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that the Secretary determines are not inconsistent with this subsection, shall apply to funds used under paragraph (1).
SEC. 504. [20 U.S.C. 1101c] DURATION OF GRANT.
(a) AWARD PERIOD.
(1) IN GENERAL.-The Secretary may award a grant to a Hispanic-serving institution under this title for 5 years.
(2) WAITOUT PERIOD.-A Hispanic-serving institution shall not be eligible to secure a subsequent 5-year grant award under this title until 2 years have elapsed since the expiration of the institution's most recent 5-year grant award under this title, except that for the purpose of this subsection a grant under section 514(a) shall not be considered a grant under this title.
(b) PLANNING GRANTS.-Notwithstanding subsection (a), the Secretary may award a grant to a Hispanic-serving institution under this title for a period of 1 year for the purpose of preparation of plans and applications for a grant under this title.
SEC. 505. [20 U.S.C. 1101d] SPECIAL RULE.
No Hispanic-serving institution that is eligible for and receives funds under this title may receive funds under part A or B of title III during the period for which funds under this title are awarded.
PART B-GENERAL PROVISIONS
SEC. 511. [20 U.S.C. 1103] ELIGIBILITY; APPLICATIONS.
(a) INSTITUTIONAL ELIGIBILITY.-Each Hispanic-serving institution desiring to receive assistance under this title shall submit to the Secretary such enrollment data as may be necessary to demonstrate that the institution is a Hispanic-serving institution as defined in section 502, along with such other data and information as the Secretary may by regulation require.
(1) APPLICATIONS REQUIRED.-Any institution which is eligible for assistance under this title shall submit to the Secretary an application for assistance at such time, in such form, and containing such information, as may be necessary to enable the Secretary to evaluate the institution's need for assistance. Subject to the availability of appropriations to carry out this title, the Secretary may approve an application for a grant under this title only if the Secretary determines that—
(A) the application meets the requirements of subsection (b); and
(B) the institution is eligible for assistance in accordance with the provisions of this title under which the assistance is sought.
(2) PRELIMINARY APPLICATIONS.-In carrying out paragraph (1), the Secretary may develop a preliminary application for use by Hispanic-serving institutions applying under this title prior to the submission of the principal application. (c) CONTENTS.-A Hispanic-serving institution, in the institution's application for a grant, shall—
(1) set forth, or describe how the institution will develop, a comprehensive development plan to strengthen the institu
tion's academic quality and institutional management, and otherwise provide for institutional self-sufficiency and growth (including measurable objectives for the institution and the Secretary to use in monitoring the effectiveness of activities under this title);
(2) include a 5-year plan for improving the assistance provided by the Hispanic-serving institution to Hispanic students and other low-income individuals;
(3) set forth policies and procedures to ensure that Federal funds made available under this title for any fiscal year will be used to supplement and, to the extent practical, increase the funds that would otherwise be made available for the purposes of section 501(b), and in no case supplant those funds;
(4) set forth policies and procedures for evaluating the effectiveness in accomplishing the purpose of the activities for which a grant is sought under this title;
(5) provide for such fiscal control and fund accounting procedures as may be necessary to ensure proper disbursement of and accounting for funds made available to the institution under this title;
(6) provide that the institution will comply with the limitations set forth in section 516;
(7) describe in a comprehensive manner any proposed project for which funds are sought under the application and include
(A) a description of the various components of the proposed project, including the estimated time required to complete each such component;
(B) in the case of any development project that consists of several components (as described by the institution pursuant to subparagraph (A)), a statement identifying those components which, if separately funded, would be sound investments of Federal funds and those components which would be sound investments of Federal funds only if funded under this title in conjunction with other parts of the development project (as specified by the institution);
(C) an evaluation by the institution of the priority given any proposed project for which funds are sought in relation to any other projects for which funds are sought by the institution under this title, and a similar evaluation regarding priorities among the components of any single proposed project (as described by the institution pursuant to subparagraph (A));
(D) a detailed budget showing the manner in which funds for any proposed project would be spent by the institution; and
(E) a detailed description of any activity which involves the expenditure of more than $25,000, as identified in the budget referred to in subparagraph (D);
(8) provide for making reports, in such form and containing such information, as the Secretary may require to carry out the Secretary's functions under this title, including not less than one report annually setting forth the institution's progress toward achieving the objectives for which the funds
were awarded and for keeping such records and affording such access to such records, as the Secretary may find necessary to assure the correctness and verification of such reports; and
(9) include such other information as the Secretary may prescribe.
(d) PRIORITY.-With respect to applications for assistance under this section, the Secretary shall give priority to an application that contains satisfactory evidence that the Hispanic-serving institution has entered into or will enter into a collaborative arrangement with at least one local educational agency or community-based organization to provide such agency or organization with assistance (from funds other than funds provided under this title) in reducing dropout rates for Hispanic students, improving rates of academic achievement for Hispanic students, and increasing the rates at which Hispanic secondary school graduates enroll in higher education.
(e) ELIGIBILITY DATA.-The Secretary shall use the most recent and relevant data concerning the number and percentage of students receiving need-based assistance under title IV in making eligibility determinations and shall advance the base-year for the determinations forward following each annual grant cycle.
SEC. 512. [20 U.S.C. 1103a] WAIVER AUTHORITY AND REPORTING REQUIREMENT.
