person from entering into an agreement with the Secretary pursuant to section 823 (h) of the Act.

[39 FR 16473, May 9, 1974; 39 FR 18098, May 23, 1974]

§ 57.317 Repayment of loans made subsequent to November 17, 1971 for failure to complete program of study.

In the event the Secretary undertakes to repay educational loans pursuant to section 830 of the Act, he shall utilize the following criteria in making his determination as to each applicant's eligibility:

(a) An applicant will be considered to have failed to complete the course of study in nursing for which an eligible educational loan was made upon certification by a school of nursing that the individual ceased to be enrolled in such school subsequent to November 17, 1971;

(b) An applicant will be considered to be in exceptionally needy circumstances if, upon comparison of the income and other financial resources of the applicant with his expenses and financial obligations, the Secretary determines that repayment of such loan would constitute a serious economic burden on the applicant. In making such determination the Secretary shall take into consideration the net financial assets of the applicant and the relationship of the income available to the applicant to the lowincome levels published annually by the Secretary pursuant to paragraph (c) of this section;

(c) An applicant will be considered to be from a low-income family if the applicant comes from a family with an annual income below a level based on low-income thresholds by family size published by the U.S. Bureau of the Census, adjusted annually for changes in the Consumer Price Index and multiplied by a factor to be determined by the Secretary for adaptation to this program, and the family has no substantial net financial assets. Such factor and income levels as adjusted will be published annually by the Secretary in the FEDERAL REGISTER.

(d) An applicant will be considered to be from a disadvantaged family if the individual comes from a family in which the annual income minus unusual expenses which contribute to the economic burdens borne by the family does not ex

ceed the low-income levels published by the Secretary pursuant to paragraph (c) of this section and the family has no substantial net financial assets;

(e) An applicant will be considered as not having resumed his nursing studies within two years following the date the individual ceased to be a student upon a certification so stating from the applicant; and

(f) An applicant will be considered as not reasonably expected to resume his nursing studies within two years following the date upon which he terminated such studies based upon consideration of the reasons for the applicant's failure to complete these studies, taking into account such factors as academic, medical, or financial difficulties: Provided, however, That the Secretary shall only repay educational loans made subsequent to November 17, 1971.

(a) Record and reports. (1) Each Federal Capital Contribution and Federal Capital Loan shall be subject to the condition that the school shall maintain such records, and file with the Secretary such reports relating to the operation of the Nursing Student Loan Fund or Funds, as the Secretary may find necessary to carry out the purposes of the Act and the regulations. Where any school has both a Fund established with Federal Capital Contributions and a Fund established with Federal Capital Loans, records shall be kept separately for each Fund. All such records shall be retained until such time as agreed upon with the Secretary that there is no further need for retention and must not be destroyed regardless of completion of a Federal audit.

(2) The following individual student records not related to the operation of the Fund must be retained for five years after the individual student has ceased to be at least a half-time student:

(i) Approved or disapproved student applications for assistance;

(ii) Documentation of the financial need of applicants;

(iii) Reasons for approval or disapproval of applications, and

(iv) Such other records as the Secretary may prescribe.

Such individual student records may be destroyed at the end of such five-year period except that in all cases where

questions have arisen as a result of Federal audit, such records shall be retained until resolution of all such questions.

(b) Inspection and audit. Any application for a Federal Capital Contribution or a Federal Capital Loan shall constitute the consent of the applicant school to inspection and fiscal audit, by the Secretary and the Comptroller General of the United States or any of their duly authorized representatives, of the fiscal and other records of the applicant school which relate to such Contribution or Loan.

§ 57.319 Additional conditions.

The Secretary may with respect to any agreement entered into with any school pursuant to § 57.305, impose additional conditions prior to or at the time of any award when in his judgment such conditions are necessary to assure or protect advancement of the purposes of the agreement, the interest of the public health or the conservation of funds awarded.

Whenever the Secretary finds that a participating school has failed in a material respect to comply with the applicable provisions of the Act or the regulations of this subpart he may, on reasonable notice to the school, withhold further payments of Federal Capital Contributions or Federal Capital Loans, and take such other action, including the termination of any agreement, as he finds appropriate to carry out the purposes of the applicable provisions of the Act and regulations. In such case no further expenditures shall be made from the Nursing Student Loan Fund or Funds involved until the Secretary determines that there is no longer any such failure of compliance.

