Calculation of the Endowment Factor for Allocations to Historically Black Colleges and Universities Under Section 314(a)(2)(A) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021

• Published date: 22 April 2021
• Citation: 86 FR 21190
• Record Number: 2021-08379
• Section: Rules and Regulations
• Court: Education Department

21190

Federal Register / Vol. 86, No. 76 / Thursday, April 22, 2021 / Rules and Regulations

6

Id.

7

19 U.S.C. 1318(b)(1)(C) provides that

‘‘[n]otwithstanding any other provision of law, the

Secretary of the Treasury, when necessary to

respond to a national emergency declared under the

National Emergencies Act (50 U.S.C. 1601 et seq.)

or to a specific threat to human life or national

interests,’’ is authorized to ‘‘[t]ake any . . . action

that may be necessary to respond directly to the

national emergency or specific threat.’’ On March

1, 2003, certain functions of the Secretary of the

Treasury were transferred to the Secretary of

Homeland Security. See 6 U.S.C. 202(2), 203(1).

Under 6 U.S.C. 212(a)(1), authorities ‘‘related to

Customs revenue functions’’ were reserved to the

Secretary of the Treasury. To the extent that any

authority under section 1318(b)(1) was reserved to

the Secretary of the Treasury, it has been delegated

to the Secretary of Homeland Security. See Treas.

Dep’t Order No. 100–16 (May 15, 2003), 68 FR

28322 (May 23, 2003). Additionally, 19 U.S.C.

1318(b)(2) provides that ‘‘[n]otwithstanding any

other provision of law, the Commissioner of U.S.

Customs and Border Protection, when necessary to

respond to a specific threat to human life or

national interests, is authorized to close temporarily

any Customs office or port of entry or take any other

lesser action that may be necessary to respond to

the specific threat.’’ Congress has vested in the

Secretary of Homeland Security the ‘‘functions of

all officers, employees, and organizational units of

the Department,’’ including the Commissioner of

CBP. 6 U.S.C. 112(a)(3).

8

DHS is working closely with counterparts in

Mexico and Canada to identify appropriate public

health conditions to safely ease restrictions in the

future and support U.S. border communities.

and over 2.2 million confirmed cases in

Mexico.

6

Notice of Action

Given the outbreak and continued

transmission and spread of COVID–19

within the United States and globally,

the Secretary has determined that the

risk of continued transmission and

spread of the virus associated with

COVID–19 between the United States

and Mexico poses an ongoing ‘‘specific

threat to human life or national

interests.’’

U.S. and Mexican officials have

mutually determined that non-essential

travel between the United States and

Mexico poses additional risk of

transmission and spread of the virus

associated with COVID–19 and places

the populace of both nations at

increased risk of contracting the virus

associated with COVID–19. Moreover,

given the sustained human-to-human

transmission of the virus, returning to

previous levels of travel between the

two nations places the personnel

staffing land ports of entry between the

United States and Mexico, as well as the

individuals traveling through these

ports of entry, at increased risk of

exposure to the virus associated with

COVID–19. Accordingly, and consistent

with the authority granted in 19 U.S.C.

1318(b)(1)(C) and (b)(2),

7

I have

determined that land ports of entry

along the U.S.-Mexico border will

continue to suspend normal operations

and will only allow processing for entry

into the United States of those travelers

engaged in ‘‘essential travel,’’ as defined

below. Given the definition of ‘‘essential

travel’’ below, this temporary alteration

in land ports of entry operations should

not interrupt legitimate trade between

the two nations or disrupt critical

supply chains that ensure food, fuel,

medicine, and other critical materials

reach individuals on both sides of the

border.

For purposes of the temporary

alteration in certain designated ports of

entry operations authorized under 19

U.S.C. 1318(b)(1)(C) and (b)(2), travel

through the land ports of entry and ferry

terminals along the United States-

Mexico border shall be limited to

‘‘essential travel,’’ which includes, but

is not limited to—

•U.S. citizens and lawful permanent

residents returning to the United States;

•Individuals traveling for medical

purposes (e.g., to receive medical

treatment in the United States);

•Individuals traveling to attend

educational institutions;

•Individuals traveling to work in the

United States (e.g., individuals working

in the farming or agriculture industry

who must travel between the United

States and Mexico in furtherance of

such work);

•Individuals traveling for emergency

response and public health purposes

(e.g., government officials or emergency

responders entering the United States to

support federal, state, local, tribal, or

territorial government efforts to respond

to COVID–19 or other emergencies);

•Individuals engaged in lawful cross-

border trade (e.g., truck drivers

supporting the movement of cargo

between the United States and Mexico);

•Individuals engaged in official

government travel or diplomatic travel;

•Members of the U.S. Armed Forces,

and the spouses and children of

members of the U.S. Armed Forces,

returning to the United States; and

•Individuals engaged in military-

related travel or operations.