(a) WAIVER REQUIREMENTS; NEED-BASED ASSISTANCE STUDENTS. The Secretary may waive the requirements set forth in section 502(a)(2)(A)(i) in the case of an institution—
(1) that is extensively subsidized by the State in which the institution is located and charges low or no tuition;
(2) that serves a substantial number of low-income students as a percentage of the institution's total student population;
(3) that is contributing substantially to increasing higher education opportunities for educationally disadvantaged, underrepresented, or minority students, who are low-income individuals;
(4) which is substantially increasing higher educational opportunities for individuals in rural or other isolated areas which are unserved by postsecondary institutions; or
(5) wherever located, if the Secretary determines that the waiver will substantially increase higher education opportunities appropriate to the needs of Hispanic Americans. (b) WAIVER DETERMINATIONS; EXPENDITURES.
(1) WAIVER DETERMINATIONS.-The Secretary may waive the requirements set forth in section 502(a)(2)(A)(ii) if the Secretary determines, based on persuasive evidence submitted by the institution, that the institution's failure to meet the requirements is due to factors which, when used in the determination of compliance with the requirements, distort such determination, and that the institution's designation as an eligible institution under part A is otherwise consistent with the purposes of this title.
(2) EXPENDITURES.-The Secretary shall submit to Congress every other year a report concerning the institutions that, although not satisfying the requirements of section
502(a)(2)(A)(ii), have been determined to be eligible institutions under part A. Such report shall—
(A) identify the factors referred to in paragraph (1) that were considered by the Secretary as factors that distorted the determination of compliance with clauses (i) and (ii) of section 502(a)(2)(A); and
(B) contain a list of each institution determined to be an eligible institution under part A including a statement of the reasons for each such determination.
SEC. 513. [20 U.S.C. 1103b] APPLICATION REVIEW PROCESS.
(a) REVIEW PANEL.-All applications submitted under this title by Hispanic-serving institutions shall be read by a panel of readers composed of individuals who are selected by the Secretary and who include individuals representing Hispanic-serving institutions. The Secretary shall ensure that no individual assigned under this section to review any application has any conflict of interest with regard to the application that might impair the impartiality with which the individual conducts the review under this section.
(b) INSTRUCTION.-All readers selected by the Secretary shall receive thorough instruction from the Secretary regarding the evaluation process for applications submitted under this title that are consistent with the provisions of this title, including
(1) an enumeration of the factors to be used to determine the quality of applications submitted under this title; and
(2) an enumeration of the factors to be used to determine whether a grant should be awarded for a project under this title, the amount of any such grant, and the duration of any such grant.
(c) RECOMMENDATIONS OF PANEL.-In awarding grants under this title, the Secretary shall take into consideration the recommendations of the panel made under subsection (a).
(d) NOTIFICATION.-Not later than June 30 of each year, the Secretary shall notify each Hispanic-serving institution making an application under this title of
(1) the scores given the institution by the panel pursuant to this section;
(2) the recommendations of the panel with respect to such application; and
(3) the reasons for the decision of the Secretary in awarding or refusing to award a grant under this title, and any modifications, if any, in the recommendations of the panel made by the Secretary.
SEC. 514. [20 U.S.C. 1103c] COOPERATIVE ARRANGEMENTS.
(a) GENERAL AUTHORITY.-The Secretary may make grants to encourage cooperative arrangements with funds available to carry out this title, between Hispanic-serving institutions eligible for assistance under this title, and between such institutions and institutions not receiving assistance under this title, for the activities described in section 503 so that the resources of the cooperating institutions might be combined and shared in order to achieve the purposes of this title, to avoid costly duplicative efforts, and to enhance the development of Hispanic-serving institutions.
(b) PRIORITY.-The Secretary shall give priority to grants for the purposes described under subsection (a) whenever the Secretary determines that the cooperative arrangement is geographically and economically sound or will benefit the applicant Hispanicserving institution.
(c) DURATION.-Grants to Hispanic-serving institutions having a cooperative arrangement may be made under this section for a period determined under section 505.
SEC. 515. [20 U.S.C. 1103d] ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.
(a) ASSISTANCE ELIGIBILITY.-Each Hispanic-serving institution that the Secretary determines to be an institution eligible under this title may be eligible for waivers in accordance with subsection (b). (b) WAIVER APPLICABILITY.—
(1) IN GENERAL.-Subject to, and in accordance with, regulations promulgated for the purpose of this section, in the case of any application by a Hispanic-serving institution referred to in subsection (a) for assistance under any programs specified in paragraph (2), the Secretary is authorized, if such application is otherwise approvable, to waive any requirement for a non-Federal share of the cost of the program or project, or, to the extent not inconsistent with other law, to give, or require to be given, priority consideration of the application in relation to applications from other institutions.
(2) PROGRAMS.-The provisions of this section shall apply to any program authorized by title IV or section 604.
(c) LIMITATION.-The Secretary shall not waive, under subsection (b), the non-Federal share requirement for any program for applications which, if approved, would require the expenditure of more than 10 percent of the appropriations for the program for any fiscal year.
SEC. 516. [20 U.S.C. 1103e] LIMITATIONS.
The funds appropriated under section 518 may not be used(1) for a school or department of divinity or any religious worship or sectarian activity;
(2) for an activity that is inconsistent with a State plan for desegregation of higher education applicable to a Hispanicserving institution;
(3) for an activity that is inconsistent with a State plan of higher education applicable to a Hispanic-serving institution;
(4) for purposes other than the purposes set forth in the approved application under which the funds were made available to a Hispanic-serving institution.
SEC. 517. [20 U.S.C. 1103f] PENALTIES.
Whoever, being an officer, director, agent, or employee of, or connected in any capacity with, any recipient of Federal financial assistance or grant pursuant to this title embezzles, willfully misapplies, steals, or obtains by fraud any of the funds that are the subject of such grant or assistance, shall be fined not more than $10,000 or imprisoned for not more than 2 years, or both.