration of funds made available to students under title IV of this Act.

"(b) LIMITATIONS.--(1) An Hispanic-serving institution may not use more than 20 percent of its grant under this part for any fiscal year to establish or improve an endowment fund.

"(2) In order for an Hispanic-serving institution to use its funds under this part to establish or improve an endowment fund, it shall provide an institutional match, using non-Federal funds, that is at least equal to one dollar of institutional funds for every one dollar of the grant funds.

" PLANNING GRANTS

"SEC. 355. The Secretary may award a grant under this part to an Hispanic-serving institution for a period of one year for the purpose of preparing a technological needs assessment, plan, and application for a grant under section 352(a).

"APPLICATIONS

Section 356. (a) APPLICATIONS.--Each Hispanic-serving institution desiring to receive assistance under this part shall submit an application in accordance with the requirements of section 381.

"(b) ADDITIONAL INFORMATION.--For purposes of this part, an application under subsection (a) shall also include--

"(1) a 5-year plan for improving the assistance provided by the Hispanic-serving institution to Hispanic and other low-income students; and

"(2) measurable goals for the institution's proposed activities, including a plan of how the applicant intends to achieve those goals.

"(c) PRIORITY.--The Secretary shall give priority to applications for programs that would strengthen the technological capabilities of Hispanic-serving institutions, as determined by the Secretary.

"PART E --STRENGTHENING TRIBAL COLLEGES AND UNIVERSITIES
"FINDINGS; PURPOSE

"SEC. 361. (a) FINDINGS.--The Congress finds that:

"(1) Indian tribes are domestic dependent nations under the protection of the United States, and that as governments, Indian tribes have the authority to administer educational institutions.

"(2) Historically, the education system in the United States has encouraged American Indian and Alaska Native students to forgo their Native language and culture in favor of Western language and culture, and those educational practices have been damaging Indian students and their communities.

"(3) In general, American Indian and Alaska Native students have a lower economic status than students in the Nation as a whole; and roughly twice as many American Indian and Alaska Native youth live below the poverty line as youth in the general population.

"(4) In general, American Indian and Alaska Native youth have a lower educational attainment level than youth in the Nation as a whole, and only 8.9% of American Indian and Alaska Native students earn a four-year bachelor's degree or higher compared to 20.3% in the Nation as a whole.

"(5) Tribal Colleges and Universities have been established by tribal governments to make post-secondary educational opportunities available in Native American communities, including GEDs; remedial instruction; and academic, vocational, and technical programs similar to those offered by public and private colleges and universities.

"(6) Tribal Colleges and Universities are well-suited to serve Native American communities because they are physically located in the communities that they serve and are attuned to Native languages and cultures.

"(7) Tribal Colleges and Universities are important centers for learning Native languages and cultures that fulfill a vitally important mission in preserving unique and valuable information concerning Native languages and cultures.

"(8) Tribal Colleges and Universities have been hampered by a lack of adequate and stable funding resources because, unlike State land grant institutions, they do not have large resource bases to draw on, and they generally do not receive State funding. This lack of funding seriously threatens the continued viability of some of these institutions.

"(9) Based on the United States' unique trust responsibility to Native Americans, financial assistance to establish, support, and strengthen the physical plants, financial management, academic resources, and endowments of the Tribal Colleges and Universities is appropriate to enhance these institutions and to expand their capacity to serve Native American students.

"(b) PURPOSE.--It is the purpose of this part to improve the academic quality, technological capacity, institutional management, and fiscal stability of eligible Tribal Colleges and Universities in order to strengthen their ability to make a substantial contribution to the higher education resources of the Nation.

"PROGRAM AUTHORIZED

"SEC. 362.(a) IN GENERAL.--From the sums available for this part under section 390(a)(6) for any fiscal year, the Secretary may award grants to Tribal Colleges and Universities that have an application approved under section 381 in order to assist such institutions plan, develop, and implement activities that promise to strengthen the institution.

"(b) DURATION.--Grants under this part shall not exceed five years.

"(c) ELIGIBILITY.--To be eligible to receive assistance under this part, a Tribal College or University must--

"(1) be an eligible institution under section 312(b); and

"(2) meets the definition of Tribal College or University under section 363(3).

