(ii) Deducted from the total project costs for the purpose of determining the net costs on which the Federal share of costs will be based.

(2) Royalties received after the completion or termination of grant support shall be disposed of as follows:

(i) Patent royalties shall be governed by agreements between the Assistant Secretary for Health, Department of Health and Human Services, and the grantee pursuant to the Department's patent regulations (45 CFR Parts 6 and 8).

(ii) Copyright royalties may be retained by the grantee, unless the terms and conditions of the grant or a specific agreement negotiated between the Secretary and the grantee provide otherwise, except State or local government grantees which receive royalties in excess of $200 a year shall return the Federal share of the excess amount (computed by applying the percentage of Federal participation in the cost of the grant supported project to the excess amount) to the Federal Government, unless specific agreement provides otherwise.

(c) Grant closeout—(1) Date of final accounting. In addition to such other special and periodic accounting as the Secretary may require, a grantee shall render with respect to each approved project a full account, as provided herein, as of the termination of grant support which shall be at the end of the project period or the date of any termination of grant support pursuant to the applicable provisions of Subpart M of 45 CFR Part 74 and the terms and conditions of the grant award.

(2) Final settlement. There shall be payable to the United States as final settlement with respect to each approved project the total sum of (i) any amount not accounted for pursuant to paragraph (a) of this section and (ii) any other amounts due pursuant to the applicable provisions of 45 CFR Part 74 and the terms and conditions of the grant award. Such total sum shall constitute a debt owed by the grantee to the United States and shall be recovered from the granteee or its successors or assignees by set-off or other action as provided by law.

from different disciplines and the administrative costs of carrying out multidisciplinary health services research, evaluations and demonstrations respecting:

(1) The accessibility, acceptability, planning, organization, distribution, technology, utilization, quality, and financing of health services and systems;

(2) The supply and distribution, education and training, quality, utilization, organization, and cost of health manpower; and

(3) The design, construction, utilization, and cost of facilities and equipment.

(b) Additional support awarded under this subpart, for National Special Emphasis Centers is intended to support staff, research, demonstration, and evaluation projects, training programs, and administrative costs for activities appropriate to the particular area of special emphasis.

As used in this subpart:

(a) "Act" means the Public Health Service Act, as amended.

(b) "Secretary" means the Secretary of Health and Human Services and any other officer or employee of the Department of Health and Human Services to whom the authority involved has been delegated.

(c) "Nonprofit" as applied to a private entity, means that no part of the net earnings of such entity inures or may lawfully inure to the benefit of any shareholder or individual.

(d) "Project period" means the total period of time for which support for a project has been approved as specified in the grant award document. Such approval does not commit or obligate the Federal government to any additional, supplemental or continuation support beyond the current budget period.

(e) "Budget period" means the interval of time (usually 12 months) into which the project has been divided for budgetary and reporting purposes and for which the Government has made a financial commitment to fund a particular project.

(f) "Center" means a Health Services Research Center supported under this subpart.

(g) "National Special Emphasis Center" mean a Center which directs a substantial portion of its efforts in research training, technical assistance, and other appropriate activities to a particular aspect of health care delivery specified by the Secretary and requiring a particular kind of scientific expertise. Such Centers shall include:

(1) A Health Care Technology Center, which shall focus on all forms of technology, including computers and electronic devices, and its applications in health care delivery;

(2) A Health Care Management Center, which shall focus on the improvement of administration and organization in the health field, the training and retraining of administrators of health care enterprises, and the development of leaders, planners and policy analysts in the health field; and

(3) Such other Centers as the Secretary shall deem appropriate, provided that formal notification of the competition for a grant award and designation as a National Special Emphasis Center under this subpart shall be made at least ninety (90) days prior to the closing date for filing applications for Center grants.

(h) "State" means one of the 50 States, the District of Columbia, Puerto Rico, Guam, Virgin Islands, American Samoa, and the Trust Territory of the Pacific Islands.

(i) "Grantee" means the public or nonprofit private entity that receives a grant under section 305(d) of the Act and this subpart and assumes legal and financial responsibility for the funds awarded and for the performance of the grant supported activity.

(j) "Director" means a single individual, designated by the grantee in the grant application and approved by the Secretary, who is responsible for the scientific, technical, and administrative direction of the Center.