The following travel does not fall

within the definition of ‘‘essential

travel’’ for purposes of this

Notification—

•Individuals traveling for tourism

purposes (e.g., sightseeing, recreation,

gambling, or attending cultural events).

At this time, this Notification does not

apply to air, freight rail, or sea travel

between the United States and Mexico,

but does apply to passenger rail,

passenger ferry travel, and pleasure boat

travel between the United States and

Mexico. These restrictions are

temporary in nature and shall remain in

effect until 11:59 p.m. EDT on May 21,

2021. This Notification may be amended

or rescinded prior to that time, based on

circumstances associated with the

specific threat.

8

The Commissioner of U.S. Customs

and Border Protection (CBP) is hereby

directed to prepare and distribute

appropriate guidance to CBP personnel

on the continued implementation of the

temporary measures set forth in this

Notification. The CBP Commissioner

may determine that other forms of

travel, such as travel in furtherance of

economic stability or social order,

constitute ‘‘essential travel’’ under this

Notification. Further, the CBP

Commissioner may, on an

individualized basis and for

humanitarian reasons or for other

purposes in the national interest, permit

the processing of travelers to the United

States not engaged in ‘‘essential travel.’’

Alejandro N. Mayorkas,

Secretary, U.S. Department of Homeland

Security.

[FR Doc. 2021–08485 Filed 4–21–21; 8:45 am]

BILLING CODE 9112–FP–P

DEPARTMENT OF EDUCATION

34 CFR Part 677

RIN 1840–AD63

Calculation of the Endowment Factor

for Allocations to Historically Black

Colleges and Universities Under

Section 314(a)(2)(A) of the Coronavirus

Response and Relief Supplemental

Appropriations Act, 2021

AGENCY

: Office of Postsecondary

Education, Department of Education.

ACTION

: Final regulations.

SUMMARY

: The Department of Education

(Department) issues this final rule so

that it may determine final allocations

to Historically Black Colleges and

Universities (HBCUs) awarded under

section 314(a)(2) of the Coronavirus

Response and Relief Supplemental

Appropriations Act, 2021 (CRRSAA).

DATES

: These regulations are effective

April 22, 2021.

FOR FURTHER INFORMATION CONTACT

:

Karen Epps, Office of Postsecondary

Education, U.S. Department of

Education, 400 Maryland Ave. SW,

Room 2B133, Washington, DC 20202.

Telephone: (202) 453–6337. Email:

Karen.Epps@ed.gov.

If you use a telecommunications

device for the deaf (TDD) or a text

telephone (TTY), call the Federal Relay

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Service (FRS), toll-free, at (800) 877–

8339.

SUPPLEMENTARY INFORMATION

:

Background

The CRRSAA was enacted on

December 27, 2020, to help Americans

cope with the ongoing economic and

health crises created by the novel

coronavirus disease (COVID–19)

outbreak. Section 314 of the CRRSAA

authorizes supplemental awards to

institutions of higher education (IHEs)

through the Higher Education

Emergency Relief Fund (HEERF)

initially established by section 18004 of

the Coronavirus Aid, Relief, and

Economic Security (CARES) Act (March

27, 2020). Section 314 of the CRRSAA

also authorizes, in paragraph (a)(2)(A),

additional awards to HBCUs eligible to

receive assistance under two programs

authorized by the Higher Education Act

of 1965, as amended (HEA): The

Strengthening HBCUs program

authorized by part B of title III of the

HEA, and the HBCU Masters program

authorized by subpart 4 of part A of title

VII of the HEA. Section 314 further

specifies, in paragraph (a)(2), the

amounts available for these additional

awards and, in paragraph (a)(2)(A), the

three-part formula for determining the

allocations to each eligible HBCU.

This formula calls for the allocation

of—

(1) 70 percent of funds according to a

ratio equivalent to the number of Pell

Grant recipients in attendance at the

institution at the end of the school year

preceding the beginning of the most

recent fiscal year and the total number

of Pell Grant recipients at all such

institutions;

(2) 20 percent of funds according to a

ratio equivalent to the total number of

students enrolled at the institution at

the end of the school year preceding the

beginning of that fiscal year and the

number of students enrolled at all such

institutions; and

(3) 10 percent of funds according to a

ratio equivalent to the total endowment

size at all eligible institutions at the end

of the school year preceding the

beginning of that fiscal year and the

total endowment size at the institution.

