 
           CHAPTER 31--GENERAL PROVISIONS CONCERNING EDUCATION
 
SUBCHAPTER III--GENERAL REQUIREMENTS AND CONDITIONS CONCERNING OPERATION 
AND ADMINISTRATION OF EDUCATION PROGRAMS: GENERAL AUTHORITY OF SECRETARY
 
                        Part 1--General Authority
 
Sec. 1231b-2. Review of applications


(a) Persons aggrieved; final State educational agency actions; hearing; 
        ruling and reasons for ruling; rescission of final actions

    In the case of any applicable program under which financial 
assistance is provided to (or through) a State educational agency to be 
expended in accordance with a State plan approved by the Secretary, any 
applicant or recipient aggrieved by the final action of the State 
educational agency, and alleging a violation of State or Federal law, 
rules, regulations, or guidelines governing the applicable program, in 
(1) disapproving or failing to approve its application or program in 
whole or part, (2) failing to provide funds in amounts in accord with 
the requirements of laws and regulations, (3) ordering, in accordance 
with a final State audit resolution determination, the repayment of 
misspent or misapplied Federal funds, or (4) terminating further 
assistance for an approved program, may within thirty days request a 
hearing. Within thirty days after it receives such a request, the State 
educational agency shall hold a hearing on the record and shall review 
such final action. No later than ten days after the hearing, the State 
educational agency shall issue its written ruling, including reasons 
therefor. If it determines such final action was contrary to Federal or 
State law, or the rules, regulations, and guidelines governing such 
applicable program, it shall rescind such final action.

(b) Appeals to Secretary; persons aggrieved; notice; orders prescribing 
        appropriate agency actions; finality of agency fact findings; 
        interim orders pending appeal or review

    Any applicant or recipient aggrieved by the failure of a State 
educational agency to rescind its final action after a review under 
subsection (a) of this section may appeal such action to the Secretary. 
An appeal under this subsection may be taken only if notice of such 
appeal is filed with the Secretary within twenty days after the 
applicant or recipient has been notified by the State educational agency 
of the results of its review under subsection (a) of this section. If, 
on such appeal, the Secretary determines the final action of the State 
educational agency was contrary to Federal law, or the rules, 
regulations, and guidelines governing the applicable program, he shall 
issue an order to the State educational agency prescribing appropriate 
action to be taken by such agency. On such appeal, findings of fact of 
the State educational agency, if supported by substantial evidence, 
shall be final. The Secretary may also issue such interim orders to 
State educational agencies as he may deem necessary and appropriate 
pending appeal or review.

(c) Records; availability

    Each State educational agency shall make available at reasonable 
times and places to each applicant or recipient under a program to which 
this section applies all records of such agency pertaining to any review 
or appeal such applicant or recipient is conducting under this section, 
including records of other applicants.

(d) Termination of assistance for noncompliance with provisions or 
        orders

    If any State educational agency fails or refuses to comply with any 
provision of this section, or with any order of the Secretary under 
subsection (b) of this section, the Secretary shall forthwith terminate 
all assistance to the State educational agency under the applicable 
program affected or issue such other orders as the Secretary may deem 
appropriate to achieve such compliance.

(Pub. L. 90-247, title IV, Sec. 432, formerly Sec. 425, as added Pub. L. 
93-380, title V, Sec. 508(a), Aug. 21, 1974, 88 Stat. 566; amended Pub. 
L. 95-561, title XII, Sec. 1247, Nov. 1, 1978, 92 Stat. 2354; renumbered 
Sec. 432 and amended Pub. L. 103-382, title II, Secs. 212(b)(1), 243, 
Oct. 20, 1994, 108 Stat. 3913, 3922.)


                            Prior Provisions

    A prior section 432 of Pub. L. 90-247 was renumbered section 438, 
and is classified to section 1232a of this title.
    Another prior section 432 of Pub. L. 90-247 was renumbered section 
442, and was classified to section 1233a of this title prior to repeal 
by Pub. L. 103-382.


                               Amendments

    1994--Subsec. (a). Pub. L. 103-382, Sec. 243(1)(C), (D), inserted 
comma after ``the hearing'' in third sentence and substituted 
``guidelines governing such applicable program, it'' for ``guidelines, 
governing such applicable program it'' in fourth sentence.
    Pub. L. 103-382, Sec. 243(1)(A), (B), substituted ``Secretary, any 
applicant'' for ``Commissioner, and in the case of the program provided 
for in title I of the Elementary and Secondary Education Act of 1965, 
any applicant''.
    Subsec. (b). Pub. L. 103-382, Sec. 243(2), substituted ``Secretary'' 
for ``Commissioner'' wherever appearing.
    Subsec. (d). Pub. L. 103-382, Sec. 243(3), substituted ``Secretary 
under'' for ``Commissioner under'' and ``Secretary shall'' for 
``Commissioner shall'' and inserted before period at end ``or issue such 
other orders as the Secretary may deem appropriate to achieve such 
compliance''.
    1978--Subsec. (a). Pub. L. 95-561 added cl. (3) relating to the 
ordering, in accordance with a final State audit resolution 
determination, the repayment of misspent or misapplied Federal funds, 
and redesignated former cl. (3) as (4).


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-561 effective Oct. 1, 1978, see section 
1530(a) of Pub. L. 95-561, set out as a note under section 1221e-3 of 
this title.


                             Effective Date

    Section 508(b) of Pub. L. 93-380 provided that: ``The amendments 
made by subsection (a) [enacting this section and section 1231b-1 of 
this title] shall be effective on the date of enactment of this Act 
[Aug. 21, 1974].''