Subpart E-Grants for Construction of

Nurse Training Facilities

AUTHORITY: The provisions of this Subpart E issued under sec. 215, 58 Stat. 690, as amended; 42 U.S.C. 216.

SOURCE: The provisions of this Subpart E appear at 37 F.R. 20548, Sept. 30, 1972, unless otherwise noted.

§ 57.401 Applicability.

The regulations of this subpart are applicable to the award of grants under section 801 of the Public Health Service Act (42 U.S.C. 296) for construction grants to expand and improve nurse training facilities.

As used in this subpart:

(a) All terms not defined herein shall have the same meaning as given them in section 843 of the Act.

(b) "Act" means title VIII of the Public Health Service Act.

(c) "Secretary" means the Secretary of Health, Education, and Welfare and any other officer or employee of the Department of Health, Education, and Welfare to whom the authority involved has been delegated.

(d) "Construction grant" and "grant” mean a grant of funds for the construction of an approved project as authorized under Part A of the Act and in accordance with these regulations.

(e) "Project" means all or so much of the teaching facilities including necessary equipment, with respect to which a grant is requested under Part A of the Act.

(f) "New school" means a school which, at the time of filing an application for a construction grant under this subpart has not graduated a class because of an insufficient period of operation.

(g) "Completion of construction” means that date on which the Secretary determines on the basis of certification by the grantee that the project is completed: Provided, however, In the event the applicant occupies the project prior to the date of such certification, the Secretary shall be immediately notified of such occupancy, and "completion of construction" shall be deemed to have occurred with respect to the project as of the date of such occupancy.

(h) "Equipment" includes those items which are necessary for functioning of the facility or portion thereof with respect to which the grant is made, but does not include items of current operating expense or consumed in use such as glassware, chemicals, food, fuel, drugs, paper, printed forms, books, pamphlets, periodicals, and disposable housekeeping items.

(1) "Council" means the National Advisory Council on Nurse Training (established by section 841(a) of the Act). § 57.403 Eligibility.

In order to be eligible for a grant under this subpart, an applicant shall:

(a) Meet the requirements of section 802 of the Act;

(b) Be located in a State;

(c) Be accredited as provided in section 843 (f) of the Act; and

(d) In the case of an application with respect to interim facilities, provide assurance satisfactory to the Secretary that such facilities are designed to provide teaching space on a short term (less than 10 years) basis while facilities of a more permanent nature are being planned and constructed.

(e) Provide its assessment of the environmental impact of the project as called for by section 102(2)(c) of the National Environmental Policy Act of 1969 (42 U.S.C. 433(2) (c)).

(f) Furnish its evaluation of the project site in accordance with the terms and provisions of Executive Order 11296, 31 F.R. 10663 (August 10, 1966) relating to the evaluation of flood hazards in locating federally owned or financed facilities.

Priority in approving applications for construction grants shall be determined in accordance with the provisions of section 802(c) of the Act, and the following: (a) The availability of training opportunities for students; (b) the relative effectiveness of the project in carrying out the purposes of Part A of the Act at the least relative cost to the Government; and (c) the relative ability of the applicant to make efficient and productive use of the facility constructed, consistent with the intent of Part A of the Act.

§ 57.405 Percentage of participation; amount of construction grant.

(a) Percentages of maximum participation. (1) The amount of any construction grant under Part A of the Act and pursuant to this subpart may not exceed 67 percent of the necessary cost of construction of a project as determined by the Secretary, except: (1) In the case of (a) a project with respect to a new school; (b) a project constituting new facilities, which will result in a major expansion of training capacity at an existing school; (c) all or so much of a project constituting a major remodeling or renovation of an existing facility which is required by a school to meet an increase in student enrollment; or (d) where the Secretary determines that unusual circumstances require a larger percent of participation in order to carry out the intent of Part A of the Act, the amount of grant made therefor may not

exceed 75 percent of the necessary cost of construction.