§ 67.103 Eligibility.

Any public or nonprofit private entity located in a State is eligible to apply for a grant under this subpart; Provided, That no entity is eligible for

assistance for more than one Center at any one time.

§ 67.104 Application.

(a) An application for a grant under this subpart shall be submitted to the Secretary at such time and in such manner as the Secretary may prescribe.1

(b) The application shall be executed by an individual authorized to act for the applicant and to assume on behalf of the applicant the obligations imposed by the Act, the regulations of this subpart and the terms and conditions of any grant award.

(c) In addition to such other pertinent information as the Secretary may require, an application for a grant under this subpart shall contain the following:

(1) A description of the manner in which the applicant intends to plan and establish a Center, including a timetable for making the proposed Center operational;

(2) A description of the staff of the proposed Center, including their qualifications, academic training, responsibilities and functions;

(3) A description of the manner in which the staff will be organized and supervised to carry out the proposed activities of the Center;

(4) A description of the applicant's plan for providing at the Center educational opportunities to students, health professionals and other appropriate individuals;

(5) A description of the applicant's plan for sharing the knowledge and expertise of the Center's staff by providing technical assistance to appropriate organizations and individuals and through other forms of public and community services;

(6) A description of the applicant's plan for disseminating the Center's research findings to appropriate forums;

(7) A description of the need of the region in which the proposed Center will be located for a Center and a description of the areas of research

'Applications and instructions are available from the Director, Review and Advisory Services, National Center for Health Services Research, Health Resources Administration, 5600 Fishers Lane, Rockville, Maryland 20852, Room 15-35.

which the applicant expects the Center to address by virtue of particular problems and characteristics of the local health care delivery system;

(8) A description of the organizational structure of the applicant and the nature of any relationship with and access to health care delivery systems in which research activities can be undertaken and research findings tested;

(9) A description of the procedures by which research projects will be selected, including the methodology to be utilized in ensuring that such projects will be selected on the basis of (i) the regional or national importance of the problem to be addressed, (ii) the unique potential for definitive research on a problem, and (iii) opportunities for local application of the research findings;

(10) A budget which allocates the total support both by type of expenditure and by the activities identified in paragraphs (c) (1), (4), (5), (6), and (9) of this section;

(11) A description of the resources which the applicant plans to make available to the proposed Center;

(12) A description of the proposed Center's relationships with other academic institutions and research organizations with regard to the impact of such relationships on the quality and scope of the Center's research and the responsiveness of its project selection to local, regional and national priorities; and

(13) Assurances satisfactory to the Secretary that the Center will meet the operational requirements of § 67.107 when it becomes operational.

(d) In addition to the material specified in paragraph (c) of this section, an application for a grant with a designation as a National Special Emphasis Center shall also contain the following:

(1) A description of the areas of research which the applicant expects the Center to address by virtue of the particular problems and characteristics of the field of special emphasis;

(2) A description of the nature of any relationships with and access to health care delivery systems that would enhance the ability to carry out research, evaluations, and demonstra

such form as the Secretary may prescribe.

(b) Determination of grant amount. The amount of any grant shall be determined by the Secretary on the basis of his estimate of the sum necessary for all or a designated portion of the direct costs of the Center plus an additional amount for the indirect costs, if any, which will be calculated by the Secretary either:

(1) On the basis of the estimate of the actual indirect costs reasonably related to the project; or

(2) On the basis of a percentage of all or a designated portion of the estimated direct costs of the project when there are reasonable assurances that the use of such percentage will not exceed the approximate actual indirect costs.

Such award may include an estimated provisional amount for indirect costs or for designated direct costs such as fringe benefit rates subject to upward (within the limits of available funds) as well as downward adjustments to actual costs when the amount properly expended by the grantee for provisional items has been determined by the Secretary.