The first two elements for

determining allocations to HBCUs under

section 314(a)(2)(A) of the CRRSAA

reflect a familiar and straightforward

methodology: Institutions receive a

share of funds commensurate with their

respective shares of Pell Grant

recipients and total overall enrollment

at all eligible institutions. However, the

third element, also known as the

endowment factor, calls for allocating

10 percent of funds based on an inverse

proportion of an institution’s share of

the total endowment funding at all

eligible institutions. In other words,

institutions with the smallest

endowments receive the largest share of

funds. This inverse proportion formula

reflects the intent of Congress to direct

additional funding to institutions

unable to tap endowment resources to

meet needs arising from the COVID–19

pandemic. Such institutions often have

smaller enrollments or serve highly

disadvantaged populations;

consequently, they have not been able to

build up significant endowment funds

over time that might have been used to

respond to the COVID–19-related

disruptions to teaching and learning on

campus.

In fact, some institutions reported an

endowment value of zero, which

contributed to the circumstances

requiring this final rule. Specifically,

endowment data collected by the

Department for the purpose of

determining the allocation of funds

through the endowment factor showed

that, of 97 eligible institutions, nine

reported an endowment value of zero.

While it seems clear that Congress

intended for such institutions to receive

the largest share of endowment factor

funding because of their complete lack

of endowment resources to call upon in

responding to the COVID–19 pandemic,

it is not possible to generate the

endowment ratios described in section

314(a)(2)(A)(iii) of the CRRSAA for

these schools due to the mathematic

principle that division by zero yields an

undefined result and thus has no

meaning. Therefore, it would be

impossible to implement this formula in

a manner consistent with the statutory

text for certain eligible entities.

Excluding these schools entirely from

the endowment factor calculation would

seem contrary to the plain language of

the statute, as the Act does not expressly

exclude these entities and is meant to

include all eligible institutions under

part B of title III and subpart 4 of part

A of title VII of the HEA. Moreover,

even if the nine HBCUs with zero

endowments could be excluded from

the formula, there is a large enough gap

between the institution with the lowest

non-zero endowment and other

institutions with non-zero endowments

that the institution with the lowest non-

zero endowment would garner nearly all

of the program funding ($72.8 million)

allocable through the endowment factor.

The Department does not believe such

an inequitable outcome would be

consistent with the design of the

endowment factor formula; rather, it

indicates a technical oversight in

developing the endowment factor.

In response to the inability to

implement this formula in a manner

consistent with the statutory text for

certain eligible entities, the Department

consulted with Congress to determine

options for calculating awards to HBCUs

under section 314(a)(2) of the CRRSAA.

These discussions were focused on two

goals: (1) Ensuring that all eligible

institutions with relatively low

endowment values benefited from the

endowment factor, and (2) ensuring that

the endowment factor operated as

intended, delivering significantly

greater amounts of funding to those

institutions with the smallest

endowments rather than to those

institutions with the largest

endowments. This consultation took on

additional urgency because of the

possibility that additional HEERF

appropriations for HBCUs would be

provided on the basis of the formula in

section 314(a)(2)(A) of the CRRSAA as

part of the American Rescue Plan Act of

2021 (ARP).

Ultimately, Congress provided such

additional appropriations in the ARP

and directed IHEs to make allocations in

accordance with the same terms and

conditions as those provided in section

314 of the CRRSAA, with several

exceptions. Of relevance here, Congress

established a ‘‘floor’’ on the endowment

value used when allocating the ARP-

provided HEERF funds based on the

endowment factor. Section 2003(3) of

the ARP specifies that an institution

‘‘that has a total endowment size of less

than $1,000,000 (including an

institution that does not have an

endowment) shall be treated by the

Secretary as having a total endowment

size of $1,000,000’’ for the purposes of

section 314(a)(2)(A)(iii) of the CRRSAA,

which is used to determine allocations

under the ARP. However, this provision

does not apply to the HEERF funds

appropriated in the CRRSAA.

Consequently, the Department

determined that the best course of

action would be to issue regulations on

the endowment factor under section

314(a)(2). In the interim, on February

26, 2021, the Department awarded 90

percent of the funds provided to HBCUs

under section 314(a)(2) of the

CRRSAA—the funds allocated on the

basis of factors 1 and 2 of the formula

in section 314(a)(2)(A).

In considering alternatives for refining

the methodology for implementing the

endowment factor, the Department

relied on analyses of options developed

both prior to and during consultation

with Congress regarding the challenges

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presented by the endowment factor

under the CRRSAA.

We considered exclusion of the nine

entities that reported an endowment

position of zero. As stated above, we

determined this was inconsistent with

the plain language of the statute.