(2) For purposes of subparagraph (1) of this paragraph: (1) A major expansion of training capacity at an existing school shall be construed to mean that the full-time first-year enrollment at such school, upon completion, will exceed by not less than 40 students or 40 percent, whichever is greater, the highest full-time first-year enrollment at such school for any of the 5 full school years preceding the year in which the application for a construction grant is made: Provided however, That where the Secretary determines with regard to a particular school that the increased enrollment specified hereinabove cannot be achieved until the second or third full school year after completion of construction the Secretary may deem the requirements for a major expansion of training capacity as being met for each of the first or second full school years, respectively, after completion of construction if the increased first-year enrollment will equal such amount in excess of 5 percent or five students, whichever is greater, as the Secretary may specify; (ii) a major remodeling or renovation of a facility shall include only that portion of remodeling or renovation which is necessary to meet an increase in student enrollment, which increase shall be construed to mean that, during the first full school year after completion of construction and for each of the 9 school years thereafter the firstyear enrollment will exceed the highest first-year enrollment at such school for any of the 5 full school years preceding the year in which the application is made by not less than the mandatory increase as provided for under section 806 (e) (1) (A) of the Act; (iii) the Secretary may determine that unusual circumstances exist (a) where a school is located in a geographical area of the United States with a critical shortage of nursing personnel (as determined by the Secretary with the advice of Council); (b) where the project is found to be vital in preventing the curtailment of enrollment at a school; or, (c) other relevant factors consistent with this subpart and the purposes of part A of the Act. The Secretary shall make his determination with respect to unusual circumstances on the basis of such additional information and assurances as he deems necessary to make such a determination.

(b) Amount of construction grantless than maximum. In determining the amount of a construction grant within the percentage limitation as set forth in paragraph (a) of this section, the Secretary shall take into consideration the most effective use of available Federal funds to further the purposes of Part A of the Act, and the needs of the applicant cant.

§ 57.406 Nondiscrimination.

(a) Executive Order 11246. Each construction contract is subject to the condition that the applicant shall comply with the requirements of Executive Order 11246, 30 F.R. 12319 (Sept. 24, 1965), as amended, relating to nondiscrimination in construction contract employment, and the applicable rules, regulations, and procedures prescribed pursuant thereto.

(b) Civil Rights Act of 1964. Attention is called to the requirements of title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C. 2000d et seq.) which provides that no person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. A regulation implementing such title VI, applicable to grants for construction of nurse training facilities, has been issued by the Secretary with the approval of the President (45 CFR Part 80).

(c) Discrimination on the basis of sex prohibited. Attention is called to the requirements of section 845 of the Act and to 45 CFR Part 83 which together provide that the Secretary may not make a grant, loan guarantee, or interest subsidy payment under the Act to, or for the benefit of any school of nursing or any other entity unless the application for the grant, loan guarantee, interest subsidy payment contains assurances satisfactory to the Secretary that the school or entity will not discriminate on the basis of sex in the admission of individuals to its training programs. § 57.407 Terms and conditions.

In addition to any other requirements imposed by law or determined by the Secretary to be reasonably necessary with respect to particular projects to fulfill the purpose of the grant, each construction grant shall be subject to the condition that the applicant shall fur

nish and comply with the following as

surances:

(a) Title. That applicant has a fee simple or such other estate or interest in the site, including necessary easements and rights-of-way, sufficient to assure for a period not less than 20 years (or in the case of interim facilities for the period constituting the estimated useful life of such facilities) undisturbed use and possession for the purpose of the construction and operation of the

facility.