"(d) LIMITATIONS.--A Tribal College or University awarded a grant under this part, other than under section 365, shall not be eligible for another grant under this part for two consecutive years following the completion of the last grant it received under this part.

"(e) SPECIAL CONSIDERATIONS.--In making awards under this part, the Secretary shall give special consideration to any Tribal College or University--

"(1) that has endowment funds (other than any endowment fund built under section 332 of this Act as in effect on September 30, 1986, and under part B) the market value of which, per full-time equivalent student, is less than the average current market value of the endowment funds, per full-time equivalent student (other than any endowment fund built under section 332 of this Act as in effect on September 30, 1986, and under part B) at similar institutions; and

"(2) that has expenditures, per full-time equivalent student, for library materials that is less than the average of the expenditures for library materials, per full-time equivalent student, by other similarly situated institutions.

"DEFINITIONS

"SEC. 363. For the purposes of this part--

"(1) the term 'Indian' means a person who is a member of an Indian tribe as defined herein;

"(2) the term 'Indian tribe' means any Indian or Alaska Native tribe, band, nation, pueblo, village or community that the Secretary of the Interior acknowledges to exist as an Indian tribe under the Federally Recognized Indian Tribe List Act, 25 U.S.C. 479a;

"(3) the term 'Tribal College and University' means an institution--

"(A) cited in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note);

"(B) any other institution that qualifies for funding under the Tribally Controlled Community College Assistance Act of 1978 (25 U.S.C. 1801 et seq.); or

"(C) that is a Navajo Community College, authorized in the Navajo Community College Assistance Act of 1978 (25 U.S.C. 640a note); and

"(4) The term 'institution of higher education' means an institution of higher education as defined by section 1201(a) of this Act.

"AUTHORIZED ACTIVITIES

"SEC. 364. (a) USES OF FUNDS.--Grants under this part shall be used by Tribal Colleges and Universities for one or more of the following:

"(1) the acquisition of scientific or laboratory equipment for educational purposes, including research and instructional purposes.

"(2) the renovation and improvement in classroom, library, laboratory, and other instructional facilities.

"(3) the support of faculty exchanges, faculty development, and faculty fellowships to assist in attaining advanced degrees in their field of instruction.

"(4) curriculum development and academic instruction .

"(5) the acquisition of library books, periodicals, microfilm, and other educational materials.

"(6) funds and administrative management, and acquisition of equipment for use in strengthening funds management.

"(7) joint use of facilities such as libraries and laboratories.

"(8) academic tutoring and counseling programs and student support services.

"(9) investing in the technological improvement of the institution's administration of funds made available to students under title IV of the Act.

"(10) the establishment or improvement of an endowment fund.

"(b) LIMITATIONS.--(1) A Tribal College or University may not use more than 20 percent of its grant under this part for any fiscal year to establish or improve an endowment fund.

"(2) In order for a Tribal College or University to use its funds under this part to establish or improve an endowment fund, it shall provide an institutional match, using non-Federal funds, that is at least equal to one dollar of institutional funds for every one dollar of the grant funds.

"PLANNING GRANTS

"SEC. 365. The Secretary may award a grant under this part to a Tribal College or University for a period of one year for the purpose of preparing a technological needs assessment, plan, and application for a grant under section 362(a).

"APPLICATIONS

Section 366. (a) APPLICATIONS.--Each Tribal College or University desiring to receive assistance under this part shall submit an application to the Secretary in accordance with the requirements of section 381.

"(b) ADDITIONAL INFORMATION.--For purposes of this part, an application under subsection (a) shall also include--

"(1) a 5-year plan for improving the assistance provided by the Tribal College or University to Indian students; and

"(2) measurable goals for the institution's proposed activities, including a plan of how the applicant intends to achieve those goals.

"(c) PRIORITY.--The Secretary shall give priority to applications for programs that would strengthen the technological capabilities of Tribal Colleges and Universities, as determined by the Secretary.

"PART F--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAMS
"PURPOSE, PROGRAM AUTHORIZATION

"SEC. 371. (a) PURPOSE.--It is the purpose of this part to continue the authority of the Department to operate the Minority Institutions Science Improvement Program created under section 3(a)(1) of the National Science Foundation Act of 1950 and transferred to the Department by section 304(a)(1) of the Department of Education Organization Act.