Further, it would exclude the

institutions with the greatest need—i.e.,

those institutions reporting endowment

amounts of zero—while allocating

virtually all funds apportioned to the

endowment factor to just two of the 88

eligible institutions with non-zero

endowments. Such an outcome would

be contrary to the purpose of any

funding formula based on

proportionality, which is to provide

benefits to all eligible entities in

proportion to one or more

characteristics of those entities, and not

to merely direct all or nearly all

applicable funding to a few such

entities.

Given that we cannot implement the

formula in a manner consistent with the

statutory text for certain eligible entities,

we considered a variety of approaches.

A rule that imputed a small dollar

amount to the nine eligible institutions

reporting zero endowment funding,

such as $1, would result in the

allocation of nearly all funding to those

institutions, effectively preventing the

accrual of any benefits from the

endowment factor to any other eligible

institutions (approximately $8.1 million

would be awarded to each of the nine

institutions with zero endowments and

a balance of less than $1,500 would be

distributed among the remaining

eligible institutions). Again, such an

outcome would not, in the Department’s

view, be consistent with the basic equity

principles that generally underlie the

funding formulas enacted by Congress

for the many formula grant programs

administered by the Department.

The Department also explored an

option that considered the relationship

between the amount institutions receive

through the endowment factor and the

sum of that value in combination with

the institution’s reported (or imputed, in

the case of the institutions reporting $0

endowments) endowment. The

underlying principle of this approach

was that while the endowment factor

was to direct additional funding to

institutions with the smallest

endowments, such institutions should

not benefit disproportionately when

compared to other institutions with

small endowments. For example, it

would be both inequitable and

inconsistent with the design of the

endowment factor if an institution with

a reported endowment of $100,000

received $3,000,000 from the

endowment factor—effectively

increasing its endowment-based

resources to $3,100,000—while another

institution with a reported endowment

of $1,000,000 received $500,000 from

the endowment factor, effectively

ending up with just half ($1,500,000) of

the endowment-based resources as the

first institution. In other words, no

institution’s allocation from the

endowment factor should exceed the

resources available to any other

institution based on the sum of its

allocation from the endowment factor

and its reported endowment. The

Department’s preliminary modeling of

an option based on this principle

produced an appropriately graduated

distribution of endowment factor

allocations to all 97 institutions, while

directing 72 percent of funds to the

bottom quartile of institutions ranked by

endowment size, a result that the

Department deemed both equitable and

consistent with the core purpose of the

endowment factor.

Importantly, for the purposes of this

final rule, the $1,000,000 floor

endowment amount set by Congress for

use in calculating endowment factor

allocations under the ARP yields an

equitable distribution of funds nearly

identical to that of the Department’s

‘‘imputed endowment size’’ model.

Specifically, applying the ARP’s

$1,000,000 endowment floor to the

endowment factor in the CRRSAA

would allocate $54.3 million, or 75

percent of funds, to the bottom quartile

of institutions ranked by endowment

size.

Consequently, the Department has

concluded that the equitable impact of

the $1,000,000 floor endowment

threshold adopted by Congress for the

purpose of calculating endowment

factor allocations under the ARP,

combined with its simplicity and the

benefits of a uniform approach to

determining endowment factor

allocations across the ARP and the

CRRSAA, make that same $1,000,000

endowment floor the most appropriate

manner to implement the endowment

factor formula in section

314(a)(2)(A)(iii) of the CRRSAA, which

cannot otherwise be implemented in a

manner consistent with the statutory

text for certain eligible entities.

Significant Regulations

Statute: Section 314 of the CRRSAA

(division M of Public Law 116–260,

December 27, 2020) provides for

funding for eligible HBCUs.

Specifically, section 314(a)(2)(A)

specifies a three-part formula for

determining the allocations to each

eligible HBCU, including an endowment

factor that allocates 10 percent of the

available funding according to a ratio

equivalent to the total endowment size

at all eligible institutions at the end of

the school year preceding the beginning

of that fiscal year and the total

endowment size at the institution.

Current Regulation: None.

New Regulation: In new § 677.1, we

provide that, for the purpose of

calculating allocations under section

314(a)(2)(A)(iii) of the CRRSAA, an

institution that has a total endowment

of less than $1,000,000, including an

institution that does not have an

endowment, will be treated by the

Secretary as having an endowment of

$1,000,000.

Reasons: The Department is making

this regulatory change to remedy a

technical defect in the statute; allocate

funds consistent with its best

interpretation of the statutory purpose

of the endowment factor; make the

allocation methodology related to

endowment size under the CRRSAA

consistent with the refined methodology

under the ARP; and ensure that the

endowment factor operates to equitably

deliver funding to eligible institutions

based on the relative size of their

endowments. See the Background

section for a more detailed discussion of

our reasons for this regulatory change.