(c) Supplemental awards. The Secretary may make supplemental awards during the course of any budget period of an approved Center where the Secretary finds on the basis of the applicant's written request and such progress and accounting reports as the Secretary may require that the amount of the award initially approved was less than the amount necessary to carry out the approved Center activities for that period. The Secretary may also make a supplemental award where in his judgment such an award is necessary for the preparation of data in suitable form for transmittal in accordance with § 67.113. However,

where the making of any supplemental award would result, in any budget period, in supplemental awards exceeding twenty per centum (20%) of the original award for direct Center costs in that budget period, the Secretary will prior to making such award obtain the recommendation of the review panel which evaluated the Center's initial application. The review panel shall submit a written report to

awards. Where a grantee has filed an application for continuation support and within the limits of funds available for this purpose, the Secretary may make a grant award for an additional budget period for any previously approved Center where the Secretary finds on the basis of such progress and accounting reports as may be required that the Center's activities during the current budget period justify continued support of the project for an additional budget period. Where the Secretary determines to continue support, the amount of grant award shall be determined in accordance with paragraph (b) of this section. Where the Secretary determines not to continue a project for an additional budget period, the grantee will be notified in writing before the end of the current budget period. In addition, where he determines such support is necessary, the Secretary may provide financial support for the orderly phase-out of the supported activity.

§ 67.107 Operational requirements.

(a) Any Center supported under this subpart shall:

(1) Have a full-time Director who possesses a demonstrated capacity for sustained productivity and leadership in health services research, demonstrations, and evaluations. The Director shall oversee the research program and the general operation of the Center and shall to the extent practicable directly participate in research activities. Where the Director of a Center becomes unable to function in such capacity, the grantee shall so inform the Secretary as quickly as possible. Within five (5) days, the grantee shall designate an Interim Director and inform the Secretary of the name of such individual. Within ninety (90) days, the grantee shall nominate an Acting Director who, if approved by the Secretary, shall serve in that capacity until the end of the budget

proval of an application shall not preclude its reconsideration if the application is resubmitted in the same or a revised version at a later date.

§ 67.106 Grant awards.

(a) General. (1) Within the limits of funds available for such purpose, the Secretary may award a grant to those applicants whose approved proposed Centers will in his judgment best promote the purposes of section 305(d) of the Act and this subpart, taking into consideration:

(i) Recommendations made pursuant to § 67.105.

(ii) The appropriateness of the proposed budget and the extent to which the fiscal plan provides assurance that effective use would be made of grant funds.

(iii) The capability of the applicant as demonstrated by organizational and institutional arrangements to successfully operate the proposed Center.

(iv) The qualifications, achievements, and commitment of the senior personnel.

(v) The strength and scientific integrity of the general program and approach of the proposed Center.

(vi) The nature of the sponsoring institution's commitment to the proposed Center and the relative importance it ascribes to the endeavor.

(vii) The past success and future potential of the proposed Center's personnel in receiving permanent and project related support from other

sources.

(viii) The extent to which a proposed Center's planning process incorporates the concerns of pertinent constituents and reflects an awareness of significant research problems in health services.

(ix) The strength of the relationship the proposed Center has developed with components of a local health care system in which specific projects will be conducted and research findings tested.

(x) The integration of disciplinary interests within the proposed Center and the coordination of the research program with training and educational efforts.

However, no grant may be awarded which will result in more than twenty

per centum (20%) of all Centers supported under this subpart being located in any one HHS region, except that this restriction shall not operate to proscribe awarding at least two grants under this subpart to institutions located in any single HHS region; Provided, That to the extent feasible, the Secretary will make such grants as will result in at least six Centers being operational in each fiscal year.

(2) In making any grant award the Secretary may add additional conditions to or require specific modifications in the Center as proposed in the application including a different level of grant support from that requested in the application. In such cases the Secretary will obtain either the written agreement of the applicant to proceed on such basis prior to making any grant award or such condition or modification will appear on the grant award notice.

(3) All grant awards shall be in writing. The Notice of Grant Awarded shall set forth the amount of funds awarded for the conduct of the Center during the first budget period and the amount of support recommended for the remainder of the project period.

(4) The project period for any grant under this subpart shall be specified in the Notice of Grant Awarded and shall begin no later than nine months following the date of such award. In no case may a project period exceed five years; Provided, That the approved project period may be extended for a period not to exceed six months beyond five years where the Secretary determines on the basis of a request by the grantee prior to the termination of the currently active grant that such additional time is needed to permit the use of funds previously awarded but not expended. No additional support may be awarded for this period.

(5) Neither the approval of any application nor the awarding of any grant shall commit or obligate the Federal Government in any way to make any additional, supplemental, continuation or other awards with respect to the Center or any part of the Center. For continuation support, grantees must make separate application annually and at such times and in