"(b) PROGRAM AUTHORIZED.--The Secretary shall, in accordance with the provisions of this part, carry out a program of making grants to institutions of higher education that are designed to effect long-range improvement in science and engineering education at predominantly minority institutions and to increase the participation of underrepresented ethnic minorities, particularly minority women, in scientific and technological careers.

"GRANT RECIPIENT SELECTION

"SEC. 372.(a) ESTABLISHMENT OF CRITERIA.--Grants under this part shall be awarded on the basis of criteria established by the Secretary by regulations.

"(b) PRIORITIES.--The Secretary shall give priority to applicants that have not previously received funding from the Minority Institutions Science Improvement Program and to previous grantees with a proven record of success, as well as to applications that contribute to achieving balance among projects with respect to geographic region, academic discipline, and project type.

"(c) CRITERIA.--In establishing criteria under subsection (a), the Secretary may consider the following selection criteria in making grants:

"(1) plan of operation.

"(2) quality of key personnel.

"(3) budget and cost effectiveness.

"(4) evaluation plan.

"(5) adequacy of resources.

"(6) identification of need for the project.

"(7) potential institutional impact of the project.

"(8) institutional commitment to the project.

"(9) expected outcomes.

"(10) scientific and educational value of the proposed project.

"USE OF FUNDS

"SEC. 373.(a) TYPES OF GRANTS.--Funds under this part may be made available as--

"(1) institutional grants (as defined in section 374(1));

"(2) cooperative grants (as defined in section 374(2));

"(3) design projects (as defined in section 374(3)); or

"(4) special projects (as defined in section 374(4).

"(b) AUTHORIZED USES FOR EACH TYPE OF GRANT.--(1) The authorized uses of funds made available as institutional grants include (but are not limited to)--

"(A) faculty development programs; and

"(B) development of curriculum materials.

"(2) The authorized uses of funds made available as cooperative grants include (but are not limited to)--

"(A) assisting institutions in sharing facilities and personnel;

"(B) disseminating information about established programs in science and engineering;

"(C) supporting cooperative efforts to strengthen the institution's science and engineering programs; and

"(D) carrying out a combination of any of the activities in subparagraphs (A) through (C).

"(3)(A) The authorized uses of funds made available as design projects include (but are not limited to)--

"(i) developing planning, management, and evaluation systems; and

(ii) developing plans for initiating scientific research and for improving institutions' capabilities for such activities.

"(B) Funds used for design project grants may not be used to pay more than 50 percent of the salaries during any academic year of faculty members involved in the project.

"(4) The authorized uses of funds made available as special projects include (but are not limited to)--

"(A) advanced science seminars;

"(B) science faculty workshops and conferences;

"(C) faculty training to develop specific science research or education skills;

"(D) research in science education;

"(E) programs for visiting scientists;

"(F) preparation of films or audio-visual materials in science;

"(G) development of learning experiences in science beyond those normally available to minority undergraduate students;

"(H) development of pre-college enrichment activities in science; and

"(I) any other activities designed to address specific barriers to the entry of minorities into science.

"DEFINITIONS

"SEC. 374. For the purpose of this part--

"(1) The term 'institutional grant' means a grant that supports the implementation of a comprehensive science improvement plan, which may include any combination of activities for improving the preparation of minority students for careers in science.

"(2) The term 'cooperative grant' means a grant that assists groups of nonprofit accredited colleges and universities to work together to conduct a science improvement program.

"(3) The term 'design projects' means projects that assist minority institutions that do not have their own appropriate resources or personnel to plan and develop long-range science improvement programs.

"(4) The term 'special projects' means--

"(A) a special project grant to a minority institution which support activities that--

"(i) improve the quality of training in science and engineering at minority institutions; or

"(ii) enhance the minority institutions' general scientific research capabilities; or

"(B) a special project grant to any eligible applicant which supports activities that--

"(i) provide a needed service to a group of eligible minority institutions; or

"(ii) provide in-service training for project directors, scientists, and engineers from eligible minority institutions.".

SEC. 302. Titles VII and part B of title X of the Act are repealed.

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Last updated: May 29, 2002 by [pss]

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