Waiver of Proposed Rulemaking and

Delayed Effective Date Under the

Administrative Procedure Act

Under the Administrative Procedure

Act (APA) (5 U.S.C. 553), the

Department generally offers interested

parties the opportunity to comment on

proposed rules. However, the APA

provides that an agency is not required

to conduct notice and comment

rulemaking when the agency, for good

cause, finds that notice and public

comment thereon are impracticable,

unnecessary, or contrary to the public

interest (5 U.S.C. 553(b)(B)).

Congress enacted the CRRSAA to help

Americans cope with the urgent

economic and health crises created by

the COVID–19 outbreak and created the

HEERF to provide emergency financial

aid grants to students and institutions.

Section 314(b)(2)(B) of the CRRSAA

requires the Secretary, to the extent

practicable, to make awards to HBCUs

under section 314(a)(2) by February 25,

2021. In the absence of this final rule,

the Department would be unable to

timely award the final 10 percent of

funds appropriated by Congress to

HBCUs under section 314(a)(2) of the

CRRSAA in a manner that equitably

benefits those HBCUs with limited

endowments serving large numbers or

percentages of students from low-

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income families. In light of the urgent

economic challenges facing IHEs as a

result of the current national emergency

and the importance of awarding all

available emergency funds appropriated

by Congress as quickly as possible,

particularly to those institutions

without access to much-needed

resources that can help address the

disruption to teaching and learning

caused by the COVID–19 pandemic, it

would be impracticable and contrary to

the public interest to conduct notice-

and-comment rulemaking. Accordingly,

there is good cause to waive the notice

and comment requirements of the APA.

Moreover, the APA generally requires

that regulations be published at least 30

days before their effective date, unless

the agency has good cause to implement

its regulations sooner (5 U.S.C.

553(d)(3)). As described above, good

cause exists for this rule to be effective

upon publication in light of the current

national emergency and the importance

of awarding HEERF allocations to

eligible institutions in a timely manner

consistent with statutory intent.

Executive Orders 12866 and 13563

Regulatory Impact Analysis

Under Executive Order 12866, the

Office of Management and Budget

(OMB) must determine whether this

regulatory action is ‘‘significant’’ and,

therefore, subject to the requirements of

the Executive order and subject to

review by OMB. Section 3(f) of

Executive Order 12866 defines a

‘‘significant regulatory action’’ as an

action likely to result in a rule that

may—

(1) Have an annual effect on the

economy of $100 million or more, or

adversely affect a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or Tribal governments or

communities in a material way (also

referred to as an ‘‘economically

significant’’ rule);

(2) Create serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impacts of entitlement grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

stated in the Executive order.

This final regulatory action is a

significant regulatory action subject to

review by OMB under section 3(f) of

Executive Order 12866. Pursuant to the

Congressional Review Act (5 U.S.C. 801

et seq.), the Office of Information and

Regulatory Affairs designated this rule

as not a ‘‘major rule’’, as defined by 5

U.S.C. 804(2).

We have also reviewed these

regulations under Executive Order

13563, which supplements and

explicitly reaffirms the principles,

structures, and definitions governing

regulatory review established in

Executive Order 12866. To the extent

permitted by law, Executive Order

13563 requires that an agency—

(1) Propose or adopt regulations only

upon a reasoned determination that

their benefits justify their costs

(recognizing that some benefits and

costs are difficult to quantify);

(2) Tailor its regulations to impose the

least burden on society, consistent with

obtaining regulatory objectives and

taking into account—among other things

and to the extent practicable—the costs

of cumulative regulations;

(3) In choosing among alternative

regulatory approaches, select those

approaches that maximize net benefits

(including potential economic,

environmental, public health and safety,

and other advantages; distributive

impacts; and equity);

(4) To the extent feasible, specify

performance objectives rather than the

behavior or manner of compliance a

regulated entity must adopt; and

(5) Identify and assess available

alternatives to direct regulation,

including economic incentives—such as

user fees or marketable permits—to

encourage the desired behavior, or

provide information that enables the

public to make choices.

Executive Order 13563 also requires

an agency ‘‘to use the best available

techniques to quantify anticipated

present and future benefits and costs as

accurately as possible.’’ The Office of

Information and Regulatory Affairs of

OMB has emphasized that these

techniques may include ‘‘identifying

changing future compliance costs that

might result from technological

innovation or anticipated behavioral

changes.’’

