[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR627.450]

[Page 215-216]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, AND III OF THE ACT--Table of Contents
 
                   Subpart D--Administrative Standards
 
Sec. 627.450  Program income.

    (a) Definition of program income. (1) Program income means income 
received by the recipient or subrecipient that is directly generated by 
a grant or subgrant supported activity, or earned only as a result of 
the grant or subgrant. Program income includes:
    (i) Income from fees for services performed and from conferences;
    (ii) Income from the use or rental of real or personal property 
acquired with grant or subgrant funds;
    (iii) Income from the sale of commodities or items fabricated under 
a grant or subgrant;
    (iv) Revenues earned by a governmental or non-profit service 
provider under either a fixed-price or reimbursable award that are in 
excess of the actual costs incurred in providing the services; and
    (v) Interest income earned on advances of JTPA funds.
    (2) Program income does not include:
    (i) Rebates, credits, discounts, refunds, etc., or interest earned 
on any of them, which shall be credited in accordance with 
Sec. 627.435(d), Cost principles and allowable costs;
    (ii) Taxes, special assessments, levies, fines, and other such 
governmental revenues raised by a recipient or subrecipient; or
    (iii) Income from royalties and license fees for copyrighted 
material, patents, patent applications, trademarks, and inventions 
developed by a recipient or subrecipient.
    (3) Property. Proceeds from the sale of property shall be handled in 
accordance with the requirements of Sec. 627.465 of this part, Property 
management standards.
    (b) Cost of generating program income. Costs incidental to the 
generation of program income may be deducted, if not already charged to 
the grant, from gross income to determine program income.

[[Page 216]]

    (c) Use of program income. (1)(i) A recipient or subrecipient may 
retain any program income earned by the recipient or subrecipient only 
if such income is added to the funds committed to the particular JTPA 
grant or subgrant and title under which it was earned and such income is 
used for that title's purposes and under the terms and conditions 
applicable to the use of the grant funds.
    (ii) A State may use interest it earns on JTPA funds, deposited by 
the United States to the State's account, to satisfy the requirement at 
31 U.S.C. 6503(c) that the State pay interest on such deposits.
    (iii) The classification of costs in Secs. 627.440 and 631.13 shall 
apply to the use of program income.
    (iv) The administrative cost limitation in Secs. 627.445 and 631.14 
shall apply to the use of program income, except that program income 
used in accordance with paragraph (c)(1)(ii) of this section shall be 
exempt from the administrative cost limitations.
    (2) Program income generated under title II may also be used to 
satisfy the matching requirement of section 123(b) of the Act.
    (3) Program income shall be used prior to the submission of the 
final report for the funding period of the program year of funds to 
which the earnings are attributable.
    (4) If the subrecipient that earned program income cannot use such 
income for JTPA purposes, the recipient may permit another entity to use 
the program income for JTPA purposes.
    (5) Program income not used in accordance with the requirements of 
this section shall be remitted to the Department of Labor.
    (d) Program and other income after the funding period. Rental income 
and user fees on real and personal property acquired with JTPA funds 
shall continue to be JTPA program income in subsequent funding periods. 
There are no Federal requirements governing the disposition of all other 
income that is earned after the end of the funding period.