(b) Competitive bids. (1) That the approval of the Secretary shall be obtained before the project is advertised or placed on the market for bidding and that such approval shall include a determination by the Secretary that the final plans and specifications conform to the minimum standards of construction and equipment as set forth in Appendix A of these regulations. (2) That, except as otherwise provided by State or local law, all contracting for construction (including the purchase and installation of built-in equipment) shall, except as provided in subparagraph (3) of this paragraph, be on a lump sum fixed-price basis, and contracts will be awarded on the basis of competitive bidding obtained by public advertising with award of the contract to the lowest responsive and responsible bidder. The provision for exceptions based on State or local law shall not be invoked to give local contractors or suppliers a percentage preference over nonlocal contractors bidding for the same contract. Such practices are precluded by this paragraph. (3) A substitute bidding procedure of selective solicitation with response from three or more bidders may be used if: (1) The applicant requests and justifies the use of the procedure; (ii) the procedure is consistent with State and local laws; and (iii) the Secretary determines that it is necessary to limit bidding to contractors of proven competence due to the complexity or specialty of the project, or that the time element is of primary consideration. When this bidding procedure is used, the applicant shall establish reasonable bid prequalification standards for contractors. The applicant shall then accept and consider bids from any contractor who requests permission to bid and who is determined by the applicant to meet these prequalification standards. Adequate time (normally 30 days) shall be allowed for contractors to prepare bids and award of construction contracts

shall be made to the lowest qualified and responsible bidder whose bid is considered fully responsive to the bid invitation.

(c) Approval of estimated cost. That applicant will enter into no construction contract or contracts, with respect to the project or any portion thereof, where the costs exceed estimates in the application for such work, without the prior approval of the Secretary.

(d) Relocation assistance. That, in the case of a public applicant with an approved project which involves the displacement of persons or businesses on or after January 2, 1971, whose real property has or will be taken, the applicant shall comply with the provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (Public Law 91-646) and the applicable regulations issued thereunder; (45 CFR Part 15, as added by 36 F.R. 18838) (Sept. 22, 1971).

(e) Costs in excess of approved costs. The applicant will finance all costs in excess of the estimated costs approved in the application and submit to the Secretary for prior approval any changes that substantially alter the scope of the educational program, or of the work, functions, utilities, or safety of the facility.

(f) Completion responsibility. That applicant will construct the project, or cause it to be constructed, to final completion in accordance with the grant application and approved plans and specifications.

(g) Records and accounts. That applicant will maintain adequate and separate accounting and fiscal records and accounts for all funds provided from any source to pay the cost of the project, and permit audit of such records and accounts at any reasonable time. All records will be retained for 3 years after the close of the fiscal year in which the construction is completed. Such records may be destroyed at the end of such 3-year period if the applicant has been notified of the completion of the Federal audit by such time. If the applicant has not been so notified by the end of such 3-year period, such records will be retained (1) for 5 years after the close of the fiscal year in which the construction is completed or (2) until the grantee is notified of the completion of the Federal audit, whichever is earlier. In all cases where audit questions have arisen before the expiration of such 5-year period,

records shall be retained until resolution of all such questions.

(h) Progress reports. That applicant will furnish progress reports and such other information as the Secretary may require.

(i) Construction supervision. That applicant will provide and maintain competent and adequate architectural or engineering supervision and inspection at the construction site to insure that the completed work conforms with the plans and specifications.

(j) Non-Federal share. That sufficient funds will be available to meet the nonFederal share of the cost of constructing the facility.

(k) Funds for operation. That sufficient funds will be available after construction is completed for effective use of the facility for the purposes for which it is being constructed.

(1) Authorized uses. That the facility shall be used for the purposes for which the application has been made; that is, the nursing program(s) have exclusive use of administrative, faculty and supporting space, and priority on teaching space and equipment is allocated in accordance with the application.

(m) Prohibition against religious use. That no portion of the facility constructed with funds under Part A of the Act will be used for sectarian instruction or as a place for religious worship for so long as such facility has substantial value.

(n) Expansion of training capacity. That in the case of any application (including an application with respect to advanced training) to expand the training capacity of an existing school, the first-year enrollment at such school during the first full year after the completion of the construction and for each of the 9 school years thereafter shall exceed the highest first-year enrollment at such school for any of the 5 full years preceding the year in which the application is made by at least 5 percent of such highest first-year enrollment, or by five students, whichever is greater. This increase shall be in addition to any increase assured pursuant to section 806 (e) (1) (A) of the Act: Provided, however, That if such school is not required to meet in the fiscal year in which the application is made the enrollment increase prescribed under section 806(e) (1) (A) because of limitations of physical facilities available to the school for training, the Secretary may, after consultation