We are issuing this final rule only on

a reasoned determination that its

benefits would justify its costs. In

choosing among alternative regulatory

approaches, we selected those

approaches that would maximize net

benefits. Based on the analysis that

follows, the Department believes that

these regulations are consistent with the

principles in Executive Order 13563.

We have also determined that this

regulatory action would not unduly

interfere with State, local, and Tribal

governments in the exercise of their

governmental functions.

Need for Regulatory Action

The Department is issuing this final

rule to clarify the methodology for

calculating allocations to HBCUs in

accordance with the endowment factor

described in section 314(a)(2)(A)(iii) of

the CRRSAA. The endowment factor is

intended to provide additional funding

to institutions with limited endowment

resources available to address

institutional and student needs arising

from the COVID–19 pandemic. This

final rule addresses a defect in the

statutory allocation formula and permits

the allocation of all available funds to

eligible institutions as quickly as

possible.

As detailed in the preamble of this

final rule, in light of the current national

emergency and the importance of

delivering HEERF awards to institutions

as soon as possible, notice-and-

comment rulemaking would be

impracticable and contrary to the public

interest. Absent immediate

implementation of this final rule, the

Department would be unable to timely

award the remaining HBCU funding in

a manner consistent with the intent to

provide funding to eligible HBCUs

based on relative endowment size, with

a potentially serious negative impact on

both institutions and the students they

serve.

Costs, Benefits, and Transfers

As noted elsewhere in this final rule,

this regulatory change affects only the

allocation of funding under the HEERF

program. It does not impose or relieve

any regulatory or compliance burden on

regulated entities. In general, we do not

anticipate this final rule to impose any

net costs on affected entities. However,

to the extent that the receipt of funding

under this program affects the marginal

cost of administering funds, there may

be some effects on participating

institutions, but given the overall

amount of funding administered under

this program and the relatively small

amount implicated by this rule, we

expect those effects to be de minimis.

As noted above, this final rule will

allow the Department to operationalize

the statutory requirements of the

CRRSAA relative to the endowment

factor and limit unintended

consequences. Since this rule is only

intended to implement existing

statutory requirements, we assess the

impacts of this final rule relative to a

pre-statutory baseline. In the absence of

passage of the CRRSAA, none of the

affected entities would have received

additional funding under the HEERF

program. Passage of CRRSAA resulted

in additional funds being made

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Federal Register / Vol. 86, No. 76 / Thursday, April 22, 2021 / Rules and Regulations

available to these entities. Specific to

this final rule, approximately $72.8

million in additional funds will be

made available to affected entities

through the endowment factor

implicated by this final rule. As noted

above, we do not anticipate this rule

resulting in any increased regulatory

burden for affected entities and, even if

the additional funding provided under

the endowment factor did result in such

increased costs, those costs would be far

outweighed by the additional funding

received. We do not anticipate this rule

to result in any transfers between

regulated entities given that, as

described above, the Department would

not be able to implement the statutory

requirements in a manner consistent

with the statutory text for certain

eligible entities without this final rule.

As a result, in the absence of this rule,

no entity would have received funds

under the endowment factor.

Regulatory Alternatives Considered

The Department considered a wide

range of options to address the issues

posed by the statutory requirements.

Initially, we considered whether it was

possible to resolve the issue without

regulating. As described elsewhere, we

determined that it would not be possible

to allocate funds for certain eligible

entities under the endowment factor in

a manner consistent with the statutory

requirements because doing so would

require the agency to divide by zero.

Alternatively, the Department could

have pursued a rule where it sought to

divide the entire amount of funds

equally among the nine entities with

zero-dollar endowments. Such an

approach would have focused resources

on entities with smaller endowments

but would have created sizable

disparities among entities. For example,

an entity without an endowment would

have received approximately $8.1

million, while the entity with the

smallest non-zero endowment (with an

endowment of only $6,400) would have

received no funding.

The Department also could have

pursued a rule that imputed a $1

endowment for all of the entities

without endowments, the minimum

required adjustment to allow for

formula allocations in accordance with

the statutory requirements. Using this

approach, approximately 55 institutions

would receive funds under the

endowment factor. Of those, 45 would

receive allocations of less than $100.

While this approach would be more

equitable than the prior alternatives, we

still do not believe such an approach

would meet the spirit of the statutory

requirement.

Under this final rule, all 97 eligible

entities would receive funding, with the

smallest allocation being approximately

$7,300. We believe that this final rule,

which ensures that all entities receive at

least some funding under the

endowment factor while also heavily

preferencing those entities with small or

no endowments, best meets the

statutory intent.

Regulatory Flexibility Act Certification

This analysis, required by the

Regulatory Flexibility Act, presents an

estimate of the effect of the final

regulations on small entities. The U.S.

Small Business Administration (SBA)

Size Standards define proprietary IHEs

as small businesses if they are

independently owned and operated, are

not dominant in their field of operation,

and have total annual revenue below

$7,000,000. Nonprofit institutions are

defined as small entities if they are

independently owned and operated and

not dominant in their field of operation.

Public institutions and local educational

agencies are defined as small

organizations if they are operated by a

government overseeing a population

below 50,000.

For purposes of this analysis, the

Department proposes to define a small

institution as a two-year IHE with an

enrollment of less than 500 FTE or a

four-year IHE with an enrollment of less

than 1,000 FTE. Under this proposed

definition, we would identify 27 of the

97 affected entities as small. As noted

above, we estimate that this final rule

will result in benefits for all affected

entities with no regulatory burden.

Small institutions would, on average,

see an increase of approximately

$952,400 and non-small institutions

receiving an increase would see an

increase of approximately $407,900.

As such, the Department certifies that

this rule will not have a significant

economic impact on a substantial

number of small entities.

Paperwork Reduction Act of 1995

There are no information collection

requirements associated with this

regulatory action.

Intergovernmental Review: This

program is subject to Executive Order

12372 and the regulations in 34 CFR

part 79. One of the objectives of the

Executive order is to foster an

intergovernmental partnership and a

strengthened federalism. The Executive

order relies on processes developed by

State and local governments for

coordination and review of proposed

Federal financial assistance.

This document provides early

notification of our specific plans and

actions for this program.

Assessment of Educational Impact

Based on our own review, we have

determined that these final regulations

do not require transmission of

information that any other agency or

authority of the United States gathers or

makes available.

Federalism

Executive Order 13132 requires us to

ensure meaningful and timely input by

State and local elected officials in the

development of regulatory policies that

have federalism implications.

‘‘Federalism implications’’ means

substantial direct effects on the States,

on the relationship between the

National Government and the States, or

on the distribution of power and

responsibilities among the various

levels of government. This final

regulation may have federalism

implications.

Accessible Format: On request to the

program contact person listed under

FOR

FURTHER INFORMATION CONTACT

,

individuals with disabilities can obtain

this document and a copy of the

application package in an accessible

format. The Department will provide the

requestor with an accessible format that

may include Rich Text Format (RTF) or

text format (txt), a thumb drive, and

MP3 file, braille, large print, audiotape,

or compact disc, or other accessible

format.

Electronic Access to This Document:

The official version of this document is

the document published in the Federal

Register. You may access the official

edition of the Federal Register and the

Code of Federal Regulations at

www.govinfo.gov. At this site you can

view this document, as well as all other

documents of this Department

published in the Federal Register, in

text or portable document format (PDF).

To use PDF, you must have Adobe

Acrobat Reader, which is available for

free on the site.

You may also access documents of the

Department published in the Federal

Register by using the article search

feature at www.federalregister.gov.

Specifically, through the advanced

search feature at this site, you can limit

your search to documents published by

the Department.

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Federal Register / Vol. 86, No. 76 / Thursday, April 22, 2021 / Rules and Regulations

List of Subjects in 34 CFR Part 677

Colleges and universities, Grant

programs-education, Reporting and

recordkeeping requirements.

Miguel Cardona,

Secretary of Education.

■For the reasons discussed in the

preamble, the Secretary adds part 677 to

title 34 of the Code of Federal

Regulations to read as follows:

PART 677—HIGHER EDUCATION

EMERGENCY RELIEF FUND

PROGRAMS

Subpart A—Provisions Related to

Historically Black Colleges and Universities

Sec.

677.1 Calculations.

677.2 [Reserved]

Subpart B—Reserved

Authority: 20 U.S.C. 1221e–3; section

314(a)(2), Pub. L. 116–260, Division M, 134

Stat. 1182.

Subpart A—Provisions Related to

Historically Black Colleges and

Universities

§ 677.1 Calculations.

For the purpose of calculating

allocations under section

314(a)(2)(A)(iii) of the Coronavirus

Response and Relief Supplemental

Appropriations Act, 2021 (division M of

Pub. L. 116–260, December 27, 2020), an

institution that has a total endowment

of less than $1,000,000, including an

institution that does not have an

endowment, will be treated by the

Secretary as having a total endowment

of $1,000,000.

§ 677.2 [Reserved]

Subpart B—Reserved

[FR Doc. 2021–08379 Filed 4–21–21; 8:45 am]

BILLING CODE 4000–01–P

DEPARTMENT OF EDUCATION

34 CFR Chapter II

[Docket ID ED–2021–OESE–0061]

RIN 1810–AB64

American Rescue Plan Act Elementary

and Secondary School Emergency

Relief Fund

AGENCY

: Office of Elementary and

Secondary Education, Department of

Education.

ACTION

: Interim final requirements.

SUMMARY

: The Department of Education

(‘‘Department’’) establishes interim final

requirements for the American Rescue

Plan Elementary and Secondary School

Emergency Relief (‘‘ARP ESSER’’) Fund,

under section 2001 of the American

Rescue Plan (‘‘ARP’’) Act of 2021. These

requirements are intended to promote

accountability, transparency, and the

effective use of funds by: Ensuring that

each State educational agency (‘‘SEA’’)

meaningfully engages in stakeholder

consultation and takes public input into

account in the development of its ARP

ESSER plan; ensuring that each local

educational agency (‘‘LEA’’) develops a

plan for the use of its ARP ESSER funds

and engages in meaningful consultation

and seeks public input as it develops

the LEA ARP ESSER plan; and

clarifying how an LEA must meet the

statutory requirement to develop a plan

for the safe return to in-person

instruction and continuity of services.

DATES

: Effective date: These interim

final requirements are effective April 22,

2021.

Comment due date: We must receive

your comments on or before May 24,

2021.

ADDRESSES

: Submit your comments

through the Federal eRulemaking Portal

or by postal mail, commercial delivery,

or hand delivery. We will not accept

comments submitted by fax or by email

or those submitted after the comment

period. To ensure that we do not receive

duplicate copies, please submit your

comments only once. In addition, please

include the Docket ID at the top of your

comments.

If you are submitting comments

electronically, we strongly encourage

you to submit any comments or

attachments in Microsoft Word format.

If you must submit a comment in Adobe

Portable Document Format (PDF), we

strongly encourage you to convert the

PDF to print-to-PDF format or to use

some other commonly used searchable

text format. Please do not submit the

PDF in a scanned format. Using a print-

to-PDF format allows the Department to

electronically search and copy certain

portions of your submissions.

•Federal eRulemaking Portal: Go to

www.regulations.gov to submit your

comments electronically. Information

on using regulations.gov, including

instructions for accessing agency

documents, submitting comments, and

viewing the docket, is available on the

site under ‘‘FAQ.’’

•Postal Mail, Commercial Delivery,

or Hand Delivery: The Department

strongly encourages commenters to

submit their comments electronically.

However, if you mail or deliver your

comments about the interim final

requirements, address them to: Britt

Jung, U.S. Department of Education, 400

Maryland Avenue SW, Room 3W113,

Washington, DC 20202.

Privacy Note: The Department’s policy is

to make comments received from members of

the public available for public viewing on the

Federal eRulemaking Portal at

www.regulations.gov. Therefore, commenters

should include in their comments only

information that they wish to make publicly

available.

FOR FURTHER INFORMATION CONTACT

: Britt

Jung, U.S. Department of Education, 400

Maryland Avenue SW, Room 3W113,

Washington, DC 20202. Telephone:

(202) 453–5563. Email: ESSERF@ed.gov.

If you use a telecommunications

device for the deaf (‘‘TDD’’) or a text

telephone (‘‘TTY’’), call the Federal

Relay Service (‘‘FRS’’), toll free, at 1–

800–877–8339.

SUPPLEMENTARY INFORMATION

: Invitation

to Comment: Although the Department

has decided to issue these interim final

requirements without first publishing

proposed requirements for public

comment, we are interested in whether

you think we should make any changes

in these requirements. We invite your

comments. We will consider these

comments in determining whether to

revise the requirements.

To ensure that your comments may be

most effectively considered, we urge

you to clearly identify the specific

section or sections of the interim final

requirements that each comment

addresses and to arrange your comments

in the same order as the interim final

requirements.

We invite you to assist us in

complying with the specific

requirements of Executive Orders 12866

and 13563 and their overall requirement

of reducing regulatory burden that

might result from these interim final

requirements. Please let us know of any

further ways by which we could reduce

potential costs or increase potential

benefits while preserving the effective

and efficient administration of the

Department’s programs and activities.

During and after the comment period,

you may inspect all public comments

about these interim final requirements

by accessing www.regulations.gov. Due

to the current COVID–19 public health

emergency, the Department buildings

are not open to the public. However,

upon reopening, you may also inspect

the comments in person at 400

Maryland Avenue SW, Washington, DC

20202, between 8:30 a.m. and 4:00 p.m.,

Eastern Time, Monday through Friday

of each week except Federal holidays.

To schedule a time to inspect

comments, please contact the person

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